Bharat Petroleum Corporation (BPCL), India’s second-biggest government-owned refiner and fuel marketer, has embarked on an ambitious expansion plan by spending Rs 1 lakh crore between FY17 and FY21. The move would increase the PSU’s refining capacity from about 30 million tonnes per annum (mtpa) now to 50 mtpa, in addition to expanding fuel marketing network in India and abroad.
“We want to have a truly global presence in refining and marketing and exploration and production in the next five years. We have embarked on a new five-year plan called project Sankalp under which the company will be doubling its investments from Rs 50,000 crore in last five years to Rs 100,000 crore in the next five years,” S Varadarajan, chairman and managing director of BPCL said on Tuesday.
BPCL has for the first time crossed a net profit of more than Rs 5,000 crore in FY15. BPCL reported a highest ever net profit of Rs 5084.51 crore on gross revenues of Rs 253,254.86 crores last financial year, a 25% increase from the previous year. In the last one year, BPCL stock price has jumped 24% on the Indian bourses against a 5% fall in the bechmark SENSEX.
Varadarajan said that the strategy is to go beyond fuel, meaning foraying into petrochemicals and looking at newer markets for expansion of retail sales. Of the proposed Rs 1 lakh crore investments, about Rs 35,000 has been earmarked for expansion of refinery capacity at Kochi and other joint venture projects at Bina and Numaligarh.
Another Rs 25,000 crore would go towards upstream activities in Mozambique and Brazil, which it holds through its wholly-owned subsidiary Bharat PetroResources Limited (BPRL), while another Rs 12,000 crore toward be spend on expanding marketing infrastructures including setting up of new import terminals.
For the first time, BPCL is spending Rs 4,600 crore to foray into petrochemicals. It is setting up a project at Kochi to produce SAP (super absorbent polymer) and expects revenues from this project to start flowing in by 2019-20. The regulatory clerances for the project are in place and work at the site has commenced.
The chairman and managing director of BPCL is confident that going forward, the firm would see better performance both in terms of products’ volumes and refining margins. “If the country sees a petroleum product demand of about 4%, it means there is an incremental demand for 7-8 million tonnes of products in a year,” added Varadarajan.
* Rs 1 lakh crore investment in next five years
* Refining capacity to expand from 30 mtpa to 50 mtpa
* Upstream investment seen at Rs 25,000 crore for Mozambique & Brazil projects
* Refining expansion cost pegged at Rs 35,000 crore
* Strengthening marketing infrastructure to cost Rs 12,000 crore
* For first time, investments of Rs 4,600 crore made towards petrochemical project
* To expand downstream operations in Nepal, Bangladesh, Ghana, Tanzania