Bharat Petroleum which got upgraded to a Maharatna company yesterday, aims to reap in a profit of Rs 10,000 crores in FY18. In conversation with CNBC TV18, the company said that the gross refining margin is likely to be in the range of 6.5-7 per barrel in the current quarter. BPCL’s June-quarter gross refining margin, or profit earned on each barrel of crude processed, slipped to $4.88 per barrel, compared with $6.09 per barrel in the same period in 2016.
Shares of Bharat Petroleum gained over 4 per cent on Tuesday after the company informed exchanges that government has conferred Maharatna Status to the oil marketing company. The shares gained 4.33 per cent to close at Rs 534.70 on BSE. On Wednesday, the shares were trading at Rs 524.05 on NSE down by more than 1.7%.
On the benefits of Maharatna status, D Rajkumar the Chairman and Managing Director of the company says that it will help the company raise cheaper funds, apart from giving it financial freedom. “For instance this will empower our board to sanction investments of up to Rs 5,000 crore in a single project, which is five-times more than when we were a Mini-ratna company,” he told while addressing media yesterday.
BPCL is looking to fund expansion at Kochi unit. The company plans to raise capacity of the Kochi unit to 15.5 million metric tonnes per annum from 9 million metric tonnes per annum currently. BPCL expects gross refining margin from Kochi unit to rise by $1.50-2 per barrel post expansion, the company told CNBC TV18.
BPCL has lined up capital expenditure of Rs 1.08 trillion for the next five years. According to Rajkumar, BPCL will spend the money on capacity expansion of refineries as well as marketing and upstream activities. Yesterday, Jal Irani of Edelweiss Financial Services said BPCL could be saving around Rs 300 crore per year after Petronet LNG successfully re-negotiated a deal with Exxonmobil. The expert pointed out that GAIL and BPCL are poised to benefit from the deal, as both the companies have the largest take-or-pay contracts, followed by IOCL. “We like BPCL among the three the most,” he said, adding that IOCL is also on top in the pecking order.