BPCL announces investment plans for fiscal year 2016-17
Bharat Petroleum Corporation Ltd. (BPCL), India’s second largest state-owned oil refiner, will invest about INR 10,000 crore (USD 1.5 billion) in fiscal year 2016-17 to boost and upgrade its refining capacity, as well as its marketing infrastructure, said P. Balasubramanian, BPCL’s finance director.
“We need to invest in infrastructure to meet the growing demand in the market,” he said.
BPCL and other state-owned oil marketing companies are now facing stiffer competition from privately owned oil companies following the deregulation of diesel fuel prices.
“The biggest challenge is to retain and grow the market share with growing competition, and meeting customer expectation in the industry,” he added.
BPCL has invested about INR 9,500 crore (USD 1.4 billion) in capital expenditures (capex) in the current fiscal year. About 40% of the planned capex in fiscal year 2016-17 will be used to finance the expansion at the Kochi refinery, which is already underway. The refinery is expanding capacity by 6 million tonnes per annum (MTPA), from its existing capacity of 9.5 MTPA. BPCL’s total refining capacity is about 27.5 MTPA, so when the expansion is completed, Kochi will represent one-third of BPCL’s total capacity.
About INR 1,000 crore (USD 149.4 million) will be used to upgrade BPCL’s other refineries to conform with Euro IV and Euro VI emission norms which will be in place by 2017 and 2020, respectively.
Another INR 1,000 crore (USD 149.4 million) will be invested in an upstream project managed by Bharat Petroresources which bought a 10% stake in an east Siberian field owned by Rosneft.
The remaining investments will be made in a petrochemicals unit, pipelines, marketing terminals, depots and LPG.