BPCL To Invest Rs 1.1 Lakh Crore For Capex In The Next 5 Years
An attendant walks past a fuel pump at a Bharat Petroleum Corp. gas station in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

BPCL To Invest Rs 1.1 Lakh Crore For Capex In The Next 5 Years

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National refiner and oil marketer Bharat Petroleum Corporation Ltd. is investing nearly Rs 1.10 lakh crore in the next five years to expand its capacity and enter newer streams.

For the current fiscal, the company will invest Rs 7,800 crore, it said on Friday after the annual general meeting.

The company is also focussing on enhancing the petchem business mainly to offset the impact of decline in demand for petrol and diesel.

"In the next five years, we plan to invest around Rs 1.10 lakh crore at the group level to augment the refining and marketing infrastructure and to enhance the petchem capacity, upstream forays and gas proliferation," Chairman and Managing Director D Rajkumar told reporters.

He said the company is not going to expand only in refinery but is also focusing on petchems keeping in mind the decline in demand for transport fuels.

"For refineries upgrade and expansion, we plan to invest Rs 20,000 crore. The investments are planned basically keeping petrochemicals in mind. For petrochem we will be investing Rs 20,000 crore.”

"For our equity share in Mozambique, we will be investing another Rs 20,000 crore and Rs 6,000 crore for the pipeline infrastructure along with a significant amount for marketing facilities," he said explaining the capex breakup.

Rajkumar said the company also aims to increase the share of petchems in term of volumes to 10-15 percent by 2024.

"When we initially started, it was just 1 percent as the focus was on transport fuels. That timewe were only talking about transport fuel and did not look at petchem. With electric vehicles coming in, there could be some likely impact on transportation fuels and so we are now taking up expansion in petchem. Our plan is to move from 1 percent to 10 percent or even 15 percent by 2024," he added.

However, he was quick to add that the general consensus is that till 2040, there will not be any major decline in transport fuels if at all there is traction on the EV front.

When asked about the divestment plan in BPCL, he said, "no such official plan has come to us. But analysis of data that is coming in the media one can understand that it is in the initial stages basically to see if its required to come or no. And if it is to be done then what would be the percentage or the extent to which the divestment would be done. So it's difficult to comment on that."

The company has also embarked on a project for manufacturing polypols, propylene glycol and mono-ethylene glycol at its flagship Kochi refinery at an estimated investment of Rs 11,130 crore to be completed by 2024.

Rajkumar further said Bharat Gas Resources is on its way to becoming a leading player in the city gas distribution market and is targeting a portfolio of 37 geographical areas at group level.

"We expect to reach target volumes of 5 mt by 2022 which is more than double the existing volumes of 1.8 mt. For this we are developing a port based LNG terminal including a regasification facility at Krishnapatnam Port," he added.

Also read: Hindalco Lines Up Rs 2,000 Crore Capex For Expansion

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