No Plan to Tie Up With Private Firms for Retail Expansion: Bharat Petroleum

Mumbai: Bharat Petroleum Corporation (BPCL), India's third largest oil marketer, has ruled out tying up with private players, saying the PSU has enough capabilities for expanding its retail presence on its own. Rival Hindustan Petroleum, which is the second largest OMC player, recently said it would be keen to tie up with private players like Reliance Industries (RIL) or Essar for sharing their idle retail infrastructure. "We have no plans to engage with private players to share their retail infrastructure for marketing as we are hopeful of taking on competition on our own. We don't see any brand synergy in doing so and also we have enough capabilities to invest more in retail expansion," BPCL chairman and managing director S Varadarajan told reporters in Mumbai over the weekend after the AGM. The chairman said BPCL had opened more than 900 outlets last fiscal year, taking its total retail network to over 12,500, the company will open more outlets. He did not specify a number. It can be noted that private players like Reliance Industries and Essar Oil with thousands of outlets have shut down marketing following the government refusal to free diesel prices after the 2006 oil spike. But with diesel being sold at market price now, they are likely to re-enter marketing. HPCL chairman and managing director Nishi Vasudeva had earlier this month said her company would like to tie up with private players for convenience and to save on capital expenditure, but added nothing had been finalised yet. Currently, oil firms are selling diesel at 35 paise above market rate as the government has not allowed them officially to cut prices. There have been reports that it may formally announce diesel deregulation post-October 15 assembly elections. Diesel prices have been brought to market levels following the staggered deregulation that began in September 2012. Under this, OMCs were allowed to raise retail prices by 50 paise per month and also due to falling crude prices, which is hovering around $98 a barrel now. Meanwhile, Mr Varadarajan said BPCL will invest over Rs 12,000 crore over the next four years in the Mozambique and Brazil upstream business. This is nearly double of what the state-run company had spent in exploration and production in the past decade. The investments will be part of the Rs 45,000-crore capex planned, including expansion of Kochi refinery from 9.5 MT to 15.5 MT at the cost of Rs 16,500 crore, over the next three years. The Mozambique (gas) and Brazil (oil) fields will start production by FY18 and FY19 respectively, he said, adding that so far no domestic player has contacted the company for gas or oil. BPCL's exploration subsidiary - Bharat PetroResources (BPRL) - owns oil and gas assets in Brazil, Mozambique, Indonesia and Australia. In Mozambique, BPCL holds a 10 per cent stake in the gas blocks operated by the US-based Anadarko Petroleum Corp. Mozambique blocks have around 50-70 trillion cubic feet natural gas, which is nearly 10 times the reserves of RIL's D6 block in the Krishna-Godavari basin. Out of this BPCL's share is at 5-7 tcf. Mr Varadarajan also said BPCL will be booking 1-3 million tonnes of LNG annually as part of its plans to improve its gas business through its East and West coasts terminals. "We are looking at booking capacities in LNG terminals. For our international business, we are looking for long term gas and have signed up two million tonnes import gas pact with foreign players," Mr Varadarajan said. He further said the company will be laying the country's first cross-country pipeline that will connect to Bangladesh. Its subsidiary Assam-based Numaligarh Refineries will shortly begin work on laying the 170-km pipeline from Siliguri in Bengal to Parbatipur in Bangladesh. The pipeline will help BPCL penetrate the Bangladeshi market and ensure sustained supply of oil products to Bangladesh.

No Plan to Tie Up With Private Firms for Retail Expansion: Bharat Petroleum

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