BPCL To Build New Oil Refinery, Aims To Cut India's Imports

State-run oil refiner Bharat Petroleum Corp. plans to construct an oil refinery to address the rising need for petrol and diesel in the country, Union Petroleum Minister Hardeep Singh Puri said on Tuesday. This announcement came at a press meet following his reappointment to the ministry for a second term.

The minister emphasised the importance of increasing domestic oil and gas production to reduce India's import dependency. He also highlighted green hydrogen, natural gas, refining, and petrochemicals as key focus areas.

Puri said attracting investors to oil and gas exploration and production will be a priority. This includes ongoing bid rounds and unique tenders like the one issued by Oil and Natural Gas Corp., which seeks a foreign partner to boost output at Mumbai High, one of India's oldest oil fields.

The minister also said BPCL is planning to build its fourth oil refinery in India. "The details are being worked out," he said.

Currently, BPCL operates refineries in Mumbai, Kochi in Kerala and Bina in Madhya Pradesh. The company aims to increase its refining capacity from 39 million tonne per annum to 45 million tonne, and the new refinery is part of this expansion plan. This new refinery will be in addition to the one being constructed by Indian Oil Corp. near Chennai.

Puri also said oil production from ONGC's eastern offshore KG-DWN-98/2 block will soon rise to 45,000 barrels per day, with gas production expected to commence shortly.

Regarding securing crude oil supplies, Puri said India has diversified its sources, including significant imports from Russia.

Previously accounting for less than 1% of its total imports, India has now become the largest buyer of Russian sea-borne oil, taking advantage of discounted prices, after Western nations halted purchases when Moscow invaded Ukraine in February 2022.

"We're a longstanding partner of the Russian Federation. We have had discussions with the Russians on long-term deals," Puri said. "I'm confident that both our private and public sector players will sign long-term deals with countries where they see benefit in doing so."

Puri also said the effort to produce and promote the use of green hydrogen, a fossil fuel alternative with no emissions, will persist. Biofuels, he said, will also be promoted.

(With inputs from PTI)