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BPCL to invest Rs 1.08 trillion in 5 years, to focus on petrochemicals segment

LiveMint logoLiveMint 13-09-2017 Kalpana Pathak

Mumbai: State-run Bharat Petroleum Corp. Ltd (BPCL) will invest Rs1.08 trillion over the next five years to expand operations across its business segments, chairman and managing director D. Rajkumar told reporters at a post-annual general meeting press conference on Tuesday evening.

The company is bullish on the petrochemicals segment and plans to invest around Rs45,000 crore in the business over five years. 

“At present, 1% of BPCL’s throughput is getting converted into petrochemicals. By 2022-23, we are targeting a throughput of 10-15%,” said Rajkumar. This additional investment will translate into higher profitability, he added.

BPCL has commissioned an integrated refinery expansion project (IREP) at its Kochi refinery. This will increase its refining capacity to 15.5 million metric tonnes per annum from the present 9 million metric tonnes per annum. Post commissioning and stabilisation of IREP, BPCL is expecting its gross refining margin to improve by $1.50 per barrel and $2 per barrel, respectively. BPCL has invested Rs16,000 crore in the IREP project. 

BPCL, which operates its exploration and production segment through its wholly-owned subsidiary Bharat PetroResources Ltd (BPRL), has invested $2.6 billion on exploration and production so far. The company holds exploration and production blocks in Mozambique, Brazil, Australia and Indonesia.

BPRL holds 10% stake in the Mozambique Rovuma basin, which has a capacity of about 75 trillion cubic feet. The company said a funding arrangement for the Mozambique basin is currently being worked out. “A final investment decision for the basin would be worked out at the end of fiscal year 2017-18. The first gas from the project can be expected by 2022-23,” Rajkumar said.

The company, which received ‘maharatna’ status recently, will be able to raise cheaper funds and make investments of up to Rs5,000 crore in a single project going forward. Earlier, BPCL held a mini-ratna status. 

BPCL shares were down 1.63% at Rs524.90 apiece at 11am on the BSE, while Sensex was up 77 points, or 0.24%, at 32,247.

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