Bharat Petroleum Corp (BPCL) has set a target of increasing its refining capacity to 50 million tonne per annum with an investment of Rs 40,000 crore over the next five years as part of its overall Rs 1 trillion capex plan under 'Project Sankalp'. The PSU, which currently has a refining capacity of 30 million tonne per annum (mtpa), has earmarked a whopping Rs 1 trillion capex by 2021 under 'Project Sankalp', primarily focusing on brownfield expansion. This is double the capex amount it had spent in the past five years.
"We plan to increase our refining capacity to 50 mtpa from 30 mtpa now by investing Rs 40,000 crore in brownfield expansion by 2021. Our total capex under Project Sankalp is Rs 1 trillion during the next five years," Chairman and Managing Director S Varadarajan said. Of the Rs 1-trillion capex, the refiner plans to spend Rs 25,000 crore for upstream development, including developing its Brazilian and Mozambique oil and gas fields and buying more oil equity abroad.
The remaining amount will go into marketing spends, which will see a lot of money being put into ramping up its non-fuel retail venture under the In & Out brand, Varadarajan said on the sidelines of the company's AGM held in Mumbai last week. The Rs 40,000 crore refining expansion will not see BPCL setting up any new project but scaling capacity to 1 million barrels a day, or 50 mtpa. While work on expanding its capacity in Kochi to 15 mt is on course, the Bina capacity will be increased from 6 mt to 15 mt and Numaligarh to 9 mt from 3 mt.
Project Sankalp also includes the refiner branching out heavily into the petrochem sector, which will be marked by a Rs 6,000-crore project at Kochi. These investments will also be used to expand the city gas distribution business and establishing BPCL as an oil and gas explorer and producer. "We want to have a truly global presence in refining, marketing and exploration & production in the next five years. The Project Sankalp will see doubling our investments to Rs 1,00,000 crore over the next five years," said Varadarajan. BPCL already has oil and gas fields in Brazil and Mozambique and it is constantly looking at good assets.
Asked why the PSU is not getting aggressive in buying overseas assets like China, India's biggest rival in this space, he said, "Only the prices of gas and crude have come down not asset prices. But we are on the constant lookout." "Project Sankalp will see us going global not only with our upstream investments but also with our expertise in marketing of petroleum products. We are looking at setting up marketing infrastructure in the neighbouring countries as well as in Far East, Africa and Latin America," he said.