MUMBAI: Bharat Petroleum Corporation Ltd (BPCL) has chalked out a five-year strategy to diversify its business into other core areas like gas, exploration and production, power generation, increasing its market share and refining capacity, a top company official said.
“With hydrocarbon as our core business, we are aware of the challenges the company is going to face down the line and after an internal exercise, we decided to diversify our business into other areas,” Chairman and Managing Director S. Radhakrishnan told reporters here on Saturday.
As a part of this five-year plan, the company has proposed to make foray into some specific power segments with an investment ranging between Rs.600 crore and Rs.1,000 crore with a view to generating 500 MW, he said.
The locations and the fuel medium would be decided later, based on how economical the fuel will be, and most of the power plants would be joint ventures, Mr. Radhakrishnan said.
BPCL is one of the serious players in the city gas segment, taking into account that CNG is taking away some parts of its LPG and retail fuel business, and the company has tied up with many others for city gas distribution and is expected to bag distribution rights in 10-15 cities, he said.
He said there was pressure on the company to diversify into gas due to several reasons, including the emission norms set by the courts and as fuel gas is cheaper than others.
Refining capacity addition is another major area included in the plan with a view to increasing it by 50 per cent from 30.5 million tonnes to 45 million tonnes annually following the launch of Bina refinery and capacity addition in Kochi, he said.
There was no decision on the initial public offer of the Bina Refinery, he said, in response to a query.
The company has no immediate plan to re-locate its Mumbai refinery, as it is not easy to create the 12-million tonne capacity and infrastructure.
But an octroi of $2.3 a barrel made this refinery uneconomical and the company was discussing the issue with the BMC and State Government, he said.
In the E&P business, the company owns 26 blocks in Mozambique and Brazil and production from these blocks is expected to start in 2013. The company has planned to invest Rs.7,500 crore in its E&P business with Rs.3,000 crore as equity.
According to Mr. Radhakrishnan, BPCL will focus on buying blocks in the last stages of exploration so that they will turn in to revenue-making soon.
Latin America, East Africa and Australasia with Indonesia were the major geographies that the company was eyeing to acquire E&P blocks, D. Rajkumar, Managing Director and CEO of Bharat Petro Resources, a wholly-owned subsidiary of BPCL to handle E&P business, said.
BPCL had earmarked Rs.800-1,000 crore for new projects, including new blocks, he said. — PTI
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