We have no plans to tie up with pvt cos for retail expansion: BPCL
Country's third largest oil marketeer Bharat Petroleum Corporation (BPCL) 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 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 here over the weekend after the annual general meeting (AGM).
The chairman said BPCL had opened more than 900 outlets last fiscal, taking the company's total retail network to over 12,500, the company will open more outlets, but did not specify a number. It can be noted that private players like Reliance 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 now.
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-15 October 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, 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, Varadarajan said, adding that so far no domestic player has contacted the company for gas or oil, Varadarajan said.
BPCL's exploration subsidiary Bharat PetroResources (BRPL), owns oil and gas assets in Brazil, Mozambique, Indonesia and Australia, and owns a 20 per cent stake in the Brazil blocks via an equal joint venture with Videocon Industries; Petrobras SA which holds 60 per cent.
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. Varadarajan also said BPCL will be booking 1-3 mn tonnes 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,' Varadarajan said.