Comments
Bharat Petroleum Corporation's six million tonne refinery in Bina, Madhya Pradesh, will be ready for commercial production in the coming weeks.
In the process, it will end up being an important supply centre for northern and central India where demand for petro-products is on the rise. IndianOil has been the dominant player in this part of the country for decades and the entry of BPCL could translate into some interesting market dynamics.
Plans are also underway to increase the capacity of the Bina refinery to nine million tonnes within the next three years. “Eventually, we are looking at 15 million tonnes given the demand potential in the region,” Mr R.K. Singh, Chairman and Managing Director of BPCL, told Business Line .
Dream Plan
This is part of the company's ‘Dream Plan', wherein it also proposes to enhance the capacity of its subsidiary, Kochi Refineries, from 9.5 million tonnes to 15 million tonnes. If everything goes according to plan, BPCL will have a total refining capacity of around 45 million tonnes within the next five years which will include 12 million tonnes of its Mumbai refinery and three million tonnes at Numaligarh in Assam.
The commissioning of the Rs 12,000-crore Bina refinery is significant to BPCL given that it was planned over 15 years ago. The Central India refinery, as it was referred to, was among three joint sector projects conceived in 1993, the other two being Indian Oil's East Coast refinery in Paradip and Hindustan Petroleum's West Coast refinery with Oman Oil Company (which was shelved). HPCL is now gearing up for the commissioning of its Bhatinda refinery in Punjab which, like BPCL, will give it a strategic foothold in the north.
TOP Concern
“While the Bina refinery marks a new chapter for BPCL, our top concern is to post strong profits every year which will allow investments in pipelines, terminals and bottling plants as well as in new areas like gas and petrochemicals. Price hikes and duty adjustments will help alleviate the huge fuel losses now being incurred,” Mr Singh said
Oman Oil is BPCL's partner in the Bina project with a 26 per cent stake. It had capped its investments when the project hit a speed-breaker and was hanging in the balance for many years. BPCL took complete charge thereafter and continued to invest in Bina. When Oman Oil made it known that it was keen to team up again, BPCL got a premium on the stake sale.
This fiscal could also see an IPO float for the joint venture, Bharat Oman Refineries, where the final equity pattern will see BPCL holding 49 per cent, Oman Oil 26 per cent, a marginal stake by the MP government and the balance accounted for by the public and financial institutions.
Oil and Natural Gas Corporation was also keen on picking up a 15 per cent stake in the Bina refinery as part of its aspiration to enter the downstream sector in the late-1990s. Subsequently, ONGC snapped up Mangalore Refinery & Petrochemicals which was then a joint venture between HPCL and the AV Birla group.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.