Bharat Petroleum Corp Ltd (BPCL) on Thursday said it has bought 1 million barrels of oil from the US — in two consignments. It is for the first time that BPCL, which is largely dependent on OPEC nations for oil imports, buys crude from the US.
“We have bought Texas sweet crude with low sulphur and a heavy grade crude. This is part of our plan to diversify its procurement and sourcing and to reduce geopolitical risk, by not being overtly dependent on one region for our oil and gas supply,” said BPCL chairman and managing director D Rajkumar.
On whether the new procurement would mean modification at the company’s refineries, which are more attuned to heavier grades of crude with high sulphur content from the Middle East, Rajkumar said there would be no need for such revisions.
“We have already made provisions to handle different types of crude. Currently, our plants can handle as many as 55 different varieties of crude,” said Rajkumar.
This move by Bharat Petroleum, which has 25% marketshare of the Indian market, comes on the heels of OPEC and non-OPEC countries slashing production in the hopes of boosting oil prices which have hit an 11-year low.
BPCL said it is looking at Rs 1 lakh crore capital expenditure in the next five years for cost-competitive acquisitions, exploration of new shale gas and technological upgrades.
“We might be exploring various options for equity and debt funding. But we will consciously keep our debt-to-equity ratio at 2:1,” he said.
On Bharat Stage VI emission norms, the CMD said, “BPCL hopes to be in compliance with the new requirements by April 1, 2018. We are actively trying to bring down sulphur content in fuel to 10 ppm from 50 ppm.”
BPCL said its purchase of Tass-Yuryakh oilfield from Russian oil major Rosneft nine months ago was proving to be beneficial. “We are finding it possible to produce petrol as cheap as Rs 3.60 a litre, which is extremely cost-competitive. If we see other acquisitions like that, it would be worth exploring.”
On the recent expansion of the Kochi refinery, BPCL said this would increase production capacity from 9 million metric tonne per annum to 15.5 million tonne.