Bharat Petroleum to Enter Upstream E&P Business

Indian downstream oil marketing company, Bharat Petroleum, announced its foray into the oil exploration and production business and has earmarked a budget of Rs 1,000-1,500 crore. The company "will look into a mix of exposure of exploration, development and production with a budget of Rs 1000-1500 crore over the next five years", BPCL Chairman and Managing Director S Behuria said.

Addressing shareholders at the annual general meeting, he said it has become necessary for BPCL to explore other avenues for securing crude by entering the upstream sector in order to have reasonable supply security, hedging of price risks and benefits of an integrated supply chain in the volatile oil market.

Behuria said it had also become imperative to enter the gas business to maintain its share in the energy market in view of the recent trend of increasing displacement of liquid fuels by natural gas as an environmentally friendly product.

On the government decision to divest 41 percent stake in BPCL through a public issue, he said the company was taking necessary steps in preparing accounts as per US GAAP.

To meet stiff competition in the retail sector, Behuria said the retail network would be increased by about 700 new sites this year even as a number of re-locations have been planned to correct the unprofitable allocations prior to deregulation.