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BPCL hints at review of Bina project

Mumbai, Sept. 26: Bharat Petroleum Corporation Ltd (BPCL) has planned a capital expenditure of over Rs 7,500 crore in the next five years and will reappraise the stalled Bina project after obtaining the necessary approvals.

Stating this at the corporation’s annual news conference held here on Wednesday, chairman and managing director S. Behuria said that out of the Rs 7,500 crore, modernisation of its Mumbai refinery—which will enhance its capacity to 12 million tonnes—will account for Rs 1,800 crore. This is expected to be complete by 2004.

BPCL will also invest close to Rs 1,600 crore in its joint ventures that include Petronet LNG and Petronet India. Further, Rs 3,500 crore will be pumped in towards retail modernisation and its lubricant plants. These investments are likely to be funded through internal accruals.

Commenting on the Bina project, Behuria said that due to delays, its cost has spiralled to Rs 6,354 crore from the initial estimate of Rs 5,277 crore. However, BPCL will reappraise the project after obtaining the requisite approvals and its enhanced equity participation is awaiting the government’s nod. He added that Oman Oil Company, BPCL’s partner in the 6 million tonne project has decided to restrict its investment. Behuria also defended the project, pointing out to the deficit in the northern region.

The extreme volatility in crude prices witnessed this year has also put margins of oil companies under pressure. Nevertheless, BPCL has seen its margins rise to $ 2.8 per barrel in August from $ 2.4 per barrel last year.

Behuria pointed out that due to various initiatives taken by the corporation, during April-August this year, while oil demand has grown by 1.6 per cent, motor spirit has shown a growth of 11 per cent against 6 per cent last year.

Earlier, speaking to shareholders at its annual general meeting, he said the company will leverage new technologies to meet enhanced customer expectations and the key would be to continuously innovate and manage customer relationships.

BPCL, which has introduced “In & Out” stores providing convenience retailing and merchandising of consumer goods, plans to add 50 such stores in the current year from the existing 40.

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