BPCL plans Rs 45,000 cr capex by 2017

State-run Bharat Petroleum Corp Ltd (BPCL) has said it has lined up Rs 40,000-45,000 crore capital expenditure plan for the next four-five years, which will be utilised in its upstream projects as well the downstream expansion.

"In the next four to five years our total capex will be to the tune of around Rs 40,000-45,000 crore. This allocation will be spent on upstream, refinery expansion and other infrastructure development," BPCL Chairman and Managing Director R K Singh told reporters yesterday after the company's annual general meeting held here.

When asked about the fund-raising plan for this capex, Singh said raising funds to this magnitude would not be a problem as BPCL is already in talks with domestic banks.

"We have no problem in mobilising this kind of resources because we have some good discoveries. Many banks are willing to fund our activities," he said.

For funding its many exploration projects, BPCL finance director S Varadarajan said a consortium of domestic banks led by State Bank of India, is ready to lend. But he added that these will be dollar-dominated borrowings.

The company has many gas blocks in Mozambique, 10 oil blocks in Brazil, and some oil and gas blocks in Indonesia, Australia, Britain, East Timor, and a shale gas project.

To a question on Cove Energy's stake in resource-rich prospective gas block in Mozambique, which it plans to offload, Singh said the BPCL is interested in purchasing Cove's holdings but for high valuation.

"Cove Energy holds 5.8 per cent stake in the consortium, which is valued at $1.9 billion. Our stake is 10 per cent in the project. We want to buy but we are not in a position because we don't have so much resources," Singh said.

The promising gas block, located in The Rovuma Basin area of Mozambique, is owned by a consortium of six players with BPCL and Videocon Industries holding 10 per cent each.

The London-based and Africa-focused Cove Energy put itself on sale early this year right after announcing probability of close to 30 tcf of gas in the Rovuma Basin.
   
Singh said following a Rs 5 per litre hike in diesel price and capping of the subsidised cooking gas cylinders at six a year, the under-recoveries would be lower this year.
   
According to Varadarajan, the under-recoveries for the full fiscal would get reduced to Rs 41,000 crore, due to the price hike and subsidy rationalisation last week.