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Bharat Petroleum Corporation Ltd.

BSE: 500547 Sector: Oil & Gas
NSE: BPCL ISIN Code: INE029A01011
BSE 00:00 | 19 Aug 338.35 -8.75
(-2.52%)
OPEN

342.00

HIGH

343.30

LOW

337.00

NSE 00:00 | 19 Aug 338.25 -8.80
(-2.54%)
OPEN

342.45

HIGH

343.25

LOW

337.00

OPEN 342.00
PREVIOUS CLOSE 347.10
VOLUME 236281
52-Week high 503.00
52-Week low 293.50
P/E 73.71
Mkt Cap.(Rs cr) 73,397
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 342.00
CLOSE 347.10
VOLUME 236281
52-Week high 503.00
52-Week low 293.50
P/E 73.71
Mkt Cap.(Rs cr) 73,397
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharat Petroleum Corporation Ltd. (BPCL) - Chairman Speech

Company chairman speech

Dear Shareowners

Greetings for the day!

It is my pleasure and privilege to present to you the Annual Report for2021-22 and share the highlights for the year.

On the physical front your Company performed better than last year.BPCL on a standalone basis registered sales of 42.51 MMT and crude throughput of 30.07MMT in the year 2021-22 as against 38.74 MMT and 26.40 MMT respectively in the previousyear. On the financial front your Company recorded a Profit After Tax (PAT) of Rs 8789crore on a standalone basis as against PAT of Rs 19042 crore in the previous year. Thehigher PAT last year was essentially due to the one-time gain on the sale of stake inNumaligarh Refinery Limited. Besides this year the gains due to higher refining marginswere more than offset by the lower marketing margins and lower inventory gains resultingin a dampening effect on our profit. The Board of Directors declared a total dividend ofRs 16 per share on earnings of Rs 41.31 per share for the year.

Recent times have brought tumult and uncertainty on a global scale.Having undergone the harrowing churnings of the viral onslaught the world felt lessgloomy when the pandemic began to taper off gradually rekindling a new enthusiasm in hopeof better times ahead. Now as we move forward the world faces a fresh set of challengesposed by spiraling global inflation and unsettling geopolitical tensions marring thesocio-economic prospects that were rising on the horizon as the impact of pandemic wasabating. Certainly these are trying times testing one's strength patience andresilience. But challenges are not new for BPCL and our unyielding can-do spirit andnever-give-up determination are the underpinnings of our inherent strength to takechallenges head-on.

The international oil and gas market continues to be volatile withsupply-side constraints leading to abnormally high prices. In such a scenario even withrobust refining margins the profitability of domestic Oil Marketing Companies (OMCs) hastaken a severe hit on the marketing side. Needless to say your Company is taking allnecessary actions to minimize the adverse impact on its financial position as it continuesto serve the growing fuelling needs of the nation.

A major highlight for us is the merger of Bharat Oman RefineriesLimited (BORL) our wholly owned subsidiary. I am extremely happy to announce that BORLhas been merged with BPCL with effect from July 1 2022. This will result in substantiallogistics operational and talent-pool synergies for the Company while also facilitatingfaster execution of the proposed Petrochemical project at Bina. The merger of Bharat GasResources Limited the wholly owned gas subsidiary with BPCL is in its last leg and isexpected to be completed soon.

The era-defining trend of today for our industry is Energy Transition.As the energy landscape changes globally your Company has been recalibrating itsstrategies to leverage emerging opportunities while mitigating risks. The Company hasfirmed up plans to diversify and expand in adjacent and alternative businesses to createadditional revenue streams and provide a hedge against any possible future decline inliquid fossil-fuel business. In this direction six strategic areas have been identifiedas pillars of future growth and sustainability viz. Petrochemicals Gas Renewables NewBusinesses (Consumer Retailing) E-mobility and Upstream while the core businesses ofrefining and marketing of petroleum products continue to serve as a solid foundationproviding stability and consistent cash flows. The Company has laid out a detailed roadmapunder each of these strategic areas and has planned a capex outlay of around Rs 1.4 lakhcrore in the next five years.

I will now elaborate Company's plans in each of these sixstrategic areas.

BPCL has placed topmost priority on the expansion of its petrochemicalsproduct portfolio and taken definitive steps in this direction. The Company has identifiedtwo new refinery-integrated petrochemical projects–the 1.2 MMTPA Ethylene Crackerunit at Bina Refinery and the 0.4 MMTPA Polypropylene unit at Kochi Refinery. Action hasbeen initiated for these projects.

Another key area of focus for BPCL is natural gas. Expanding itsnatural gas footprints your Company has secured licenses for 8 new Geographical Areas(GAs) under the recently concluded 11th and 11A City Gas Distribution (CGD) bid rounds.With this BPCL has licenses for developing CGD networks in 25 GAs covering 62 districtsand a total of 50 GAs covering 105 districts inclusive of JVs. The success in the pastfew CGD rounds has placed BPCL among the top 3 CGD players in the country. Further 8 newGAs were commissioned during the year while work in other GAs is fast progressing towardscompletion. Capitalising on its extensive experience and wide presence the Company iswell poised to become a significant player in the growing natural gas market in thecountry.

Aligned with national priorities and committed to the common globalcause of climate stabilisation your Company has pledged to achieve "Net Zero"in Scope 1 and Scope 2 emissions by 2040. To realise this aspiration diversification intoRenewal Energy (RE) business will play a major role and to this end the Companyestablished a new business unit "Renewable Energy" to take forward thisinitiative. Also the Company has clearly articulated its RE targets to reach 1 GW by 2025and 10 GW by 2040. Further pursuing the nation's objectives of ensuring energysecurity and a cleaner environment through usage of biofuels your Company has recentlyachieved blending of more than 10% ethanol in petrol and is committed to enhancing theblending in line with the roadmap laid out by the government.

Non-fuel offerings have been an important constituent of BPCL'sretailing portfolio and one of the major drivers of growth in fuel business through therub-off effect. The Company has formed a business unit called "New Businesses"for expanding the consumer retailing business more vigorously and in newer ways withinitial focus on small towns and rural areas. Deploying a unique digitally enabledbusiness model the Company has dovetailed fuel with non-fuel offerings and enrolled ruralwomenfolk entrepreneurs called "Urja Devis" to reach out to the lowestdenominator in the Indian market. I am extremely happy to inform you that in just ninemonths since the creation of this business unit we have already opened 30 "In &Out stores" in Tehsils and partnered with 300 Urja Devis in rural areas. Ourendeavour is to create 1500 "In & Out stores" and engage 15000 Urja Devisin the coming year.

In the Electric Mobility space to address range anxiety pertaining toelectric 4-wheelers the Company came up with a novel concept of creating Highway FastCharging Corridors and on a pilot basis adopted the 900-kmChennai-Trichy-Madurai-Chennai highway (NH-45) to develop it as a Highway Fast ChargingCorridor. Going forward BPCL plans to grow in this space in tandem with market expansion.

On the upstream front Bharat PetroResources Limited (BPRL) our whollyowned upstream subsidiary achieved a major milestone with the consortium submitting theDeclaration of Commerciality for the oil and gas discovery in BM Seal 11 Concession inBrazil during the year. The Field Development Plan is expected to be submitted shortlywhich will be followed by Final Investment Decision for monetization of the discoveries.Also in Mozambique where world-class offshore gas discoveries are being developed formonetization through the LNG route by the consortium the project execution activities areexpected to re-commence soon with the improving security situation. With most of itsassets now either in development or production phase BPRL is well on its path to take itsrevenue generation to the next level.

Over the years BPCL has been focusing on creating additionalcapacities and augmenting its infrastructure to reduce dependence on other oil companiesto serve its markets. I am proud to share with you that today your Company isself-sufficient in product availability and distribution across the country. It was agreat honour that during the year our 355-km Bina-Kanpur multi-product pipeline wasdedicated to the nation by Hon‘ble Prime Minister. Our strategically locatedrefineries and well laid out network of depots installation plants and pipelines giveus the confidence to ensure seamless supply of products and pursue growth in the nearfuture without any constraints.

Adding another feather to the cap your Company achieved a majormilestone by expanding its fuel-retailing network crossing the 20000 mark for the numberof Fuel Stations in March 2022. The growth leadership position that the Companyregistered amongst PSU OMCs in sales of petrol and diesel during the year bears testimonyto the faith that customers have reposed in BPCL. Mindful of the need to reinventourselves with the changing times we are committed to and progressing towardstransforming our Fuel Stations into Energy Stations where all forms of energy solutionsfor mobility like petrol diesel natural gas EV solutions flexi fuels and eventuallyhydrogen would be available.

During the year BPCL has taken further measures to optimize manpowerand enhance efficiencies by restructuring various roles and centralising variousfunctions thus making the organisation leaner and more agile. This will go a long waytowards enhancing competitiveness of the Company while also providing better exposure andopportunities to employees.

Further as a binding enabler for all our strategic initiatives wehave embraced the best of technologies to optimally harness their potential. It is withimmense satisfaction that I share that the digitalisation journey we embarked upon abouttwo years back with "Project Anubhav" has started bearing fruits. In a shortspan of time BPCL has created powerful brands like HelloBPCL IRIS Urja UFill andSalesBuddy. "Project Anubhav" has catalysed the creation of a multiplier effectto reinforce our commitment of Trust Convenience and Personalisation to our customers andoffer them a bouquet of new digital experiences while also improving our operationalefficiencies.

Also the year 2021-22 saw a paradigm shift in how the public perceivedthe BPCL Brand. Leveraging various social media platforms we reimagined and repositionedour presence in the public domain setting the stage for highly positive brandperceptions. BPCL today has the largest follower base on social media among oil &gas companies in India and has been able to garner a viewership of 10 crore for our socialmedia content during the year.

BPCL's image in the society is that of a sterling corporatecitizen born out its unflinching belief in what Philip Kotler has said: "Acompany's civic character is its most potent customer preference builder". Yourcompany has always been at the forefront of service to the society and the nation and hasbeen contributing whole-heartedly to the cause of societal ascent and wellbeing includingduring the pandemic.

Fully seized of the growing need to re-invent ourselves and align withthe tide of change ushered in by the global energy transition your Company has beenmoving steadily towards creating a distinct identity on a larger canvass and eventuallybecoming an Energy Company in the broadest sense of the term. You would be aware that thegovernment has recently put on hold its plans to disinvest its stake in the Company.Notwithstanding any such decision the Company has been and will continue with itsexpansion plans consistent with its long-term business strategy in its pursuit ofcreating value for all stakeholders.

Before I conclude I would like to place on record my sincere thanks toall our leaders employees business partners customers vendors bankers and otherstakeholders for their continued support unmatched dedication and unwavering loyaltywhich has always served as a beacon of inspiration in all our endeavours. I would alsolike to place on record my heartfelt gratitude to the Ministry of Petroleum & NaturalGas for their invaluable guidance and constant support. I am humbled by the immenseconfidence reposed by the investors in the BPCL management which has given us the courageto spread our wings even wider.

As I prepare to embark upon the next phase of my life after myretirement later this year I envision BPCL conquering newer peaks as it marches forwardon the path of growth and sustainability. I assure all of you that the leadership pipelineof the company is vibrant and robust with intelligent and young leaders set to take thisgreat organization to even greater heights.

I conclude with a quote by Winston Churchill which I hope will helpsum up my journey in this wonderful organization: "Success is not final; failure isnot fatal: it is the courage to continue that counts."

Arun Kumar Singh
Chairman & Managing Director

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