Shares of oil marketing companies (OMCs) were trading higher on the bourses in an otherwise weak market as oil prices fell on fears of a Greek debt default.

Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) were up 1%-2% on the BSE compared to a 1.7% decline in the S&P BSE Sensex at 0939 hours.

Shares of oil marketing companies mainly Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have rallied by up to 6% each on the bourses after the companies reported better-than-expected results for the March 2015 quarter.

HPCL has surged 6% to Rs 674, less than 2% away from its record high of Rs 686 on the NSE, after posting a net profit at Rs 2,162 crore against average analyst estimates of Rs 1,341 crore. The board has recommended a final dividend of Rs 24.50 per share.

State-owned Bharat Petroleum Corp Ltd (BPCL) today said it has raised $500 million through fixed rate unsecured notes to fund its capital expenditure.

"BPCL has launched an issue of $500 million fixed rate unsecured notes due 2025, which were priced on April 29," the company said in BSE filing.

State-run oil marketing companies surged over 4 per cent in intraday trade on Tuesday.

Indian Oil Corp gained as much as 2.48 per cent, Bharat Petroleum Corp was up 4.44 per cent and Hindustan Petroleum Corp surged 4.5 per cent in intraday trade.

Bharat PetroResources Limited, upstream arm of Bharat Petroleum Corporation Limited (BPCL), and Videocon Industries, announced that Petrobras, operator of the block SEAL-M-426 in BM-SEAL-11 Concession, Brazil, had completed assessment of the petroleum potential of the wells located in the ultra-deep waters of the Sergipe-Alagoas Basin.

"The results confirmed the presence of light oil and good productivity of the reservoirs. This drilling identified two reservoir intervals of light oil and gas - the top with a thickness of 44 metres, and the bottom 11 metres thick, the bottom zone being a new discovery for the area," Bharat PetroResources and Videocon said in a filing to an exchange.

Shares of public sector oil marketing companies (OMCs) such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have rallied by up to 6% on the Bombay Stock Exchange (BSE).

BPCL surged 4% at Rs 801, also its record high on the BSE, during intra-day trade. IOC rallied 6% to Rs 375, while HPCL gained 4% to Rs 655.

Buy Bharat Petroleum Corp (BPCL) with target price of R887. We use use a 7x target EV/ebitda multiple on an FY16E basis, at a slight discount to the 7.5x multiple we accord to RIL’s cyclical refining and petchem earnings, though there could potentially be upside to these multiples if the marketing business continues to grow structurally driven by deregulation, minimal government intervention, and stable oil demand growth in India, and the companies are successful in establishing a good track record.

Shares of all three listed state-owned oil marketing companies – Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) are trading higher between 1-3% on BSE after Brent crude dropped to $48.44 a barrel.

Brent crude oil futures edged higher after big losses in the previous session, after China took steps to pour fresh liquidity into the world's second-biggest economy to spur activity. Brent for March settlement was up 50 cents at $54.66 a barrel.

A consortium that includes Bharat Petroleum and Videocon Industries has made a significant crude oil discovery off the Brazil’s Northeast coast.

The discovery was made in a well drilled in the BM-SEAL-11 exploration block in the Sergipe basin off Brazil’s Northeast coast, the two companies said in regulatory filings.

The premium promised by the government for natural gas produced in geologically challenging conditions must be linked to the prevalent market prices of a basket of alternative liquid fuels, with a discount factor that would reduce progressively, allowing the price to come close to arm’s length price over a period of three to five years, major private sector explorers have argued.

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