BPCL plans to list Bina refinery JV in FY18

State-run Bharat Petroleum Corporation Ltd (BPCL) plans an initial public offering (IPO) for its Bina refinery joint venture (JV) company in the next financial year, top company official said.

The company also plans to start full operations of its expanded Kochi refinery project in the fourth quarter of the current financial year.

“We are looking for a public issue for Bina somewhere next year. Bina reported profits last year and in the first quarter,” said S Vardarajan, chairman and managing director, BPCL on Wednesday.

Bharat Oman Refineries Ltd (BORL) is a JV company of Bharat Petroleum Corporation Ltd (BPCL) and Oman Oil Company (OOC).

BORL owns and operates the six-million-tonne capacity Bina refinery.

On the equity structure for the planned public offer for the Bina JV, a top BPCL official said, OVS intends to remain invested in the project and will not exit through the public offer. The company also plans to expand Bina’s current 6-mt capacity to 7.8 mt in the first phase. “OOC has shown reluctance to fund the expansion. We have our internal approvals for putting the full funding as far as this part of the funding is concerned,” Vardarajan said.

In the second phase of expansion, BPCL looks to increase the capacity to 15 mt. For both phases, it plans to invest Rs 18,000 crore.

Overall, BPCL plans to invest Rs 1 lakh crore over the next five years. Of the plan capex, about Rs 50,000 to Rs 55,000 crore is to be spent on its refining capacity alone.

The planned expansion at its Kochi refinery, the companysaid, will be complete and operational by the March quarter of the current financial year. The company is expanding its refining capacity at the Kochi Refinery fromthe existing 9.5 MMTPA to 15.5 MMTPA for an investment of Rs16,000 crore. BPCL is also in the process to revise the capitalexpenditure planned for its Mozambique block to factor in the change in productand service costs.

“The capex is being revised as service costs have come down,would be pre-mature to put a range,” Vardarajan said. The company in the nextfive years plans to spend around Rs 20,000 crore in its upstream projectsincluding the Mozambique block.

“A final decision on the planned investment inthe Mozambique block will be taken early next year,” Vardarajan said. BPCLholds a 10% stake in the Mozambique block through its subsidiary BharatPetroResources Limited (BPRL).