Bharat Petroleum Corporation Ltd. will invest $3.4 billion, or Rs 27,200 crore, in two of its major overseas oil and gas blocks in Brazil and Mozambique.
“The Brazil oil and gas block has achieved project commerciality. We have to submit the field development plan by Nov. 2,” said Arun Kumar Singh, chairman of BPCL in a post annual general meeting call with reporters. “The union cabinet has already approved our share of the $1.6 billion investment for Brazil. The investments will be made over three to four years and we are on course as per the plan,” he said.
The state-run oil and gas company will invest an additional $1.8 billion in the next three to four years in the Mozambique block, Singh said.
“We do not see any problem in managing the debt,” the chairman said. “We have an annual internal cash generation of Rs 8,000 to Rs 10,000 crore after dividend pay outs.”
That would mean an accrual of Rs 50,000 crore over the investment period of four-to-five years, he said. “The overall planned capex for the same period is around Rs 1,40,000 crore.”
The chairman is confident of keeping the company’s debt-to-equity ratio in the 0.65 to 1 range. “The debt-to-equity ratio has risen from 0.65 due to higher commodity prices, but we expect that to drop to same level by next year,” Singh said.
Green Energy Expansion
Despite the chairman’s firm belief in India’s continued need for fossil fuels, particularly petroleum products, he outlined the company’s plans to grow in the green and clean energy space by investing in renewable and green hydrogen.
BPCL plans to increase its renewable energy capacity to 1 GW by 2025 with a target to reach 10 GW by 2040. “The company will invest Rs 5,000 crore to reach 1GW by 2025,” Singh said. “Future costs are still being worked out.”
The oil refiner is also setting up a 20 MW hydrogen electrolyser plant at the Bina refinery, and is working on an indigenous electrolyser technology which will bring down the hydrogen generation cost by 40%.
The company has earmarked capex of Rs 10,000 crore for the current fiscal year and Rs 1.5 lakh crore for the next five years.
