Bharat Petroleum Corporation

Last modified by Asif Farooqui on 2021/03/22 17:46

Company History

Bharat Petroleum Corporation Limited (NSE:BPCL) a 'Maharatna' Public Sector Unit of Government of India and a Fortune 500 company with upstream, midstream and downstream presence in the oil & gas sector.

Incorporated in Scotland in 1886, the Burma Oil Company became an important player in the South Asian market that grew out of an enterprise named Rangoon Oil Company (formed in 1871) to refine crude oil produced from primitive hand dug wells in Upper Burma independently.¹

The search for oil and gas in India began in 1886, when Mr. Goodenough of McKillop Stewart Company successfully drilled a well near Jaypore, Upper Assam, striking oil.

In 1928, Asiatic Petroleum (India) joined hands with the Burmah Oil Company, an active producer, refiner and distributor of petroleum products, particularly in Indian and Burmese markets to form the Burmah-Shell Oil Storage and Distributing Company of India Limited.

Burmah Shell began its operations with the import and marketing of Kerosene and soon proved itself to be a pioneer in more ways than one. The company imported oil products in bulk and transported them in 4-gallon and 1-gallon tins all over India.

With the advent of motor cars, came canned Petrol to be subsequently followed by fuel service stations. In the 1930s, retail sale points were built with driveways set away from the road. As more such service stations began to appear, they soon became an accepted part of road infrastructure and development.

Post war, Burmah Shell established efficient and up-to-date fuel service and filling stations to give its customers the highest possible standard of service facilities.

On 15th December 1951, the Burmah Shell Group signed an agreement with the Government of India to build a modern refinery at Trombay, Bombay. Soon after, on 3rd November 1952, Burmah Shell Refineries Limited was incorporated as a private limited company under the Indian Companies Act and began working on the marshlands of Trombay.

With relentless hours of work and effort put in by both man and machine, the swamps gave way to towers, tanks of steel and miles of pipeline. Soon, the refinery spread over 454 acres of land at Mahul, went on-stream on 30th January 1955, one year ahead of schedule.

Dr. S. Radakrishnan, the then Vice President of India, declared the 2.2 MMTPA (Million Metric Tonnes Per Annum) Refinery open on 17th March 1955, making it the largest refinery in India then.

Business overview

On 24th January 1976, the Burmah Shell Group of Companies was taken over by the Government of India to form Bharat Refineries Limited, which was later renamed as Bharat Petroleum Corporation Limited. Today, Bharat Petroleum operates several oil refineries in India.

Refineries

Kochi Refinery

he BPCL Kochi Refinery, embarked on its journey in 1966 with a capacity of 50,000 barrels per day. Formerly known as Cochin Refineries Limited, the refinery was originally established as a joint venture in collaboration with Phillips Petroleum Corporation, USA. It was later renamed as Kochi Refineries Limited, and today, it is a frontline entity as a unit of the Fortune 500 Oil and Gas Maharatna Bharat Petroleum Corporation Limited with a capacity of 3,10,000 barrels per day.²

Kochi Refinery is located at Ambalamugal, near Kochi in Kerala, and is one of the two Refineries of BPCL, presently having a crude oil refining capacity of 15.5 Million Metric Tonnes per Annum (MMTPA). The product portfolio of the Kochi Refinery today includes petrochemical feedstocks and specialty products in addition to its range of quality fuels.

The products of this fuel based refinery include Liquefied Petroleum Gas, Naphtha, Motor Spirit, Kerosene, Aviation Turbine Fuel, High Speed Diesel and Asphalt. Specialty products for the domestic markets include Benzene, Toluene, Food Grade Hexane, Propylene, Special Boiling Point Spirit, Mineral Turpentine Oil, Sulphur, Petcoke and Hydrogen.

With the prestigious Crude Oil receipt facilities consisting of Single Point Mooring (SPM) and associated shore tank farm in place since December 2007, the Kochi refinery is equipped to receive crude oil in Very Large Crude Carriers (VLCCs). This facility helps the refinery in reducing the freight charges to a great extent, over and above increasing flexibility in crude oil selection. This, thereby, is a major infrastructure facility to accelerate the future growth.

The refinery has facilities to evacuate products to the consuming centres through road, rail andships through pipelines. All the major industries in the area are connected to the refinery for product receipt. The BPCL installation at Irumpanam is connected to the refinery via pipelines and is the major product distribution centre of the refinery. A 300 km long pipeline connects the refinery to various consumption points in Tamil Nadu such as Coimbatore and Karur.

Post the Integrated Refinery Expansion Project, the refining capacity of KR has been augmented to 15.5 MMTPA with facilities for Euro-IV/VI compliant auto-fuels to meet the growing demand of petroleum products in the Indian market. This would also upgrade the refinery residue stream to value added distillates and create synergy for future diversification into value added petrochemical products. For niche Petrochemical products, a Propylene Derivative Petrochemical Project is well into its commissioning stage at Kochi Refinery.

Mumbai Refinery

BPCL plans to diversify into petrochemicals on a long term basis as it aims to provide an attractive higher value addition alternative over transportation fuels. The company is planning a CAPEX of Rs 13,000 crores on its Mumbai refinery.³

Numaligarh Refinery

Numaligarh Refinery Limited (NRL), which was set up at Numaligarh in the district of Golaghat (Assam) in accordance with the provisions made in the historic Assam Accord signed on 15th August 1985, has been conceived as a vehicle for speedy industrial and economic development of the region.⁴

The 3 MMTPA Numaligarh Refinery Limited was dedicated to the nation by the erstwhile Hon'ble Prime Minister Shri A. B. Vajpayee on 9th July, 1999. NRL has been able to display creditable performance since commencement of commercial production in October, 2000. With its concern, commitment and contribution to socio-economic development of the state combined with a track record of continuous growth, NRL has been conferred the status of Mini Ratna PSU.

Bina Refinery

With significant co-operation from the Government of Madhya Pradesh, BORL set up a six million tonnes per annum (6.0 MMTPA) grassroots petroleum refinery at Bina, M. P. in the serene surroundings of Bundelkhand. Dedicated to the nation in May 2011 by then Hon’ble Prime Minister of India, the refinery produced environmentally compliant fuels of BS-IV grade.⁵

Since commissioning, the Company has achieved significant milestones and has recently implemented the debottlenecking project to enhance capacity from 6.0 to 7.8 MMTPA with capability to produce 100% BS-VI specifications fuel.

Fuels & Services

Bharat Petroleum, offers world-class Fuel Stations (Petrol Pump) across the country, selling Petrol, Diesel, Automotive LPG and CNG. The company's products and services are designed to meet the needs of its diverse customers, which has led it to create specialized Fuel Station formats, such as Pure for Sure, Pure for Sure Platinum, Ghar, Highway Star and many more.⁶

BPCL has a wide network of 15,402 world class Fuel Stations, which continues to grow, across the country, which you can count on. With 13,648 fully automated Fuel Stations, the company offer wide range of products and services – from Petrol & Diesel fuel to Speed and Speed 97 (which are premium petrol with better driving experience and higher octane numbers) to convenience stores, like In & Out, Restaurants and ATMs.

The company's specialized formats across geographies such as Pure for Sure, Pure for Sure Platinum, Ghar, Highway Star etc., ensure that the company meet the diverse needs of its customers with best quality and quantity of fuels, products and services.

The Bharat Petroleum assurance comes with the promise of being “Pure for Sure”. Simply put, this means that you can expect impeccable service and convenience at your nearest fuel station, which you can locate by downloading SmartDrive - the smartphone app for smart buyer.

Bharatgas

Bharatgascomes from the house of Bharat Petroleum, a Fortune 500 company and a major player in refining and marketing of petroleum products in India. Bharatgasfuels over 42 million homes and has brought many innovative products and customer centric offerings to the customers.⁷

MAK Lubricants

MAK Lubricants – from Bharat Petroleum (BPCL) is an established, trusted brand in Lubricants and Greases in India and International Markets, offering 300+ grades across various segments. MAK Lubricants pioneered to introduce its formulations from superior quality Group II+ Base oils (MAKBase) since 2006-07 and continues to deliver technically advanced Lubricants ensuring best of performance under extreme conditions.⁸

MAK R&D Centre, Mumbai, a state-of-art facility with international and national accreditations to its credit, is all geared up to face the challenge as Indian markets adapt to BS VI norms.

In the year 2018, MAK Lubricants launched their new packaging range, focused on customers needs. Attributes like convenience of pouring, reassuring genuineness, premiumness in terms of material and build quality were the highlights of the design. The innovative design won the coveted SIES SOP STAR AWARDS 2018 under the category of excellence in packaging with emphasis on “Innovation, Creativity, Developments and New Concepts”.

MAK Lubricants is a leading player in 4T (2 wheeler) segment, approved by major manufacturers like TVS , Hero and Honda. MAK is also a Genuine Oil supplier for TATA trucks and cars. Automotive manufacturing industries like TVS, Hero, Eicher Motors, Atlas Copco, Elgi, Godrej, Kirloskar, Endurance, TATA group, Munjal Showa, Showa India, and many more instill trust in MAK Lubricants for over a decade now.

Aviation

Bharat Petroleum Corporation Limited (BPCL) is pioneer in providing aviation fuel services in India. BPCL is in this business for over 75 years and had the privilege of fueling India’s first flight in 1911 in its earlier Avatar.⁹

The company provide high quality product and fueling services across 50+ airports in India, daily. BPCL’s Aviation Team having domain expertise with rich experience provides efficient and safe Into-plane services to domestic and international airlines. That’s why, BPCL is the preferred supplier for airlines in India.The company's stress on safety, quality and timely services stands testimony to the fact that more than 45% of the international volumes in India is fueled by it.

BPCL is proud to be associated with the defence services in India. The company operate and maintain Aviation facilities at multiple locations across the country catering to defence aircrafts.

BPCL is the only oil company in India to have an equity stake in the 1st Greenfield Airport at Cochin International Airport Limited where the company own and operate state of the art Hydrant refueling system. BPCL is also the first company to introduce electronic database and XML invoicing for its customers.

In addition to providing aviation services at the airports, the company also render fueling services at remote locations, away from airports, to refuel the aircrafts/helicopters of VVIPs or in rescue efforts during natural calamities such as floods, earthquakes, etc.

The company provide -

International Quality ATF and Jet fuel
Into-Plane services benchmarked to International standards
State of the Art Fuel Farm management

Gas

he Bharat Petroleum Natural Gas Company was an early mover into the gas business, co-promoted Petronet LNG Ltd, along with IOC, ONGC and GAIL. The equity structure consists of 12.5% each by the promoters, 10% by Gaz de France, and 5.2 % by ADB and the balance by public.¹⁰

PLL along with off takers, has finalised and signed long-term sale purchase agreement with Ras Gas for the supply of 7.5 MMTPA of LNG over a period of 25 years to Dahej Terminal. Recently agreements were also finalised with Exxon Mobil Australia for the supply of around 1.44 MMTPA LNG commencing in 2014-15, to be supplied over a period of 20 years to Kochi Terminal.

Out of the 7.5 MMTPA to be imported at the Dahej terminal, BPCL has marketing rights for 10% of the quantity whereas GAIL and IOC have the marketing rights for 60% and 30% respectively. BPCL’s marketing share at the currently under construction Kochi terminal is 40%.

In addition to being a co-promoter of PLL, BPCL has also been a first mover in the CGD business by co-promoting Indraprastha Gas Ltd (IGL), a Joint Venture with GAIL, by setting up a gas distribution network in NCR. BPCL thereafter also co-promoted three more CGD networks by forming JVCs viz. Sabarmati Gas Ltd (SGL) in Gujarat with GSPC, Maharashtra Natural Gas Ltd (MNGL) and Central UP Gas Ltd (CUGL) with GAIL.

BPCL is currently marketing its share of RLNG from Dahej to various customers across the country and supplying RLNG to Mumbai and Kochi Refineries for their own consumption. BPC has developed a vast customer base of gas customers in the country and is currently handling a volume of around 1.5 MMTPA.

Bharat Petroleum along with consortium has been authorized by PNGRB for laying, building and operating cross country pipelines across central India namely Mallavaram-Bhilwara pipeline and Mehsana-Bhatinda-Jammu pipelines.

Bharat Petroleum along with the consortium has also participated in the bidding process initiated by PNGRB for laying, building and operating CGD networks in new geographical areas and for cross country pipelines, forming various consortiums.

In the year 2010, Bharat Petroleum has commenced marketing of LNG by Tank Trucks in collaboration with Inox India Ltd and have commissioned the first pilot project at General Motors, Halol in Gujarat. Many more customers who were not having access to gas pipelines were added thereafter.

After partnering in the major cross country gas pipelines, BPCL Natural Gas SBU has taken another major step to strengthen the infrastructural requirements for meeting natural gas demands of the country, by booking regasification capacity of 1 MMTPA at Petronet LNG terminal at Dahej.

Bharat Petroleum also pioneered LNG bunkering in India, supplying LNG as bunker fuel from Petronet LNG Terminal at Kochi in the year 2015.

Industrial Fuel Products

Bharat Petroleum manufactures and supplies various industrial fuel products to its customers across the country. Listed below are the common fuels used in India for Industrial purposes:¹¹

Gases including Poly Propylene Feedstock
Fuelsincluding Naphtha, Diesel, Kerosene, White Oil, Black Oil and Furnace Oil
Bitumen, an oil based substance used for road construction, surfacing airfield runways and taxi tracks
Solvent and Special Productssuch as Toluene, Benzene, Hexane, Special Boiling Point Spirits and Mineral Turpentine
Industrial Lubricantscomprising a range of industrial oil lubricants and greases
Sulphur given its improved specifications of MS and HSD

Pipelines

BPCL took its baby steps in the field of Cross Country Pipelines by setting out to lay a hydrocarbon artery connecting the supply-heart of Mumbai with Manmad, a major hinterland terminal. Since commissioning of BPCL first petroleum product pipeline i.e. Mumbai-Manmad Pipeline in the year 1998, BPCL has successfully commissioned many more product pipelines, thereby widening its pipelines network to 2229 km over the last two decades.

Indian Petroleum Sector

The fastest growing major economy in the world, India is also one of the largest consumers of energy. During the year 2018, India’s primary energy demand grew by approx. 4%, outpacing the global demand growth. More than one third of the primary energy consumption comes from oil and gas. The petroleum products consumption in the country grew by around 2.6% in the year 2018-19 as against around 5.9% in the previous year, while the natural gas consumption grew by around 2.7% as against around 6.2% in the previous year. Petroleum products consumption grew at a faster pace in the first few months, due to the lower base effect and increase in economic activity, though it moderated thereafter, as economic growth slowed.¹²

During the year 2018-19, the country produced around 34.2 MMT of crude oil as against 35.7 MMT in the previous year, 4% lower, mainly due to declining production from matured fields, under-performance and operational issues in some fields. While the import volumes grew by 2.8% to around 226.6 MMT in the year 2018-19 from 220.4 MMT in the previous year, the average price of the Indian crude basket increased by around 23% to USD 70 per barrel in the year 2018-19, as against the average of USD 57 per barrel in the previous year. The consumption of petroleum products was at around 211.6 MMT in the year 2018-19 against 206.2 MMT in the year 2017-18. Diesel constituted 39% while Petrol constituted 13%, followed by LPG at 12% of the total consumption of petroleum products in 2018-19. The consumption of Diesel has increased by 3%, Petrol by 8% and LPG by 7% during 2018-19, as compared to the previous year.

Financial overview

During 2018-19, the aggregate refinery throughput of BPCL’s Refineries at Mumbai and Kochi, along with its Subsidiary Company Numaligarh Refinery Limited (NRL) and considering 50% throughput of Joint Venture Company (JVC), Bharat Oman Refineries Limited (BORL) was 36.76 Million Metric Tonnes (MMT) as compared to 34.72 MMT during 2017-18. The BPCL Group ended the year with Market Sales of 43.30 MMT as compared to 41.38 MMT during 2017-18. During the year, the BPCL Group exported 1.99 MMT of petroleum product as against 2.02 MMT during 2017-18.

During the year 2018-19, the refinery throughput at BPCL’s Refineries at Mumbai and Kochi was 31.01 MMT as against 28.54 MMT achieved in 2017-18. The Market sales of the Corporation grew by 4.51% to 43.07 MMT in 2018-19 from 41.21 MMT in 2017-18.

BPCL’s Gross Revenue from operations for 2018-19 stood at ` 3,37,622.53 crores reflecting an increase of 21.77% over the previous year’s revenues of ` 2,77,270.54 crores. The profit before tax for the year was ` 10,439.62 crores as compared to ` 11,285.97 crores in 2017-18. After providing for Tax, (including deferred tax) of ` 3,307.60 crores, as against ` 3,309.67 crores during the last year, the Profit after Tax for the year stood at ` 7,132.02 crores as against ` 7,976.30 crores in 2017-18. Internal Generation during the year was lower at ` 7,449.44 crores as against ` 8,758.63 crores in 2017-18, mainly due to lower Profit after Tax.

Refineries

During the year 2018-19, the operational performance of the refineries has shown an increasing growth profile over the past year. The refinery throughput at BPCL’s Refineries at Mumbai and Kochi was 31.01 MMT as against 28.54 MMT achieved in the previous year. BPCL achieved a Gross Refining Margin (GRM) for the year 2018-19 at USD 4.58 per barrel (` 7,319 crores), as compared to USD 6.85 per barrel (` 9,356 crores) realized in 2017-18.

Marketing

During the year 2018-19, BPCL’s market sales volume was 43.07 MMT as compared to 41.21 MMT in the previous year, registering a growth of 4.51%. BPCL’s market share amongst the public sector oil companies was 23.83% as at 31st March 2019, as compared to 23.75% at the end of the previous year, an increase of 0.08%.

Retail

Petroleum retailing in India is continuing to witness a change. PSUs’ market share marginally fell from 92.1% last year to 91.1% in year 2018-19, mainly due to network expansion by private players. During this period, while country’s Retail Petroleum Sector grew by 3.7%, the PSU’s Retail growth was 2.6%, indicating a marginal shift to private players. The Retail business of BPCL in the year 2018-19, registered a total market sale of 27.30 MMT, with a growth of 2.6%, in line with PSUs’ growth of 2.6%. MS volumes grew at 6.4% to 7.4 MMT and HSD volumes grew at 1.4% to 18.93 MMT. In the alternate fuels segment, BPCL recorded a growth of 15.8% on the sale of CNG, while Auto LPG registered a negative growth of 6.7%. SKO also registered a de-growth of 13.3%.

Industrial and commercial

In year 2018-19, the SBU recorded an overall sales of 5.75 MMT and registered an unparalleled growth of 10.5% to become the industry growth leader, following the trend of the previous year. The SBU also increased its market share amongst PSUs to 15.6%, a significant jump of 0.6% to become the only PSU to have improved its market share in the current financial year.

Gas

The Gas SBU handled 1,797 TMT of Gas in the year 2018-19. The market sales grew to 1,078 TMT from 1,036 TMT in FY 17-18, a growth of 4.05%. Out of 1,797 TMT, 276 TMT of Gas was supplied to Mumbai Refinery and 443 TMT was supplied to Kochi Refinery to meet their internal requirements. The remaining 1,078 TMT of Gas was supplied to various customers in Fertilizer, Power, CGD, Steel and other industries across the country and BPCL exceeded the 1 MMT sales mark for the second year in a row.

Lubricants

The Lubricants business of BPCL has registered a healthy growth of 12.5% in the Institutional channel, 5.9% in the export channel, 4.2% in the OEM channel and 4.0% in the Bazaar channel during 2018-19 over the previous year. The retail channel turned around its performance with a growth of 1.53%.

LPG

The LPG SBU registered sale of 6.49 MMT and for the third consecutive year clocked the highest growth of 8.4% amongst Oil PSUs in 2018-19, gaining market share consecutively for 3 years. This year, BPCL was the only Oil PSU to gain market share, achieving a growth of 0.3% over the previous year. In LPG, BPCL’s market share stands at 26.55%. The LPG SBU added 826 Distributors this year, breaking past records and taking the total distributor network to 5,907. Newly added distributors contributed adding 1.2 crore new LPG consumers, taking the total domestic customer base to 7.83 crores. To support the expanding customer base, second cylinder facility was extended to 14.4 lakh customers, leading the ‘Double Bottle Connection’ coverage to 3.4 crore customers, which is 39% of the total consumer base.

Aviation

The Aviation SBU has recorded the highest ever sales of 1,989.68 TMT, a growth of 11.1% over last year against the Industry growth of 9.9%. The Aviation SBU was able to retain most of its major customers. In the domestic segment, the Aviation SBU recorded a growth of 24% mainly due to higher uplifts by Indigo. This is despite the challenging situation faced by the SBU, as OMCs were focussing on refinery evacuation due to surplus ATF leading to heavy discounts.

Recent developments

BPCL Consolidated December 2020 Net Sales at Rs 66,074.93 crore, down 11.85% Y-o-Y ¹³

January 9, 2021; Reported Consolidated quarterly numbers for Bharat Petroleum Corporation are:
Net Sales at Rs 66,074.93 crore in December 2020 down 11.85% from Rs. 74,959.18 crore in December 2019.
Quarterly Net Profit at Rs. 1,565.23 crore in December 2020 down 11.89% from Rs. 1,776.35 crore in December 2019.
EBITDA stands at Rs. 6,188.83 crore in December 2020 up 68.77% from Rs. 3,666.94 crore in December 2019.
BPCL EPS has decreased to Rs. 7.96 in December 2020 from Rs. 9.03 in December 2019.