Also plans to spend Rs 13,000 crore in hydrocarbon exploration and manufacture in Mozambique and Brazil in excess of the next four years
State-run Bharat Petroleum Corporation Limited is planning to increase $2 billion through medium-term notes to economics its capex initiatives. Fitch Ratings has allocated a ‘BBB-‘ rating to the notes.
BPCL is the third-biggest refiner in the nation with an ability of 30.5 million tonnes per annum (mtpa) secretarial for 14% of refinement capacity in India. It is as well the second-biggest dealer of petroleum merchandises with a 21% market share.
BPCL has delineated a capex of over Rs 30,000 crore in excess of the subsequently four years. The major part of the capex is for the growth of the Kochi processing plant to 15.5mtpa from the present 9.5mtpa at a price of about Rs 16500 crore.
Preceding month BPCL bureaucrats told the corporation is increasing Rs 4,000 crore for the growth of its Kochi refinery as well as to finance its petrochemicals project through the State Bank of India (SBI).
Fitch Ratings told the high capex is expected to cause continued negative free cash flows in excess of the upcoming four to five years.
“With BPCL possible to produce negative free cash flows because of high capex, Fitch anticipates the corporation’s net leverage to enlarge to about five times more than the upcoming two to three years. BPCL has a contented liquidity position with cash as well as money equivalents of Rs 5000 crore at end-September 2014. The corporation also enjoys good access to global as well as domestic capital marketplaces,” it said.
BPCL also plans to spend Rs 13,000 crore in hydrocarbon exploration as well as manufacture in Mozambique and Brazil in excess of the next four years.
BPCL holds 20 upstream blocks– eight in India as well as 12 out of the country. Of these blocks, its most thriving discoveries have been in the Rovuma Basin in Mozambique, where it holds 10% contributing interest and in its Brazilian projects where it holds 20% contributing interest. It as well holds 27.8% bet in West Australian ashore projects in Perth.
The Mozambique asset is evaluates at having recoverable income of 50-70 trillioin cubic feet of natural gas, in addition to the shareholders in the venture also plan to arrangement a natural gas liquefaction plant with two trains with an original capacity of 5 million tonnes per annum all.
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