MOSCOW (MRC) -- Indian energy group Bharat Petroleum Corp. is looking at buying more stakes in oil and gas assets that are already producing to speed up investment returns, the managing director of the company's exploration business told Reuters.
The state-run refiner had previously focused mainly on exploration assets overseas, where it has invested just over USD1.5 B.
The company is also looking at fields that are already producing. In March, it bought a stake in Russian oilfields that are in production via its upstream subsidiary Bharat Petro Resources Ltd.
"That is why we looked at Russia," BPRL's managing director D. Rajkumar told Reuters in the sidelines of a news conference on Wednesday.
"That will ensure we have a balanced portfolio of assets from exploration, development to producing. So with all this, we will be in a self-sustaining place soon."
Pressure on oil companies to get a quick return on their investment has increased because of lower oil prices which have also hit the industry's capital spending plans.
Bharat Petroleum was the first Indian state refiner to venture into the upstream oil business when it bought minority stakes in Brazilian blocks in 2007.
In 2008, Bharat Petroleum invested in a gas block in Mozambique but the production has now been delayed to 2020-21 after liquefied natural gas (LNG) prices slumped.
The purchase of the Russian assets gives Bharat Petroleum a potential for immediate revenues and bridges the gap till 2021-22 when Mozambique gas production starts, Rajkumar said.
The company's chairman S. Varadarajan said it would also continue to look for exploration opportunities.
"There is a strategy to look at different markets and projects which are at different phases (of exploration and production) and that is why we did the Russian acquisition," Varadarajan said.
BPCL plans to invest USD2.25 B to USD3.00 B over the next five years in developing existing blocks, the company has said.
As MRC informed before, BPCL plans to invest Rs. 4,800 crore in the propylene derivative petrochemical project in Kochi, which was earlier planned as a joint venture. BPCL identified six technology partners for the project. Cost of the integrated refinery expansion and petrochemical project is Rs. 25,000 crore and is the single largest investment in Kerala. Propylene for the project will be sourced from the expanded refinery. The capacity of the refinery is being raised from 9.5 mln tpa to 15.5 mln tons.
Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas company headquartered in Mumbai, India. Bharat Petroleum owns refineries at Mumbai, Maharashtra and Kochi, Kerala (Kochi Refineries) with a capacity of 12 and 9.5 million metric tonnes per year.
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