BPCL bets big on India’s energy transition with ₹1.7 lakh crore investment plan

Bharat Petroleum Corporation Ltd (BPCL), India’s second-largest oil marketing company and sixth-largest company by turnover, is undertaking a massive expansion to meet India's future energy security and sustainability goals, with an investment of over ₹1,70,000 crore.

The goal is to increase refining and upstream capacity, foray big into petrochemicals and renewables, expand natural gas capacity, besides investments in digitalisation and natural gas network by 2027. Project Aspire, launched in 2021, hinges on “nurturing the core” with “future big bets” with a focus on five key areas: diversifying the energy basket, investing in future fuels, expanding infrastructure, and embedding digital transformation, said sources.

Refinery expansion

BPCL currently operates 35.3 metric million tonnes per annum (MMTPA) of refining capacity across its three refineries in Mumbai, Kochi, and Bina in Madhya Pradesh. The Bina expansion project is ongoing, increasing capacity from 7.8 to 11 MMTPA, and the project execution is within timelines. The Mumbai and Kochi refineries have a long-term potential for further capacity expansion, which will help BPCL reach 45 MMTPA capacity in the future. A 9 MMTPA greenfield refinery will come up near Ramayapatnam in Andhra Pradesh, and the investment will be about ₹90,000 crore. The board has cleared pre-project activities. Feasibility studies are underway where about 6,000 acres have been allocated by the state government.

BPCL, which posted net sales of ₹4,40,272 crore in FY25, achieved the highest gross refining margin (GRM) among PSUs at $6.82 per barrel, distillate yield of 84.33%, and capacity utilisation of 115% in the past financial year. Domestic sale volumes also increased from 42.51 MMT in FY22 to 52.4 MMT in FY25.

In upstream, BPCL, through its subsidiary Bharat Petro Resources, has investments across six countries: Russia, Brazil, Mozambique, the UAE, Indonesia, and India. The company hopes that once Mozambique and Brazil's oil and gas fields start production, it will be able to monetise investments and reduce India's import bills.

Petrochemicals

Currently, BPCL has a 0.84 MMTPA capacity in petrochemicals following the Propylene Derivative Petrochemical Project (PDPP) that was set up in Kochi in 2021. It makes acrylic acid and oxo alcohols, which were earlier fully imported. An upcoming 400 KTPA polypropylene plant worth ₹5,000 crore in Kochi targets to meet demands from customers in the industrial, packaging, and automotive sectors. BPCL is also setting up a ₹49,000-crore integrated ethylene cracker and petrochemical complex at Bina. The foundation stone was laid in September 2023, and the project is currently under construction. It is expected to be commissioned in FY28. Once that takes off, BPCL's petrochemical capacity will increase to 3.2 MMT. The target is to make petrochemicals contribute 8% of BPCL’s overall revenue by FY29.

Foray into renewables

BPCL is rolling out multi-energy stations offering CNG, LNG, EV charging, and battery swapping. After setting a target of 7,000, BPCL has set up over 6,500 outlets with EV charging stations, the highest among OMCs. In city gas distribution, BPCL and its partners have 52 geographical areas (26 directly and 26 via JVs). Strategic acquisitions of geographical areas with strong industrial growth include cities such as Ahmednagar, Aurangabad, and Rohtak. About 2,370 CNG outlet networks have been created as of FY25. To ensure supply security, 2.89 MMTPA has been contracted through long-term and 0.5 MMTPA through medium-term agreements. BPCL is also investing heavily to set up 10 gigawatt (GW) of green energy capacity by 2035, from wind and solar projects. It has commissioned a 5-MW green hydrogen plant at Bina, the first of its kind commercial-scale project in the country. A green hydrogen refueling station is also being set up near the Kochi airport.