Livemint: BPCL sets sights on becoming an integrated global energy firm

Not many outside the energy sector know Ashok Sinha. At most, people know him as a former chairman and managing director (CMD) of India’s second biggest oil marketing and refining company—Bharat Petroleum Corp. Ltd (BPCL). What is less known is that the decisions taken during his tenure between fiscals 2005 and 2010 are slowly transforming BPCL into an integrated energy firm and putting it on track to take on its larger rival Indian Oil Corp. Ltd (IOCL).

An integrated oil and gas firm is one which has a substantial presence across the value chain of its business. The exploration and production (E&P) businesses are termed as upstream operations, transportation forms the midstream segment, while refining, marketing and petrochemicals are categorized as downstream operations.

IOCL is India’s largest state-owned oil and gas refiner and marketer with a revenue of Rs.4,73,210 crore in fiscal 2014. BPCL and HPCL follow with revenues of Rs.2,60,060 crore and Rs.2,23,271 crore, respectively. In terms of growth rates and stock performance, though, BPCL has already overtaken the others.

In the last five years, while IOCL revenue grew at a compounded annual growth rate (CAGR) of 15.92%, BPCL grew 16.39% and HPCL, with the lowest base, 17.34%. In terms of five-year CAGR of net profit, BPCL trumped all with a growth of 19.09%, while both IOCL and HPCL have posted a negative CAGR of 2% and 6%, respectively. MORE