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We met BPCL at the Deutsche Bank Namaste India conference. The key
takeaways from the meeting were:
** Upstream business: i) Mozambique (Area 1 in Rovuma Basin): BPCL
estimates 2P recoverable gas reserve of 15-30 tcf in the block. BPCL expects
its share of exploration capex in Mozambique at US$100m each in
FY13 and FY14 - 5 exploration and 3 appraisal wells in FY13 and 4 exploration
and appraisal wells each in FY14. BPCL holds 10% stake in the block.
ii) Brazil (Block BM-C-30): BPCL estimates its share of exploration capex
in the block at US$170m in FY13 (5 exploration wells and 3 appraisal wells)
and US$60m in FY14 (2 exploration wells and 1 appraisal well). BPCL holds
12.5% stake in the block.
** Bina refinery (BPCL 49% stake): Capacity utilization at the 6mmtpa Bina
refinery is currently at 80% and is expected to reach 100% in the next few
months. All the secondary units have also been commissioned, and the final
capex for the project is INR122bn (US$2.4bn).
** Kochi refinery expansion: BPCL plans to expand the Kochi refinery from
9.5mmtpa to 15.5mmtpa and also upgrade it from a Nelson Complexity of
6 to 9.1. The estimated capex for the project is INR120bn (US$2.4bn) and
it is expected to be commissioned in FY17. The company also plans to set
up a niche specialty chemicals production facility in Kochi with an estimated
capex of INR60bn (US$1.2bn).
** Capex: BPCL estimates capex spend of INR35-40bn (US$700-800m) in
FY13, with cINR18bn (US$360m) being spent on upstream business and
the rest on refining and marketing infrastructure. The total capex spend on
upstream business over the next five years is expected at INR100bn (US
$2bn).
** Debt: Gross debt currently stands at INR220bn (US$4.4bn), down from
INR250bn (US$5bn) in Dec 2011, after the receipt of Government compensation
for 1HFY12 subsidy losses in Jan/Feb 2012.
We rate BPCL a Hold as high oil prices without an increase in regulated
product prices are likely to lead to higher losses from sales of subsidized
petroleum fuels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We met BPCL at the Deutsche Bank Namaste India conference. The key
takeaways from the meeting were:
** Upstream business: i) Mozambique (Area 1 in Rovuma Basin): BPCL
estimates 2P recoverable gas reserve of 15-30 tcf in the block. BPCL expects
its share of exploration capex in Mozambique at US$100m each in
FY13 and FY14 - 5 exploration and 3 appraisal wells in FY13 and 4 exploration
and appraisal wells each in FY14. BPCL holds 10% stake in the block.
ii) Brazil (Block BM-C-30): BPCL estimates its share of exploration capex
in the block at US$170m in FY13 (5 exploration wells and 3 appraisal wells)
and US$60m in FY14 (2 exploration wells and 1 appraisal well). BPCL holds
12.5% stake in the block.
** Bina refinery (BPCL 49% stake): Capacity utilization at the 6mmtpa Bina
refinery is currently at 80% and is expected to reach 100% in the next few
months. All the secondary units have also been commissioned, and the final
capex for the project is INR122bn (US$2.4bn).
** Kochi refinery expansion: BPCL plans to expand the Kochi refinery from
9.5mmtpa to 15.5mmtpa and also upgrade it from a Nelson Complexity of
6 to 9.1. The estimated capex for the project is INR120bn (US$2.4bn) and
it is expected to be commissioned in FY17. The company also plans to set
up a niche specialty chemicals production facility in Kochi with an estimated
capex of INR60bn (US$1.2bn).
** Capex: BPCL estimates capex spend of INR35-40bn (US$700-800m) in
FY13, with cINR18bn (US$360m) being spent on upstream business and
the rest on refining and marketing infrastructure. The total capex spend on
upstream business over the next five years is expected at INR100bn (US
$2bn).
** Debt: Gross debt currently stands at INR220bn (US$4.4bn), down from
INR250bn (US$5bn) in Dec 2011, after the receipt of Government compensation
for 1HFY12 subsidy losses in Jan/Feb 2012.
We rate BPCL a Hold as high oil prices without an increase in regulated
product prices are likely to lead to higher losses from sales of subsidized
petroleum fuels.
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