BPCL begins lube oil production to meet overseas demand

In an effort to cash in on the growing overseas demand, Bharat Petroleum Corporation Limited (BPCL) has commenced the production of lube oil in Mumbai.

Addressing a press conference, S Radhakrishnan, director (marketing), BPCL, said that the company's lube oil base stock plant would have an initial capacity of 1.80 lakh tonnes and that trial production had already started.

Elaborating further on this, Radhakrishnan said that Group II plus, the high quality lube oil, would likely to be commercialised by the end of August 2006.

"Since this is of a premium quality, we expect it to largely cater to the overseas market where there is a growing demand for lubricants," he added.

Some companies like Total, Shell and others have already shown interest in the equity participation of Group II plus and that negotiations are still on.

BPCL, which has started construction on a six-million tonne refinery at Bina in Madhya Pradesh, is looking for a partner to implement the project, which is expected to cost around Rs 5,000 crore. The work on the Bina refinery is likely to be commissioned by the end of 2009.

Commenting on the possibilities of joint ventures in this regard, Radhakrishnan said that the government had allowed BPCL to take up to 49 per cent equity stake in the project. The company would share the balance with the partner once finalised.

The process of merging Kochi Refineries Ltd (KRL) with BPCL is also on. Since both are government-run companies, certain formalities have to be gone through and the hearings by the Department of Company Affairs are on.

The company plans to continue selling KRL products under the BPCL brand although the former has sought permission to set up its own retail network.