The company is likely to invest Rs 600-1,000 crore in the project
State-owned oil retail and marketing major BPCL is planning to enter power generation through joint ventures. The company is likely to invest Rs 600-1,000 crore for this.
The decision to make a beginning in the power sector came after an internal exercise of identifying growth segments, said S Radhakrishnan, chairman and managing director, BPCL.
BPCL said it could look to generate around 500 megawatts (Mw) by 2015-16. The company, however, has not yet firmed up its plans, and has not yet decided the fuel that will power its plants in the future.
The petroleum refining and marketing company plans to invest Rs 7,500 crore over the next four years in exploration and production. Of this, around Rs 3,000 crore will be spent on ongoing exploration programmes; Rs 3,500 crore on further exploration and another Rs 1,000 crore for new projects and new energy areas like shale gas.
While the company plans to generate Rs 3,000 crore through internal accruals, it will raise Rs 4,500 crore from the market.
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Radhakrishnan said the company was looking at nuclear and gas-based power generation capacity. “Gas is one of the preferred fuels but we could look at nuclear too.” Indian Oil Corporation, BPCL’s big brother in refining and marketing, has already tied up with Nuclear Power Corporation of India for foraying into the nuclear energy sector.
While IndianOil is also looking at solar power generation, Radhakrishnan ruled out entering this segment saying it would not be economical for the company. Naphtha and furnace oil are among the fuels that can be used for power generation and are sold by BPCL. But, the chairman said they were not economical options to generate power.
Though BPCL is opting for a joint venture to enter the segment, it does have the experience of running captive power units at its refineries in Bina, Mumbai and Kochi that generate around 200 Mw.