IB-SANDEEP KUMAR RAINA- 02_IB_Week3_s3-4_Application Assignment

Bharat Petroleum Corporation Ltd. set up as Bharat Refineries on 24 Jan 1976

from Burma Shell Co.
Oil Companies are Govt. Of India Enterprises and Function under the directive of
Ministry of Petroleum & Natural Gas (MOP&NG).
Till 2003 BPCL focused only on downstream (Marketing) and not upstream
(Exploration & Production) Upstream sector for India was mainly looked after by
ONGC Videsh Ltd. During the NDA rule it was decided to diversify Oil Marketing
Companies (OMC) to upstream sector. This initiated a new path of
Internationalization of BPCL. The brief History of the same is explained as below:

2003:
Bharat Petroleum which was a downstream company, added its portfolio of going
to upstream Sector in 2003 with mainly two aims:
1. Securing Crude Supply
2. Hedging of Price Fluctuations
3. Become a vertically integrated company
4. Strengthening the Profitability
2006
As a wholly owned subsidiary of BPCL, Bharat Petro resource Limited was
incorporated in October 2006 with a profile of carrying out Exploration and
Production and looking into future investment opportunities globally. Its mission
was as below:
1. Developing core competence in Exploration & Production of Oil & Gas with
a Focus on Production
IB-SANDEEP KUMAR RAINA- 02_IB_Week3_s3-4_Application Assignment
2. To maximize investor wealth and stake holder expectation
3. To Create a Pool of Knowledgeable and inspired employees
Company set an investment plan of Rs 3000 Crore over 5 years. Investment
focus was on early exploration stage than more expensive end stage
development. This kept open option of exit and sell off if need be.

2007
NELP VI (5 blocks) (2007): Got 5 Blocks under New Exploration and Licensing
Policy of Govt of India.
2008

Brazil & Mozambique Acquisition

BPRL spent Rs. 330 Crore to buy 10% stake in Oil-Block in Mozambique. It
created a subsidiary venture called Mozambique BV and bought stake from US
Based Anadarko Petroleum Corporation in accordance with regulatory approvals
from Mozambique.
Mozambique is a small country with 12million population without civil unrest etc.

2009
Indonesia Entry
When Anadarko wished to farm out some of the participating interest in
Indonesia - Nunukan BPRL again grabbed the opportunity to have 12.5%
participating interest.

2010
Shale Gas Entry Australia EP-413. Perth Basin . An Investment of Rs. 13mn
Australian Dollars. However Environmentatlists are still opposing Shale Gas
activities.

2011
BPRL becomes Joint Operator in Oil BLocks
 IB-SANDEEP KUMAR RAINA- 02_IB_Week3_s3-4_Application Assignment

2012
BPRL becomes Lead Operator

2013
Schedule B Reserve Certification
2014
BPRL has 20 Discoveries and Appraisal Success

2015
BPRL has 22 Discoveries

Successful discoveries in Upstream to help BPCL achieve higher level of Vertical

Integration
 IB-SANDEEP KUMAR RAINA- 02_IB_Week3_s3-4_Application Assignment

Partnership with established Oil & Gas operators expected to generate

optimal returns for BPCL
IB-SANDEEP KUMAR RAINA- 02_IB_Week3_s3-4_Application Assignment
Source: www.bharatpetroleum.com

Status as on Date:
BPRL is currently holding PI (participating Interest ) in over 26 exploration blocks.
As of date there is no production. Company is not focusing on Capex intensive
Exploration & Production, but focussing on monetization of discoveries in Brazil,
Mosambique and Indonesia.

Monetization of Assess is the main strategy of the company to start revenue

generation.