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Bharat Petroleum Corporation Ltd would be reviewing its investment plans following Rs 431 crore (Rs 4.31 billion) losses during April-June 2005.
The company, known for its aggressive presence in petroleum retailing, has decided to go slow on Rs 350 crore (Rs 3.5 billion) investment lined up in the current quarter besides controlling its capital expenditure.
"All investment have to be relooked and some of them will be put on hold," said Ashok Sinha, chairman and managing director, BPCL, to Business Standard.
The company recorded the first ever quarterly loss against a net profit of Rs 147.3 crore (Rs 1.47 billion) during the same period last year on account of Rs 2,100 crore (Rs 21 billion) under-recoveries in sale of petroleum products. It recorded a cash loss of Rs 400 crore (Rs 4 billion) in July.
The company had drawn plans for Rs 1,600 crore (Rs 16 billion) capital expenditure besides Rs 600 crore (Rs 6 billion) investment in the retail sector during the current year. Of the Rs 600 crore, Rs 350 crore was to be invested immediately.
Sinha said while the company's board would need to review fresh investments such as construction of new tankage and pipelines, it could not stop ongoing projects such as the lube oil base stock work, which was around 70 per cent complete.
On the proposed Bina refinery in Madhya Pradesh, he said banks and financial institutions were undertaking project appraisal and once it was complete, BPCL would be finalising partners who would be offered 50 per cent equity.
The 6 million tonne refinery would require an investment of Rs 8,500 crore (Rs 85 billion) besides another Rs 2,000 crore (Rs 20 billion) towards setting up of a 943 km pipeline.
The initial authorised equity for the refinery initially planned to be set up under the banner of Bharat Oman Company would be Rs 150 crore (Rs 1.5 billion).
On the impact of recent flooding of BPCL refinery at Mumbai, he said that operations have become normal. "The refinery was never shut down. There was some water logging so the distillation unit was closed for some time."
He dispelled reports that the refinery would remain closed for a few weeks.
Crude supply from Mumbai High after July 27 fire was continuing though it was substantially reduced. BPCL's Mumbai refinery processed 10 million tonne crude, of which 50 per cent was from Mumbai High and the remaining was being imported.
Crude impact
