Hindustan Petroleum Corporation Ltd will invest Rs 500 crore (Rs 5,000 million) over the next 2-3 years in oil exploration and plans to continue with its retail venture by setting up 750 petrol stations this fiscal.

"We have earmarked an investment of Rs 500 crore in acquisition of oil fields through our subsidiary Prize Petroleum," HPCL chairman and managing director M B Lal told reporters in New Delhi.

Prize Petroleum, in which HPCL holds 50 per cent stake, has already acquired an oil block in Cambay basin in the fourth round of bidding under the New Exploration Licensing Policy. It has also been awarded contract by ONGC to put on production three oil fields in Gujarat on service fee basis.

"We will be investing Rs 30 crore (Rs 300 million) in putting to production the three ONGC fields while we continue to scout for opportunities at home and abroad," he said.

Prize Petroleum had previously unsuccessfully bid for properties in Oman and United Kingdom.

Lal said HPCL will set up 750 more petrol pumps in 2004-05 to take the total number of pumps to about 6,000.

On refinery margins, he said the difference between the cost of raw material and price realised on final product was over $7 per barrel in the last quarter of 2003-04. The average gross refinery margins were over $4 a barrel in 2003-04 as against $2.5 a barrel the previous year.

He said HPCL profits have jumped by over 50 per cent in the first nine months of 2003-04 fiscal and sales rose 2.9 per cent to 19 million tonnes.