Bharat Petroleum Corporation Ltd is strengthening ties with upstream oil major Oil and Natural Gas Corporation in order to have a presence all along the energy chain.
BPCL has decided to buy Mangalore Refinery and Petrochemicals Ltd's products for sale through its network. ONGC recently acquired a 72 per cent stake in MRPL.
This takes the relationship between BPCL and ONGC to a new high, after the former announced a foray into exploration and production. It also offered equity in its Bina refinery in Madhya Pradesh to ONGC.
BPCL is in talks to market over 1 million tonnes of petroleum products like petrol, diesel, liquefied petroleum gas, kerosene and aviation turbine fuel from MRPL's refinery.
"We are discussing with MRPL the marketing of mainline products to feed our market in Karnataka," a BPCL executive said. "We are looking at a long-term relationship through a product purchase agreement and not through a 'crude-for-product' deal.
Since we are deficit in products, BPCL can bridge the gap by marketing MRPL's products," he added. At present, BPCL buys these products from Hindustan Petroleum and Indian Oil Corporation to meet its demand.
The relationship between ONGC and BPCL is expected to strengthen further with the latter expected to pick stakes in the former's proven oil exploration blocks. "We are also considering picking up equity in existing blocks where ONGC has bid under the second and third rounds of the new exploration licensing policy," the BPCL executive said.
Recently, BPCL roped in ONGC as a partner for exploration blocks under the fourth round of bidding for oil exploration blocks.
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