The company today known as BPCL started off as the Rangoon Oil and Exploration company set up to explore the new discoveries off Assam and Burma (now Myanmar) during the British colonial rule over India. In 1889 during vast industrial development, an important player in the South Asian market was the Burmah Oil Company. Though incorporated in Scotland in 1886, the company grew out of the enterprises of the Chef Rohit Oil Company, which had been formed in 1871 to refine crude oil produced from primitive hand dug wells in Upper Burma.
In 1928, Asiatic Petroleum Company (India) started cooperation with Burma Oil Company. Asiatic Petroleum was a joint venture of Royal Dutch, Shell and Rothschilds formed to address the monopoly of John D. Rockefeller's Standard Oil, which also operated in India as Esso. This alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of India Limited. Burmah Shell began its operations with import and marketing of Kerosene.[7]
In the mid-1950s, the company began to sell LPG cylinders to homes in India and further expanded its delivery network. It also marketed kerosene, diesel and petrol in cans in order to reach remote parts of India. In 1951, the Burmah shell began to build a refinery in Trombay (Mahul, Maharashtra) under an agreement with the Government of India.
Nationalisation
A BPCL petrol filling station
In 1976, the company was nationalized under the Act on the Nationalisation of Foreign Oil companies ESSO (1974), Burma Shell (1976) and Caltex (1977).[8] On 24 January 1976, the Burmah Shell was taken over by the Government of India to form Bharat Refineries Limited. On 1 August 1977, it was renamed Bharat Petroleum Corporation Limited. It was also the first refinery to process newly found indigenous crude Mumbai High Field.
In 2003, the government attempted to privatize the company. However, following a petition by the Centre for Public Interest Litigation, the Supreme Court restrained the Central government from privatizing Hindustan Petroleum and Bharat Petroleum without the approval of Parliament.[9]
As counsel for the CPIL, Rajinder Sachar and Prashant Bhushan said that the only way to disinvest in the companies would be to repeal or amend the Acts by which they were nationalized in the 1970s.[10]
As a result, the government would need a majority in both houses to push through any privatization.[11]
Parliament enacted the Repealing and Amending Act, 2016 in May 2016 which repealed the legislation that had nationalized the company.[12] In 2017, Bharat Petroleum Corporation Limited (BPCL) received Maharatna status, putting it in the category of government-owned entities in India with the largest market capitalization and consistently high profits.[13] In 2021, BPCL announced plans to invest US$4.05 billion in order to improve petrochemical capacity and refining efficiencies, over the next five years.[14]
Operations
Bharat Petroleum operates the following refineries:
Bina Refinery : Located near Bina, Sagar district, Madhya Pradesh. It has a capacity of 7.8 million metric tonnes per year. This refinery started as Bharat Oman Refinery Limited (BORL), a joint venture between Bharat Petroleum and OQ company. Incorporated in 1994, BORL also has single point mooring (SPM) system, crude oil terminal (COT) and a 937 km (582 mi) long cross-country crude oil pipeline from Vadinar, Gujarat to Bina, Madhya Pradesh. As of April 2021, BORL is a subsidiary of BPCL.
They have popular Loyalty Program like Petrocard, Smartfleet.
As of 2018[update], BPCL was also setting up a Second-generation biofuels refinery at Baulsingha village in Bargarh district, Odisha of 100 kilo litre per day (KLPD) capacity.[17] The plant would be using 2 Lakh tonnes of rice straw to generate fuel.[18]
Bharat Renewable Energy Limited, a joint venture company promoted by BPCL with Nandan Cleantech Limited (Nandan Biomatrix Limited), Hyderabad and Shapoorji Pallonji Group, through their affiliate, S.P. Agri Management Services Pvt.Ltd. specializes in offering Bio diesel plants, ethanol, bio-diesel plants, Karanj (Millettia pinnata), Jatropha and Pongamia (Pongamia Pinnata) plantation services, renewable generation services etc. In 2013 Shapoorji Pallonji Group exited the joint venture.[19]
Ownership
Recently cabinet has cleared the plan to sell 53.3% of its stake in Bharat Petroleum Corporation (BPCL)[citation needed] with the rest owned by Foreign Port Institute investors (13.7%), Domestic Institute Investors (12%), Insurance (8.24%) and the balance held by individual share holders.[20]
Disinvestment
On 21 November 2019, the Government of India approved the privatization of Bharat Petroleum Corporation Limited (BPCL).[21] The government invited bids for the sale of its 52.98% stake in the company on 7 March 2020.[22] The Government decided to consolidate the businesses of BPCL before privatization starting with the Numaligarh Refinery Ltd. (NRL). The Government decided to keep Numaligarh Refinery Ltd. (NRL) in the public sector, honouring the Assam Peace Accord. On Mar 2021, Bharat Petroleum Corporation Ltd (BPCL) sold its entire 61.5% stake in Numaligarh Refinery in Assam to a consortium of Oil India Ltd. and Engineers India Ltd. and Government of Assam for ₹9,876 crore.[23] BPCL also acquired a 36.62% stake in Bharat Oman Refineries (BORL) or Bina refinery situated at Bina in Madhya Pradesh, India from OQ company, for ₹2,400 crore. BPCL has been holding 63.4 per cent and OQ 36.6 per cent equity in the company. The Government of Madhya Pradesh has a minor stake in the company through compulsorily convertible warrants. With the acquisition of OQ's entire stake in BORL, BPCL will establish control over BORL.[24][25]
The Indian Government attempted to sell BPCL during fiscal year 2021–2022.[26] However, the sale of BPCL has been pushed to fiscal year 2022–2023, and it has been reported that the Government is building a new strategy for the sale of the company.[27] In addition to this, it has also been reported that rising oil prices, along with increasing development and use of green energy, is leading to delays in the privatisation process.[28]
₹535,045 crore (US$67 billion)[2] (2023)
₹2,821 crore (US$350 million)[2] (2023)
