BPCL to invest in exploration, overseas blocks

By Hiral Vora

MUMBAI (Reuters) - State-run Bharat Petroleum Corp (BPCL) plans to spend up to 15 billion rupees ($370 million) on exploration over two to three years and is scouting overseas for development or producing fields, its chairman said on Tuesday.

India's third-largest refiner sees exploration and production as growth drivers and is looking for assets in West Africa, Brazil, South America and Australia, chairman Ashok Sinha told Reuters in an interview.

BPCL, which has stakes in 14 oil and gas blocks in India and abroad, has set up a wholly owned subsidiary, Bharat PetroResources, for its drive into exploration.

"The real constraint is non-availability of gas and therefore exploration for sources of gas ... and that's where the thrust area on exploration came in," Sinha said.

"We are going to be in partnership with ONGC, Oil India and Gujarat State Petroleum Corp (GSPC) as consortium partners, and own anything between 10 to 30 percent," he said.

Sinha said BPCL was also interested in buying a stake in GSPC's city gas distribution arm, GSPC Gas, which has operations in Gujarat.

"We have been talking to them. It's basically because we are in Ahmedabad and are looking at consolidating operations," he said.

Sinha said BPCL would pay 3 to 4 billion rupees for a preferential placement of a 2.5 percent stake in Oil India Ltd that is being made in tandem with Oil India's public offering.

Sinha also said BPCL would raise $300 million from local banks instead of through planned foreign loans after authorities last month placed restrictions on foreign borrowings by domestic firms.