Bharat Petroleum Corporation Ltd will spend Rs 7,500 crore (Rs 75 billion) in the 10th Five-Year Plan period (2002-07) in expanding refinery capacity, putting up new petrol stations and oil exploration.

"We plan to invest Rs 1200 crore (Rs 12 billion) to increase our retail presence through new outlets while venturing into oil exploration and production business, for which Rs 1500 crore (Rs 15 billion) is budgeted over the next five years," S Behuria, chairman and managing director, BPCL told a news conference in New Delhi on Tuesday evening.

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The company is investing Rs 1,830 crore (Rs 18.30 billion) in expanding its Mumbai refinery capacity to 12 million tonnes from the current 9 million tonnes by October 2004.

BPCL, which currently has a market share of 22 per cent, will add another 700 petrol stations this year to its existing 5,014 outlets.

Behuria said the company plans to extent the Mumbai-Manmad-Indore product pipeline to Delhi in the north, where it has 4 million tonnes of product deficit annually.

On the E&P initiative, he said the firm plans to bid for oil and gas blocks on offer in the fourth round of new exploration licensing policy and was in talks with Oil and Natural Gas Corporation for joint bidding.

"We are also looking at farm-in opportunities and plan to bid for acquiring Tata Petrodyne's minority stake in Gujarat offshore blocks," he added.

Behuria said BPCL will lose Rs 100 crore (Rs 1 billion) every month if prices of domestic cooking gas and kerosene were not revised immediately.

"We lost Rs 477 crore (Rs 4.77 billion) in the first three months of 2003-04 fiscal on under recoveries in LPG and kerosene prices," he said, while stating that the government subsidy on the two products was much below the cost.

This year, the finance ministry has reduced the subsidy on LPG and kerosene to two-thirds of the amount allowed in 2002-03. The subsidy of Rs 67.75 per cylinder on LPG and Rs 2.45 a litre on kerosene in 2002-03 was not enough to cover the cost and IOC, BPCL, HPCL and IBP together lost Rs 5,430 crore (Rs 54.30 billion).

For the current year, the subsidy on LPG has been cut to Rs 45.17 a cylinder and that on kerosene to Rs 1.63 a litre.

"The current level of subsidies were Rs 80 per cylinder below the cost," he said, adding the oil companies would have been in dire straits if the marketing margins had not come for their rescue.

Behuria said the Mumbai refinery expansion would enable it to produce Euro-III emission norm complaint transport fuels -- petrol and diesel.

Behuria said the combined refinery throughput at BPCL's refinery at Mumbai and its subsidiary Kochi and Numaligarh refineries increased from 17.87 million tonnes to 18.17 million tonnes in 2002-03. Group market sales increased from 19.90 million tonnes in 2001-02 to 20.53 million tonnes.

In addition, the group also exported 0.69 million tonnes of products, he said.

"Over the last five years, BPCL has increased its market share from 21.5 per cent to 22 per cent," he said.

On the merger of Kochi Refineries Ltd with BPCL, Behuria said, "We desire that, but it is not being actively pursued. There are many approval which need to be taken...we are open to it but are not pushing for it."

He ruled out the merger before the proposed public offering of government share in BPCL. "The government plans to offload 25 per cent of its share through American depository receipts and 10 per cent in the domestic capital market. That process is on and I do not see KRL merger before the entire process is over."

BPCL was working with the financial and legal consultants for preparing its accounts as per US GAAP for the overseas listing, he said.

Behuria also ruled out offloading a portion of its equity in Numaligarh Refinery Ltd to Oil India Ltd. "We do not intent to reduce our holding in NRL," he added.