Bharat Petroleum Corporation Ltd
NSE:BPCL
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Bharat Petroleum Corporation Ltd
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Ladies and gentlemen, good day, and welcome to Bharat Petroleum Limited Q4 FY '24 Earnings Conference Call, hosted by PhillipCapital India Private Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Nitin Tiwari from PhillipCapital India Private Limited. Thank you, and over to you, Mr. Tiwari.
Thanks, Manav. Good morning, ladies and gentlemen. First of all, apologies for the slight delay that we just faced because there was a technical issue because of which we got disconnected. So apologies for that again. And on behalf of PhillipCapital, I welcome everyone to BPCL's Fourth Quarter and FY '24 Earnings Call. We have the pleasure of having with us the senior management team of BPCL led by the CMD of BPCL, Mr. G. Krishnakumar.
Without much ado, I'll hand over the floor to the management for their opening remarks, which shall be followed by a Q&A session. Over to you, sir.
Yes. Thank you, Nitin. Good morning. On behalf of BPCL team, I welcome you all to this post Q4 results con call. Before we begin, I would like to mention that some of the statements that we would make during this con call are based on our assessment of the matter, and we believe that these statements are reasonable. However, the nature involves a number of risks and uncertainties that may lead to different results. Since this is a quarterly result review, please restrict your questions to Q4 results.
I now request our Chairman and Managing Director, Mr. G. Krishnakumar, who is leading the BPCL team for this call to make his opening remarks. Thank you, and over to you, sir.
Thank you, Rahul. Good morning, everyone. Welcome to the post Q4 FY '24 results con call. Thank you for joining us today. I hope you were able to go through our results for the quarter and the financial year gone by.
Before taking you through the BPCL results, let me touch up on the macros. Consumptions of petroleum products in India has shown a resilient growth in the year gone by with an overall growth of 4.8%. Major products such as petrol, diesel, ATF have grown by 6.4%, 4.3% and 11.8%, respectively. Brent prices for the crude oil averaged about $83 a barrel, which is about 13.6% lower than last year. The year was marked by production cuts by OPEC+, Saudi and Russia, along with the breakout of the Israel Hamas war, which drove price uncertainty.
Geopolitical tensions also caused disruptions in the Red Sea from November '23, increasing global freight rates and voyage time for shippers. Global economy is forecasted to marginally strengthen in this year, supported by economic resilience in key markets like U.S. and China. However, escalating tensions and trade road disruptions present a downside risk on the demand side of growth.
Our expectations is that global supply and demand will be relatively balanced and the prices would be range bound between $83 and $87. The factors that could impact prices is largely related to unplanned production disruptions, risk highlighted by escalating tensions in the Middle East.
If you only look at India as a country amidst the fiscal challenges faced by major economies, India continues to be an oasis of growth and stability. The FY '24 real GDP growth has been estimated about 7.6% year-on-year, driven by growth in manufacturing and construction sectors and a robust government CapEx investment.
In '25, Indian economy is likely to grow by 6.2% to 7.5% and continue to be the world's fastest-growing major economy. We expect petrol and diesel demand to grow in the near term. Growth in demand of petrol is expected to be around 5%, whereas in diesel will be about 1.5% to 2%. As far as energy transition is concerned, India struck the right balance between its energy security and climate goals, Our rapidly expanding economy will inevitably lead surge in energy demand. The current demand is about 618 million tonnes of oil, and it's expected to grow to about 2,200 million tonnes of oil equivalent by 2047. So there will be a growth in demand in BPCL score and new businesses.
India has set a goal of attaining net zero emissions by 2070. This will accelerate the adoption of green and low-carbon energy solutions, opening up significant economic opportunities for companies operating in the broader energy sector, including for BPCL. BPCL has an attractive set of opportunities across core as well as new growth areas like petchem, gas and green energy. In the previous year, we launched Project Aspire a 5-year strategic framework. Our strategy is based on 2 fundamental pillars that is nurturing the core and investing in future big bets.
We remain committed to our core business, which include refining marketing of petroleum products and the upstream. In addition, we are also focusing on big bets, which comprises petrochemicals, gas, green energy, nonfuel retail and digital. The strategy aligns with the commitment to our Scope 1 and Scope 2 net zero emissions by 2040.
We've been actively working towards implementing this strategy within the set time lines to fuel next wave of growth and enable us to create long-term value for our shareholders.
To begin with, on the refinery side, we plan to increase our capacities as we believe the fuel demand will continue to grow. Increased capacities will also cater to a diversification strategy into petchem. Accordingly, we are planning to expand our refining capacity to 45 million metric tonnes per annum by FY '29 beginning with the brownfield expansion of Bina Refinery.
On the marketing side, our marketing strategy continues to be focused on strengthening our marketing infrastructure, which includes augmenting our network of 22,000 outlets with an additional 4,000 new outlets by FY '29. We will focus on driving profitable growth across aviation, lubes, LPG and INC segments, along with premiumization across the board.
Our efforts towards premiumization will be centered around nonfuel retail, customer centricity and digital initiatives. During the year, we have relaunched our premium petrol speed with Mr. Neeraj Chopra as a brand ambassador.
We announced 2 new petrochemical projects during the last year. We are happy to share that the licenses for all petchem units have been onboarded and the preparation of process packages are in progress. In line with the government focus to increase gas share in the Indian energy portfolio from 6% to 15%, we intend to increase our gas footprint by building optimal CTT infrastructure and acquiring high opportunity geographic areas. We're also exploring on enablers like diversification of sourcing, trading capabilities, storage facilities and also looking at LNG regasification infrastructure, et cetera, to support our aspirations. We are happy to share that to be -- out of 27 GAs 25 are in operation.
As far as upstream is concerned, BPCL's share of production from its investment in Russia and its stake in Lower Zakum Concession, Abu Dhabi, and Indian blocks was 2.63 million metric tonnes of oil during FY '24. In our exploration block onshore 1 in Abu Dhabi, activities are progressing as per schedule and the block is expected to move to the development phase shortly.
The security situation in Mozambique has been improving progressively and the project is gearing up for a restart. In the Mozambique block where BPRL has 40% participating interest as nonoperational, gas sales has increased from 13,000 SCMD to 53,000 SCMD resulting in reduction of gas flaring and about 70,000 SCMD to 25,000 SCMD from about -- sorry, 70,000 SCMD to 25,000 SCMD.
Flaring in the block is expected to be put off in the coming weeks. In FY '24, we have impaired our investments in BPRL by INR 1,798 crores primarily on account of BMC-30 Concession in Brazil as the operator mode ahead with exclusive operation for the Wahoo development and the arbitral tribunal ruled in favor of the operator. We have challenged the arbitral award in the English High Court in London.
As far as green energy is concerned, we aim to build 10 gigawatts of renewable energy portfolio through organic and inorganic acquisition of operating assets by 2040. We are currently exploring various offers, and we'll shortly be able to zero in on some of them. We have strong competencies in the green hydrogen business, given our experience in handling and storing hydrogen. We also have significant own demand in our refineries for hydrogen. We will produce a 30 kilotons per annum of green hydrogen in our refineries by 2030 to meet 10% of our captive demand. We'll also engage in pilots for green hydrogen fuel mobility and other applications.
Biofuels is another major focus area for us, we'll operationalize our integrated 1G, 2G ethanol plant in the near term. We set up about 26 CBG plants in the near term. The proposal of setting up a biomethanation plant of 150 tonnes per day capacity at Kochi by converting biodegradable waste into CBG has been approved by the government of Kerala. The construction is in progress, and we are intending to commission it by January of '25. We are also planning to set up a pilot SAF project.
In the EV charging business, we plan to reach a total of about 7,000 charging stations by FY '25. As of March '24, we have added 2,445 new charging and battery shopping station, taking our total to 3,135 EV charging stations.
Overall, we plan to invest about INR 1.7 lakh crores over a period of 5 years. Of this INR 75,000 crores is earmarked for the refineries and petchem projects. We also plan to undertake strategic pipeline projects with an investment of about INR 8,000 crores, of which projects worth INR 5,000 crores have already been identified and the approval process is in place. We will invest more than INR 20,000 crores for our marketing business, as mentioned earlier. We've also earmarked investments of INR 32,000 crores for upstream production, mainly in Mozambique and Brazil, depending on positive developments on ground.
We will invest about INR 25,000 crores on gas business, another INR 10,000 crores on green energy business. All these investments will be subject to a positive business case and visibility of returns. As of March '24, we are fairly comfortable and very low on debt with a consolidated debt equity of about 0.6 as on March 31, '24.
The debt equity at stand-alone gross borrowing levels is 0.25, and at net borrowing level, excluding investment is about 0.14. We anticipate these investments not to put a strain on our balance sheet and the peak debt equity ratio at 1 on a stand-alone basis in the next 5 years, considering the current margin levels.
Now going to our performance for the recent quarter and the overall financial year, we've achieved our highest ever throughput for the refineries of 39.33 million metric tonnes per annum during the current year. Throughout for the quarter was -- throughput for the quarter was 10.36 million metric tonnes. Our distillate yield has been 84.67% in this quarter, which is one of the highest among the Indian refineries. This quarter evidenced a significant fall in international product tracks as compared to corresponding quarter. During previous year, despite this, our refineries recorded a GRM of $12.48 per barrel in the quarter and $14.14 per barrel in the financial year gone by, at a premium to Singapore GRM.
On the marketing side, our domestic market sales grew at 2.09% in the quarter to 13.18 million metric tonnes. We have continued to increase our market share in petrol and diesel retail segments among the oil companies with a share of 29.6% and 29.8% in MS and HSD, respectively.
In the retail business, we continue to generate the highest throughput for retail outlet amongst top peers, the throughput of about 154 kiloliters per month against the average PSU sales of 139 KL, driven by access to strategic markets and locations and strong network amongst highways. We've commissioned about 800 new retail outlets this year and plan to set up about 1,300 outlets in the FY '25, taking our total network to about 23,000 plus outlets.
In FY '24, LPG customer base was expanded to INR 9.35 crores. This year, the LPG business saw a 3.4% growth with a market share of 27.4% in sat LPG. Aviation business achieved a growth of 9.4% in FY '24. We also signed an MoU with Yamuna International Airport for ATF pipeline from Piyala to Jewar for upcoming Noida International Airport.
The Industrial business unit reached a market share of 23% amongst the oil companies and achieved 7.2 million metric tonnes in sales volume this year, the highest ever by this institutional business. With a strong brand positioning of MAC, the lubricant business achieved a market share of 24% amongst the oil companies. And the highest ever sales volume of 421 TMT in the financial year '24. We're also happy to share with you that we have commissioned new channel partners in Sri Lanka, put steps in African continent in Kenya, Uganda and Tanzania for our lubricants business.
In line with our focus to expand nonfuel consumer retailing and rural markets, we have started babysteps in retailing stores at our fuel stations in '22. Village-level woman entrepreneurs called Urja Devis have also been associated to these outlets and professionally trained. They've started on-field activities and are improving our fuel sales as well as serviceability of LPG, diesel, lubricants and non-cell assortment being catered from the vast BPCL network. They service gram panchayats and villages with the population between 2,000 to 5,000.
We have opened about 190-plus stores till date. To gain expertise in our own sourcing and to pick supply chain nearer to the store, we have set up our own warehouse in Lucknow during Q3. Looking at the success of our own sourcing model in Lucknow, we plan to set up such additional facilities in Madhya Pradesh, Maharashtra, Rajasthan, Andhra Pradesh and Karnataka.
In the gas business, as I mentioned earlier, we have operationalized 25 of the 27 GAs with BPCL, except the recently acquired Jammu & Kashmir and Ladakh GAs. BPCL along with oil as a consortium partner, has received the LOI for Arunachal Pradesh, making it our seventh JV in the gas business.
We're happy to share we have added 435 CNG retail outlets in FY '24, taking the total count to 2,034 stations and plan to add another 300 outlets in the year '25. We also have supply security via long-term tie-ups for about 2.89 million metric tonnes per annum, a supply agreement with Qatar Energy has also been renewed during the year for 20 years from 2028.
As far as green energy is concerned, we have currently an installed capacity of 64 megawatts of RE and a further 190 megawatts is under construction. BPCL's first green hydrogen plant of 5 megawatts electrolyzer capacity is being implemented at the Bina Refinery. A pilot green hydrogen refueling station project of 100 newton meter cube per hour capacity in mobility sector is under execution at CIAL Kochi and is expected to be commissioned by January '25 and is based on an electrolyzer indigenously developed with BARC.
We have achieved about 11.7% ethanol blending for the financial year and in line to meeting government objectives of 20% ethanol blending target. Without further ado, let me guide you through the financial highlights. We have recorded our highest ever net profit of INR 26,674 crores this financial year, a significant increase from the profit of about INR 1,870 crores in FY '23.
For Q4, the revenue from operations stood at INR 132,085 crores. The profit after tax stood at INR 4,224 crores. Against a CapEx target of INR 10,000 crores for the financial year '24, we have spent about INR 11,702 crores, we have now budgeted INR 16,400 crores for FY '25. Our stand-alone net worth as on March 31 '24 is INR 74,675 crores, the earnings per share for '24 works out to INR 125.21. We are happy to have declared a final dividend of INR 21 per share pre-bonus in addition to INR 21 per share already declared as interim dividend.
In order to reward our shareholders for their continued support, we have also proposed a bonus issuance of 1 bonus share for every existing share held subject to shareholder approval. Overall, we are complementing our high-class assets with our high operational excellence, prudent capital allocation, disciplined project execution and delivering consistent shareholder returns.
These conclude my comments, and we'll be happy to take your questions. Thank you.
[Operator Instructions] We have our first question from the line of Probal Sen from ICICI Securities.
I just had a couple of questions. Thank you for the extremely descriptive rundown of the business outlook and everything else. On the refining front sir, the performance of the Bina Refinery has been especially strong. Can we just get a broad sense of the product slate of this refinery just in terms of what is the yield of diesel, petrol, ATF, some of the major products, if you can get any color, that is my first question.
Yes. In respect of Bina, the product slate rate for MS, it is 15.5%, diesel is around 53% to 54%, ATF is around 8%.
Sir, just to try and understand, I mean, just diesel -- I mean, yield expense is responsible for the clear outperformance of this refinery versus virtually, I think, any refinery that is there in the country today. Anything you can sort of give us a flavor of why this refinery is doing so well?
Two major contributing factors for this Bina higher GRMs. One is the crude mix. If you see the majority of the crude is coming from Russian Ural side, high sulfur crude we are processing in Bina as compared to any other refineries. And secondly, the product set if you compare the HSD streams in Bina has much, much higher than compared to other refineries. And you know that diesel cracks were very good during this entire financial year. So these two has helped actually Bina generating higher ERMs.
All right. So just to get a broad sense in term of overall numbers, was the percentage of Russian crude slightly lower in this quarter versus Q3 or has it -- I believe last quarter also you've given a broad guidance that I think it was around 25% to 30% of our overall slate. Is it similar this quarter?
If we see for FY '23, '24, our imported crude is around 36 MMT. Out of 36 MMT, around 39% we have procured from the Russia. It is containing like Urals, ESPO, CPC grades. And we are expecting this year also a similar grades still available for Russia. Then for '24, '25 also Russian crude can play a significant role in total throughput.
Understood, sir. And on the marketing front, sir, on the crude prices, correct me if I'm wrong, we are not really making any significant margins from retail fuel. So what is the thought process about looking at the price or at the moment, we are comfortable with our overall margin mix? How should we look at this?
Even earlier also, we said as long as crude prices are hovering at $80 to $85 range, so we are comfortable even at this pricing as the margins may be a short period of time, the margins may be squeezed for a shorter period of time. But as long as crude is hovering around $80 to $85, we are reasonably -- we can generate the marketing margins.
Right, sir. Last question from my side, if I may. In terms of Mozambique you said that it could be -- sort of the force majeure could be lifted and the project would be restarted. Is it reasonable to assume that restart will happen sometime over the next 12 months. In FY '25, we can see a resumption of operations and -- or rather resumption of at least commissioning activity on the Mozambique asset?
We are very -- Probal, we are very hopeful that it will restart during this year. We are also very keen to see it. I'm sure it starts, but we are very hopeful this will start this year.
[Operator Instructions] We have our next question from the line of Amit Murarka from Axis Capital.
On CapEx, could you spell out the target for FY '25? And broadly, how will the CapEx pan out over the next few years, given that the target of INR 1.5 lakh crore over 5 years?
Yes. For FY '24 '25, we are estimating our CapEx outlay will be around INR 15,000 crores to INR 16,000 crores. So major amount will go -- around INR 4,200 crore will go to for refinery and petrochemicals projects. And for marketing, we are going to allocate around INR 7,000 crores for various projects, mainly including the CGDs and our existing project.
And BPRL we are planning to increase around INR 2,000 crores to INR 2,500 crores of equity during this year. So with this the total capital outlay, we are planning for '24, '25 will be around INR 15,000 crores to INR 16,000 crores.
And how will that scale up to, let's say, '26, '27?
We are expecting '27, '28, the scaling up will happen for Bina project. Maybe even for next year, also, the CapEx will be maybe around INR 16,000 crores to INR 20,000 crores range. The major CapEx spending will happen for these major projects will be in '27, '28 onwards -- the peak CapEx will happen in '27, '28 onwards.
Sure. But I'm just wondering like that's still would not add up to the INR 1.5 lakh crore number. I think what you have...
Over a period of 5 years when we are planning, you know the projects what we have announced, already major projects of petrochemicals, 2 projects we have announced for INR 49,000 crores, plus INR 5,000 crores. And the CGD in various licensing, we got around 52 CGD licensing areas where we have declared a CapEx outflow of INR 25,000 crores in the first 5 years. And over a period of the life will be around INR 45,000 crores. These 2 are the already announced projects.
And there are small refinery projects, ongoing projects and marketing side ongoing projects, and we are expecting at least 2 gigawatt of renewable around INR 10,000 crores. With all this, actually, our capital outlay will be around INR 1.7 lakh crores for a period of maybe 5 years or 5.5 years. But otherwise our capital outlay, we have worked out, it will be around INR 1.7 lakh crores.
Sure. So this is all till FY '28, right? I mean this all of this CapEx outlay.
'29. Starting from '24, '25, 5 years, FY '29.
[Operator Instructions] We have our next question from the line of Mayank Maheshwari from Morgan Stanley.
Two questions from my end. One, in terms of Kochi, can you just talk us through of the update on the chemicals project?
Sorry to interrupt, Mayank, we have the management line disconnected. Please stay connected. [Technical Difficulty] Ladies and gentlemen, we have the management back with us. Thank you for patiently waiting.
Yes. Sorry, I think I'll just repeat the questions. First was in terms of the petrochemical project at Kochi, can you just talk us of how has been the progress in terms of margin contribution this year and this quarter? And any improvement in terms of the overall profitability of that project? And the second one was more related to renewables, you're talking about 10 gigawatt target in terms of renewable capacity. Can you just walk us through of how it will lower your operating costs at the refinery level once you have this 10 gigs of capacity coming in, in terms of renewables?
Ladies and gentlemen, we have the management disconnected. We'll reconnect. Please stay connected. [Technical Difficulty] Ladies and gentlemen, we have the management back with us. Over to you, sir.
Yes. The first question related to the petrochemical plants at Kochi refinery. Previous year, the operating capacity was 60%. We have operated all the plants. This year, it was at 70%.
The total production in the previous year, it is 197.15 metric tonne TMT and currently it is 232 metric tonne TMT. There is a significant increase of product operating capacity utilization. The gross margin during this year from petrochemicals is around INR 560 crores as compared to INR 364 crores previous year.
And the second question regarding the renewable ambition. We have an ambition of around 10 gigawatt over a period of next 15 years. By 2040,, at least we want to create a 10 gigawatt of renewable capacity. It will significantly help in cost efficiency in terms of energy consumption at our refineries. Today, if you see the RE, the power generation equally, the power generation is coming around INR 2.6, INR 2.7, even including the landing, it will be around INR 5 or INR 5.20. So with this, there will be a significant savings. We are not working at this point of time. But when we create this particular portfolio of 10 gigawatt renewables, it will have a significant impact on energy savings for our refinery.
Sir, just a follow-up on that point. Can you just tell us what is your total power requirements across the BPCL overall today, across 3 refineries and everything else that you use power for?
We'll share it separately.
[Operator Instructions] We have our next question from the line of Sabri from Emkay Global.
Congratulations on good set of numbers. Just one question, regarding refining capacity, I mean Bina expansion is the only one, right? Are you planning something else also other than that?
Yes. One is we have declared about Bina expansion, and we are working towards some sort of creeping acquisition from the existing refineries where maybe respective refineries can take up additional 1, 1.5 additional capacities we can create by debottlenecking of our existing units. So that we are working on it. That is the region in the next couple of years, we want to take it out refining capacity from the existing level to 45 MMT, including Bina.
The main capacity expansion happens for Bina, in all other refineries, the capacity expansions will be maybe around 1.5 to 2 MMT range.
Okay. And this NRL 15-year deal, that is for like how much volumes, is it like even the expansion is covered in that? Or any idea on that?
We have the first right of refusal for entire volume. The commercial terms are not yet finalized, but otherwise, you have the first right of refusal for the entire volumes.
Okay. So if you have any demand from the marketing side, the NRL has to provide you first , then only you can...
We have our next question from the line of Varatharajan from Antique Stockbroking.
Just wanted to check on this Brazil things like what exactly transpired and why we are writing off at this point in time? And is there a breach of contract there? Or what was the reason behind it?
Yes. We have one investment in BMC 30, one of the block in Brazil. In fact, the FY '21, '22, it went to a dispute with the operator. So accordingly, we have filed our appeal in International Court of London. Last month, actually, unfortunately, we are not received any favorable orders. The other had gone against Bharat Petroleum. So with that background, whatever value we had in our books, we have impaired. But however, yesterday is the last date for filing an appeal before the London High Court accordingly, we have filed an appeal.
There are 2 disputes. One is on the data sharing with the operator, as they've not provided sufficient data to take any commercial call on that. Second is when they have demanded the handling charges for crude, which was significantly higher as compared to the market rates. So that is the reason we have not participated in the ballot for development, but subsequently it went to the dispute, we have declared an exclusive operation without our consent. Accordingly, we went to the arbitration. Now the case is pending before the appellate authority in the London High Court.
Okay. And this write-off of INR 1,700-odd crores out of the total investment in Brazil, how much does it constitute?
This particular block, we had an investment of $1.2 million, means roughly around INR 1,100 crores our investment side. But in the impairment, the total impairment, the major factor is BMC 30 only.
We have our next question from the line of S. Ramesh from Nirmal Bang Equities.
So if you can give us some direction in terms of how you see the stand-alone CGD ramp-up in terms of CNG stations, volumes and capitalization of assets that will give us some sense in terms of how the revenues will shape up. And when do you expect the CGD business to be visible in terms of the impact on your stand-alone top line and EBITDA?
Yes. If we see the CGD network, in fact, already, we have crossed the network, CGD fuel stations around 2,000 stations we have crossed. Even this year, also, we are planning around 450 CGD stations. So the network expansion is happening in a rapid pace.
For FY '24, '25, we are allocating a capital outlay of around INR 2,500 crores for further expansion. In terms of the market sale point of view, around 73 TMT, we have sold through CGD network. The margins are good, and we are hoping the volumes will pick up further with the help of the network expansion and the stable prices of gas prices, it will help.
So these numbers you have said, are they all in the stand-alone GAs or those also include your CNG...
Both put together, because in our network, in our network means where we have a retail outlet, where we have the CNG stations, some are within our JVs -- GAs, some are -- the geographical area licensing is with others, but whereas the marketing stations are with our retail outlets.
So if I may ask in the CGD, can you give us the numbers separately for the 25 GAs you started in terms of the number of customers -- number of...
We'll provide separately breakup.
We have our next participant from the line of Puneet from HSBC.
If you can talk about how much LNG or gas you are currently consuming and what is the peak volume consumption that you expect from your refineries?
Yes. For '23, '24, we have 2 refineries we are consuming mainly RLNG. Around 400 TMT, 420 TMT for Kochi refinery, around 300 TMT for Mumbai refinery, both put together our consumption during this year is around 733 TMT.
And once Bina comes, then what should be the number?
Bina, at this point of time, we're not configured -- the base vision is not configured for RLNG consumption. Only it's in optional flexible fuel. At that point of time after commissioning, we have to wait and see how much gas we can pump it for either fuel or sweep.
And can we consume more at 733 TMT in the existing refineries?
Existing refineries, we can go up to a little bit more compared to -- based on the pricing. For example, the naphtha prices are costlier than RLNG, then we can shift our consumption some small quantity of naphtha, we can shift to RLNG. Or sometimes RLNG is costlier then we shift, very small quantity. Beyond that, we can take more RLNG. It depends on the commercials for naphtha.
We have our next question from the line of Somaiah V from Avendus Spark.
The first question is on the Russian crude. So you said 39% of the total reports. So would it be possible to give at a refinery level Bina, Kochi and Mumbai of the total 50 million tonnes roughly that you have indicated.
Generally, we don't share individual refinery-wise breakup, but overall, total imports 39% we have consumed in FY '23, '24. So I can give you indication, Bina will be highest in terms of the percentage, Kochi will be next and the lowest percentage will be Mumbai refinery.
Okay. Got it, sir. Sir, second question, given that product cracks and crude sourcing benefit have been quite volatile. So what do we look at as a steady-state GRM when you're going for -- I mean, INR 1.8 lakh crores of CapEx in the next 4, 5 years. What are the kind of steady state GRM you think this business can give us, which can help us in cash flows?
Very difficult to say -- give any guidance for the GRM because entirely, it depends on the crack movements, international crack moments. So last 2 years was very good in terms of the refining margin side. But recently in the last couple of months that cracks have started becoming moderated. Even if you take a 10 years average crack -- it is very difficult to take a 1-year average crack or 2 years' average crack. Even a 10 years average crack even if you take our GRMs, maybe if it is in the range of $6 to $8. So whatever our CapEx outlay when we have projected at INR 1.7 lakh crore with the peak debt equity level of around INR 1 lakh crores, we are comfortable that broadly, we are looking at it.
Okay, sir. So the Bina refinery expansion when it is expected to come? And when it is coming online, the existing ops will be taking -- I mean, will it be impacted? Or is it -- how do we look at it?
It's completely a new complex -- petrochemical complex. So we are expecting FY '28, '29, the unit should be commissioned, that is what we are expecting. I don't think it will have any impact of the exiting refining. Whatever throughput of products for Bina, it will continue. Additionally, it may give around 600 TMT to 700 TMT of products -- petroleum products beyond the petrochemicals.
We have our next question from the line of Manikantha Garre from Franklin Templeton India.
Yes. Sir, I wanted to check on your opening remarks, you mentioned that you are interested in LNG infrastructure facilities also. I was wondering, are you suggesting that along with the investment which you already got in petrol and LNG, you are looking to invest in some of the terminals -- some stake acquisition there or you want to set up a terminal on your own? Is that what you're suggesting there?
See, we are looking at opportunities, and we will evaluate it and take it as it comes. Hello?
So both greenfield and equity investment is what it...
Both options, all options we are looking at seriously. And if something comes our way, we will look at it. We are open to suggestions.
Right. And what would be your total gas consumption across all businesses that you have got? I hear you giving a number for the refineries, but what would be a total gas consumption as on today?
Our total gas footprint will be around 1.5, 1.6 MMT, including the refinery consumption, CGD network, everything put together as of current levels, total footprint. And we have long-term agreements of around 2.9 MMT, we have signed already gas agreements.
We have our next question from the line of Yogesh Patil from Dolat Capital.
Sir, if you could share the crude inventory gains and the product inventory gains numbers for this quarter and whole year, that would be helpful. And the second one is, if possible, can you share the percentage of Venezuelan crude you have processed during the quarter? And which refinery can process the Venezuelan crude?
Yes. Venezuela crude, actually, we have not processed anything for our refineries. Secondly, in terms of the inventory gain losses, we have not calculated anything separately for our crude inventory gain losses in the GRM because even earlier also, we have clarified that our average inventory will be less than 30 days for crude. In fact, most of the contract is the average pricing is monthly average.
So then there won't be any significant inventory gain losses on account of inventory holding of crude. For marketing, already we have given in our standout for the full year, the marketing inventory losses are around INR 765 crores for the quarter. And for the full year, INR 707 crores for the full year losses both.
Sir, you mean to say $12.5 per barrel GRM of this quarter doesn't include the inventory gains?
There won't be any inventory gain losses. Even if there is any gain losses, there are not significant. We don't calculate separately. Once again, I'm clarifying because our average inventory is less than 30 days whereas our pricing is average -- 30 days average. So it will not have any significant inventory gain losses in the GRMs.
Okay. And the last one, sir, is this quarter in our reported GRM, we have seen a sharp fall in a premium over the Singapore GRM. So what would be the major reason? That's the one question. And for the period of FY '25, how much premium over Singapore GRM, one should build in for the projection?
So I cannot give any guidance how much we can build in the Singapore GRM or to the premium. We can clarify how the Indian refinery -- BPCL refinery GRMs are more than the Singapore GRMs, mainly 2 reasons. Our entire throughput processing, the Russian crude basket compared significantly higher. And secondly, if you see the product portfolio our diesel stream is bigger as compared to what is the basket in Singapore GRM. So these 2 are the main reasons. And future, very difficult to say how the cracks will move? How the percentage of crude and what is the commercial terms available for Russian crude? Based on that, we can work out what would be premium. Otherwise, on a standardized basis very difficult to say how our GRMs -- what premium we can work with Singapore GRMs.
But sir, in the last few quarters that premium has started falling -- that is my question. So in the recent quarter, quarter 4 FY '24....
Actually depends on the crack. If you see the diesel cracks compared to Q3, Q4 of previous year, the current cracks have significantly eroded. So you may not see that much of a premium compared to Singapore GRM to our refinery GRMs. As compared to previous years, the cracks have come down. So maybe the premiums also it will be lesser.
We have our next question from the line of Kirtan Mehta from BOB Capital Markets. Kirtan are you there? As we are unable to get to Kirtan, we'll move on to the next question. We have our next question from the line of Roshni from August Capital.
Yes. Okay. So Kochi refinery was expected to go in maintenance in September, October. So is there anything similar plan for the Mumbai refinery?
Yes, we have certain units, we are planning a shutdown in the month of July and August. But Q2, but that period maybe around -- how many days...
30 days.
But any specific section, which will be undergoing maintenance?
Yes. Kochi CDU is going, CDU 2, which is a smaller capacity trial and [ MR ] there are certain units NSGU and SGU we are planning for shutdown.
Okay. And for the Mumbai one, which you're talking about in July or August?
Yes. Mumbai only. That is what I'm saying, Mumbai.
We have our next question from the line of Nitin Gandhi from Inoquest Advisors.
Sir, with tensions in Russia easing out and other things, global condition improving. Do you expect the discount which we did in last year to comparatively be less and margins to be impacted?
Compared to last year, actually, last year, it was an oversupply of Russian crude, but now it is not in a oversupply. The demand supplies for Russian crudes, it is moderated. So we are expecting moderated discounts only, not a very aggressive discount for Russian Urals.
How is the average discount for last year?
It all depends on the consignment because generally, we procure on spot basis, you have 2 months in advance, so every cargo, every trader, cargo wise it varies. Earlier, we used to get last year, maybe around $8 to $10. Maybe now we can give a range of around $3 to $4 or $3 to $6 range.
So as compared to 39% of supply last year, are we expecting somewhere at this time around 25% to be...
As of date, we are foreseeing we'll get the Russian supplies. But the only thing most of the Russian supplies are not on a term basis, it is on spot basis. So every 2 months, M minus 2 only we can plan it. If there is no new geopolitical tensions or there are no new issues at least, we are estimating the supplies will continue at the similar levels.
So for the April till for the next 2 months average, will we be having at least 25% supply or it will be less than that?
We can assume.
We have a last question for today from the line of Vishnu Kumar from Avendus Spark.
Sir, a couple of months ago, we had a lot of articles saying that the Russian crude could not -- I mean, in the high seas, a lot of ships were docking and could not enter the Indian shores. Any particular reason why we were not able to take it? And is that problem resolved.
Yes, there will be problems, and there will be solutions. So it is not smooth, right, but we are getting the supplies. It is not that we are stopping any supplies. Maybe sometimes there may be a delay of loading and there may be a delay of unloading at transact times. But overall, if you see the supplies are continuing.
Is that was something to do with the payment-related problems or any other additional shipping-related sanctions that have come in?
Both because if we see regularly, there will be some parties that are adding into the sanction list. So it creates some problem. So it is a continuous process. It is not that the sanction list is frozen for a particular period of time. So every 3 months or 4 months, some new entities are adding into the sanction list that creates a little bit of problems.
Understood, sir. And just one final question on the heavy crude sourcing that we do outside of Russian crude. Are the other grades that we are sourcing either from Middle East or they at the premium to the normal benchmark, at least that's something we see. So material delta over benchmark, let's say, a couple of years ago to now, is that we are seeing...
As of date, Russian urals are commercially -- comparatively better than any other grade. So that is I mean our preference will be Russian grades at this point of time.
Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Nitin Tiwari for closing comments.
On behalf of PhillipCapital, I thank everyone for joining this call, and sincere apologies for frequent disconnections. Thanks again, and have a good day.
Thank you.
Thank you.
On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.