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BP gets approval to sell jet fuel in India

DELHI

After nearly two years of hectic negotiations, Europe’s second largest oil company United BP (formerly British Petroleum)  has won an ‘in-principle’ approval from India’s Petroleum Ministry to sell aviation turbine fuel (ATF) to airlines in India. BP will also have to obtain environment, safety and airport clearance before beginning sales.

    • BP plc: formerly British Petroleum
    • Stock price: BP (NYSE)$28.76
    • CEO: Bob Dudley
    • Headquarters: London, United Kingdom
    • Founded: 1909, London, United Kingdom
    • Subsidiaries: Castrol, Aral AG, ARCO, BP Solar, BP Shipping
    • Revenue in 2014: USD 358.7 bn
    • Profit in 2014: USD 4 bn
    • One one of the world’s seven “supermajor” oil and gas companies

“BP has been granted ‘in-principle’ approval to market aviation turbine fuel (ATF) in India. We see a great future for aviation in India and are excited to be involved in this market and contribute to its future development and success,” a company spokesperson told PTI.

BP Exploration (Alpha), a wholly-owned subsidiary of BP, had on June 11, 2014 submitted an application for authorisation to market ATF in India. It had then claimed to have invested USD 477 million in the country.

For getting a licence to retail auto fuels petrol, diesel and ATF in India, a company should have invested a minimum of Rs. 2,000 crore in exploration, production, refining, pipeline or terminals leading to addition to existing assets or creation new ones.

The Oil Ministry had initially rejected BP’s application for retails saying that only USD 171 million of the claimed investment were capital expenditure and the rest were of an operating expenditure nature. The company was subsequently able to convince the ministry otherwise.

BP said in its application that $259 million out if the total $477 mn investments were of a capital nature. It added that it planned to invest an additional $2.3 billion in exploring and producing oil and gas from India’s eastern offshore. The government also did not consider the $7.2 billion BP spent in buying a 30% stake in Reliance’s 21 exploration blocks for the purposes of capital investment.

Air BP, BP’s aviation division, has a network of operations at over 700 locations in 50 countries and sells over seven billion gallons of aviation fuel a year. India is currently the ninth largest aviation market in the world consuming roughly 5.9 million tonnes per annum. The same is expected to grow with the growth in the Indian economy.

Musafir Namah Bureau

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