India’s state-run oil refiner, Bharat Petroleum Corporation Ltd (BPCL), is seeking $3.8 billion in loans to expand its production capacity.
The leading oil firm is in talks with major local banks to raise funds for the ambitious expansion efforts. If banks sanction the BPCL loan, it would be the biggest loan received in the Indian rupees in the country.
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BPCL’s Expansion Plans and India’s Oil Strategy
BPCL announced plans to raise its refining capacity to 1.12 million barrels per day (bpd) until 2028. That’s a 22% increase from its current oil production output. The oil firm is in talks with the Bank of India, Punjab National Bank, and Bank of Baroda to secure the $3.8 billion in loans, reported Bloomberg.
India Aims At Major Oil Expansion Plans
Apart from BPCL, other top oil refiners like Nayara Energy and Reliance Industries have similar ambitious plans. The giants are now signing long-term deals with Russian oil firms for imports.
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Impact of US Sanctions on Russian Oil Imports
Russia is currently the biggest oil importer to India. However, the US sanctions on Russia for invading Ukraine have allowed developing countries to buy Russian oil at discounted prices.
India saved nearly $7 billion from 2022 to 2024, procuring oil at cheaper rates from Russia. It saved billions through exchange rates as the settlements were cleared in local currencies, not the US dollar.
Find out how India benefitted from the US sanctions on Russia and brought oil at discounted rates.
Saudi Arabia’s Aramco and Strategic Offshore Projects
The expansion comes as Saudi Arabia’s state-run giant Aramco launches a tender process for strategic offshore projects. The new tenders are to ensure and help the firm increase its oil production capacity at the Marjan oil and gas field.
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The engineering, procurement, construction, and installation (EPCI) deals for the Aramco tender stand between $2 billion to $3 billion.