New Delhi: Bharat Petroleum Corporation Limited’s (BPCL) Mumbai refinery will be India’s first refinery to become a ‘quartile one’ refinery next year, according to Solomon Associates’ benchmarking study, Director (Refineries) Sanjay Khanna told Energy Watch during an interview on the sidelines of India Energy Week (IEW) 2025. As Mumbai refinery becomes a quartile one refinery, the other two refineries of BPCL in Bina (Madhya Pradesh) and Kochi (Kerala) will enter quartile two.
The assessment is done by Solomon Associates, which undertake the benchmarking study for refineries across the globe. For nearly 40 years, Solomon’s Comparative Performance Analysis (CPA) benchmarking methodology has earned the reputation as the gold standard in the energy industry and it evaluates refineries on four parameters: Operational Availability (OA), Energy Intensity Index (EII), Maintenance Cost Efficiency Index (MEI), and Return on Investment (ROI). The first quartile includes the best oil refineries of the world.
BPCL, which plans to become net zero by 2040, is focussed on improving the energy efficiency of its refineries, expanding its Renewable Energy (RE) portfolio, scaling up compressed biogas projects, setting up ethanol and green hydrogen projects to attain the goal, said Khanna while discussing the details of the company’s decarbonisation plan with PSU Watch. With a new refinery-cum-petrochemical project on the anvil in Andhra Pradesh, BPCL is keen to seek a partner, said the senior official.
Here are excerpts from the interview:
We are at the third edition of India Energy Week. What are the trends that you see emerging in the sector this time?
If I look at this particular edition, it is becoming amply clear that India’s growth story is here to stay and so is the demand for energy. Today, there is space for every form of energy. In the time to come, the ratio of the various forms will change, but in order to ensure growth, to sustain the overall energy spectrum, every form of energy will be existing and there is ample scope for all the energy forms. This is one. Second is that, knowing the environmental impact, it is very, very important that every energy producer act with much more responsibility, ensuring that along with meeting the need for energy, they are taking care of the environment through a decarbonisation plan. So, these are the two trends that emerge very, very clearly in this particular India Energy Week.
We have heard the minister (Minister for Petroleum and Natural Gas Hardeep Singh Puri) talk about the importance of diversifying supply chains. So, at BPCL, how are you navigating this area?
As far as BPCL is concerned, the diversification was there right from the beginning. With three refineries, the size is much bigger than what it was earlier. So, I can command a better deal in crude transaction. It allows me much more flexibility in terms of crude procurement. That is one. Second is that on the gas side as well, we are expanding our portfolio and we are present across countries. So, when it comes to diversification, we are looking for new geographies.
How many countries is BPCL currently importing oil from?
At any point of time, we take crude oil from anything between 12-to-16 countries. Depending on the duration of the year, the product recipe is different. During the non-monsoon period, it will be different from the monsoon period. But if you ask me, in three refineries, I will be having anything between 12-to-16 types of crude.
And could you name some of these countries where we are getting oil from?
Saudi, Kuwait, Abu Dhabi, then US… these are the few key countries.
What about the term deal that, media reports claimed, OMCs were negotiating with Russia? Any update on that front?
Yes, it happens all the time. The term deal happens with all suppliers. Given a choice, I would like to do the term deal. But again, at the end of the day, it depends upon several factors. We know that Russia was under sanction, and, with time, the sanctions have become more expansive. So, those challenges were there.
But it does not make a very big difference. Our typical term number (quantity of oil procured through term deals) is something like 50 percent, plus-minus 2 percent. So, 48-to-52 percent of our crude is procured through term deals. So far, Russia has been one of the key suppliers in our spot procurement.
What percentage of your supplies have been coming from Russia?
Our typical procurement was in the range of 33 percent, plus minus 2 percent. So, 31-to-35 percent.
How much discounts have you been getting on Russian oil?
Earlier, the discounts were quite attractive. But slowly, since the last year, the discounts have started sliding down. It came down to something like USD 4-5 per barrel. And off late, it has been in the range of USD 2.5-3 per barrel.
Have there been any disruptions in supply?
No. Once having committed, there was no disruption. Wherever there was a scope for disruption, we had not ventured into those areas.
Have you had discussions with companies for securing crude oil supplies for BPCL’s upcoming Andhra refinery?
Our Andhra refinery is still shaping up. Right now, we have not even taken the final investment decision. It will take one year’s time to take the final investment decision. Till that time, nothing will happen.
And would you be seeking a partner for your Andhra refinery?
Definitely, if some agreement happens between two parties, it is always welcome. It is a good move as it would signify that they are also seeing the future in the refinery. So, if somebody comes onboard on reasonable terms, then why not?
Have there been any discussions in this regard here at IEW?
See, what happens when people meet on such forums, they ask us, we ask them, but can it be termed official? No. So, there is nothing official as of now.
BPCL plans to go net zero by 2040. Refineries are the place where a lot of these emissions will have to be reduced. So, what is the road map?
We have scheduled our net zero journey to be completed by 2040 for scope 1 and 2 emissions put together. The major action has to happen in the refinery. So, in that direction, the very first action is to improve the energy efficiency of our refineries. Energy efficiency improvement has begun and we are working constantly in that direction. It has got scope of around 10 percent decarbonisation. This journey would take about five years and will include all the three refineries. It is currently underway.
Secondly, we are developing our renewable portfolio, which was around 20 MW some two years back. Next year, we are expecting it to touch 600 MW-plus. We have tied up with Sembcorp for expanding our green energy portfolio. For biofuels, we have Praj and GPS… they are helping us in scaling up our compressed biogas projects.
Apart from that, at Bargarh in Odisha, we are setting up 1G and 2G ethanol plants with a capacity of 100 kilo litres per day.
What is the feedstock that the ethanol plant will be using?
The feedstock for 2G will be rice straw and 1G will be bagasse.
As far as Green Hydrogen is concerned, in BPCL’s Bina refinery, we are setting up a 5 MW electrolyser which is expected to be commissioned in the next quarter. We have also just floated a tender for 5 KTPA green hydrogen and the unit is likely to get functional by the next year-end. In Kochi city, we are setting up an indigenous electrolyser, which has been jointly developed by BPCL and BARC (Bhabha Atomic Research Centre) that is likely to get commissioned for production of green hydrogen for vehicles which will be plying in the city of Kochi.
When you say that the efficiency of refineries will be optimised, what do you mean? How do you measure the refinery efficiency?
For that purpose, every second year, we do a Solomon benchmarking study. The good refineries are supposed to be quartile one. This means that the energy consumed by quartile-one refineries will be lower. Such refineries are compared in the benchmark of their own type, their own size and complexity of refinery. I am very happy to share that our Mumbai refinery will be the first refinery in India which is likely to become quartile one next year. And Bina and Kochi refineries are also likely to enter quartile two. This means that they will be becoming more efficient compared to the last benchmark study. This assessment is done by Solomon Associates. They do worldwide benchmarking for all refineries.
