BP gets in-principle nod to sell jet fuel in India
13 Jan 2016
Europe's second-largest oil company BP has been warded 'in-principle' approval to sell aviation turbine fuel (ATF) to airlines in India.
"BP has been granted in-principle approval to market 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 said.
BP Exploration (Alpha), a wholly-owned subsidiary of BP, submitted an application for authorisation to market ATF in June 2014, saying it had invested $477 million in the country.
The petroleum ministry initially rejected BP's application on the ground that its investment did not qualify for a retailing licence, which could be granted provided after it meets the eligibility criteria.
The ministry, had said only $171 million of the claimed investment was capital expenditure, while the rest was operating expenditure. For a licence to retail auto fuels petrol, diesel and ATF, a company should have invested a minimum of Rs2,000 crore in exploration or production, refining, pipeline or terminals leading to additionality to the existing assets or creation of new assets in the eligible activities.
The company subsequently was able to satisfy the ministry of its investments to win the in-principle nod. BP had in its application stated that out of the $477 million, $259 million was capital investment.
Besides, it plans $2.3 billion investment in exploring and producting oil and gas from eastern offshore. Its $7.2 billion spending in buying 30 per cent stake in 21 exploration blocks of Reliance Industries is not being considered as capital investment.
"Air BP [BP's aviation division] aims to build a strong, sustainable and material business in India, drawing upon our global expertise combined with the skills of a strong local partner," the spokesperson said.
Air BP is one of the world's largest suppliers of aviation fuel products and services. It has a network of operations at over 700 locations in around 50 countries and sells over seven billion gallons of aviation fuel a year. India is currently the ninth largest aviation market in the world.