Annual Report 2008-2009 - Bharat Petroleum

. Imports
Crude Oil
The crude oil prices reached their historical highs during the year when West Texas Intermediate (WTI)
reached a record level of 147.27 USD/bbl on 11th July, 08. However, thereafter crude oil prices started
reducing drastically month after month due to the global economic meltdown and stabilized at around
45 USD/bbl during the last quarter.
The average price of Dated Brent crude oil increased marginally by 2% during the year from
82.3 USD/bbl in 2007/08 to 83.9 USD/bbl in 2008/09. The sweet/sour (Dated Brent/Dubai) difference
also reduced substantially from 4.9 in 2007/08 to 2.1 USD/bbl in 2008/09 mainly on account of the
economic slowdown, especially in the US, resulting in lower demand for LS crude oil and OPEC cuts
on HS crude oil.
Actual crude Imports for our Mumbai & Kochi refineries during the year were as under :
2008-09 2007-08
Crude imports MMT 12.7 14.5
Value USD Billion 8.0 8.4
Avg. FOB Price USD/bbl 85.3 79.2
The ratio of ‘Term to Spot’ purchase of imported crude was 85:15, implying security of volume
tie up.
Product Imports
During the year, BPCL imported 1057 TMT of HSD, 254 TMT of SKO and 195 TMT of LPG to meet the
shortfall in supply from domestic sources.
c. Hedging
During the year the price of crude and products continued to be highly volatile. Hedging of refinery
margins continued to be an area of focus to manage the volatility affecting the refining margins. During
the course of the year, hedging volumes for refinery margins were around 11.6 million barrels as against
12.6 million barrels during 2007-08. All the deals were executed on the e-tender platform developed
in-house to reduce the response time.
Besides refinery margin exposures, hedging activity was expanded to cover exposures arising out of
Platinum required for Kochi reformer catalyst. 2000 Troy ounce of the precious metal was hedged for
protecting the cost involved. In addition, fixed price deals to end consumers of I&C were provided for
about 72 TMT Naphtha supplies.
ii) The details of foreign exchange earnings & outgo are given below :
Rs. Crores
2008-09 2007-08
Earnings in Foreign Exchange 6,567.42 7,440.16
– includes receipt of Rs. 1,249.85 crores (previous year
Rs. 1,527.03 crores) in Indian currency out of the repatriable
funds of foreign airline customers and Rs. 8.44 crores (previous
year Rs. 9.75 crores) of INR exports to Nepal and Bhutan.
– Includes Rs. 353.78 crores (previous year Rs. 704.27 crores)
on CFR basis.
Foreign Exchange Outgo 45,261.07 34,560.75
– on account of purchase of Raw Materials, Capital Goods,
Chemicals, Catalysts, Spare Parts, International Trading
Activities.
38 Bharat Petroleum Corporation Limited