BP counters ministry stand on jet fuel licence

ROUGH WEATHER Global energy giant writes to petroleum ministry justifying its eligibility to market transportation fuels

NEW DELHI: Global energy giant, BP Plc, which invested $7.2 billion in purchasing a 30% share in 21 oil and gas blocks in India and subsequently invested another $500 million (approx ` 3,015 crore) in the country’s energy sector, has strongly countered the petroleum ministry’s stand that it does not qualify for a license to market transportation fuels.

BP had recently applied for a license to market transportation fuels in India, starting with jet fuel or aviation turbine fuel (ATF) but the petroleum ministry rejected its application stating that the company does not fullfill conditions laid out for retailing transportation fuels.

A senior petroleum ministry official confirmed that BP has written to the government justifying its eligibility for a license to market transportation fuels.

The official disclosed that BP has contested that through its investments, BP has become one of the partners in the 21 blocks contract to which the government of India is also signatory.

“BP has further stated that its proposal to buy an 30% participating interest in 21 blocks was approved by Cabinet Committee on Economic Affairs (CCEA),” he said.

When contacted a BP’s spokesperson refused to comment on the company’s move to counter petroleum ministry’s stand over refusing it a license to market ATF. “BP has had positive discussions with the ministry regarding our application for obtaining license for ATF (aviation turbine fuel or jet kero) marketing in India. We are confident we meet the requirements and are working closely with the authorities to complete documentation,” a company spokesperson said.

Under the government guidelines, any company keen on retailing transportation fuels in India must own refineries and must have invested or proposed an investment of ` 2,000 crore in the country’s energy sector.

However, petroleum ministry officials say the investment by BP’s subsidiary was done in 21 oil and gas blocks owned by Reliance Industries Ltd (RIL) and the investment was not made directly in India’s energy sector.

“BP has stated that its investment was directly into the relevant assets themselves and not in the equity of Reliance Industries Ltd, therefore the investment was a direct, and not an indirect investment,” the petroleum ministry official said.