News Release Details
Govt asks BPCL to ink ventures for ethanol investments
New Delhi 14-Aug-2007
The Government has asked Mumbai-based public sector enterprise Bharat Petroleum Corporation Ltd (BPCL) to ink joint ventures with other state-owned oil marketing companies for ethanol investments in Brazil. "The project is financially attractive with an internal rate of return of 18.9 per cent in conservative scenario with an net asset value of $198 million (Rs 812 crore) and a payback period of seven years," a report prepared by consultants Jai group has said. The strategy recommended investments in greenfields and acquisition, which deliver most attractive financial pay-offs. According to the report, the production of ethanol for blending would be feasible as long as the international crude prices remain above $45 a barrel. However, it has been made clear to the public sector enterprise that investments should not emphasise export of ethanol from Brazil. "The oil industry should prospect in ethanol acreages in Brazil like oil and gas, but it should look at it with a view to importing ethanol into India, as the government may not permit import of ethanol for ethanol blending programme in the immediate future, keeping in view the interest of farmers," the report pointed out. The sugar industry is also not in favour of importing ethanol. In such a scenario, investments could be made for sale of ethanol in Brazil and exported to third-world countries. China and Japan have already made investments in Brazil. Taking into account the risks involved in making such investments, it was suggested that the status of land laws should be checked. The national policy on biofuels has projected the blending targets of 5 per cent by 2012,10 percent by 2017 and above 10 per cent beyond 2017. The policy also recommends minimum support prices for bio-fuel crops like Jatropha and other non-edible oil seeds.
New Delhi 14-Aug-2007
The Government has asked Mumbai-based public sector enterprise Bharat Petroleum Corporation Ltd (BPCL) to ink joint ventures with other state-owned oil marketing companies for ethanol investments in Brazil. "The project is financially attractive with an internal rate of return of 18.9 per cent in conservative scenario with an net asset value of $198 million (Rs 812 crore) and a payback period of seven years," a report prepared by consultants Jai group has said. The strategy recommended investments in greenfields and acquisition, which deliver most attractive financial pay-offs. According to the report, the production of ethanol for blending would be feasible as long as the international crude prices remain above $45 a barrel. However, it has been made clear to the public sector enterprise that investments should not emphasise export of ethanol from Brazil. "The oil industry should prospect in ethanol acreages in Brazil like oil and gas, but it should look at it with a view to importing ethanol into India, as the government may not permit import of ethanol for ethanol blending programme in the immediate future, keeping in view the interest of farmers," the report pointed out. The sugar industry is also not in favour of importing ethanol. In such a scenario, investments could be made for sale of ethanol in Brazil and exported to third-world countries. China and Japan have already made investments in Brazil. Taking into account the risks involved in making such investments, it was suggested that the status of land laws should be checked. The national policy on biofuels has projected the blending targets of 5 per cent by 2012,10 percent by 2017 and above 10 per cent beyond 2017. The policy also recommends minimum support prices for bio-fuel crops like Jatropha and other non-edible oil seeds.