Indian State Firm BPCL Readies $3-Billion Bond to Fund Brazil oil Project

Indian state-owned refiner Bharat Petroleum Corporation Limited (BPCL) is set to issue a $3-billion bond to fund its share of a significant offshore oil development project in Brazil. Indian companies are increasingly expanding their international presence in upstream oil and gas ventures to secure crude oil supplies. BPCL, India's second-largest state-controlled oil refiner, anticipates raising the funds through multiple tranches and has conducted roadshows in London, Singapore, and Dubai to gauge potential investor interest, according to sources familiar with the plan.

The proposed bond issuance would finance BPCL's $2.8-billion contribution to the development of the SEAP-I oil and gas field offshore Brazil. Through its wholly-owned subsidiary, Bharat PetroResources Limited (BPRL), BPCL holds equity stakes in six blocks in Brazil, the greatest number of offshore blocks owned by a single entity, followed by seven blocks domestically in India.

Earlier this year, BPCL finalized agreements to acquire the remaining stake in IBV Brasil Petroleo Ltda from Videocon Energy Brazil Ltd, making BPCL a wholly-owned subsidiary of BPRL Ventures BV, the overseas subsidiary of BPRL.

The acquisition is a strategic move aimed at bolstering BPCL's global upstream portfolio, enhancing operational flexibility, and solidifying its commitment to bolstering India's energy security through significant international investments. BPCL highlighted in July that the acquisition reinforces its focus on developing a resilient and future-ready energy portfolio, supporting India's growing energy demands while expanding its global energy footprint.

BPCL holds a 40% stake in the SEAP-I project, which is jointly operated by Petrobras, Brazil's state-owned oil major. The project is expected to commence oil production in 2030 and natural gas extraction in 2031. In July, Brazil's oil giant approved the development of SEAP-I. Petrobras has contracted SBM Offshore to design, construct, and operate floating production, storage, and offloading (FPSO) vessels for both the SEAP-I and SEAP-II projects. These FPSOs will be instrumental in processing and storing the extracted oil and gas.