Mumbai: India’s second largest oil marketing company, Bharat Petroleum Corp. Ltd (BPCL), is planning to enter contract farming in Brazil for biodiesel with Brazil’s petroleum company Petrobras, which is partly owned by the government.

Bharat Petroleum’s chairman and managing director Ashok Kumar Sinha said BPCL is scouting for around 600 acres of sugar cane plantation

Contract farming: BPCL’s CMD Ashok Kumar Sinha.

Sinha said details such as whether biodiesel would eventually be transported to India from Brazil or will be traded elsewhere are being worked out. Bharat Petroleum, along with Videocon Industries Ltd, last week entered into a contract to buy stakes in 10 oil exploration blocks spread across four fuel producing basins in Brazil, where Petrobras is the lead operator.

India’s largest private sector oil company, Reliance Petroleum Ltd, is also reported to be on the lookout for sugar cane acreage in Brazil for biodiesel, but the company has consistently denied such reports.

BPCL has also set up a 50-50 joint venture (JV) with a Texas, US-based Matrix Marine Fuels to sell bunker oil or fuel oil to ships in Singapore. Sinha said Matrix Marine is the largest bunker fuel supplier in Singapore with a 128 million tonne (mt) tankerage and owns 70 ships.

BPCL is planning to invest around Rs3,500 crore in expanding its existing refinery and pipeline capacities over the next two years. A bulk of this investment, or around Rs2,600 crore, will go to expand the capacity of its Kochi refinery by another 2mt, said S.K. Joshi, finance director at BPCL. An additional Rs300 crore will be invested in constructing a single buoy mooring at Kochi LNG terminal, which is operated by BPCL. Other investments during the year would include Rs250 crore in the liquefied petroleum gas (LPG) business and Rs400 crore in expanding fuel retail network, Joshi said.