India looks to fund state refiners’ Net-Zero operations goals

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India’s government this week asked some of the biggest state oil refiners to launch rights issues with which the authorities plan to help fund the firms’ net-zero and energy transition goals, Reuters reported on June 23, quoting sources with knowledge of the matter.

The government will be seeking equity in Indian Oil Corp and Bharat Petroleum Corporation Limited (BPCL) via rights issues and has asked Hindustan Petroleum Corporation Limited (HPCL) to issue preferential shares to the government. In exchange for the equity in the refiners, India plans to support their goals to achieve net-zero operational emissions in the 2040s.

Indian Oil, BPCL, and HPCL are looking to invest a combined up to $48.8 billion (4 trillion Indian rupees) to reach their net zero-emissions goals by 2040, Reuters’ sources said.

Indian Oil Corp, the country’s top refiner and fuel retailer, said earlier this year it would consolidate all its green energy businesses into a wholly owned unit with the purpose of boosting its clean energy division.

The government aims to complete the multi-billion-dollar process for the rights and preferential issues by October this year, according to Reuters’ sources.

Earlier this year, India announced a $3.67 billion (300 billion rupees) support to state oil refiners to help them boost green energy projects and meet emission reduction targets. In the 2023/2024 budget, India also announced it would support battery storage systems.

India, the world’s third-largest carbon emitter after China and the U.S., has a net-zero target set for 2070, twenty years later than the 2050 target of most developed economies including the U.S.

Meanwhile, Indian state-held oil and gas explorer, Oil and Natural Gas Corporation Limited (ONGC), the biggest oil and gas producer in the country, said last month it aims to boost its renewable energy portfolio and plans $12 billion in investment in green projects.

ONGC looks to have as much as 10,000 megawatts, or 10 GW, in its portfolio of operations by 2030, up from just 189 MW at the end of March, ONGC’s chairman Arun Kumar Singh said.