BP share price: company denied Indian jet fuel marketing license
BP plc (LON:BP) has been denied the rights to sell jet fuel to Indian customers, a source ‘with direct knowledge’ of the matter has told Reuters today. The exact conditions that had not been met were not disclosed by the person, but there have been suggestions that BP has insufficient investments in Indian oil infrastructure.
BP’s shares edged 0.89 percent higher to 447.55p as of 14:44 BST today. The company’s stock has gained nearly nine percent year-to-date, though it is still about eight percent lower on an annual basis.
According to Indian law, companies must have invested at least 20 billion rupees (£215 million) in oil exploration and production in the country in order to be eligible for a jet fuel marketing license.
“BP has been continuously engaging with the Ministry of Petroleum and Natural Gas regarding the licensing application and we are confident we meet the requirements,” a BP spokeswoman said, according to Reuters. “We will continue to work closely with the Government authorities and urge them to review the decision.”
BP claims to have an investment of over $8 billion in India. In 2011 the company took a 30 percent stake in a number of oil and gas production licenses operated by India’s Reliance Industries (RELI.NS) for $7 billion.
If confirmed, the decision to reject BP’s jet fuel marketing bid would be the second time the oil major has failed to secure selling rights for India’s booming domestic market.
India’s aviation market is projected to triple in size by the end of the decade, while the Petroleum Planning and Analysis Cell in the federal oil ministry expects a 2.2 percent rise in jet fuel demand for the year starting in April.
As of 16:15 BST, Monday, 30 March, BP plc share price is 447.32p.