'Bakri Group contributing significantly in the country's energy sector'

Business Recorder: Since its inception ten years ago, how has the journey been for Bakri?
Mirza Shakil Baig: Bakri Group companies were established in Pakistan with 100 percent foreign investment. Bakri is a well known Saudi group engaged in shipping, oil trading, aircraft and ship refuelling, on shore and off shore oil blending, city infra structure development, desalination plant and few other businesses in Saudi Arab, Middle East, Africa and South Asia. Bakri has been one of the largest fuel oil supplier to Pakistan for over a quarter century and having a large interest in Pakistan they decided to start Bakri oil marketing companies in the country. Since the start of the companies the business is growing well and the companies are contributing significantly in the country's energy sector.
Bakri group invested in two companies, BTCPL (Bakri trading company Pakistan) and OOTCL (Overseas oil trading company). The Group initially owned 100 percent stake in BTCPL, and 50 percent in OOTCL having a JV with a local partner but later on 50 % OOTCL shares with the other partner were also purchased by the Bakri group. Right now, the two companies are in a merging process and in couple of months, they will become a single entity and the surviving company will be BTCPL, renamed as Bakri Petroleum Pakistan Limited (BPPL) which will be a fully owned Company of Bakri International Energy Co In due course BPPL plans to become a publicly listed company.
BR: Given how oil prices behaved, how was 2015 for Bakri?
MSB: 2015 was a challenging year for all oil companies and so was for Bakri; I think it was a very exciting year. A lot of challenges faced by the global petroleum industry due to low product prices. Due to this downward trend, companies have seen their margins shrink. Similar is the case in Pakistan and we were no different.
BR: What are the goals for Bakri Group going forward?
MSB: We want to be a top tier company in Pakistan. Working in multinational corporations like Shell Canada and WorleyParsons Canada, I personally have this desire to make this company working on multinational company pattern. And we are moving there with strong business ethics, experienced and qualified resources and in near future, we don't see ourselves anything less than a multinational. After the merger in a couple of months, the second milestone for us will be the IPO. We are targeting that end of this year.
BR: As an insider, how do you see oil prices panning out?
MSB: It's very hard to predict anything right now, given we are on the downward trend. We are already on 12-13 year lows and there are no signs of things getting better. People were expecting that the conflict between Saudi Arabia and Iran, like in the past, would result in a jump in oil prices. That didn't happen this time around. Low demand and excessive supply have kept pressure on prices and with Iran coming up with exports, oil is bound to go further down.
BR: What is the current situation of Bakri's retail network development and expansion?
MSB: Currently we have close to 300 retail outlets (petrol pumps) in Pakistan and we want to have our presence throughout the country. We have big expansion plans. There are 100 retail outlets in the pipeline and in the next two years we are aiming at a network of 500 pumps.
BR: What product categories does the company currently deals in and what are your diversifications plans?
MSB: At present, we are in the fuel and lubricant business, we are selling diesel, motor gasoline (petrol) and furnace oil and lubricants. We import almost all products. We are now entering into Aviation business. We are also working on LPG business. Bakri has its own lubricants brand and we have recently launched a famous European lubricant brand in Pakistan Q8.
BR: How do you see the future of black and white oil businesses?
MSB: Furnace oil, or black oil requirement is reducing in Pakistan and will go down further. Many new IPPs are coming with coal powered generation. Many will convert to gas. So going forward, we might consider going into the distribution of LNG and LPG.
BR: In the first decade of operations, what have been the biggest achievements for Bakri?
MSB: We started without any assets, without anything on the ground and in 10 years we have 300 retail outlets all over the country. In petroleum products storage, we are second to Pakistan State Oil, which is the largest company in Pakistan at Port Qasim. . The company has developed a terminal at Machike. Our terminal at Shikarpur is in under construction. Next in line are Daulatpur near Sindh, then Mehmoodkot and Sahiwal up country. Soon we will have all these depots ready for operations.
We have a big contribution to country oil storage and infrastructure. Pakistan has storages capacity that can last for country needs for 15 days. Any addition is making that better.