Bharat Petroleum Asia's best-performing energy stock

State-owned Bharat Petroleum Corp is the best- performing energy stock on the MSCI AC Asia Pacific Index this year and analysts say its foray into exploration in Africa to counter refining losses may mean there's more growth to come, according to a Bloomberg report.

With a 54-per cent surge this year, Bharat Petroleum is the only refiner among the top 10 gainers on the MSCI AC Asia Pacific Index and the best performer on the National Stock Exchange's 50-share Nifty index. India's second-biggest state refiner holds a 10-per cent stake in a block off Mozambique, the site of the biggest natural gas discoveries in a decade.

The company, based in Mumbai, is emulating PetroChina Co and China Petroleum & Chemical Corp in acquiring overseas oil and gas assets to reduce the risk of refining and selling fuels at state-controlled prices. A discovery reported on 15 May in the Mozambique block operated by Anadarko Petroleum Corp. (APC) may increase gas reserves by 66 per cent, enough to supply China and India for eight years, based on 2010 consumption.

The Mozambique block may have as much as 50 trillion cubic feet of gas, according to a 12 May statement. The reserves may be enough to support construction of a gas liquefaction terminal to export the fuel to Asia's biggest economies.

Bharat Petroleum reported the new discovery in Rovuma Area 1 in the Indian Ocean. The Golfinho exploration well found 7 trillion to 20 trillion cubic feet of recoverable gas, according to the statement. That adds to the reserves in the Prosperidade find, which holds as much as 30 trillion cubic feet, the company said.

Bharat Petroleum and its fellow government-owned oil retailers and refiners Indian Oil Corp and Hindustan Petroleum Corp are obliged to sell fuels below cost - petro-fuel prices have always been tightly controlled by the Indian government. The companies together lose Rs5,100 crore a day on sales and lost Rs1,40,000 in revenue in the year ended 31 March, according to petroleum ministry data.

The refiner posted losses in the first two quarters of the year that ended on 31 March after the government failed to compensate it for selling diesel and cooking fuels at less than market rates. The company is scheduled to report fourth-quarter earnings on 25 May.