IndianOil Performance : 2018-19
Matching the pace of energy demand in the country, India’s flagship oil & gas major, Indian Oil Corporation (IndianOil), posted yet another scintillating performance in FY 2018-19, retaining its numero uno position in the downstream petroleum sector and strengthening its new verticals of Gas, Petrochemicals and E&P. The Corporation continued with its legacy of putting the nation first as it expanded its business verticals to provide viable solutions to diverse customer groups.
Mr. Sanjiv Singh, Chairman, IndianOil, addressed a press conference here this afternoon and shared with the media that the Corporation registered domestic sales of 84.65 million metric tonnes (MMT) of products (including petroleum products, gas, petrochemicals and explosives) in the year 2018-19, as against 81.5 MMT in the previous year, registering a growth of 3.9%.
IndianOil’s nine refineries clocked a throughput of 71.9 MMT, bettering the previous year’s throughput of 69.0 MMT. The Corporation’s pan-India pipelines network registered the highest ever throughput of 88.5 MMT of crude oil and petroleum products.
IndianOil incurred a capital expenditure of Rs. 26,548 crore during the year 2018-19, which is about 116% of the target.
With India projected to see robust demand for POL products in the foreseeable future, the country’s largest commercial undertaking and top-ranked corporate in Fortune’s ‘Global 500’ listing is pursuing an ambitious agenda to double its refining capacity to 140 million metric tonnes per annum (MMTPA) by the year 2030 with commensurate expansion of its pipelines network and marketing infrastructure.
Considering the dominant determinants in terms of demographic changes, technological innovations and stringent regulatory & environment norms, the Corporation is integrating natural gas and renewables in its energy value chain in a big way, besides making significant investments in oil & gas assets and petrochemicals.
CORE PERFORMANCE
Marketing
In the backdrop of India’s primary energy demand outpacing global demand, rising infrastructure projects and a surge in commercial vehicle sales led to record high diesel consumption in 2018-19. Matching this pace of growth, IndianOil maintained its place at the top in terms of market share.
IndianOil, which caters to nearly half of India's petroleum consumption, registered its best ever sales volumes of 80 MMT of petroleum products in 2018-19. The Corporation commissioned 313 fuel stations, 335 Kisan Seva Kendra outlets in rural areas as well as 352 dedicated pumps for bulk consumers to take the total customer touch points to over 50,000.
As the industry leader in retail sales, IndianOil completed automation of its 27,700-strong fuel stations network during the year to enhance Q&Q (quality & quantity) assurance to its customers. The ambitious Project Dhruva initiative currently underway encompasses new technologies and services to achieve greater efficiency in operations and a superior buying experience for customers. The Corporation took the lead in launching door delivery of products through mobile dispensers during the year.
With 5,033 more fuel stations of the Corporation converted to run on solar energy during the year, the cumulative installed capacity of its 14,173 solar-operated fuel stations has risen to 71 MW.
The Corporation did well in institutional sales too, registering increase in market share in all products.
IndianOil accounts for nearly half of the market share for LPG cooking gas in the country, and has been extending the reach of its Indane Superbrand to more households every year. Leading the push for clean energy, the Corporation released more than 2.1 crore new LPG connections, the highest ever in a year, during 2018-19, raising the Indane customer base to over 14.8 crore households. About 1,800 new LPG distributorships were commissioned during the year, setting another new record. Sale of LPG crossed 1 million tonnes per month for the first time in Dec. ’18, a trend that continued in Q4 also.
SERVO, another IndianOil Superbrand, achieved top position in the retail lubes segment for the first time, besides registering an 8.7% growth in overall finished lubes. Over 120 SERVO grades earned OEM approvals from reputed companies in 2018-19.
With the opening of new aviation fuel stations (AFS) at Jagdalpur, Raipur, Tuticorin, Shirdi, Jharsuguda, Vijayawada, Kishangarh, Lilabari and Tirupati during 2018-19, the Corporation now operates 116 AFSs in the country, with 60% market leadership.
The Corporation and its retail network extended 24x7 support to the rescue and relief operations in the wake of the unprecedented floods in Kerala in August 2018.
IndianOil exported 5.24 MMT of products during 2018-19. Product exports to Nepal increased from 2.1 MMT to 2.4 MMT and export of Indane Nanocut (additised LPG for suited for high-temperature industrial applications) to Bangladesh commenced during the year. The Corporation opened a new representative office in Nepal in addition to existing offices in Myanmar, Bangladesh and Singapore.
Refineries
IndianOil refineries excelled in all major physical parameters and achieved a record combined crude oil throughput of 71.9 MMT during 2018-19 as compared to 69.0 MMT in 2017-18. The refineries came out with the best ever numbers in Specific Energy Consumption (MBN), Energy Intensity Index (EII) and Fuel & Loss at 71.3, 97.9 and 8.57% respectively.
With Delhi National Capital Territory having switched over to BS-VI transportation fuels on 1st April 2018, supply of BS-VI fuels was extended to 12 more contiguous districts of the National Capital Region in the States of Rajasthan and Uttar Pradesh as well as the city of Agra from 1st April 2019.
IndianOil refineries are currently implementing BS-VI upgradation projects to meet the April 2020 target for supply of BS-VI fuels across the country. The quantum jump from BS-IV to BS-VI is unprecedented anywhere in the world and IndianOil is on course to achieve this tough target.
A 680-KTA Polypropylene (PP) plant was commissioned at Paradip Refinery in Feb. 2019, raising IndianOil’s petrochemicals production capacity to 3.15 MMTPA. The PP plant shall act as the mother unit in nurturing the downstream plastics processing industry in the region.
Work has also commenced on a 357-KTA (kilo tonnes per annum) Monoethylene Glycol (MEG) plant being set up at Paradip Refinery. The project is envisaged as a key driver for the growing textiles industry in the region, especially for polyester fibre.
Works are also in progress for capacity expansion of IndianOil’s Barauni Refinery from the current 6 to 9 million MMTPA and an ATF production unit using the in-house INDjet technology of IndianOil’s R&D Centre.
For the first time, a term contract was concluded for sourcing crude oil from USA during the year. The Corporation enhanced its capabilities to process crude oil grades from a wider and cheaper basket, with flexibility for sourcing additional volumes in term contracts to manage contingencies.
- IndianOil refineries at Mathura, Paradip and Barauni processed difficult crude to the extent of 77%, outlining their operational flexibility.
- With the processing of 9.7 MMT, 14.6 MMT, 6.65 MMT and 2.5 MMT, Mathura, Paradip, Barauni and Bongaigaon refineries concluded the year with the highest ever crude oil processed respectively.
- Paradip Refinery achieved its best ever distillate yield of 80.8% in 2018-19
- Naphtha Cracker at Panipat processed the highest ever quantum of naphtha at 3,027 TMT in 2018-19, surpassing the previous best of 2,945 TMT in 2016-17
- Gujarat Refinery commissioned various facilities for processing high-TAN crude
- Guwahati Refinery completed the test run for processing 50% imported crude blended with Assam crude
- Digboi refinery commissioned an organic waste-to-biogas plant based on in-house bio-methanation process
- Bongaigon Refinery disposed of about 392 MT of oily sludge by using the innovative oilivorous bacterial inoculum developed by IndianOil R&D centre
Pipelines
During 2018-19, IndianOil's crude oil & product pipelines clocked the highest ever combined throughput of 88.5 MMT, setting a new record for the fifth consecutive year. The 14,231-km pipelines network provides immense competitive advantage to the Corporation in the new era of digitally-aided logistics.
About 950-km of major pipelines/replacement pipelines were commissioned during the year, which includes Paradip-Haldia-Durgapur LPG Pipeline ( 516 km) and the Jaipur-Panipat Naphtha Pipeline (344 km).
Work has commenced on two major pipeline projects with JV partners during the year 2018-19. The 2,757-km Kandla-Gorakhpur LPG Pipeline project, on completion, will be the longest LPG pipeline in the world, and will provide direct connectivity to 22 bottling plants en route. The project is being executed by a JV of IndianOil, BPCL and HPCL. For the Northeast Gas Grid Project, IndianOil has formed a joint venture, Indradhanush Gas Grid Ltd., with ONGC, OIL, GAIL and NRL to develop a 1,656-km gas pipelines grid connecting all the State capitals of the northeast.
Other than IndianOil’s City Gas Distribution (CGD) projects and those with JV partners, 17 pipeline projects of the Corporation with a combined capex of about Rs. 24,000 crore are in various stages of implementation. On their completion in the next three years, the Corporation’s pipelines network will expand to about 21,500 km.
Research & Development
IndianOil’s R&D Centre is shaping into a game-changer in the ensuing competitive scenario as the Corporation adds new technologies, products and services to its bouquet of offerings.
The year 2018, observed as the Year of Trust, saw the Corporation further build upon the confidence reposed by its customers by developing and commercialising products and process technologies that cater to the changing industry needs. The R&D Centre developed over 100 new lubricant formulations during the year and commercialised 87% of them.
Adding to the Corporation’s intellectual wealth, the R&D Centre crossed a stellar milestone of filing its 1,001st patent recently. IndianOil's IP (Intellectual Property) portfolio currently comprises 794 active patents, of which 542 patents were granted abroad and 252 in India. The Corporation has a higher commercialisation rate for its patents than the global average. Several of the quality upgradation projects implemented at IndianOil refineries for production of BS-VI fuels are based on deep desulphurisation, isomerisation and dimerisation technology patents developed in-house.
The R&D Centre commissioned a 5 tonnes-per-day plant at Faridabad for converting organic waste to biogas with a methane content of over 80% based on a novel bio-methanation technology developed in-house. The Centre is also commercialising a 2G ethanol process, together with a novel enzyme, which reduces ethanol production costs by 30%.
On the advice of the Hon’ble Supreme Court of India, IndianOil R&D is setting up a 4 tonnes-per-day Hydrogen-CNG (H-CNG) production plant at a Delhi bus depot to run 50 BS-IV compliant CNG buses on H-CNG blends. Trial runs of this patented compact reformer technology have proved that H-CNG fuel significantly reduces carbon monoxide and hydrocarbon emissions and improves ambient air quality.
NEW BUSINESSES
Exploration & Production
With an upstream integration ratio of 5.5% and a balanced portfolio of producing, discovered and exploration assets, the Corporation achieved significant progress in terms of 2P reserves, production volumes, equity oil and revenues during the year.
IndianOil currently has participating interest (PI) in 10 domestic and 12 overseas E&P assets spread across 10 countries, i.e., Canada, USA, Russia, Venezuela, Abu Dhabi, Oman, Libya, Nigeria, Gabon and Israel.
The year 2018-19 was marked by acquisition of participating interest in E&P assets in Oman, Abu Dhabi and Israel. Acquisition of 17% PI in Mukhaizna Oil Field, Oman, signals IndianOil’s entry into the highly prospective region, which is consistent with its strategic objective of adding high-quality producing assets to its upstream portfolio. With the acquisition of this asset, IndianOil's share of 2P reserves increased by 109 million barrels of oil equivalent (MMboe) and production went up by about 19,000 Boe/day.
Petrochemicals
IndianOil sold 2.7 MMT in petrochemicals during 2018-19 as against 2.4 MMT during 2017-18, registering 11.8% growth. Backed by world-scale plants and world-class technology, IndianOil’s PROPEL brand of petrochemicals cover over 80% of all conceivable applications in plastics, and are exported to over 70 countries.
Between 1997-98 and 2018-19, IndianOil has incurred a capex of over Rs. 25,000 crore in major petrochemicals projects such as LAB plant at Gujarat, PX/PTA plant and Naphtha Cracker at Panipat, and Polypropylene plant at Paradip. Among the major ongoing projects are MEG plant at Paradip and expansion of Naphtha Cracker at Panipat. In addition, IndianOil has plans to invest over Rs. 26,000 crore on various ongoing and new petrochemical projects till 2023-24.
The IndianOil Board has accorded approval for a Plastics Park at Paradip and a JV has been rolled out with Industrial Development Corporation of Odisha. Similarly, Board approval has been obtained for land procurement and finalisation of a JV partner for a textiles project at Bhadrak in Odisha. Industrial Promotion & Investment Corporation of Odisha has allotted 60 acres of land out of a total 75 acres for the development of the textiles project.
Gas Marketing
IndianOil sold 3.96 MMT of gas in 2018-19 as compared to 3.86 MMT in 2017-18, registering 3% growth. The portfolio includes 60 R-LNG customers besides supplies to the Company’s own refineries at Mathura, Panipat and Koyali.
The Corporation’s 5-MMTPA LNG import terminal was commissioned in March 2019 and has begun supplying R-LNG to Manali Refinery and other anchor customers. A pipeline network has been planned to transport LNG right up to Tuticorin via Pondicherry and Trichy and another pipeline to connect Hosur and Bengaluru.
Besides being a JV partner in Indradhanush natural gas pipeline grid in the Northeast, IndianOil made an aggressive bid for city gas distribution (CGD) projects and won 17 exclusive Geographical Area sites in the 9th and 10th rounds. In addition, IndianOil along with its JV partners Green Gas Ltd. and IndianOil Adani Gas Pvt. Ltd., has won 23 geographical area sites under the 8th, 9th and 10th CGD bidding rounds, taking its total tally to 40 GAs.
The Corporation’s investment on development of CGD networks in the next eight years is likely to be about Rs. 10,000 crore, which includes equity contribution in JVCs.
Sustainable Alternatives
IndianOil is fully aligned to the country’s aspirations to transit to clean energy and has planned Rs. 27,000 crore investment in alternative energy and sustainable development projects. Besides a target to raise its solar energy and wind-power portfolio to 260 MW by the year 2020, the Corporation has initiated diversification into alternative, renewable energy and bio-fuels – 2G and 3G ethanol, waste-to-energy and compressed bio-gas (CBG).
As part of the SATAT (Sustainable Alternative Towards Affordable Transportation) initiative launched during the year, IndianOil has issued LOIs for 96 plants to supply 782 tonnes per day of CBG. With similar calorific value and other properties, CBG has the potential to replace CNG as an affordable fuel in automotive, industrial and commercial uses by conversion of biomass, or any kind of organic waste. In fact, the CBG programme has the potential to replace 62 million tonnes per annum of petroleum fuels as a waste-to-wealth measure.
A FUTURE-READY CORPORATE
IndianOil has planned Rs. 2 lakh crore investments in the next 5-7 years to evolve into a future-ready corporate that provides comprehensive energy solutions to diverse user groups in an exciting phase of energy transition and technology disruptions.
Besides focus on refinery expansions, new technologies for clean fuels & enhanced outputs, and refinery-petrochemicals integration, IndianOil is aggressively leveraging its R&D expertise to move into horizon technologies like 2G and bio-fuels, coal gasification, H-CNG, Hydrogen fuel cells, battery technology, etc. These technologies, along with cleaner fuels and higher engine efficiencies, can offer sustainable solutions to today’s energy challenges.
The Corporation is implementing a number of new technologies and/or pilot studies in the areas of refinery processes, petrochemicals & polymers, alternative energy and bio-energy in collaboration with reputed partners in India and abroad.
Going closer to consumption centres and consumers in an economical and environment-friendly manner has been the philosophy behind IndianOil’s pipeline network expansion. And, as the Corporation grows its LPG and LNG verticals, its pipelines network too is set for phenomenal growth.
The Corporation aspires to be a major player in natural gas and is taking steps to enhance its share in LNG sourcing, import terminals, pipelines, city gas distribution networks and LNG supply by road tankers.
A certified Great Pace to Work, IndianOil is continuously improving its human eco-systems to achieve cross-divisional synergy and a solutions-oriented approach. Today, 33,000 committed IOCians are collaborating across functions and divisions to enrich its bouquet of offerings to its billion-plus customers. They are being actively encouraged to acquire new knowledge and skills to be active partners of a 21st century organisation focussed on growth opportunities of the future.
BEYOND BUSINESS
Besides reaching essential fuels to every nook and corner of the nation, IndianOil has been actively engaged in a wide gamut of community welfare activities across the country since inception. The thrust areas for such activities include safe drinking water and protection of water resources, healthcare and sanitation, education and employment-enhancing vocational skills, empowerment of women and socially/ economically backward groups, etc.
The CSR projects are mostly undertaken in the vicinity of the Corporation’s operating locations for improving the quality of life of the community, which invariably includes marginalised groups belonging to the under-privileged sections of society. For the year 2018-19, IndianOil spent Rs. 490 crore on CSR activities, thereby achieving 100% budget utilisation. Here are three key CSR initiatives launched recently:
IndianOil Vidushi is a unique coaching programme for bright under-privileged girls being run at two residential centres, in Bhubaneswar and Noida, to falicitate their admission to prestigious engineering institutes like IITs, NITs, etc. A maximum of 30 girls are selected for each centre after class XII, and provided specialised coaching and mentoring free of cost to succeed in JEE Mains, JEE Advanced and other Central and State engineering entrance exams. 46 of the 56 girls in the two centres cleared the JEE Mains 2019 exam recently.
Skill Development Institute (SDI), Bhubaneswar: IndianOil is running the Skill Development Institute (SDI) at Bhubaneswar since 2016, imparting skills to under-privileged youth in six trades. The Centre now has a sprawling new campus and is shaping up into a one-of-its-kind model skills academy of global standards.
Industry-Academia Partnership: With focus on strengthening industry-academia partnership and as a first for the industry, IndianOil has collaborated with the Institute of Chemical Technology (ICT) Mumbai, to set up the IOC-ICT Campus at Bhubaneswar. The launch of its maiden 5-year integrated M.Tech Programme through JEE-Main examination received an overwhelming response from aspirants, and the admission process has been completed for a batch of 60 students. The institute will commence Executive M.Tech. and Ph.D. programmes also this year.