IndianOil consolidates core business in 2019-20, strengthens natural gas & petrochemicals verticals
Indian Oil Corporation Limited (IndianOil), the country's top-ranked PSU and leading oil & gas major, has registered yet another excellent year of performance in the financial year 2019-20. The Company retained its dominant position in its core oil refining & marketing business while strengthening the growing verticals of Natural Gas, Petrochemicals and E&P.
Continuing with its legacy of meeting the nation’s fuel needs and serving a diverse customer base for over six decades, the Corporation expanded and consolidated its operations with a capital expenditure of over Rs. 28,316 crore for the year 2019-20.
Mr. Sanjiv Singh, Chairman, IndianOil, saluted the 33,000-strong team of IOCians and the Corporation’s channel partners and service staff manning its 50,000-plus customer touch-points for their fighting spirit in the face of Covid-19 novel Coronavirus. He expressed happiness that the Corporation could maintain the supply line of petroleum fuels, especially for households and essential/emergency services, without a break right through the prolonged lockdown period.
Performance Highlights : 2019-20
Sharing the highlights of IndianOil’s performance in FY 2019-20 with the national media, Mr. Sanjiv Singh said that the Corporation registered domestic sales of 81.74 million metric tonnes (MMT) in the year 2019-20, besides exports of 2.61 MMT. Its nine refineries clocked a throughput of 69.42 MMT, exceeding their plated capacity. The Corporation’s pipelines network, spanning over 14,600 km, registered a throughput of 85.35 MMT of crude oil and products for the year.
The Corporation sold 5.42 MMT of Gas in 2019-20 as against 4.56 MMT in 2018-19 registering a growth of 19%. The import quantity of LNG in 2019-20 was 4.77 MMT as against 3.89 MMT in 2018-19, an increase of 22%. Petrochemicals sales in 2019-20 was 2.22 MMT. The Corporation’s share of production from eight producing assets where it has participating interest was 4.26 MMToe in 2019-20.
IndianOil's biggest accomplishment for the year was the seamless pan-India transition from BS-IV directly to BS-VI grade transport fuels by 16th March, 2020, a full fortnight ahead of the 1st April 2020 deadline. As the country's largest refiner with the largest marketing infrastructure in the country, IndianOil led the downstream PSUs in becoming fully BS-VI compliant right from its refineries down to the pump nozzles of its 29,085 fuel stations. This involved implementation of a Rs. 17,000 crore fuel quality upgradation programme at its nine refineries.
The Corporation also led the oil marketing companies (OMCs) in achieving the target of 8 crore new LPG connections under the Pradhan Mantri Ujjwala Yojana in September 2019, seven months ahead of the timeline. Altogether, IndianOil released 3.75 crore LPG cooking gas connections to women from BPL households under the Government’s flagship scheme.
During the year, IndianOil launched IMO-2020 compliant low-sulphur (0.5%) bunker fuel and lubricants for the shipping industry and an exclusive high-flash HSD variant for the Indian Navy ships. Another innovation came in the form of a special winter-grade diesel, with a low pour-point of -33o Celsius, for use by motorists in the high-altitude regions of the Himalayas.
IndianOil commissioned India’s first transnational Motihari-Amlekhganj products pipeline to Nepal in July 2019, eight months ahead of schedule. Import of bulk LPG by road from Bangladesh into Northeast India commenced with receipt of the product at IndianOil’s Bishalgarh bottling plant in Tripura.
The Corporation has invested US$ 12.5 Million through its wholly-owned subsidiary, IOC Sweden AB, to acquire a minority equity stake in Phinergy, an Israel-based company offering cutting-edge metal-air battery solutions to run automobiles.
Another IndianOil subsidiary, IOC Middle East FZE, has signed an agreement with Qatrat Naft LLC, a wholly-owned subsidiary of Al-Jeri Transportation Company, Saudi Arabia, in Oct. ’19 to form a JV Company for development of retail network in Saudi Arabia and other countries in the region.
IndianOil executed a tripartite letter of cooperation with two US companies, ExxonMobil and Chart Energy Inc., in Feb. 2020 for delivering LNG in ISO containers to Indian cities that are not connected to pipeline networks. Conceived as virtual pipelines to fuel industries, households and vehicles in such cities, the use of ISO containers will enable easy and economical multimodal transportation of LNG through road, rail and waterways.
The Corporation enlarged and diversified its crude oil basket during the year 2019-20 by adding three new grades to its crude oil basket and procuring seven new grades from diverse geographies, including USA. Term contracts were signed with Equinor and Sonatrach for procuring US crude oil grades and with Rosneft of Russia for import of Urals crude.
Despite the short-term destruction of demand for petroleum products due to the Covid-19 crisis, IndianOil is hopeful of an imminent recovery across sectors and, therefore, stands committed to scaling up its refining capacity, with commensurate expansion of pipelines network and marketing infrastructure. The Corporation is also making significant investments to integrate Natural Gas, Petrochemicals, Equity Oil and Renewables in its value chain.
IndianOil is on track to spend the approved capex of Rs. 26,143 crores in 2020-21. Work on almost 200 projects (above Rs. 1 crore) has restarted on-ground post-lockdown.
The Corporation commissioned 1,400 new fuel stations during the year 2019-20, which included 664 Kisan Seva Kendra outlets in rural areas. 273 CNG-dispensing stations were also commissioned in 2019-20. By the end of the year, automation of day-to-day operations has been achieved in nearly 25,000 fuel stations, complete with V-SAT connectivity to a central hub for real-time data exchange. About 57% of the Corporation’s fuel stations now run on solar energy and no longer depend on electricity.
The Corporation’s LPG sales reached an all-time high of 12.3 million tonnes in 2019-20, registering a year-on-year growth of 6.6%. Indane, the largest packed LPG brand is now selling about 27 lakh refill cylinders a day. Over 75 lakh new LPG customers were enrolled in the year, of whom about 41 lakhs were Ujjwala beneficiaries. IndianOil commissioned 524 new LPG distributorships in the year 2019-20, raising their total number to 12,450, to serve the 13.11 crore Indane customers.
IndianOil Aviation maintained a market share of 60.8% in the industry during the year, refuelling nearly 2,200 flights a day from 119 aviation fuel stations (AFS). They include four new AFSs commissioned during the year, at Naharlagun, Pantnagar, Ludhiana and Agatti. During the lockdown, the Corporation maintained ATF supplies for rescue and evacuation flights overseas, to the defence services, cargo aircraft, air ambulances, etc,.
IndianOil's SERVO continued to be the country’s market-leading brand in finished lubricants and recorded the highest ever export sales to Nepal and Bangladesh during the year. A specialised gear oil was launched for wind-mills.
The Corporation commenced sale of Compressed Bio-Gas (CBG) at Pune and Kolhapur with the brand name IndiGreen. CBG is similar to CNG but is a renewable fuel produced from organic waste.
IndianOil refineries processed 69.42 MMT during 2019-20, excelling in all physical and energy efficiency parameters. The Corporation added six new import grades to its crude oils basket of 186 grades from over 44 countries.
The quantum jump from BS-IV to BS-VI fuels was attempted in India for the first time anywhere in the world and IndianOil’s 11 group refineries achieved the ambitious target with a synergised strategy and efficient project management. Other major projects commissioned during the year were Polypropylene unit at Paradip Refinery and distillate yield improvement project at Haldia Refinery.
IndianOil’s pipelines network grew by over 400 km during FY20 to span more than 14,600 km in length, with a throughput capacity of 94.56 MMTPA for crude oil & refined products and 21.69 MMSCMD for gas.
With ongoing pipelines projects in different stages of execution at an investment of Rs. 24,000 crore, the network is set to expand to 21,000 km, excluding CGD and JV projects.
IndianOil is the lead partner providing PMC services for the ongoing Kandla-Gorakhpur LPG pipeline (2,828 km), the world’s longest LPG pipeline with a design throughput capacity of 8.25 MMTPA. The project has brought together all the three OMCs in a collaborative partnership. IndianOil has formed another joint venture, Indradhanush Gas Grid Ltd., with ONGC, OIL, GAIL and NRL as partners to develop a 1,656-km gas grid connecting the seven State capitals of the northeast.
Research & Development
Cutting-edge solutions from its R&D stable continue to propel IndianOil in core areas of refinery processes, lubricants, catalysts, fuels & additives, petrochemicals & polymers, and sunrise areas like 2G/3G bio-fuels and Hydrogen-based fuel solutions.
During the year 2019-20, the Centre developed 132 new formulations of lubricants for automobile, industrial and defence applications, of which over 110 were commercialised. Its portfolio of patents crossed the 1,000-patents milestone in 2019-20; 121 patents were filed during the year and approvals received for 113.
In a first-ever overseas agreement of its kind, the Corporation’s INDMAX technology was licenced to M/s. NIS for its refinery in Serbia. Nano-additised commercial LPG, with 5-8% lower fuel consumption, was rolled out from 10 Indane bottling plants.
IndianOil’s start-up fund has incubated 24 start-ups in two rounds of funding; 11 patents and six copyrights have been filed jointly with the start-ups.
IndianOil has established itself as the second largest player in natural gas in India and is scaling up LNG sourcing, import terminals, pipelines, city gas distribution networks and ‘LNG at the Doorstep’ service on a continuous basis.
The Corporation is registering good growth in the rapidly growing city gas distribution (CGD) segment and has bagged 40 Geographical Areas, 17 on its own and 23 with JV partners. 10 of these have already been commissioned.
IndianOil is developing three natural gas pipelines – Mehsana-Bhatinda, Bhatinda-Jammu-Srinagar and Mallavaram-Bhopal-Bhilwara-Vijaipur – through JVCs.
The Corporation’s petrochemicals sale during 2019-20 was 2.22 MMT. Five new grades of polymers were introduced and 12 OEM approvals obtained during 2019-20.
IndianOil’s upstream portfolio includes participating interest in 12 overseas and 12 domestic assets. Together with Bharat Petro Resources Ltd., it was jointly awarded an onshore block in Abu Dhabi for a 35 years’ term.
Alternative & Renewable Energy
IndianOil’s renewable energy portfolio comprises 167.6 MW of wind-power capacity and 58.6 MW of solar photo-voltaic capacity. They together generated 393 million units of electricity during 2019-20, equivalent to emission mitigation of 322 TMT of carbondioxide (TMTCO2e).
Similarly, 2,500 IndianOil fuel stations were converted to operate on solar energy in 2019-20; their total number has now gone up to 16,678, with a cumulative installed capacity of over 92 MW.
As part of the SATAT scheme (Sustainable Alternative Towards Affordable Transportation) launched in Oct.’18, IndianOil has issued LOIs to prospective entrepreneurs for setting up 295 plants for production and supply of 0.6 MMTPA of Compressed Bio-Gas (CBG).
IndianOil is in the process of setting up three 2G-ethanol production plants of 100 kl per day capacity each at Panipat, Gorakhpur and Dahej using bio-waste as feedstock. A bio-fuels complex with a CBG production plant for conversion of 200 tonnes per day of bio-waste is also coming up near Gorakhpur.