lndianOil at a Glance
With a 33,000-plus work-force, extensive refining, distribution & marketing infrastructure and advanced R&D facilities, lndianOil plays a significant role in fuelling the socio-economic development of the country. With a mandate to ensure India's energy security and self-sufficiency in refining & marketing of petroleum products, lndianOil has in the past six decades provided energy access to millions of people across the length and breadth of the country through its ever-expanding network of over 50,000 customer touch-points.
With a turnover of Rs. 6,05,924 crore and a net profit of Rs. 16,894 crore in 2018-19, lndianOil is recognised as one of India's most valuable companies .
The Company continues to be the largest contributor to the national exchequer in the form of duties and taxes. During the year 2018-19, Rs. 1,93,422 crore was paid to the exchequer as against Rs. 1,90,670 crore paid in the previous year.
The Energy for India's Rise
lndianOil's core business has been refining, transportation and marketing of petroleum products. In line with India's growing energy demand, the Company has over the years expanded its operations across the hydrocarbon value chain - upstream into oil & gas exploration & production and downstream into petrochemicals, besides diversifying into natural gas and alternative energy resources .
lndianOil continues to expand its business operations abroad through its overseas establishments in Sri Lanka, Mauritius, the UAE, Singapore, USA, Myanmar and Bangladesh.
Business Profile
Refineries
IndianOil refineries excelled in all major physical parameters and achieved a record combined crude oil throughput of 71.9 MMT during 2018-19. 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.
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.
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.
Marketing
Keeping all parts of the vast nation well supplied with essential petroleum products is a 24/7 commitment from lndianOilPeople. During the year, lndianOil continued its dominance in the domestic market, covering the entire range of petroleum products from LPG, petrol, diesel, CNG, aviation fuels, lubricants, naphtha, furnace oil, speciality products , etc. The marketing and distribution network was expanded to over 50,000 customer touch points during the year.
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 Corporation took the lead in launching door delivery of products through mobile dispensers during the year.
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.
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.
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.
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.
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.
Petrochemicals
IndianOil sold 2.7 MMT in petrochemicals during 2018-19, 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.
Natural Gas
IndianOil sold 3.96 MMT of gas in 2018-19, 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.
Exploration & Production (E&P)
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.
Explosives and Cryogenics
Explosives and Cryogenics businesses recorded the highest ever production and sales of explosives and cryocans during the year, 2018-19. The Explosives group manufactured and sold 1,83,194 metric tonnes of explosives during the year, recording a growth of 3.6 % over the previous year's volume of 1,76,757 metric tonnes. The Cryogenics group sold 29,555 units of cryocans and cryovessels during 2018-19, as against previous year's sale of 28,782 units. During the year, the Cryogenics group developed new equipment for aviation, lubricants and refineries segments of the Corporation.
Alternative Energy and Sustainable Development
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.
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.