Going all out
New Delhi 06-Dec-2010
Mr. B.N. Bankapur,
Director (Refineries), IndianOil
IOC is increasing its refining capacity to meet the energy challenge of the nation.
Public sector oil marketing company Indian Oil Corporation (IOC) is planning to augment its refining capacity to 80.7 million tonnes per annum (mtpa) by 2012. “We are the market leaders in refining in the country with a 36 per cent market share,” says B.N. Bankapur, director, refineries, IOC. “Out of the 20 refineries in the country, half belong to IOC. The group's present refining capacity of 65.7 mtpa will increase to 80.7 mtpa by 2012, when its 15 mtpa grassroots refinery in Paradip is commissioned.”
The Paradip refinery is being built at a cost of Rs. 29,777 crore. IOC produces 40-42 mtpa of crude. For its refinery in Paradip, it will source crude from the Middle East. “We could also look at importing crude from Mexico and Venezuela,” Bankapur adds.
To meet the energy challenge, IOC has adopted innovative systems, strategies and technologies aimed at improving its refinery margins and profitability. Practices like stream sharing, processing cheaper or indigenous crude oil varieties, employing new operational strategies and increasing production of value-added products are being pursued aggressively. “The achievement of refining in India is spectacular,” says S. Sundareshan, secretary, ministry of petroleum and natural gas. “Despite the fact that we import 78 per cent of our crude requirement, the export of petroleum products, at 185 mtpa, is the largest merchandise export in the country. This will increase to 240 mtpa by 2012 - both by the private and public sector.”
Larger base
The increase in exports of petroleum products from India is encouraging refining companies to increase their base. There is likely to be an increase of 3.4 per cent of refining products annually. “There may be talk of a shift to a gas-based economy, but that will take many years to turn into reality and till then the economy will depend on oil,” says Bankapur. “Therefore, there is a need to put more refineries In India.” Till 2030, oil will be the major source of energy all across the globe, he adds. The GDP growth of around 9 per cent requires a lot of support from the energy sector. Oil and gas contribute nearly 40 per cent to GDP.
Meanwhile, in the two blocks that IOC had bid for under the New Exploration Licensing Policy (NELP), there seem to be possible discoveries. One block is in Mahanadi basin and the other is in Assam. However, assessment of both fields is yet to be made.
To accrue maximum competitive advantage, IOC’s business strategy straddles the entire hydrocarbon value chain through integration and diversification initiatives,” says Bankapur. “The energy major's venture into petrochemicals has been a contributing factor for the remarkable results facilitating the corporation to be labelled ‘energy of India’.”
At the Panipat refinery, the integration of petrochemicals with refinery operations and the ongoing capacity enhancement has led to more value addition to the refining operations. The Panipat Naphtha Cracker, sourcing surplus naphtha from Gujarat, Panipat and Mathura refineries, will produce 800 kilo tonnes per annum (ktpa) of ethylene and 600 ktpa of propylene, which will act as feed for downstream polymer units. In the days ahead, the refining processing schemes and the addition of new facilities in existing refineries will be governed by economies of scale and the integration of petrochemicals to maximise profitability.
IOC’s turnover was Rs. 2,71,074 crore and profit after tax was Rs. 10,221 crore for the year 2009-10. Meanwhile, IOC has invested close to Rs. 12,280 crore in state-of-the-art technologies at its refineries for production of green fuels. Both petrol and diesel quality improvement projects installed at all its refineries - have been completed and are producing and supplying Euro IV grade petrol and diesel. To further reduce dependence on petroleum products and take the nation closer to achieving energy security, IOC is exploring various options in alternative fuels such as an ethanol-blended petrol, bio-diesel, hydrogen and hydrogen-CNG mixture!
