IndianOil Performance 2007-08
New Delhi 28-May-2008
<a href=/HTML/Presentation.htm target=_blank class=normallink >Presentation on IndianOil's Financial Results 2007-2008</a><br/>
<a href=/downloads/AuditedResults_pdf.pdf target="_blank" class = normallink >Audited Financial Results for the Year Ending 31st of March 2008</a>
India’s No.1 Fortune ‘Global 500’ company and downstream oil major, Indian Oil Corporation Ltd. (IndianOil), registered one more year of sustained all-round growth in 2007-08 despite a challenging business environment and turbulence in the market place.
According to IndianOil Chairman, Mr. Sarthak Behuria, the Corporation sold 59.29 million tonnes of petroleum products during the year 2007-08, as compared to 54.84 million tonnes during the previous year. This includes sale of natural gas, which has gone up to 1.74 million tonnes in 2007-08 as compared to 1.48 million tonnes in the previous year. In addition, product exports rose to 3.33 million tonnes from 3.13 million tonnes in the previous year.
The Corporation’s seven refineries surpassed 100% capacity utilisation and clocked the highest ever throughput of 47.4 million tonnes. Its pipelines network too registered the highest ever operational throughput of 57.12 million tonnes of crude oil and petroleum products.
Among new businesses, Natural Gas Marketing and Petrochemicals together generated revenues of over Rs. 4,600 crore during the year 2007-08. The year also marked expansion of the Corporation’s E&P (Exploration & Production) portfolio to 19 oil & gas assets in India and abroad. As part of the consortium approach with Oil India Ltd. (OIL), a special purpose vehicle, Ind-OIL Overseas Ltd., was incorporated at Port Louis, Mauritius, for acquisition of overseas E&P assets.
The year 2007-08 also saw a major restructuring exercise in the form of seamless merger of the marketing subsidiary, IBP Co. Ltd., with IndianOil. Swift integration of the countrywide assets and operations of both the companies led to the formation of a larger and more formidable marketing network for IndianOil. A similar exercise is underway for merger of the refining subsidiary, Bongaigaon Refinery and Petrochemicals Ltd. (BRPL).
<b><u>Core Performance</u></b>
<b>Financial Performance </b>
IndianOil's Gross Turnover (inclusive of excise duty) for the year 2007-08 reached a new high of Rs. 2,47,479 crore, up by 12.1 % as compared to Rs. 2,20,779 crore in the previous year.
The Profit After Tax was Rs. 6,963 crore, which is after considering the compensation of Rs. 18,997 crore in the form of oil bonds issued by the Government of India.
The IndianOil Board, which met here today, recommended a Dividend @ 55 %.
For the year 2007-08, the Company's Earnings Per Share (EPS) stand at Rs. 58.39 as compared to Rs. 62.90 for 2006-07. The total net under-recovery on account of price under-realisation on petrol, diesel, PDS kerosene and Domestic LPG in the financial year 2007-08 is Rs. 9,774 crore, after considering the compensation received in the form of oil bonds, subsidy sharing by upstream companies and Govt. of India subsidy.
<b>Marketing</b>
IndianOil’s Marketing group maintained its dominance in the market place during the year 2007-08. Growth in domestic sales from 53.36 million tonnes in the previous year to 57.55 million tonnes for the year 2007-08 ensured a 2.3% growth in market share. Market leadership was maintained in the direct consumer business with further strengthening of long-standing business ties with core sector customers like the Defence Services, Railways, State Transport Undertakings, etc. through innovative initiatives.
Retail sales in MS (petrol) and HSD (diesel) registered a robust growth of 12.2% and 12.7% respectively, with expansion of the network to 17,642 petrol/diesel stations (retail outlets). This includes commissioning of 727 special-format Kisan Seva Kendra (KSK) outlets in rural markets during the year, taking their total to 2,050.
The Corporation’s branded fuels, XTRAPREMIUM petrol and XTRAMILE diesel, maintained their leadership status, with a market share of 48% and 58.7% respectively among branded fuels in the market. XTRAPREMIUM and XTRAMILE are now available from 7,071 and 10,477 retail outlets of IndianOil respectively.
Use of XTRAPOWER fleet card by fleet owners went up by 26%, with transactions of Rs. 9,800 crore, while the XTRAREWARDS loyalty card programme, for rewarding retail customers with free fuel and gifts from alliance partners, crossed the one-lakh mark during the year. More IndianOil outlets were upgraded to XTRACARE standards during the year, taking their total to nearly 2,000. The process of third-party certification was also extended to more outlets and now covers about 6,500 outlets. About 1,000 outlets were fully automated during the year.
IndianOil enrolled over 37 lakh new LPG (Liquefied Petroleum Gas) customers during the year 2007-08, raising the total number of Indane households to 504 lakhs. Non-domestic packed LPG sales recorded a 41% growth while bulk LPG sales registered a 38% growth over the previous year; Autogas (LPG) sales from over 150 IndianOil retail outlets in 71 cities touched 90,000 tonnes, a 53% growth over the previous year.
SERVO lubricants achieved over 4.5% growth in domestic market while exports grew by 56% during the year with tapping of new markets in Indonesia, Vietnam, Nigeria and Oman and appointment of new distributors in Bahrain and Qatar.
IndianOil continued to be the leader in aviation fuelling business with a 62.6% market share. It met the full requirements of aviation fuels of the Army, Navy and over 88% of the Air Force during the year. Marine sales grew by about 12%.
<b>Refineries </b>
For the year 2007-08, IndianOil’s seven refineries achieved the highest ever throughput of 47.4 million tonnes, registering a 7.7% growth in crude oil processing over the previous year. For improved margins, these refineries processed the highest ever percentage of high-sulphur crude oil (48.8% as against the previous highest of 43.7% in 2006-07) and heavy crude oil (9.4% as against the previous highest of 3% in 2006-07). Stream-sharing between group refineries ensured better capacity utilisation and enhanced gross refining margins.
Continuing with direct chartering of ships for petroleum imports, IndianOil imported a record quantity of 45.73 million tonnes of crude oil in 2007-08 as against 42.68 million tonnes in 2006-07. This includes crude oil imported for Chennai Petroleum Corporation Ltd. (CPCL), a group company. Several new grades were procured from Angola, Nigeria, Cameroon, Equatorial Guinea and Malaysia to widen the crude oil basket.
<b>Pipelines</b>
As the backbone of IndianOil’s refining and marketing operations, its 9,300 km pipelines network registered the highest ever operational throughput of 57.12 million tonnes during the year. Compared to the previous year, the product pipelines achieved a 10.45% increase in throughput at 21.27 million tonnes while the crude oil pipelines registered a 10.54% growth at 35.85 million tonnes. During the year, IndianOil opened new facilities at Mundra port on the west coast for handling of heavy crude oil and blending of heavy and normal grades.
<b>Projects</b>
IndianOil is implementing projects of over Rs. 50,000 crore currently. Major ones among them are: a crude oil pipeline system from Paradip to Haldia (330 km); capacity augmentation at Panipat Refinery (from 12 to 15 million metric tonnes per annum or MMTPA) and Haldia Refinery (from 6 to 7.5 MMTPA); MS quality improvement projects at Panipat and Mathura refineries; residue upgradation and MS/HSD quality improvement project at Gujarat Refinery; a Naphtha Cracker at Panipat; a 15 MMTPA integrated refinery-cum-petrochemicals complex at Paradip; and new product pipelines from Koyali to Ratlam (265 km), Chennai to Bengaluru (290 km), Panipat to Jalandhar (275 km LPG pipeline), and Mathura to Bharatpur (21 km) and also its first gas pipeline from Dadri to Panipat (130 km).
<b>Research & Development</b>
IndianOil R&D developed 186 lubricant formulations during the year, of which 160 were commercialised. About 45 approvals were also received from OEMs (Original Equipment Manufacturers). Eighteen new patents were filed, of which 12 were approved. This takes the total number of patents to nearly 120, including over 50 international patents. As part of commercialisation of in-house developed technologies, a novel Needle Coke technology was licenced to Numaligarh Refineries Ltd., the first time to a company outside the IndianOil Group.
The R&D Centre is in the process of setting up a commercial Hydrogen-CNG dispensing station at an IndianOil retail outlet in New Delhi this year as part of the Corporation’s efforts to promote Hydrogen as an alternative fuel. It has commissioned a bio-gas plant and bio-mass gasifier plant during the year 2007-08 for conducting research into energy-efficient biogas burners. It has also signed a Memorandum of Understanding with Saudi Aramco for research into cracking of refinery condensate for generating value-added products.
<b><u>New Businesses</u></b>
Besides consolidation in core areas, IndianOil took big strides in new businesses during the year 2007-08.
<b>Integration Initiatives</b>
<b><u>Exploration & Production (E&P)</u></b>
The consortium of IndianOil, OIL and Hindustan Oil Exploration Company (HOEC) discovered gas in Assam during the year and commerciality of the find is being established. IndianOil holds a participating interest of 43.5% in the gas block with HOEC as the operator. The IndianOil-OIL-Sonatrach (Algeria) consortium bagged Area 95/96 under the fourth round of international bidding in Libya, with Sonatrach as the operator. The IndianOil Board has approved purchase of 5% equity of upstream major OIL on offer from the Government of India.
<b><u>Petrochemicals</u></b>
During the year, IndianOil emerged as the most preferred supplier of LAB (Linear Alkyl Benzene, used in the manufacture of detergents) in the domestic market, generating revenues of over Rs. 935 crore during the year as compared to Rs. 697 crore in 2006-07. IOCLAB sales grew by 12% over the previous year, as a cumulative of 9.3% growth in the domestic market and 22% growth in exports. This translated into sales of 136,000 tonnes and a plant capacity utilisation of over 110%. The domestic market share of IOCLAB is nearly 37%, with exports to about nine countries.
IndianOil completed its first full year in PTA (Purified Terephthalic Acid, feedstock for the polyester industry) business in 2007-08 with sales of 375,210 tonnes and revenue of over Rs, 1,525 crore in the domestic market. The Corporation also exported Paraxylene to Indonesia, Thailand and Malaysia for the first time during the year.
<b>Diversification Initiatives</b>
<u>Gas</u>
IndianOil sold 1.74 million tonnes of R-LNG during 2007-08, thus generating a turnover of Rs. 2,077 crore (Rs.1,899 crore in 2006-07). A technology innovation was initiated to reach LNG directly to the doorstep of bulk consumers. Supplies have commenced through cryogenic tankers to customers in Maharashtra and Gujarat for industrial as well as captive power applications. During the year, the Corporation has tied up with several more new partners for sourcing of gas and entered into gas sales agreements with major customers like Pragati Power Corporation Ltd., Delhi, and Ratnagiri Gas & Power Pvt. Ltd.
<u>Bio-fuels</u>
During the year 2007-08, IndianOil obtained the approval of its Board and the consent of its shareholders for amending the Company’s Memorandum of Association to enable entry into the entire value chain of bio-diesel. As a sequel to this, it has signed an MoU with the Government of Chhattisgarh for the formation of a joint venture to take up plantation of Jatropha (in about 30,000 hectares of revenue wasteland) and other activities related to bio-diesel production in the State. The Government of Madhya Pradesh has also allotted 2,000 hectares of revenue wasteland in Jhabua district to IndianOil for energy crop plantation.
<b>Globalisation Initiatives</b>
<u>IndianOil (Mauritius) Ltd.</u>
IndianOil (Mauritius) Ltd. (IOML) emerged as the leader in the highly competitive aviation business during the year, with a 35% market share. Overall sales grew by 19.5% as compared to the previous year while sale of SERVO lubricants grew by 40% to 142 kl. Five new retail outlets were commissioned during the year, taking the total number to 13. With the commissioning of two new tanks, the storage capacity of IOML’s Mer Rouge terminal went up to 24,000 tonnes.
<u>Lanka IOC Ltd.</u>
Lanka IOC commissioned an 18,000 tonnes per annum lubricants blending plant and a state-of-the-art laboratory for testing fuels and lubricants at Trincomalee during the year. It also commenced bunkering business and commissioned 8 new lube distributorships to expand the lube marketing network.
<u>IndianOil Middle East FZE</u>
IndianOil Middle East FZE (IOME), set up to oversee the expansion of the Corporation’s business in the Middle East, is mainly into blending of SERVO lubricants and marketing of lubricants and petroleum products in the Middle East, Africa and CIS countries During 2007-09, IOME saw a five-fold increase in sale of finished lubes as compared to the previous year. SERVO distributors were appointed for Oman, Qatar and Bahrain and are under finalisation in UAE and Yemen. SERVO trademark has been registered in the UAE and is in process in Oman
<u>Consultancy</u>
The Turkish Energy Market Regulatory Authority has granted licence to IndianOil and Calik Enerji of Turkey for setting up a 15 MMTPA grassroots integrated refinery-cum-petrochemicals complex at Ceyhan in Southern Turkey. Discussions are underway with Calik Enerji, Eni (Italy), and KazMunay Gas (Kazakhstan) for formation of a consortium. Discussions are also underway to finalise the share sale purchase agreement for acquiring 12.5% equity in the Trans-Anatolian Pipeline Company (TAPCO) promoted by Calik Enerji and Eni. TAPCO will develop and implement a 550-km crude oil pipeline of 50 MMTPA capacity from Samsun to Ceyhan
The technical services and manpower secondment agreements of over a decade with Emirates National Oil Company, Dubai, have been extended by one more year. A consultancy contract at Mina Al Ahmadi Refinery of Kuwait National
<img src=http://www.indianoilxpress.com/NewImages/Thumbnail/indianOil_Expect.jpg width=600 align=center>
Petroleum Company was completed during the year. Training programmes are being conducted for oil industry officials of Iraq, Libya, Sudan and Malaysia.
<a href=/HTML/Presentation.htm target=_blank class=normallink >Presentation on IndianOil's Financial Results 2007-2008</a><br/>
<a href=/downloads/AuditedResults_pdf.pdf target="_blank" class = normallink >Audited Financial Results for the Year Ending 31st of March 2008</a>
