Indian Oil Corporation Ltd. (IndianOil), India’s top-ranked Fortune 'Global 500' company and flagship national oil major in the downstream sector, ended the year 2016-17 on a triumphant note by achieving record performance in all physical parameters and surpassing its earlier benchmarks.
According to IndianOil Chairman, Mr. B Ashok, IndianOil sold 83.49 million tonnes of products, including POL, gas, petrochemicals, explosives and exports, during 2016-17; its refineries achieved a throughput of 65.2 million tonnes; and the cross-country network of pipelines registered a record throughput of 81.8 million tonnes.
With Paradip Refinery in its first year of operation, IndianOil refineries achieved a cumulative crude oil throughput of 65.2 million tonnes, during the year 2016-17, which is the highest ever. Excluding Paradip Refinery, all other refineries together utilised 105% capacity.
The Corporation's pipelines network of over 12,800 km achieved a combined throughput of 81.8 million tonnes in 2016-17, thereby surpassing the previous highest figure of 79.8 million tonnes in 2015-16.
IndianOil emerged as the second biggest player in both petrochemicals & natural gas by achieving the best ever sales performance in both the verticals. The Corporation sold 2.57 million tonnes of petrochemicals in 2016-17. Sale of Natural Gas, at 3.79 million tonnes, registered a 4% growth over the previous year.
IndianOil’s E&P business got a shot in the arm when an Indian consortium with IndianOil acquired 23.9 % of Vankor & 29.9% of Taas assets in Russia from Rosneft. With this, the Corporation’s share of production increased from 0.97 MMTPA to 1.45 MMTPA, by over 200%.
The year 2016-17 saw IndianOil spearheading yet another mammoth welfare programme, Pradhan Mantri Ujjwala Yojana, the world's biggest initiative for energy and financial inclusion of women from the bottom of the pyramid sections of society. With a target to release 5 crore deposit-free LPG connections to BPL households by the year 2019, the programme crossed two crore connections in less than a year, raising LPG usage across markets to above 70 per cent.
As part of another major mission to go beyond BS-III fuel standards, a three-phase roll-out of BS-IV transportation fuels was launched in 2014, which involved major refinery upgrades, changes in supply logistics and other related transitions. During 2016-17, meticulous planning ensured a smooth roll-out of the final phase (Phase-3) in the rest of India effective April 1, 2017. IndianOil is also the first among oil marketing companies to supply advanced BS-VI grade fuel to major automobile manufacturers for their test runs of vehicles that will be rolled out in 2020.
In 2016-17, IndianOil launched a revolving Startup Fund to nurture an eco-system conducive for innovations in the domestic hydrocarbons sector. Driven by IndianOil' state-of-the-art Research & Development Centre at Faridabad, the scheme will support projects that aim to establish innovative technology and business process re-engineering ideas with significant business potential, social relevance and focussed on environment-protection.
True to its legacy of going beyond the call of duty during disturbed conditions, IndianOil rose to the occasion and maintained near-normal supplies of petroleum products to certain parts of Jammu & Kashmir, Tripura and Manipur despite adverse law & order conditions and grave threats to its employees and transporters. Supply line was also maintained in Chennai city in the aftermath of Cyclone Vardah in Dec. 2016.
IndianOil achieved a capital expenditure of Rs. 70,054 crore during the XII Plan period, which is about 125% of the target of Rs. 56,200 crore.
The improvement in operational and financial performance for FY 2016-17 reflected in the market capitalization of the Company, which grew two-fold, from Rs. 95,564 crore as on 31st March 2016 to Rs. 1,87,948 crore as on 31st March 2017. In view of its rising share price and market capitalisation, IndianOil was included in the Nifty50 index (NSE benchmark index of 50 best performing corporates).
The Offer For Sale of IndianOil shares to employees during the year received an overwhelming response, making it the best ever employee participation in the disinvestment process of any public sector company.
CORE PERFORMANCE
Marketing
Mr. B. Ashok, Chairman, IndianOil addressing
the media at IndianOil's Annual Press Conference 2017. With sales of 74.11 million tonnes of petroleum products in 2016-17, IndianOil continued to lead the domestic market in the core product categories of petrol, diesel and LPG. In line with the growth of infrastructure, manufacturing and services sectors, the Corporation expanded its marketing infrastructure and retail network, backed by enhanced refining and pipeline throughput capacities.
Besides serving bulk customers like the defence services, the railways and state transport undertakings through over 6,500 dedicated facilities, IndianOil currently operates over 26,200 fuel stations covering every nook and corner of the country. Over 930 fuel stations were added to the retail network in 2016-17, of which 365 were Kisan Seva Kendra (KSK) outlets in rural areas. The contribution of KSK outlets to total sales reached a new high of 14.6% in MS and HSD during the year. With about 600 fuel stations automated in 2016-17, the cumulative number of such automated stations at IndianOil crossed the 10,000 mark.
As part of Pradhan Mantri Ujjwala Yojana (PMUY), formally launched by the Hon'ble Prime Minister on 1st May, 2016, IndianOil released 91 lakh new deposit-free LPG connections during 2016-17. The Corporation released an all-time high 1.5 crore LPG connections (PMUY+regular) during the year against 1.03 crore last fiscal. For the first time, Indane sales crossed 10 million tonnes in 2016-17, registering a 10% year-on-year growth.
IndianOil’s SERVO brand lubricants improved their market share during the year with a volume gain of 9.7 TMT. IndianOil Aviation Service, now operating from 104 locations, cruised high during the year, registering a volume growth of 5.7% (Sales: 3.95 MMT in 2016-17) in an increasingly competitive market.
In support of the Government’s demonetisation drive, IndianOil quickly mainstreamed the popular cashless payment modes across its sales network. The Corporation also eased the situation for the general public by disbursing about Rs.100 crore in new currency notes through Cash@POS from its fuel stations. It is now partnering several e-retailers, including banks for e-payment gateways, as well as tying up with transport aggregators to optimise supply & distribution.
IndianOil's customer touch-points pan-India are seamlessly backed up by a network of supply locations, 60 of them converted to Smart Terminals, where several new initiatives for improved processes have been incorporated in the Terminal Automation System
Refineries
With Paradip Refinery in its first year of operation, IndianOil refineries achieved a cumulative crude oil throughput of 65.2 million tonnes during the year 2016-17, which is the highest ever. Excluding Paradip Refinery, all other refineries together achieved 105% capacity.
Paradip Refinery, commissioned in February 2016, continued its journey of excellence during the year, while ramping up its capacity utilisation to more than 85% during March 2017.
The year saw the best ever performance of IndianOil refineries (excluding Paradip) in energy parameters such as Energy Efficiency (MBN: 74.9) and Fuel & Loss (F&L: 8.49%.
IndianOil refineries led the industry to enable the country keep its commitment to supply cleaner, 100% BS-IV compliant automotive fuels across the country from 1st April, 2017. In another first aimed at timely implementation of the Government of India target of switchover to BS-VI fuels across the country by 1st April 2020, Mathura Refinery became the first refinery to produce BS-VI compliant MS and HSD for testing purposes by automobile manufacturers.
IndianOil widened its crude oil basket during the year with new grades, viz., Antan, Clov, Mondo, Iracema and Sangos. Processing of cheaper heavy and high-TAN crude grades went up to 18%.
Pipelines
IndianOil’s underground highways have been its major strength in reaching out to markets and customers as a least-cost supplier. The Corporation achieved the highest throughput of 81.8 MMT during the year 2016-17 as against the previous highest of 79.8 MMT in 2015-16.
About 1,100 km of pipeline sections were commissioned during the year, expanding the length of IndianOil’s pipeline network to 12,848 km, with the capacity of the liquid pipelines network at 93.7 MMTPA and that of the gas pipelines at 9.5 MMSCMD.
Projects currently under implementation will further increase the length of IndianOil's pipeline network to about 20,000 km and the capacity of liquid product pipelines to about 118 MMTPA and that of gas pipelines to 44.5 MMSCMD.
Research & Development
IndianOil made significant progress in deployment of indigenous technology during the year 2016-17. Oilivorous-S, a bioremediation technique perfected by IndianOil’s R&D Centre, was called to the fore to mitigate the oil spill at Ennore near Chennai in Jan-Feb. 2017, validating IndianOil’s focus on environment protection. IndianOil’s R&D Centre filed for 105 patents (6 in India and 99 overseas) during the year. The Centre was granted 28 patents in 2016-17, taking IndianOil’s portfolio of active patents to 554.
Among the innovative products & processes commercialised during the year were:
• Delayed coking technology, jointly licenced by IndianOil and EIL, was deployed to revamp the 0.6 MMTPA Coker-A unit at Barauni Refinery.
• INDAdeptG unit of 35 TMTPA capacity commissioned in Guwahati Refinery using homegrown technology for deep desulphurisation of gasoline.
• INDMAX unit at Guwahati Refinery was revamped to 0.15 MMTPA (150% of design capacity) based on R&D’s process design package.
• Ind-CokerAT technology was successfully demonstrated at Panipat Refinery with significant increase in distillate yield as compared to delayed coking technology.
A 16-inch diameter in-line inspection tool for pipelines has been fully designed & developed with in-house capabilities, whose performance is at par with that of other global high-resolution inspection tools.
NEW BUSINESSES
Petrochemicals
During the year 2016-17, IndianOil achieved the highest ever sales of petrochemicals (2.57 MMT, including Benzene, as against 2.54 MMT in the previous year). The Corporation has established itself as the second largest polymer supplier in the country with grades covering 90% of plastic applications. 52 polymer grades were introduced in the domestic market.
IndianOil has added two new export destinations, Myanmar and Egypt, for petrochemicals during the year 2016-17. With this, PROPEL brand petrochemicals now have presence in 73 countries, with polymer exports to 55 countries across the globe.
Natural Gas
The total gas sales during FY 16-17 was 3.79 MMT, which resulted in approx. 4 % growth over the previous financial year. Sale of 23.6 TMT of LNG was achieved through ‘LNG at the Doorstep’ scheme during the year. IndianOil, through its joint venture company, IndianOil LNG Pvt. Ltd., is setting up a 5-MMTPA LNG Terminal at Kamarajar Port, Ennore, to be commissioned by 2018-19.
The Corporation is operating city gas distribution projects in Agra & Lucknow through its JV with GAIL, i.e., Green Gas Ltd. (GGL). IndianOil is also implementing city gas distribution projects in Chandigarh, Allahabad, Panipat, Daman, Ernakulam, Udhamsingh Nagar and Dharwad through its JV with Adani Gas Ltd., i.e., IndianOil-Adani Gas Pvt. Ltd. (IOAGPL). The projects are in various stages of execution.
IndianOil has initiated forays into bio-CNG marketing and has signed MoUs with three leading bio-CNG producers in the country.
Exploration & Production
IndianOil is actively engaged in exploration activities in eight domestic blocks (including two coal-bed methane block) and nine overseas blocks, with a working interest ranging from 3.50 per cent to 50 per cent. The nine overseas blocks are located in eight countries, namely Russia, USA, Canada, Libya, Venezuela, Gabon, Nigeria and Yemen.
The Indian consortium (IndianOil, OIL and BPRL) completed acquisition transactions of 23.9% Participating Interest (PI) in Vankor & 29.9% PI in Taas assets in Oct. 2016. With this, IndianOil's share of 2P reserves would increase by 338 MMBOE and current production from these assets is 46,000 BOE/day and IndianOil’s share of production would increase by 200% to 1.45 MMTPA from 0.56 MMTPA.
International expansion
IndianOil signed an MoU with M/s. Bangladesh Petroleum Corporation, the national oil company of Bangladesh, for engaging in mutually advantageous activities in the hydrocarbon sector, particularly in LPG, including development of infrastructure facilities for import & storage, marketing network in Bangladesh as well as transportation of LPG from Chittagong to North East India. Another MoU was signed with M/s. Premier LP Gas Pvt. Ltd., Bangladesh, a subsidiary of M/s. Total Oil India Pvt. Ltd., for import and storage of bulk LPG in their existing storage facility at Chittagong with a view to augment LPG supply to North East India till such time own infrastructure could be set up with the cooperation of Bangladesh Petroleum Corporation.
SUSTAINABILITY INITIATIVES
Alternative Energy
IndianOil has commissioned 167.6 MW of wind-power projects in Gujarat, Andhra Pradesh and Rajasthan. During 2016-17, four new wind-power projects of 98.3 MW capacity were commissioned in Jaisalmer & Jodhpur districts of Rajasthan and in Rojmal, Gujarat. Generation from wind-power projects during 2016-17 was 158 million units (kWh), which corresponds to an emission reduction of 129 TMTCO2e (thousand metric tonnes of carbon dioxide equivalent).
IndianOil’s total installed capacity of solar PV is 20 MW. This includes 9.5 MW grid-connected solar projects and 10.5 MW off-grid projects. During 2016-17, 12.3 MW solar PV were installed at various marketing, pipelines and refinery installations.
About 2,000 IndianOil fuel stations were converted to operate on solar power during the year. Cumulatively, 6,170 fuel stations have been converted to solar energy till date, having a cumulative capacity of about 24 MW.
Waste Management
Under Swachh Bharat Mission, IndianOil is installing 10 waste-to-energy plants of 5 tonnes per day capacity each, to manage the Municipal waste generated in Varanasi city. The first plant became operational in Dec. ’16 and the electricity generated is being used to illuminate street lights in the vicinity.
IndianOil’s Mathura Refinery has signed an MoU with the National Mission for Clean Ganga (NMCG), Ministry of Water Resources, Govt. of India, in Aug. 2016 for using treated effluent (20 mld) from the sewage treatment plant located on the banks of River Yamuna in Mathura-Vrindavan area for non-potable purposes of the refinery. This will reduce withdrawal of fresh water from natural sources by the refinery.
A total of 560 rain-water harvesting systems have been installed at various refineries, terminals, depots and housing complexes of IndianOil. With a total catchment area of 950 hectares, about 3 billion litres of water is being harvested annually.
CSR INITIATIVES
• IndianOil set up a Tourist Medical Facilitation Centre at Khardungla, the world’s highest motorable mountain pass in Jammu & Kashmir. The centre is situated at a height of 18,380 feet from mean sea level.
• IndianOil constructed 23 vegetable storage cellars in village Nang near Leh, J&K with support from Leh district administration. The cellars are partially buried underground and help preserve the vegetables during the harsh winters in an environment-friendly way. This would help the local farmers fetch better prices for their produce during the lean seasons and will also help them get better quality seeds for the next crop season.
• Under the Government of India’s National Skill Development Mission, IndianOil established a Skill Development Institute (SDI) at Bhubaneswar with an aim to train 40,000 youth in 10 years (See box item). • Under the Government of India’s Swachh Bharat Abhiyan, over 6,800 cleanliness activities, viz., cleanliness drives, awareness campaigns, etc., were undertaken across the country.
• IndianOil’s wide network of operating locations has opened up unique opportunities to reach out to communities. “IndianOil Jal Jivan” (drinking water solution for an entire village population) and “IndianOil Surya Prakash” (solar street light for an entire village road) are some of the flagship community development initiatives implemented during the year across 32 villages situated near some of its operating locations.
Kalikrishna M
Chief General Manager (Corporate Communications)
Indian Oil Corporation Limited
Corporate Office
