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Strongly driven by the highest ever sales of petroleum products and boosted by an increasing contribution from its Petrochemicals and Gas businesses, the nation’s largest corporate and its highest ranked Fortune ‘Global 500’ company, Indian Oil Corporation Ltd. (IndianOil) reported an excellent performance for the year 2009-10.
Sharing the highlights of the year, Mr. B.M.Bansal, Chairman, IndianOil, said, “Despite the uncertain phase that the global economy went through, the Indian economy showed a resilience that was truly remarkable. While the overall petroleum products consumption in the country grew at 3.4% during the year, IndianOil managed to notch up a growth of 4.6% registering a sales volume of 63.7 million tonnes. The Corporation's refineries surpassed 100% capacity utilisation for the third consecutive year and clocked a throughput of 50.7 million tonnes. IndianOil’s pipelines network registered the highest ever operational throughput of 65 million tonnes of crude oil and petroleum products”, he added.
During the year 2009-10, in which the company celebrated its Golden Jubilee, IndianOil’s ranking improved from 116th to 105th in the prestigious Fortune Global 500 listing. The sale of Natural Gas also went up to 1.89 million tonnes and the company emerged as the first Indian corporate to enter the international bond market this year, and even bagged the high-potential Carabobo block in Venezuela in a consortium with Repsol, Petronas, OVL and OIL. A seamless merger of Bongaigaon Refineries and Petrochemicals Ltd was also completed with IndianOil during the period. To realign the company’s strategy in the light of emerging challenges in the future, a new Vision was adopted by the Corporation with an aspiration to emerge as the Energy of India.
Financial Performance
IndianOil’s gross turnover (inclusive of excise duty) for the year 2009-10 touched Rs. 2,71,074 crore. The Profit After Tax was Rs 10,221 crore.
For the year 2009-10, the company’s Earnings Per Share (EPS) stands at Rs 42.10 as compared to Rs. 12.15 for 2008-09. The total net under-recovery on account of price under–realisation on PDS Kerosene and domestic LPG in the financial year 2009-10, is Rs. 3,159 crore. This is in comparison with a net under-realisation of Rs.Nil crore in 2008-09.
For the year 2009-10, IndianOil has accounted for cash compensation of Rs 15,172 crore, out of which Rs. 7,100 crore has been received during the year. In addition, the company has been granted discount of Rs 7,548 crore received from upstream companies, as per the under recovery sharing mechanism.
The Board of Directors has recommended a dividend of Rs 13 per share.
The Gross Refining Margin for April-March 2010 is USD 4.47 per barrel as compared to USD 3.69 per barrel during the previous year.
Core Performance
Marketing
IndianOil continued to maintain its dominance in the market clocking the highest ever level of sales during the year 2009-10. Sales volume and market shares improved in almost all the segments in marketing. In the high-volume, high-competition direct consumer business, IndianOil continued to be the leader with a market share of 65% and long-standing business ties with core sector customers were further strengthened.
During the year, BS-IV quality petrol and diesel was launched in 13 cities. Retail sales in MS (petrol) and HSD (diesel) registered a robust growth of 14% and 9.2% respectively, with the expansion of IndianOil’s countrywide network which touched 18,643 petrol/diesel stations (retail outlets). This includes commissioning of about 414 special-format Kisan Seva Kendra (KSK) outlets in rural markets during the year, taking their total to 2947. The Rajiv Gandhi Grameen LPG Vitarak scheme, a new concept to extend the availability of LPG to the rural market was launched during the year. IndianOil enrolled 42 lakh new LPG customers during the year 2009-10, raising the total number of Indane households to nearly 574 lakh.
Non-domestic packed LPG sales recorded a 29% growth while bulk LPG sales registered a 45% growth over the previous year. To cater to the growing demand of Autogas (LPG), 50 Auto LPG Dispensing Stations were commissioned during the year taking their tally to 273. During the year, IndianOil's market share in the finished lubes segment grew by 1.4%. SERVO lube network was also expanded to over 200 auto stockists, 74 industrial stockists, 9 marine stockists and 27 CFAs. IndianOil's world class SERVO lubricants were formally launched in Qatar and exports touched nine TMTs with a growth of 34%. IndianOil continued to be the leader in the aviation business with a market share of 62.9% among PSUs and several new businesses of international airlines were garnered during the year.
Refineries
For the year 2009-10, IndianOil's refineries achieved over 100% capacity utilization for the third consecutive year. As a result of sustained efforts in energy conservation, IndianOil refineries clocked the lowest overall specific energy consumption of 62 MBTU/BBL/NRGF (MBN) during the year as against 64 in 2008-09. Also the best distillate yield of 75.3 wt% was achieved during the period. Panipat, Haldia, Mathura refineries commenced production of BS-IV compliant petrol and diesel. Stream-sharing between group refineries ensured better optimisation, capacity utilisation, value addition and enhanced gross refining margins. Some of the projects completed during the year are MS quality upgradation projects at Panipat and Mathura.
To widen the crude oil basket, several new grades were procured from Australia, Kazakhstan, Algeria, Nigeria and Libya. Continuing with the direct chartering of ships for petroleum imports, crude imported for IndianOil touched 39 million tonnes in 2009-10. Four projects were commissioned for flare gas recovery systems at Digboi, Haldia, Barauni and Gujarat refineries.
Pipelines
During the year, IndianOil's network of underground highways breached the 10,550 kilometre mark and registered the highest ever operational throughput of 65 million tonnes. The Mathura-Delhi pipeline became the first to supply BS-IV complaint petrol to the National Capital Region. The 290 km, 1.45 MMTPA capacity Chennai-Bengaluru product pipeline was also commissioned during the period.
Projects
IndianOil is currently implementing projects with an approved cost of over Rs 47,000 crore. The major ones in the refining segment are - a 15 MMTPA refinery at Paradip; residue upgradation and MS/HSD quality improvement at Gujarat Refinery; MSQ upgradation projects at Barauni, Guwahati, Digboi, Bongaigaon; DHDT at Bongaigaon Refinery and Panipat Refinery Expansion. Some of the major pipeline expansion projects include the Paradip-Sambalpur-Raipur-Ranchi pipeline(1,108 km) and the Dadri-Panipat R-LNG line. The projects related to the integrated crude oil handling facilities at Paradip is also under way.
Research & Development
IndianOil’s R&D continued to add value to different facets of the companies’ activities. During the year, 181 lube formulations were developed and 75% were commercialised. Over 351 patents were filed and some of the new in-house technologies and catalysts developed are the Olivorus-S bio-remediation technology, DHDS catalyst, a special Indicat catalyst for BS-IV compliant Diesel, IndVi catalyst for improved distillate yield and FCC throughput. IndianOil won the prestigious Technology Day Award 2010 from the Government of India, for the successful development and commercialisation of multifunctional additives for Premium Grade Diesel and Lubricity additives for Ultra low sulphur Diesel.
New Businesses
Besides consolidation in core areas, IndianOil took big strides in new businesses during the year 2009-10.
Integration Initiatives
Exploration & Production (E&P)
During the year, IndianOil was awarded the Petroleum Exploration Licence for one operatorship block by the Government of Gujarat under NELP VII while two blocks have been provisionally awarded under NELP VIII. IndianOil’s E&P portfolio comprises eight blocks in the NELP rounds and two blocks in the CBM rounds with one farm-in block in the domestic sector. In addition, the company had earlier bagged blocks in Yemen(Two), Libya(Three), Iran(One) and Venezuela(One) with Farm-in blocks at Gabon(One), Nigeria(One) and Timor-Leste(One).
Petrochemicals
During the year, IndianOil’s LAB (Linear Alkyl Benzene) sales touched 124 TMT and over 19 TMT was exported to six countries including Yemen, Bangladesh, Korea, UAE and Australia. The PTA (Purified Terephthalic Acid) business expanded to cater to all major domestic customers and clocked a sales volume of 5,28,000 tonnes with a growth of over 30% from the previous year. IndianOil's largest petrochemicals investment, at a cost of Rs 14,400 crore - the Naphtha Cracker and downstream polymer units at Panipat - has been completed and the first batch of polymers dispatched.
Diversification Initiatives
Gas
IndianOil sold 1.89 million tonnes of R-LNG during 2009-10 and turnover grew by 3.9% over the previous year. IndianOil’s JV – Green Gas has been granted authorisation for City Gas Distribution(CGD) at Agra and has also emerged the lowest bidder for CGD at Allahabad, Chandigarh and Ghaziabad. A long term gas supply agreement has been signed with NTPC.
Bio-fuels
IndianOil has the largest captive plantation for bio-fuel production in India – 1012 hectares – which is underway in Chattisgarh and Madhya Pradesh, generating rural employment of over 1.4 lakh mandays. IndianOil has also entered into a partnership with Ruchi Soya Industries Ltd., a leading manufacturer of high quality edible oils, to establish a model value chain for the production of bio-diesel in the State of Uttar Pradesh.
Other Diversification Initiatives
IndianOiI has forayed into wind energy business with the commissioning of a 21 MW wind power project in the Kutch district of Gujarat and the cumulative power generation from the 14 wind turbine generators has crossed 6 crore units(KWHR) since commissioning in January 2009. IndianOil has also launched Solar Lanterns in Orissa, Karnataka and North East states and an all-India phased roll out is being planned. IndianOil has signed a MoU with the Nuclear Power Corporation of India Ltd.(NPCIL), for investing in the nuclear energy sector in the country.
Globalisation Initiatives - Overseas Subsidiaries
IndianOil (Mauritius) Ltd. (IOML)
In the year 2009-10, IOML's sales grew by 11% while the industry grew by (-)1.9%. The company emerged as the third largest player in the Mauritian petroleum industry. IOML also emerged as a leader in the aviation fuelling business with a market share of 41.9% and recorded its highest ever throughput of 262 TKL. The company’s terminal at Mer Rouge received the ISO 9001-2008 accreditation, making it the only petroleum installation in the country to obtain the prestigious recognition.
Lanka IOC Plc (LIOC)
LIOC has been ranked No. 1 among Sri Lanka's leading listed companies for the third consecutive year. During the year, the overall market share of the company went up from 9.4% to 12.4%. It also achieved a market share of about 43.5% in the highly competitive bunker market, catering to all types of bunker fuels and lubricants at all ports of Sri Lanka. Five new lube distributors and 14 SERVOXpress outlets were commissioned during the year, besides the introduction of Nitrogen filling facilities for automotive tyres – the first of its kind in Sri Lanka.
IndianOil Middle-East FZE
IOME FZE is IndianOil's subsidiary in the Middle East and is mainly into blending and marketing of SERVO lubricants and marketing of petroleum products in the Middle East, Africa and CIS countries. During 2009-10, lubes sales grew by 120% over the previous year and finished lubes were exported to Qatar, Yemen, Bahrain, Oman, UAE and Nepal.
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