A Pre-Submission report on

Study of Refinery Capacity utilization with special reference to Indian Oil Corporation and Bharat Petroleum corporation

UNDER SUPERVISION OF Dr. (Mrs.) SHAIVYA SINGH Sr. Lecturer, SMS

SUBMITTED BY PUSHPESH KUMAR PGRM/02/35, SMS

School of Management Sciences, Varanasi 2008-09

INTRODUCTION

1.

CAPACITY UTILISATION

MANY domestic oil companies have the potential to go global while integrating their operations within the entire hydrocarbon value chain. In the `XIII refinery technology meet on maximising hydrocarbon value chain', However, refineries face the challenge of competing in the changing world energy scene, while being cost effective. Citing a study conducted in partnership with Shell, only two refineries in the country met the better plant capacity utilisation benchmarks. This has to be extended to other plants. The three-day refinery technology meet is aimed at addressing issues relating to country's energy security and sustaining refining business in the context of rising crude oil prices, etc. Three grassroots refineries of BPCL at Bhatinda (Rs 10,000 crore investment), BPCL, Oman Oil at Bina in M.P. (Rs 9,000 crore) and IOC's at Paradip (Rs 18,000-20,000 crore), were coming up. 75 per cent of the crude oil requirement is met through imports, and the country is heavily vulnerable on various external factors affecting the hydrocarbon sector. Demand for energy in India is expected to double the world average growth of 1.9 per cent.

2.REFINERIES IN INDIA
1. As of July, 2008 there are a total of 18 refineries in the country comprising 17 in the Public Sector, one in the private sector. The company-wise locations and capacity of the refineries as on 1.01.2008 as given below:

S.No Name of the company 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Indian Oil Corporation Limited (IOCL) IOCL IOCL IOCL IOCL IOCL IOCL Bharat Petroleum Corporation Limited (BPCL) Kochi Refineries Ltd. (KRL)

Location of the Refinery Guwahati Barauni Koyali Haldia Mathura Digboi Panipat Mumbai Kochi

Capacity (MMTPA)* 1.00 6.00 13.70 6.00 8.00 0.65 6.00 6.90 7.50 2.35 3.00 9.69 70.79

Bongaigaon Refinery & Petrochemicals Ltd. (BRPL) Bongaigaon Numaligarh Refinery Ltd.(NRL)

Numaligarh

Mangalore Refinery & Petrochemicals Ltd. (MRPL) Mangalore

TOTAL

Mil*m*Million Metric Tonnes Per Annum

2.1 REFINING CAPACITY AND CAPACITY UTILISATION
1. To meet the growing demand of petroleum products, the refining capacity in the country has been gradually increased over the years by setting up of new refineries in the country as well as by expanding the refining capacity of the existing refineries. The total refining capacity in the country as on 1.7.2005 stands at 127.37 MMTPA. 2. The refining capacity, actual crude throughput and capacity utilisation during the last five years are indicated below:

2000-01 Refining Capacity(As on 114.59 1st April) Actual Crude throughput 103.1 (MMTPA) Capacity 91.00 Utilisation (%)

2001-02

2002-03

2003-04

2004-05

114.66

116.96

127.37

127.37

106.5

10.6

118.7

124.3

93.00

95.00

99.00

---

2.3 INTRODUCTION OF IOC REFINARY

Indian Oil Corporation Limited

Type Founded Headquart ers

PSU (Trading on BSE & NSE) 1964

New Delhi, India

Key people Sarthak Behuria, Chairman Petroleum products = Petrol, Industry Diesel, Kerosene, LPG, Petrochemicals

Revenue

▲ र. 2474.79 billion or $61.7
Billion [1] (2007-2008) US$ 1.96 billion (2007) ▲ 12.9% from 2006

Net income

Indian Oil is currently metamorphosing from a pure sect oral company with dominance in downstream in India to a vertically integrated, transnational energy behemoth. The Corporation is already on the way to becoming a major player in petrochemicals by integrating its core refining business with petrochemical activities, besides making large investments in E&P and import/marketing ventures for oil & gas in India and abroad.

2.3.1 IOC REFINARIES
Digboi Refinery, in Upper Assam, is India's oldest refinery and was commissioned in 1901. Originally a part of Assam Oil Company, it became part of IndianOil in 1981. Its original refining capacity had been 0.5 MMTPA since 1901. Modernization project of this refinery has been completed and the refinery now has an increased capacity of 0.65 MMTPA.

Guwahati Refinery, the first public sector refinery of the country, was built with Romanian collaboration and was inaugurated by Late Pt. Jawaharlal Nehru, the first Prime Minister of India, on 1 January 1962. Barauni Refinery, in Bihar, was built in collaboration with Russia and Romania. It was commissioned in 1964 with a capacity of 1 MMTPA. Its capacity today is 6 MMTPA. Gujarat Refinery, at Koyali in Gujarat in Western India, is IndianOil’s largest refinery. The refinery was commissioned in 1965. It also houses the first hydrocracking unit of the country. Its present capacity is 13.70 MMTPA. Haldia Refinery is the only coastal refinery of the Corporation, situated 136 km downstream of Kolkata in the Purba Medinipur (East Midnapore) district. It was commissioned in 1975 with a capacity of 2.5 MMTPA, which has since been increased to 5.8 MMTPA Mathura Refinery was commissioned in 1982 as the sixth refinery in the fold of IndianOil and with an original capacity of 6.0 MMTPA. Located strategically between the historic cities of Delhi and Agra, the capacity of Mathura refinery was increased to 7.5 MMTPA. Panipat Refinery is the seventh refinery of IndianOil. The original refinery with 6 MMTPA capacity was built and commissioned in 1998. Panipat Refinery has doubled its refining capacity from 6 MMT/yr to 12 MMTPA with the commissioning of its Expansion Project.

2.4 INTRODUCTION OF BPC REFINERY

Bharat Petroleum Corporation Limited

Type Founded Headquarter s Key people Industry Products Revenue Website

PSU (Trading on BSE) 1976 (After nationalisation of Burmah Shell Company) Mumbai, India Ashok Sinha, Chairman & MD Petroleum Oil , LPG USD $27.873 Billion (20072008) ▲ 27.5% from (20062007) www.bharatpetroleum.com

Bharat Petroleum Corporation Limited (BPCL) is one of India's largest PSU companies, with Global Fortune 500 rank of 287 (2008). Its corporate office is located at Ballard Estate, Mumbai. As the name suggests, its interests are in petroleum sector. It is involved in the refining and retailing of petroleum products.Bharat Petroleum is considered to be a pioneer in Indian petroleum industry with various path-breaking initiatives such as Pure for Sure campaign, Petro card, Fleet card etc.

2.4.1 BPC REFINARIES
BPCL has Refineries at Mumbai and Kochi(Kochi Refineries) with a capacity of 12 Million Metric Tonnes (MMT) and 7.5 MMTPA respectively for refining crude oil. BPCL's subsidiary at Numaligarh has a capacity of 3 MMT.

FINDINGS -

TABLE 1.
CURRENT PRODUCTION CAPACITY OF REFINARIES

TABLE 2.

INSTALLED CAPACITY AND REFINERY CRUDE THROUGHPUT

TABLE 3.

CAPACITY UTILISATION BY INDIAN OIL CORPORATION

Indicator Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil Refinery Capacity Utilisation By Indian Oil

Units Per cent Per cent Per cent Per cent % % % % % % % %

Cumulativ Annual e Expression L L Ival Ival Ival Ival YoY YoY YoY YoY PoP PoP PoP PoP 7.71 -0.05 7.71 7.79 100.09 106.25

Monthly Quarterl L L 105.99

106.33

4.14 20.13 2.05 -1.97

TABLE 4

CAPACITY UTILISATION BY BHARAT PETROLEUM CORPORATION

Indicator Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum Refinery Capacity Utilization By Bharat Petroleum

Units Per cent Per cent Per cent Per cent % % % % % % % %

Cumulativ Annual e Expression L L Ival Ival Ival Ival YoY YoY YoY YoY PoP PoP PoP PoP -7.94 1.34 -7.94 -2.86 107.08 104.45

Monthly Q L L 108.51

-3.63

3.11

ANALYSIS COMPARATIVE BAR GRAPHS:GRAPH 1.

IOC AND BPC PRODUCTION

PRODUCTION OF IOC & BPC
4500 4000 3500 MMTPA 3000 2500 2000 1500 1000 500 0 2004-05 2005-06 YEARS 2006-07 IOC BPC

PRODUCTION OF REFINERY
MMTPA IOC BPC 2004-05 3142 1881 2005-06 3464 3402 2006-07 4072 3992

*MMTPA=20000 barrels per day

GRAPH 2.

IOC & BPC TOTAL INCOME:-

Income of IOC & BPC
300000 Rs (in crores) 250000 200000 150000 100000 50000 0 12 mths Mar 2002 12 mths Mar 2003 12 mths Mar 2004 12 mths Mar 2005 12 mths Mar 2006 12 mths Mar 2007 Total income of IOC Total income of BPC

Years

INCOME OF IOC & BPC
Mar 2003 12 mths 125990.68 49049.93 Mar 2004 12 mths 137586.33 54575.53 Mar 2005 12 mths 158139.42 65607.19 Mar 2006 12 mths 201908.8 85668.04 Mar 2007 12 mths 256164.55 108226.27

Rs (in crores)
Total income of IOC Total income of BPC

Mar 2002 12 mths 116304.9 42557.03

GRA

GRAPH 3.
TOTAL EXPENSES OF IOC & BPC
TOTAL EXPENSES OF IOC & BPC
300000 250000 200000 150000 100000 50000 0 12 mths 12 12 mths mths 12 mths 12 12 mths mths

Rs (in crores)

Total expenses of IOC Total expenses of BPC

Mar Mar Mar Mar Mar Mar 2002 2003 2004 2005 2006 2007 YEARS

TOTAL EXPENSES OF IOC & BPC
Rs (in crores )
Total expenses of IOC Total expenses of BPC Mar 2002 12 mths Mar 2003 12 mths Mar 2004 12 mths Mar 2005 12 mths Mar 2006 12 mths Mar 2007 12 mths

113059.1

122288.01

131310.98

154902.69

199593.77

248485.26

41370.21

49266.57

52596.94

66227.64

86130.83

106626.33

GR

GRAPH 4.
IOC & BPC NET SALES IN FIGURES

TOTAL SALES OF IOC & BPC
300000 250000 200000 150000 100000 50000 0 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

Rs (in crores)

Total sales of IOC Total sales of BPC

Mar Mar Mar Mar Mar Mar 2002 2003 2004 2005 2006 2007 YEARS

TOTAL SALES OF IOC & BPC
Rs (in crore )
Total sales of IOC Total sales of BPC 42274.04 48578.49 54084.41 63857.01 85149.62 107452.27 115182.42 124378.83 135908.93 156768.6 199430.91 250380.17 Mar 2002 12 mths Mar 2003 12 mths Mar 2004 12 mths Mar 2005 12 mths Mar 2006 12 mths Mar 2007 12 mths

CONCLUSION:•

Performance of Oil production: On the basis of data acquired we can conclude that both IOC and BPC have contributed up to 63% of total Oil production of Indian OIL Refining industry. Individually IOC has contributed 44.20% & BPC has contributed 18.80% of the total oil production of Indian oil Refining industry.

Performance of net sale: Looking towards the net sale of both IOC and BPCL we can conclude that IOC is showing better performance in respect to the BPCL performance.

Performance of total income: Now looking towards the total income of both IOC and BPC we can conclude that IOC yearly gained income is greater than the BPC gained income. • Performance of total expenses: Looking towards the performance of IOC of total expenses we can say that total expenses incurred by the company were rising heavily from March 2003 to march 2007. Now looking next to that of BPC we can say that from March 2002 to Mar2007 it is showing a consistent growth in there expenses.

Bibliography:• CMIE DATA BASE (PROWESS)

• www.petroleum.nic.in • www.indianoil.com(IOC Annual Report) • www.bharatpetroleum.com(BPC Annual Report)

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