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CREDIT NOTE ON INDIAN OIL CORPORATION LIMITED


Background and Business Description
IndianOil is India's flagship national oil company,with business
interests that straddle the entire hydrocarbon value chain - from
refining,pipeline transportation and marketing of petroleum
products to exploration & production of crude oil & gas as well as
marketing of natural gas and petrochemicals.It is the highest ranked
Indian corporate in the prestigious Fortune 'Global 500'
listing,ranked at the 83rd position in the year 2012.
The company and its subsidiaries own and operate 10 of India's
refineries and its cross-country network of crude oil,product and gas
pipelines is the largest in the country.With a strong workforce,the
company has been helping to meet India's energy demands for over
five decades.The companys operations are strategically structured
along
verticals
Refineries,Pipelines,Marketing,Business
Development,Petrochemicals and Natural Gas.
The President of India is the largest shareholder with 78.92%
shares,followed by Oil and Natural Gas Corporation Limited which
holds 8.77% shares.The rest of the shares are distributed among
insurance
companies,mutual
funds,institutional
and
retail
investors.As evident from the shareholding pattern,the Government
of India is the major stakeholder in the company and majority of its
activities are influenced based on Government policies and
directives.
The company has a portfolio of powerful and much-loved energy
brands that include Indane LPGas,SERVO lubricants,XtraPremium
petrol,XtraMile diesel, PROPEL petrochemicals,etc.The companys
ISO-9002 certified aviation service commands an enviable market
share in the aviation fuel business and successfully services the
demands of domestic and international flag carriers,private airlines
and the Indian Defence Services. The company also enjoys a major
share of the fuel needs of the bulk consumer, industrial, agricultural
and marine sectors.

Market, Market Position and Competition


The continued tensions at the global flashpoints with supplydemand mismatch manifested in high crude oil prices with the Brent
average at USD 115/bbl during FY2012 vis a vis USD 87/bbl in
FY2011.Despite the supply dislocations and increase in demand
albeit at a reduced pace due to drop in consumption in developed
countries,there was continued healthy demand from emerging
economies including India.The companys refineries achieved the
highest ever crude throughput of 55.62 million tonnes during
FY2012,surpassing the previous best of 52.96 million tonnes
achieved in FY2010.
The company retained its position as the nation's largest corporate
according to the list of 500 Indian companies released by Fortune
India. At the 83rd rank, the company is the countrys highest ranked
enterprise in the Fortune Global 500 list. The company continued to
retain its market leadership during the year and achieved domestic
sales of 68.1 million tonnes of petroleum products. With an overall
capacity utilisation of 102.60% for the year, the company has
consistently attained a capacity utilisation of over 100% since last
five years. The company continued to export petroleum &
petrochemical products during the year to various countries. While
the export of lubricants increased by 13%,the export of
petrochemical products more than doubled during the year.
The company has lined up more than Rs. 460 billion in a host of
projects for augmentation of refining, pipelines and petrochemical
capacities, expansion of marketing infrastructure, technology
induction and product quality up gradation. All these projects,
including the petrochemical value projects, new grass-root refinery
at Paradip, Butadiene extraction unit at Panipat, FCC revamp at
Mathura as well as new pipelines like Paradip-Raipur-Ranchi and
Paradip-Haldia-Durgapur(LPG),are intended ensure availability of
the petro products to the customers on one hand and enhancing
the profitability on the other.
The company has two major domestic competitors, Bharat
Petroleum and Hindustan Petroleum. Both of them are public
limited companies with the government being the major
stakeholder. Apart from them, there are also two private
competitors, Reliance Industries and Essar Oil.
Globally,the Oil & Gas industry continued to be impacted by geo
political tensions rocking the oil markets and bringing in a
heightened volatility in oil prices.The refining sector is especially
expected to pass through a tough time primarily because of the
slowdown in growth all around,including scaling down of growth
rates in emerging economies from Asia essentially due to the
increased inter-connectivity of the global business.