ACKNOWLEDGEMENT

We are highly obliged to S.K. PATEL INSTITUTE OF MANAGEMENT

AND COMPUTER STUDIES for giving us the opportunity of doing our project for
STRATEGIC MANAGEMENT.

We wish to express our deep sense of gratitude and sincere thanks to our
director Mr. Chinnam Reddy, who gave us the privileged opportunity to carry on
this project and realize the hidden potentials of ours.

We also express our great indebtedness to our faculty members, of

SKPIMCS for their continuous support, kind co-operation and fruitful suggestion
over the period of time that helped us to cultivate better professional skills.

We would like to express our deep feeling of gratitude and thanks to our
parents, sister, friends and our classmates and roommates, who offered us full
fledged support and all those who knowingly or unknowingly helped us to fulfill
the project.

DEVDUTT GOSWAMI(26)
DHWANEET MEHTA(54)
MITESH SHAH(57)
DARSHIT SHAH(60)

INDEX

SR.NO PARTICULARS PAGE

NO.

1 ACKNOWLEDGEMENT

1
2 EXECUTIVE SUMMARY

3 INTRODUCTION

4 INVESTMENT OPPORTUNITIES

5 ONGC
OIL INDIA LTD
6
6.1 OIL INDIA LTD(OIL's) Vision
6.2 Corporate Objectives
6.3 Research and development
6.4 Production activities
6.5 Exploration and development
6.6 Drilling and work over services

INDIAN OIL CORPORATION

7
7.1 Brands of IOC

7.2 Investments of IOC abroad

7.3 Vision

7.4 Mission

7.5 Values

7.6 Company profile

7.7 Major projects

GULF OIL COMPANY(HINDUJA GROUP COMPANY)
8

GUJARAT GAS
9
9.1 Transmission System

9.2 Natural Gas distribution

9.3 Health, Safety, Security and

Environment

9.4 Standards of service

2
10 GAIL

11 Bongaigaon Refineries and Petrochemicals Limited

(BRPL)
Conservation of petroleum products
12
12.1 In house conservation.

12.2 Petroleum Conservation Research Association (Pcra)

And Its Activities

12.3 End Users Of Petroleum Products And Conservation

Efforts

12.4 Further Tips For Conservation To Be Taken By

Individuals

12.5. Role Of Oil Industry To Promote Oil Conservation

13 LPG
Bibliography
14

15 PEST ANALYSIS OF IOC

16 SWOT ANALYSIS OF IOC

17 SWOT ANALYSIS OF HPCL

3
 Oil and Gas

PROCESS OF HOW OIL AND GAS ARE BEING FORMED

Almost all oil and natural gas are found deep

underground in tiny holes in rocks. Millions of years
ago a sea covered much of what is now dry land. In
prehistoric times, tiny plants and animals lived in the
sea. When these creatures died, they sank to the
bottom of the sea, and got buried in layers of mud and
sand. As the ages passed, this organic material sank
deeper and deeper. The earth's crust changed its
shape, and put intense pressure and heat on what was
once only plants and tiny animals. Heat from the
earth's interior and the weight of the overlying rocks gradually changed the
energy-containing substances in the accumulated plants into hydrocarbon liquids
and gases. As millions of years passed, these deposits turned into chemicals that
are now called ‘hydrocarbons’.

Hydrocarbons are simple molecules made up of carbon and hydrogen atoms

joined together in chains or in rings. These molecules, being light and mobile,
migrated upwards through the rocks but eventually became trapped beneath
impermeable rock structures in the earth's crust. That is where oil and natural
gas come from. Some were created millions of years ago, some were created
thousands of years ago, and some are being created right now!

Much of the oil and gas production now comes from underneath the sea-bed. As
the technology for extraction continues to advance, production becomes possible
from deeper and deeper waters. But the supplies are limited. Every drop of oil
burnt adds to the monumental environment problems already created by
pumping gases like carbon dioxide into the atmosphere. Many scientists worry
that this continual release of carbon dioxide is an important cause of global
warming.

Natural gas is usually found underground near an oil source. It is a mixture of

light hydrocarbons including methane, ethane, propane, butane, and pentane.

4
Other compounds found in natural gas include carbon dioxide, helium, hydrogen
sulphide, and nitrogen. It is found around the world, but the largest reserves are
in the former Soviet Union and the Middle East. This gas is lighter than air and is
highly flammable, made up mainly of a gas called methane. Methane is a simple
chemical compound that is made up of carbon and hydrogen atoms. Natural gas
usually has no odour and cannot be seen. Before it is sent to the pipelines and
storage tanks, it is mixed with a chemical that gives it a strong odour, almost like
rotten eggs. The odour makes it easy to detect a leak.

Natural gas is the cleanest burning fossil fuel. When it is burned, it gives off less
carbon dioxide than oil or coal, virtually no sulphur dioxide, and only small
amounts of nitrous oxides. Natural gas is mostly composed of methane and other
light hydrocarbons. Both the carbon and the hydrogen in methane combine with
oxygen when natural gas is burned, giving off heat. Coal and oil contain
proportionally more carbon than natural gas, therefore giving off more carbon
dioxide per unit of energy produced. Natural gas gives off 50% of the carbon
dioxide released by coal and 25% less carbon dioxide than oil, for the same
amount of energy produced. Carbon dioxide is the most important greenhouse
gas contributing to global warming.

To find oil and natural gas, companies drill through the earth to the deposits deep
below the surface. The oil and natural gas are then pumped from below the
ground by oil rigs. They then usually travel through pipelines.

At oil refineries, crude oil is split into various types of products by heating the
thick black oil. The products include gasoline, diesel fuel, aviation fuel, home
heating oil, oil for ships, and oil to burn in power plants to make electricity. Oil is
used for transportation—cars, airplanes, trucks, buses, and motorcycles.

Oil is stored in large tanks until it is sent to various places to be used. Oil is also
made into many different products—fertilizers for farms, clothes, toothbrush,
plastic bottle, and plastic pen. There are thousands of other products that come
from oil. Almost all plastic comes originally from oil. Oil is transported in huge
pipelines and tanker ships to places where it is made into other products.

The origin of the oil industry in India can be traced back to the last part of the
19th century when petroleum was discovered in Digboi in north-east India.
Thereafter large numbers of oil fields have been discovered both inland and off-
shore. This has led to the setting up of refineries to process the oil and gas for
use in various sectors.
                                   

5
 INVESTMENT OPPORTUNITIES IN THE OIL INDUSTRY

Investment Opportunities in
Refining Sector

India has witnessed a

spectacular growth in the
refining sector over the years. In
1947, at Independence, there
was only one refinery located in
Digboi with a capacity of 0.25
million tonnes per annum.
Subsequently, Standard
Vaccum Oil Company put up a
refinery in Bombay in 1955: and
Caltex at Visakhapatnam in
1957.
 
Today there are 14 refineries in
the country, 13 in the public
sector and one in the joint
sector, with an install capacity of
60.4 million tonnes per annum.
Out of the 13 PSU refineries, 6
are owned by Indian Oil Corporation Limited (IOCL), while
the other 7 are owned by Hindustan Petroleum Corporation
Limited (HPCL) (2). Madras Refineries Limited (MRL) (2)
and one each by Bharat Petroleum Corporation Limited
(BPCL), Cochin Refineries Limited (CRL) and Bongaigaon
Refinery & Petrochemicals Limited (BRPL). One refinery in
JVC is the 3 million tonnes Mangalore Refinery &
Petrochemicals Ltd.

 ONGC to supply gas to Rajasthan’s 330 MW Dholpur power plant

6
ONGC will supply Gas to Rajasthan Rajya Vidyut Utpadan Nigam Ltd. (RRVUNL)
for its 330 Mega Watt (MW) power plant coming up at Dholpur, to partially
bridge the acute power shortage in the western state.

This brings a new dimension to the association between ONGC and Rajasthan,
which is more than four decades old. A Gas Sales and Purchase (GS&P)
agreement was signed between ONGC and the Rajasthan entity on 31st October
2005 at Jaipur.

The signing ceremony was presided over by the Hon’ble Chief

Minister of Rajasthan Ms. Vasundhara Raje.

The Gas Sales & Purchase agreement was inked by Mr. Niladri Kumar
Mitra, Director (Offshore) – I/C Marketing of ONGC, and Mr. N S
Chaudhary, C&MD of RRVUNL. The picture also shows the Chief
Minister of Rajasthan Ms. Vasundhara Raje, ONGC’s C&MD Mr. Subir
Raha and ONGC’s Director (HR) Dr. A K Balyan
The Dholpur power plant is a combined-cycle power project being set
up at a cost of Rs.1155 Crore. The agreement envisages gas supply
by ONGC to the power plant for a period of 12 years, which can be
extended later.

DATA OF OIL INDIA LIMITED

7
OIL INDIA LTD(OIL's) Vision

To be a vibrant, responsive, knowledge based, competitive E&P company

with global presence, and a selective presence across the oil and gas value
chain
in India, maximizing shareholders' value,
respecting stakeholders' aspirations
and caring for the environment.

Corporate Objectives

OIL Believes "superlative efforts precede superlative results". To serve that very
purpose, OIL has set the highest challenges for itself to measure up to.

OIL's Organisational agenda is to :

 Accelerate exploratory efforts in order to increase hydrocarbon reserves.
 Speedy development of discovered fields and increase recovery from depleting
and developed fields, to augment crude oil and gas    production.
 Endeavour to have more acreage for hydrocarbon exploration/development
both in India & overseas.
 Endeavour to undertake expansion of the activities by venturing into the oilfield
services sector both in India and abroad.
 Generate adequate internal resources to meet the planned programmes of the
Company after ensuring reasonable return on    capital.
 Sustain & promote environmental protection.
 Enhance implementation of safety measures in operations.
 Ensure optimum development and effective utilization of human resources

The Company has been the pioneer in the Indian oil ind
implement the concepts of modern reservoir management. N
reservoir simulation has remained our forte almost since its in
Introduced by the Company for the first time in India way back
seventies, simulation has been used as an important
management planning, production forecasting and decision
Based on numerical simulation studies, gas and water injectio
and polymer flooding projects have been successfully implem
our fields yielding recoveries on the average of over 20% in e
what would have been recovered by primary depletion alone.
many areas of the Company's strength, special mention ha
made of the expertise developed in reservoir management o
fields. Today, the Company has the potential in terms of the
the-art numerical reservoir simulators with dedicated workstat
valuable knowledge-base to tackle the challenges of cost effective reservoir evaluation, developm
management in all demanding environments.

8
An integrated database management system designed and developed in-house has been found e
efficient in processing / analysing various reservoir monitoring data. Apart from the routine acti
reservoir surveillance, many other operations such as, transient well tests, nodal analysis, coll
crude / condensate / gas samples for PVT analysis, analysis of side-wall and conventional cores,
carried out as an integral part of reservoir management
 

Research and development

Research & Development has been an on-going process since the inception of
the company. During the earlier days, R&D activities were carried out by pooling
resources from various operating departments. Some of the significant initial
R&D achievements include, thermal conditioning of oil for pipeline transportation
of OIL's waxy crude, development and indigenisation of speciality oilfield
chemicals like demulsifiers, deoilers and flow improvers, polymer flooding for
enhanced oil recovery etc. In 1985, a full fledged R&D Centre was set up to
intensify R&D activities for continuous upgradation of technology and expertise in
the operations of the company. Within a short span of time, the centre has
equipped itself with the most modern sophisticated instruments and computing
facilities. The department is recognised by Department of Science & Technology,
Govt. of India.

In the recent past, R&D department has developed / implemented a number of

innovative technical processes with tremendous operational and economical
benefits to the company. Significant amongst these are geochemical
identification of pay zones in drilling wells, cost effective low dosage flow
improver treatment of crude oil for pipeline transportation in place of thermal

9
conditioning, arresting fluid loss in highly depleted reservoirs for quick flow back
after workover, fluoboric acid for well stimulation and bioremediation of soil /
water polluted by oil. The department has won the prestigious NPMP award for
its work on geochemical identification of pay zones.

Further, in view of the rich deposits of coal in the North East, a research
programme to carry out techno - economic viability study for making synthetic
crude oil from coal has been taken up. A pilot coal liquifaction plant has been set
up at the R&D centre in Duliajan and first phase of study has been successfully
completed. It is the first of its kind in the whole of Asia and has long term
implication as an alternate source of energy for the country in the future.

PRODUCTION ACTIVITIES

The Company has accumulated over a hundred years of experience in the field
of oil and gas production, since the discovery of Digboi oilfield in 1889. Possibly,
the only company to do so. From well completion to wellbore servicing,
installation, operation and maintenance of modern surface handling facilities, the
company has the skill and expertise to manage the entire range of operations
required for onshore oil and gas production. The Company has perfected the
techniques to produce and condition waxy (paraffinic and asphaltenic) crude oil
produced from the oilfields of Assam.
Productivity improvement measures like acid stimulation, polymer water shut-off,
gravel packing, chemical consolidation are designed and implemented in-house.

Coil tubing technology has been increasingly used over the last decade.

10
 About 50% of crude oil production come from depleting
oilfields. Artificial lifting and EOR techniques adopted since
late 1960's have played an important role in augmenting
production and enhancing the ultimate recovery from these
oilfields.
Today, the company possesses the expertise in designing, installing and trouble
shooting of continuous and intermittent gas-lift systems and the related networks.

The Company produces around 5 MMSCUMD of Natural gas and has a

dedicated pipeline network for collection/supply of gas as fuel and feedstock to
many nearby industries such as Refinery, Fertilizer & Petrochemical Plant, Power
generation Plant and 200 Tea Gardens. Over 90% of internal energy
requirements for varied oilfield plants and equipment is met by Natural Gas.

The Company utilises a SCADA (Supervisory Control and Data Acquisition)

system for online monitoring of production, injection, storage-cum-flowback and
distribution of Natural gas and has the expertise to design, install and
commission gas compressor stations and gas collection and distribution network.
OIL achieved highest ever Natural Gas production of 1882.96 MMSCUM and
Natural gas sale 1377.16 MMSCUM during the year 2003-2004.

An ambitious plan has been drawn up to supply Natural Gas to NRL, NEEPCO
(enhanced) by Dec 2005 through systematic development of Non-associated gas
field in Upper Assam.

An LPG Plant was set up In 1982, to process 2.20 MMSCMD of gas using Turbo
Expander Technology for the first time in Asia. This plant is consistently
producing LPG with feedstock supplied from the Company's internal gas
production. Due to efficient operation and maintenance of the Plant, it is
consistently producing over 50,000 MT of LPG annually. Bottling of LPG is also
done at this plant.

11
Exploration and development

Our systematic and scientific approach to exploration has been rewarded with a
very high success ratio of sixty five percent of the exploratory wells drilled. Also
possess both 2D and 3D seismic data acquisition capabilities, with excellent
support services ranging from satellite navigation systems to remote blasting
units.

The Company owns a vast array of advanced computing systems and

experienced personnel for processing and interpreting variety of geoscientific
data through integrated exploration applications such as Remote Sensing,
Structural and Stratigraphic Interpretation, Seismic Attribute Analysis, Source
Rock Evaluation, Biostratigraphy, Petrophysics, Sequence Stratigraphy, Basin
Analysis, Techno-economic evaluation, etc.

The geoscientific interpretation is done using state-of-the-art Workstations.

Formation evaluation through an integrated approach of geological, geophysical,
geo-chemical and reservoir engineering studies has allowed the Company to
successfully develop and exploit deep (3500-4700 m) thin sand prospects.
Today, these reservoirs contribute over 50% of the Company's production. It is
envisaged that current introduction of extensive 3D seismic will assist in reservoir
management not only in the new fields but also in the ageing fields heralding a
new chapter in reservoir engineering studies.

The Company has so far acquired, processed and interpreted over 77000 Line
kms of 2D and 2000 sq km of 3D seismic data in the wide variety of forums
including terrains, hills, deserts, rivers, marsh, etc.

12
 Drilling and work over services

The Company currently owns and operates 13

drilling rigs and 14 workover rigs. In addition to
this, the Company also charter hires drilling rigs
based on operational requirement.

Over 1000 wells, more than 3.5 million metres,

have been drilled in varying surface and sub-
surface environments including high
underground pressures and temperature
conditions and the depth of the well varied from
1000 m to as deep as over 5500 m.

In order to minimize land acquisition time, OIL

has resorted to cluster well drilling for
developing its oil and gas fields. This has
resulted in protection of green belt surrounding
OIL's operational area.

The company has a legacy of pioneering innovations and achievements in

drilling. The all round excellence in performance could be attributed to drilling
wells efficiently by the rig building team and proper maintenance of equipment
at the company's well-equipped Workshop and have achieved peak
performance level of over 20000 M/Rig year.

13
DISTRIBUTION AND MANAGEMENT

14
DATA RELATED TO INDIAN OIL CORPORATION

BRANDS OF INDIAN OIL CORPORATION

(1)SERVO

IndianOil's SERVO :IndianOil's Global Brand.

SERVO is India's largest selling lubricant

brand. SERVO range of lubricants enjoy
approvals from major Original Equipment
Manufacturers (OEMs) including new
generation cars. 9,000 Retail Outlets and a
countrywide network of SERVO SSls and SSAs Bazaar traders offer SERVO
range of lubricants to customers.

The SERVO range of lubricants is used in almost every application covering

automotive, industrial and marine sectors. SERVO range of lubricants is fast
emerging as a Global Brand with wide acceptance in UAE, Malaysra, Mauritius,
Bangladesh, Bahrain, Sri Lanka, Nepal, Yemen, Kenya, Kuwait, Burkina Faso,
Reunion Islands and other markets. SERVO has been designated as a
SUPERBRAND. SERVO has genuine oil tie ups with a wide range of companies
like Hyundai, Maruti, Bajaj, Lancer. Anil Kumble, the ever dependable sporting
icon is SERVO Brand Ambassador.

Developed exclusively at IndianOil's world-class R&D Centre at Faridabad, there

is a SERVO lubricant for virtually every single application. With over 42% market
share and 450 grades, the country's leading SERVO brand lubricants from
IndianOil are sold through over 8,100 IndianOil petrol/diesel stations, over 1,300
SERVO Shops and a countrywide network of bazaar traders.

15
 (2) Indane LPGas

IndianOil Indane LPGas is used in 40 Million

homes as cooking fuel and commands over
48% market share in India. Indane LPGas is
marketed through a network of 4350 Indane
distributors. Widely used in commercial sectors
like industries, hotels & restaurants, medical
labs, etc. 87 Indane Bottling Plants are spread across the country with a
combined bottling capacity of 3.77 MMTPA. New and convenient 5 kg Indane
LPGas cylinders introduced in rural and hilly regions for wider use by
economically weaker sections. IndianOil's auto LPG brand Autogas is the leader
in the segment. Marketed through a network 48 stations out of an industry total of
103 Auto LPG Dispensing Stations.

(3)IndianOil Aviation Service

Meets complete Aviation Fuel requirements

of the Defence Services and for over 75
Domestic and International airlines besides
private aircraft operators. IndianOilAviation
Servicess is ISO 9002 certified and entrusted
with WIP refueling for national and overseas
dignitaries. IndianOil's prompt, courteous and 'No-Delay' Aviation Fuel Service
has received accolades from major customers. Always on call for providing
services in exigencies of war and peace.

IndianOil Aviation Services has a market share of 65% with a network of 95

Aviation Fuel Stations (AFS) IndianOil Aviation Services is not only the largest
aviation fuel marketer in the country but also the most preferred supplier of jet
fuel for customers in India and abroad. IndianOil Aviation Services serves over
71 International airlines besides the domestic airlines in India. From
Thiruvananthapuram in the South, to Leh in the North. From Porbandar in the
West to Ziro in the East.

IndianOil Aviation Services covers India like no one else. In fact, every 1.6
minutes, an aircraft is being refuelled by IndianOil Aviation Services, somewhere
in the country. It also caters to over 90% demand of the Indian Defence services,
besides the sensitive requirements of WIP flights at all the airports and at remote
helipads/helibases across the Indian subcontinent. IndianOil Aviation Services
not only maintains world-class standards in operations and safety but also
conforms to the stringent global quality requirements of Aviation Fuel storage and
handling.

16
Presently, IndianOil has earned this accreditation for thirteen major Aviation Fuel
Stations including at all international airports. Eleven of the fourteen quality
control laboratories have also earned this
accreditation. IndianOil is also the first in India
to have adopted a Quality Control Index
System based on a quality audit. Fourteen
DGCA approved IndianOil laboratories spread
across the country carry out full specification tests for Aviation Fuels.

IndianOil's Aviation Services, with 68% market share, meets the fuel and
lubricants needs of domestic and international flag carriers, Defence Services
and private aircraft operators through 93 aviation fuelling stations. Between one
sunrise and the next, IndianOil refuels over 900 aircrafts. In fact, the refueling
never stops and neither does our customer service, which is round the clock. The
wing’s foreign exchange earnings during the year 2002-03 touched Rs. 898
crore.

(4)AutoGas

Autogas (LPG) has been introduced in

Hyderabad, Bangalore and Mumbai markets.
This alternative fuel is a good business proposition in the long term, and
IndianOil intends to further expand its marketing in a big way.

 (5)Pr emium Fuels

IndianOil offers XtraPemium Petrol and XtraMile Diesel, which are the best your
vehicle can get. India's first 91 Octane petrol, XtraPremium is reinforced with
multifunctional additives including 'Friction Buster'. Available at nearly 2000
Retail Outlets nationwide, XtraPremium offers :

.Super Mileage and Super Pick-up

·Enhances cleaning of engines
·Minimizes exhaust emissions
·Restores peak engine power and acceleration
·Reduces maintenance cost

XtraMile, IndianOil's new generation High Speed Diesel with world-class

additives has taken a leadership position in the market. Available at nearly 4400

17
Retail Outlets nationwide, XtraMile offers :

Extra mileage -Greater Acceleration

Faster pick-up -Lower maintenance Costs
Longer engine life -Enhanced overall performance
Eliminates engine knockings

Launched on Sept. 24, 2002, the premium auto fuels - XtraPremium and XtraMile
(originally IOC Premium and Diesel Super respectively), mark a new beginning
for IndianOil and offer a new genre of convenience and enhanced comfort for our
customers.

XtraPower

IndianOil's XtraPower Fleet Card Program is a complete fleet management

solution for Fleet Owners / Operators and Corporates. XtraPower is a Smart
Card based Fleet Card Program, which facilitates cashless purchase of fuel &
lubes from designated retail outlets of IndianOil through flexible prepaid and
credit facilities. The fleet card program also offers an exciting Rewards Program
and unique benefits like personal accident insurance cover and vehicle tracking
facilities. Every time you fill your fleet with fuel & lubes using your XtraPower fleet
cards at designated retail outlets of IndianOil, you earn XTRA Points. You can
exchange your accumulated XTRA Points for attractive gifts from XtraPower
Rewards Catalogue including free fuel & lubes. In short, the XtraPower Fleet
Card Program offers you, not just amazing convenience & security but also an
opportunity to translate all your dreams into a reality.

‘Swagat’ Highway Flagship Retail Outlets

To cater the high growth areas of National Highways forming a part of Golden
Quadrilateral and N-S, E-W corridors, IndianOil has launched Flagship Outlets,
which have been branded as “Swagat” Retail Outlets.

The facilities in the Swagat outlets is designed for, Best Q&Q standards in the
industry through Retail Outlet site and tank truck automation Third party
certification through Bureau Veritas Fortnight sampling thru Quality Audit Officers
Training through a professional agency for the Dealer

Incentives available on fuel purchases in the form of loyalty points redeemable

against fuel/lubes and other rewards.

18
Availability of XtraMile and XtraPremium

Forecourt standards: strict housekeeping and maintenance standards ensure

consistence performance in terms of service, on time, every time.

Non-fueling offering tailored to increasing

driver comfort and productivity.

Non-fueling offering through ‘Best-in-class’

alliance on exclusive basis wherever possible
(communication, food/rest, healthcare,
parking, vehicle care.)

There are 111 such ‘Swagat’ Flagship ROs planned across the country of which
45 ‘Swagat’ Flagships have already been commissioned with a complement of
fuel and non-fuel.

XtraCare

The launch of XtraCare was the culmination of a series of plans in retail design,
product and service upgradation, capability training, automation, loyalty
programme, retail site management techniques all benchmarked to global
standards. While the industry standard is to take samples on a quarterly basis,
IndianOil has moved several steps ahead by introducing fortnightly random
sampling with specific importance given to RON (Research Octane Number)
sampling which is truly the definitive test for quality and quantity. The surveillance
audits by BV are being done on a more comprehensive basis. In another
pioneering move, the third party certification, by BV, is also being done, for the
first time, on a range of parameters that include hygiene, service, efficiency of
fore court, allied services and customer satisfaction.

The non-fuel services are being given a major fillip in the IndianOil XtraCare plan
with a wide range of loyalty programme with -XtraRewards, XtraPower and co-
branded cards like IndianOil-Citibank credit cards. The automation project of
XtraCare is by far the most state-of-the-art in the country. The cutting edge
technology includes automatic tank level gauges, temperature sensors, density
measurement sensors, back-office server with DU controls, automatic bill printing
facility, customer database, etc.

The Tank Truck automation - Sealed Parcel Delivery System (SPDS) - will also
include electronic locking of TTs carrying loads to these ROs. The real time
density sensors and the sealed parcel delivery system is superior to mere GPS-
based tracking systems because it not only tracks where the Tank Truck is but
what is happening to the Tank Truck consignments. SPDS ensures that the
quality of the fuel would be ensured from “Supply point to the Customers”.

19
As a precursor to the IndianOil XtraCare launch, IndianOil had recently
introduced the Platinum Circle and Gold Circle - top of the line, exclusive clubs
for high selling retail outlet dealers. These elite IndianOil dealers have emerged
as peer leaders and are an integral part of the XtraCare dealer ‘sensitisation’
strategy.

During the year, IndianOil has already introduced modern and dedicated
networked highway outlets with multifarious offerings, under the brand name
‘Swagat’ which are IndianOil’s flagship Retail Outlets. So far over 400 XtraCare
ROs have been set up; around 1500 XtraCare ROs will be ready by end 2006.

Rest and Refreshment Dhaba

  Dormitory, Toilets/Bathing facilites
Communications STD/ Fax facilities
Health care Health checkup for STD thru a tie-up
with Gates Foundation
Security Secured Parking Space
Vehicle Care OEM Service Station in alliance with
Tata Motors Limited
C-Store Convenience store thru alliance
partners of choice

INVESTMENTS OF IOC ABROAD

Indian Oil Blending Ltd (IOBL)  

20
Indian Oil Blending Ltd (IOBL) is a fully
owned subsidiary of Indian Oil Corporation
Ltd. engaged in the Manufacturing of
Lubricants and Greases and catering to the
requirements of Defence, Railways,
Streets Transports Undertakings, etc.

During 2004-2005 IOBL posted a net loss

of Rs. 4.87 crore, in the same year it
achieved a production of 211 Thousand
MT (TMT) of Lubricants and Greases, as
compared to 223 TMT produced during
previous year, thereby recording a capacity
utilization of 88%.

IOBL is a fully integrated ISO Certified

Company. The Company has blending
facilities at Mumbai, Vashi and Kolkata. All
the three Plants have ISO-14001 certified
Environment Management System and QS
9000 Certified Quality Management
System. All the Plant Laboratories are
equipped with the most modern automated
equipments to maintain high quality
standards of Lubricants and Greases.

Lanka IOC Private Limited (LIOC)

LIOC, IndianOil’s wholly owned subsidiary in

Sri Lanka, is the only private oil company other
than the state-owned Ceylon Petroleum
Corporation (CPC) that operates retail petrol
stations in Sri Lanka.

It has been incorporated to carry out retail

marketing of petroleum products, bulk supply to
industrial consumers, building and operating
storage facilities at the Trincomalee Tank farm,
etc., thereby not only providing energy security
and supply stability for Sri Lanka but also
upgrading the overall standards of service,
particularly in the retail sector.

21
LIOC is making phased investments to the tune of Rs 172 crore
(US $ 100 million) to provide world-class quality petroleum
products and services at the most competitive prices to the Sri
Lankan customers.

Says Chairman, IndianOil, Mr M S Ramachandran, “Our entry

into Sri Lanka is in line with IndianOil’s Corporate Vision of
becoming a transnational energy major. While we want to
expand our market base and convert the surplus avails of
petroleum products into more wealth for our stakeholders,
IndianOilis also committed to being a good strategic partner to
Sri Lanka. IndianOil’s vast experience in downstream
petroleum operations will help create a healthy and competitive
petroleum industry in Sri Lanka for the larger benefit of the
island nation”.

At present, the Sri Lankan petroleum market, with a demand of

3.5 million metric tonnes per annum (MMTPA) and a refining
capacity of 2.2 MMTPA, meets the shortfall in supply through
imports of about 1.5 million tonnes of products. Ceylon
Petroleum Corporation is the only player in the petroleum
sector with about 1070 retail outlets in the country.

LIOC took over 100 CPC-owned petrol/diesel stations in

February 2003 and commenced retailing products to
customers. LIOC has also taken over 35 dealer-owned
franchisee retail outlets and is in the process of taking over
another 115 such franchisee outlets shortly. The outlets are
being refurbished with world-class, state-of-the-art facilities and
services at par with international standards. LIOC, through its
retail chain, is also making available non-fuel facilities like
Convenience stores, 24-hour ATMs, automatic carwash, food
marts, etc. This will not only give value-for-money to the
motorists but would give altogether a new refueling experience.
The refurbished stations of LIOC have brought praise from all
sections of the Sri Lankan society.

The China Bay Tankfarm, of World War II vintage, is of historic

and strategic significance, being the largest tankfarm located
between the Middle East and Singapore. The tankfarm
connects to the Trincomalee harbour, which is the 5th largest
all-weather, non-tidal natural harbour in the world, with a 56 km

22
 shoreline, making this tankfarm most effective for fuel receipt,
storage and supply. The tankfarm, formerly owned and
operated by CPC, has a total of 99 tanks, each with a capacity
of 12000 kilolitres. Currently, only 15 of these tanks are
operational. LIOC intends to develop the tankage on need
basis, as the volume of its downstream marketing operations in
Sri Lanka grows.

Progressively, LIOC will also look at introducing Auto LPG

(Autogas), Aviation Fuel and INDANE LPGas in Sri Lanka,
besides its worldclass lubricants SERVO, which is already an
established brand there.

The surplus refining capacity in India will be used to bridge the

existing gap between demand and supply in Sri Lanka. LIOC
intends to harness the advantages of geographical proximity
between India and Sri Lanka, resulting in low freight rates in
transportation and IndianOil’s superior R&D capabilities, to
provide petroleum products at the most competitive price to the
Sri Lankan market. A term contract valued at US$ 120 million
between CPC and IndianOil is already in place for supply of 0.5
MMT products to CPC and supplies have commenced since
September 2002. In addition, LIOC’s retail volumes are also
being replenished by IndianOilfrom Indian refineries, the first
such supply having commenced in March 2003.

A tripartite agreement signed between the Sri Lankan

Government, CPC and LIOC guarantees that only three retail
players (including CPC and LIOC) will operate in the Sri Lankan
market for the next five years, while authorising LIOC to import,
sell, supply and distribute petroleum products in Sri Lanka.
LIOC has also been allowed income tax exemption for 10 years
from the date of commencement of operations and a
concessional tax of 15% thereafter against the prevailing rate of
35%. The IndianOilsubsidiary has also been granted customs
duty exemption for import of project-related plant, machinery
and equipment during project implementation period of 5 years,
besides free transfer of dividend/income to India.

IndianOil Mauritius Ltd.

23
 IndianOil Mauritius Ltd. (IOML) is IndianOil’s wholly owned
subsidiary in Mauritius. IndianOil is investing US$ 18 million in
Mauritius to
set up a range of marketing infrastructure.

A state-of-the-art petroleum storage terminal

with 15,500 metric tonnes capacity has
already been commissioned at Mer Rouge
to serve as the supply base of petroleum
products. This microprocessor-controlled
facility is the first-of-its-kind in Mauritius with automated product
level monitoring, truck loading and computerised access
control. As part of this project, separate import lines for Motor
Gasoline (petrol), Gas Oil (Diesel), Jet Fuel (Aviation Fuel) and
Fuel Oil have also been laid.

IOML has also strengthened the bunkering facilities with new

lines to various quays in the port, which is fast emerging as the
region’s busiest port.

Soon, IOML would be setting up a network of 25 world-class

petrol stations in Mauritius, equipped with a range of value-
added services. These outlets would provide the discerning
Mauritian customers with auto fuels and lubricants of
international quality with care beyond compare.

IOML has also joined a consortium of four existing oil

companies to operate aviation fuel storage, hydrant lines and
aircraft fuelling facilities in Mauritius. The consortium would
soon build a new Aviation Fuel Terminal at Sir Seewoosagar
Ramgoolam International Airport.

IOML plans to build infrastructure for INDANE LPGas storage,

bottling and distribution and also to market the world-class
SERVO lubricants in the country.

IOML is leveraging the strengths of its parent company –

IndianOil - and its extensive knowledge of the Mauritian market
to build a world-class business reputation and deliver a
delightful experience to the people of Mauritius.

IOML stands for commitment and service to the people of

Mauritius.

24
 "A New Wave In Mauritius"

Hum honge kamyab !

IndianOil Technologies Limited

IndianOil Technologies Limited (ITL) is a wholly owned

subsidiary of Indian Oil Corporation. ITL is the technology-
marketing arm for the entire range of technologies developed at
IndianOil’s R&D Centre. The Centre, which was set up over
three decades ago, has developed several technologies and
technical expertise both in refining and lubricant sector.

IndianOil has nurtured technology by nurturing human talent.

This approach has worked well since the hydrocarbon sector is
both technology and knowledge intensive. As a result, the
Corporation is now in a position to offer a bouquet of
technologies, products, processes and solutions that are aimed
at improving performance and profitability.

The R&D activities in refining technology are targeted in the

areas of fluid catalytic cracking (FCC), hydro processing,
catalysis, residue upgradation, distillation, simulation and
modeling, lube processing, crude oil evaluation, process
optimisation, material failure analysis, remaining life
assessment and other technical services.

ITL also offers state-of-the-art sludge disposal technology

based on biotechnology which is widely accepted in the
hydrocarbon sector. ITL also markets the R&D developed
lubricants technology, which possesses USPs, established
through wide market acceptance.

The technology basket of ITL consists of process technologies,

products and specialized services.

25
IBP Co. Limited (IBP)

IBP Co. Limited, a subsidiary of IndianOil, is a

stand-alone petroleum marketing company with
exclusive business groups for Petroleum,
Explosives and Cryogenics.

As an enduring petroleum retailing company,

IBP’s marketing efforts are fully focussed on
improving its retail market share in petrol and
diesel, which has continued to grow and
reached a new high during 2004-05. The
Company achieved a growth of 12.3 % in MS
(retail) with a market share of 8.89%, and 12%
in HSD (retail) with a market share of 10.7%.
The growth is nearly three times the Industry
growth.

During the year 2004-05, IBP sold an all-time high of 5.74

million kl of petroleum products against 5.19 million kl during
2003-04, resulting in a spectacular growth of 10.6 % against
PSU industry growth of 3.9%. After takeover by IndianOil in
2002, the Company has more than doubled its retail network
from 1,559 retail outlets in 2002 to 3,272 retail outlets as on
31.03.2005. In the last fiscal, 511 new petrol/diesel stations
(retail outlets) were commissioned and it is proposed to
commission another 700 retail outlets during the year 2005-06.

IBP has been a pioneer in introducing quality and quantity

assurance of all products and services at its retail outlets. The
branding activities will be further strengthened during this fiscal
through an initiative called "Project Horizon" in which 250
select, high-volume outlets will be specially branded with
upgraded retail visual identity matching the “XTRACARE” retail
outlets of IndianOil. These 250 ROs will be audited by a third
party for its quality and quantity assurance and will offer a
range of services such as loyalty rewards, fleet cards, etc

IBP currently has 16 supply locations of its own. In other

locations, its requirements of petroleum products are primarily
met by IndianOil’s depots and terminals. Significant synergy
and rationalisation have been achieved already through
optimization of resources at both IOC and IBP., leading to
lowering of operating costs. IBP ROs have also commenced
marketing IOC’s branded auto fuels XTRAPREMIUM (petrol)

26
 and XTRAMILE (diesel) from its ROs. IBP, however, will
continue to sell IBP Red lubricants from its outlets.

IBP has a small presence in LPG business too. It reaches LPG

cooking gas to the doorsteps of about 3.5 lakh homes in the
country through a network of 87 distributorships. However,
plans are underway to hand over the LPG business to IOC
post-merger.

IBP's unique and proven excellence in retail marketing is being

further strengthened by the vast infrastructure, product support,
technology strength and market leadership of IndianOil, thus
ushering in a new era of progress and prosperity.

 Infrastructure Details
 NO. OF ROs  3272 (as On 18.05.2005)
 SKO / LDO
 378
DEALERSHIP
 LPG
 74
DISTRIBUTORSHIP
 TWO OTHER BUSINESS
 DIVERSIFIED GROUPS
ANCILLIARIES  EXPLOSIVES
 CRYOGENICS
 TOTAL NO - 18
 EASTERN - 4
 DEPOT /TERMINALS  NORTHERN - 6
 SOUTHERN - 3
 WESTERN – 5
 LUBRICANT FILLING
 AT BUDGE (WB)
AND BLENDING PLANT
 EXPLOSIVES PLANT  AT CHATTISGARH
 R&D CENTRE  AT MANESAR
 ONE MANUFACTURING /
 FOR CRYOGENICS
R&D CENTRE AT NASHIK
BUSINESS GROUP
AND OFFICE IN MUMBAI

Chennai Petroleum Corporation Limited (CPCL)

Operations Safety, Human Vision - Meeting
Health & Resources & Future future Auto
Environment Community Plans Fuel (MS &

27
 HSD)
Development quality
norms

Chennai Petroleum Corporation Limited

(CPCL), a group company of IndianOil, has a
refining capacity of 10.5 Million Metric Tons Per
Annum (MMTPA), making it the largest refinery
in South India. The year 2004-05 was a
landmark year in the growth of CPCL.

CPCL’s 3MMTPA Refinery Expansion cum

Modernization Project, which went on stream in
March’04, was completely operationalized and
the refining capacity at Manali now stands at
9.5 MMTPA. The second refinery at
Nagapattinam, Tamil Nadu, has a refining
capacity of 1.0 MMTPA. The achievements in
the various fronts are detailed below:

Operations:

The year 2004-05 saw a quantum leap in the crude thru’put and
the quality of products from CPCL’s Manali Refinery.

 All the units of the Rs. 2360 crore 3 MMTPA Refinery

Expansion cum Modernization Project were
operationalized, including the Once-through
Hydrocracker Unit (OHCU) and its associated facilities
which were successfully commissioned in August ’04.
The commissioning of the OHCU was very smooth and
safe and was classified by the licensor (Chevron
Lummus Global, USA) as “World Class”.
 With this, CPCL has started to produce Euro-III grade
MS and HSD from January ’05, well ahead of the
scheduled date of 1st April, 2005.
 The Fluidized Catalytic Cracking Unit at Manali was
revamped in October ’04 at a cost of Rs. 91.38 crore.
With the commissioning of the revamped FCCU, the
total integration of the 3MMTPA Refinery Expansion cum
Modernization Project with the existing refinery now
complete.
 Since December’04, Manali Refinery has been
consistently operating in excess of 100% of its expanded
capacity of 9.5 MMTPA.

28
  In 2004-05, CPCL touched an all time highest ever-
crude throughput at 8923 Thousand Metric Tonnes
(TMT) processing highest ever High Sulphur crude
(about 70%).
 CPCL has achieved in the year 2004-05, the highest
ever production of MS (583 TMT), ATF (430 TMT) and
HSD (2749 TMT).
 An all-time high sales of Wax and Sulphur was achieved.
 CPCL’s performance on the expenditure on Plan
Projects has been consistently over 100% of the Plan for
the third year in succession.
 On the treasury front, foreign currency loan to the extent
of US$ 218 million was availed with an overall cost of
2%.
 CPCL’s share price touched a record high of Rs.262.0
on 27th October’04.

CPCL implemented Total Productive Maintenance (TPM) in

one of its units (Propane Deasphalting Unit) designating it as
Manager Model Plant and has now extended the TPM activities
to the entire Manali Refinery.

The record production details are given below:

MANALI
  2004-05 Previous Best
  TMT TMT Year
Crude
8181 6387 2003-04
throughput
LPG 239 170 2003-04
MS 583 399 2003-04
ATF 430 363 2003-04
HSD 2749 2421 1997-98

CBR-NAGAPATTINAM
  2004-05 Previous Best
  TMT TMT Year
Crude
742 653 2003-04
throughput
LPG 28.5 24.2 2003-04
Naphtha 181 159.3 2003-04
HSD 320.1 274.4 1999-00

29
 Safety, Health & Environment

Safety, Health & Environment has been one of CPCL’s thrust

areas and significant achievements have been made in the
year 2004-05.

 CPCL’s unique 2.5 MGD Sewage Treatment Plant was

revamped by replacing the conventional chemical
treatment with Ultra Filtration membranes.
 The third Effluent Treatment Plant to treat the effluents
from the expanded refinery was commissioned.
 To ensure that ambient air quality is continuously
monitored, two additional ambient air quality monitoring
stations were installed.
 A comprehensive QEHS (Quality, Environment, Health &
Safety) policy was adopted and external Surveillance
audit was conducted by BVQI.
 Provision of Oil Spill Response (OSR) facilities at
Chennai Port Trust was completed and a Mock Drill was
conducted with these OSR facilities under the guidance
of Coast Guard.
 On the safety front, CPCL achieved a record 10 million
accident-free manhours on 2nd March, 2005.

Human Resources & Community Development

CPCL treasures its human resources and makes every effort to

ensure the sustained growth of this invaluable asset.

 To improve technical competency of employees, CPCL

facilitated 23 of them to acquire B.S. degree in Process
Engineering offered by BITS, Pilani.

 To enhance the communication with employees, the

Intranet Message Board (IMB) and Employee
Communication Systems (ECS) were introduced,
whereby employees could seek information on all
matters – technical or personal. The responses to these
queries could also be viewed by all the employees.

 A new Community Development Policy has been

introduced for services in Education, Health, Women
Development and Sports.

 Scholarship amount of Rs.1.3 lakh was paid to the

30
 meritorious/poor children studying in Manali schools.

 CPCL contributed Rs.2.5 Cr. to the Prime Minister’s

Fund towards Tsunami. CPCL employees have
contributed Rs.11.08 Lakhs to the Chief Minister’s Fund
for the same.

 In the aftermath of the Tsunami tragedy, CPCL’s

Nagapattinam unit provided shelter to the affected local
people in the housing complex in the days following the
Tsunami. Essential relief materials worth Rs. 4.21 Lakhs
handed over to District Collector, Nagapattinam for
providing immediate assistance to the victims.

 As a socially responsible corporate entity, CPCL

contributed Rs.5 Lakhs towards construction of a
Stadium at Thiruvallur.

Vision - Future Plans

Self-sufficiency in Water: CPCL’s Manali Refinery faces

acute water shortage from time to time on account of monsoon
failures. To overcome this difficulty, a seawater desalination
project of 5.8 MGD capacity has been conceived. The project
will cost Rs.193 crore, and will go on stream by mid 2007

Polypropylene Project: The potential Propylene from the

Cracked LPG of the revamped FCCU has increased to 90,000
TPA. It is proposed to augment this Propylene from external
sources and set up a Polypropylene unit of 150,000 TPA
capacity at Manali.

Crude Oil Pipeline from Chennai Port to Manali refinery:

With the old pipeline now more than 30 years old, CPCL will be
putting up a new 42-inch crude pipeline, laid between Chennai
Port and Manali. The project is expected to be completed by
March 2006. The pipeline will follow the route of the Port
Connectivity Road Project being undertaken by NHAI.

Debottlenecking of Refinery-III CDU/VDU: The Crude &

Vacuum Distillation unit of Refinery-III, which was
commissioned in March’04 with a design capacity of 3.0
MMTPA, is proposed to be debottlenecked to increase its
capacity to 4.0 MMTPA. Preliminary studies are being
undertaken.

31
 LNG Terminal at Ennore: IOC & CPCL propose to set up a
2.5 MMTPA LNG terminal at Ennore (about 17 km from Manali
refinery). CPCL would be the lead promoter of this project. IOC
is in the process of lining up LNG suppliers.

Meeting future Auto Fuel (MS & HSD) quality norms

a) MS quality upgradation:

·Conversion of SCR to CCR: The revamp of existing Semi-

Regenerative Catalytic Reformer (SCR) to Continuous Catalytic
Reformer (CCR) is contemplated to augment MS production. It
is proposed to increase the capacity from the present 225,000
to 300,000 TPA. Discussions with the licensor are in progress.

New Isomerization Unit: In addition to revamping the existing

SCR to CCR, CPCL will install an additional Isomerization Unit
to meet the MS specification in 2010. Studies in this respect
have been initiated.

b) HSD quality upgradation:

DHDS Revamp: It is proposed to undertake a revamp of the

existing DHDS unit and thereby increase its capacity from 1.8
to 2.34 MMTPA. Preliminary studies have been completed and
detailed cost estimates are under preparation.

Bongaigaon Refineries and Petrochemicals Limited (BRPL)

Introduction

Bongaigaon Refinery & Petrochemicals Ltd. (BRPL) was

incorporated on 20th February, 1974 as a Govt. Company fully
owned by the Central Government.

The Company was registered with an authorised equity share

32
 capital of Rs. 50 crore, which was subsequently increased to
Rs. 200 crore by December 1983. As on 31.03.2005, the total
paid up capital of the company stood at Rs. 199.82 crore.

The Government of India was holding the entire paid-up capital

of the Company till 1990-91. The Government disinvested
25.54% of its share-holding in BRPL to UTI and other Financial
Institutions and employees of the Company during 1991-92 to
1993-94.The last tranche of disinvestments of 74.46% was
made in favour of Indian Oil Corporation Ltd. on 29th March
2001. As a result BRPL is a subsidiary of Indian Oil Corporation
Ltd, which is a Govt. of India Undertaking.

The Company has its Registered Office and production units at

Dhaligaon in Bongaigaon District (now under recently
constituted Chirang District) of Assam. In addition, the
Company has Marketing/Regional offices at Guwahati, Kolkata,
Mumbai, Coimbatore, and Delhi.

Business Business & Plant BUSINESS

Performance
Activities Capabilities PLAN

Business Activities

The core activities of BRPL are refining of crude oil and

production of petroleum products. The Company is also
engaged in production and marketing of value-added
petrochemical and PSF products. The Company has a Refinery
with a rated capacity of 2.35 million tonnes per annum of crude
oil, a petrochemicals complex comprising of a Xylene plant, a
Dimethyl Terephthalate (DMT) plant and a Polyester Staple
Fibre (PSF) plant. Commercial production of the refinery started
in 1979 and other plants were commissioned in stages. The
Refinery, which normally processes crude oil available in
Assam, is presently processing crude from Ravva Oil Fields of
Krishna Godavari Basin also. The Petrochemicals units
consume Naphtha as its major raw material, which is supplied
from the Refinery itself.

The major products from the refinery are LPG, Unleaded MS,
Naphtha, ATF, SKO, HSD, LDO, LSHS, LVFO, RPC & CPC.
The major products of the Petrochemicals and PSF units are
DMT and PSF. The petroleum products (except RPC & CPC)
are marketed by Indian Oil Corporation Ltd.(IOCL). BRPL

33
markets RPC, CPC, Petrochemicals products and PSF through
its own marketing network in alliance with M/s RIL.

The PSF and DMT plants, which were under shut-down for
some period due to economic reasons are being operated in
alliance with Reliance Industries Ltd.

As on 31.03.2005, the Company had 1,744 employees on its

rolls.

Business & Plant Capabilities

 Initial capacity of 1.00 MMTPA –

commissioned in 1979
 Refinery  De-bottlenecked to 1.35 MMTPA in
1987
 Expanded to 2.35 MMTPA in 1995
 29,000 MTPA Para-Xylene plant
commissioned in 1985
 45,000 MTPA DMT plant
 Petrochemicals
commissioned in 1985
 30,000 MTPA PSF plant commissioned
in 1988
 Petrochemical products by BRPL
through its countrywide network;
 Marketing
Refinery products by IndianOil through
a  marketing agreement.

Performance

2000- 2001- 2002- 2003- 2004-

S.No. Particulars.
01 02 03 04 05
Turnover (Rs.
i) 1220 1326 1863 2849  
Crore)
Net Profit (Rs.
ii) (-) 57 (-) 199 178 304  
Crore)
Dividend (Rs.
iii) - - 61 174  
Crore)
Crude
iv) 1.49 1.48 1.46 2.13 2.31
throughput (mt)
Contribution to Exchequer (cumulative up
   
to 2003-04) = Rs.2851 crores

34
 The Ministry of Petroleum & Natural Gas has allocated Ravva
Crude from Krishna Godavari Basin to BRPL from 2003-04,
which has helped in improved capacity utilisation of the
Refinery. In-house, there has been remarkable improvement in
efficiency in production with improved distillate yields, low
energy consumption & loss, reduction in production cost, etc. In
addition, the Government of India has extended 50% excise
duty benefit to all the NE refineries effective March 2002. All
these have contributed to improved financial performance
during the past three years. The financial and physical
performance till 31.12.2004 have lived up to the expectations of
the shareholders.

BUSINESS PLAN
In the Refining business, MS and HSD quality up-gradation
projects would be essential to meet new product specifications
applicable from the year 2010. Two projects, viz., MS (petrol)
quality upgradation and HSD (diesel) quality upgradation, to
meet Bharat stage-III specifications, are being pursued for
implementation. These are major projects with a combined
outlay of about Rs.800 crore.

In the PSF business, capacity expansion with associated

diversification has been identified as an economic option to
improve viability & competitiveness. The project envisages use
of alternative feedstock PTA instead of DMT considering the
advantages PTA has over DMT as a feed. Detailed analysis is
being carried out.

Vision  
A major diversified, transnational, integrated energy company, with national
leadership and a strong environment conscience, playing a national role in
oil security& public distribution.
 
Mission
To achieve international standards of excellence in all aspects of energy
and diversified business with focus on customer
   delight through value of products and services, and cost reduction.
 To maximise creation of wealth, value and satisfaction for the stakeholders.
 To attain leadership in developing, adopting and assimilating state-of- the-

35
art technology for competitive advantage.
To provide technology and services through sustained Research and
Development.
To foster a culture of participation and innovation for employee growth and
contribution.
To cultivate high standards of business ethics and Total Quality
Management for a strong corporate identity and brand equity.
To help enrich the quality of life of the community and preserve ecological
balance and heritage through a strong environment     conscience.

Values
Care
Innovation
Passion
Trust

IndianOilPeople...
                              towards Excellence...

Company profile

Indian Oil Corporation Limited

 

36
 Click Here To View Annual
Report 2004-2005

Indian Oil Corporation Ltd.

(IndianOil) was formed in 1964
through the merger of Indian Oil
Company Ltd. (Estd. 1959) and
Indian Refineries Ltd. (Estd.
1958).

It is currently India’s largest company by sales with a turnover

of Rs. 1,50,677 crore (US $ 34.44 billion) and profits of Rs.
4,891 crore (US $ 1.12 billion) for fiscal 2004.

IndianOil is also the highest ranked Indian company in the

Fortune ‘Global 500’ listing, at 170th position. It is also the 18th
largest petroleum company in the world and the # 1 petroleum
trading company among the national oil companies in the Asia-
Pacific region.

India’s Downstream Major

The IndianOil Group of companies owns and operates 10 of

India’s 18 refineries with a combined refining capacity of 54.20
million tonnes per annum (1 million barrels per day). These
include two refineries of subsidiary Chennai Petroleum
Corporation Ltd. (CPCL) and one of Bongaigaon Refinery
and Petrochemicals Limited (BRPL). IndianOil owns and
operates the country’s largest network of cross-country crude
oil and product pipelines spanning nearly 10,000 kilometres,
with a combined capacity of 58.62 MMTPA.

IndianOil and its subsidiaries account for 56% petroleum

products market share among public sector oil companies, 42%
national refining capacity and 69% downstream pipeline
throughput capacity.

For the year 2004-05, IndianOil sold 50.13 million tonnes of

petroleum products, including 1.96 million tonnes through
exports.

To maintain its competitive edge and leadership status,

IndianOil is investing Rs. 24,000 crore (US $ 5.6 billion) during

37
 the X Plan Period (2002-07) in
integration and diversification
projects, besides refining and
pipeline capacity augmentation,
product quality upgradation and
retail expansion.

Network Beyond Compare

As the flag-ship national oil company, IndianOil’s countrywide

network of 24,000 sales points is backed for supplies by 158
bulk storage depots and terminals, 95 aviation fuel stations and
88 Indane LPG bottling plants. Its subsidiary, IBP Co. Ltd., is a
stand-alone marketing company with a nationwide network of
nearly 4000 retail sales points.

IndianOil reaches Indane cooking gas to the doorsteps of 41.05

million households in 2,353 markets through a network of
nearly 4,700 Indane distributors.

IndianOil also operates the largest and the widest network of

retail outlets (petrol/diesel stations) in the country. A significant
milestone was achieved with the commissioning of the
company’s 10,000th petrol station during the year 2004-05.
IndianOil’s SERVO brand lubricants, being the first and only
one in its category in India to be accorded ‘Superbrand’ status,
is the country's leading, with over 42% market share and 450
grades. SERVO lubricants are sold through over 10,000
Company retail outlets, besides a countrywide network of
bazaar traders.

IndianOil’s ISO-9002 certified Aviation Service commands a

65% market share in aviation fuel business, meeting the fuel
needs of domestic and international flag carriers, private
airlines and the Indian Defence Services.

Customer First

At IndianOil, customer is the first priority. During 2004-05, a

slew of initiatives were launched for the convenience and
benefit of the various customer segments. Branded auto-fuels
(XtraPremium petrol and XtraMile diesel) market was
expanded to cover more retail outlets across the country.

38
 Exclusive XtraCare retail outlets
were unveiled in select urban
and semi-urban markets during
the year 2004-05, offering a
range of services to enhance
customer delight and loyalty.

Similarly, to meet the discerning

needs of highway motorists,
large format Swagat brand retail outlets were launched during
the year with multiple facilities such as food courts, first aid,
dormitories for drivers and cleaners, repair and spare part
shops etc..

Specially formatted retail outlets - Kisan Sewa Kendras – were

also launched during the year 2004-05 to meet the diverse
needs of rural customers were launched during the year. These
outlets were strategically positioned to offer product and
services such as fertilizers, seeds, pesticides, farm equipment,
medicines, spare parts for trucks and tractors, tractor engine
oils and pump set oils besides auto fuels and kerosene.

R&D for Growth

IndianOil’s world class R&D Centre is perhaps Asia’s finest.

Besides pioneering work in lubricants formulation, refinery
processes, pipeline transportation and alternative fuels such as
bio-diesel, the Centre is also the nodal agency of the Indian
hydrocarbon sector for ushering in Hydrogen fuel in the
country.

Expanding Horizons

IndianOil has set its sight to reach US$ 60 billion revenues by

the year 2010-11 from current earnings of US$ 34.44 billion.
The road map to attain this milestone has been laid through
vertical integration – forward into petrochemicals and
backwards into exploration and production of crude oil, besides
diversification into natural gas business and globalisation of our
operations.

In petrochemicals, a master plan envisaging Rs. 25,000 crore

(US$ 5.7 billion) investment is already underway. The
commissioning of the world’s largest single train Linear Alkyl
Benzene plant at Koyali refinery in August 2004 and the on-

39
going integrated Paraxylene/Purified Terephthalic Acid
(PX/PTA) plant and a world-scale Naphtha Cracker with
downstream polymer projects are part of this plan. IndianOil
also proposes to convert the on-going Paradip refinery into a
refinery-cum-petrochemicals complex to strengthen its
presence in the sector.

In exploration & production (E&P), IndianOil has participated in

the first three rounds of NELP (New Exploration Licensing
Policy) in India, in consortium
with other companies, and was
awarded 11 exploration blocks. It
has acquired participating
interest in on-shore blocks in
Assam and Arunachal Pradesh
region. Overseas ventures
include 2 blocks in Sirte Basin in
Libya and Farsi Exploration
Block in Iran. The Corporation is
also exploring opportunities to acquire a suitable medium-sized
E&P company to quickly consolidate its upstream operations.

In natural gas business, IndianOil is already marketing 5.26

MMSCMD (million metric standard cubic metres per day) of
gas. To augment its business in the sector, it has now finalised
an import deal for 1.75 million tonnes of LNG per annum with
Iran for supplies from the year 2009 onwards. The Corporation
has also proposed partnering Petropars, a subsidiary of
National Iranian Oil Company, in jointly developing gas blocks
in the North Pars fields of Iran.

IndianOil grossed its first US$ 1 billion in revenues through

initiatives in new business in 2004-05.

Transnational Presence

To emerge as a transnational energy major, IndianOil has set

up offices in Sri Lanka, Mauritius and UAE and is
simultaneously scouting new opportunities in new energy
markets in Asia and Africa.

The Sri Lankan subsidiary, Lanka IOC, operates 170 retail

outlets commanding a 27% market share. Its oil terminal at

40
Trincomalee is also Sri Lanka’s largest petroleum storage
facility.

IndianOil Mauritius Ltd. has garnered a 7% market share in

the very first year of its operation. It also operates a modern
petroleum bulk storage terminal at Mer Rouge port, besides five
retail outlets. A modern product testing laboratory and
expansion of retail network have also been proposed in
Mauritius.

IndianOil’s Regional Office in Dubai, which is coordinating

business expansion in the Middle East, has commenced
blending of SERVO lubricants through contract blending
arrangements for the first time recently.

Synergy through Subsidiaries

A wholly owned subsidiary IndianOil Technologies Ltd., has

been established for commercialising the innovations and
technologies developed by the R&D Centre across the
globe.The merger of Indian Oil Blending Ltd with the parent
company, now approved by the Government, is in the final
stages of implementation.

The merger of IBP Co. Ltd., a retail focussed subsidiary with a

network of 4,000 retail outlets, with the parent company is
awaiting the Government’s nod after its approval by the Boards
of IndianOil and IBP. On Government’s approval, other
statutory approvals, including shareholder’s approval, would be
sought to complete the merger at the earliest.

The merger of Bongaigaon Refinery and Petrochemicals

Ltd. with the parent company has also been mooted with the
respective Boards approving the same already. Other
formalities, including Government’s nod, would be sought in
due course.

Spreading Wings

The Corporation has launched several joint ventures in

partnership with some of the most respected Corporates from
India and abroad -- Lubrizol, Nyco SA, Petronas, Oiltanking
GmbH, Marubeni, to name a few. SERVO lubricants are being
marketed in Dubai, Nepal, Bhutan, Kuwait, Malaysia, Bahrain,

41
Indonesia, Sri Lanka, Kyrgyzstan, Mauritius, Bangladesh, etc.

IndianOil has been lending its expertise for nearly two decades
to various countries in several areas of refining, marketing,
transportation, training and research & development. These
include Sri Lanka, Kuwait, Bahrain, Iraq, Abu Dhabi, Tanzania,
Ethiopia, Algeria, Nigeria, Nepal, Bhutan, Maldives, Malaysia,
Sudan and Zambia.

IndianOil's sincere commitment to Quality, Safety, Health and

Environment is reflected in the series of national and
international certifications and awards earned over the years.

The 18th largest petroleum Company in the world, IndianOil is

well on its way to becoming an integrated, transnational energy
corporate.

IndianOil. Bringing Energy to Life.

PRODUCTWISE SALES

PRODUCT 2004-05 2003-04

Figures in
TMT
LPG 4763.3 4386.8
NAPHTHA/NGL 3348.5 3688.4
MOTOR SPIRIT (Gasoline / 2968.3 2844.2
Petrol)
ATF (Jet Fuel) / JPS 1847.4 1649.0  
SKO 5622.2 5625.1
HIGH SPEED DIESEL (Gas 18050.3 17404.8
Oil)
LIGHT DIESEL OIL / MLO 622.5 713.2
LUBES / GREASES 433.3 418.9
FURNACE OIL / LSHS 7807.3 7435.7
BITUMEN 2095.4 2101.7
FTP Products 599.5 521.4

42
CNG 26.7 17.1
ALL PRODUCTS 48184.7 46806.3
The above figures include sales of IndianOil and Assam
Oil Division.

THE MARKETING NETWORK

IndianOil's Marketing Network is spread throughout the country

with over 23,000 sales points (the largest in the country). These
include petrol / diesel stations, consumer outlets, lube
distributors, SERVO SHOPS, SKO/LDO dealers, LPG
distributors, etc. The Regional offices look after the North, East,
West and Southern Regions of India, and Assam Oil Division
supplements operations in the NorthEast. A number of State
Level, Divisional and Indane Area offices have been
established in each Region.

Petroleum products are essential inputs to the industrial,

transportation, commercial and household sectors.

The extensive network of sales points comprises:

Number
Unit /
Quantity
Divisional Offices 44
LPG Area Offices 35
State Offices 15
Terminals and Depots 165
Aviation Fuel Stations 95
LPG (Indane) Bottling Plants 87
3778
LPG Bottling Capacity
TMTPA
Petrol / Diesel Stations 10144
SKO/LDO Dealers 3552

43
Indane Distributors 4675
SERVO Stockists 204
Bulk Consumer Outlets 5847
Towns with Indane 2064
Indane Customers 424 lakh
Markets covered by Indane 2177*
(Above figures as on 1.4.2005)

The Marketing Mantra for IndianOil is to continuously provide

the best products and services at the most reasonable cost.
The "New Look" petrol / diesel service stations selectively have
"ConveniO" shopping stores, snap services, quick Lube
change, automatic car wash and multi-product dispensing
pumps. To facilitate easy transaction, many of our stations
accept major credit cards. In fact, IndianOil and Citibank have
launched a special co-brand card, the "IndianOil Citibank
Card" which is not only accepted  at IndianOil petrol stations
but at many restaurants, shops, airlines, etc. Also, IndianOil's
tie-up with Coca-Cola ensures that select petrol stations stock
and dispense "Coke" - thus quenching the thirst of the vehicles
and the motorists! 

A new concept of "Jubilee Retail Outlets" has also been

launched to set up petrol / diesel stations on highways with
comprehensive  value added facilities for various customer
segments, namely truckers, farmers, tourists and passenger
transport. These include motels, restaurants, parking lots,
weighbridges, sale of tyres, batteries, acessories, agricultural
machinery repairs and recreational facilities provided
selectively. The first such retail outlet was commissioned at
Ongole, District Prakasam, Andhra Pradesh in August 1998.

IndianOil's "INDANE LPG" is

being marketed in as many as
2064 towns with a customer
population of 349 lakh served by a
network of 4120 distributors - one
of the largest networks in the
world.

SERVO ® lubricant range is the

largest selling lubricant brand in

44
India. IndianOil's Aviation Service
continues to be the market leader
in the aviation fuel business with a
market share of nearly 67.7%.
IndianOil was the first to introduce
Hydrant Refueling System in India.
IndianOil is also bunkering all
types of marine fuels and
lubricants required by the Shipping
Industry in India.

IndianOil - Changing The Face Of Petroleum Retailing

In this section:
Xtra Initiatives in Retail Branding
XtraQuality
Xtra Customer Service
XtraAutomation
XtraCommitment
XtraValue
Visual Identity
Q & Q Concept
Top Gear
Jubilee Outlets
Cashless Transactions
Premium Fuels
 AutoGas (LPG)
Customer Focus
 Fleet Card
 Truck Tracking
 Transport Exchange

Early anticipation of the future needs of the customer is the

secret of IndianOil's success in retail marketing. Periodic
market research and in-depth focus studies help the
Corporation gauge the changing customer choices and future
market expectation. With over 10,144 petrol and diesel stations
spread throughout the country, and an additional 3272 of
subsidiary company, IBP Co. Ltd., IndianOil commands a
dominant market share in the petroleum retail segment in India.

IndianOil has over 53.2% market share of the petroleum

45
consumption in India.

In fact, it was the first company to recognise petrol and diesel

stations as a "Key People Interface". Way back in the 1970s,
IndianOil introduced Multi Purpose Distribution Centres
(MPDCs) in select rural and semi-urban markets, which, apart
from selling petroleum products, were dispensing medicines,
farm equipment and other essential daily-use commodities.
Today, it has gone a step further by opening Convenio Stores
in urban markets dispensing a variety of consumer items.

XtraInitiatives in Retail Branding

IndianOil Citibank Credit/Debit Card is leading in the co-

branded credit/debit segment with a customer base of 5.70
lakh.

Special arrangement with State Bank of India Credit Cards for

use at IndianOil outlets. XtraPower Fleet Card, exclusive
Credit-cum-Debit Card for the fleet operators has over 4 lakh
users.

XtraRewards Card, specially designed for urban cash

customers Exclusive facilities like ATMs, Convenio stores,
Cyber Cafe, Auto Car wash, Quick Lube change centers at new
generation retail outlets for enhanced customer care.

XtraCare retail outlets a culmination of a series of planning in

retail design, product and service upgradation, capability
training, automation, loyalty programme, retail site
management techniques all bench marked to global standards
XtraCare Quality & Quantity, housekeeping, maintenance and
customer service certified by the globally renowned agency –
M/s Bureau Veritas (BV).

XtraQuality

Samples tested on random/fortnightly basis with specific

46
importance given to RON (Research Octane Number) a
definitive test for quality and quantity. Third party certification,
by Bureau Veritas on a range of parameters that include
hygiene, service, efficiency of fore court, allied services and
customer satisfaction.

The maintenance of the various equipment at the XtraCare

outlets is being done by regular Original Equipment
Manufactures under a unique 'Equipment Quality Outsourcing'
system.

Xtra Customer Service

Shree levels of competencies Customer Service, Personal

hygiene/grooming and customer Complaint redressal. State-of-
the-art training systems like 'Retail Site Business Management'
modules a unique training template culled out of best Global
practices in Retail Sales management and backed by IIM
inputs.

The high performers given status of 'Retail Stars' and a

consistent record will also give the Retail outlet the 'Star
XtraCare Retail' outlet status. High performing pump attendants
rewarded with extremely attractive compensation packages and
high performing dealers who continue to retain the high levels
of XtraCare eligible for a wide range of monetary incentives.

XtraAutomation

State of the Art automation project which includes automatic

tank level gauges, temperature sensors, density measurement
sensors, back-office server with DU controls, automatic bill
printing facility, customer database etc.

Tank Truck automation Sealed Parcel Delivery System (SPDS)

includes electronic locking of TTs carrying loads to ROs. Real
time density sensors and the sealed parcel delivery system
superior to mere GPS based tracking systems. SPDS ensures
that the quality of the fuel would be ensured from "Supply point
to the Customers".

XtraCommitment

IndianOil introduced the Platinum Circle and GOLD Circle- top

47
of the line, exclusive clubs for high selling retail outlet dealers.
These elite IndianOil Dealers have emerged as peer leaders
and is an integral part of the XtraCare Dealer 'sensitisation'
strategy that IndianOil has been planning for the last year.

XtraValue

IndianOil has tied up with Tata Motors for Tata Authorised

Service Stations (TASS) and auto spare parts at Retail Outlets
Offered a real time truck tracking facility for fleet owners in
collaboration with BSNL and Chennai based eLogistics.
IndianOil has also signed a MoU with Coffee Day Xpress, part
of the Amalgamated Bean Coffee Trading Company (ABCTC),
for setting up coffee bars and take away kiosks at IndianOil
petrol stations.

IndianOil has also signed a MoU with the leading tyre brand JK
Tyre for a wide range of loyalty benefits for mutual customers
including IndianOil's XtraPower Fleet Card program offering
loyalty reward points on the purchase of JK Truck tyres, tubes
and flaps. IndianOil has also set up Nirula, MacDonald and
Foodworld outlets in select places as well as extended support
to the Bill and Melinda Gates Foundation for a range of
services including healthcare advise to the Trucking community
which is a key customer segment for IndianOil. Recently,
IndianOil achieved the enviable distinction of being the only
petroleum brand in the latest ranking of the top 150 Indian
Brands by Brand Equity. Among the exclusive services list for
petrol pumps, IndianOil leads the charge with the top rank
followed by its subsidiary IBP. In the sector wise ranking of all
services

IndianOil has powered its way to the 11th position, leaving the
competition far behind.
For the first time IndianOil took the Title Sponsorship of a major
Cricket Event of Global proportions IndianOil Asia Cricket Cup
at Colombo.

IndianOil also launched an immensely successful Customer

Ambassadors' programme which is an umbrella customer
outreach programme.

IndianOil's Aish in Malaysia named to the Limca Book of World

Records as the largest consumer sales promotion campaign
ever: Over 43 Million customers participated in the 'Aish in

48
Malaysia' contest.

Another record campaign was the Ao Roz Ek Truck Pao -Over

Rs 12 crore worth prizes were declared 31 trucks in 31 days
designed to address the greatest aspiration of a driver i.e. to
own his own truck.

IndianOil, ICICI Bank have formally signed an Memorandum of

Understanding for setting up 'Kissan Seva Pumps' throughout
the country. The Kissan Seva Pumps will market custom built
product/service packages which will be made available to them
at their doorsteps thereby saving considerable Time, Cost and
Energy and avoiding conventional storage and leakage proof
needs.

The Kissan Seva Pumps will primarily market Fuels like Diesel,
Kerosene, Indane LPG and SERVO Lubricants as well as
Financial services, Fertiliser and agro inputs seeds, pesticides,
equipment; Agro products like vegetables, Communication
services, Stationery and other items.

Visual Identity

IndianOil first anticipated customer needs in urban areas for

better, cleaner and well-designed petrol stations almost a
decade ago. IndianOil was also the first to develop a
comprehensive Retail Visual Identity programme to re-orient
the design and standards of our petrol and diesel stations.
IndianOil developed its strategy, marking the entry of colour-
coded canopies, multi-product dispensing pumps, concrete
driveways, digital air towers, cyber cafes, automated teller
machines, auto-car washes, etc., all of which later became
industry norms. The addition of world class infrastructure
facilities in IndianOil's marketing network has had a significant
impact on its market share in the petroleum retail sales
category.

49
Q & Q Concept

IndianOil's retail marketing initiatives are oriented around two

simple concepts - Quality and Quantity. The concept of testing
the product before buying at the IndianOil retail stations has
few parallels in the petroleum industry. The Corporation's focus
has been to segmentise market needs, as the requirements in
urban and semi-urban areas is quite different from the highway
market where the Corporation has a very strong presence.
IndianOil launched a novel 'Check-and-Win' campaign in 49
major cities and towns, whereby motorists win prizes for
checking the quality of fuel at ROs. About 2.62 lakh customers
have already carried out checks across 12 cities, with no
product failures reported.

Top Gear

For IndianOil, the time spent by a customer at its outlet is

valuable. It is, therefore, the Corporation's responsibility to
convert this time into "quality time" for the customer. Quick
delivery of fuel and fast payment transactions add value to
customers' time.

IndianOil has commissioned "Top Gear" in Mumbai as a state-

of-the-art petrol station with multiple associated facilities. Top
Gear is tailor-made to provide 'fill-and-fly' service to the Mumbai
motorists who battle 'time' in their daily lives. With facilities like
multi-product dispensing pumps, auto carwashes, Convenio
stores, SERVOShops, digital air towers, bank ATM, customer
lounge, art gallery, computerized online billing system, help
desk and cyber cafe, etc., Top Gear symbolizes the cutting
edge of petroleum retail marketing. Several more 'Top Gear'
stations are coming up in major cities to cover all State
Capitals.

50
Jubilee Outlets

The ever-changing trends in highway traffic and the increase in

the number of automobiles plying on trunk routes set IndianOil
to commission a completely new range of facilities to meet the
demands of this vital segment of our business. In 1997,
IndianOil commissioned the country's first Jubilee Retail Outlet
in Ongole, Andhra Pradesh, in what was a revolutionary step in
petroleum retail marketing in the populous and prosperous rural
hinterlands and National Highways. The Jubilee RO concept,
introduced on the occasion of the Golden Jubilee celebrations
of India's independence, has been a major success in the
history of Petroleum Retailing. Today, IndianOil has as many as
80 Jubilee outlets spread across the country.

Each Jubilee outlet, built on a sprawling four acre area, has

dozens of fuel islands, Convenio stores, massive parking lots,
cafeteria for motorists, dhabas for truckers, dormitories for
tourists and passengers on pilgrimages, playground, bank
extension counter, post office, pharmacy, fist aid facilities,
dedicated STD/ISD facilities, etc.

Cashless Transactions

For customer convenience, cashless transactions through co-

brand credit cards were introduced by IndianOil at its petrol
stations. The IndianOil-Citibank co-brand credit card grew to be
the largest co-brand credit card in India and was also adjudged
by MasterCard as the best co-brand credit card in South-East
Asia.

Last year, IndianOil also introduced the PowerPlus Fleet card in

association with Sundaram Finance. It also launched the
"SmartGold" smart card together with State Bank of India. Very
recently, for the first time in the country, a co-branded debit
card (MyShoppe) has been introduced through which
customers will pay only at the time of buying goods, including

51
fuel, and also collect bonus points which can be redeemed at
IndianOil ROs.

The Corporation has also tied up with reputed agencies like

Akbarallys' for Convenio stores, with Dominos and Kamats for
food courts, with ICICI Bank, Centurion Bank, etc., for ATMs to
provide an exhilarating retail experience to motorists. In all
these, our effort is to facilitate easier and cashless transactions
so that our customers spend 'Quality Time' at our stations.

IndianOil's retail tie-up with private partners:

 IndianOil and Sundaram Finance sign Agreement
 Foodworld outlet inaugurated at IndianOil petrol stations
 Citibank for co-branded credit cards
 ICICI Bank, Centurion Bank and Bank of Punjab for ATMs
 Apollo Hospitals for pharmacy/Convenio stores
 Akbarallys for Convenio stores
 MTNL for telephone bill payments in Mumbai/Delhi
 Dishnet DSL for cyber cafes
 JK Tyres for digital air towers
 Dominos for pizza takeaway outlets

PIONEERING EFFORTS IN INDIA: IndianOil FIRSTS

 Hydrant Refueling System at Mumbai

 State-of-the-art LPG Import Facility at Kandla with Cryogenic

Storage

 Mounded Storage for LPG and Automatic Electronic Filling

System at Madurai LPG Bottling Plant

 Mobile LPG Bottling 

 Rural Marketing of LPG by Mobile LPG Filling Truck

introduced by Chief Minister of Tamil Nadu in Thanjavur on
18th May 1997. The second such Rural Marketing Vehicle
(RMV) was launched in Allahabad District of Uttar Pradesh
during December 1998. As of April 1999, both RMVs are
catering to over 17,800 customers. Each RMV, with a Storage

52
Vessel of 5T capacity, has 2 filling machines at 15 m safety
distance.

 Equipment for quality control check and rollable fencing.

 First oil marketing company in India to get ISO-9002

certification for Aviation Services, Lube Blending Plants, 
Quality Control Labs, and R&D Centre.

Major projects

Joint ventures

 Date of  Promoters &

Name of JV  Area(s) of Operation
 Incorp'tn  Equity
 Avi - Oil 04.11.1993  IOC: 25% To blend, manufacture and
 India Limited  Balmer Lawrie: sell synthetic, semi synthetic
25% and mineral based lubricating
 NYCO SA, oils, greases and hydraulic
 France: 50% fluids, related products and
specialities for Defence and
Civil Aviation uses.
 Indian 28.08.1996  IOC: 50% To build and operate
Oiltanking  Oiltanking terminalling services for
 Limited  GmbH: 50% petroleum products.
 Lubrizol India Existing  IOC: 50% To manufacture and market
 Private Limited Co.  Lubrizol Corp, chemicals for use as
restructure  USA: 50% additives in fuels, lubricants
d w.e.f. and greases.
01.04.2000
 IndianOil 03.12.1998  IOC: 50% To construct and import
Petronas  Petronas, facilities for LPG import at
 Private Limited  Malaysia: 50% Haldia and to engage in

53
 parallel marketing of LPG.
 Petronet LNG 02.04.1998 IOC, BPC, Development of facilities for
 Limited GAIL,ONGC: import and regasification of
12.5% each, LNG at Dahej and Kochi.
Gaz de France
International :
10%,
Asian
Development
Bank :5.2%,
Public Issue :
34.8%
 Petronet India 26.05.1997 IOC, BPC, To implement Petroleum
 Limited (PIL) HPC:16% each, Products, Pipeline projects
RPL, IL&FS, through Special Purpose
ICICI, SBI, EOL: Vehicles.
10% each,
IBP: 02%
 Petronet VK 21.05.1998 IOC, PIL: 26% To construct and operate a
Limited each, pipeline for transportation of
RPL, EOL: 13% petroleum products from
each, Vadinar to Kandla.
SBI, KPT,
GIIC,IL&FS:
05% each,
CB: 02%
 IndianOil 06.10.1999  IOC: 50% To build own and operate
Panipat  MC: 50% power generation plant at
 Power Panipat and to sell power to
Consortium Haryana Vidyut Prasaran
 Limited Nigam Ltd.
 Petronet CI 07.12.2000  IOC, PIL, RPL: To construct and operate a
Limited  26% each pipeline for evacuation of
 EOL, BPC: petroleum products from RPL
11% each and EOL refineries at
Jamnagar as well as from
Gujarat Refinery at Koyali to
feed the consumption zones
at Central India.
       
BPC - Bharat Petroleum Corporation Ltd., EOL – Essar Oil Ltd.; GAIL – GAIL
(IndianOil Litd., HPC – Hindustan Petroleum Corporation Ltd., IL&FS –

54
 Infrastructure Leasing & Financial Services ltd., IOC – Indian Oil Corporation
Ltd., KPT – Kandla Port Trust – ONGC – Oil & Natural gas Corporation Ltd.,
PIL – Petronet India Ltd., RPL – Reliance Petroleum Ltd., SBI – State Bank of
India, GIIC – Gujarat Industry Investment Corporation, CB – Canara Bank,
MC – Marubeni Corporation, Japan

GULF OIL COMPANY(HINDUJA GROUP COMPANY)

Gulf Oil Corporation LtdLubricants Division

55
The lubricant industry is growing at a tremendous rate and with
international auto giants entering the Indian market the need for high
quality lubricants will increase exponentially.

A pioneer in the lubricant industry, Gulf Oil India is one of the largest
private, comprehensive lubricant manufacturers in India. Its product range
encompasses the entire spectrum of light and heavy vehicles, from:

 Two wheelers to Cars

 LCV's to Trucks
 Tractors to Earthmovers
 Industrial to Defence Machinery equipment's & Railways
 Ships to Airplanes

Technology
A 75000 tonnes p.a., ISO 9002 certified, completely computerised facility
in Silvassa acquires specially selected and imported European base
stocks and tailor-made performance additives developed at the Gulf Oil
Research Laboratories in USA and Europe for blending and filling.

The fully equipped laboratory with internationally trained and experienced

chemists conducts over 1200 tests every day to guarantee final product

56
 performance. Specially built programmable logical control systems, aided
by imported French-made software, ensures precise control of the finished
product properties.

Quality
Quality through unswerving customer satisfaction has been Gulf's strong
suit. Change is important and the ISO certified company continuously
upgrades its quality by introducing products developed with newer
technology.

Marketing-Customised Solution
Gulf's vast industrial product range covers every application known to man
- from water-dissolving cutting oil and high temperature grease to fire-
resistant hydraulic fluids. In fact, it is likely that everything you use has
been processed on machinery touched by Gulf Oil.

Network
Gulf Oil started operations in 1993 with a distribution network of
approximately 600 dealers and 54 stockists in the West Zone. Today, this
distribution network has morphed into gigantic operation covering 120
exclusive Gulf Shoppes, 85 depots, over 1200 dealers and 18000 retail
outlets, and the count is rapidly increasing

Update
Shareholders have recently approved Gulf Oil India's merger with IDL
Industries Ltd. in a 2:1 swap ratio. This merger will enable the Hinduja
Group consolidate its position in the Indian chemical segment and give it
better synergies and a larger network for both domestic and international
marketing.

Transmission system of Gujarat gas

Transmission System

57
Gujarat Gas, India's first and largest private sector natural gas
distributing company, is committed to building adequate
infrastructure for continuous availability of natural gas.
GGCL has invested
more than Rs. 1000
million for setting
up the Hazira
Ankleshwar
pipeline. Apart from
providing its
customers the
benefit of multiple
sources, the spare  
capacity in the
pipeline is used for
third party
transportation.
Currently, this
pipeline is used to
transport
approximately 3.2
mmscmd of gas.

Natural Gas distribution

In 1988, Gujarat Gas Company Limited (GGCL) pioneered the

private distribution of Natural Gas in India, through the
establishment of an independent network of pipelines to
industrial, commercial & domestic customers in Southern
Gujarat.

Today, GGCL pipeline network spans  

more than 1800 kilometers.  GGCL
has established it's base in one of the
most industrialized belts of the
country - the Golden Corridor of
Gujarat. Specifically, the three cities
of Surat, Bharuch, and Ankleshwar
form the nucleus of its current
operations. GGCL has also extended
the network to Jhagadia. The
potential for growth derives from the
ever-increasing energy demand-

58
 supply gap in this economically
vibrant area.

GGCL supplies approximately 2.2 million standard cubic metres

per day (mmscmd) of Natural Gas to approximately 1,45,000
domestic households, 1,800 commercial and 475 industrial
customers, which include Indian and multinational companies in
sectors like Pharmaceutical, Chemical, Textile etc. This makes it
the largest private sector gas distribution company in volume
terms in India.

The Company is committed to making further investments in

expanding the basic pipeline infrastructure. This will not only
allow the Company to consolidate its position, but will also
enable it to grow significantly.

Health, Safety, Security and Environment

Our policy builds on the high standards inherent within our company,
and reinforces our commitment to the continuous improvement of
Health, Safety, Security and Environmental Performance in all our

59
activities.

GGCL is an ISO 9000 : 2000, ISO 14001 and OHSAS 180001 certified
company.

GGCL has won the following awards

 BG Group Chairman's Award 4 times since 2000 for excellent

performance in HSSE
 Gujarat Safety Council Award for Lowest Disabling Injury Rate
for the year 2002.
 National Safety Council Council's Pransha Patra for the year 2003
 

HSSE Policy

Safety First

YOU CAN EXPECT FROM G.G.C.L.

(1) You Rely on Pipeline Gas :

- You will have over 99.99% uninterrupted gas supply.
- Prior notification in case of supply interruption. (except in
Emergencies).
- Gas supply will be restored the same day (Except in Emergencies).

(2) You Expect Safety :

- We recommend you call us to check your pipeline installation
annually, if it is not checked.
- Emergency phone line is manned 24 hours everyday - Call 1915
- Emergency teams are on alert 24 hours everyday and will arrive
within one hour.
- All offices are equipped with hot lines & wireless.
- All vehicles are equipped with wireless

(3) You expect courteous, friendly service :

We aim to provide prompt, efficient, courteous & useful services to
ensure your satisfaction. Below are our standards of service which we
aim to achieve.

STANDARDS OF SERVICE

Safety Instructions

60
 DO'S
1.Keep "Gas Tap" closed when
Gas is not being used
2. If the premises is to remain
closed for more than a day, shut
off control valve.
3. Gas leakage should be brought   3. Don't keep hot utensils near
to the notice of GGCL
immediately.
4. On leakage, immediately close
control valve, open doors and
windows and inform GGCL.
5. Keep children away from all
Gas equipments.
  DONT'S
  1. Don't handle or adjust critical
equipment on your own in the
Gas Line i.e. Regulator, Meter
etc. call GGCL for any problem.
  2. Don't use cracked rubber
tube; if it is cracked, ask GGCL
for replacement.
the rubber tube.
  4. Don't make any changes in
plumbing work which has been
carried out by GGCL. If any
changes is required contact
GGCL only.
  5. Don't operate electric
switches, fridge, mixer etc.; Let
them remain in "As it is"
position in case you smell Gas.

GAIL clinches NPMP award for DVPL

GAIL (India) Limited has received the coveted NPMP award in recognition of
excellence in Enterprise Category for Dahej-Vijaipur Pipeline Project. Shri S P
Rao, Director (Projects), GAIL received this award from Shri Mani Shankar Aiyar,
Hon'ble Minister of Petroleum and Natural Gas in presence of Shri Proshanto
Banerjee, Chairman and Managing Director, GAIL. GAIL has completed the
Dahej- Vijaipur Pipeline Project in a record period of 27 months. The Project was
completed six months ahead of schedule, resulting into a cost saving of Rs.
736.37 crore. This is the largest diameter cross country onshore pipeline for
transportation of high pressure gas so far executed in India. The total approved
cost of the project was Rs. 2936 crore. The pipeline passes through Gujarat and
Madhya Pradesh.

61
Global Recognition

 Platts declares GAIL as first among Global Gas Utilities based on Return
on Invested Capital (ROIC) in its Worldwide Survey of Top 250 Energy
Companies in 2004.

 GAIL joins Top 10 Club of Global Energy Companies based on Return on

Invested Capital (ROIC) in Platts Worldwide Survey of Top 250 Energy
Companies in 2004

Standing Tall among India Inc

 ET 500 ranks GAIL among Top 10 Indian Companies

The Glow of a Navratna

Public Enterprises Survey 2002-03* ranks GAIL's performance

 9th in terms of Turnover

 5th in terms of Pre-Tax Profits
 4th in terms of Net Profit
 10th in terms of Gross Block
 7th in terms of Improvement in Performance

* Survey conducted by Department of Public Enterprises, Ministry of Heavy

Industries & Public Enterprises

  

The use of compressed natural gas (CNG) in vehicles has led to considerable
reduction in air pollution as is evident from the following data:

A. Autorickshaw - Three wheelers:

(Emission in gram/Km)
Bajaj Three wheeler Pollutants Petrol CNG % Reduction
  HC 3.26 1.26 63.19
  CO 5.48 1.57 71.35
  CO2 47.44 27.60 41.82
  NOx 0.25 0.20 20.00

HC:Hydrocarbons
CO: Carbon Mono oxide

62
 CO2: Carbon di oxide
NOx: Nitrogen oxides
Source: Bajaj Auto Limited

B. Passenger Cars:

(Emission in gram/Km)
Pollutants Petrol CNG % Reduction
Maruti Omni CO 19.79 .55 97
  HC 1.14 1.02 11
Maruti Gypsy CO 4.94 0.59 88
  HC 1.86 1.42 24
Premier Padmini CO 18.38 0.94 95
  HC 2.83 2.03 28
Premier 118NE CO 15.6 2.04 87
  HC 2.57 1.92 25
Ambassador CO 52.16 0.78 98
  HC 6.37 4.33 32

Source: Indraprastha Gas Limited, GAIL (India) Limited

C. Diesel Buses:

% Reduction
Pollutants
by use of CNG over diesel
Ashok Leyland HC 16.67
  CO 19.37
  NOx 41.77
  Particulate Matter 97.68

Source: Ashok Leyland Limited

  

Air pollution has direct impact on climate change, the major pollutants being
Greenhouse gases: Carbon Dioxide, Methane, Chloro Fluoro Carbons (CFCs)
and Nitrous Oxide. These gases allow sunlight to come in but block some of the
infrared radiation (carrying heat back into the atmosphere) from leaving the
earth's surface. This leads to development of concentrated heat zones on the

63
earth surface. Development of concentrated heat zones causes turbulence in air
currents and ocean currents leading to increased precipitation, floods, storms,
cyclones and droughts, frequently witnessed phenomena in recent years.

Carbon Dioxide is the most prominent Greenhouse gas. The concentration of

CO2 has increased by over 20 per cent post-industrial revolution. While the
United States is the largest producer of global CO2 emissions (23%), India's
share is relatively lower at 4%.

Particulate matters in the atmosphere also contribute to climate changes. Among

particulate matters, black carbon has a warming effect while nitrates and
sulphates have a cooling effect on the climate. However, higher concentration of
nitrates and sulphates shields the effect of particulate matters on climate change.
Natural gas is one of the cleanest conventional fuels, which can help improve the
quality of air, especially when used in place of other more polluting energy
sources. Natural gas combustion results in virtually no atmospheric emissions of
sulphur dioxide or small particulate matter, and far lower emissions of carbon
monoxide, reactive hydrocarbons, nitrogen oxides and carbon dioxide.

The two principal air pollution issues are

acid rain and carbon monoxide
(CO)/ozone pollution levels. Reducing high
ozone pollution levels in urban areas
requires the reduction of reactive
hydrocarbons and sometimes nitrogen
oxide emissions. Besides being a
contributor to ozone formation, CO is a
health hazard. All these pollutants are
released into the atmosphere by the
combustion of some fossil fuels in
stationary sources such as industrial
boilers and power plants, and in
automobiles.

Natural gas is the solution to these

Source:IEA
pollution problems. Advanced natural
gas-fuelled vehicles have the potential to
reduce carbon monoxide emissions by 90
per cent and reactive hydrocarbon
emissions by 85 per cent compared with
gasoline vehicles. It is also possible to
burn natural gas simultaneously with less
environment-attractive fuels.
  

64
 GAIL (India) Limited

  

65
LPG - Liquefied petroleum gas

LPG is the abbreviation or short form for liquefied petroleum gas. Like all fossil
fuels, it is a non-renewable source of energy. It is extracted from crude oil and
natural gas. The main composition of LPG are hydrocarbons containing three or
four carbon atoms. The normal components of LPG thus, are propane (C 3H8) and
butane (C4H10). Small concentrations of other hydrocarbons may also be present.
Depending on the source of the LPG and how it has been produced, components
other than hydrocarbons may also be present.

LPG is a gas at atmospheric pressure and normal ambient temperatures, but it

can be liquefied when moderate pressure is applied or when the temperature is
sufficiently reduced. It can be easily condensed, packaged, stored and utilized,
which makes it an ideal energy source for a wide range of applications.

Normally, the gas is stored in liquid form under pressure in a steel container,
cylinder or tank. The pressure inside the container will depend on the type of
LPG (commercial butane or commercial propane) and the outside temperature.

When you start using LPG, some of the pressure in the container is released.
Some of the liquid LPG then boils to produce vapour. Heat is needed to convert
the liquid to vapour (known as the latent heat of vaporization). As the liquid boils,
it draws the heat energy from its surroundings. This explains why containers feel
cold to touch and why, if there is a heavy off-take, water or ice may appear on
the container. When you stop using LPG, the pressure will return to the
equilibrium value for the surrounding temperature. The pressure of the LPG in
the container varies with the surrounding temperature. It is also much higher than
is needed by the appliances that use it; it needs to be controlled to ensure a
steady supply at constant pressure. This is done by a regulator, which limits the
pressure to suit the appliance that is being fuelled. It is a colourless and
odourless gas to which foul-smelling mercaptan is added so that leak can be
easily detected.

LPG is highly inflammable and must therefore be stored away from sources of
ignition and in a well-ventilated area, so that any leak can disperse safely.
Another reason why care should be taken during storage is that LPG vapour is
heavier than air, so any leakage will sink to the ground and accumulate in low
lying areas and may be difficult to disperse. LPG expands rapidly when its
temperature rises. So whenever a container is filled, sufficient space is left to
allow for such expansion. LPG will cause natural rubber and some plastics to
deteriorate. This is why only hoses and other equipment specifically designed for
LPG should be used.

Although LPG is non-toxic, its abuse – (like that of solvents) – is highly

dangerous. LPG should always be treated with respect and kept away from
children whenever possible.

66
Liquid petroleum gases were discovered in 1912 when Dr. Walter Snelling, an
American scientist, realized that these gases could be changed into liquids and
stored under moderate pressure. From 1912 and 1920, LP-gas uses were
developed. The first LPG cook stove was made in 1912, and the first LPG -fueled
car was developed in 1913. The LPG industry began sometime shortly before
World War I. At that time, a problem in the natural gas distribution process
popped up. Gradually facilities were built to cool and compress natural gas, and
to separate the gases that could be turned into liquids (including propane and
butane). LPG was sold commercially by 1920.

67
CONSERVATION OF PETROLEUM PRODUCTS

Oil and gas conservation means their better and more efficient use with regard to
economic, social or environmental costs and benefits, resulting in attainment of
higher energy use efficiencies, minimization of wasteful practices and wastage
and protection of the environment.

2. Despite discovery of new sources of unconventional energy and due to

existing inadequacies in supply of other forms of commercial energy relative to
demand, petroleum remains the primary energy source in India and a preferred
swing fuel. Its consumption has been increasing at a very steep rate from 3.5
MMT in 1950-51 to 84.3 MMT in 1997-98 and projected to reach 130 MMT in
2001-02 and 175 MMT in 2006-07.

3. Out of the known Indian reserves of 660 MMT of Crude Oil and 648 Billion
Cubic Metres of Natural Gas, only a part may be technically and economically
feasible to exploit. This fact, coupled with the present and expected consumption
rates implies that these reserves may not last even 10 years. Our present
indigenous production is only 33 MMT and is less than 50% of our annual
requirement. Therefore, the Government attaches high priority to minimizing the
gaps between indigenous production and consumption of petroleum products.
The need of the hour is to conserve petroleum by its judicious use, substituting it
by other resources wherever feasible and restricting its use only to the essential
needs.

4. Various steps are being taken to promote conservation of petroleum products

in the following areas. The following specific activities are taken up from time to
time.

IN HOUSE CONSERVATION IN UPSTREAM AND REFINING SECTORS

Effective and result-oriented conservation methods adopted by the upstream

undertakings in the oil sector include reduction of gas flaring by re-injection of
gas to underground reservoir, installation of waste heat recovery systems,

68
utilization of non-conventional energy sources and close monitoring of all
conservation efforts by ONGC and OIL. Energy audits, efficiency upgradation of
equipment and appliances; substitution of diesel with Natural Gas, deployment of
solar-powered illumination panel, battery operated vehicles, Bio-gas etc., are
other steps taken.

The oil refineries implement various schemes like revamp and replacement of
low efficiency furnaces and boilers, installation of heat exchangers, economizers
and co-generation equipment, and adoption of improved house keeping
practices. They benchmark energy consumption levels with international
pacesetters for improvement. They also implement ‘ENCON’ (Energy
Conservation) schemes like heat integration and technology upgradation for
yield-energy optimization, vapour recovery system to arrest the avoidable escape
of gases through flare, tank seal etc.

In addition, they have implemented an Action Plan to produce and sell high grade
lubricants to the extent of about 2.5 lakh tonnes per year to replace the lubricants
of lower efficiency, in a phased manner and constantly upgrade lubricants in line
with the international developments meeting Euro Standards. Multi-grade railroad
engine oils with diesel saving potential have been developed for introduction in
Indian Railways.

(D) Although transport losses are inevitable while moving the petroleum products
by import tankers and coastal tankers over sea routes and at ports of unloading,
a number of steps taken by the Ministry to keep the loss down to the lowest level
have led to a progressive reduction.

6. PETROLEUM CONSERVATION RESEARCH ASSOCIATION (PCRA) AND

ITS ACTIVITIES

As a part of the Government’s response to the oil crisis of early seventies, the
PCRA was set up in 1976 to undertake studies to identify the potential and to
make recommendations for achieving conservation of petroleum products in
various sectors of the economy. It sponsors R&D activities for the development
of fuel-efficient equipment / devices and organizes multi-media campaigns for
creating mass awareness for the conservation of petroleum products. Fuel oil
utilization studies, energy audits, boiler modernization scheme, introduction of
equipment bank concept, use of energy vans, development of oil consumption
norms, model depot projects, driver training programs, demonstration clinics/
workshops/ exhibitions, consumer meets, education films/TV spots, hoarding/
electronic display, distribution of printed literature, R&D projects are other
activities.

6.1 MULTI MEDIA MASS AWARENESS PROGRAMME

69
Multi-media campaigns to create mass awareness about the need for conserving
petroleum products and motivating users to take concrete steps to actually
conserve are undertaken by PCRA and the Oil Marketing Companies through
various media such as TV, Radio, Press, printed literature, outdoor publicity.
Extensive use of Publicity Van of the Government Field Publicity Department of
the States is made for increasing the reach amongst the consumers in the semi-
urban and rural segments.

6.2 OIL CONSERVATION FORTNIGHT (OCF)

The success of the first Oil Conservation Week (OCW) organized in January,
1991 has led to its continuance in the subsequent years and finally, an extension
to Oil Conservation Fortnights (OCF) from 1997. These are organized by the
entire Oil Sector in close coordination with the concerned Ministries /
Departments of the Union and State Governments, Public Sector Undertakings,
Chamber of Commerce etc., with PCRA acting as the nodal coordinating agency.
Mass awareness and educational programmes and various sectoral activities are
undertaken. Inaugural functions are presided over by dignitaries such as Union
Ministers, Governors, Chief Ministers, etc. and the Fortnight ends with a
Valedictory function in every State.

6.3 END USERS OF PETROLEUM PRODUCTS AND CONSERVATION

EFFORTS

In addition to the activities of PCRA detailed above, sectoral conservation steps

taken by it are as follows:

TRANSPORT SECTOR

Adoption of practices conducive to increased fuel-efficiency

TRAINING PROGRAMMES

INDUSTRIAL SECTOR

Replacement of old and inefficient boilers, furnaces and other oil-operated

equipment with efficient ones

Promotion of fuel-efficient practices and equipment.

AGRICULTURAL SECTOR

70
Standardization of fuel-efficient irrigation pumpsets

Rectification of existing pumpsets to make them more energy efficient

HOUSEHOLD SECTOR

Development as well as promotion of the use of fuel-efficient equipment and

appliances like kerosene and LPG stoves

Action Group meetings and adoption of States has been introduced to give
further impetus to the oil conservation movement and for focussed attention at
the State level.

6.4 R&D PROJECTS

(i) RECOVERY OF KEROSENE IN TEXTILE PRINTING

In view of the large-scale losses of kerosene used in the drying section of the
textile pigment-printing machine, an R&D project was successfully commissioned
to recover kerosene vapors. Under this project at one plant 180 KL of kerosene
worth Rs. 14.4 lakhs is being recovered and recycled per annum. The technology
developed is being promoted in the textile sector.

(ii) BATTERY OPERATED VEHICLES (BOV’s)

Battery operated vehicles around Taj Mahal area run by Agra Development
Authority (ADA) have operated satisfactorily for the last six years leading to a
savings in diesel and reduction in pollution. To provide thrust and to promote the
operation of BOV’s, PCRA has sponsored two BOV’s to be operated by Airline
Authorities at IGI Airport for transportation of passengers from terminal to Aircraft
and back as a demonstration project. Moreover, to encourage and support the
operation of BOV’s on a larger scale a subsidy of Rs. 1 lakh per BOV is being
provided by PCRA, in addition to the subsidy (upto 50% of the cost of vehicle)
being provided by MNES.

(iii) SYNCHRONIZATION OF TRAFFIC SIGNALS

A study undertaken at Delhi in 1996 revealed a wastage per day of petrol and
diesel of 3 lakh and 1 lakh litres respectively by vehicles while waiting for green
signal at the traffic intersections, amounting to a financial loss of Rs. 246 crores
per annum. The study brought out a scope for MS & HSD saving by
synchronization of traffic signals and reducing the waiting period for the vehicles.

To demonstrate, projects in 5 cities viz. Delhi, Calcutta, Pune, Bangalore and

Chennai were taken up for synchronization. Project at Calcutta has since been
successfully completed with the result that City and State administration, Traffic

71
Police, PWD etc. are convinced about benefits of synchronization of traffic
signals. Projects in other towns are in advanced stage of completion.

6.5 FURTHER TIPS FOR CONSERVATION TO BE TAKEN BY INDIVIDUALS

(A) CONSERVATION AT HOME

Customers are recommended a switchover to Nutan gas stove or Nutan wick

stove developed by Indian Oil and aimed at fuel conservation

While cooking use wide bottom vessels with covers

Allow food articles taken out of the refrigerators to attain room temperature
before cooking them

Soak cereals and dals for sometime before cooking them to reduce the cooking
time as well as the fuel consumption.

Use just sufficient water for cooking

Pressure cookers used with separators lead to substantial fuel saving.

Reduce flame by bringing the burner knob to the simmer position as soon as the
water starts boiling

Try to eat together to avoid repeated warming of food. This not only saves fuel
but also preserves the nutritional value of food

Light the flame only after all preparations have been made and the vessel is
ready to be put on the stove.

Use hot water from solar water heaters for cooking if the facility is available

Try to use a solar cooker, if facility and time permit

In the rural sector, use of gobar gas plants, would be an excellent fuel
conservation technique

If feasible, the use of electric hot plates could also be a fuel-saving tip.

(B) KEROSENE FOR ILLUMINATION

Switch-over to Nutan Hurricane Lanterns developed by Indian Oil both for better
illumination & fuel conservation is recommended

The use of electric lamps or solar lanterns, if feasible.

72
(C) CONSERVATION ON ROADS

The first rule of fuel conservation would be to travel judiciously and curtail
wasteful driving

Wherever possible/ available and convenient, use public transport instead of

using personal transport

Matching the size of the vehicle to your need would also go a long way in
conserving fuel. For instance if you have the option of a personal car and a
scooter, then use the scooter when only two persons have to travel, and the car if
more persons have to travel or heavy luggage needs to be transported.

Car pooling to work will not only conserve fuel but will also improve social
relations with your colleagues

Following traffic signals will help avoid traffic jams and reduce lower gear driving
and idling.

As far as possible, avoid idling the vehicle, be it a car, scooter or any other
mechanized transport.

The criteria for choosing the vehicle you are going to buy should be its fuel
efficiency.

There is no substitute for timely attention, servicing and tuning of the vehicle in
fuel conservation and emission control. This should include checking of injectors
and spark plugs, correct tyre pressure, re-greasing, topping up or renewal of
lubricants for engine and gear boxes.

The use of quality lubricant is extremely important. There should not be any
compromise on this aspect.

Correct driving habits are important for conservation. Try to avoid sudden
speeding, braking & stopping, clutch riding, idling, over- speeding, and over-
loading

Have your vehicle checked for emission control regularly – not only because
defaulters are fined, but because it leads to fuel conservation and pollution
control, which as citizens of India, is our moral duty. It is time we inculcate these
measures to become a part of our daily routines. Only by practising and
preaching these conservation tips can we think of future progress. Given the
difficult times ahead, it becomes our responsibility to spread this awareness,
particularly amongst it the youth who will be citizens of tomorrow. Good habits
taught early will salvage the oil shortage to a great extent.

73
7. ROLE OF OIL INDUSTRY TO PROMOTE OIL CONSERVATION

7.1 Soft loan and subsidies are given by Oil Industry (OIDB) for conducting
energy audits, purchase of energy audit equipments/ instruments, upgradation of
maintenance facilities at garage, LIP rectification, foot valve replacement,
upgradation of testing facilities to foot valve manufacturers for promoting oil
conservation.

7.2 The Oil Industry is also promoting the use of alternate sources of energy to
the maximum extent possible. Many petrol pumps are provided with SPV system.
Some Oil Company colonies have solar water heaters, solar cookers, solar
lanterns, gobar gas plants, improved choolhas, efficient kerosene stoves &
lanterns. In some select villages in the districts of Solan, Sultanpur and Jaisalmer
Wind mills are also being considered. All these will act as stimuli for other to
emulate.

Petroleum Conservation, then becomes our joint responsibility be it the

industries, individual citizens, organizations, Oil Companies or the Government.
Each one of us has a specific and significant role to play.

8. INTER FUEL SUBSTITUTION

8.1 COMPRESSED NATURAL GAS (CNG)

Compressed Natural Gas (CNG) is used as a fuel in transport sector in many

countries. It is a safe, clean burning and environment friendly fuel. It has been
established that exhaust emissions like hydrocarbons and carbon monoxide are
significantly reduced as compared to other fuels. Toxic emissions such as lead
and sulphur are completely eliminated. Existing petrol vehicles can use CNG by
fitting a conversion kit. The CNG converted vehicles have the flexibility of
operating either on petrol or on CNG.

An experimental programme to use CNG as fuel in transport sector in the country

was initiated by GAIL in 1992, whereby CNG was made available in Delhi,
Mumbai and Baroda. The supply of CNG in Mumbai and Delhi are managed by
two joint ventures viz. Mahanagar Gas Nigam Ltd. and Indraprastha Gas Limited
respectively and in Surat and Ankleshwar, by a private company. The average
cost of converting a petrol car to CNG is about Rs.35,000. There are over 10,000
CNG converted Petrol vehicles in Mumbai and over 3000 such vehicles in Delhi.
11 buses of DTC are running on CNG in Delhi, with 2 existing diesel buses
converted to CNG on trial basis.

CNG dispensing retail outlets on mother-daughter concept as well as online

dispensing units have been set up in Delhi. Under the former system, Natural
Gas is compressed and filled into truck mounted cascades (basket of cylinders)
in the mother compressor station and transported to daughter units for

74
dispensing to CNG vehicle. The mother station initially set up in Ghaziabad has
been re-located and brought near to Delhi at Sarai Kale Khan, in May’97. At
present there are seven daughter and four on-line dispensing retail outlets in
Delhi. Further expansion of the infrastructural network to 80 CNG outlets is
proposed by March 2000. The process of acquiring land sites to set up the
required number of outlets is going on.

8.2 FEASIBILITY OF ETHANOL/METHANOL AS AUTOMOTIVE FUEL

Exploration of the feasibility of using alcohol-blended fuel has also received

attention in this Ministry. Recommendations of Technical Committee studying this
issue have testified to the safe usage of blended alcohol upto 6% with gasoline
which does not require any modification of engine design, the only stipulation
being that the alcohol should be of anhydrous variety. Consideration of the use of
this fuel is still in progress.

8.3 USE OF LPG AS AUTOMOTIVE FUEL

LPG is recognized as superior fuel to petrol and diesel in terms of the vehicular
emissions. To abate pollution caused by vehicles, a number of countries in the
World have been using LPG as auto fuel for more than last 30 years.

In India, the use of LPG as auto fuel has been prohibited by Motor Vehicles Act
and LPG Control Order, 1974. With the liberalization in the marketing of LPG
initiated in 1993 by decanalizing the import of LPG and introduction of parallel
marketing of LPG, a number of private sector including multinationals have
started making investment in the development of infrastructure for import of LPG
and its marketing. The availability of LPG from the public sector as well as private
sector has also been increasing through indigenous production as well as
imports.

In order to take further actions relating to amendment of the Acts/Rules/Control

Order, an Expert Committee was constituted. Taking into account the
recommendations of the Committee, the concerned Ministries and Departments
are in the process of making necessary amendments.

9. STEPS TAKEN BY THE MINISTRY ON ENVIRONMENTAL ISSUES

9.1 UPGRADATION OF FUEL QUALITY

(A) INTRODUCTION OF UNLEADED PETROL

In pursuance of the need for reduction of environmental pollution due to

emissions from vehicles, from April,1995 the Oil Companies have made available
unleaded petrol in the in the city of Agra and the four metros of Delhi, Mumbai,
Calcutta, Madras and radial routes emanating from these metros. Petrol with

75
reduced lead content of 0.15g/ltr. (maximum) was made available all over the
country from December, 1996. The availability of unleaded petrol was extended
to Capitals of state and Union Territories by June, 1998 and would be extended
to throughout the country by March 2000.

(B) SUPPLY OF LOW SULPHUR HSD

The sulphur in diesel has considerable potential to pollute the air and damage
human health, especially with regard to respiratory disorders caused by high
level of respirable particulate matter. Hence, Low Sulphur Diesel i.e., containing
0.5% sulphur by weight as against the normal proportion of 1% by weight was
supplied w.e.f. April, 1996 in metros and Taj Trapezium. Supply of diesel with still
further reduction of sulphur content upto only 0.25% by weight has been
envisaged w.e.f. January 2000 in the entire country. It was, however, introduced
in Taj Trapezium w.e.f. 1.9.1996 and in Delhi from 14.8.1997. An investment of
Rs. 5600 crores has been made to set up a diesel hydro desulphurization plant in
the country. A further reduction in the sulphur content to 0.05% in diesel in the
National Capital Region w.e.f. April 2000 in compliance of Supreme Court orders
to adopt Euro II norms in the country is contemplated in a phased manner.

(C) SPECIFICATION OF 2-T OILS FOR 2-STROKE ENGINES

To address the environmental issues relating to emissions from 2/3 wheelers,

Synthetic 2-stroke engine oils meeting JASO, FC, Japan have been introduced
w.e.f. 1.4.1999. These environment friendly oils reduce visible smoke and lead to
fuel conservation.

(D) RESTRICTIONS IN BENZENE CONTENT

The benzene content in gasoline is to be restricted to a maximum of 3% by

volume in metro cities and 5% by volume in other cities as required under the
notification of the Central Pollution Control Board from the year 2000. In Delhi,
this has already been implemented.

(E) ADDITIONAL STEPS TAKEN IN DELHI

Pre-mixed dispensers for supply of petrol to 2-stroke engine have been installed
at all retail outlets of all Oil Marketing Companies by December 1998 and ban
enforced on sale of loose 2T oils at petrol stations and service garages from that
date. One Fuel Testing Laboratory (FTL) has been set up at Noida for monitoring
fuel adulteration.

(vi) NATURAL GAS FOR INDUSTRIES

76
Six lakh cubic metres of natural gas per day has been allocated for supply
through pipelines to the industrial units in the area. Pipelines to Agra and
Ferozabad are ready. Gas purchase agreements have already been signed with
a number of industrial units in Ferozabad and Agra. Out of these units have
already started using natural gas and fifty more would do so by Dec. 1999. The
distribution of gas would be undertaken by a Joint Venture Company (JVC).
Pending formation of JVC, GAIL has been implementing the project for setting up
the distribution network in Agra and Ferozabad. However, the progress is
conditional on the underpinning of the gas pipeline to the Yamuna River Bridge.

10. FUTURE THRUST AREAS

To give added momentum to oil conservation efforts, there is an urgent need for
an Integrated Energy Policy. This policy would include legislation on energy
conservation, which makes energy audits mandatory for industries; energy
labeling of equipment’s necessary and BIS standards mandatory. The old
inefficient engines, equipment and processes that do not meet environmental
standards must be scrapped under the policy. The Ministry of Power is working
on this aspect.

PEST analysis of IOC (Indian Oil Corporation)

Political and Legal factors

 Removal of regulation on foreign trade by delisting oil and gas company

from restricted list given the oil and gas majors in India an opportunity to
serve global customers. But it has also increased competition, as now
global players are free to enter in India. This industry will see increased
competition in India in near future.
 With the environment norms not being as stringent as the western
countries, foreign companies are more likely to set up new manufacturing
facilities in India.
 With the insufficient counter valley duties and duty free export and import
from countries from Nepal will see dumping of plastic goods in India. This
unless act upon by the government will means a decrease in demand for
oil and gas which have derived demand for plastic industry.
 A reduction on custom duty will bring down the realization.
 A strong employment law is probably on factor that may deter foreign oil
and gas manufacturer from setting up unit in India.
 Unstable governme5nt may also affect the disinvestment plan of industry
like oil and gas.

77
SOCIO-CULTURAL FACTORS

 Life style changes like demand for lighter automobiles had lead to
increase the demand for oil and gas products and in probably a reason for
high market growth rate.
 Again higher level of education had lead to demand for mineral water and
other. This in turn has increased the demand for oil and gas which are
derived demand.

Economical factor

 Oil and gas industry is one of the chief consumer of energy in India so
energy conservation has been top priority issue for the perspective of
reducing overall cost and also from point of view of national priority.

Technological factor

 Govt. has continuous emphasis on research and development of new

technologies to develop processes, which are environmental friendly.
 In recent years this industry has a general trend of importing the
technologies and them setting up manufacturing and marketing
indigenously.

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 SWOT Analysis of IOC (Indian Oil Corporation)

Strengths

 Oil and Gas is a capital intensive industry. So it is impossible for new

players to enter this market overnight.
 There are only a few major players in India i.e. it is more of a
oligopolistic market.
 This is an industry where different export markets are available through
competition is intense.
 Market growth rate of 12 to 13 % which is relatively high compared to
world market growth rate of 5 to 6 %.
 Products of this industry have wide applications and these products
have particularly no substitutes as of now.
 Specific infra structure requirements like vicinity of refinery, vicinity of
other resources etc so it is not possible to set up new projects just
anywhere.
 Long term relationships developed with both suppliers and buyers over
a period of time.

Weakness

 It is not always possible to sell the entire production, as the demand may
be low on depressed and hence high levels of inventory have to be
maintained. This leads to high inventory carrying costs.
 Subject to cost push inflation; i.e. if cost of raw materials increase then to
maintain margins cost of oil and gas are also increased.

Opportunities

 Do a lot of research and Development and develop friendly products to

sell in global market.
 Sell products to global customers and achieve economies of scale by
selling volumes i.e. companies are trying to transform themselves in global
players.
 In India, huge potentials exist because oil and gas consumption is low.
 Value added products could be looked into as chemical industry has very
diverse applications.
 Lowering of prices of raw material has led to substitution effect ; raw
materials replacing the traditional packing materials a good opportunity for
Indian oil corporation.

Threats

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  As basic raw material is crude oil the increasing oil prices by OPEC
countries adversely affects the industry.
 This industry has derived demand and so fall in demand of products made
by ancillary units leads to a fall in demand for its products.
 Oil and Gas is a polluting industry and with increase in environment
awareness throughout the world, it is likely to face serious opposition from
environmental protection groups.

SWOT Analysis of BPCL

Strengths

 BPCL has will-established network which forms company’s backbone.

 The company has focused its business in oil and gas
 BPCL being a pioneer in these products in India, has tremendous
goodwill in the market.
 BPCL has a large base of trained and experienced personnel who are
well suited for this industry
 Company is financially sound.

Weakness

 It is a public sector undertaking and hence a typical beaurocratic

structure where decisions get unnecessarily prolonged which is a
disadvantage in present scenario.
 It is often said “if you just sit, you might be runover “. This might
become a reality for BPCL as in last yeas, BPCL has not made
capacity additions and hence it is vulnerable to a possible loss of
economies of scale especially since other private sector players are
expanding.

Opportunities

 With India moving into the WTO regime BPCL can take the advantage of
growth taking place in domestic as well as exports markets.
 BPCL can increase its debt-equity ratio in future as allowable ratio in this
industry is 4:1 and so can generate a lot of debt funds for future
expansions.

Threats

 Opening up of market means that international players coming to India

and eating away BPCL’s market share

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 Insufficient Govt. protection means that foreign manufacturers will dump
their products into Indian markets and hence a fall in demand of BPCL’s
market share.

SWOT Analysis of HPCL

Strengths

 Project implementation is done on time and according to the scheduled

plan. So there are no costs overruns.
 Cost of production is kept in check and other costs are also kept under
check. So only optimum cost is incurred
 HPCL has a large capacities and industry size does matter this is one
industry where small is not beautiful.
 HPCL has capability of integrating both forward and backward as and
when needed.

Weakness

 Highly diversified business. In such case, focus can be lost i.e. trying
bite more than one chew
 HPCL has very large manpower i.e. it is facing a problem of over
employment.

Opportunities

 Lowering of excise duty from 24.5 to 16% has led to substation of

traditional packaging materials
 In this industry lowering of prices leads to increase in demand and so
low prices of polymers has given additional impetus to demand. HPCL
with its huge capacities can take advantage of this factor.
 Growing domestic and international markets.

Threats

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  Overseas oil and gas players mainly from middle east and asia pacific
region setting up manufacturing gases in India leading to increased
competition.
 Dumping of products especially plastics by foreign companies.
 Cheaper imports can pose a threat to HPCL

BIBLIOGRAPHY

(1) www.google.com
(2) www.essaroil.com
(3) www.relianceindustries.com
(4) www.gujaratgas.com
(5) www.ongc.com
(6) www.bpcl.com
(7) www.hpcl.com
(8) www.ibp.com
(9) www.ioc.com
 

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