OVERVIEW OF MARKETING OPERATION

B.K.Jha
Ch. Terminal mgr.
Bijwasan, New Delhi
 Contents

 Links to Oil Supply Chain Management

 Indian Oil Network
 Supply-Demand Scenario in India
 Changing Supply Chain Management
- Pre-deregulation
- Post- deregulation
- IndianOil’s Supply Chain Optimization
 Enablers, Challenges & Constraints
 Links in SCM
 Demand centers
 Retail Outlets/ Consumers
 Depots/ Terminals/ TOPs/ Ports
 Supply Sources

 Own Refineries
 Port Locations
 Exchange Partners
 Purchases

 Transportation Network
 Pipeline
 Rail
 Road
 Coastal
 IOC Network

 10 Own / Associate refineries

 13 well-knit Cross-country operating

pipelines

 166 operating locations

 6 locations under construction/

commissioning/proposed
 Refineries in India

BHATINDA
(9.0) I PANIPAT
Refn. Nos Capacity (12.0)
DIGBOI
MMTPA mbpd (0.7)
I BONGAIGAON
IndianOil 10 54.2 1.09 (2.4) I
MATHURA I
Other PSUs 7 45.3 0.91 (8.0) B
I NUMALIGARH
Pvt 2 43.5 0.88 I GUWAHATI
(3.0)
BARAUNI (1.0)
Total 19 143.0 2.88 (6.0)
New 5 66.0 1.15 BINA
I (6.0)
I
BARODA
JAMNAGAR HALDIA
(13.7)
(33.0, 10.5, 30.0)
30.0) (6.0)

PARADEEP
MUMBAI B H (15.0)
(9.5) H VISAKH
(12)
(7.5)
(0.8)
TATIPAKA
(0.1)
MANGLORE
(9.7) Existing
I CHENNAI
(9.5) New / Additions
CADDALORE
B NOCL (6.0)
KOCHIN I NARIMANAM
(7.5) (1.0)
 Industry
Petroleum Pipelines
Jalandhar

Ambala
Bhatinda
Roorkee
Sangrur Najibabad
Panipat
Meerut
Rewari NaHOrkatiyaTinsukia
Delhi
Sanganer Mathura
Ajmer Siliguri Bongaigaon
Jodhpur Tundla Lucknow Digboi
Chaksu
Barauni Guwahati
Kot Kanpur
Chittaurgarh
Sidhpur Ahmedabad Rajbandh
Kandla
Mundra Navagam Budge
Vadinar Koyali Indore Maurigram Budge
Dahej Ankleshwar Haldia
Industry Pipelines
Manmad
IOC’s Pipelines (Existing)
Crude: 2887 KM Mumbai Mumbai Paradip
High Product
(28.5 MMTPA) Vizag
Uran PuneSecunderabad Crude Oil
Product: 7545 KM
IOC’s Pipelines (On-going)
(55.6 MMTPA) Vijayawada
Mangalore Product
Total: 10432 KM Chennai Crude Oil
Bangalore Other’s Pipelines
(84.1 MMTPA) Sankari Asanur
Karur Product
Coimbatore Trichy Crude Oil
Kochi
Madurai
Changing SCM - Pre – deregulation

- Post - deregulation
 Pre- deregulation: Downstream Petroleum Cos. in India

 Pre-independence – Digboi, Burma Shell, Esso, Caltex

 Indian Oil - the first govt. owned oil company in 1960

 Seventies: all private oil companies were taken over by

Govt.

 Nineties: Govt. decided private players entry

 Pre- deregulation : Supply Chain up to 1.4.02

 Governed under directive of Ministry of Petroleum &

Natural gas

 Industry Products/Infrastructure- common pool shared

amongst all Oil Cos.

 All under recoveries covered under Govt. Oil Pool

Mechanism

 All Refineries had same ‘Refinery Selling Price’

 Pre- deregulation : Supply Chain up to 1.4.02

Supply Planning

Crude Crude Crude

Transptn. Refining Refn Product
Purchase Storage
(Tanker/PL) Storage

Supply
SupplyPush
Push

Distribution Planning

Retailing / Mktg Product Product

Consumer Storage Transptn/Distribution
(Demand Centre) (Terminal/ Depot/ Port) (Tanker/PL/Rail/Road)
 Post Deregulation – Effect on Downstream Cos’ ?

 Logistics under-recoveries : No reimbursement

 RTP : Port refineries:- Trade Parity Price (TPP) &

Inland refineries:- TPP + inland fright differential

 All taxes and duties : Payable

Market Price :- Governed by MoP&NG

 Post deregulation: IndianOil’s objective - redefined

 increasing Corporate margins: meeting demand on ‘Least

Landed Cost’
 Optimizing Refn. production: individual ‘economic demand
zone’
 Infrastructures network:
network capacity utilization

 Product Exchanges/ Purchases:

Purchases on economic consideration

 Import / Export:
Export inventory changes decision
 HO
Supplies Indianoil’s Optimization Planning Model

Crude evaluation What crude What & Where

& Procurement ? to Feed ? To Make ?
RPMS Model
Integrated Model

Demand
DemandPull
Pull Corporate
Corporate
Optimization
Optimization

D F Model SAND Model

Demand Distribution
Forecast ? Planning ?
 Indianoil’s Down stream Distribution-
Guiding Principle

Maximization of Realization from market =

All India [ Depot selling price – ( Depot Optg cost +

Product positioning Cost )]

Minimization of product
positioning cost
 The Enablers

 GDP growth- change in industry composition

 Infrastructure improvement initiatives by the Govt.
of India e.g. Golden Quadrilateral, North-South &
East-West corridors

 Qualitative improvement in Industrial environment in

India – Euro III/ IV fuel/ Bio fuel, etc.

 Increased application of Information Technology

 Data WareHOusing & Management
 The Challenges

 Integrating Supply with Demand

 Improved Forecasting

 Time compression in the supply chain –

reducing the lead time

 Complete alignment of Supply Chain

Strategy with Overall Business Strategy
 The Constraints

 Demand Fluctuations
 Availability constraints from refineries
 Movement Constraints:
 TW movement
 PPL movement
 Tanker movement
 Road movements
 Facility Constraints:
 Tankage considering multiplicity of products
 Loading/Unloading

 Grade-related Constraints
 Operations – Prime Objectives

 M & O - To maintain and operate the

existing depots/terminals in a most cost
effective way.
 S & S - To ensure safety and security of
locations.
 Q & Q - To ensure supply of quality and
quantity of products to customers at
right time.
 Statutory Rules & Regulations

 Licence from Chief Controller of Explosives

 Oil Industry Safety Directorate Norms
 Factories Licence
 Pollution Control Act (Air & Water)
 Contract Labour Prevention & Abolition Act
 Payment of minimum wages
 Central Excise / Customs Registration
 Sales Tax Registration
 Weights & Measures Certificate for delivery
equipments
 Classification of Petroleum Products

 Dangerous Petroleum (Class – A)

– Flash Point below 23 deg C
– MS / Naphta / AV Gas etc.
 Non Dangerous Petroleum (Class – B)
– Flash Point more than 23 deg C but less than 65
deg C
– HSD / SKO / ATF etc.
 Heavy Petroleum (Class – C)
– Flash Point more than 65 deg C
– FO / LSHS / HF HSD etc.

CRUDE IS CLASSIFIED AS CLASS – A WHY ?

 HO
Supplies Type of Locations

 Port Terminals
 Pipeline Terminals
 Inland Terminals
 RCOs (Refinery Co-ordination Offices)
 FSTs (ForesHOre Terminals)
 Depots
 Terminals & Depots

 Terminals & Depots are centres for

receipt, storage & distribution of bulk
petroleum products
 Terminals receive products mainly by
Pipelines / Ocean Tankers, whereas
Depots receive products mainly by
Tank Wagons & Tank Trucks
 Main Operational Activities

Receipt
Key
activities Storage

Deliveries
PICTORIAL VIEW OF A TERMINAL
PICTORIAL VIEW OF A
TERMINAL
PICTORIAL VIEW OF A
TERMINAL
PICTORIAL VIEW OF A
TERMINAL
TOP VIEW OF TERMINAL FACILITIES

100.0 M
47800

6000MM WIDE ROAD

7.0M 7.0M

15.0M

15.0M

15.0M
19.0M

19.0M

19.0M
58000
15000
11.0M
17 18 19 20 21 22
15000
10 15.0M 20.0M

7.0M
201.0 M

7.0M
10.0M 10.0M 10.0M 15.0M 15.0M 15.0M
128.1 M FIRE BREAK WALL 600 MM HIGH

13.0M
1800MM HT. CHAINLINK FENCING 229.9 M
6000MM WIDE ROAD 6000 MM WIDE ROAD
(S/W GLE STORIED)
15.0M 9 15.0M 7.0M
8000MM WIDE ROAD

GENERATOR RM. 7.0M

6000MM WIDE ROAD

10000 X 10000

15.0M

15.0M
15.0M
15.0M

15.0M
13.0M

58.0 M
6.0M

8 15.0M 11 15.0M 12 15.0M 13 15.0M 14 15.0M 15 15.0M

15000

ND 10000
FOR 2 SPAN 15.0M 15.0M 20.0M

7.0M
6000MM WIDE ROAD
TO DAY MANI FOLD

7.0M
1600
15000

MANIFOLD
7000

15.0M

15.0M

15.0M

15.0M

15.0M
15.0M

32000 X 15000 SPACE FOR MANIFOLD 54.0 M

70000X20000
5000

T.W P/H T.W P/H

158.7 M

7800MM WIDE ROAD

11.8M

15000

6.4M 6000MM WIDE ROAD 6000MM WIDE ROAD

11.6M
ENCLOSURE WALL
16.0M

1650MM HIGH
ENCL. CAP. - 5203 KL
ENCL. CAP. - ENCL. CAP. - 5.6M 30.0M
24560KL 24560 KL

31.3M
31.3M
7 16 36.9M

P UM P HO US E

P UM P HO US E
M AN IFO LD
30.0M
26.4M
ENCLOSURE WALL

30.0M
5
2000
6000 MM WIDE ROAD
2500 25.0M 3 24.0M 25.0M 22.4M

40.0 M
17 18 19 20 21 22 23 24
21.5M

30.0M 30.0M
78.0 M
8000MM WIDE ROAD

8000MM WIDE ROAD

5.6M

22.8M
8000MM WIDE ROAD

P UM P HO US E
FIRE BREAK WALL

40.0 M

P UM P HO US E
40.0M

FIRE BREAK WALL TLF SHED

M AN IFO LD
8000MM WIDE ROAD
1

30.0M
22.0M 20.0M

5.8M
20.0M
6400
30.0M
30.4M

9 10 11 12 13 14 15 16
FIRE BREAK WALL 9800
8 .0 M. W IDE

24.0M
EMERGENC Y ELEC SUB STN. FOR DUCK LINE

25.0M 4 24.0M 25.0M 6 22.4M

GATE
PUMP HOUSE
(18700 X 3000 X 4000 CL.HT) TOILET
(3000X5300)

TLF SHED

8.5M
22.0M 2 20.0M 89.4 M

20.0M
91.0 M
36.0 M
36.0M

6.0M

6 7 8
P .G

5
8000MM WIDE ROAD 8000MM WIDE ROAD
12.0M

8000MM WIDE ROAD

2 3 4

3000 MM HT BK WALL
TLF SHED
MANI FOLD EXTN.
1
8.0M

25.7Mx10.0M
103.75 M
P/HOUSE P/HOUSE
28.0M

25.7Mx5.0M
S EC URITY
TLD RO O M
12000

P LATFO RM 4 0 0 0 MM W IDE GATE

6000MM WIDE ROAD

S & D BUILDING
400MM M.S 400MM M.S

10000 X 6000
600MM 1800MM HT CHAIN LINK FENCING 6 0 M W IDE RO AD
600MM
600MM HSD 600MM HSD P UM P T.T. P ARKING
HO US E
W T1 72000

ROOM 4000X4000 1 2 .0 M
3 2 .0 M

6 .0 M W ID E G ATE
32.0M

SCOOTER
3300 MM HIGH COMPOUND WALL 6 .0 M W IDE GATE EM G ERNC Y GATE

CYCLES
C O N TRO L
C /TO W ER

SPACE FOR LUBE YARD 1 0 .0 M

6000MM WIDE EMGERNCY GATE LUBE W IRE HO US E
RO O M
1 8 .0 M x3 0 .0 M
1 0 .0 M
60.9M 1 0 .0 M
PUMP SLAB (FUTURE) S EC URITY RO O M 8 .0 M W IDEGATE
2 7 0 0 0 X6 0 0 0 W T2
3 .0 M x3 .0 M
 HO
Supplies Types of Petroleum Storage Tanks

 Underground Storage Tank – Retail

Outlets
 Semi burried Tanks
 Above Ground
– Cone Roof (CR) type – for storing Class B &
Class C
– Floating Roof (FR) type – for storing Class A
 LEARNING OPERATIONS

 WHAT- What are we supposed to do?

 WHY- Why we should do it?
 HOW- How we should do it?
 WHO- Who can guide or help us?
 WHERE- Where we should do it?
 WHEN- When we should do it?
 Operation Activities at locations
 Receipt
– By Tank Wagons
– By Tank Trucks
– By Pipelines
– By Ocean Tankers

 Storage
– In Storage Tanks – Cone Roof or Floating Roof

 Delivery
– By Tank Wagons
– By Tank Trucks
– By local Pipeline Transfer
– By loading Ocean Tanker
 HO
Supplies
Various Operations

TERM INAL
OPERATIONS

TANKER TANK W AGON TANK TRUCK PIPELINE BUNKERING

OPERATIONS OPERATIONS OPERATIONS OPERATIONS OPERATIONS
 VARIOUS FUNCTIONS

HOW EFFICIENT OPERATIONS AND PRODUCTIVITY IS ACHIEVED?

TERMINAL
OPERATIONS

SAFETY QUALITY COST STOCK LOSS EQUIPMENT EMPLOYEE

CONTROL CONTROL CONTROL M&I RELATION & PR
 Facilities

 Storage tanks
 Pump HOuse
 Pipelines
 TW sidings (Tank Wagon Sidings)
 TLF Sheds (Tank Lorry Filling Sheds)
 Office Buildings / Canteen / Rest Rooms
 Stores
 Laboratory
 Generator Room
 Other buildings such as Fire P/H etc
Tank Trucks
 18000 Tank Trucks
on All India
 Dealer owned Tank
Trucks – 60%
 Transporter owned
Tank Trucks – 40%
 Capacity range from
4 KL to 20 KL
 Safety fittings in
Tank Truck
 Fitted with Vehicle
Tracking System
Tank Wagons
 Broad Gauge / Meter
Gauge
 Conventional
– 4 wheeler Tank Wagon
– Average capacity 25 KL
– Average rake size 70 T/W
 BTPN Tank Wagons
– 8 wheeler
– Average capacity 66 KL
– Average rake size 46 T/W
Ocean Tankers
 Time Charter / Voyage
Charter
 Tanker Classifications –
VLCC, Suezmax,
Panamax, LR, MR etc.
 Tanker Terminology –
Port, Star Board, Fore, Aft,
Draft etc.
 Tanker detention –
demurrage
 Ocean losses
 Bio - Fuels
 Ethanol Blended Petrol (EBP)
– Introduced in 2003 as trial run
– 5% blending in 20 states & 4 UTs started from
01/10/2006
– 10% EBP planned w.e.f. 01/10/2008
– Clearance from Society of Indian Automobile
Manufacturers (SIAM) awaited.

 Bio – Diesel
– Bio-diesel for Jatropha seeds
– 30,000 hectares of land identified at Chattisgarh &
MP for Jatropha cultivation
– Takes 4-5 years for reaping of seeds
– Started on trial basis by KSRTC
 Branded Fuels

 XTRA PREMIUM
– P-994 Additive dosed in Petrol in Tank
Truck filling bay – 600 PPM
– Additive dosing through automated system

 XTRA MILE
– EMDFA-200 Additive dosed in Diesel in
Tank Truck filling bay – 400 PPM
 HO
Supplies Major Operating Parameters

 Stock loss, overtime, cost control

 Timely execution of indents
 Security locks & Master key Management
 Preventive maintenance
 Safety, QC, M&I Indices
 Budget provision Capital / Revenue
 Timely payments to vendors
 Office administration & welfare
 Supplies Activities

 Tank truck loading / unloading

 Tank wagon loading / unloading
 Tanker receipt / loading
 Pipeline receipt / transfer
 Lube / Bitumen handling
 Maintenance activities
 Stores activities
 HO
Supplies
Safety Activities

 Monthly Fire Drill

 Safety Committee Meetings
 Maintenance of safety equipments as per OISD norms
 Emergency Response Drill
 Checking of Tank truck safety fittings
 Periodic Safety Inspections
 Checking of earthing connections
 Periodic checking of Fire Extinguishers
 Fire Engine, Hydrant lines & Monitors
 HO
Supplies Security Activities

 Sensitisation on Security
 Photo I cards
 Character & Antecedents Verification
 Hoax Bomb Drill
 Work of Security Guards
 Security Records Maintenance
 Periodic Security Inspections
 Liaison with State Govt. Authorities
 Critical Quality parameters

 Periodic cleaning of Storage Tanks

 FO/LDO tank circulation
 First parcel in tank – full spec test
 No fresh receipt for 3 months – Batch
Formation Test
 Sulphide Test for water bottom tanks
 Monthly monitoring tests
 Flash Point Tests (SKO)
 Special checks for Aviation Turbine Fuel
 Statutory Rules & Regulations

 Licence from Chief Controller of Explosives

 Oil Industry Safety Directorate Norms
 Factories Licence
 Pollution Control Act (Air & Water)
 Contract Labour Prevention & Abolition Act
 Payment of minimum wages
 Central Excise / Customs Registration
 Sales Tax Registration
 Weights & Measures Certificate for delivery
equipments
SURVIVAL OF CORPORATE
WORLD
Thank You