sp - analysis of oil companies

7/14/2019 SP - Analysis of Oil Companies

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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 onthis 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 suggestionover 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 fullfledged support and all those who knowingly or unknowingly helped us to fulfillthe project.

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

INDEX

SR.NO PARTICULARS PAGENO.

1 ACKNOWLEDGEMENT

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2 EXECUTIVE SUMMARY

3 INTRODUCTION

4 INVESTMENT OPPORTUNITIES

5 ONGC

6OIL INDIA LTD

6.1 OIL INDIA LTD(OIL's) Vision6.2 Corporate Objectives6.3 Research and development6.4 Production activities6.5 Exploration and development6.6 Drilling and work over services

7INDIAN OIL CORPORATION

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

8GULF OIL COMPANY(HINDUJA GROUP COMPANY)

9GUJARAT GAS

9.1 Transmission System

9.2 Natural Gas distribution

9.3 Health, Safety, Security andEnvironment

9.4 Standards of service

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10 GAIL

11 Bongaigaon Refineries and Petrochemicals Limited(BRPL)

12Conservation of petroleum products

12.1 In house conservation.

12.2 Petroleum Conservation Research Association (Pcra) And Its Activities

12.3 End Users Of Petroleum Products And ConservationEfforts

12.4 Further Tips For Conservation To Be Taken ByIndividuals

12.5. Role Of Oil Industry To Promote Oil Conservation

13 LPG

14Bibliography

15 PEST ANALYSIS OF IOC

16 SWOT ANALYSIS OF IOC

17 SWOT ANALYSIS OF HPCL

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http://www.pcra.org/






Oil and Gas

PROCESS OF HOW OIL AND GAS ARE BEING FORMED

Almost all oil and natural gas are found deepunderground in tiny holes in rocks. Millions of years

ago a sea covered much of what is now dry land. Inprehistoric times, tiny plants and animals lived in thesea. When these creatures died, they sank to thebottom of the sea, and got buried in layers of mud andsand. As the ages passed, this organic material sankdeeper and deeper. The earth's crust changed itsshape, and put intense pressure and heat on what wasonce only plants and tiny animals. Heat from the

earth's interior and the weight of the overlying rocks gradually changed theenergy-containing substances in the accumulated plants into hydrocarbon liquidsand 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 beneathimpermeable rock structures in the earth's crust. That is where oil and naturalgas come from. Some were created millions of years ago, some were createdthousands of years ago, and some are being created right now!

Much of the oil and gas production now comes from underneath the sea-bed. Asthe technology for extraction continues to advance, production becomes possible

from deeper and deeper waters. But the supplies are limited. Every drop of oilburnt adds to the monumental environment problems already created bypumping gases like carbon dioxide into the atmosphere. Many scientists worrythat this continual release of carbon dioxide is an important cause of globalwarming.

Natural gas is usually found underground near an oil source. It is a mixture of light hydrocarbons including methane, ethane, propane, butane, and pentane.

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Other compounds found in natural gas include carbon dioxide, helium, hydrogensulphide, and nitrogen. It is found around the world, but the largest reserves arein the former Soviet Union and the Middle East. This gas is lighter than air and ishighly flammable, made up mainly of a gas called methane. Methane is a simplechemical 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 andstorage tanks, it is mixed with a chemical that gives it a strong odour, almost likerotten 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 lesscarbon dioxide than oil or coal, virtually no sulphur dioxide, and only smallamounts of nitrous oxides. Natural gas is mostly composed of methane and other light hydrocarbons. Both the carbon and the hydrogen in methane combine withoxygen when natural gas is burned, giving off heat. Coal and oil containproportionally more carbon than natural gas, therefore giving off more carbondioxide 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 sameamount of energy produced. Carbon dioxide is the most important greenhousegas contributing to global warming.

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

At oil refineries, crude oil is split into various types of products by heating thethick black oil. The products include gasoline, diesel fuel, aviation fuel, homeheating 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 alsomade into many different products—fertilizers for farms, clothes, toothbrush,plastic bottle, and plastic pen. There are thousands of other products that comefrom oil. Almost all plastic comes originally from oil. Oil is transported in hugepipelines 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 the19th 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.

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INVESTMENT OPPORTUNITIES IN THE OIL INDUSTRY

Investment Opportunities inRefining Sector

India has witnessed aspectacular growth in therefining sector over the years. In1947, at Independence, there

was only one refinery located inDigboi with a capacity of 0.25million tonnes per annum.Subsequently, StandardVaccum Oil Company put up arefinery in Bombay in 1955: andCaltex at Visakhapatnam in1957.

Today there are 14 refineries inthe country, 13 in the public

sector and one in the jointsector, 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), whilethe other 7 are owned by Hindustan Petroleum CorporationLimited (HPCL) (2). Madras Refineries Limited (MRL) (2)and one each by Bharat Petroleum Corporation Limited(BPCL), Cochin Refineries Limited (CRL) and BongaigaonRefinery & Petrochemicals Limited (BRPL). One refinery inJVC is the 3 million tonnes Mangalore Refinery &

Petrochemicals Ltd.

ONGC to supply gas to Rajasthan’s 330 MW Dholpur powerplant

ONGC will supply Gas to Rajasthan Rajya Vidyut Utpadan Nigam Ltd.(RRVUNL) for its 330 Mega Watt (MW) power plant coming up at

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Dholpur, to partially bridge the acute power shortage in the westernstate.

This brings a new dimension to the association between ONGC andRajasthan, which is more than four decades old. A Gas Sales and

Purchase (GS&P) agreement was signed between ONGC and theRajasthan entity on 31st October 2005 at Jaipur.

The signing ceremony was presided over by the Hon’bleChief 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. Thepicture also shows the Chief Minister of Rajasthan Ms.

Vasundhara Raje, ONGC’s C&MD Mr. Subir Raha and ONGC’sDirector (HR) Dr. A K Balyan

The Dholpur power plant is a combined-cycle power projectbeing set up at a cost of Rs.1155 Crore. The agreementenvisages gas supply by ONGC to the power plant for aperiod of 12 years, which can be extended later.

DATA OF OIL INDIA LIMITED

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OIL INDIA LTD(OIL's) Vision

To be a vibrant, responsive, knowledge based, competitive E&P companywith global presence, and a selective presence across the oil and gas valuechain

in India, maximizing shareholders' value,respecting stakeholders' aspirationsand caring for the environment.

Corporate Objectives

OIL Believes "superlative efforts precede superlative results". To serve that verypurpose, 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 depletingand 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

Research and development

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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 poolingresources from various operating departments. Some of the significant initialR&D achievements include, thermal conditioning of oil for pipeline transportationof 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 tointensify R&D activities for continuous upgradation of technology and expertise inthe operations of the company. Within a short span of time, the centre hasequipped itself with the most modern sophisticated instruments and computingfacilities. 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 economicalbenefits to the company. Significant amongst these are geochemical

identification of pay zones in drilling wells, cost effective low dosage flowimprover treatment of crude oil for pipeline transportation in place of thermalconditioning, arresting fluid loss in highly depleted reservoirs for quick flow backafter 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 researchprogramme to carry out techno - economic viability study for making syntheticcrude oil from coal has been taken up. A pilot coal liquifaction plant has been setup at the R&D centre in Duliajan and first phase of study has been successfullycompleted. It is the first of its kind in the whole of Asia and has long termimplication as an alternate source of energy for the country in the future.

PRODUCTION ACTIVITIES

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The Company has accumulated over a hundred years of experience in the fieldof 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, thecompany has the skill and expertise to manage the entire range of operationsrequired for onshore oil and gas production. The Company has perfected thetechniques to produce and condition waxy (paraffinic and asphaltenic) crude oilproduced 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.

About 50% of crude oil production come from depleting oilfields. Artificial liftingand EOR techniques adopted since late 1960's have played an important role inaugmenting production and enhancing the ultimate recovery from these oilfields.

Today, the company possesses the expertise in designing, installing and troubleshooting of continuous and intermittent gas-lift systems and the related networks.

The Company produces around 5 MMSCUMD of Natural gas and has adedicated pipeline network for collection/supply of gas as fuel and feedstock tomany nearby industries such as Refinery, Fertilizer & Petrochemical Plant, Power generation Plant and 200 Tea Gardens. Over 90% of internal energyrequirements 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 anddistribution of Natural gas and has the expertise to design, install andcommission gas compressor stations and gas collection and distribution network.OIL achieved highest ever Natural Gas production of 1882.96 MMSCUM andNatural 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 gasfield in Upper Assam.

An LPG Plant was set up In 1982, to process 2.20 MMSCMD of gas using TurboExpander Technology for the first time in Asia. This plant is consistentlyproducing LPG with feedstock supplied from the Company's internal gasproduction. Due to efficient operation and maintenance of the Plant, it is

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consistently producing over 50,000 MT of LPG annually. Bottling of LPG is alsodone at this plant.

Exploration and development

Our systematic and scientific approach to exploration has been rewarded with avery high success ratio of sixty five percent of the exploratory wells drilled. Alsopossess both 2D and 3D seismic data acquisition capabilities, with excellentsupport services ranging from satellite navigation systems to remote blastingunits.

The Company owns a vast array of advanced computing systems andexperienced personnel for processing and interpreting variety of geoscientificdata through integrated exploration applications such as Remote Sensing,Structural and Stratigraphic Interpretation, Seismic Attribute Analysis, SourceRock Evaluation, Biostratigraphy, Petrophysics, Sequence Stratigraphy, Basin

Analysis, Techno-economic evaluation, etc.

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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 tosuccessfully 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 anew chapter in reservoir engineering studies.

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

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 onoperational requirement.

Over 1000 wells, more than 3.5 million metres, have been drilled in varyingsurface and sub-surface environments including high underground pressuresand temperature conditions and the depth of the well varied from 1000 m to asdeep as over 5500 m.

In order to minimize land acquisition time, OIL has resorted to cluster welldrilling for developing its oil and gas fields. This has resulted in protection of

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green belt surrounding OIL's operational area.

The company has a legacy of pioneering innovations and achievements indrilling. The all round excellence in performance could be attributed to drillingwells efficiently by the rig building team and proper maintenance of equipment

at the company's well-equipped Workshop and have achieved peakperformance level of over 20000 M/Rig year.

DISTRIBUTION AND MANAGEMENT

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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 lubricantsenjoy approvals from major Original Equipment Manufacturers (OEMs) includingnew 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 coveringautomotive, industrial and marine sectors. SERVO range of lubricants is fastemerging 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 aSUPERBRAND. SERVO has genuine oil tie ups with a wide range of companieslike Hyundai, Maruti, Bajaj, Lancer. Anil Kumble, the ever dependable sportingicon is SERVO Brand Ambassador.

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Developed exclusively at IndianOil's world-class R&D Centre at Faridabad, thereis a SERVO lubricant for virtually every single application. With over 42% marketshare and 450 grades, the country's leading SERVO brand lubricants fromIndianOil are sold through over 8,100 IndianOil petrol/diesel stations, over 1,300SERVO Shops and a countrywide network of bazaar traders.

(2) Indane LPGas

IndianOil Indane LPGas is used in 40 Million homes as cooking fuel andcommands over 48% market share in India. Indane LPGas is marketed through anetwork of 4350 Indane distributors. Widely used in commercial sectors likeindustries, hotels & restaurants, medical labs, etc. 87 Indane Bottling Plants arespread across the country with a combined bottling capacity of 3.77 MMTPA.New and convenient 5 kg Indane LPGas cylinders introduced in rural and hillyregions for wider use by economically weaker sections. IndianOil's auto LPG

brand Autogas is the leader in the segment. Marketed through a network 48stations 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 WIPrefueling 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 largestaviation fuel marketer in the country but also the most preferred supplier of jetfuel for customers in India and abroad. IndianOil Aviation Services serves over 71 International airlines besides the domestic airlines in India. FromThiruvananthapuram in the South, to Leh in the North. From Porbandar in theWest to Ziro in the East.

IndianOil Aviation Services covers India like no one else. In fact, every 1.6minutes, an aircraft is being refuelled by IndianOil Aviation Services, somewherein 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 remotehelipads/helibases across the Indian subcontinent. IndianOil Aviation Servicesnot only maintains world-class standards in operations and safety but alsoconforms to the stringent global quality requirements of Aviation Fuel storage andhandling.

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Presently, IndianOil has earned this accreditation for thirteen major Aviation FuelStations including at all international airports. Eleven of the fourteen qualitycontrol laboratories have also earned this accreditation. IndianOil is also the firstin 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 andlubricants needs of domestic and international flag carriers, Defence Servicesand private aircraft operators through 93 aviation fuelling stations. Between onesunrise and the next, IndianOil refuels over 900 aircrafts. In fact, the refuelingnever stops and neither does our customer service, which is round the clock. Thewing’s foreign exchange earnings during the year 2002-03 touched Rs. 898crore.

(4)AutoGas

Autogas (LPG) has been introduced in Hyderabad, Bangalore and Mumbaimarkets. This alternative fuel is a good business proposition in the long term, andIndianOil intends to further expand its marketing in a big way.

(5)Premium 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 withmultifunctional additives including 'Friction Buster'. Available at nearly 2000Retail 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-classadditives has taken a leadership position in the market. Available at nearly 4400Retail Outlets nationwide, XtraMile offers :

Extra mileage -Greater Acceleration

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Faster pick-up -Lower maintenance CostsLonger engine life -Enhanced overall performanceEliminates engine knockings

Launched on Sept. 24, 2002, the premium auto fuels - XtraPremium and XtraMile

(originally IOC Premium and Diesel Super respectively), mark a new beginningfor 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 SmartCard based Fleet Card Program, which facilitates cashless purchase of fuel &lubes from designated retail outlets of IndianOil through flexible prepaid andcredit facilities. The fleet card program also offers an exciting Rewards Programand unique benefits like personal accident insurance cover and vehicle trackingfacilities. Every time you fill your fleet with fuel & lubes using your XtraPower fleetcards at designated retail outlets of IndianOil, you earn XTRA Points. You canexchange your accumulated XTRA Points for attractive gifts from XtraPower Rewards Catalogue including free fuel & lubes. In short, the XtraPower FleetCard Program offers you, not just amazing convenience & security but also anopportunity to translate all your dreams into a reality.

‘Swagat’ Highway Flagship Retail OutletsTo cater the high growth areas of National Highways forming a part of GoldenQuadrilateral 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 theindustry through Retail Outlet site and tank truck automation Third partycertification through Bureau Veritas Fortnight sampling thru Quality Audit OfficersTraining through a professional agency for the Dealer

Incentives available on fuel purchases in the form of loyalty points redeemableagainst fuel/lubes and other rewards.

Availability of XtraMile and XtraPremium

Forecourt standards: strict housekeeping and maintenance standards ensureconsistence performance in terms of service, on time, every time.

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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 which45 ‘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, loyaltyprogramme, retail site management techniques all benchmarked to globalstandards. While the industry standard is to take samples on a quarterly basis,

IndianOil has moved several steps ahead by introducing fortnightly randomsampling with specific importance given to RON (Research Octane Number)sampling which is truly the definitive test for quality and quantity. The surveillanceaudits 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 thefirst 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 planwith 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 edgetechnology includes automatic tank level gauges, temperature sensors, densitymeasurement sensors, back-office server with DU controls, automatic bill printingfacility, customer database, etc.

The Tank Truck automation - Sealed Parcel Delivery System (SPDS) - will alsoinclude electronic locking of TTs carrying loads to these ROs. The real timedensity 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 butwhat is happening to the Tank Truck consignments. SPDS ensures that thequality of the fuel would be ensured from “Supply point to the Customers”.

As a precursor to the IndianOil XtraCare launch, IndianOil had recentlyintroduced the Platinum Circle and Gold Circle - top of the line, exclusive clubsfor high selling retail outlet dealers. These elite IndianOil dealers have emergedas peer leaders and are an integral part of the XtraCare dealer ‘sensitisation’strategy.

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During the year, IndianOil has already introduced modern and dedicatednetworked highway outlets with multifarious offerings, under the brand name‘Swagat’ which are IndianOil’s flagship Retail Outlets. So far over 400 XtraCareROs 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-upwith Gates Foundation

Security Secured Parking Space

Vehicle Care OEM Service Station in alliance with

Tata Motors LimitedC-Store Convenience store thru alliance

partners of choice

INVESTMENTS OF IOC ABROAD

Indian Oil Blending Ltd (IOBL)

Indian Oil Blending Ltd (IOBL) is a fullyowned subsidiary of Indian Oil CorporationLtd. engaged in the Manufacturing of Lubricants and Greases and catering to therequirements of Defence, Railways,Streets Transports Undertakings, etc.

During 2004-2005 IOBL posted a net loss

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of Rs. 4.87 crore, in the same year itachieved a production of 211 ThousandMT (TMT) of Lubricants and Greases, ascompared to 223 TMT produced duringprevious year, thereby recording a capacity

utilization of 88%.

IOBL is a fully integrated ISO CertifiedCompany. The Company has blendingfacilities at Mumbai, Vashi and Kolkata. Allthe three Plants have ISO-14001 certifiedEnvironment Management System and QS9000 Certified Quality ManagementSystem. All the Plant Laboratories areequipped with the most modern automatedequipments to maintain high quality

standards of Lubricants and Greases.

Lanka IOC Private Limited (LIOC)

LIOC, IndianOil’s wholly owned subsidiary inSri Lanka, is the only private oil company other than the state-owned Ceylon PetroleumCorporation (CPC) that operates retail petrolstations in Sri Lanka.

It has been incorporated to carry out retailmarketing of petroleum products, bulk supply toindustrial consumers, building and operatingstorage facilities at the Trincomalee Tank farm,etc., thereby not only providing energy securityand supply stability for Sri Lanka but alsoupgrading the overall standards of service,particularly in the retail sector.

LIOC is making phased investments to the tune of Rs 172 crore

(US $ 100 million) to provide world-class quality petroleumproducts and services at the most competitive prices to the SriLankan customers.

Says Chairman, IndianOil, Mr M S Ramachandran, “Our entryinto Sri Lanka is in line with IndianOil’s Corporate Vision of becoming a transnational energy major. While we want toexpand our market base and convert the surplus avails of

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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 downstreampetroleum operations will help create a healthy and competitive

petroleum industry in Sri Lanka for the larger benefit of theisland nation”.

At present, the Sri Lankan petroleum market, with a demand of 3.5 million metric tonnes per annum (MMTPA) and a refiningcapacity of 2.2 MMTPA, meets the shortfall in supply through

imports of about 1.5 million tonnes of products. CeylonPetroleum 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 tocustomers. LIOC has also taken over 35 dealer-ownedfranchisee 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 andservices at par with international standards. LIOC, through its

retail chain, is also making available non-fuel facilities likeConvenience stores, 24-hour ATMs, automatic carwash, food

marts, etc. This will not only give value-for-money to themotorists 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 historicand strategic significance, being the largest tankfarm located

between the Middle East and Singapore. The tankfarmconnects to the Trincomalee harbour, which is the 5th largest

all-weather, non-tidal natural harbour in the world, with a 56 kmshoreline, making this tankfarm most effective for fuel receipt,

storage and supply. The tankfarm, formerly owned andoperated by CPC, has a total of 99 tanks, each with a capacity

of 12000 kilolitres. Currently, only 15 of these tanks areoperational. LIOC intends to develop the tankage on need

basis, as the volume of its downstream marketing operations inSri Lanka grows.

Progressively, LIOC will also look at introducing Auto LPG(Autogas), Aviation Fuel and INDANE LPGas in Sri Lanka,

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besides its worldclass lubricants SERVO , which is already anestablished brand there.

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

existing gap between demand and supply in Sri Lanka. LIOCintends to harness the advantages of geographical proximitybetween India and Sri Lanka, resulting in low freight rates intransportation and IndianOil’s superior R&D capabilities, to

provide petroleum products at the most competitive price to theSri Lankan market. A term contract valued at US$ 120 million

between CPC and IndianOil is already in place for supply of 0.5MMT products to CPC and supplies have commenced sinceSeptember 2002. In addition, LIOC’s retail volumes are alsobeing replenished by IndianOilfrom Indian refineries, the first

such supply having commenced in March 2003.

A tripartite agreement signed between the Sri LankanGovernment, CPC and LIOC guarantees that only three retail

players (including CPC and LIOC) will operate in the Sri Lankanmarket 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 aconcessional tax of 15% thereafter against the prevailing rate of 35%. The IndianOilsubsidiary has also been granted customsduty 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.

IndianOil Mauritius Ltd. (IOML) is IndianOil’s wholly ownedsubsidiary in Mauritius. IndianOil is investing US$ 18 million in

Mauritius toset up a range of marketing infrastructure.

A state-of-the-art petroleum storage terminalwith 15,500 metric tonnes capacity has

already been commissioned at Mer Rougeto serve as the supply base of petroleumproducts. This microprocessor-controlled

facility is the first-of-its-kind in Mauritius with automated productlevel 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

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Fuel Oil have also been laid.

IOML has also strengthened the bunkering facilities with newlines 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-classpetrol 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 oilcompanies to operate aviation fuel storage, hydrant lines andaircraft 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 adelightful experience to the people of Mauritius.

IOML stands for commitment and service to the people of Mauritius.

"A New Wave In Mauritius"

Hum honge kamyab !

IndianOil Technologies Limited

IndianOil Technologies Limited (ITL) is a wholly ownedsubsidiary of Indian Oil Corporation. ITL is the technology-

marketing arm for the entire range of technologies developed atIndianOil’s R&D Centre. The Centre, which was set up over

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three decades ago, has developed several technologies andtechnical 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, theCorporation 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 theareas of fluid catalytic cracking (FCC), hydro processing,catalysis, residue upgradation, distillation, simulation andmodeling, lube processing, crude oil evaluation, process

optimisation, material failure analysis, remaining lifeassessment and other technical services.

ITL also offers state-of-the-art sludge disposal technologybased on biotechnology which is widely accepted in the

hydrocarbon sector. ITL also markets the R&D developedlubricants technology, which possesses USPs, established

through wide market acceptance.

The technology basket of ITL consists of process technologies,products and specialized services.

IBP Co. Limited (IBP)

IBP Co. Limited, a subsidiary of IndianOil, is astand-alone petroleum marketing company withexclusive business groups for Petroleum,Explosives and Cryogenics.

As an enduring petroleum retailing company,IBP’s marketing efforts are fully focussed onimproving its retail market share in petrol anddiesel, which has continued to grow andreached a new high during 2004-05. TheCompany 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 Industrygrowth.

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During the year 2004-05, IBP sold an all-time high of 5.74million kl of petroleum products against 5.19 million kl during2003-04, resulting in a spectacular growth of 10.6 % againstPSU industry growth of 3.9%. After takeover by IndianOil in

2002, the Company has more than doubled its retail networkfrom 1,559 retail outlets in 2002 to 3,272 retail outlets as on31.03.2005. In the last fiscal, 511 new petrol/diesel stations

(retail outlets) were commissioned and it is proposed tocommission another 700 retail outlets during the year 2005-06.

IBP has been a pioneer in introducing quality and quantityassurance of all products and services at its retail outlets. Thebranding activities will be further strengthened during this fiscal

through an initiative called "Project Horizon" in which 250select, high-volume outlets will be specially branded with

upgraded retail visual identity matching the “XTRACARE” retailoutlets of IndianOil. These 250 ROs will be audited by a thirdparty for its quality and quantity assurance and will offer arange 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 primarilymet by IndianOil’s depots and terminals. Significant synergy

and rationalisation have been achieved already throughoptimization 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)and XTRAMILE (diesel) from its ROs. IBP, however, willcontinue to sell IBP Red lubricants from its outlets.

IBP has a small presence in LPG business too. It reaches LPGcooking gas to the doorsteps of about 3.5 lakh homes in thecountry 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 beingfurther strengthened by the vast infrastructure, product support,

technology strength and market leadership of IndianOil, thusushering in a new era of progress and prosperity.

Infrastructure Details

NO. OF ROs 3272 (as On 18.05.2005)

SKO / LDO 378

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DEALERSHIP

LPGDISTRIBUTORSHIP

74

DIVERSIFIED

ANCILLIARIES

TWO OTHER BUSINESSGROUPS

EXPLOSIVESCRYOGENICS

DEPOT /TERMINALS

TOTAL NO - 18

EASTERN - 4

NORTHERN - 6

SOUTHERN - 3

WESTERN – 5

LUBRICANT FILLINGAND BLENDING PLANT

AT BUDGE (WB)

EXPLOSIVES PLANT AT CHATTISGARH

R&D CENTRE AT MANESAR

FOR CRYOGENICSBUSINESS GROUP

ONE MANUFACTURING /R&D CENTRE AT NASHIKAND OFFICE IN MUMBAI

Chennai Petroleum Corporation Limited (CPCL)

Operations

Safety,

Health &Environment

HumanResources &

CommunityDevelopment

Vision -

FuturePlans

Meetingfuture AutoFuel (MS &

HSD)qualitynorms

Chennai Petroleum Corporation Limited(CPCL), a group company of IndianOil, has arefining capacity of 10.5 Million Metric Tons Per

Annum (MMTPA), making it the largest refineryin South India. The year 2004-05 was alandmark year in the growth of CPCL.

CPCL’s 3MMTPA Refinery Expansion cumModernization Project, which went on stream inMarch’04, was completely operationalized andthe refining capacity at Manali now stands at9.5 MMTPA. The second refinery atNagapattinam, Tamil Nadu, has a refiningcapacity of 1.0 MMTPA. The achievements inthe various fronts are detailed below:

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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 RefineryExpansion cum Modernization Project wereoperationalized, including the Once-through

Hydrocracker Unit (OHCU) and its associated facilitieswhich were successfully commissioned in August ’04.

The commissioning of the OHCU was very smooth andsafe 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 thescheduled 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 cumModernization Project with the existing refinery now

complete.• Since December’04, Manali Refinery has been

consistently operating in excess of 100% of its expandedcapacity of 9.5 MMTPA.

•

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) andHSD (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 extentof US$ 218 million was availed with an overall cost of 2%.

• CPCL’s share price touched a record high of Rs.262.0on 27th October’04.

CPCL implemented Total Productive Maintenance (TPM) inone of its units (Propane Deasphalting Unit) designating it as

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Manager Model Plant and has now extended the TPM activitiesto the entire Manali Refinery.

The record production details are given below:

MANALI2004-05 Previous Best

TMT TMT Year

Crudethroughput

8181 6387 2003-04

LPG 239 170 2003-04

MS 583 399 2003-04

ATF 430 363 2003-04

HSD 2749 2421 1997-98

CBR-NAGAPATTINAM2004-05 Previous Best

TMT TMT Year

Crudethroughput

742 653 2003-04

LPG 28.5 24.2 2003-04

Naphtha 181 159.3 2003-04

HSD 320.1 274.4 1999-00

Safety, Health & Environment

Safety, Health & Environment has been one of CPCL’s thrustareas and significant achievements have been made in the

year 2004-05.

• CPCL’s unique 2.5 MGD Sewage Treatment Plant wasrevamped 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 continuouslymonitored, two additional ambient air quality monitoring

stations were installed.• A comprehensive QEHS (Quality, Environment, Health &

Safety) policy was adopted and external Surveillanceaudit was conducted by BVQI.

• Provision of Oil Spill Response (OSR) facilities atChennai Port Trust was completed and a Mock Drill was

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conducted with these OSR facilities under the guidanceof Coast Guard.

• On the safety front, CPCL achieved a record 10 millionaccident-free manhours on 2nd March, 2005.

Human Resources & Community Development

CPCL treasures its human resources and makes every effort toensure the sustained growth of this invaluable asset.

• To improve technical competency of employees, CPCLfacilitated 23 of them to acquire B.S. degree in Process

Engineering offered by BITS, Pilani.

• To enhance the communication with employees, theIntranet Message Board (IMB) and Employee

Communication Systems (ECS) were introduced,whereby employees could seek information on allmatters – technical or personal. The responses to these

queries could also be viewed by all the employees.

• A new Community Development Policy has beenintroduced for services in Education, Health, Women

Development and Sports.

• Scholarship amount of Rs.1.3 lakh was paid to themeritorious/poor children studying in Manali schools.

• CPCL contributed Rs.2.5 Cr. to the Prime Minister’sFund towards Tsunami. CPCL employees have

contributed Rs.11.08 Lakhs to the Chief Minister’s Fundfor the same.

• In the aftermath of the Tsunami tragedy, CPCL’sNagapattinam unit provided shelter to the affected localpeople in the housing complex in the days following theTsunami. 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, CPCLcontributed Rs.5 Lakhs towards construction of a

Stadium at Thiruvallur.

Vision - Future Plans

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Self-sufficiency in Water: CPCL’s Manali Refinery facesacute water shortage from time to time on account of monsoon

failures. To overcome this difficulty, a seawater desalinationproject 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 theCracked LPG of the revamped FCCU has increased to 90,000TPA. It is proposed to augment this Propylene from external

sources and set up a Polypropylene unit of 150,000 TPAcapacity at Manali.

Crude Oil Pipeline from Chennai Port to Manali refinery:With the old pipeline now more than 30 years old, CPCL will beputting up a new 42-inch crude pipeline, laid between Chennai

Port and Manali. The project is expected to be completed byMarch 2006. The pipeline will follow the route of the PortConnectivity 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 3.0MMTPA, is proposed to be debottlenecked to increase its

capacity to 4.0 MMTPA. Preliminary studies are beingundertaken.

LNG Terminal at Ennore: IOC & CPCL propose to set up a2.5 MMTPA LNG terminal at Ennore (about 17 km from Manalirefinery). 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 CatalyticReformer (CCR) is contemplated to augment MS production. Itis proposed to increase the capacity from the present 225,000to 300,000 TPA. Discussions with the licensor are in progress.

New Isomerization Unit: In addition to revamping the existingSCR to CCR, CPCL will install an additional Isomerization Unit

to meet the MS specification in 2010. Studies in this respect

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have been initiated.

b) HSD quality upgradation:

DHDS Revamp: It is proposed to undertake a revamp of theexisting DHDS unit and thereby increase its capacity from 1.8to 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) wasincorporated on 20th February, 1974 as a Govt. Company fully

owned by the Central Government.

The Company was registered with an authorised equity sharecapital of Rs. 50 crore, which was subsequently increased to

Rs. 200 crore by December 1983. As on 31.03.2005, the totalpaid up capital of the company stood at Rs. 199.82 crore.

The Government of India was holding the entire paid-up capitalof the Company till 1990-91. The Government disinvested

25.54% of its share-holding in BRPL to UTI and other FinancialInstitutions and employees of the Company during 1991-92 to

1993-94.The last tranche of disinvestments of 74.46% wasmade in favour of Indian Oil Corporation Ltd. on 29th March

2001. As a result BRPL is a subsidiary of Indian Oil CorporationLtd, which is a Govt. of India Undertaking.

The Company has its Registered Office and production units atDhaligaon in Bongaigaon District (now under recentlyconstituted Chirang District) of Assam. In addition, the

Company has Marketing/Regional offices at Guwahati, Kolkata,Mumbai, Coimbatore, and Delhi.

Business Business & Plant Performance BUSINESS

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Activities Capabilities PLAN

Business Activities

The core activities of BRPL are refining of crude oil andproduction of petroleum products. The Company is alsoengaged in production and marketing of value-added

petrochemical and PSF products. The Company has a Refinerywith a rated capacity of 2.35 million tonnes per annum of crudeoil, a petrochemicals complex comprising of a Xylene plant, aDimethyl Terephthalate (DMT) plant and a Polyester Staple

Fibre (PSF) plant. Commercial production of the refinery startedin 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 unitsconsume Naphtha as its major raw material, which is suppliedfrom 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 areDMT and PSF. The petroleum products (except RPC & CPC)

are marketed by Indian Oil Corporation Ltd.(IOCL). BRPLmarkets 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 itsrolls.

Business & Plant Capabilities

Refinery

Initial capacity of 1.00 MMTPA –commissioned in 1979De-bottlenecked to 1.35 MMTPA in

1987Expanded to 2.35 MMTPA in 1995

Petrochemicals 29,000 MTPA Para-Xylene plantcommissioned in 198545,000 MTPA DMT plant

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commissioned in 198530,000 MTPA PSF plant commissioned

in 1988

Marketing

Petrochemical products by BRPLthrough its countrywide network;

Refinery products by IndianOil througha marketing agreement.

Performance

S.No. Particulars.2000-

012001-

022002-

032003-

042004-

05

i)Turnover (Rs.

Crore)1220 1326 1863 2849

ii)

Net Profit (Rs.

Crore) (-) 57 (-) 199 178 304

iii)Dividend (Rs.

Crore)- - 61 174

iv)Crude

throughput (mt)1.49 1.48 1.46 2.13 2.31

Contribution to Exchequer (cumulative up

to 2003-04) = Rs.2851 crores

The Ministry of Petroleum & Natural Gas has allocated RavvaCrude from Krishna Godavari Basin to BRPL from 2003-04,

which has helped in improved capacity utilisation of theRefinery. In-house, there has been remarkable improvement in

efficiency in production with improved distillate yields, lowenergy consumption & loss, reduction in production cost, etc. In

addition, the Government of India has extended 50% exciseduty benefit to all the NE refineries effective March 2002. Allthese have contributed to improved financial performance

during the past three years. The financial and physicalperformance till 31.12.2004 have lived up to the expectations of

the shareholders.

BUSINESS PLANIn the Refining business, MS and HSD quality up-gradation

projects would be essential to meet new product specificationsapplicable from the year 2010. Two projects, viz., MS (petrol)quality upgradation and HSD (diesel) quality upgradation, tomeet Bharat stage-III specifications, are being pursued for implementation. These are major projects with a combined

outlay of about Rs.800 crore.

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In the PSF business, capacity expansion with associateddiversification has been identified as an economic option to

improve viability & competitiveness. The project envisages useof alternative feedstock PTA instead of DMT considering the

advantages PTA has over DMT as a feed. Detailed analysis isbeing carried out.

Vision A major diversified, transnational, integrated energy company, with nationalleadership and a strong environment conscience, playing a national role inoil security& public distribution. MissionTo 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-

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.

ValuesCareInnovationPassion

Trust

IndianOilPeople...towards Excellence...

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Company profile

Indian Oil Corporation Limited

Click Here To View Annual Report 2004-2005

Indian Oil Corporation Ltd.(IndianOil) was formed in 1964through 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 theFortune ‘Global 500’ listing, at 170th position. It is also the 18thlargest petroleum company in the world and the # 1 petroleumtrading company among the national oil companies in the Asia-Pacific region.

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India’s Downstream Major

The IndianOil Group of companies owns and operates

10 of India’s 18 refineries with acombined 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 andoperates the country’s largest network of cross-country crudeoil and product pipelines spanning nearly 10,000 kilometres,with a combined capacity of 58.62 MMTPA.

IndianOil and its subsidiaries account for 56% petroleumproducts market share among public sector oil companies, 42%national refining capacity and 69% downstream pipelinethroughput capacity.

For the year 2004-05, IndianOil sold 50.13 million tonnes of petroleum products, including 1.96 million tonnes throughexports.

To maintain its competitive edge and leadership status,IndianOil is investing Rs. 24,000 crore (US $ 5.6 billion) during

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

Network Beyond Compare

As the flag-ship national oil company, IndianOil’s countrywidenetwork of 24,000 sales points is backed for supplies by 158bulk storage depots and terminals, 95 aviation fuel stations and88 Indane LPG bottling plants. Its subsidiary, IBP Co. Ltd., is astand-alone marketing company with a nationwide network of

nearly 4000 retail sales points.

IndianOil reaches Indane cooking gas to the doorsteps of 41.05million 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

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milestone was achieved with the commissioning of thecompany’s 10,000th petrol station during the year 2004-05.IndianOil’s SERVO brand lubricants, being the first and onlyone in its category in India to be accorded ‘Superbrand’ status,

is the country's leading, with over 42% market share and 450grades. SERVO lubricants are sold through over 10,000Company retail outlets, besides a countrywide network of bazaar traders.

IndianOil’s ISO-9002 certified Aviation Service commands a65% market share in aviation fuel business, meeting the fuelneeds of domestic and international flag carriers, privateairlines and the Indian Defence Services.

Customer First

At IndianOil, customer is the firstpriority. During 2004-05, a slewof initiatives were launched for the convenience and benefit of the various customer segments.Branded auto-fuels

(XtraPremium petrol and XtraMile diesel) market wasexpanded to cover more retail outlets across the country.

Exclusive XtraCare retail outlets were unveiled in select urbanand semi-urban markets during the year 2004-05, offering arange 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 duringthe year with multiple facilities such as food courts, first aid,dormitories for drivers and cleaners, repair and spare partshops etc..

Specially formatted retail outlets - Kisan Sewa Kendras – were

also launched during the year 2004-05 to meet the diverseneeds of rural customers were launched during the year. Theseoutlets were strategically positioned to offer product andservices such as fertilizers, seeds, pesticides, farm equipment,medicines, spare parts for trucks and tractors, tractor engineoils 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.

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PRODUCTWISE SALES

PRODUCT 2004-05 2003-04Figures in

TMT

LPG 4763.3 4386.8

NAPHTHA/NGL 3348.5 3688.4

MOTOR SPIRIT (Gasoline /Petrol)

2968.3 2844.2

ATF (Jet Fuel) / JPS 1847.4 1649.0

SKO 5622.2 5625.1

HIGH SPEED DIESEL (GasOil)

18050.3 17404.8

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

CNG 26.7 17.1

ALL PRODUCTS 48184.7 46806.3

The above figures include sales of IndianOil and AssamOil Division.

THE MARKETING NETWORK

IndianOil's Marketing Network is spread throughout the countrywith over 23,000 sales points (the largest in the country). Theseinclude petrol / diesel stations, consumer outlets, lubedistributors, SERVO SHOPS, SKO/LDO dealers, LPGdistributors, etc. The Regional offices look after the North, East,West and Southern Regions of India, and Assam Oil Divisionsupplements operations in the NorthEast. A number of State

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Level, Divisional and Indane Area offices have beenestablished in each Region.

Petroleum products are essential inputs to the industrial,transportation, commercial and household sectors.

The extensive network of sales points comprises:

UnitNumber

/Quantity

Divisional Offices 44

LPG Area Offices 35

State Offices 15

Terminals and Depots 165 Aviation Fuel Stations 95

LPG (Indane) Bottling Plants 87

LPG Bottling Capacity3778

TMTPA

Petrol / Diesel Stations 10144

SKO/LDO Dealers 3552

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 providethe best products and services at the most reasonable cost.The "New Look" petrol / diesel ser vice stations selectively have"ConveniO" shopping stores, snap services, quick Lubechange, automatic car wash and multi-product dispensingpumps. To facilitate easy transaction, many of our stationsaccept major credit cards. In fact, IndianOil and Citibank havelaunched a special co-brand card, the "IndianOil Citibank

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Card" which is not only accepted at IndianOil petrol stationsbut at many restaurants, shops, airlines, etc. Also, IndianOil'stie-up with Coca-Cola ensures that select petrol stations stockand dispense "Coke" - thus quenching the thirst of the vehicles

and the motorists!

A new concept of "Jubilee Retail Outlets" has also beenlaunched to set up petrol / diesel stations on highways withcomprehensive 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, agriculturalmachinery repairs and recreational facilities providedselectively. The first such retail outlet was commissioned atOngole, District Prakasam, Andhra Pradesh in August 1998.

IndianOil's "INDANE LPG" isbeing marketed in as many as2064 towns with a customer population of 349 lakh served by anetwork of 4120 distributors - oneof the largest networks in theworld.

SERVO ® lubricant range is the

largest selling lubricant brand inIndia. IndianOil's Aviation Servicecontinues to be the market leader in the aviation fuel business with amarket share of nearly 67.7%.IndianOil was the first to introduceHydrant Refueling System in India.IndianOil is also bunkering alltypes of marine fuels andlubricants required by the ShippingIndustry in India.

IndianOil - Changing The Face Of Petroleum Retailing

In this section:Xtra Initiatives in Retail BrandingXtraQuality

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Xtra Customer ServiceXtraAutomation XtraCommitmentXtraValue

Visual IdentityQ & Q ConceptTop Gear Jubilee OutletsCashless TransactionsPremium Fuels AutoGas (LPG)Customer Focus Fleet CardTruck Tracking Transport Exchange

Early anticipation of the future needs of the customer is thesecret of IndianOil's success in retail marketing. Periodicmarket research and in-depth focus studies help theCorporation gauge the changing customer choices and futuremarket expectation. With over 10,144 petrol and diesel stationsspread throughout the country, and an additional 3272 of subsidiary company, IBP Co. Ltd., IndianOil commands adominant market share in the petroleum retail segment in India.

IndianOil has over 53.2% market share of the petroleumconsumption in India.

In fact, it was the first company to recognise petrol and dieselstations 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, apartfrom selling petroleum products, were dispensing medicines,farm equipment and other essential daily-use commodities.Today, it has gone a step further by opening Convenio Storesin urban markets dispensing a variety of consumer items.

XtraInitiatives in Retail Branding

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IndianOil Citibank Credit/Debit Card is leading in the co-branded credit/debit segment with a customer base of 5.70lakh.

Special arrangement with State Bank of India Credit Cards for use at IndianOil outlets. XtraPower Fleet Card, exclusiveCredit-cum-Debit Card for the fleet operators has over 4 lakhusers.

XtraRewards Card, specially designed for urban cashcustomers Exclusive facilities like ATMs, Convenio stores,Cyber Cafe, Auto Car wash, Quick Lube change centers at newgeneration retail outlets for enhanced customer care.

XtraCare retail outlets a culmination of a series of planning inretail design, product and service upgradation, capabilitytraining, automation, loyalty programme, retail sitemanagement techniques all bench marked to global standardsXtraCare Quality & Quantity, housekeeping, maintenance andcustomer service certified by the globally renowned agency –M/s Bureau Veritas (BV).

XtraQuality

Samples tested on random/fortnightly basis with specific

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

The maintenance of the various equipment at the XtraCareoutlets is being done by regular Original EquipmentManufactures under a unique 'Equipment Quality Outsourcing'system.

Xtra Customer Service

Shree levels of competencies Customer Service, Personalhygiene/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 Globalpractices in Retail Sales management and backed by IIM

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inputs.

The high performers given status of 'Retail Stars' and aconsistent record will also give the Retail outlet the 'Star

XtraCare Retail' outlet status. High performing pump attendantsrewarded with extremely attractive compensation packages andhigh performing dealers who continue to retain the high levelsof XtraCare eligible for a wide range of monetary incentives.

XtraAutomation

State of the Art automation project which includes automatictank level gauges, temperature sensors, density measurement

sensors, back-office server with DU controls, automatic billprinting facility, customer database etc.

Tank Truck automation Sealed Parcel Delivery System (SPDS)includes electronic locking of TTs carrying loads to ROs. Realtime density sensors and the sealed parcel delivery systemsuperior to mere GPS based tracking systems. SPDS ensuresthat the quality of the fuel would be ensured from "Supply pointto the Customers".

XtraCommitment

IndianOil introduced the Platinum Circle and GOLD Circle- topof the line, exclusive clubs for high selling retail outlet dealers.These elite IndianOil Dealers have emerged as peer leadersand 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 AuthorisedService Stations (TASS) and auto spare parts at Retail OutletsOffered a real time truck tracking facility for fleet owners incollaboration with BSNL and Chennai based eLogistics.IndianOil has also signed a MoU with Coffee Day Xpress, partof the Amalgamated Bean Coffee Trading Company (ABCTC),for setting up coffee bars and take away kiosks at IndianOilpetrol stations.

IndianOil has also signed a MoU with the leading tyre brand JK

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Tyre for a wide range of loyalty benefits for mutual customersincluding IndianOil's XtraPower Fleet Card program offeringloyalty reward points on the purchase of JK Truck tyres, tubesand flaps. IndianOil has also set up Nirula, MacDonald and

Foodworld outlets in select places as well as extended supportto the Bill and Melinda Gates Foundation for a range of services including healthcare advise to the Trucking communitywhich is a key customer segment for IndianOil. Recently,IndianOil achieved the enviable distinction of being the onlypetroleum brand in the latest ranking of the top 150 IndianBrands by Brand Equity. Among the exclusive services list for petrol pumps, IndianOil leads the charge with the top rankfollowed by its subsidiary IBP. In the sector wise ranking of allservices

IndianOil has powered its way to the 11th position, leaving thecompetition far behind.For the first time IndianOil took the Title Sponsorship of a major Cricket Event of Global proportions IndianOil Asia Cricket Cupat 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 campaignever: Over 43 Million customers participated in the 'Aish inMalaysia' contest.

Another record campaign was the Ao Roz Ek Truck Pao -Over Rs 12 crore worth prizes were declared 31 trucks in 31 daysdesigned to address the greatest aspiration of a driver i.e. toown 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 builtproduct/service packages which will be made available to themat their doorsteps thereby saving considerable Time, Cost andEnergy 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

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Financial services, Fertiliser and agro inputs seeds, pesticides,equipment; Agro products like vegetables, Communicationservices, Stationery and other items.

Visual Identity

IndianOil first anticipated customer needs in urban areas for better, cleaner and well-designed petrol stations almost adecade ago. IndianOil was also the first to develop acomprehensive Retail Visual Identity programme to re-orientthe design and standards of our petrol and diesel stations.IndianOil developed its strategy, marking the entry of colour-

coded canopies, multi-product dispensing pumps, concretedriveways, digital air towers, cyber cafes, automated teller machines, auto-car washes, etc., all of which later becameindustry norms. The addition of world class infrastructurefacilities in IndianOil's marketing network has had a significantimpact on its market share in the petroleum retail salescategory.

Q & Q Concept

IndianOil's retail marketing initiatives are oriented around twosimple concepts - Quality and Quantity. The concept of testingthe product before buying at the IndianOil retail stations hasfew parallels in the petroleum industry. The Corporation's focushas been to segmentise market needs, as the requirements inurban and semi-urban areas is quite different from the highwaymarket where the Corporation has a very strong presence.

IndianOil launched a novel 'Check-and-Win' campaign in 49major cities and towns, whereby motorists win prizes for checking the quality of fuel at ROs. About 2.62 lakh customershave already carried out checks across 12 cities, with noproduct failures reported.

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PIONEERING EFFORTS IN INDIA: IndianOil FIRSTS

Hydrant Refueling System at Mumbai

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

Mounded Storage for LPG and Automatic Electronic FillingSystem at Madurai LPG Bottling Plant

Mobile LPG Bottling

Rural Marketing of LPG by Mobile LPG Filling Truckintroduced by Chief Minister of Tamil Nadu in Thanjavur on18th May 1997. The second such Rural Marketing Vehicle(RMV) was launched in Allahabad District of Uttar Pradeshduring December 1998. As of April 1999, both RMVs arecatering to over 17,800 customers. Each RMV, with a StorageVessel of 5T capacity, has 2 filling machines at 15 m safetydistance.

Equipment for quality control check and rollable fencing.

First oil marketing company in India to get ISO-9002certification for Aviation Services, Lube Blending Plants,Quality Control Labs, and R&D Centre.

Major projects

Joint ventures

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Name of JVDate of Incorp'tn

Promoters &Equity

Area(s) of Operation

Avi - OilIndia Limited

04.11.1993 IOC: 25%Balmer Lawrie:25%NYCO SA,France: 50%

To blend, manufacture andsell synthetic, semi syntheticand mineral based lubricatingoils, greases and hydraulicfluids, related products andspecialities for Defence andCivil Aviation uses.

IndianOiltankingLimited

28.08.1996 IOC: 50%OiltankingGmbH: 50%

To build and operateterminalling services for petroleum products.

Lubrizol IndiaPrivate Limited

Existing Co.restructured

w.e.f.01.04.2000

IOC: 50%Lubrizol Corp,USA: 50%

To manufacture and marketchemicals for use as additivesin fuels, lubricants andgreases.

IndianOilPetronasPrivate Limited

03.12.1998 IOC: 50%Petronas,Malaysia: 50%

To construct and importfacilities for LPG import atHaldia and to engage inparallel marketing of LPG.

Petronet LNGLimited

02.04.1998 IOC, BPC,GAIL,ONGC:12.5% each,Gaz de FranceInternational :10%,

AsianDevelopmentBank :5.2%,Public Issue :34.8%

Development of facilities for import and regasification of LNG at Dahej and Kochi.

Petronet IndiaLimited (PIL)

26.05.1997 IOC, BPC,HPC:16% each,RPL, IL&FS,ICICI, SBI, EOL:

10% each,IBP: 02%

To implement PetroleumProducts, Pipeline projectsthrough Special PurposeVehicles.

Petronet VKLimited

21.05.1998 IOC, PIL: 26%each,RPL, EOL: 13%each,SBI, KPT,

To construct and operate apipeline for transportation of petroleum products fromVadinar to Kandla.

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GIIC,IL&FS:05% each,CB: 02%

IndianOilPanipatPower

ConsortiumLimited

06.10.1999 IOC: 50%MC: 50%

To build own and operatepower generation plant atPanipat and to sell power toHaryana Vidyut PrasaranNigam Ltd.

Petronet CILimited

07.12.2000 IOC, PIL, RPL:26% eachEOL, BPC:11% each

To construct and operate apipeline for evacuation of petroleum products from RPLand EOL refineries atJamnagar as well as fromGujarat Refinery at Koyali tofeed 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 –Infrastructure Leasing & Financial Services ltd., IOC – Indian Oil CorporationLtd., 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)

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The lubricant industry is growing at a tremendous rate and with

international auto giants entering the Indian market the need for highquality lubricants will increase exponentially.

A pioneer in the lubricant industry, Gulf Oil India is one of the largestprivate, comprehensive lubricant manufacturers in India. Its product rangeencompasses 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 basestocks 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 experiencedchemists conducts over 1200 tests every day to guarantee final product

performance. Specially built programmable logical control systems, aidedby 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 continuouslyupgrades its quality by introducing products developed with newer

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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.

NetworkGulf Oil started operations in 1993 with a distribution network of

approximately 600 dealers and 54 stockists in the West Zone. Today, thisdistribution network has morphed into gigantic operation covering 120

exclusive Gulf Shoppes, 85 depots, over 1200 dealers and 18000 retailoutlets, and the count is rapidly increasing

UpdateShareholders have recently approved Gulf Oil India's merger with IDL

Industries Ltd. in a 2:1 swap ratio. This merger will enable the HindujaGroup consolidate its position in the Indian chemical segment and give itbetter synergies and a larger network for both domestic and international

marketing.

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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

activities.

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

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

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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 arrivewithin 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 weaim to achieve.

STANDARDS OF SERVICE

Safety Instructions

DO'S DONT'S

1.Keep "Gas Tap" closed when

Gas is not being used

1. Don't handle or adjust critical

equipment on your own in the

Gas Line i.e. Regulator, Meteretc. call GGCL for any problem.

2. If the premises is to remain

closed for more than a day, shutoff control valve.

2. Don't use cracked rubber

tube; if it is cracked, ask GGCLfor replacement.

3. Gas leakage should be brought

to the notice of GGCLimmediately.

3. Don't keep hot utensils near

the rubber tube.

4. On leakage, immediately close

control valve, open doors andwindows and inform GGCL.

4. Don't make any changes in

plumbing work which has beencarried out by GGCL. If any

changes is required contactGGCL only.

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5. Keep children away from all

Gas equipments.

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 PRao, Director (Projects), GAIL received this award from Shri Mani Shankar Aiyar,Hon'ble Minister of Petroleum and Natural Gas in presence of Shri ProshantoBanerjee, Chairman and Managing Director, GAIL. GAIL has completed the

Dahej- Vijaipur Pipeline Project in a record period of 27 months. The Project wascompleted 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 approvedcost of the project was Rs. 2936 crore. The pipeline passes through Gujarat andMadhya Pradesh.

•

Global Recognition

• Platts declares GAIL as first among Global Gas Utilities based on Returnon Invested Capital (ROIC) in its Worldwide Survey of Top 250 EnergyCompanies in 2004.

• GAIL joins Top 10 Club of Global Energy Companies based on Return onInvested Capital (ROIC) in Platts Worldwide Survey of Top 250 EnergyCompanies 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

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• 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 HeavyIndustries & Public Enterprises

The use of compressed natural gas (CNG) in vehicles has led to considerablereduction 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:HydrocarbonsCO: Carbon Mono oxide

CO2: Carbon di oxideNOx: Nitrogen oxidesSource: 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

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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:

Pollutants% Reduction

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 beingGreenhouse gases: Carbon Dioxide, Methane, Chloro Fluoro Carbons (CFCs)and Nitrous Oxide. These gases allow sunlight to come in but block some of theinfrared radiation (carrying heat back into the atmosphere) from leaving theearth's surface. This leads to development of concentrated heat zones on the

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 theUnited States is the largest producer of global CO2 emissions (23%), India'sshare is relatively lower at 4%.

Particulate matters in the atmosphere also contribute to climate changes. Amongparticulate 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 thequality of air, especially when used in place of other more polluting energysources. Natural gas combustion results in virtually no atmospheric emissions of sulphur dioxide or small particulate matter, and far lower emissions of carbonmonoxide, reactive hydrocarbons, nitrogen oxides and carbon dioxide.

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The two principal air pollution issues areacid rain and carbon monoxide(CO)/ozone pollution levels. Reducing highozone pollution levels in urban areasrequires the reduction of reactive

hydrocarbons and sometimes nitrogenoxide emissions. Besides being acontributor to ozone formation, CO is ahealth hazard. All these pollutants arereleased into the atmosphere by thecombustion of some fossil fuels instationary sources such as industrialboilers and power plants, and inautomobiles.

Natural gas is the solution to these

pollution problems. Advanced naturalgas-fuelled vehicles have the potential toreduce carbon monoxide emissions by 90per cent and reactive hydrocarbonemissions by 85 per cent compared withgasoline vehicles. It is also possible toburn natural gas simultaneously with lessenvironment-attractive fuels.

Source:IEA

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GAIL (India) Limited

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LPG - Liquefied petroleum gas

LPG is the abbreviation or short form for liquefied petroleum gas. Like all fossilfuels, it is a non-renewable source of energy. It is extracted from crude oil andnatural gas. The main composition of LPG are hydrocarbons containing three or

four carbon atoms. The normal components of LPG thus, are propane (C 3H8) andbutane (C4H10). Small concentrations of other hydrocarbons may also be present.Depending on the source of the LPG and how it has been produced, componentsother than hydrocarbons may also be present.

LPG is a gas at atmospheric pressure and normal ambient temperatures, but itcan be liquefied when moderate pressure is applied or when the temperature issufficiently 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 convertthe 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 feelcold to touch and why, if there is a heavy off-take, water or ice may appear onthe container. When you stop using LPG, the pressure will return to theequilibrium value for the surrounding temperature. The pressure of the LPG inthe 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 asteady supply at constant pressure. This is done by a regulator, which limits thepressure to suit the appliance that is being fuelled. It is a colourless andodourless gas to which foul-smelling mercaptan is added so that leak can beeasily 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 isheavier than air, so any leakage will sink to the ground and accumulate in lowlying areas and may be difficult to disperse. LPG expands rapidly when itstemperature rises. So whenever a container is filled, sufficient space is left toallow for such expansion. LPG will cause natural rubber and some plastics todeteriorate. 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 highlydangerous. LPG should always be treated with respect and kept away fromchildren whenever possible.

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Liquid petroleum gases were discovered in 1912 when Dr. Walter Snelling, an American scientist, realized that these gases could be changed into liquids andstored under moderate pressure. From 1912 and 1920, LP-gas uses weredeveloped. The first LPG cook stove was made in 1912, and the first LPG -fueledcar was developed in 1913. The LPG industry began sometime shortly before

World War I. At that time, a problem in the natural gas distribution processpopped up. Gradually facilities were built to cool and compress natural gas, andto separate the gases that could be turned into liquids (including propane andbutane). LPG was sold commercially by 1920.

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CONSERVATION OF PETROLEUM PRODUCTS

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

2. Despite discovery of new sources of unconventional energy and due toexisting inadequacies in supply of other forms of commercial energy relative todemand, petroleum remains the primary energy source in India and a preferredswing fuel. Its consumption has been increasing at a very steep rate from 3.5MMT in 1950-51 to 84.3 MMT in 1997-98 and projected to reach 130 MMT in2001-02 and 175 MMT in 2006-07.

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

4. Various steps are being taken to promote conservation of petroleum productsin the following areas. The following specific activities are taken up from time totime.

IN HOUSE CONSERVATION IN UPSTREAM AND REFINING SECTORS

Effective and result-oriented conservation methods adopted by the upstreamundertakings in the oil sector include reduction of gas flaring by re-injection of gas to underground reservoir, installation of waste heat recovery systems,utilization of non-conventional energy sources and close monitoring of all

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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., areother steps taken.

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

In addition, they have implemented an Action Plan to produce and sell high gradelubricants 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 linewith the international developments meeting Euro Standards. Multi-grade railroadengine oils with diesel saving potential have been developed for introduction inIndian Railways.

(D) Although transport losses are inevitable while moving the petroleum productsby 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 levelhave 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, thePCRA was set up in 1976 to undertake studies to identify the potential and tomake recommendations for achieving conservation of petroleum products invarious sectors of the economy. It sponsors R&D activities for the developmentof fuel-efficient equipment / devices and organizes multi-media campaigns for creating mass awareness for the conservation of petroleum products. Fuel oilutilization studies, energy audits, boiler modernization scheme, introduction of equipment bank concept, use of energy vans, development of oil consumptionnorms, 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

Multi-media campaigns to create mass awareness about the need for conservingpetroleum products and motivating users to take concrete steps to actually

64







conserve are undertaken by PCRA and the Oil Marketing Companies throughvarious 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 extensionto Oil Conservation Fortnights (OCF) from 1997. These are organized by theentire 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 areundertaken. Inaugural functions are presided over by dignitaries such as Union

Ministers, Governors, Chief Ministers, etc. and the Fortnight ends with aValedictory function in every State.

6.3 END USERS OF PETROLEUM PRODUCTS AND CONSERVATIONEFFORTS

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

Standardization of fuel-efficient irrigation pumpsets

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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 givefurther impetus to the oil conservation movement and for focussed attention atthe 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 commissionedto recover kerosene vapors. Under this project at one plant 180 KL of keroseneworth Rs. 14.4 lakhs is being recovered and recycled per annum. The technologydeveloped 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 asavings in diesel and reduction in pollution. To provide thrust and to promote theoperation 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 Aircraftand back as a demonstration project. Moreover, to encourage and support theoperation of BOV’s on a larger scale a subsidy of Rs. 1 lakh per BOV is beingprovided 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 anddiesel of 3 lakh and 1 lakh litres respectively by vehicles while waiting for greensignal 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 bysynchronization of traffic signals and reducing the waiting period for the vehicles.

To demonstrate, projects in 5 cities viz. Delhi, Calcutta, Pune, Bangalore andChennai were taken up for synchronization. Project at Calcutta has since beensuccessfully completed with the result that City and State administration, TrafficPolice, PWD etc. are convinced about benefits of synchronization of trafficsignals. Projects in other towns are in advanced stage of completion.

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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 temperaturebefore cooking them

Soak cereals and dals for sometime before cooking them to reduce the cookingtime 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 thewater starts boiling

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

Light the flame only after all preparations have been made and the vessel isready 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 fuelconservation 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.

(C) CONSERVATION ON ROADS

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The first rule of fuel conservation would be to travel judiciously and curtailwasteful 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 inconserving fuel. For instance if you have the option of a personal car and ascooter, 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 socialrelations with your colleagues

Following traffic signals will help avoid traffic jams and reduce lower gear drivingand 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 fuelefficiency.

There is no substitute for timely attention, servicing and tuning of the vehicle infuel conservation and emission control. This should include checking of injectorsand 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 anycompromise on this aspect.

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

Have your vehicle checked for emission control regularly – not only becausedefaulters are fined, but because it leads to fuel conservation and pollutioncontrol, 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 andpreaching these conservation tips can we think of future progress. Given thedifficult times ahead, it becomes our responsibility to spread this awareness,particularly amongst it the youth who will be citizens of tomorrow. Good habitstaught early will salvage the oil shortage to a great extent.

7. ROLE OF OIL INDUSTRY TO PROMOTE OIL CONSERVATION

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7.1 Soft loan and subsidies are given by Oil Industry (OIDB) for conductingenergy 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 oilconservation.

7.2 The Oil Industry is also promoting the use of alternate sources of energy tothe 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 toemulate.

Petroleum Conservation, then becomes our joint responsibility be it theindustries, 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 manycountries. It is a safe, clean burning and environment friendly fuel. It has beenestablished that exhaust emissions like hydrocarbons and carbon monoxide aresignificantly reduced as compared to other fuels. Toxic emissions such as leadand 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 countrywas 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 bytwo joint ventures viz. Mahanagar Gas Nigam Ltd. and Indraprastha Gas Limitedrespectively and in Surat and Ankleshwar, by a private company. The averagecost of converting a petrol car to CNG is about Rs.35,000. There are over 10,000CNG 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 onlinedispensing units have been set up in Delhi. Under the former system, NaturalGas is compressed and filled into truck mounted cascades (basket of cylinders)in the mother compressor station and transported to daughter units for dispensing to CNG vehicle. The mother station initially set up in Ghaziabad hasbeen re-located and brought near to Delhi at Sarai Kale Khan, in May’97. At

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present there are seven daughter and four on-line dispensing retail outlets inDelhi. Further expansion of the infrastructural network to 80 CNG outlets isproposed by March 2000. The process of acquiring land sites to set up therequired 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 receivedattention in this Ministry. Recommendations of Technical Committee studying thisissue have testified to the safe usage of blended alcohol upto 6% with gasolinewhich does not require any modification of engine design, the only stipulationbeing 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 theWorld 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 Actand LPG Control Order, 1974. With the liberalization in the marketing of LPGinitiated in 1993 by decanalizing the import of LPG and introduction of parallelmarketing of LPG, a number of private sector including multinationals havestarted making investment in the development of infrastructure for import of LPGand its marketing. The availability of LPG from the public sector as well as privatesector has also been increasing through indigenous production as well as

imports.

In order to take further actions relating to amendment of the Acts/Rules/ControlOrder, an Expert Committee was constituted. Taking into account therecommendations of the Committee, the concerned Ministries and Departmentsare 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 toemissions from vehicles, from April,1995 the Oil Companies have made availableunleaded 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 withreduced lead content of 0.15g/ltr. (maximum) was made available all over thecountry from December, 1996. The availability of unleaded petrol was extended

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to Capitals of state and Union Territories by June, 1998 and would be extendedto throughout the country by March 2000.

(B) SUPPLY OF LOW SULPHUR HSD

The sulphur in diesel has considerable potential to pollute the air and damagehuman health, especially with regard to respiratory disorders caused by highlevel of respirable particulate matter. Hence, Low Sulphur Diesel i.e., containing0.5% sulphur by weight as against the normal proportion of 1% by weight wassupplied w.e.f. April, 1996 in metros and Taj Trapezium. Supply of diesel with stillfurther reduction of sulphur content upto only 0.25% by weight has beenenvisaged w.e.f. January 2000 in the entire country. It was, however, introducedin 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 inthe country. A further reduction in the sulphur content to 0.05% in diesel in theNational 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 introducedw.e.f. 1.4.1999. These environment friendly oils reduce visible smoke and lead tofuel conservation.

(D) RESTRICTIONS IN BENZENE CONTENT

The benzene content in gasoline is to be restricted to a maximum of 3% byvolume in metro cities and 5% by volume in other cities as required under thenotification 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 installedat all retail outlets of all Oil Marketing Companies by December 1998 and banenforced on sale of loose 2T oils at petrol stations and service garages from thatdate. One Fuel Testing Laboratory (FTL) has been set up at Noida for monitoring

fuel adulteration.

(vi) NATURAL GAS FOR INDUSTRIES

Six lakh cubic metres of natural gas per day has been allocated for supplythrough pipelines to the industrial units in the area. Pipelines to Agra and

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Ferozabad are ready. Gas purchase agreements have already been signed witha number of industrial units in Ferozabad and Agra. Out of these units havealready started using natural gas and fifty more would do so by Dec. 1999. Thedistribution 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 isconditional 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 energyconservation, which makes energy audits mandatory for industries; energylabeling of equipment’s necessary and BIS standards mandatory. The oldinefficient engines, equipment and processes that do not meet environmentalstandards 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 companyfrom restricted list given the oil and gas majors in India an opportunity toserve global customers. But it has also increased competition, as nowglobal players are free to enter in India. This industry will see increasedcompetition in India in near future.

• With the environment norms not being as stringent as the westerncountries, foreign companies are more likely to set up new manufacturingfacilities in India.

• With the insufficient counter valley duties and duty free export and importfrom countries from Nepal will see dumping of plastic goods in India. Thisunless 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 oiland gas manufacturer from setting up unit in India.

• Unstable governme5nt may also affect the disinvestment plan of industrylike oil and gas.

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SOCIO-CULTURAL FACTORS

• Life style changes like demand for lighter automobiles had lead toincrease 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 andother. This in turn has increased the demand for oil and gas which arederived demand.

Economical factor

• Oil and gas industry is one of the chief consumer of energy in India soenergy 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 newtechnologies to develop processes, which are environmental friendly.

• In recent years this industry has a general trend of importing thetechnologies and them setting up manufacturing and marketingindigenously.

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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 throughcompetition is intense.

• Market growth rate of 12 to 13 % which is relatively high compared toworld market growth rate of 5 to 6 %.

• Products of this industry have wide applications and these productshave 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 justanywhere.

• 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 maybe low on depressed and hence high levels of inventory have to bemaintained. This leads to high inventory carrying costs.

•

Subject to cost push inflation; i.e. if cost of raw materials increase then tomaintain margins cost of oil and gas are also increased.

Opportunities

• Do a lot of research and Development and develop friendly products tosell in global market.

• Sell products to global customers and achieve economies of scale byselling volumes i.e. companies are trying to transform themselves in globalplayers.

• In India, huge potentials exist because oil and gas consumption is low.

• Value added products could be looked into as chemical industry has verydiverse applications.

• Lowering of prices of raw material has led to substitution effect ; rawmaterials 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 OPECcountries adversely affects the industry.

• This industry has derived demand and so fall in demand of products madeby 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 fromenvironmental 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 tremendousgoodwill in the market.

• BPCL has a large base of trained and experienced personnel who arewell suited for this industry

• Company is financially sound.

Weakness

• It is a public sector undertaking and hence a typical beaurocraticstructure where decisions get unnecessarily prolonged which is adisadvantage in present scenario.

•

It is often said “if you just sit, you might be runover “. This mightbecome a reality for BPCL as in last yeas, BPCL has not madecapacity additions and hence it is vulnerable to a possible loss of economies of scale especially since other private sector players areexpanding.

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 thisindustry is 4:1 and so can generate a lot of debt funds for futureexpansions.

Threats

• Opening up of market means that international players coming to Indiaand eating away BPCL’s market share

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• Insufficient Govt. protection means that foreign manufacturers will dumptheir products into Indian markets and hence a fall in demand of BPCL’smarket share.

SWOT Analysis of HPCL

Strengths

• Project implementation is done on time and according to the scheduledplan. 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 oneindustry where small is not beautiful.

• HPCL has capability of integrating both forward and backward as andwhen needed.

Weakness

• Highly diversified business. In such case, focus can be lost i.e. tryingbite 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 solow prices of polymers has given additional impetus to demand. HPCLwith 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 pacificregion setting up manufacturing gases in India leading to increasedcompetition.

• 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

http://www.google.com/

http://www.essaroil.com/

http://www.relianceindustries.com/

http://www.gujaratgas.com/

http://www.ongc.com/

http://www.bpcl.com/

http://www.hpcl.com/

http://www.ibp.com/

http://www.ioc.com/

http://www.google.com/

http://www.essaroil.com/

http://www.relianceindustries.com/

http://www.gujaratgas.com/

http://www.ongc.com/

http://www.bpcl.com/

http://www.hpcl.com/

http://www.ibp.com/

http://www.ioc.com/

sp - analysis of oil companies

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