Pushpesh Project On Iocl And Bpcl

A Pre-Submission report on

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

UNDER SUPERVISION OF

SUBMITTED BY

Dr. (Mrs.) SHAIVYA SINGH

PUSHPESH KUMAR

Sr. Lecturer, SMS

PGRM/02/35, SMS

School of Management Sciences, Varanasi 2008-09

INTRODUCTION

1.

CAPACITY UTILISATION

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

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

S.No Name of the company

Location of the Refinery

Capacity (MMTPA)*

1.

Indian Oil Corporation Limited (IOCL)

Guwahati

1.00

2.

IOCL

Barauni

6.00

3.

IOCL

Koyali

13.70

4.

IOCL

Haldia

6.00

5.

IOCL

Mathura

8.00

6.

IOCL

Digboi

0.65

7.

IOCL

Panipat

6.00

8.

Bharat Petroleum Corporation Limited (BPCL)

Mumbai

6.90

9.

Kochi Refineries Ltd. (KRL)

Kochi

7.50

10.

Bongaigaon Refinery & Petrochemicals Ltd. (BRPL) Bongaigaon

2.35

11.

Numaligarh Refinery Ltd.(NRL)

3.00

12.

Mangalore Refinery & Petrochemicals Ltd. (MRPL) Mangalore

9.69

TOTAL

70.79

Numaligarh

•

Mil*m*Million Metric Tonnes Per Annum

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

2000-01

2001-02

2002-03

2003-04

2004-05

114.66

116.96

127.37

127.37

106.5

10.6

118.7

124.3

93.00

95.00

99.00

Refining Capacity(As on 114.59 1st April) Actual Crude throughput 103.1 (MMTPA) Capacity

91.00 Utilisation (%)

2.3 INTRODUCTION OF IOC REFINARY

---

Indian Oil Corporation Limited

Type Founded Headquart ers

PSU (Trading on BSE & NSE) 1964

New Delhi, India

Key people Sarthak Behuria, Chairman Petroleum products = Petrol, Industry

Diesel, Kerosene, LPG, Petrochemicals

Revenue

Net income

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

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

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

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

2.4 INTRODUCTION OF BPC REFINERY

Bharat Petroleum Corporation Limited

Type

PSU (Trading on BSE)

Founded

1976 (After nationalisation of Burmah Shell Company)

Headquarter s

Mumbai, India

Key people

Ashok Sinha, Chairman & MD

Industry

Petroleum

Products

Oil , LPG

Revenue

USD $27.873 Billion (20072008) ▲ 27.5% from (20062007)

Website

www.bharatpetroleum.com

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

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

FINDINGS -

TABLE 1. CURRENT PRODUCTION CAPACITY OF REFINARIES

TABLE 2.

INSTALLED CAPACITY AND REFINERY CRUDE THROUGHPUT

TABLE 3.

CAPACITY UTILISATION BY INDIAN OIL CORPORATION

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

Units Per cent Per cent Per cent Per cent

Cumulativ Annual e Expression L L

Monthly Quarterl L L

Ival

105.99

Ival

100.09

Ival

106.25

Ival

%

YoY

%

YoY

%

YoY

%

YoY

%

PoP

%

PoP

%

PoP

%

PoP

106.33 7.79 7.71 4.14 20.13 2.05 -1.97 -0.05 7.71

TABLE 4

CAPACITY UTILISATION BY BHARAT PETROLEUM CORPORATION

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

Units Per cent Per cent Per cent Per cent

Cumulativ Annual e Expression L L Ival Ival

Monthly Q L L 108.51

107.08

Ival

104.45

Ival

%

YoY

%

YoY

%

YoY

%

YoY

%

PoP

%

PoP

%

PoP

%

PoP

-2.86 -7.94

-3.63

3.11 1.34 -7.94

ANALYSIS COMPARATIVE BAR GRAPHS:GRAPH 1.

IOC AND BPC PRODUCTION

PRODUCTION OF IOC & BPC 4500

MMTPA

4000 3500 3000 IOC

2500 2000

BPC

1500 1000 500 0 2004-05

2005-06

2006-07

YEARS

PRODUCTION OF REFINERY MMTPA IOC BPC

2004-05

2005-06

2006-07

3142 1881

3464 3402

4072 3992

*MMTPA=20000 barrels per day

GRAPH 2.

IOC & BPC TOTAL INCOME:-

Income of IOC & BPC

Rs (in crores)

300000 250000

-

200000

Total income of IOC

150000

-

100000

Total income of BPC

50000 0 12 mths

12 mths

12 mths

12 mths

12 mths

12 mths

Mar 2002

Mar 2003

Mar 2004

Mar 2005

Mar 2006

Mar 2007

Years

INCOME OF IOC & BPC

Rs (in crores)

Mar 2003

Mar 2004

Mar 2005

Mar 2006

Mar 2007

12 mths

12 mths

12 mths

12 mths

12 mths

116304.9

125990.68

137586.33

158139.42

201908.8

256164.55

42557.03

49049.93

54575.53

65607.19

85668.04

108226.27

Mar 2002 12 mths

Total income of IOC Total income of BPC

GRA

GRAPH 3. TOTAL EXPENSES OF IOC & BPC

Rs (in crores)

TOTAL EXPENSES OF IOC & BPC 300000 250000

-

200000 150000 100000

Total expenses of IOC Total expenses of BPC

50000 0 12 mths

12 12 mths mths

12 mths

12 12 mths mths

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

TOTAL EXPENSES OF IOC & BPC Rs (in crores )

Mar 2002

Mar 2003

Mar 2004

Mar 2005

Mar 2006

Mar 2007

12 mths

12 mths

12 mths

12 mths

12 mths

12 mths

Total expenses of IOC

113059.1

122288.01

131310.98

154902.69

199593.77

248485.26

Total expenses of BPC

41370.21

49266.57

52596.94

66227.64

86130.83

106626.33

GR

GRAPH 4. IOC & BPC NET SALES IN FIGURES

Rs (in crores)

TOTAL SALES OF IOC & BPC 300000 250000

-

200000 150000 100000

Total sales of IOC Total sales of BPC

50000 0 12 mths

12 mths

12 mths

12 mths

12 mths

12 mths

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

TOTAL SALES OF IOC & BPC Rs (in crore )

Mar 2002

Mar 2003

Mar 2004

Mar 2005

Mar 2006

Mar 2007

12 mths

12 mths

12 mths

12 mths

12 mths

12 mths

115182.42

124378.83

135908.93

156768.6

199430.91

250380.17

42274.04

48578.49

54084.41

63857.01

85149.62

107452.27

Total sales of IOC Total sales of BPC

CONCLUSION:•

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

•

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

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

Bibliography:• CMIE DATA BASE (PROWESS)

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