Indian Oil Corporation

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Indian Oil Corporation Limited
Type Public
Traded as BSE530965
NSEIOC
Industry Oil and gas
Founded 1964
Headquarters New Delhi, India
Area served India
Key people R.S Butola (Chairman)
Products Fuels, lubricants, petrochemicals
Revenue Increase US$ 76.05 billion (2012)[1]
Operating income Increase US$ 03.30 billion (2012)[1]
Profit Decrease US$ 0786 million (2012)[1]
Total assets Increase US$ 40.88 billion (2012)[1]
Total equity Increase US$ 11.59 billion (2012)[1]
Owner(s) Government of India
Employees 36,198 (2012)[1]
Website www.iocl.com

Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India. It is the world's 88th largest corporation, according to the Fortune Global 500 list, and the largest public corporation in India when ranked by revenue.[2]

IndianOil and its subsidiaries account for a 49% share in the petroleum products market, 31% share in refining capacity and 67% downstream sector pipelines capacity in India. The IndianOil Group of companies owns and operates 10 of India's 22 refineries with a combined refining capacity of 65.7 million metric tonnes per year. In FY 2012 IOCL sold 75.66 million tonnes of petroleum products and reported a PBT of INR37.54 billion, and the Government of India earned an excise duty of INR232.53 billion and tax of INR10.68 billion.

The company is mainly controlled by Government of India which owns approx. 79% shares in the company.[3] It is one of the seven Maharatna status companies of India, apart from Coal India Limited, NTPC Limited, Oil and Natural Gas Corporation, Steel Authority of India Limited, Bharat Heavy Electricals Limited and Gas Authority of India Limited.[4]

History[edit]

IndianOil began operations in 1959 as Indian Oil Company Ltd. The Indian Oil Corporation was formed in 1964, with the merger of Indian Refineries Ltd.
Recently IndianOil Corp (IOC) has raised $500 million by selling 10-year dollar-denominated bonds, its fourth such issue overseas in the last three and a half years.[5]

Products and services[edit]

The main products of IndianOil are petrol, diesel, LPG, auto LPG, aviation turbine fuel, lubricants and petrochemicals: naphtha, bitumen, kerosene etc.

IndianOil operates the largest and the widest network of fuel stations in the country, numbering about 20,575 (16,350 regular ROs & 4,225 Kisan Seva Kendra). It has also started Auto LPG Dispensing Stations (ALDS). It supplies Indane cooking gas to over 66.8 million households through a network of 5,934 Indane distributors.

Brands:

  • Indane Gas - Domestic and Industrial Gas
  • AutoGas - Automotive Natural Gas
  • Xtra Premium - Automotive Premium Petrol
  • Xtra Mile - Automotive Premium Diesel
  • Servo - Lubricants and Greases
  • Propel - Petrochemicals
  • IndianOil Aviation - Aviation fuel
  • LNG at Doorstep - LNG by cryogenic transportation

The main services offered by IndianOil are Refining, Marketing, Pipelines, R&D and Training. IndianOil's Research and Development Center (R&D) at Faridabad supports, develops and provides the necessary technology solutions to the operating divisions of the corporation and its customers within the country and abroad.

Loyalty programs
XTRAPOWER Fleet Card Program is aimed at large fleet operators. Currently it has 1 million customer base. XTRAREWARDS is a recently launched loyalty program for retail customers where customers can earn reward points on their purchases.[citation needed]

Operations[edit]

Refineries: IOCL has various refineries across India.

In Assam

  • Digboi Refinery 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. Modernisation project of this refinery was completed by 1996 and the refinery now has an enhanced capacity of 0.65 MMTPA. UOP licensed the technology for the Coking process in this refinery.
  • Guwahati Refinery, the first public sector refinery of the country, was built with Romanian collaboration and was inaugurated on 1 January 1962. Its capacity is 1 MMTPA.
  • Bongaigaon Refinery became the eighth refinery of IndianOil after merger of Bongaigaon Refinery & Petrochemicals Limited w.e.f. 25 March 2009. It is located at Dhaligaon in Chirang district of Assam, 200 km west of Guwahati.

In Bihar: Barauni Refinery, in Bihar, was built in collaboration with Russia and Romania. It was commissioned in 1964 with a capacity of 1 MMTPA. Its current capacity is 6 MMTPA.

In Gujarat: Gujarat Refinery, at Koyali (near Vadodara) in Gujarat, is IndianOil’s second 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.

In West Bengal: 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 7.5 MMTPA.

In Uttar Pradesh: 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 Delhi and Agra, the capacity of Mathura refinery has been increased to 8.8 MMTPA.

In Haryana: Panipat Refinery is the seventh and largest refinery of IndianOil. The original refinery with 6 MMTPA capacity was built and commissioned in 1998. Panipat Refinery has since expanded its refining capacity to 12 MMTPA. There are plans to further expand the capacity to 21 MMTPA.[6]

In Odisha (Orissa): Paradip Refinery - The commissioning of 15 million tonnes per annum refinery in November 2012 has been delayed and is now expected to be operational only in September 2013.[7]

Group companies and joint ventures

  • Green Gas Ltd. – a joint venture with Gas Authority of India Ltd. for city-wide gas distribution networks.
  • Indo Cat Pvt. Ltd., with Intercat, USA, for manufacturing 15,000 tonnes per annum of FCC (fluidised catalytic cracking) catalysts & additives in India.
  • IndianOil – CREDA Biofuels Ltd., a joint venture with Chattisgarh government for production and marketing of Bio-fuels.
  • Numerous exploration and production ventures with Oil India Ltd., Oil and Natural Gas Corporation
  • India Synthetic Rubber Ltd - A joint venture between IOCL, Taiwan Synthetic Rubber Corporation(Taiwan) and Marubeni(Japan)
  • Petronas (Malaysia) Ltd

International rankings[edit]

  • IndianOil is the highest ranked Indian company in the Fortune Global 500 listing, at the 88th position in 2013. It is also the 18th largest petroleum company in the world and the No. 1 petroleum trading company among the national oil companies in the Asia-Pacific region.
  • IOCL was featured on the 2011 Forbes Global 2000 at position 243.
  • It is the fifth most valued brand in India according to an annual survey conducted by Brand Finance and The Economic Times in 2010.[8]

Employees[edit]

As on 31 March 2013, the company had 34,084 employees, out of which 2643 were women (7.8%). Its workforce includes 14,981 officers.[9] The attrition rate in IndianOil is around 1.5%.[10] The company incurred INR 78 billion on employee benefits during the FY 2012-13.[9]

Concerns[edit]

Indian Oil Corporation Limited, by virtue of being the largest Public sector Oil company has borne the largest share of subsidy burden due to Govt restriction on Pricing of common fuels like Diesel Oil, Kerosene and LPG.

The current formula of making the marketing company share 1/3rd of the subsidy burden ( the up stream and the Government share the rest equally) forces the corporation to cross subsidize price regulated fuels with other fuels that are not regulated like Gasoline, Fuel oil, Aviation Turbine Fuel and Lubricants. This has rendered the corporation's fuels and Lubricant segments uncompetitive with respect to private marketeers who are delving into the open priced fuel/ Lubricants markets in an aggressive way.

The subsidy burden which went over Rs. 300 Billion in 2011 has thereby handicapped the public sector oil companies as a whole and IndianOil in particular, by virtue of its large share of the energy market.

IndianOil has tried to come out of the disadvantageous position it finds itself vis-a-vis the private companies like Total Oil India Limited and Reliance Industries, by taking the fight to newer sectors where private players are dominant like Petrochemicals and Alternative Fuels.

Petrochemicals is IndianOil's most profitable revenue division currently and massive investments in the recent years have been made in Petrochemical complexes at Panipat refinery and the upcoming Paradip refinery.

Despite substantial well directed efforts, the corporation still faces significant challenges in maintaining its current dominance once the imminent free pricing is introduced, although the corporation's vast infrastructure shall also play to its advantage in such a scenario.

Listing and shareholding[edit]

IndianOil's equity shares are listed on the Bombay Stock Exchange and National Stock Exchange of India.[11]

As on 31 December 2013, the promoters Government of India held approx. 79% of the shares in IndianOil. ONGC held approx. 9% of the shares. Remaining 12% of the shares are held by others.[3]

Shareholders (as on 31-Dec-2013) Shareholding[3]
Promoter Group (Government of India) 78.92%
private single body 20.13%
Insurance Companies 01.50%
Individual shareholders 0.83%
Trusts 0.42%
Foreign Institutional Investors (FII) 0.13%
Others 0.07%
Total 100.0%

Competitors[edit]

Indian Oil Corporation has two major domestic competitors, Bharat Petroleum and Hindustan Petroleum. Both are state-controlled, like Indian Oil Corporation. There are two private competitors: Reliance Industries and Essar Oil.

Oil Industry Development Board[edit]

India has begun the development of a strategic crude oil reserve sized at 37.4 million barrels (5,950,000 m3), enough for two weeks of consumption.[12] Petroleum stocks have been transferred from the Indian Oil Corporation (IndianOil) to the Oil Industry Development Board (OIDB).[13] The OIDB then created the Indian Strategic Petroleum Reserves Ltd (ISPRL) to serve as the controlling government agency for the strategic reserve.[14]

See also[edit]

References[edit]

  1. ^ a b c d e f "Financial Statement - Indian Oil Corporation Limited". Bloomberg Businessweek. Retrieved 27 January 2014. 
  2. ^ "Global 500". Fortune Global 500. Retrieved 31 Aug 2013. 
  3. ^ a b c "Shareholding Pattern". Indian Oil. 31 December 2013. Retrieved 27 January 2014. 
  4. ^ List of Maharatna, Navratna and Miniratna CPSEs |. Dpe.nic.in. Retrieved on 2013-07-28
  5. ^ http://www.business-standard.com/article/companies/ioc-raises-500-mn-in-dollar-bond-issue-113072900513_1.html
  6. ^ "IOC mulls expanding capacity at Panipat refinery to 21 million tonne". The Economic Times. Retrieved 29 November 2013. 
  7. ^ "Delay in commissioning of Paradip refinery". 11-08-2012. 
  8. ^ "India's top 10 brands". Rediff.com. Retrieved 26 October 2010. 
  9. ^ a b "IOCL - Annual Report 2012-13". BSE India. Retrieved 26 January 2014. 
  10. ^ "HighTea Chat Transcript with Mr. Biswajit Roy: GM (HRD), Indian Oil Corporation". Times Jobs. 22 January 2014. Retrieved 26 January 2014. 
  11. ^ "Listing Information - Indian Oil Corporation Limited". Economic Times. Retrieved 27 January 2014. 
  12. ^ "Alexander's Gas & Oil Connections – India to build up storage of crude oil". Gasandoil.com. 21 September 2004. Retrieved 26 August 2010. 
  13. ^ "Strategic oil reserves to come directly under Govt". The Hindu Business Line. 2 April 2006. Retrieved 26 August 2010. 
  14. ^ 20 June 2007, 09.18 pm IST, PTI (20 June 2007). "'India to form crude oil reserve of 5 mmt'- Oil & Gas-Energy-News By Industry-News-The Economic Times". Economictimes.indiatimes.com. Retrieved 26 August 2010. 

External links[edit]