Chairman:
Chairman expressed satisfaction over the optimistic Quarter 1 results and the improvement in the Fortune 500 ranking but showed concern over the rising trend in the crude prices.
Focussing on the physical performance, he shared that Panipat, Barauni & Guwahati Refineries achieved the highest-ever crude throughput. The Gross Refinery Margin during the last quarter was US$ 7.36/barrel. Fuel quality up- gradation projects are progressing on schedule and the April 2010 deadline is well within reach for meeting Euro IV products. Construction progress of the Naphtha Cracker Project has now entered the commissioning phase. Paradip refinery work is progressing well.
Chairman complimented the Marketing team on posting sales growth in the last quarter, 3.9% increase among PSUs, 29.5% growth in Auto LPG and 61% in non-domestic packed LPG. IOML registered a market share of over 21% and made forays in offshore bunkering.
Expressing satisfaction over the Pipelines Division’s successful commissioning of Panipat-Jalandhar LPG Pipeline, ATF pipeline to Bengaluru Airport and to Chennai Airport, Paradip-Haldia Pipeline system and Koyali-Ratlam Pipeline, Chairman lauded the efforts of the pipelines team.
Regarding the Petrochemical business-Customer mapping and market segmentation has been completed and the process of appointment of channel partners for Polymer marketing has been initiated. In the gas business, IndianOil will get 0.43 MMPTA of RLNG additionally, as its share from Mobil-Exxon, Australia.
Chairman complimented the R&D team for completing successful trials of in-house developed catalyst for DHDS at CPCL for meeting Euro-IV norms.
Talking about the CEOs conclave of Oil PSUs organised by MoP&NG, for charting the `Vision 2015-Customer Satisfaction & Beyond’ document, he spoke of Ministry’s instructions to provide better customer service, especially in the business of LPG. A target of releasing 5 crores LPG connections in the next five years, along with introduction of technological interventions to eliminate misuse was also drawn. Issues relating to deeper penetration of the rural market, kerosene diversion and oil security for the nation were the core concern of the meet.
Chairman informed that the IndianOil Board held its Strategy meet in Goa where issues pertaining to the perspective business plan were deliberated upon. Ideas to boost lube business and to provide world-class IT-enabled solutions were the prime focus.
Concerns
Chairman stressed on ‘safety’, mentioning the recent incidents of fire in the Delayed Coker Unit at Digboi Refinery and fatalities at project site in Panipat and Bongaigaon Refineries. Accidents at workplaces involve loss of precious human lives besides serious damage to valuable assets and erosion in our credibility.
Chairman encouraged the house to understand every element of the new Vision and imbibe work ethics professionally. Elaborating further, he said our work ethics must carry the elements of honesty and accountability. He clarified that essentially, work ethic is what one does, or would do, in a particular situation. The pinning question in a situation involves what is right and acceptable versus what is wrong, underhand, and under the table.
He also made a mention of some incidents of demeaning integrity that came to his knowledge. He implored not to get lured by any temptations. Honesty, Integrity and accountability must be on top of our minds, while we execute our duty.
Chairman concluded with the hope that everybody would bring the best to IndianOil.
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Director (Planning & Business Development)
Director (Planning & BD) opened his address with his remarks on sales revenues of BD group which increased to Rs 2041 crore for April to July ‘09 as compared to Rs 1914 crore for April to July ‘08. BD group earned a net profit of Rs 206 crore as compared to Rs 79 crore during April to July ‘08. The increase in net profit is mainly attributed to higher volumes of PTA and effective margin management of petrochemicals business particularly of PTA. An amount of Rs 63 crore has also been incurred towards E&P activities. Total Gas sales in Q1 were 0.635 MMT, with 0.0547 MMT supplied to IndianOil refineries.
He expressed concern over IndianOil facing tough time in disposing of surplus gas generated on account of lower off-takes by contracted customer Ratnagiri Gas & Power Private Limited (RGPPL). Even Torrent Power, which was to take Gas from Tranche LNG, has also requested to come out of agreement, earlier signed with IndianOil. RIL gas has saturated the demand of power sector. Further the price of spot LNG is also at all time low.
The Tranche A LNG from Rasgas will be available from November/December 2009 for which Rasgas has served the notice. IndianOil’s share of Tranche A would be 2.63 mmscmd.
IndianOil submitted bids for Chandigarh, Ghaziabad, Allahbad & Rajahmundry in consortium with Adani Energy Limited. PNGRB is yet to announce the results of this second round of bids.
For further expansion of the gas business; IndianOil will offtake 30% of RLNG from Petronet LNG Ltd.’s Kochi Terminal. LNG Sales Purchase Agreement with Mobil-Exxon, Australia is likely to be signed in August 2009 for 1.44 MMTPA. The Off takers i.e GAIL, BPCL and IndianOil are jointly negotiating the Gas Sale Agreement with the major consumers eg NTPC, BSES, FACT etc
PNGRB has accorded authorization for CGD in Agra to GGL, and authorization for Lucknow is under process.
Director (Planning & BD) informed the house that with the successful implementation of the ‘LNG at Doorstep’ project for the first time in the country, IndianOil proposes to set-up City Gas Distribution system based on this technology.
IndianOil has floated an EOI for setting up liquefaction plant for monetizing gas from the small marginal fields; where supply of gas through pipeline is either not economical or feasible. IndianOil has received response from 11 parties.
Petrochemical :
- Petrochemical Marketing
- Regarding the Petrochemical business, D(Plg.&BD) brought to light the sales figures. He elaborated that LAB sales of 43850 MTs were achieved during Apr-July’09 vis-à-vis 43,822 MT last year.
- PTA Sales of 176,225 MT has been achieved during Apr-July’09 vis-à-vis 136,369 MT last year achieving a growth of 29.23 %.
- As far as Polymer Marketing is concerned, till date, extensive work on customer mapping and market segmentation has been carried out
- Petrochemical Projects:
- As regards to Para-xylene unit at Baroda, the DFR study for integrated PX/PTA project at Gujarat refinery, has now envisaged change of scope / basis with a view to maximize PX & MS production, mainly through undertaking modifications in SR – CRU and its NHT units in the form of addition of fourth reactor. Accordingly, the DFR budgetary cost has increased vis-à-vis the approved, for which we are in the process of seeking Board’s approval.
- The DFR study for SBR project at Panipat in joint venture with TSRC, Taiwan and Marubeni, Japan is under finalization to arrive at Capex level of +/- 10%. Basic Design has been completed. Draft capex estimation, as done by CTCI (Taiwan), has been reviewed and the revised numbers submitted by them in July end are under review.
- Feasibility study for setting up a naphtha cracker and downstream polymer complex at Barauni with GAIL based on feedstocks available from various refineries viz. Barauni, Haldia, CPCL and Paradip has been completed. The return is not very encouraging. However, considering various levels of fiscal incentives from State as well as Central Governments, the economics can be improved. A presentation to Secretary (P&NG) was made on 5-6-09.
- Regarding the activities of India DME Chapter, a task force has been set up with members drawn from the oil sector (PSU and private sector), automobile association and other related agencies with a view to establish viability of a DME project in India as a multi-purpose fuel.
Bio-fuels :
- Jatropha plantation in over 600 hectares in Jhabua, Bilaspur and Sarguja districts of MP and Chhattisgarh states will be done in this season.
- A NREGS funded Jatropha plantation model through a consortium of IndianOil and M/S Ruchi Soya has also been firmed up in UP. This partnership will work on 50,000 hectares of Panchayat controlled wasteland in Jhansi & Lalitpur districts of UP.
- Examining of the Biodiesel production as business opportunity is also on.
- Biofuels group in consultation with R&D has proposed tying-up with Petro Algae LLC of Florida USA.
- D(P&BD) informed that he called upon Dr. Farukh Abdullah, Hon’ble Cabinet Minister for New & Renewable Energy on 9th July and apprised him about policy initiative required for fast growth of Biofuels, wind and solar energy segments in our country. Hon’ble minister was highly appreciative of IndianOil’s initiatives in all renewable energy fields and assured all help for us to play major role in these business areas.
Globalisation:
- IndianOil is considering participation in the tender for 7000 MTs of Base Oils, as supplies from Haldia should give us a natural logistics advantage over other sources.
- Bulk Bitumen export to M/s Bay Terminal, Bangladesh is being taken up by BD this year. Negotiations are on for finalizing a three year long term contract of 35000 MTs per annum.
- Finalized 10000 MTs of bitumen supplies to Corolla Corporation, Bangladesh by truck from Haldia.
- With reference to Global Tender for Nigeria Gas Master Plan (NGMP), M/s GAIL was shortlisted as a Core Investor (with IndianOil as a probable partner) for submission of the bid. However, IndianOil has decided to keep its participation under hold.
- Petromoc/Govt of Mozambique have expressed the desire to take assistance from IndianOil for upgrading some of their port oil handling / terminal facilities.
- Our Infrastructure Group would be reviewing IndianOil’s participation taking into account business requirement of Marketing, Refineries and Pipelines in relation to submitting bid for Kandla Port Trust (KPT) notification for setting up SPM & allied facilities.
- PII proposes to make itself a Limited Liability Partnership (LLP) Company, and has requested IndianOil to provide suitable manpower. Divisions are required to release suitable manpower for PII assignments; as such assignments enrich their technical competence, besides giving them motivation thru such international exposer.
E&P:
- IndianOil has participating interest in 12 domestic blocks and 9 overseas blocks. The domestic blocks include 2 NELP-VII blocks in Cambay basin, which have been allotted to IndianOil with 100% participating interest and operatorship. The overseas blocks include 3 blocks in Libya, 2 blocks in Yemen, and 1 block each in Iran, Gabon, Nigeria and Timor-Leste.
- Regarding the Farsi block, subsequent to acceptance of commerciality of the gas discovery in August 2008, the consortium submitted the draft Master Development Plan to National Iranian Oil Company (NIOC) in April 2009. Negotiations with NIOC for finalization of Master Development Plan and draft Development Service Contract have started recently.
- The appraisal of discoveries in Mahanadi offshore and Assam-Arunachal Pradesh blocks is in progress.
- In the Bokaro CBM block, land has been acquired at 6 locations. Drilling of 1st pilot well has been now completed and that of 2nd pilot well in the process. Further, in the North Karanpura CBM block, land for 3 out of 5 pilot well locations has been acquired. Drilling is expected to start in end October 2009.
CP&ES:
- The MoU score for 2008-09 is expected to be excellent. The Capital expenditure up to June 2009 is Rs. 3280 crore, which is 28.4 % of BE (Rs.11561 crore including Bongaigaon Refinery).
- Renewable Energy and particularly Wind Power, the generation performance has been better than the estimates, with generation crossing 2.75 crore units as of 25th July 2009. The wind patterns have suddenly changed in the month of July 2009, resulting in generation of 31 lakh units in July as compared to about 65 lakh units in the month of June.
- In the next stage, based on analysis of electricity consumption possibility of setting up projects in Gujarat (23 MW captive), Rajasthan (9 MW captive), TamilNadu (9 MW captive), Maharashtra (2-3 Mw captive) and Karnataka (2-3 MW captive) will be explored.
- The solar energy initiative, supported by Renewable Energy group under CP&ES, Orissa State Office has launched LED based solar lantern during the Golden Jubilee function in the month of June 09. The initial response from the Dealers is very encouraging.
- D(Plg.&BD) urged Director (Marketing) and all State Heads to consider marketing solar of lanterns, which has the potential to substantially reduce usage of kerosene lanterns.
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Director (Finance)
CAG introduced three-phase audit for the first time on an experimental basis. IndianOil as the largest PSU volunteered to undergo the same. Audit was carried out based on December accounts. The government audit was completed well in time and the comments came in before June-end. All this helped in completing, printing and dispatching the Annual Report much ahead of this schedule.
As for the performance of 2008-09, the price volatility played a role along with so many negative factors contributing to the losses, government compensated with support measures.
Last year, the under-recoveries on petroleum were compensated but under-recoveries on LPG & kerosene were yet to be received. There were also factors like advantage of accounting like exchange loss on interest, treatment of royalty and bonds which contributed to the profits. He cautioned that the 1st Quarter results included one-time gains on inventories, foreign currency gains, etc. He informed that while the under-recoveries of petrol & diesel of 229 crore had been paid for, Rs 2,900 crore of under-recoveries on LPG & kerosene was yet to be compensated.
Director (Finance) informed that IndianOil is holding bonds worth Rs. 19,700 crore. In the wake of the falling prices, the borrowings have come down substantially. Although borrowings are manageable but the market uncertainty affects borrowings. Re 1/- increase in crude oil adds to Rs 2000 crore to the borrowings or vice versa.
Spending is high owing to the ongoing projects. Long-term investments need to be considered. Capital expenditure, at present, is more than Rs 1000 crore per month. Spending exceeds budget provision of Rs. 11,000 crore, since projects are on the peak and expenditure is huge. Till the projects are completed and give results, a guard on capital investments is required till 2011-12.
Foreign currency borrowings are good. The treasury has done well. All efforts were made to reduce interest rates, and it was managed by getting loans at competitive rates.
Director (Finance) complimented the Corporate IS group on the success of SAP implementation. The roll out of SAP at CPCL was also seamless. At Lanka IOC too, SAP implementation is also in line but was delayed due to hardware problem at Lanka IOC. Implementation of payroll data in SAP will be completed by end of the year. SAP has a vast potential and its use in business must be fully tapped.
The ongoing court cases must be reviewed. Some of them are very old. In the light of the recent remarks of the Delhi High Court, IndianOil must avoid contesting arbitration in normal course, unless malafied intention can be established. To this effect, Director (Finance) stressed that all such cases in future should be referred to the Corporate Office.
Lanka IOC suffered losses of nearly Rs. 50 crore mainly due to the high prices during last year. This year, 1st Quarter is not expected to be good but by the 2nd Quarter, scenario could be better due to bunker market and lube business.
In International Trade, despite the problems posed by OPEC, it was possible to procure crude reasonably well.
Commenting on the MoU ranking of 2008-09 Director (Finance) remarked that IOC is taking up the issue with MoP&NG that due to the turbulent market last year, MoU ranking should be on the basis of the published results.
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Director (HR)
Director (HR) opened his address with an update on the Golden Jubilee Celebrations at Vigyan Bhawan as well as various Divisions/Locations.
He informed about a ‘Coffee Table Book’ depicting 50 years’ history of IndianOil that is under preparation. To mark the Golden Jubilee Anniversary each employee will be given a copy of the ‘Coffee Table Book’, the First Day Cover’ with the ‘Commemorative Stamp’, a Gold Coin and Rs.25,000/- cash.
M/s. MMTC Ltd. will supply the gold coins by middle of September ’09. Thereafter, Gold Coins will be sent to various units for distribution to employees. He informed that the weight of the Gold Coin has been linked to the service period of employees as on 30th June ’09 as under :-
- Upto 10 years = 10 gms
- More than 10 years & upto 20 years = 15 gms
- More than 20 years & upto 30 years = 20 gms
- More than 30 years = 30 gms
A 10gm gold coin will be distributed to the retired employees too.
Explaining the important issue of Officers’ Pay Revision Director (HR) said that the Presidential Directives on Officers’ Pay Revision were received from MOP&NG vide their letter dated 21.4.09 and the same have been implemented. The officers started getting salary on revised Pay Scales effective May ’09. Arrears were also paid during 1st week of July ’09. Following issues are still pending for consideration and decision at various levels:
- Intermediary Scales for Gr.A, B, F & G
- Special Pay and Protected Pay
- Hardship Locations Allowances
- Cafeteria Approach for Perks & Allowances
- Review and re-alignment of various Retiral Schemes
- Review of Lease Rentals effective 26.11.2008.
- Pay Fixation of Board level executives
- Employee Stock Option Scheme
Director (HR) further outlined that the Pay Revision for non-Officers is due from 1.1.2007. Unions of Refineries, Pipelines and R&D Centre had already submitted Charter of Demands. However, Marketing Unions have submitted on 13th July ’09 only and is targeted to conclude the Pay Revision of Non-Officers latest by December ’09.
Next, he explained about the new VISION which was adopted by IndianOil after the necessary board approval and was unveiled by Honourable Minister for Petroleum & Natural Gas, Shri Murli Deora on 30th June 2009.
The structured implementation task force of the new Vision is as mentioned below:
D(P&BD) : Energy of India
D(F) : Ethics
D(M) : Customers
D(HR) : People
D(R ) : Technology
D(R&D) : Innovation
D(PL) : Environment
Director (HR) talked about the new development of Corporate Cadres for Officers. He said presently, all the officers belong to the cadre of a particular Division. Considering that some of the functions are common across the Divisions like HR, Finance, Information Systems, Legal, Corporate Communications, it has been decided that officers of these functions will be in the Corporate Cadre. Their establishment will be maintained at Corporate Office.
Campus Recruitment exercise for 2009-0 is under way from June 2009. 144 candidates from 19 Engineering Institutions have been recruited and it has been planned to recruit 345 Engineering Graduates and 55 Management Graduates from campus during this year. So far, 321 recruits from last year campus have joined the Corporation. 200 more recruitees are expected to join in due course. 2nd round of mid level recruitment was done in April ’09 for Petrochemicals & Bio-Fuels. Offers were issued to 21 experienced professionals.
With reference to guidelines of DPE vide their communication dated 28 May ’09, the open appraisal system will be adopted to replace the present partly open appraisal system.
The contribution to the scheme of Tatkal Sahayata Yojna has been increased from Rs. 150/- to Rs. 200/- after the end of year review. This scheme was envisaged on the principle of ‘No cost to the company’.
IIPM launched two new initiatives namely “Certified Business Leadership Program” (both on line & face to face) and Certificate in Project Management. (An exclusive on-line Program).
Three Summer Schools (Industry Academia interactions) were held during the years which were attended by 75 academicians from various engineering institutes and 54 professionals from industry.
Director (HR) informed about the fatal accidents at Digboi and Bongaigaon refinery and added that the Marketing Division has taken the initiative to circulate and implement various guidelines and instructions to prevent road accidents inside the premises of Terminals and Depots.
Informing about the Anti Adulteration Cell (AAC), Director (HR) said that a total of 883 ROs and 50 LPG Distributors were inspected during the Quarter April-June ’09. Apart from observing other discrepancies, one RO has been terminated during the period April-June ’09 on account of selling normal Fuel (MS) as branded fuel (Xtra Premium).
An Orientation-cum-Refresher Programme for AAC Officers was organized in May ’09 in Mumbai. ED (RS) and GM (QC) also participated and interacted with the participants.
Director (HR) gave the following highlights of Explosives Business:-
- All economically unviable units have been closed except 10 bulk Explosives Plants. These are being operated with less than 100 regular employees.
- Business has become viable since February ’09. Net Profit recorded during April-June ’09 is Rs.3.36 crore.
- In addition to Coal India Ltd. long term contracts have been finalized with SAIL and Hindustan Zinc Ltd. for supply of bulk explosives.
Director (Refineries)
Director (Refineries) opened his address with an update on the Golden Jubilee celebrations across Refinery Division and observed that these celebrations are adding to the enthusiasm and team-building.
Director (Refineries) informed that after the merger of BRPL that was concluded formally on 25th March ‘09 within a short span of 4 months, all functions of Projects, Materials, Finance, HR have been totally integrated with refineries. Post merger, 99 officers were redeployed at various refineries and offices. Operations in 14 Bank Accounts held by Bongaigaon Refinery have been closed for better accounting control. Certain issues pertaining to PLI/PIS, SBF Trust/PF & GSLI etc. are being examined. Pay-related issues will be settled with the long term settlement with the unions. He complimented the BRPL & the team at HO for the same.
He spoke with pride about the Total Productive Management systems taken up by all IndianOil refineries. After Barauni & Panipat refinery received excellence award by Japan Institute of Plant Maintenance, Guwahati has also qualified for assessment in Nov ‘09.
During the period from Apr’09 to July’09 all the planned M&I shutdowns of Barauni, Digboi, Gujarat & Bongaigaon Refineries have been completed as per schedule except Mathura Refinery. Major planned shutdown activities of Mathura Refinery completed and refinery resumed operation since end July ‘09 without OHCU due to problem in Breech Lock Exchanger. The exchanger is expected to be back by Aug ’09 end and unit on-stream by first week of Sept ’09. VG Oil is moved from Mathura to Panipat to sustain operations.
Director (Refineries) complimented the teams at Panipat Refinery, Refineries Hqrs and the Marketing S&D for excellent team work. S&D team organised and managed the movement of VGO excellently.
Talking about the 1st Quarter performance of 2009-‘10, Director (Refineries) said that IndianOil Refineries achieved crude t’put of 12.5 MMT with capacity utilisation of 100.6% exceeding MOU target by 577.0 TMT, despite the fact that 5 refineries were under planned shutdown. This was managed by stretched daily limits. During April-July ’09, crude t’put was 16.45 MMT with capacity utilization of 99.2% and higher than MoU target by 604.0 TMT. Complimenting Panipat & Barauni Refineries which achieved highest ever crude t’put in July 09, Director (Refineries) said that the capacity utilization in these refineries were 115% and 110% respectively.
In order to widen crude basket and reduce input cost, first time heavy Australian Crude (API degree of 22) viz. Enfield was processed at Panipat Refinery. During the period, one more new crude viz. Agbami of Nigerian origin was also procured for widening the resources.
The Gross Refinery Margins during Q1 Apr-Jun’09 (2009-‘10) for IndianOil refineries was US $ 7.36/barrel as compared to US $ 4.50/ barrel for the Quarter January-March ’09 (2008-09) and $ 3.69 /bbl in 2008-09. The stock gain/loss contributed to the variations of increase or decrease in GRM. Efforts to improve the operational performance continue to be in the full earnest.
Persistent efforts of Mathura & Gujarat resulted in refund of Rs.36 crore from Customs during April – July ’09.
Director (Refineries) informed that Mathura refinery expansion (from 8 to 11 MMTPA) was taken up with MOEF for NOC. As advised, an affidavit has been filed in the Supreme Court for environmental clearance. 1st hearing was held on 20th July 09. He hoped to get the clearance from both MOEF and Supreme Court.
Further, he said that 3 CDM projects one each at Digboi, Haldia & Barauni have been registered with United Nations Forum for Climate Change convention with the total Certified Emission Reduction (CER) of 29000 units. One more CDM project for Gujarat Ref with CER of 21000 has been submitted for registration.
For the first time, one VLCC has been chartered/ contracted in time charter mode.
PDEC Cell has taken over the work related to all the debottlenecking schemes. Apart from Engineering Consultancy job of IOC Refineries, the group has also started getting request / offer from other organizations like MRPL, Toyo etc for consultancy. ENOC is also looking for help through PDEC. Director (Refineries) complimented the PDEC group.
He stated that IndianOil was committed to process Rajasthan Crude from M/S Cairn Energy @ 1.5 MMT allocated to Indian Oil Refineries from the year 2010-11. This will be processed at Panipat Refinery and Gujarat Refinery. The facilities at Radhanpur & Viramgram are being taken up by M/s Cairn and expected to be completed by Jan’10, In the current year, 0.2 MMT of Rajasthan Crude will be absorbed at Panipat Refinery. Negotiations with Cairn Energy for pricing completed and a draft COSA has also been prepared. Finalization of the same will be after completion of negotiations between Cairn Energy & MRPL/HPCL.
With regard to the Quality Improvement Projects to supply Euro-III/IV quality MS/HSD, he informed that the progress at Panipat & Mathura is satisfactory. At other refineries, best efforts are needed. Execution of Quality Improvement projects at Barauni, Guwahati, Digboi & BGR have many constraints and delayed up to June ’10. The same has been indicated to MoP&NG. BGR HSD quality project is also delayed which has been intimated to MoP&NG.
Director (Refineries) brought to light the fact that in order to accommodate product requirement as desired by the industry, the planned Panipat Refinery expansion to 15 MMTPA has been postponed to July-Aug ’10 against earlier plan of April – May ’10.
Talking about the Naphtha Cracker Project at Panipat Refinery, Director (Refineries) informed that it was 93.9% complete. It has now entered a very crucial phase of pre-commissioning/commissioning activities. Utilities like Plant Air, Instrument Air, Cooling Water, DM/RO, and ETP have been commissioned. There has been considerable delay by L&T in completing the Captive Power Plant, thereby delaying the availability of Steam & Power, which are required for pre-commissioning of process plants. Safe and flawless commissioning is critical and all concerned must ensure these aspects. Hopefully, the project will be complete by February 2010 and the commitment to Petrochemical group for product availability can be kept.
The Paradip Refinery Project’s Financial Closure has been achieved in May ’09. The work at all fronts is progressing well. Execution of Paradip Refinery Project is a combination of various execution modes such as Conventional, Cost Plus Conversion, LSTK, BOO and BOOT (First time). Road show was organized in New Delhi on 25.06.09 for contractors. The event was attended by major Indian and International contractors who showed great interest. The Managing PMC M/s Foster Wheeler, UK utilized various modern tools and softwares which none of the Indian Consultants have used so far. This will ensure better interface management and speeding up of project activities.
Director (Refineries) highlighted that in order to seek speedy resolution of pending issues, related to several infrastructure jobs in Orissa, a meeting was held with Chief Secretary of Orissa Government at Bhubaneswar on 4th August 2009 in presence of other government dignitaries.
Director (Refineries) also informed that considering additional LAB demand and high margin, a feasibility study for revamp of existing LAB unit in Gujarat had been initiated through original licensor i.e M/s UOP.
Awards
Panipat Refinery bagged the 1st Prize of Jawaharlal Nehru Centenary Awards for Energy 2007-08 for Lowest Specific Energy Consumption under Group I amongst all Indian PSU Refineries.
IndianOil refineries have bagged 4 out of 6 awards in the steam leak survey conducted during OGCF-2009 during second fortnight of Jan ’09. The winners are Mathura & BGR in Group-1 and Guwahati & Panipat in Group-2.
Mathura refinery received ‘International Safety Award – 2008’ from British Safety Council, London on 9th April’09.
Bongaigaon refinery received ‘Indira Gandhi Paryavaran Puraskar – 2006’ by MoEF, Govt. of India on 5th June’09.
Six refineries received ‘Green Tech. Safety Award – 2009’ by Green Tech. Foundation, New Delhi.
Panipat & Guwahati refineries received ‘Golden Peacock Awards’ from Institute of Directors, New Delhi.
Concerns
Director (Refineries) cited various issues of concern like the Black Oil Movement at Gujarat Refinery. The LSHS and Bitumen movement is less and have constraints resulting in running Gujarat refinery at 85 % of its capacity. He requested Consumer Sales to look into it and find suitable solution to overcome the problem.
He also expressed concern about fatal accidents and frequent plant interruptions. It is necessary to follow the procedures/systems to ensure safe operations. Regarding plant interruptions, it is necessary to strengthen our efforts in proper inspection and maintenance activities.
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Director (R&D)
Director (R&D) opened his address by conveying his best wishes to the IndianOil Family on the occasion of the Golden Jubilee.
Director (R&D) shared the achievements of R&D for the quarter as follows:
Refinning Technology:
- DHDS/DHDT Catalyst: Director (R&D) remarked on the successful development of DHDS Catalyst which was scaled up and tried in Plant #13 of CPCL (Manali). He said, Chairman, who was in the Manali refinery, also, visited this plant, and complimented the team for this remarkable achievement.
Complimenting the CPCL team, Director (R&D) appreciated their entrepreneur spirit and risk taking capability, that enabled the trial of this novel catalyst. He also complimented the IndianOil R&D team involved in the catalyst development. Further, he mentioned that Panipat Refinery also showed interest in the catalyst after seeing the results at CPCL.
- INDMAX GR: Catalyst loss in Guwahati Refinery Indmax came down from 650 to 250 Kg/day. Further reduction of about 40-kg/day catalyst loss is possible by modifying the reactor cyclones diplegs. Modification details have been finalized and shared with Guwahati refinery for implementation in upcoming shutdown.
- Applied Materials & Metallurgy: In the area of capability building in applied metallurgy, an advanced ultrasonic test system (OMNISCAN), having been successfully installed and commissioned at R&D. With this, IndianOil, will develop specialised expertise in onsite inspection and interpretation of material condition, at inapproachable locations, reducing time for inspection of equipments for the Refineries.
Pipeline Technology:
With regard to Pipeline Research, Director (R&D) highlighted that 24” prototype iPIG and CPIG had been developed in association of BARC, and was ready for field trials.
Lubricant Technology :
Sharing the developments made in the area of Lubricant Technology, he informed that in the last 4 months, 69 lube formulations had been developed and 11 OEM approvals were obtained, some of which are from Indian Railways and Shanghai Electric Power Construction Corporation has given approval for IOC lubricants.
With persistent follow up, by our scientists with M/s Morgan USA, had agreed for discussions during the visit of our scientists to US for attending related conference. It has resulted in a better understanding, which should help in getting their approval for our lubricants.
Alternate & Renewablw Energy Research:
Second Gen Bio-Fule: NREL has reconfirmed their commitment to collaborate with IndianOil in the areas of Ethanol from Lignocelluloses. NREL has already received grant from DOE, for collaborative research with IOC R&D. We are in the process of finalizing MOU between the two organizations, following which. The work on setting up a 5 Kg/hr pilot plant, first of its kind in Asia, shall start and will be operational by 2010. MoU, for this purpose will be signed soon.
Algal Biofuels: NREL is expecting grant from DOE to initiate Algal related joint R&D with IOC-R&D. As a way forward, NREL has agreed to have a broad MOU with IOC (R&D) for undertaking R&D programmes in various areas of 2nd generation biofuels.
Petrochemicals & Polymer Research:
Complementing the new initiatives, D(R&D) informed that with a team of just five research scientists and limited facilities in this Greenfield area of petrochemicals, IndianOil R&D has been extending support to petrochemical marketing and Panipat operation group for addressing PTA quality related problems.
Work on setting up of petrochemical/Polymer R&D infrastructure is progressing well. The state-of-the-art labs is expected to be ready and operational by December 2009. Chairman laid foundation of Polymer lab. On completion, this lab will set a benchmark for the Polymer lab.
Research Talent Management:
Exchange Programme:With regard to nurturing talent, he informed that MoP&NG received an invitation from Asia Biomass Energy Co-operation Promotion Office, New Energy Foundation, Japan, for advanced research in biomass energy. Three scientists from IOC R&D, of a total of 20 from the Asian countries, have been selected and invited by Japanese Research Institutes to work for a period of 4-6 months.
Summer School / Workshop. Seminars: Regarding IndianOil R&D’s summer school and other training efforts, Direcor (R&D) shared that a Summer School on Tribology was organised jointly by IndianOil R&D Centre, Tribology Society of India and Petrotech Society at IndianOil Institute of Petroleum Management during 10-13 June 2009. The programme was highly appreciated by the participants and as result of the discussions and the recommendations; the participating institutions agreed to review their curriculum and, included Tribology as a main subject.
He further informed that a workshop on “Advances in Steel Plant Lubrication” for Jindal Steel Works (JSW) Engineers was organized. A programme on ‘Management of Carbon Footprint’ was conducted by ICF International with faculty support from India and UK. Stressing on the reduction of carbon footprint he) said that R&D centre will make efforts in this direction starting from its own premises.
Awards:
D(R&D) shared that for the fifth consecutive year, IndianOil-R&D received the “Golden Peacock Award”, conferred for the development of eco-friendly Jute Batching Oil.
Director (Pipelines)
Director (Pipelines) said that Pipelines Division has achieved 102 (105% for product pipelines & 101% for crude pipelines) throughput w.r.t. pro-rated MOU (for product pipelines) / Internal target (for crude oil pipelines) for 2009-10 during the first quarter.
Pipelines achieved 106% (100% for product pipelines & 110% for crude pipelines) throughput in 2009-10 during the first quarter against the similar period for last year.
Salaya-Viramgam section recorded highest daily throughput of 87941 KL on May 20, 2009 with DRA injection at Jamnagar surpassing the previous highest daily throughput of 84138 kl on March 04, 2009 without DRA.
Guwahati-Siliguri Pipeline recorded the highest ever monthly throughput of 148.7 TMT in June 2009 against previous best of 132.11 TMT in February 2009.
CTMPL recorded the highest ever monthly throughput of 153.9 TMT in May 2009 against previous best of 151.8 TMT in April 2009.
ATF Pipeline to Chennai Airport was formally dedicated to the nation by Hon’ble Minister of Petroleum & Natural Gas on July 2, 2009.
Director (Pipelines) mentioned that the Intelligence Pig Survey (IPS) of Viramgam-Mathura Section (803 km) of Salaya-Mathura Pipeline was completed in March 2009 as per the rolling plan. Immediate action for repair of critical defects identified in the preliminary report was initiated and repair of these features (204 Nos.) were completed before onset of monsoon. Repair of further critical features identified in the final report (5 sections) are currently in progress.
IPS for further 6 pipelines (18” Dia Koyali-Viramgam section of Koyali-Sanganer Pipeline, 42” Offshore Pipeline System of Salaya-Mathura Pipeline, 12” Haldia-Barauni & Haldia-Mourigram-Rajbandh Pipelines, 8” Guwahati-Siliguri Pipeline and Koyali-Ahmedabad Pipeline) have been planned in this year, work for which will be awarded shortly.
Extensive coating refurbishment with a superior coating systems i.e. cold applied tape and polyurethane (PU) has been taken up to improve line protection in Salaya-Mathura Pipeline. All other mainline pipelines are fully protected (cathodically).
Further, D(PPL) said that in 2008 & 2009 (till date) coating refurbishment for approx. 115 km in SMPL has been carried out. Coating activities are continuing in 14 km of unprotected stretches of the pipeline.
Dry Docking of IM-1555 Buoy of Vadinar SPM system is planned during October-December 2009.
Due to adverse weather condition prevailing at Paradip during monsoon, there was an incidence of snapping of mooring hawsers during discharge of cargo from the tanker MT Gorgios on 14.7.2009. SPM operation has since then restored.
63 large capacity crude oil storage tanks are owned and operated by the Pipelines Division, with combined capacity of 4.08 million kilolitres. As per the rolling plan for M&I, three tanks have been re-commissioned after M&I during 2008 and another three tanks at Vadinar, Viramgam and Chaksu have been re-commissioned during 2009. M&I of three tanks at Viramgam, Vadinar and Haldia is currently under progress (one will be completed in August 2009 and two in early 2010).
Coating Surveys i.e. DCVG & CAT surveys for vulnerable stretches of mainline were carried out for identification of coating defects. Coating re-visioning/ refurbishment carried out in 109.5 km identified stretches. Marked improvement has been observed in mainline protection after refurbishment of coating in these stretches.
The reorganized patrolling system introduced in Pipelines Division, along with deployment of armed guards as well as night patrolling has resulted in significant reduction in the pilferage.
No incident of major fire or fatal accident reported in the Pipeline Operating Units during 2008-09 and Q1 of 2009-10.
Initiatives have been taken for energy management by judicious use of Drag Reducer Additives (DRA) during peak demand, Variable Frequency Drive (VFD) for the HT motors, pigging of pipelines at regular intervals and switching off radiator motors of mainline engines when ambient temperature is low.
PPL Projects
Ratlam Terminal: After completion of OISD audit on 27th & 28th June, 2009 and subsequent visit of Acceptance Committee of Marketing Div., the terminal is ready to be commissioned with HSD.
Works for railway siding & gantry loading facility are in progress and targeted to be ready by December 2009.
Mundra-Panipat Pipeline Augmentation: Augmentation of Mundra – Panipat Pipeline completed with commissioning of two mainline pumping units at Rewari on 2.6.2009.
Dadri-Panipat RLNG Pipeline: On going impasse with farmers broken in June 2009 and ROW opening being done progressively through signing of agreement with Farmers in presence of local administration.
Elaborating on the status, Director (Pipelines) said that the mainline works were in progress (62/132 km welding completed).
HDD crossings completed at the Ganga Unlined Canal. For 2nd section of Yamuna River crossing, the equipment is being mobilized shortly.
In the present scenario, the mechanical completion is anticipated by December 2009
Chennai – Bengaluru Product Pipeline: Mainline works are in progress (114/290 km welding completed)
The project shall be completed by December 2009.
Bijwasan Panipat Naphtha pipeline: Impasse with farmers in Haryana sector broken and mainline works is in progress with active support from Haryana Govt. (39/111 km welding completed). The project shall be completed by November 2009.
Mathura-Bharatpur product pipeline: Supply of mainline coated pipes has been completed. Mainline, PCP, HDD & combined station works awarded and contractor mobilized at site. Station work has commenced.
Branch pipeline from KDPL to Hazira: In this project also, frequent resistance from farmers is being resolved with the help of local administration. Mainline works in progress and anticipated completion by January 2010.
Hook up of Tikrikalan terminal with existing MJPL - Supply of Mainline coated pipes completed. LOA placed. Anticipated completion by March 2010.
Introduction of Rajasthan Crude in IOCL Pipelines: LOA has been placed.
The facilities for crude injection at MPPL- Radhanpur shall be made ready by October 2009.
Augmentation of Chennai - Trichy-Madurai Pipeline: LOI placed for Mainline Pumping Units. Tenders are on sale. The project is anticipated for completion by February 2011.
Branch Pipelines from KSPL, Viramgam to Kandla: Proposal of laying pipeline through Wild Ass Sanctuary was considered on 4.7.2009 by State Board for Wild life and being forwarded to National Board for Wild life, New Delhi. Procurement action for materials is in process. Anticipated for completion by August 2011.
Construction of tanks and blending facilities at Vadinar – Work awarded for Area Development. Procurement action for materials is in process. Anticipated for completion by August 2011.
Transfer Pipeline from North Oil Jetty to PHBPL, Paradip: Procurement action for materials is in process. Tenders are on sale. Targeted for completion by May 2010.
Kolkata ATF Pipeline - Efforts are being made for getting early permission from NHAI and other authorities like Railway. The project is anticipated for completion by April 2011
New Schemes
Paradip-New Sambalpur-Raipur-Ranchi Pipeline - Detailed route survey and EIA/RA study completed. Site office established at Bhubaneshwar. DFR has been prepared and put up for approval.
De-bottlenecking of SMPL system - Detailed engineering survey completed. DFR revised and put up for approval on 30.4.2009.
Branch Pipeline to Raxaul and Baitalpur - cost estimate prepared.
Guwahati ATF Pipeline - DDMS accorded permission. Detailed survey from Guwahati Refinery to Guwahati AFS (Civil) completed.
Golden Jubilee was celebrated at all the locations of pipelines.
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