Background and Business Description IndianOil is India's flagship national oil company,with business interests that straddle the entire hydrocarbon value chain - from refining,pipeline transportation and marketing of petroleum products to exploration & production of crude oil & gas as well as marketing of natural gas and petrochemicals.It is the highest ranked Indian corporate in the prestigious Fortune 'Global 500' listing,ranked at the 83rd position in the year 2012. The company and its subsidiaries own and operate 10 of India's refineries and its cross-country network of crude oil,product and gas pipelines is the largest in the country.With a strong workforce,the company has been helping to meet India's energy demands for over five decades.The companys operations are strategically structured along verticals Refineries,Pipelines,Marketing,Business Development,Petrochemicals and Natural Gas. The President of India is the largest shareholder with 78.92% shares,followed by Oil and Natural Gas Corporation Limited which holds 8.77% shares.The rest of the shares are distributed among insurance companies,mutual funds,institutional and retail investors.As evident from the shareholding pattern,the Government of India is the major stakeholder in the company and majority of its activities are influenced based on Government policies and directives. The company has a portfolio of powerful and much-loved energy brands that include Indane LPGas,SERVO lubricants,XtraPremium petrol,XtraMile diesel, PROPEL petrochemicals,etc.The companys ISO-9002 certified aviation service commands an enviable market share in the aviation fuel business and successfully services the demands of domestic and international flag carriers,private airlines and the Indian Defence Services. The company also enjoys a major share of the fuel needs of the bulk consumer, industrial, agricultural and marine sectors.
Market, Market Position and Competition
The continued tensions at the global flashpoints with supplydemand mismatch manifested in high crude oil prices with the Brent average at USD 115/bbl during FY2012 vis a vis USD 87/bbl in FY2011.Despite the supply dislocations and increase in demand albeit at a reduced pace due to drop in consumption in developed countries,there was continued healthy demand from emerging economies including India.The companys refineries achieved the highest ever crude throughput of 55.62 million tonnes during FY2012,surpassing the previous best of 52.96 million tonnes achieved in FY2010. The company retained its position as the nation's largest corporate according to the list of 500 Indian companies released by Fortune India. At the 83rd rank, the company is the countrys highest ranked enterprise in the Fortune Global 500 list. The company continued to retain its market leadership during the year and achieved domestic sales of 68.1 million tonnes of petroleum products. With an overall capacity utilisation of 102.60% for the year, the company has consistently attained a capacity utilisation of over 100% since last five years. The company continued to export petroleum & petrochemical products during the year to various countries. While the export of lubricants increased by 13%,the export of petrochemical products more than doubled during the year. The company has lined up more than Rs. 460 billion in a host of projects for augmentation of refining, pipelines and petrochemical capacities, expansion of marketing infrastructure, technology induction and product quality up gradation. All these projects, including the petrochemical value projects, new grass-root refinery at Paradip, Butadiene extraction unit at Panipat, FCC revamp at Mathura as well as new pipelines like Paradip-Raipur-Ranchi and Paradip-Haldia-Durgapur(LPG),are intended ensure availability of the petro products to the customers on one hand and enhancing the profitability on the other. The company has two major domestic competitors, Bharat Petroleum and Hindustan Petroleum. Both of them are public limited companies with the government being the major stakeholder. Apart from them, there are also two private competitors, Reliance Industries and Essar Oil. Globally,the Oil & Gas industry continued to be impacted by geo political tensions rocking the oil markets and bringing in a heightened volatility in oil prices.The refining sector is especially expected to pass through a tough time primarily because of the slowdown in growth all around,including scaling down of growth rates in emerging economies from Asia essentially due to the increased inter-connectivity of the global business.