In spite of the various challenges faced, the Indian Oil Corporation delivered robust performance during 2012-13. It recorded the 
highest turnover of Rs. 4,14,909 crores, up by 11 per cent on year-on-year basis. At the 88th position in the Global ‘Fortune’ 500 list, the Corporation was the only Indian company in the top 100 list. Its net profit rose to Rs. 5,005 crores, registering a growth of 26.6 per cent over the previous year.
Capacity utilization of the refineries at 54.56 MMT exceeded 100 per cent for the sixth consecutive year in a row. Distillate yield improved to a record 78.1 per cent and energy efficiency levels of the refineries recorded the best MBN of 56.3 during the year.
Domestic product sales rose to a level of 68.76 MMT. Additional 1,910 new retail outlets were set up during the year, taking the total number of outlets to 22,372, including over 5,000 Kisan Seva Kendras, the exclusive presentation of the Corporation to the rural markets. Over 1,600 retail outlets were automated, taking the total automated outlets to 4,377. All the outlets in 50 large cities will be automated soon. This again will be another unique offering of the Corporation to assure supply of quality and quantity of products through its outlets.
The Pipelines Division of the company moved the highest-ever throughput of 28.09 MMT of petroleum products, besides 47.40 MMT of crude oil. The petrochemicals segment recorded the highest-ever total sales of 1.9 MMT and established itself as the second largest petrochemicals player in the country. The E&P segment is also shaping well and has earned small but first-ever revenue from its Niobrara Shale assets in the US and the Carabobo asset in Venezuela.
Strategy, initiatives and prospects
International crude oil prices continue to be high and volatile. The Corporation is, however, focussing on minimizing the costs in all areas under its control. Besides improving its ability to source cheaper crude oils, its endeavours resulted in processing 53.3 per cent in 2012-13 over 49.2 per cent in 2011-12 of high sulphur crude and further enlarging the crude basket to include high TAN and heavy crudes with API as low as 210.
Presently, the share of opportunity crudes (heavy & high TAN) is over 13 per cent and includes processing of Maya crude and heavy Rajasthan crude. This is targeted to be doubled to over 26 per cent once the Paradip Refinery is operational. Supply chain optimization is seen as another area for achieving significant cost reductions. The commissioning of integrated crude oil handling facilities at Paradip is one such step. This facility has enabled it to receive the entire crude oil requirement of the Barauni, Haldia and Bongaingaon refineries and the upcoming Paradip refinery through very large crude carriers (VLCCs) and thereby effect significant cost reduction.
Indian Oil Corporation is the established market leader in the downstream petroleum sector of the country. While the market size is set to increase, the competition levels in the market are also expected to rise. As a dominant marketer, while it has a strong network and presence in all markets, it is very seriously mindful of the challenges that may arise with the opening up of markets. It believes it will only make it more efficient and competitive.
Technological solutions such as automation of infrastructure, loyalty building programmes, GPS enabled vehicle tracking systems, modernization of all dispensing units, imparting quality training to dealers and pump attendants, infrastructure rationalization and retail network expansion in key demand and upcoming growth areas will continue to be the focus areas of the Corporation.
LPG is another market, which is set to witness fundamental changes on account of the introduction of capping on subsidized cylinders, Aadhaar-based direct benefit transfer scheme and consumer portability, etc. The direct benefit transfer scheme launched in 20 districts has been a big success, and plans are afoot to extend this to 35 more districts.
Bringing LPG transportation from road movement to pipeline network is another area of cost and product efficiency. Towards this end, the Corporation’s Paradip-Haldia-Durgapur LPG pipeline and Ennore-Trichy-Madurai LPG pipeline projects are under implementation.
A number of customer-friendly initiatives have also been taken by the Indian Oil Corporation in the recent months to make it more transparent and customer-centric with the help of IT-enabled solutions such as transparency portal, web-based Indsoft and emergency service care.
Further, the Corporation places significant thrust on knowledge and research-based growth. The year 2012-13 was quite successful for its R&D Centre with 120 new formulations resulting in 43 OEM approvals, including approval for diesel engine oil, marine oil and transformer oil from reputed customers.
During the year, the R&D Centre commissioned India’s first integrated ligno-cellulosic biomass to an ethanol pilot plant with the technological support from the National Renewable Energy Laboratory of the US. Another breakthrough was achieved with the successful demonstration trial of co-processing of the Jatropha oil along with diesel feed in the DHDT unit of its subsidiary CPCL’s refinery. This process, by using the existing refinery infrastructure, presents much better opportunities as compared to the biodiesel trans-esterification plant options.
IOC has also well realised that sustainability and economic well-being go hand in hand. Its ecological footprints are being constantly assessed, and an eco-footprinting exercise was completed at 48 locations and energy audit carried out in 28 locations.