Indian Oil Corporation Ltd.

An Internship Report

Giselle Charisma Sequeira SSN: 889-94-0978

In Partial Fulfillment of the Master s Program in Business Administration, Ohio University, Athens, USA

OHIO University Christ College Academy for Management Education Christ College Campus, Hosur Road, Bangalore-29

April 2007

ACKNOWLEDGEMENTS

Completing a task is never a solo effort. It is often the result of invaluable contributions by a number of individuals in a direct or indirect manner, which helps in the shaping and achievement of success. Firstly, I would like to express my sincere gratitude to Mr. Nilesh Nekaljay, Manager (T&D) for granting me the opportunity to undertake an internship at the Indian Oil Corporation Ltd. (Marketing Division, Mumbai). I am extremely grateful to my project guide, Mr. Vigyan Kumar, Manager (Retail Sale) for his encouragement and patience throughout the duration of this project. Without his vision, guidance and support this report would not have materialized. I would also like to deeply thank the various people at IndianOil who, during the period of my internship, provided me with useful and helpful assistance. Without their care and consideration this report would not have been completed. I am thankful to the Internship Coordinators at Ohio University Christ College, Dr. Amalendu Jyotishi and Mr. Girish M. for their invaluable support and guidance during the internship period.

Last but not the least, I would like to thank my parents for their inestimable love, support and encouragement which gave me the confidence and determination to carry out this project.

EXECUTIVE SUMMARY

The deregulation of the Indian Petroleum sector in 1999 brought about a major change in the way Petroleum companies conduct their business. This sector has been exposed to new market forces and competition has grown enormously. With the entry of private players, the consumers demands have increased. The existing players have thus come to recognize the need to evolve at a quick pace and to be market driven, service driven and most importantly relationship driven. Loyalty programs is the new trend which is catching up at a relatively fast pace in India.

Indian Oil Corporation Limited (IOCL) is running its own loyalty based fleet card program known as the XTRAPOWER Fleet Card Program. Launched in March 2004, this program has emerged as the largest and most wide-ranging fleet card program in the country and has crossed the mark of one million customers. In spite of this program s huge success and active promotional schemes being undertaken by IOCL, the current customers are not using the cards to the full extent. The main objective of my project at IOCL was to, thus, study the XTRAPOWER Fleet Card Program Proposition and to recommend steps to be taken to enhance card usage. This project report includes the methodology of the research undertaken, findings and solutions to the current problems being faced by customers.

TABLE OF CONTENTS

Particulars Page No.

The Oil Industry in India
y

5 ..6 7 ...8 9 .10 .... 14 .16 .22 27 .. 28 29 .31 ..32 ..37 .38 .40

Oil Industry Structure In India

Indian Oil Corporation Limited

y y y y y y y

Vision, Mission & Values Organization Structure Business of IndianOil IndianOil Products IndianOil Brands Group of Companies Financial Analysis

Project Findings
y y

Petrol Retail & Consumer Loyalty In India XTRAPOWER Fleet Card Program

1. Program Details 2. Additional Information on Fleet Tracking 3. Additional Information on Reward Program 4. Additional Information on Insurance Cover

y y

Objective & Scope of the Study Market Research Methodology

.42 42 42 .43 ..44 46 ..46 ....47

1. Defining the Research Problem 2. Selecting & Establishing the Research Design 3. Collecting & Analyzing Data 4. Statistical Inference & Findings
y y y

Total Customers Contacted [Diagram] Problems Faced by Inactive Customers [Diagram] Problems Faced by Active Customers (Customers Temporarily Inactive During Oct-Nov, 2006) [Diagram] . ..

.47 48

Reasons Why Customers are Not using the Cards

Branches of Delhi Assam Roadways Corp. Ltd. (DARCL) Contacted and Reasons for Cards Not Being Used 50 ..52 ..53 .. ..56 ..58 .. .. .. ..59 ..59 ..61

y y y

SWOT Analysis Recommendations

..

Conclusion & Future Line of Work

References Appendix
y y

Appendix 1 Appendix 2

THE OIL & GAS INDUSTRY IN INDIA

India is the sixth largest consumer of oil. There exists a huge gap between the demand and supply of oil and gas in India. The country imports more than 70% of its crude oil requirements. In the year 2005, oil and gas accounted for 38% of primary energy consumption in India, followed by coal at 55%. The oil and gas industry is broadly classified into Upstream, Midstream and Downstream segments. Midstream operations are usually included in the downstream category. The Indian Oil Industry comprises of 18 refineries with a total refining capacity of 132.47 MMTPA as of April 1, 2006. During the same year, the consumption of crude oil and that of natural gas was estimated at 130.11 MMT and 31.02 BCM respectively. The production and consumption of petroleum products was estimated at 119.75 MMTPA and 111.92 MMT respectively. India has recently emerged as net exporter of petroleum products.

UPSTREAM SECTOR:
The upstream sector, also known as the exploration and production (E & P) sector, is concerned with the search for potential underground or underwater oil and gas fields, the drilling of exploratory wells, and subsequently operating in the wells that recover and bring the crude oil and/or raw natural gas to the surface.

MIDSTREAM SECTOR:

The midstream sector processes, stores, markets and transports commodities such as crude oil, natural gas and natural gas liquids (NGLs) such as ethane, propane and butane.

DOWNSTREAM SECTOR:
The downstream sector includes oil refineries, petrochemical plants, petroleum product distribution, retail outlets and natural gas distribution companies. The downstream sector reaches thousands of products such as gasoline, diesel, jet fuel, heating oil, asphalt, lubricants, synthetic rubber, plastics, fertilizers, antifreeze, pesticides, pharmaceuticals, natural gas and propane to consumers.

OIL & GAS INDUSTRY STRUCTURE IN INDIA

Oil and Natural Gas Corporation Ltd. (ONGC) UPSTREAM Oil India Ltd.

Indian Oil Corporation Ltd. (IOCL)

Reliance Industries Ltd. (RIL)

DOWNSTREAM Bharat Petroleum Corporation Ltd. (BPCL)

Hindustan Petroleum Corporation Ltd. (HPCL)

Mangalore Refinery & Petrochemicals Ltd. (MRPL)

GAS TRANSPORT & DISTRIBUTION Gas Authority of India Ltd. (GAIL)

INDIAN OIL CORPORATION LTD.

Company profile:
Formed in 1964 through the merger of Indian Oil Company Ltd. (Estd. 1959) and Indian Refineries Ltd. (Estd. 1958), Indian Oil Corporation Ltd. (IndianOil) is presently India s largest commercial enterprise with a sales turnover of Rs. 1,83,204 crore (US$ 41 billion) and profits of Rs. 4,915 crore (US$ 1.10 billion) in the fiscal year 2005. IndianOil also enjoys the status of being the highest ranked Indian company in the prestigious Fortune Global 500 listing, having moved up 17 places to the 153rd position this year based on the performance of the fiscal year 2005. In addition to being the 21st largest petroleum company in the world, it also tops the list of the petroleum trading companies among the National Oil Companies in the Asia-Pacific region.

IndianOil, along with its subsidiaries, accounts for a market share of 47% in petroleum products, 41% refining capacity and a petroleum product capacity of 51% in India. In the year 2005-06, the IndianOil Group sold 54.6 million tonnes through exports. The IndianOil Group of companies presently owns and operates 10 out of 18 refineries with a combined refining capacity of 54.20 million tonnes per annum (1.1 million barrels per day). These include two refineries of the subsidiary Chennai Petroleum Corporation Ltd. (CPCL) and one of the Bongaigaon Refinery & Petrochemicals Ltd. (BRPL). The Corporation s cross-country crude oil and product pipeline network spanning over 9,000 km meets the vital energy needs of the country.

VISION, MISSION & VALUES

Vision
A major diversified, transnational, integrated energy company, with national leadership and a strong environment conscience, playing a national role in oil security& public distribution.

Mission
y

To achieve international standards of excellence in all aspects of energy and diversified business with focus on customer delight through value of products and services, and cost reduction.

y y

To maximize creation of wealth, value and satisfaction for the stakeholders. To attain leadership in developing, adopting and assimilating state-of- the-art technology for competitive advantage.

y y

To provide technology and services through sustained Research and Development. To foster a culture of participation and innovation for employee growth and contribution.

To cultivate high standards of business ethics and Total Quality Management for a strong corporate identity and brand equity.

To help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience.

Values
IndianOil nurture a set of core values, which are:
y y y y

Care Innovation Passion Trust

ORGANIZATION STRUCTURE

The organization structure of the Indian Oil Corporation Ltd. is divided on the basis of the company s functions comprising of pipelines, refineries, research & development, marketing, human resource, finance, and planning and business. Each division is headed by a director with general managers and executive directors working under him.

On the basis of my observations, I can state that the organization structure of IndianOil is fairly flat with few levels of intervening management between staff and managers. Rather than being closely supervised by many layers of management, workers are more directly involved in the decision making process concerned with the company. There are many individual units within the organization which enables the existence of a horizontal organization structure. Employee involvement is thus encouraged through a decentralized decision making process.

BUSINESS OF INDIANOIL

y y y y y y y

Refining Pipelines Marketing Research & Development Petrochemicals Gas Exploration & Production

Refineries:
IndianOil presently owns and operates 10 out of India s 18 refineries with a current combined capacity of 54.20 million tonnes per annum (1.1 million tonnes per day). During the year 200506 IndianOil refineries recorded a crude oil throughput of 38.52 million tonnes. The seven refineries together achieved a capacity utilization of 93.1%, higher than the Asia-Pacific average of 91.5% which also happens to be the highest in the last six years. The fiscal year 2005 also witnessed IndianOil becoming the first public sector organization in the country to have its own ship Chartering Cell, which is functioning under the Refineries Division. All refinery units are accredited with ISO 9002 and ISO 14001 certifications. The refineries are as follows:
y y y y

Guwahati Refinery (Assam) Digboi Refinery (Upper Assam) Barauni Refinery (Near Patna, Bihar) Haldia Refinery (Near Kolkata, West Bengal)

y y y

Mathura Refinery (Near Delhi) Panipat Refinery (Near Delhi) Koyali Refinery

y y

BRPL (Bongaigaon Refinery & Petrochemicals Ltd.) CPCL (Chennai Petroleum Corporation Ltd.)

Pipelines:
IndianOil owns and operates a pipeline network of 9,024 km, the largest network of crude oil and product pipelines in India. This widespread network of pipelines achieved the highest ever throughput of 45.35 million metric tonnes during the year 2005-06. The major pipelines of IndianOil are:
y y y y y y y

Salaya Mathura Pipeline Kandla-Bhatinda Pipeline Mathura-Jalandhar Pipeline Guwahati-Siliguri Pipeline Barauni-Kanpur Pipeline Haldia-Barauni Pipeline Koyali-Roorkee Pipeline

Marketing:

IndianOil has a wide spread marketing network with over 23,000 sales points. These include petrol/diesel stations, consumer outlets, lube distributors, SERVO shops, SKO/LDO dealers, LPG distributors. The regional offices are in charge of the North, East, West and Southern Regions of India, and Assam Division supplements operations in the North-East. State level, Divisional and Indane Area offices have also been set up in each region. IndianOil commands a dominant market share in the petroleum retail segment in India and has over 10,144 petrol and diesel stations spread throughout the country along with an additional 3,272 of the subsidiary company, IBP Co. Ltd.

Research & Development:

Operating the first R&D Centre to get ISO 9002 and 14001 Certifications, IndianOil boasts of having the best Research & Development Centre in Asia which is also one of the finest in the world. It has been involved in world-class petroleum research and is carrying out extensive work on refinery processes and transportation of pipelines. IndianOil s R&D Centre developed 85 cost-effective formulations during the year, out of which 74 were commercialized. Marking a new milestone in the march towards a Hydrogen-fuelled

economy, the R&D Centre commissioned IndianOil s first Hydrogen-CNG (H-CNG) dispensing station in October 2005.

Petrochemicals:
IndianOil has been continuously striving for growth by incorporating its core business with opportunities available in the petrochemicals sector. The company is currently executing a plan to achieve Rs. 30,000 crore (US$ 6.8 billion) investment by the year 2011-12. In order to

implement this plan, a world-scale Linear Alkyl benzene (LAB) plant at the Gujarat Refinery and an integrated Paraxylene/Purified Terephthalic Acid (PX/PTA) plant at Panipat are already in operation. A Naphtha Cracker with downstream polymer units, designed to produce 8,00,000 tonnes per annum of Ethylene and 6,00,000 tonnes per annum of Propylene is coming up at Panipat. In order to strengthen its presence in the petrochemicals sector, IndianOil also plans to develop a refinery cum petrochemicals complex at Paradip on the east coast of India.

Gas:
As a step towards expanding its business in the Natural Gas sector, IndianOil has signed an MOU with Iran to implement the import of 1.75 million tonnes of LNG per annum starting from the year 2009 onwards. The corporation is already marketing 1.43 million tonnes per annum. IndianOil has entered into a joint venture with GAIL (India) Ltd. called Green Gas Ltd. in 2005 to distribute city gas. This project initially launched in Agra and Lucknow, is another emerging growth area for IndianOil. Entry in the shipping business is being actively pursued in order to implement the corporation s strategy to participate in the entire gas value chain. IndianOil has also embarked on a pilot project to supply LNG through cryogenic road/rail tankers as the limited gas pipeline infrastructure in the country presents good opportunities in this area.

Exploration & Production (E&P):

Having participated actively in the bidding rounds to increase the indigenous production of Oil, IndianOil, under the New Exploration Licensing Policy (NELP) in consortium with other companies has bagged nine blocks in the first three rounds.

The corporation has also obtained participating interest in on-shore blocks in Assam and Arunachal Pradesh. IndianOil has undertaken overseas ventures including two gas blocks in the Sirte basin of Libya, the Farsi exploration block in Iran and onshore farm-in arrangements in Gabon. Opportunities are being explored to acquire a suitable medium-sized E&P company in order to consolidate its upstream portfolio.

INDIANOIL PRODUCTS

Indian Oil Corporation Limited has a number of products which are as follows:

1. Fuels & Feedstock

y y y

Naphtha Light Diesel Oil Furnace Oil/ LSHS/ HHS

2. Lubricants & Greases

y

Automotive Lubricating Oils

y y y y y y y y y y y

Automotive Specialty Oils Railroad Oils Industrial Lubricating Oils Metal Working Oils Agricultural Spray Oils Automotive Greases Railroad Greases Industrial Greases Marine Lubricating Oils Defense Grade Lubes Industrial Specialty Oils

3. Petrochemicals & Specialties

y y y y y

Benzene Calcined Petroleum Coke Hexane Jute Batching Oil Paraffin & Microcrystalline Waxes

4. Liquefied Petroleum Gas

5. Motor Spirit/ Gasoline

6. Superior Kerosene Oil/ KERO

7. High Speed Diesel/ Gas Oil

8. Aviation turbine fuel/ Jet Kero

INDIANOIL BRANDS

1. SERVO 2. Indane LPGas 3. AutoGas 4. IndianOil Aviation Service 5. Premium Fuels-XtraPremium & XtraMile 6. XtraPower 7. XtraRewards 8. Swagat Highway Flagship Retail Outlets 9. XtraCare 10. Kisan Sewa Kendras

1. SERVO:
IndianOil s Global Brand, SERVO is also India s largest selling lubricant brand. The SERVO range of lubricants is available to customers at over 9,000 Retail Outlets and a

countrywide network of SERVO SSLs and SSAs Bazaar traders. This range of lubricants is used in nearly all applications covering automotive, industrial and marine sectors and is approved by major Original Equipment Manufacturers (OEMs) including new generation cars. Having emerged as a Superbrand, Servo has genuine oil tie ups with a wide range of companies like Hyundai, Maruti, Bajaj and Lancer. It is also fast making its mark in overseas markets such as the UAE, Malaysia, Mauritius, Bangladesh, Bahrain, Sri Lanka, Nepal, Yemen, Kenya, Kuwait, Burkina Faso, Reunion Islands and others. Having been developed at IndianOil s world-class R&D Centre at Faridabad, SERVO enjoys a market share of 42% and is sold through over 8,100 IndianOil petrol/diesel stations, over 1,300 SERVO shops and a nationwide network of bazaar traders.

2. Indane LPGas:
IndianOil s Indane LPGas, with a market share of 48% and a network of 4,350 Indane distributors, is widely used in commercial sectors like industries, hotels & restaurants, medical labs, etc. It is used daily in over 40 million homes as cooking fuel. Around 87 bottling plants are spread across the country with a combined bottling capacity of 3.77 MMTPA. Presently, new and improved 5 kg Indane LPGas cylinders are being introduced in rural and hilly regions to implement wider usage by the economically weaker sections.

3. AutoGas:
AutoGas is Liquefied Petroleum Gas (LPG) used as an alternative fuel for the propulsion of road vehicles. It has an excellent safety record both in terms of its storage, transportation and use. Extensive safety tests have led to the conclusion that Autogas is substantially safer than petrol due to its more robust fuel tank having a resistance to impact damage.

AutoGas has been introduced in Hyderabad, Bangalore and Mumbai through a network of 48 stations out of an industry total of 103 Auto LPG Dispensing Stations. This alternative fuel is a good long term business proposition, and IndianOil intends to further expand its marketing in a big way.

4. IndianOil Aviation Service:

IndianOil s Aviation Services, with a 68% market share and a network of 95 Aviation Fuel Stations (AFS), meets the fuel and lubricant needs of domestic and international airlines, Defence Services and private aircraft operators. IndianOil Aviation service is ISO 9002 certified and is not only the largest aviation fuel marketer in the country but is also the most preferred supplier of jet fuel for customers in India and abroad. Besides the domestic airlines, IndianOil Aviation Service serves over 71 International airlines. IndianOil Aviation Service caters to over 90% demand of the Indian Defence Services as well as the sensitive requirements of WIP flights at all airports and at remote helipads across the Indian subcontinent. It not only maintains world-class standards in operations and safety but also conforms to the severe global quality requirements of Aviation fuel storage and handling.

5. Premium Fuels-XtraPremium & XtraMile:

Launched on September 24, 2002, the premium fuels

XtraPremium and XtraMile

(originally IOC Oremium and Diesel Super respectively), mark a new beginning for IndianOil and offer the benefits of convenience and enhanced comfort to its customers.

XtraPremium: India s first 91 octane petrol, XtraPremium is reinforced with

multifunctional additives including Friction Buster . It is available at over 2,000 Retail Outlets all over the country and has the following attributes:
o o o o o

Super Mileage and Pick-up Enhances cleaning of engines Minimizes exhaust emissions Restores peak engine power and acceleration Reduces maintenance cost

XtraMile: IndianOil s new generation High Speed Diesel with world-class additives,
XtraMile is the leader in its market segment. Offered at over 4,400 Retail Outlets nationwide, it has the following features:
o o o o

Extra mileage leading to a Greater Acceleration Faster pick up, resulting in lower Maintenance Costs Longer engine life, thus providing Enhanced Overall Performance Eliminates engine knockings

6. XtraPower:
XtraPower is a Smart Card based Fleet Card Program, which enables the cashless purchase of fuel and lubes from designated retail outlets of IndianOil through flexible prepaid and credit facilities. The fleet card program aimed at solving the needs of fleet

owners/operators offers many benefits which includes an exciting rewards Program, Personal Accident Insurance Cover and Vehicle Tracking Facilities. Launched in March 2004, XtraPower, having crossed the one million mark, has emerged as the largest fleet card program in the country. It has the widest Retail Outlet coverage

with over 4,800 Retail Outlets in its network and has locked in about 22% of the Fleet market share in the retail segment. Any Fleet Owner/Operator, Corporate or Business Entity owning or operating commercial vehicles can sign up for membership of the XtraPower Fleet Card Program at an annual charge of Rs. 100/-. Each fleet owner is issued one Fleet Control Card and VehicleSpecific Fleet Cards for every vehicle enrolled under the program. Backed by IndianOil/s vast infrastructural network as well as service providers through its dedicated site www.iocxtrapower.com, XtraPower provides many facilities to its members through the numerous salient features such as Flexible Pre-paid and Credit options, Card Limits for better control, Web-bases allocation of funds on specific cards, Card-to-Card Fund Transfer, Attractive Reward program, Option for Real Time tracking of vehicles at subsidized cost, interest-free credit with an option for customers to choose from more than one credit partners, discounts on purchase through reward points, redemption of points not only for fuel/lubes but also for a wide range of consumer goods and novelties and Free Personal Accident Insurance Cover for fleet owners, Drivers, Co-drivers and Helpers. The XtraPower Fleet Card Program is thus a solution to every Fleet Owner/Operator s Fleet management Problems.

7. XtraRewards:

The country s first online loyalty card for cash customers, XtraRewards was launched in Bangalore on the 26th of March 2007. XtraRewards is a loyalty program for urban vehicle owners through which the customers can add further value to their purchases by piling up loyalty points. These loyalty points can also be accrued by customers paying through credit and debit. Having been launched in 60 outlets all over Bangalore, this program will be unveiled later in Chennai followed by Hyderabad. In the first phase, 1,250 outlets of IndianOil and IBP will be automated by September at a cost of Rs. 169 crore to be followed by 1,178 outlets at Rs. 163 crore to be implemented by the middle of 2008. IndianOil has launched this reward program with an aim to leverage technology in its retail business in order to provide maximum facilities and benefits to its customers and also to help the

dealers plan and manage inventory, monitor activities of their fore-court and to maintain records for dealing with customer complaints and queries online. The card is backed by Tata Indicom s CDMA based PDSN technology which will act as the communication backbone with HDFC Bank providing Point of Sale Terminals (POST) at the designated IndianOil Retail Outlets.

8. Swagat Highway Flagship Retail Outlets:

The Swagat Retail Outlets have been launched by IndianOil to cater to the high growth areas of National Highways forming a part of the golden Quadrilateral and the NorthSouth, East-West corridors. These Flagship retail outlets are spread across the country and 45 out of the total 111 Swagat retail outlets have already been commissioned with fuel and non-fuel facilities. These retail outlets have been designed to provide customers with fuel/lubes including XtraMile and XtraPremium as well as non-fuel facilities such as

food/rest, communication, healthcare, parking, vehicle care etc. These retail outlets maintain high Q&Q standards through retail outlet site and tank truck automation, third party certification through Bureau Veritas, fortnight sampling through Quality Audit Officers and training through a professional agency.

9. XtraCare:
IndianOil s XtraCare outlets are benchmarked against international standards of Q&Q, housekeeping, maintenance and customer service as certified by the global agency Bureau Veritas. The launch of XtraCare was a result of a series of plans in retail design, product and service upgradation, capability training, automation, loyalty programs and retail site management techniques. The non-fuel services are boosted in the IndiaOil XtraCare plan with a wide range of loyalty programs- XtraPower, more recently XtraRewards and co-branded cards like IndianOil-Citibank credit cards. XtraCare has the most state-of-the-art automation with cutting edge technology including automatic tank level gauges, temperature sensors, density measurement sensors, back-office server with DU controls, automatic bill printing facility, customer database, etc.

IndianOil had recently introduced the Platinum Circle and Gold Circle as a precursor to the XtraCare launch. The Platinum Circle and Gold Circle are exclusive, top of the line clubs for high selling retail outlet dealers and these dealers have emerged as peer leaders and are an integral part of the XtraCare dealer sensitization strategy.

10. Kisan Sewa Kendras:

IndianOil launched Kisan Sewa Kendras for the rural markets as a new growth area in retail business. These outlets offer a variety of products and services besides autofuels and kerosene, thus meeting the diverse needs of the rural population. The Kendras mainly market petroleum fuels, SERVO lubricants, fertilizers and agro inputs like seeds, pesticides, farming equipment; vegetables, stationery and other items. Besides serving the farming community through wide-ranging products, services and facilities, this initiative is also expected to create employment avenues in rural India, which is fast emerging as one of the largest consumer bases, thereby providing attractive returns to the operators.

GROUP OF COMPANIES

The IndianOil Group of Companies comprises of:

1. Lanka IOC Limited (LIOC) 2. IndianOil (Mauritius) Limited. 3. IBP Co. Limited (IBP) 4. Chennai Petroleum Corporation Limited (CPCL) 5. Bongaigaon Refinery and Petrochemicals Limited (BRPL) 6. IndianOil Technologies Limited

1. Lanka IOC Limited (LIOC):

IndianOil s subsidiary in Sri Lanka, Lanka IOC, is the only private oil company other than the state owned Ceylon Petroleum Corporation (CPC) that operates retail petrol/diesel stations within Sri Lanka. IndianOil entered into Sri Lanka with a view to accomplish its objective of becoming a transnational energy major. IndianOil s vast experience in downstream petroleum operations in India creates a healthy and competitive petroleum industry in Sri Lanka which largely benefits the island nation. Lanka IOC Limited has been incorporated mainly to carry out retail marketing of petroleum products, bulk supply to industrial consumers, building and operating storage facilities at the Trincomalee Tank farm, etc. Thus it not only provides energy security and supply stability to Sri Lanka but also upgrades the overall standards of service, particularly in the retail sector of the nation.

Having a market share of 22% and operating over 160 outlets, the company occupies the NO. 2 position among the top 50 listed companies operating in Sri Lanka. Its oil terminal at Trincomalee is Sri Lanka s largest petroleum storage facility. In order to provide world class quality petroleum products and services at the most competitive prices to the Sri Lankan customers, Lanka IOC is making periodic investments to the tune of about INR 450 crore. The retail outlets are being refurbished with state-of-the-art facilities and services at par with international standards. Through

its retail chain, the company is also making available non-fuel facilities like convenience stores, 24-hour ATMs, automatic carwash, food marts, etc. These revamped stations of Lanka IOC have earned praises for the company from all sections of the Sri Lankan society.

2. IndianOil (Mauritius) Limited.

IndianOil is investing US$ 36 million to set up a range of marketing infrastructure in Mauritius through its wholly owned subsidiary IndianOil Mauritius Ltd. (IOML). A stateof-the-art petroleum storage terminal with a capacity of 15,500 metric tonnes has already been commissioned at Mer Rouge to serve as the supply base of petroleum products. This microprocessor-controlled facility with automated product level monitoring, truck loading and computerized access control is the first-of-its-kind in Mauritius. As part of this project, separate import lines for Motor Gasoline (petrol), Gas Oil (Diesel), Jet Fuel (Aviation Fuel) and Fuel Oil have also been laid. IOML has also strengthened the bunkering facilities with new lines to various quays in the port, which is fast emerging as the region s busiest port.

IOML has undertaken means to set up a network of 25 world class petrol stations in Mauritius in order to provide the Mauritian customers with auto fuels and lubricants of international quality. These outlets will be equipped with a range of value-added services including both fuel and non-fuel facilities. IOML has also joined a consortium of four existing oil companies to operate aviation fuel storage, hydrant lines and aircraft fuelling facilities in Mauritius. The consortium will soon build a new Aviation Fuel Terminal at Sir Seewoosagar Ramgoolam International Airport. IndianOil (Mauritius) Ltd. which has attained a 14% market share includes aviation fuelling and bunkering business. Besides the expansion of the retail network, a modern producttesting laboratory is also being set up in Mauritius. It now occupies the 25th place among the top 100 companies in Mauritius in less than 30 months after commencement of operations there.

3. IBP Co. Limited (IBP):

IBP Co. Limited, a subsidiary of IndianOil, is a stand-alone petroleum marketing company with exclusive Business Groups for Petroleum, Explosives and Cryogenics. IBP s marketing efforts are fully focused on improving its sales of petrol and diesel. During the period April Dec 2006 the company achieved a sales volume of 798,559 KL of

petrol and 2,959,018 KL of diesel which resulted in a sales growth of 2.8% in petrol and 6.4% in diesel as compared to same period last year. The revenue from the Business Group (Petroleum) witnessed an increase of 16% during the fiscal year 2005-06.

A pioneer in introducing quality and quantity assurance of all products and services at its retail outlets, IBP is constantly striving to keep up with industry standards by implementing third party audits by reputed agencies. The branding activities are further reinforced through an initiative called Project Horizon in which IBP s 422 select top of the line high-volume outlets are specially branded with an upgraded retail visual identity. Independent agencies are appointed to collect samples from these retail outlets in order to test them on a monthly basis so as to guarantee that products available to customers meet the specified standards. As part of synergy with the parent company IndianOil, the Company has begun marketing branded fuels, viz., XTRAPREMIUM petrol and XTRAMILE diesel at select retail outlets of the Company. IBP has also introduced Indian Oil s XtraCare Fleet Card Program in its network. This program is designed to help transporters in efficient management of their fleets besides rewarding them for their loyalty to the Company.

4. Chennai Petroleum Corporation Limited (CPCL):

A subsidiary of IndianOil, Chennai Petroleum Corporation Limited has two refineries with a combined capacity of 10.5 Million Tonnes Per Annum (MMTPA). The Manali Refinery, with a capacity of 9.5 MMTPA is one of the most complex refineries in India with Fuel, Lube, Wax and Petrochemical feedstock production facilities. CPCL s second refinery is located at Cauvery Basin at Nagapattinam with a capacity of 1.0 MMTPA.

The main products of the company are LPG, Motor Spirit, Superior Kerosene, Aviation Turbine Fuel, High Speed Diesel, Naphtha, Bitumen, Lube Base Stocks, Paraffin Wax, Fuel Oil, Hexane and Petrochemical feed stocks. The crude throughput for the year 2005-06 was highest-ever at 10.36 Million Metric Tonnes (MMT) against the Memorandum of Understanding (MoU) target of 10.2 MMT. The crude processing was 16% higher than the previous year crude throughput of 8.92 MMT. During the year, the Manali Refinery processed 9.68 MMT and Cauvery Basin Refinery (CBR) processed 0.68 MMT. CPCL s MoU target for 2006-07 has been set at 10.4 MMT. The turnover for the year 2005-06 was the highest-ever at Rs.25,409 Crore as against Rs.16,270 Crore in the previous year registering an increase of about 56%. The turnover was higher mainly due to increase in crude throughput and higher prices for the products based on import-parity. CPCL has commissioned many new facilities including a Zero Discharge Plant, Additional 2.5 MGD Capacity Sewage Reclamation Plant and a 5.8 MGD Desalination Project. The new project and initiatives being implemented are Crude Oil Pipeline Project, Resid Upgradation Project, Propylene Recovery Project, Windmill Power Project, Quality upgradation Projects to meet Euro-IV Products and Refinery Capacity augmentation at Manali.

5. Bongaigaon Refinery and Petrochemicals Limited (BRPL):

Bongaigaon Refinery and Petrochemicals Limited (BRPL) has its registered office and production units at Dhaligaon in the Bongaigaon District (now under recently constituted Chirang District) of Assam. The company has its Regional/Marketing offices at Guwahati, Kolkata, Mumbai and Delhi. The core activities of BRPL are refining of crude oil and production of petroleum products. The Company is also engaged in the production and marketing of value-added petrochemical and PSF products. The Company has a Refinery with a rated capacity of 2.35 million tonnes per annum of crude oil, a petrochemicals complex comprising of a

Xylene plant, a Dimethyl Terephthalate (DMT) plant and a Polyester Staple Fibre (PSF) plant. Commercial production of the refinery started in 1979 and other plants were commissioned in stages. The Refinery, which normally processes crude oil available in

Assam, is presently processing crude from Ravva Oil Fields of Krishna Godavari Basin also. The Petrochemicals units consume Naphtha as its major raw material, which is supplied from the Refinery itself. The major products from the refinery are LPG, Unleaded MS, Naphtha, ATF, SKO, HSD, LDO, LSHS, LVFO, RPC & CPC. The major products of the Petrochemicals and PSF units are DMT and PSF. The petroleum products (except RPC & CPC) are marketed by Indian Oil Corporation Ltd. (IOCL). BRPL markets RPC, CPC, Petrochemicals and PSF products through its own marketing network.

6. IndianOil Technologies Limited (ITL):

A wholly owned subsidiary of IndianOil, IndianOil Technologies Limited (ITL) is the technology-marketing arm for the entire range of technologies developed at IndianOil s R&D Centre at Faridabad. This centre, which was set up over three decades ago, has developed several technologies and technical expertise both in refining and the lubricant sector. The R&D activities in refining technology are targeted in the areas of fluid catalytic cracking (FCC), hydro processing, catalysis, residue upgradation, distillation, simulation and modeling, lube processing, crude oil evaluation, process optimization, material failure analysis, remaining life assessment and other technical services. ITL also offers state-of-the-art sludge disposal technology based on biotechnology which is widely accepted in the hydrocarbon sector. ITL also markets the R&D developed lubricants technology, which possesses USPs, established through wide market acceptance. The company imparts training in the areas of FCC, Hydroprocessing,

Catalytic Reforming, Delayed coking, Simulation and Modeling, Bio-remediation, Crude Assay, Material Failure Analysis, Remaining Life Assessment, Analytical techniques, Lubricants & grease etc. covering the basics, plant trouble shooting and technical solutions. In the recent past ITL carried out such trainings in Kuwait, Iran etc. IndianOil has adopted the approach of nurturing human talent as a means to nurturing technology. This approach has worked well as the hydrocarbon sector is both technology and knowledge intensive. As a result, the Corporation is now in a position to offer a bouquet of technologies, products, processes and solutions that are aimed at improving performance and profitability.

FINANCIAL ANALYIS OF INDIANOIL

BALANCE SHEET
As on Assets Gross Block Net Block Capital WIP Investments Inventory Receivables Other Current Assets Balance Sheet Total(BT) 31Mar06 Rs mn 435588.10 249193.90 96453.00 145263.80 242777.90 66994.80 58329.70 %BT 50.71 29.01 11.23 16.91 28.26 7.80 6.79 31Mar05 Rs mn 397824.40 233037.20 87339.10 57049.20 195048.20 56898.70 67608.40 %BT 57.08 33.44 12.53 8.19 27.98 8.16 9.70 31Mar04 Rs mn 363413.60 220018.10 52865.70 55954.30 149510.80 39731.20 121088.60 %BT 56.86 34.42 8.27 8.75 23.39 6.22 18.94

859013.10

100.00

696980.80

100.00

639168.70

100.00

Liabilities Equity Share Capital Reserves Total Debt Creditors and Acceptances Other current liab/prov. Balance Sheet Total(BT)

Rs mn 11680.10

%BT 1.36

Rs mn 11680.10

%BT 1.68

Rs mn 11680.10

%BT 1.83

279731.20 264037.20 128307.40

32.56 30.74 14.94

247061.90 173199.30 112479.20

35.45 24.85 16.14

217613.10 121776.10 79699.60

34.05 19.05 12.47

175257.20

20.40

152560.30

21.89

208399.80

32.60

859013.10

100.00

696980.80

100.00

639168.70

100.00

RATIO ANALYSIS
y

CURRENT RATIO = 1.224

The current ratio being 1.224 implies that for every one rupee of current liabilities, current assets of 1.224 are available to meet them.
y

QUICK RATIO = 0.26

The quick ratio is a measure of the firm s ability to service short term liabilities. A large part of the firm s current assets are tied up in slow paying debts.
y

DEBT EQUITY RATIO = 0.903

Debt equity ratio is the related contribution of creditors and owners of the business in its financing. This ratio thus signifies that a portion of 0.903 of equity and debt of the company is being used to finance its assets.