Oil Refinery In India

Oil Refinery in India

An Industry Overview

 

Table of Contents

INTRODUCTION 2

GLOBAL VIEW ON REFINING 3

INDUSTRY OVERVIEW 4

REGULATORY FRAMEWORK 8

INDUSTRY ANALYSIS 9

FUTURE OUTLOOK 11

REFERENCES 12

"THE ONCE RELIABLE CONSTANTS HAVE BECOME GALLOPING VARIABLES"

-ALVIN TOFFLER

India the world's seventh largest country and the second most populace nation has been a destination of unrealized potential. In the recent past it has seen as stir of economic activity changing the prim face of the nation. The country has had breath taking reforms bringing in foreign direct investments and foreign institutional investments into the country at a brisk pace. Today India is one of the most exciting emerging markets in the world to be in. A new economic freedom is sweeping every industry in the nation. And one the industries to see a plethora of changes is the "Oil Refining Industry". This industry is of paramount importance as oil is of the key energy source on which other industries are dependent on.

What is Oil Refining?

"Oil refining is an industrial process where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, and asphalt base, heating oil, kerosene, and liquefied petroleum gas."

It's black...& it's not gold!

Having to stare at 15% of the world population with only 0.5% of world oil reserves has been giving the Indian ministry sleepless nights. India's consumption is about 5.9% compounded annually. This sector had long been controlled by the public sector companies and is seeing the savor of private players and competitive growth. New discoveries in the Krishna-Godavari basin and in the Mahanadi Basin are already attracting a lot of foreign attention. Global deals in the oil and gas sector stood at a whopping $291 billion. Some of the major developments seen during the year are BPCL's takeover of KRL, Cairn's pre-IPO placement and ONGC-Cairn's Rajasthan oilfield. Considering the international attention these companies are receiving, it seems that oil is on its way of divorcing its Ð''unsustainable burden' status soon.

Global View on Refining

There is global shortage in the refining industry. The supply has not kept pace with the demand. Just for example USA has not had a new refinery since 1976 because of environmental concerns. It is estimated that the world's energy needs will be 50% higher in 2030, with 55-60% of demand from conventional oil and gas. Worldwide, refining capacity has increased by less than 2mbpd while consumption has risen by almost 4mbpd in the past couple of years.

Global Refining Capacity 2007

 

Industry Overview

Indian Oil Industry Structure

India has observed a tremendous growth in this sector, in 1947 after independence India had just one oil refinery at Digboi with a capacity of 0.27 MMTPA and as of 2007 India has 19 active refineries. 17 of which were in the public sector.

Refining Capacity of India 2007

Sl. No. REFINERY MMTPA

PUBLIC SECTOR

1 Indian Oil Corporation Limited, Digboi 0.65

2 Indian Oil Corporation Limited, Guwahati 1

3 Indian Oil Corporation Limited, Koyali 13.7

4 Indian Oil Corporation Limited, Barauni 6

5 Indian Oil Corporation Limited, Haldia 6

6 Indian Oil Corporation Limited, Mathura 8

7 Indian Oil Corporation Limited, Panipat 12

8 Hindustan Petroleum Corporation Limited, Mumbai 5.5

9 Hindustan Petroleum Corporation Limited, Visakh 7.5

10 Bharat Petroleum Corporation Limited, Mumbai 12

11 Kochi Refineries Limited, Kochi 7.5

12 Chennai Petroleum Corporation Limited, Chennai 9.5

13 Chennai Petroleum Corporation Limited, Nagapatinam 1

14 Bongaigaon Refinery & Petrochemicals Limited, Bongaigaon 2.35

15 Numaligarh Refinery Limited, Numaligarh 3

16 Oil & Natural Gas Corporation Limited, Tatipaka 0.078

17 Mangalore Refinery & Petrochemicals Limited, Mangalore 9.69

TOTAL PUBLIC SECTOR 105.468

PRIVATE SECTOR

18 Reliance Petroleum Limited, Jamnagar 33

19 Essar Oil Limited, Jamnagar 10.5

TOTAL PRIVATE SECTOR 43.5

GRAND TOTAL 148.968

Source Indian Ministry of Petroleum and Natural Gas

India as of 2007 had has oil-refining capacity of 2.5 million barrels per day and its consumption is about 2.2 million barrels per day thus it has a surplus of capacity as on date.

 

Product MMT %

Diesel 40.2 35.9%

Petrol 8.6 7.7%

LPG 10.3 9.2%

Kerosene 9.4 8.4%

FO/LSHS 12.7 11.4%

Naphtha 12.2 10.9%

Bitumen, ATF, Lubes, Solvents 18.5 16.5%

111.9 100%

 

Key Indian Players