Pure gold: IndianOil celebrates its 50 years as a true milestone company in India
New Delhi   26-Jul-2009
New caller tunes for all employees of IndianOil have been introduced for three months (July to September), amongst a host of other celebrations, to mark the company's Golden Jubilee celebrations. "It is a big achievement for any company to cross 50 years, and we have begun celebrating this milestone in all our spheres of activity," says Mr. Sarthak Behuria, CMD, IndianOil. IndianOil was born of the vision of India's first Prime Minister, Pandit Jawaharlal Nehru, to pursue a policy of self-sufficiency in the petroleum sector as a strategic requirement of a free nation. Indian Refineries Ltd. was established in August 1958, under 100 per cent government ownership, to set up refineries and lay petroleum pipelines. Subsequently, the Indian Oil Company Ltd. (also 100 per cent government-owned) was formed on 30 June 1959 to market petroleum products across the country. It was entrusted with the task of reaching petroleum products to every nook and corner of India. On 1 September 1964 Indian Refineries Ltd was merged with Indian Oil Company and was renamed Indian Oil Corporation, as it is known today. Since then, the integrated refining and marketing entity has grown into the country's largest commercial enterprise with a sales turnover of Rs 2,85,337 crore in 2008-09. It has not been an easy 50 years for the petroleum behemoth. The Indian petroleum market at that time was ruled by multinationals like Burmah Shell, Esso Eastern Inc., Caltex (India) Ltd.,Indo-Burmah Petroleum Co. Ltd. and Assam Oil Company Ltd. IndianOil's first and foremost challenge was to assert itself in the face of stiff competition from these well-entrenched transnational oil companies operating in India. Yet, by 1969, IndianOil was handling more than 50 per cent of the total petroleum consumption of the nation, and claimed a market share of 64.2 per cent by 1974. Fate favoured IndianOil. Not finding conditions in India favourable market, the multinationals left the country in the 1970s, IndianOil emerged as a monopoly in the refining and marketing of oil products. Interestingly, even though the worst periods when virtually every item was controlled or rationed, petroleum and diesel products were always freely available across the country. Starting from a meagre refining capacity of 0.75 million metric tonnes per annum (mmtpa) with its first refinery at Guwahati in 1962, IndianOil has grown into the flagship petroleum company. The post-independence era witnessed rapid industrialisation leading to an increased demand for petroleum products. With the stepping up of indigenous crude production, there was a need to create additional refining capacity. One after another, IndianOil's refineries came into being at Barauni, Gujarat, Haldia and Mathura. The refinery at Digboi is perhaps one of the oldest working refineries in the world. Over the years, the business environment has changed. In spite of the partial deregulation of oil sector and competition from private players, IndianOil has maintained its position as India's flagship national oil company, with a 48.84 per cent market share. Today, IndianOil is India's largest commercial enterprise, and the 18th largest petroleum company in the world. It is currently the highest-ranked Indian company in the Fortune Global 500 listing of the world's largest corporates. The crowning glory in its Golden Jubilee Year (1959-2009), is that IndianOil has moved up 11 places, in the just-released <i>Fortune Global 500 list</i> by sales for the year 2009. Placed at 105, it leads the pack with seven Indian companies following in the listing. It owns and operates 10 of India's 20 refineries, with a combined refining throughput of 47.40 mmt, which constitutes 40.43 per cent of the total refining capacity in the country. Its wide network of cross-country pipelines of 9,273 km crude/product pipeline as also its distribution outlets all over the country have been a major strength. "Today IndianOil is proud of its 10,000 km cross-country pipeline network, a world-class research and development centre hailed as Asia's finest and a countrywide marketing network that serves the remotest corners of the country," says Mr. Murli Deora, Minister of Petroleum and Natural Gas. With 34,029 marketing touch points, the company has unparalleled infrastructure in the industry, IndianOil has a network of about 35,000 sales points across the country. This includes over 18,000 petrol and diesel stations and specially formatted <i>'Kisan Seva Kendras'</i>, meeting the diverse needs of the rural populace. And while Reliance and Essar have built up significant refining capacities they do not have any significant marketing strength within the country. IndianOil's clean and convenient Indane cooking gas reaches the doorsteps of over 53 million households in nearly 2,700 markets. Its aviation fuelling service has over 62 per cent of the market share, catering to the Indian Air Force and domestic and international passengers. <b>Proving its mettle</b> IndianOil's R&D centre, which was established in 1972, has now emerged as a world-class institution. Besides pioneering work in lubricants formulation, refinery processes, pipelines and alternative fuels, the centre is also the nodal agency of the Indian hydrocarbon sector for experimenting with hydrogen fuel as a possible long term oil substitute. So far over 200 patents have been registered (12 in 2008) out of which 50 are for international patents. Also, it has developed 2,486 lubricant formulations (186 in 2008) till now. In the past five decades, IndianOil has proved its mettle in war and peace and during natural calamities. Beginning with the 1965 war, IndianOil has maintained the supply of vital petroleum products to the armed forces. Besides this , its bulk consumer businesses include a dominant share in railways, state transport undertakings, industrial, agricultural, Paradip-Haldia crude oil pipeline commissioned with single point mooring and the Mundra-Panipat crude oil pipeline augmented from 6 to 9 mmtpa. aviation and the marine sectors. "Whether it is a dominant share in national refining capacity, an extensive pipeline network, cutting-edge R&D or accounting for nearly half of India's petroleum consumption; IndianOil has more than met its mandate of achieving self-sufficiency in downstream operations for India. With several initiatives on the anvil as part of its ambitious plans for expansion across the hydrocarbon value chain, IndianOil is poised to grow and expand even faster in the years to come," says Mr. Jitin Prasada, Minister of State for Petroleum and Natural Gas. To emerge as a major player in Asia, the company has envisaged investments of Rs 30,000 crore in petrochemicals alone by the year 2011-12. With overseas subsidiaries already in operation in Sri Lanka, Mauritius and the UAE, IndianOil is now scouting for new opportunities in other energy markets of Asia and Africa. "For IndianOil, it is its 34,000-strong team of people who strive to meet the energy demands of the nation which is its most valued asset. Indian Oil people have always been at the forefront in adapting to the changing environment and enhancing the organization's capabilities in providing innovative and value-added offerings to the customers," says Mr. Behuria. <b>Milestones</b> <font color= "#650000"><b>1958:</b></font> Indian Refineries Limited established on 22 August with Feroz Gandhi as part-time Chairman. <font color= "#650000"><b>1959:</b></font> Indian Oil Company Limited incorporated on 30 June with Mr. S. Nijaltngappa as part-time Chairman. <font color= "#650000"><b>1960:</b></font> Agreement signed with Soyuznef-teexport of USSR for supply of kerosene and diesel. First import parcel of 11,390 tonnes of diesel from Russia received at Pir Pau Jetty in Bombay on 17 August on mv Uzhgorod and stored at Antop Hill installation taken over from the defence services. First major coastal terminal commissioned at Kandla and first petrol/diesel station (retail outlet) commissioned at Anjar near Kandla in Gujarat. <font color= "#650000"><b>1962:</b></font> Guwahati refinery inaugurated by Pandit Jawaharlal Nehru and construction of Barauni refinery commenced. <font color= "#650000"><b>1970:</b></font> 60 per cent majority shares of Indo-Burma Petroleum Cooperation Limited acquired from Steel Brothers and Co. UK <font color= "#650000"><b>1971:</b></font> Fuel supply lines maintained during the Indo-Pak war; Reservation in retail outlet dealerships extended to war widows, disabled defence services personnel, freedom fighters for the first time after the war. <font color= "#650000"><b>1975:</b></font> Introduction of multipurpose distribution centres for the convenience of rural customers. The world's highest altitude retail outlet commissioned in Leh, Ladakh. <font color= "#650000"><b>1995:</b></font> Listing of equity shares on Bombay Stock Exchange. <font color= "#650000"><b>1998:</b></font> Phase wise dismantling of the administered pricing mechanism (apm) begins, refining sector out of apm ambit w.e.f. 1 April 1, 1998. <font color= "#650000"><b>1999:</b></font> Government disinvests 9.11 per cent of the total equity in favour of ONGC. <font color= "#650000"><b>2000:</b></font> The turnover of 1999-2000 crossed Rs l ,00,000 crore - first corporate in India to do so. <font color= "#650000"><b>2001:</b></font> Digboi refinery completed 100 years of operation. <font color= "#650000"><b>2003:</b></font> Casohol, 5 per cent ethanol-blended petrol introduced in select states. <font color= "#650000"><b>2005:</b></font> Exploration and production sharing agreement signed with National Oil Corporation of Libya for a block in the Sirte basin of Libya. <font color= "#650000"><b>2007:</b></font> The turnover of 2006-07 crossed Rs 2,00,000 crore and Panipat refinery's capacity doubled from 6 mmtpa to 12 MMTPA.