IndianOiI chief rues uncertainty of investment return
New Delhi   06-Nov-2009
<b>Indian refiners world class in operations, but still relying on foreign technology</b> The Chairman and Managing Director of IndianOil, Mr. Sarthak Behuria, on Thursday rued that the "much needed investment in the oil refining industry is not attaining its required level" because of "uncertainty of (investment returns". Speaking at the 15th Refining Technology Meet organised here by die Centre for High Technology and sponsored by Chennai Petroleum Corporation Ltd, Mr. Behuria observed that the growth of the oil refining sector is determined by efficient supply chain management, improvement hi energy efficiency and additional capacity creation. This additional capacity creation, he said, requires heavy investment "This is where the problem lies," he said, in a guarded reference to the Indian scenario where oil marketing companies are forced to sell their main products at prices below the costs of production. (Later, speaking to journalists, Mr. Behuria said that IndianOil, with a net worth of Rs 47,000 crore, had no problem in raising funds. In fact, all of its projects are on schedule. The naphtha cracker (petrochemicals) project associated with the Panipat refinery has reached the 'precommissioning stage' and would go on stream in a few months. <b>Challenges</b> At the meet, which was held on the theme 'Harvesting Excellence through Knowledge Partnerships: Challenge for the Hydrocarbon sector1, Mr. Behuria noted that the refining capacity in die Asia Pacific region was 25 million barrels a day. The product shortfall in die region is 4 million barrels a day. This demand attracts investment for production facilities or imports info die region, he said. Another challenge faced by die oil refiners is product slate management. Refinery configuration presents a problem because on die one hand naphdia and gasoline are expected to be in surplus while on dies other, diesel, fuel oil and bitumen are expected to be in deficit Mr. P. K. Sinha, Additional Secretary and Financial Advisor, Ministry of Petroleum and Natural Gas, noted that die Indian refining sector faced four major challenges - developing indigenous process technologies, optimization of input and output energy conservation and up-gradation and modernisation of refineries. Observing that Indian refiners were "world class" in operation and maintenance of refineries, Mr Sinha pointed out that they were still dependent on foreign vendors for technology. "It is our responsibility to develop indigenous vendors," he said. Mr. Sinha said that Indian refiners had, yet to perfect die art of optimization, which refers to die refinery configuration keeping in mind die most economic choice of crude and die most profitable output products. "There is a lotto be gained by optimization," he said. Introducing die theme of die meet, Mr. K. K. Acharya, Managing Director, CPCL, noted that 'oil and gas' accounted for 55 per cent of India's energy basket and would continue to dominate die energy scenario, at least until 2030. Mr. Acharya stressed on die need for stepping up R&D for improved profitability.