IndianOil looking to expand global footprint
New Delhi   19-Jan-2010
Country's largest Oil Marketing Company (OMC), IndianOil, with a market value of over Rs 50,000 crore, proposes to give a fillip to its research and development (R&D) initiatives to expand its global footprint, diversify into new businesses and generate extra revenue. IndianOil is utilising the enormous scope to revamp and modernise refineries in African countries to maximise their gasoline and diesel production that can help them to reduce bottom of the barrel and increase their bottom line. African countries offer big opportunity for IndianOil to license its refining technologies and the catalysts developed in-house, Mr. Anand Kumar, Director (R&D), IndianOil, told Financial Chronicle. Africa has 43 refineries. But, only nine of those have a fluid catalytic cracking (FCC) unit. These refineries produce mostly gasoline and fuel oils. FCC is used to convert high-boiling, heavyweight hydrocarbons in crude oil to more valuable gasoline and other products. FCC is one of the most important conversion processes used in refineries. IndianOil is keen to cash in by licensing its novel technologies such as INDMAX, DHDS, product improvement processes, and catalysts, among others. IndianOil's R&D centre has developed a patented technology, INDMAX, to produce liquefied petroleum gas (LPG) from heavy petroleum fractions. Similarly, diesel hydro desulphurisation unit (DHDS) helps in production of extra low-sulphur diesel. Nigerian National Petroleum Corporation (NNPC) has evinced keen interest in IndianOil's R&D capabilities and technologies. "We are trying to establish contacts with a few of the refineries to initiate a formal dialogue in this respect. NNPC has also sought our assistance in setting up a research centre," said Mr. Kumar. Interestingly, India in the recent past has geared up its trade talks with oil and gasrich countries such as Nigeria. This is similar to China's strategy to secure access to petroleum assets in energyrich Africa. A high-level Indian delegation, comprising government officials and top honchos from petroleum companies, are leaving for an African safari this month to seal cooperation agreements between oil firms of both countries. India imports more than 15 per cent of its crude oil from Nigeria. Mr. Kumar said for any technology, licensing and licensing fee and the royalty are two main sources of revenue. However, the quantum depends upon the size of the units. "As an estimate, for licensing one INDMAX unit of 4 mmtpa capacity, the earning from licensing fee is of the order of Rs 27 crore and royalty may be about Rs 1.3 crore every year. Even a very small demonstration INDMAX unit of 0.1 mmtpa installed at Guwahati refinery resulted in value addition of Rs 50 crore every year to the refinery," Mr. Kumar added.