A Report on Natural Gas

INTRODUCTION

Natural gas (also called fossil gas) is a naturally occurring hydrocarbon gas mixture consisting
primarily of methane, but commonly including varying amounts of other higher alkanes, and
sometimes a small percentage of carbon dioxide, nitrogen, hydrogen sulfide, or helium. It is
formed when layers of decomposing plant and animal matter are exposed to intense heat and
pressure under the surface of the Earth over millions of years. The energy that the plants
originally obtained from the sun is stored in the form of chemical bonds in the gas.

Natural gas is a non-renewable hydrocarbon used as a source of energy for heating, cooking, and
electricity generation. It is also used as a fuel for vehicles and as a chemical feedstock in the
manufacture of plastics and other commercially important organic chemicals.

Natural gas is a major cause of climate change, both in itself when leaked and also due to the
carbon dioxide it produces when burned.

Natural gas is found in deep underground rock formations or associated with other hydrocarbon
reservoirs in coal beds and as methane clathrates. Petroleum is another resource and fossil fuel
found in close proximity to and with natural gas. Most natural gas was created over time by two
mechanisms: biogenic and thermogenic. Biogenic gas is created by methanogenic organisms
in marshes, bogs, landfills, and shallow sediments. Deeper in the earth, at greater temperature
and pressure, thermogenic gas is created from buried organic material.

In petroleum production gas is sometimes burned as flare gas. Before natural gas can be used as
a fuel, most, but not all, must be processed to remove impurities, including water, to meet the
specifications of marketable natural gas. The by-products of this processing
include: ethane, propane, butanes, pentanes, and higher molecular weight hydrocarbons,
hydrogen sulfide (which may be converted into pure sulfur), carbon dioxide, water vapor, and
sometimes helium and nitrogen.
OBJECTIVES OF THE STUDY

 To examine the trends in the production of crude oil and natural gas in India
 To know about the marketing strategy adopted by Indian Oil Corporation Limited
 To learn about the different vehicles used by Indian Oil for Marketing.
 To learn how successful has Indian Oil been in implementing their marketing strategy.
 To learn how successful has Indian Oil been in accomplishing their marketing goals.

STATEMENT OF THE PROBLEM

The development of the petroleum refineries in both public and private sectors in India has
ample economic benefits to the entire country. Even though, it is a capital-intensive industry, it
generates employment opportunities at the upstream and downstream industries. On account of
the value of the petroleum products both the central and state exchequers are having the
opportunities to increase their income from these activities. Over and above this, industry helps
infrastructural developments too. Therefore, a study relating to the growth potential of the
petroleum industry in India will high light the importance of this industry.

SCOPE OF THE STUDY

The research study presumes the selection of Indian Oil Corporation Limited for the study
purpose. The oil and gas sector in India are largely in the public sector. Though the Government
of India has opened the oil and gas industry to private participation since the announcement of
New Industrial Policy on July 24 1991, the private investment in this area has not come up as
expected, presumably due to enormous capital requirement, environmental constrains and long-
gestation period, etc.

At present, there are more than 12 companies in the public sector engaged mainly in producing,
refining and selling oil and gas products in India. The oil and gas companies in India have been
organized as Government Companies U/S 617 of the Companies Act 1956. Some of the
companies are included in the list of Global Fortune-500 Companies List-2011 because of their
capacity outlay, turnover and profit, etc. Even after opening the oil and gas sector as private
sector companies the Government of India has decided to retain the public sector oil and gas
companies under its control in the larger national interest.

COMPANY PROFILE

In order to ensure greater efficiency and smooth working in the petroleum sector, Government of
India decided to merge the refineries and the distribution activities. The Indian Refineries and
Indian Oil Company were combined to form the giant Indian Oil Corporation (IOCL) on 1st
September 1964, with its registered office at Bombay. In 1967, the pipeline division of the
corporation was merged with the refinery’s division. Research & Development of Indian Oil
Came into Existence in 1972. In October 1981 Assam Oil Company was nationalized and has
been amalgamated with IOCL as Assam Oil Division (AOD).

50 Golden Years in the Service of the Nation

India’s flagship national oil company and downstream petroleum major, Indian Oil Corporation
Ltd. (Indian Oil) is celebrating its Golden Jubilee during 30th June - 1st September 2009.
Established as an oil marketing entity on 30th June 1959, Indian Oil Company Ltd. was renamed
Indian Oil Corporation Ltd. on 1st September 1964 following the merger of Indian Refineries
Ltd. (established in August 1958) with it? The integrated refining & marketing entity has since
grown into the country’s largest commercial enterprise and India’s No.1 Company in the
prestigious Fortune Global 500· listing of the world’s largest corporate, currently at the 116th
position. It is also the 18th largest petroleum company in the world.

Indian Oil Today

From a fledgling company with a net worth of just Rs. 45.18 crore and sales of 1.38 million tons
valued at Rs. 78 crores in the year 1965, Indian Oil has since grown over 3000 times with a sales
turnover of Rs. 285,337 crores, the highest²ever for an Indian company, and a net profit of Rs.
2,950 crores for 2008-09. And in 2010-11 sales turnover,328,744crore and net profit is 7445
crores ($ 1,633 million) for the year 2010-11.

Set up with the mandate of achieving self-sufficiency in refining and marketing operations for a
nascent nation set on the path of economic growth and prosperity, Indian Oil today accounts for
nearly half of India’s petroleum consumption, reaching precious petroleum products to millions
of people every day through a countrywide network of around 35,000 sales points. They are
backed for supplies by 167 bulk storage terminals and depots, 101 aviation fuel stations and 89
Indane LPG bottling plants. For the year 2008-09, Indian Oil sold 62.6 million tons of petroleum
products, including 1.7 million tons of natural gas.

The Indian Oil Group of companies owns and operates 10 of India’s 20 refineries with a
combined capacity of over 60 MMTPA, accounting for 34% of national refining capacity, after
excluding EOU refineries. Projects under execution will take the capacity further to 80 MMTPA
by the year 2011-12. Besides setting up state-of-the-art facilities to raise product quality to global
standards, Indian Oil has undertaken chartering of ships for crude oil imports on its own and is
expanding its basket of crudes and upgrading its refineries to handle a wider array of crudes,
including high- Sulphur types.

As a pioneer in lying of cross-country crude oil and product pipelines, the Corporation crossed
10,000 km in pipeline length and about 70 MMTPA in throughput capacity with the
commissioning of the 330-km Para dip-Haldia crude oil pipeline recently. Plans are under
execution to add about 4,000 km more by the year 2012. In-house capabilities have enabled the
Corporation undertake all pipeline projects on its own and even offer turnkey expertise in
techno-economic feasibility studies, design and detailed engineering, project execution,
operations, maintenance and consultancy services.

Synergy through Subsidiaries and Joint Ventures:

Indian Oil Corporation believes in creating synergies through acquiring subsidiaries both
horizontally and vertically. It has also entered in a number of Joint Ventures, which have turned
to be highly profitable.

A wholly-owned subsidiary, Indian Oil Technologies Ltd., is commercializing the innovations

and technologies developed by Indian Oil‟s R&D Centre, across the globe.

The merger of the wholly owned subsidiary, Indian Oil Blending Ltd., is complete. Merger of
IBP Co. Ltd., the marketing subsidiary, with the parent company have completed recently.
Indian Oil is currently metamorphosing from a pure sectoral company with dominance in
downstream in India to a vertically integrated, transnational energy behemoth. The Corporation
is implementing a master plan to emerge as a major player in petrochemicals by integrating its
core refining business with petrochemical activities, besides making large investments in E&P
and import/marketing ventures for oil and gas in India and abroad. With a view to this Indian Oil
is strengthening its existing overseas marketing ventures and simultaneously scouting new
opportunities for marketing and export of petroleum products to new energy markets in Asia and
Africa.

Mission of Indian Oil Corporation Limited:

 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.
 To maximize creation of wealth, value and satisfaction for the shareholders.
 To attain leadership in developing, adopting and assimilating state of the art technology
for competitive advantage.
 To provide technology and services through sustained research and development.
 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 ecology and heritage
through a strong environment conscience.

Objectives of Indian Oil Corporation Ltd:

 To serve the national interest in the oil and related sector in accordance and consistent
with government policies.
 To earn a reasonable rate off interest on investment.
 To work towards the achievement off self–sufficiency in the field off oil refining by
setting up adequate capacity and to build up expertise in laying off crude oil and
petroleum product pipelines.
  To create a strong research and development base in the field off oil refining and
stimulate the development of new product formulations with a view to minimize,
eliminate their imports and to have next generation products.
 To maximize utilization off existing facilities in order to improve efficiency and increase
productivity.
 To optimize utilization of its refining capacity and to maximize distillate yield from
refining off crude oil to minimize foreign exchange outgo.
 To minimize fuel consumption in refineries and stock losses in operations to affect
energy conservation.
 To further enhance distribution network for providing assured service to customers
throughout the country through expansion of reseller network as per marketing plan/
government approval.
 To avail of all viable opportunities, both national and global, arising out of liberalization
policies being pursued by the Government of India.

Achievements of Indian Oil:

 Indian Oil Corporation has completed 50 years in the business of Refining and Marketing
of Petroleum Products in India in 2009.
 Indian Oil Corporation Ltd. is the largest commercial enterprise in India and the only
Indian name in the Fortune magazine’s Global 500 listing of the world’s largest
corporations with a ranking of 105 based on fiscal 2008 performance.
 Indian Oil received coveted World Petroleum Congress Excellence Award 2008 at
Madrid, Spain, in the technical development category for its path breaking R&D work in
hydro-processing technology for Green Fuels.
RESEARCH METHODOLOGY

Research methodology is a process of systematically solve the research problems. It guides the
researcher to do the research scientifically. It contains of different steps that are generally adopted
by a researcher to study his research problem along with the logic behind them. Data can be used
as information only when a proper methodology is adopted. The research methodology includes
the logic behind the methods we use in the content of our research study.

Research Design: -

Research design is the method, which help the researcher to get the required information
from the respondents within the specific time limit,

Type of Research: -

The type of research was descriptive

Nature of Research: -

The nature of research was quantitative.

Type of questions: -

Standard and limited Probing

Type of analysis: -

Statistical

No of Respondents

100 Employees of Indian Oil Corporation Ltd. selected for research.

Method to classify data

Primary Data

The primary source of data will be scheduled questionnaire

Secondary Data
The secondary source included catalogue, annual reports of the company, magazines, employee’s
handbook, magazines and journals

Method you will use to present the data

The data will be analyzed through statistical methods. Simplex percentage analysis will be used
for analyzing the collected data.

Simplex Percentage Analysis:

Percentage analysis is the method adopted to represent raw streams of data as a percentage (a part
in100‐ percent) for better understanding of collected data.

Graphs:
Graphical representations will be used to show the results in simple form. The graphs will be
prepared on the basis of data that will be received from the percentage analysis.
REFERENCES:
• Sekhar, Y.C, First Edition (2005), “Indian Oil Industry-Transition to Deregulation”. The ICFAI
University Press.

• Muthukumar, R. (2008), “Case Studies on Oil Industry”. The ICFAI University Press.

• Pandey, R.S., Petroleum secretary, Government of India, (2009), “Oil and Gas-Meeting future
energy needs”. The Hindu Survey of Indian Industry.

• Oil & Gas Sector Survey 2009, 2010 & 2011, Ministry of Petroleum and Natural Gas,
Government of India.

• Ministry of New and Renewable Energy, Renewable Energy for Urban, Industrial &
Commercial Applications, Government of India.

• Official websites of ONGC, IOCL, OIL, BPCL, HPCL and GAIL.

CHAPTERIZATION SCHEME

This research project consists of five chapters, excluding reference and appendices list. The
chapters are presented below.

CHAPTER 1 Introduction

CHAPTER 2 Review of Literature

CHAPTER 3 Research Methodology

CHAPTER 4 Data Analysis & Interpretation

CHAPTER 5 Findings, Suggestions and Conclusion

Bibliography

Annexure