Indian oil corporation limited

Company History:

The Indian Oil Corporation Ltd. operates as the largest company in India in terms of turnover and is the only Indian
company to rank in the Fortune "Global 500" listing. The oil concern is administratively controlled by India's
Ministry of Petroleum and Natural Gas, a government entity that owns just over 90 percent of the firm.

Since 1959, this refining, marketing, and international trading company served the Indian state with the important
task of reducing India's dependence on foreign oil and thus conserving valuable foreign exchange. That changed in
April 2002, however, when the Indian government deregulated its petroleum industry and ended Indian Oil's
monopoly on crude oil imports. The firm owns and operates seven of the 17 refineries in India, controlling nearly 40
percent of the country's refining capacity.

Origins
Indian Oil owes its origins to the Indian government's conflicts with foreign-owned oil companies in the period
immediately following India's independence in 1947. The leaders of the newly independent state found that much of
the country's oil industry was effectively in the hands of a private monopoly led by a combination of British-owned
oil companies Burmah and Shell and U.S. companies Standard-Vacuum and Caltex.
An indigenous Indian industry barely existed. During the 1930s, a small number of Indian oil traders had managed
to trade outside the international cartel. They imported motor spirit, diesel, and kerosene, mainly from the Soviet
Union, at less than world market prices. Supplies were irregular, and they lacked marketing networks that could
effectively compete with the multinationals.
Burmah-Shell entered into price wars against these independents, causing protests in the national press, which
demanded government-set minimum and maximum prices for kerosene--a basic cooking and lighting requirement
for India's people--and motor spirit. No action was taken, but some of the independents managed to survive until
World War II, when they were taken over by the colonial government for wartime purposes.
During the war, the supply of petroleum products in India was regulated by a committee in London. Within India, a
committee under the chairmanship of the general manager of Burmah-Shell and composed of oil company
representatives pooled the supply and worked out a set price. Prices were regulated by the government, and the
government coordinated the supply of oil in accordance with defense policy.

The Indian Oil Industry Evolves: Late 1940s-60s

Wartime rationing lasted until 1950, and a shortage of oil products continued until well after independence. The
government's 1948 Industrial Policy Resolution declared the oil industry to be an area of the economy that should be
reserved for state ownership and control, stipulating that all new units should be government-owned unless
specifically authorized. India remained effectively tied to a colonial supply system, however.
Oil could only be afforded if imported from a country in the sterling area rather than from countries where it had to
be paid for in dollars. In 1949, India asked the oil companies of Britain and the United States to offer advice on a
refinery project to make the country more self-sufficient in oil. The joint technical committee advised against the
project and said it could only be run at a considerable loss.

Between 1954 and 1957, two refineries were built by Burmah-Shell and Standard-Vacuum at Bombay, and another
was built at Vizagapatnam by Caltex. During the same period the companies found themselves in increasing conflict
with the government.
The government came into disagreement with Burmah Oil over the Nahorkatiya oil field shortly after its discovery
in 1953. It refused Burmah the right to refine or market this oil and insisted on joint ownership in crude production.
Burmah then temporarily suspended all exploration activities in India.

Indian Oil Corporation: 1964 to the 1990s

In September 1964, Indian Refineries Ltd. and the Indian Oil Company were merged to form the Indian Oil
Corporation. The government announced that all future refinery partnerships would be required to sell their products
through Indian Oil.

It was widely expected that Indian Oil and India's Oil and Natural Gas Commission (ONGC) would eventually be
merged into a single state monopoly company. Both companies grew vastly in size and sales volume but, despite
close links, they remained separate. ONGC retained control of most of the country's exploration and production
capacity. Indian Oil remained responsible for refining and marketing.
During this same decade, India found that rapid industrialization meant a large fuel bill, which was a steady drain on
foreign exchange. To meet the crisis, the government prohibited imported petroleum and petroleum product imports
by private companies. In effect, Indian Oil was given a monopoly on oil imports.

For a time, no more foreign refineries were allowed. By the mid-1960s, government policy was modified to allow
expansions of foreign-owned refinery capacity. The Indian Oil Corporation worked out barter agreements with
major oil companies in order to facilitate distribution of refinery products.

In the 1970s, the Oil and Natural Gas Commission of India, with the help of Soviet and other foreign companies,
made several important new finds off the west coast of India, but this increased domestic supply was unable to keep
up with demand. When international prices rose steeply after the 1973 Arab oil boycott, India's foreign exchange
problems mounted. Indian Oil's role as the country's monopoly buyer gave the company an increasingly important
role in the economy.

While the Soviet Union continued to be an important supplier, Indian Oil also bought Saudi, Iraqi, Kuwaiti, and
United Arab Emirate oil. India became the largest single purchaser of crude on the Dubai spot market.
Changes in the Oil Industry: Late 1990s and Beyond
The oil industry in India changed dramatically throughout the 1990s and into the new millennium. Reform in the
downstream hydrocarbon sector--the sector in which Indian Oil was the market leader--began as early in 1991 and
continued throughout the decade. In 1997, the government announced that the Administered Pricing Mechanism
(APM) would be dismantled by 2002.

To prepare for the increased competition that deregulation would bring, Indian Oil added a seventh refinery to its
holdings in 1998 when the Panipat facility was commissioned

.The company also looked to strengthen its industry position by forming joint ventures. In 1993, the firm teamed up
with Balmer Lawrie & Co. and NYCO SA of France to create Avi-Oil India Ltd., a manufacturer of oil products
used by defense and civil aviation firms. One year later, Indo Mobil Ltd. was formed in a 50-50 joint venture with
Exxon Mobil. The new company imported and blended Mobil brand lubricants for marketing in India, Nepal, and
Bhutan. In addition, Indian Oil was involved in the formation of ten major ventures from 1996 through 2000.

Indian Oil also entered the public arena as the government divested nearly 10 percent of the company. In 2000,
Indian Oil and ONGC traded a 10 percent equity stake in each other in a strategic alliance that would better position
the two after the APM dismantling, which was scheduled for 2002. According to a 1999 Hindu article, Indian Oil
Corporation's strategy at this time was "to become a diversified, integrated global energy corporation
." The article went on to claim that "while maintaining its leadership in oil refining, marketing and pipeline
transportation, it aims for higher growth through integration and diversification. For this, it is harnessing new
business opportunities in petrochemicals, power, lube marketing, exploration and production ... and fuel
management in this country and abroad."

In early 2002, Indian Oil acquired IBP, a state-owned petroleum marketing company. The firm also purchased a 26
percent stake in financially troubled Haldia Petrochemicals Ltd. In April of that year, Indian Oil's monopoly over
crude imports ended as deregulation of the petroleum industry went into effect. As a result, the company faced
increased competition from large international firms as well as new domestic entrants to the market. During the first
45 days of deregulation, Indian Oil lost Rs7.25 billion, a signal that the India's largest oil refiner would indeed face
challenges as a result of the changes

Principal Subsidiaries: Indo Mobil Ltd. (50%); Avi-Oil Ltd. (25%); Indian Oiltanking Ltd. (25%); Petronet India
Ltd. (16%); Petronet VK Ltd. (26%); Petronet CTM Ltd. (26%); Petronet CIPL Ltd. (12.5%); IndianOil Petronas
Ltd. (50%); IndianOil Panipat Power Consortium Ltd. (26%); IndianOil TCG Petrochem Ltd. (50%); Librizol India
Pvt. Ltd. (50%)

Principal Competitors: Bharat Petroleum Corporation Ltd.; Hindustand Petroleum Corporation Ltd.; Royal
Dutch/Shell Group of Companies
 Indian Oil Corporation Limited

Indian Oil Corporation Limited (IOCL), commonly known as IndianOil is an Indian state government
owned oil and gas company headquartered in New Delhi It is the largest commercial oil company in the country,
with a net profit of INR 19,106 crore (USD 2,848 million) for the financial year 2016–17 It is ranked 1st in Fortune
India 500 list for year 2016 and 117th in Fortune Global 500 list of world's largest companies in the year 2019 As of
31 March 2017 IndianOil's employee strength is 33,135, out of which 16,545 are in the officer cadre.  It is India's
largest downstream oil company, with a work force of more than 33,000 employees, a turnover of Rs. 506,428 crore
and a net profit of Rs. 21,346 crore in 2017-18.

Business Divisions

There are 7 major Business Divisions in the organization:

 Refineries Division
 Pipelines Division]
 Marketing Division[17]
 R&D Division[18]
 Petrochemicals Division[19]
 Exploration & Production (E&P) Division[20]
 Explosives and Cryogenics Division

Products and services

Indian Oil accounts for nearly half of India's petroleum products market share, 35% national refining capacity
(together with its subsidiary Chennai Petroleum Corporation Ltd., or CPCL), and 71% downstream sector pipelines
through capacity. The Indian Oil Group owns and operates 11 of India's 23 refineries with a combined refining
capacity of 80.7 MMTPA (million metric tonnes per annum).

 Indian Oil's cross-country pipeline network, for transportation of crude oil to refineries and finished products to
high-demand centers, spans over 13,000 km The company has a throughput capacity of 80.49 MMTPA for crude oil
and petroleum products and 9.5 MMSCMD for gas. On 19 November 2017, IOC, in collaboration with  launched
India’s first electric charging station at one of its petrol-diesel stations in Nagpur. 

Indian governments’ National Electric Mobility Mission Plan launched in 2013 aims at gradually ensuring a vehicle
population of 6 to 8 million electric and hybrid vehicles in India by 2020
Block diagram of IOCL

A block diagram is a diagram of a system in which the principal parts or functions are represented by blocks
connected by lines that show the relationships of the blocks. They are heavily used in engineering in hardware
design, electronic design,  software design, and process flow diagrams. In this block diagram shows the iocl process
of crude oil to petrol and other petroleum products
INDIAN OIL CORPORATION ORGANISATIONAL STRUCTURE

IOCs new SBU

Indian Oil Corporation (IOC), the countrys energy major, has set up a separate strategic business unit (SBU) to
market its petrochemical products and capture a major portion of the global market.

According to sources close to the development, The SBU has five exclusive sub-groups, classified productwise
(Linear Alkyl Benzene (LAB), PTA, polymers) and functionwise (logistics and exports)

1. According to company sources, the LAB unit, used in the manufacture of detergents in the Gujarat refinery,
achieved 93.3% capacity utilisation in its first full year of operation. The product has been successfully
marketed within India, attaining a significant marketshare and has also been exported.
2.  Integrated PX/PTA plant in Panipat refinery has commenced commercial production since June 2006.
Moreover, Indian Oil has initiated various activities for setting up a world scale Naphtha cracker project
along with downstream polymer units in Panipat.
3. According to a Mumbai-based analyst, the world is now focussing on plasticulture, packaging for
processed foods and consumer non-durables, automobiles and consumer durables, infrastructure
development and innovative products for telecommunications and information technology services sector,
among others. He added that IOCs growth strategy will help the SBU enrich the company in future.
4. According to a Mumbai-based analyst, the world is now focussing on plasticulture, packaging for
processed foods and consumer non-durables, automobiles and consumer durables, infrastructure
development and innovative products for telecommunications and information technology services sector,
among others. He added that IOCs growth strategy will help the SBU enrich the company in future.

Vision and mission of IOCL

VISION

A major, diversified, transnational, integrated energy company, with national leadership and a strong
environment conscience, playing a national role in oil security & public distribution

MISSION

 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 maximise creation of wealth, value and satisfaction for the stakeholders
 To attain leadership in developing, adopting and assimilating stateof-the-art technology for competitive
advantage
 To provide technology and services through sustained Research and Development To foster a culture
of participation and innovation for employee growth and contribution
  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 ecological balance and heritage
through a strong environment conscience

Objectives IOCL
Objectives

 To serve the national interests in oil and related sectors in accordance and consistent with Government
policies.
 To ensure maintenance of continuous and smooth supplies of petroleum products by way of crude oil
refining, transportation and marketing activities and to provide appropriate assistance to consumers to conserve and
use petroleum products efficiently.
 To enhance the country's self-sufficiency in crude oil refining and build expertise in laying of crude oil and
petroleum product pipelines.
 To further enhance marketing infrastructure and reseller network for providing assured service to customers
throughout the country.
 To create a strong research & development base in refinery processes, product formulations, pipeline
transportation and alternative fuels with a view to minimizing/eliminating imports and to have next generation
products.
 To optimise utilisation of refining capacity and maximize distillate yield and gross refining margin.
 To maximise utilisation of the existing facilities for improving efficiency and increasing productivity.
 To minimise fuel consumption and hydrocarbon loss in refineries and stock loss in marketing operations to
effect energy conservation.
 To earn a reasonable rate of return on investment.
 To avail of all viable opportunities, both national and global, arising out of the Government of India�s
policy of liberalisation and reforms.
 To achieve higher growth through mergers, acquisitions, integration and diversification by harnessing new
business opportunities in oil exploration & production, petrochemicals, natural gas and downstream opportunities
overseas.
 To inculcate strong �core values� among the employees and continuously update skill sets for full
exploitation of the new business opportunities.
 To develop operational synergies with subsidiaries and joint ventures and continuously engage across the
hydrocarbon value chain for the benefit of society at large.

Chairman speech
Mr. Sanjiv Singh, as Chairman of IndianOil,

Chairperson – Sanjiv Singh

Indian oil has published integrated annual report for the year 2018-19.

The integrated annual report had made specific reference to 6 key capitals they are

1. Financial capital
2. Manufactured capital
3. Human capital
4. Intellectual capital
5. Social and relationship capital
6. Natural capital
7. Indian GDP in 2018-19 is expected to increase to 7.4% due to improvement in global demand investment
and reduction of internal barriers by GST.
8. Geo-political issues are the key factors of uncertainties for the global oil and gas industry.
9. There was a low in prices of crude oil in 2014-17. prices began to raise impacting import -dependent
economies from July 2017.
10. The recent US sanction on Iran have added further uncertainty to an already volatile market.
11. Indian oil is planning to decrease 10% in oil imports by the year 2022.
12. Indian oil is expanding its non-oil energy port folio as well as focusing on energy conservation and
efficiency improvement measures.
13. The net profit of Rs 21,346 crore which is highest ever earned by Indian oil company.
14. The Indian oil has emerged as the most profitable central public sector enterprise.
15. Indian oil is of net worth Rs 91664 crore.
16. Having debt-equity ratio of 0.53 : 1 with comfortable debt level of Rs 58030 crore.
17. EBITDA of Rs 43079 crore with earning of Rs 5,06,428 crore
18. The total equity of the company is Rs 110171.
19. Interim dividend of Rs 19 per share. Under Indian oil is start-up fund 11 projects were selected for funding
and incubati

The chairman said to the investors My heartiest greetings to you on my personal behalf and on behalf of Indian Oil
People. It is my pleasant duty once again to present to you the Integrated Annual Report of your company for the
financial year 2018-19, focussing on the performance highlights of the year and the high-growth agenda lined up for
the future.
You will notice that, like last year, this year too we have followed the Integrated Reporting format focussing on the
Company's six key capitals Financial Capital, Manufactured Capital, Human Capital, Intellectual Capital, Social &
Relationship Capital and Natural Capital. Without an iota of doubt, Indian Oil strength as a successful enterprise
stems from its rich human capital. With a proud legacy of fuelling on the Company's six key capitals Financial
Capital, Manufactured Capital, Human Capital, Intellectual Capital, Social & Relationship Capital and Natural
Capital. Without an iota of doubt, Indian Oil strength as a successful enterprise stems from its rich human capital.

With a proud legacy of fuelling the growth of all sediments of the economy for the past six decades, the 33.000
strong team of 1OCians is gearing to play a leadership role in these exciting times as a new India rises on the global
arena. Indianoil People take pride in being future ready by continuously upgrading their skills and capabilities Your
Company has kept its promises to the nation since inception, working for self sufficiency and security in energy and
related areas. Surmounting many challenges, it achieved sustained growth in sync with the nation to become India's
leading Maharatna PSU and one of the largest commercial undertakings.

As the fastest growing economy in the world, India requires access to abundant energy, delivered in new and
affordable ways. IndianOil is fully geared for the challenge. Over 50.000 customer touch points of your Company
spread across every nook and corner of the nation provide energy solutions to a billion-plus customers to keep India
on the move. And we are further expanding our refining capacity, supply & distribution channels and marketing
network in line with the growing domestic demand.

Today, as a low-carbon future beckons on the horizon, Indianoil is engaged in building a future full of clean and
green energy. We are leading the industry in an unprecedented quantum leap from BS-IV fuels to a world standard
BS-VI compliant regime by April 2020

CHAIRMAN SPECH OF IOCL IN 2017 2018

The chairman should said to the shareholders Greetings to you on behalf of the 33,000-strong IndianOil team. It is
once again my proud privilege to communicate with you through this Annual Report. This time, we have attempted
to publish an Integrated Annual Report that not only details the Company’s financial performance but also reflects
its commitment towards value creation for its stakeholders.

The integrated report makes specific reference to six key capitals, i.e., Financial Capital, Manufactured Capital,
Human Capital, Intellectual Capital, Social & Relationship Capital and Natural Capital. The integrated report
emphasises the strong bonds of trust that IndianOil has built with its stakeholders over time and IndianOil’s
initiatives towards continuous growth in an exciting world of challenges and opportunities.

Industry Trends The overall global economy continues to be robust and there is a broad consensus on acceleration
of global GDP growth in the current year. India's GDP growth in 2018-19 is expected to accelerate to 7.4%, driven
by improving global demand, investment revival, rejuvenation of rural demand, and reduction of internal barriers by
GST. For the global oil & gas industry, geo-political uncertainties remain a key factor. After the comparatively
lower price regime during 2014-17, crude oil prices began to rise again from July 2017, impacting import-dependent
economies like ours. The recent US sanctions on Iran have added further uncertainty to an already volatile market.
However, Saudi Arabia and Russia have indicated increased supplies to provide a balance in the interest of both oil-
producing as well as oil-importing countries.

Oil-importing countries too are taking necessary steps for energy security. With our plans of 10% reduction in oil
imports by the year 2022, IndianOil is expanding its non-oil energy portfolio as well as focussing on energy
conservation and efficiency improvement measures. IndianOil: 3600 Excellence I am delighted to inform you that
2017-18 has been a great year for the Company across divisions and verticals, and we have once again surpassed
previous records and posted a remarkable performance, both in physical and fiscal terms.

The net profit of ` 21,346 crore is the highest ever earned by your Company and, for the second consecutive year,
IndianOil has emerged as the most profitable Central Public Sector Enterprise. Indeed, our differentiators are our
strong financials – our net worth of ` 91,664 crore, our debt/equity ratio of 0.53:1 and our comfortable debt level of `
58,030 crore. Our EBITDA of ` 43,079 crore is the highest ever; so are our earnings of ` 5,06,428 crore. As a
national trust for economic prosperity, our contribution to the exchequers is also high at ` 1,90,670 crore. The total
Equity (Share Capital and Reserves & Surplus) of the Company crossed Rupees One Lakh crore during the year and
stood at ` 1,10,171 crore as on 31st March 2018. Besides an interim dividend of ` 19/- per share paid during the year,
the Board of your Company has recommended a final dividend of ` 2/- per share. This is in addition to successive
issue of bonus shares in the ratio of 1:1 during the financial years 2016-17 and 2017-18.

CHAIRMAN SPEECH AND ANALYSIS IN 2016 AND 2017

, This is my first communication to you after taking over as Chairman on 1st June, 2017, and I consider it a privilege
to share my thoughts with you through this forum. I do acknowledge that it is a great honour to lead IndianOil,
which has been serving the nation with distinction for nearly six decades now. IndianOil’s corporate vision of being
‘The Energy of India’ and becoming ‘A globally admired company’ and its core values of Care, Innovation, Passion
and Trust differentiate it from the other corporates. Each of its business verticals remains strongly committed to
respective core competencies, making IndianOil a strong player across the hydrocarbon value chain. With a
workforce encompassing varied age groups and expertise, IndianOil represents a perfect blend of youth and
experience. This creates an environment highly conducive to innovative ideas, technologies, high-quality products &
services, and safe & efficient operations while enhancing stakeholder value on a sustained basis. Such a positive
environment is conducive to making the Company future-ready.

Global Trends In 2016, the global economy witnessed a slowdown in growth, slipping to 3.1 per cent from 3.4 per
cent recorded in 2015. While growth in the advanced economies slipped from 2.1 per cent in 2015 to 1.7 per cent in
2016, it slid marginally from 4.2 per cent to 4.1 per cent in emerging economies. Global GDP growth is projected at
3.4 per cent in 2017 and 3.6 per cent in 2018. In 2016, global primary energy consumption increased only by 1 per
cent on a year-on-year basis compared to a 10-year average of 1.8 per cent.

While oil and natural gas consumption grew by 1.6 per cent and 1.5 per cent respectively, renewable energy
(including biofuels) grew at a robust 12 per cent. The global oil demand rose to 96.8 mbpd (million barrels per day)
in 2016-17 as compared to 95.3 mbpd in 2015- 16. With increase in demand and restrictions on output growth by the
producers, the surplus in the global oil markets fell from 1.5 mbpd in the year 2015-16 to 0.12 mbpd in 2016-17.
Crude oil (Brent) prices averaged at $48.62/bbl in 2016-17, only slightly higher than the average of $47.26/bbl in
2015-16; the prices have been moving up further in 2017-18 and are projected to remain in a reasonable range
around $55/bbl. IndianOil, being a downstream major, is benefiting from this range-bound price. It is also helping us
in being more bullish towards future expansion plans, which are essential for the Company’s growth.

The OPEC countries and the United States have for long had a major say in the oil & gas sector, but other regions
like Latin America and Africa too are likely to emerge as key players in the coming years. A shift in demand in
favour of low-carbon fuels and slower energy demand growth underpinned by energy efficiency gains were the two
clear trends that emerged during the year. Alternative energy is gradually making headway based on cost-
competitiveness against conventional options.

Again, fall in costs is being driven by technological advancements and the scale of deployment. Though hydro and
geothermal energy are competitive even today, renewables like solar PV and wind-power with cost reductions of 40-
75 per cent and 10-25 per cent respectively, are coming to the fore. It is being estimated that, by the year 2040, more
than 50 per cent of renewables-based power generation may not require subsidy support to become competitive.

The transportation sector is the largest oil consumer today, accounting for 57 per cent of the global oil demand.
Renewables contribute to the sector directly through biofuels and indirectly through electricity generation. Though
the number of electric vehicles (EV) is expected to increase manifold in the coming years, the transport sector is
likely to be dominated by conventional fuels for many years to come.

Though several industry experts are predicting that liquid fuels would take a back seat soon, this soon may be a bit
far, particularly in the Indian context. In fact, with continuously increasing demand for both oil and gas, India needs
to handle this transition in an efficient and organised manner