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Contents
S.No. Particulars
1 From the Chairman
2 DG's Report
3 CEO Speakby Mr. Anant Maheshwari, MD, Honeywell Automation India Ltd. (HAIL)
4 Petroleum Pricing Muddle – Way Forwardby Mr. P K Agarwal, Senior Fellow & Director (HR), TERI
5 Why Emerging Markets Really Matter for LNGby Mr. Nikos Tsafos , Senior Manager, PFC Energy
6 Biofuels: The Indian Resource Positionby Mr. Chudamani Ratnam, former Chairman, Oil India Ltd.
7 Globalisation and Challenges of India's DevelopmentBy Prof. Pranab Banerji, Professor of Economics, Indian Institute of Public Administration
8 On the Anvil - India Oil & Gas Upstream Licensing Regimeby Ms. Neetu Vinayek and Mr. Manish Baghla
9 India's POL Consumption in 2011-12: The Year of King Dieselby Mr. Vijay K Sethi, Additional Director (Demand & Economic Studies), Petroleum Planning & Analysis Cell
10 Is Petroleum Refining a Sunset Industry In India?by Dr. Aradhna Aggarwal, Senior Fellow, National Council of Applied Economic Research
11 LPG Transparency Portalby Mr. Jayadevan P, Chief Manager(LPG-Sales), Indian Oil Corporation Limited
12 No liability for Service Tax – But Still Pay Income-Tax On It!by Mr. Shailesh Monani, Executive Director & Mr. Bhavin Sheth, Manager, PricewaterhouseCoopers Pvt. Ltd.
13 Realignment of Petroleum Refineries – Survival of the Fittestby Mr. A. K. Roy, Executive Director (Corporate Planning & Economic Studies) and Mr. Pramod Narang, Dy. General Manager (Corporate Planning & Economic Studies), Indian Oil Corporation Limited
14 The Business of Innovation by Mr. Mohinish Sinha, Leadership & Talent Practice Leader, Hay Group South & South East Asia, Pacific & Africa
15 HPNA Management in High Conversion Hydrocrackersby Mr. Richard K Hoehn, Senior Engineering Fellow and Mr. Soumendra Banerjee, Senior Manger-Process & Product Development, UOP LLC, A Honeywell Company.
16 Strategic Options For Upstream Companies by Mr. Sudipta Das, Advisory Partner & Climate Change & Sustainability Leader (India), Ernst & Young
17 Remote Collaboration: Poised to Deliver Transformational Resultsby Mr. Christophe Romatier, Sr. Strategic Marketing Manager, Honeywell Process Solutions
18 Innovative Strategies to Reduce O & M Costby Mr. Satyajit Dwivedi, Director - Energy (Asia Pacific) & Strategic Initiatives, SAS Institute Inc.
19 Innovative Technology to Improve FCC Flexibilityby Mr. Matthew Lippmann, FCC Technology Group Leader and Ms. Lisa M. Wolschlag, Senior Manager –FCC, Treating and Alkylation Research & Development, UOP LLC, a Honeywell Company
20 Members' News in Pictures
21 PetroFed Awards 2011
22 Events
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Petroleum Federation of India02
Page No.
Petroleum Federation of India 03
From the Chairman
The global economic situation continues to be
precariously balanced with some growth but not without
attendant risks. The World Bank projects a weak base
line forecast expansion of 2.5% of the global economy
this year before picking up to 3 and 3.3% in 2013 &
2014. The annual growth in the United States is
projected to accelerate from 1.7% in 2011 to 2.10% in
2012.
The developing countries GDP is expected to expand
by 6% in each of 2013 and 2014 which is slower than
the 6.3% average pace during the first seven years of
this century. In South Asia, growth is anticipated to
remain subdued, as growth in India settles around 7%
over the 2012-14 period.
The Asia Pacific region is also beginning to emerge as
one of the world's largest energy markets. It is
endeavouring to move from an agrarian economy to an
industr ial ised economy. Domestic mater ial
consumption in the region grew at a compounding
annual rate of 4.9% over the three decades from 1975
to 2005. The corresponding growth rate for the rest of
the world was around 0.5%. During the same period
the share of the region in the total primary energy
supply of the world grew from19% to over 35%, and will
reach 50% by 2028, according to UNEP.
The need for natural gas, which will overtake coal as the
second most widely used source of energy by 2025, will
be the greatest in regions like the Asia Pacific according
to a forecast by ExxonMobil. According to Statoil also
global gas demand is projected to increase by 60% by
2040 against a total energy demand increase by 40%
during the period. The oil demand is expected to
R. S. ButolaChairman
plateau at just about 100 million barrels a day around
2030.
Asia Pacific today has become the world's dynamo of
economic growth and a vast consumer market. It is
also a very unequal market. Almost a quarter of the
people in the region live in extreme poverty, on PPP of
USD 1.25 or less a day. The region is also home to a
major share of the world's population lacking electricity
and modern fuels for cooking. It has a substantial
middle class that aspires to life style changes. Between
the decades 1990-99 and 2000-09, global per capita
household expenditure increased by 18%, while in a
number of Asian countries it increased far more rapidly -
by 48% in Cambodia, for example, 92% in China and
45% in India. At the same time there has been rise in
inequality where the rich are getting richer faster, while
the poor are missing out on most of this rising
prosperity, according to a UNDP report.
At the recent UN Conference on Sustainable
Development, the Prime Minister made it clear that for
developing countries, inclusive growth and a rapid
increase in per capita income levels are development
imperatives. He called for an approach to the problem
globally which should be guided by equitable burden
sharing.
India's emissions to GDP intensity, excluding
agriculture, has declined nearly 25% over the period
1994 to 2007 as a result of our efforts over the last two
decades. A target has been set to further reduce the
emissions intensity of GDP by 20 to 25% between 2005
and 2020. Let us all strive and work for achieving this
goal and conserve energy and fuels. A rationalisation
of fuel pricing, which has been talked about for quite
some time, is expected to aid in this effort and also
reduce subsidy burden of the Government.
The United Nations Conference on Sustainable
Development has re-affirmed 'the principle of common
but differentiated responsibilities'. The UN has also
designated 2012 as the International Year of
Sustainable Energy for All and intends to galvanise
actions that catalyse the attainment of this goal.
According to UNEP's Global Renewables Status
Report 2012 investments in clean energy hit 257 billion
US dollars by December 2011. Renewable energy
markets and policy frameworks have evolved rapidly in
recent years. Renewable energy sources have grown
to supply an estimated 16-17% of global energy
consumption in 2010. In the power sector, renewables
accounted for almost half of the estimated 208
gigawatts (GW) of electric capacity added globally in
2011. Wind energy & solar power accounted for almost
40% & 30% of new renewable capacity respectively.
They were followed by hydropower at 25%. India can
be justifiably proud of the fact that it is among the top
seven countries that have attained threshold in
renewable energy transition, namely China, USA,
Germany, Spain, Italy, India & Japan.
Even the International Energy Agency (IEA), which was
created to monitor and manage global oil markets in the
wake of the 1973 oil crisis, has stated that on our current
investment path, global carbon dioxide emissions are
likely to nearly double by 2050. If the world has any
hope of keeping the average rise in global temperatures
to below 2 degrees centigrade, it needs to double its
rate of spending on clean energy infrastructure
between now and 2020. It goes on to say that if
controlling carbon emissions is truly a priority, the world
DG's Report
A. K. Arora
Director General
needs to spend 36 trillion US$ between now and 2050
on low carbon technologies, on top of the 100 trillion
US$ needed under a business-as-usual scenario. This
is the equivalent of USD 130 per person every year,
according to IEA. It adds that every additional dollar
invested can generate 3 dollars in future fuel savings by
2050. The clean energy technologies we require
already exist and we are not using them. According to
another UNEP report, the shift to a greener economy
can translate into upto 60 million additional jobs across
a range of sectors. Greening the economy also offers
the opportunity to improve social inclusion by
addressing the challenges of energy poverty and of lack
of access to energy.
It is prudent that we increase investment in clean
energy and put in place green policies to switch to a low
carbon economy. This was also stressed during rd
PetroFed's 3 International Symposium on Biofuels and
Bioenergy held at New Delhi during April 2012. It is
covered in the events section of the Journal.
Another significant event was the presentation by a
PetroFed delegation led by Mr. B.C. Tripathi, CMD,
GAIL (India) Ltd. to the Parliamentary Standing
Committee on Finance who offered us an opportunity to
present our views on the 'The Constitution (One
Hundred and Fifteenth Amendment) Bill, 2011'
pertaining to the Goods & Services Tax. PetroFed also
coordinated an Oil Industry Technical Team led by Sh.
P. Kalyanasundaram, Director (IC& CA), MoP&NG to
Islamabad to discuss trade with Pakistan. A
representation has been made to the Ministry of
Shipping on their draft policy for award of ports
waterfront and associated land on captive user basis.
We continue to proactively take up issues of the
Industry with concerned authorities and are in the
process of preparing a paper for the recently
constituted Rangarajan Committee on Production
Sharing Contracts in hydrocarbon exploration.
Petroleum Federation of India04
Globalization is presenting industries with myriad
challenges to growth, sustainability and profitability. Oil
and gas, no less than any other industry, is also
confronted daily with these challenges, while
competing in an increasingly rigorous environment
marked by tighter regulation, growing margin
pressures and an aging workforce, among other
issues.
.
Three key challenges are affecting players along the oil
and gas value chain in a big way:
1. Turning data into meaningful information&
faster decision making: A common theme we
hear from our customers is that they are
struggling under the sheer volume of data their
operations generate. As they strive to make
better decisions, there is a need to integrate
many more systems and applications together,
but the complexities of trying to integrate data
silos can be extremely overwhelming. Further,
leveraging automated decision making systems
for the integrated databases is the next level of
challenge
2. Working in remote environments: Oil and gas
exploration today is based in some of the most
remote places that make them difficult to access.
Multiple production facilities are often spread
over vast geographical distances and, in some
cases, in hazardous environments, making it
difficult to ensure the safety of plant personnel
CEO SpeakEnabling the Digital Plant
Anant Maheshwari
Managing Director
Honeywell Automation India Limited
and production assets, or share valuable
information and best practices. Plus, remote
facilities often operate independently from one
another, making it even harder to share learnings
and to achieve optimal productivity levels across
the whole network.
The challenges are many and no single solution will
encompass them all. However,we believe that
companies that have the following will differentiate
themselves from their peers and build a sustainable
competitive advantage.
i) Work process consistency and an integrated
view of their operations
ii) The ability to communicate and collaborate in
real time
Work process consistency implies understanding
comprehensively how people interact with the object of
their work and ensuring this is properly documented.
This enables to decouple the operator from the process
and move from people driven operations to process
driven operations which is critical whether you consider
operating oil fields in remote locations and harsh
environments or addressing the staffing and
competency requirements in downstream.
The critical next step is the ability to use an underlying
IT platform application that will help implement and
enforce those best practices. An illustration of such an TM application is Honeywell Intuition Executive
launched in May 2012. Such a solution allows industrial
companies to anticipate, collaborate and act with
confidence on data. With its sophisticated data
processing and analytics capabilities, Intuition
Executive anticipates problems and identifies
3. Lack of skilled resource: Oil and Gas is a
specialized domain, as energy demand grows
and more and more capacity comes online there
will be a shortage of skilled and specialized
resources. India is already seeing a shortage and
therefore this is one of the key challenges any
CEO faces today.
So what is the solution to manage these
challenges?
Petroleum Federation of India 05
opportunities. It delivers enterprise-wide information
management, decision support, and collaboration
software to help companies make better sense of the
vast amounts of data being collected and achieve
operational excellence.
The ability to communicate and collaborate has many
advantages as well. For example, Honeywell's
Remote Collaboration solution helps customers
share their expertise across remote facilities,
improving safety in hazardous environments, as well
as optimizing production and improving recovery.
Remote collaboration allows oil and gas companies to
monitor and manage operational activities across
multiple facilities from anywhere within a network of
sites, leading to better collaboration between staff and
process optimization across locations. Sites can be
connected to each other, either through a central facility
or via a network of interconnected collaboration
centers, supporting real-time collaboration, resolving
challenges quickly and improving production/yield over
the full lifecycle.
data integration, visualization and
collaboration are integral to the current business
environment. The ability to see, understand and act on
the relationships within critical data is key to creating
competitive advantage, and this can only be achieved
when all applications and underlying data are
amalgamated. Additionally, the increasingly
sophisticated and powerful capability to monitor and
manage operational activities in real time, regardless of
location and personnel, offers O&G Upstream and
Downstream operators the opportunity to create
multiple value streams to their organizations while
achieving transformational results.
In conclusion,
Courtesy: Business India
Estimated lifetime consumption expenditure of an Indian born in 2009, in US dollars: 1,84,556
Estimated lifetime consumption expenditure of an Indian born in 1960, in US dollars: 14,645
Percentage of total consumption expenditure spent on food and housing: 31 & 14
Percentage of total consumption expenditure spent on education/leisure and health: 7 & 5
Number of times printing of ̀ 500 and ̀ 1,000 denomination notes has gone up since 2000: 17 & 9
Average size of one-time withdrawal from ATMs in India presently, compared to `5, 000 three years ago, in ̀ : 7,000
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Petroleum Federation of India06
Obituary
It is difficult to come to terms with the fact that Dr. Abid Hussain is no more. He passed away at London
on June 21, 2012 after a massive heart attack. He was 85 years old and is survived by his wife, two sons
and a daughter.
His ever smiling, zestful and vivacious presence was noticeable at the PetroFed Awards ceremony on
June 8, 2012 at New Delhi. Nattily dressed as always, brimming with ideas and spreading hope and
good cheer, he was a member of the Jury for the annual PetroFed Awards since their inception in 2007.
Dr. Abid Hussain was honoured with the Padma Bhushan in 1988. Born in December 1926, he was a
member of the Indian Administrative Service and served in various capacities at the centre including
Secretary, Ministry of Heavy Industries, Secretary, Commerce and Chairman, IIFT. He was appointed
as Member, Planning Commission in 1985 and was Ambassador to the United States between 1990-
1992.
Dr. Abid Hussain has been described as a 'born diplomat' and an excellent communicator. He was a
soft-spoken person seeped in the best of Hyderabadi secular and cosmopolitan traditions. He is said to
be one of the key persons who set the ball rolling for India's economic liberalisation. He chaired six
committees of which the one's on trade and small scale industries are still important reference markers.
Dr. Abid Hussain was Chairman of a large number of organizations including the Ghalib Academy, the
Lovraj Kumar Memorial Trust and Professor Emeritus at several institutes including Indian Institute of
Foreign Trade and Foreign Service Institute of the Ministry of External Affairs. He was the trustee of
several educational, cultural and charitable institutions in India and abroad.
A liberal in every sense of the term, he would be missed by one and all.
Abid Hussain (1926-2012)
Petroleum Federation of India 07
Petroleum Pricing Muddle – Way Forward
P K Agarwal Senior Fellow & Director (HR),
TERI
After independence, for over 25 years the prices of
petroleum products were based on import parity. This
was followed by the Administered Pricing Mechanism
(APM), essentially cost plus, for over 25 years. And now
for nearly a decade we have an era of ad-hocism. If the
past is any indication, this may continue for more time.
Ad-hocism began no sooner the dismantling of APM
was over by the end of 2001-02. While prices of Petrol
and Diesel were de-regulated effective April 1, 2002
and oil marketing companies started revising them on
fortnightly basis, domestic LPG and PDS Kerosene
carried specific subsidies to be phased out over three
years in an equated manner. As per the scheme
announced by the government, for subsidies to stay
specific per cylinder of LPG or per litre of kerosene, the
changes in international prices, ocean freight etc. were
to be passed on to the consumers on monthly basis.
However, in practice, the Govt. did not permit public
sector oil marketing companies to pass on any increase
in price of domestic LPG and PDS kerosene and
compelled them to bear the under-recoveries over and
above the specific subsidies. Interestingly, the Govt.
did not go back completely on the announced scheme
and implemented reduction of specific subsidy by one
third after one year and by two thirds after two years,
whereafter these have remained unchanged. With
increasing international prices of Petrol and Diesel, the
Govt. introduced informal control of prices of these
products in the later part of 2003.
Increasing under-recoveries suffered by oil marketing
companies, placed the Govt. under pressure to take
various decisions, though ad-hoc, such as issuing of Oil
Bonds, sharing of burden by upstream national oil
companies, permitting non commensurate increases in
prices. When the situation became increasingly difficult,
the Govt. appointed a committee on “Pricing and
Taxation of Petroleum Products”, under the
chairmanship of Dr. C Rangarajan. Its report, submitted
in February, 2006, urged implementation of sets of
recommendations as packages. The Govt. selectively
implemented those recommendations which neither
adversely impacted Govt. revenues nor resulted in an
increase in consumer prices. With ballooning under
recoveries the Govt., in June, 2008, again constituted a
“High Powered Committee on Financial Position of Oil
Companies”, under the chairmanship of Mr. B K
Chaturvedi, which submitted its report in August, 2008.
The Govt. did not implement almost any
recommendation of the Chaturvedi Committee. In
August, 2009, the Govt. yet again appointed an Expert
Group on “A Viable and Sustainable System of Pricing
of Petroleum Products”, under the chairmanship of
Dr. Kirit S Parikh. It submitted its report in February,
2010.
It was only in June, 2010, after vacillating for over four
years, that the Govt. announced deregulation of Petrol
prices in addition to an increase in prices of diesel, PDS
kerosene and domestic LPG. The Govt. also
announced its intention to deregulate prices of diesel
from which it later retracted. With mounting pressure of
increasing under recoveries, the Govt., in June, 2011,
took the bold decision of reducing customs duties on
petrol and diesel from 7.5% to 2.5%. In addition,
reduction in excise duty and increase in retail selling
price of diesel was announced. This had a salutary
impact on bringing down under-recoveries on diesel
sales which account for about 45% of the total sale of
petroleum products in the country. The relief was,
however, short lived with international product prices
going north.
During 2011-12, the total under recoveries are placed at
about `. 1,38,000 crore, an all time high for any one
year. While the Govt. deregulated prices of Petrol in
June, 2010 it did not permit public sector oil companies
to raise prices in line with international prices. Thus, oil
Petroleum Federation of India08
marketing companies could neither raise prices as
required nor their under-recoveries were recognized in
selling petrol. With mounting pressure from oil
companies on the Govt. to either once again declare
petrol as a regulated product or deregulate it in the real
sense, the Govt. finally permitted them to increase th
petrol prices effective 24 May, the steepest so far at
any one time. This resulted in widespread
dissatisfaction amongst petrol users. Small price
changes periodically would have caused lesser
dissatisfaction. It is, thus, evident that the Govt. has not
followed a well thought out road map to deal with prices
of key petroleum products.
The myriad ill effects of under-pricing of petroleum
products and hence growing subsidies include not only
inefficient usage, substitution of low value products,
adulteration, and a mounting fiscal deficit but also
deteriorating financial health of oil companies. It is
appreciated that certain sections of the society need
protection against the increasing international prices.
Among the solutions suggested from several quarters
are deregulation of diesel prices and targeted direct
subsidy to identified persons for domestic LPG and
PDS kerosene. All that is required is strong political will.
There is no dearth of people in the Govt. who can
provide innovative solutions. It is the Govt. that needs to
take the bull by the horns and not allow the problem to
drift. The Govt. then needs to create an environment of
appreciation, understanding and cooperation in the
country. Short term and long term measures need to be
agreed upon. Some of the short term measures could
be ensuring surrender of multiple domestic LPG
connections, no subsidized LPG to tax payers and
users of PNG, removal of bogus ration cards, limiting
subsidy for diesel beyond which it should be passed on
to consumers, rationalizing duties for Petrol & Diesel,
persuading states to rationalize VAT/ sales tax on
petroleum products etc. Among the long term
measures, the supply of piped gas should be expanded
to replace LPG, PDS kerosene used as illuminant
should be substituted by solar lighting, and all subsidies
should be directly targeted to individuals who deserve
them.
(Views Expressed in this article are personal)
Courtesy: Business India
Percentage of students studying at various Indian Institute of Technology (IITs) who
were women in 2011: 11
Percentage of students studying at various Indian Institute of Technology who were
women five years ago, in 2006: 6
Average percentage of food served in social gatherings in India that is wasted: 15-20
Rank of marriages, seminars and conferences in terms of food wastage: 1/2/3
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Petroleum Federation of India 09
Why Emerging Markets Really Matter for LNG
Nikos TsafosSenior Manager
PFC Energy
The proliferation of LNG importers marks the most
important structural change in the LNG market today.
But the importance of having more importers lies
beyond merely creating demand. These markets are
changing the structure of the LNG market; as a result,
grasping the importance of new markets rests not with
merely estimating their LNG import needs but with
understanding how their participation in the LNG
marketplace may alter the structure, composition and
value of the LNG market.
The emergence of new LNG importers marks the
biggest structural change that has taken place over the
past few years and one that will define the market over
the coming decade. In 2003, there were as many
countries importing LNG as there were exporting LNG
(12). By 2011, there were 18 exporters and 27
importers, and by 2020, PFC Energy estimates that 36
countries will be importing LNG and 23 will be exporting
it. The gap between the numbers of importers and that
of exporters will widen further. Europe has been, and
will remain, the region with the most importers. The
Americas has seen much growth due to the entry of
Mexico, Canada, Chile, Brazil and Argentina and will
see little growth out to 2020. The Middle East (from 0 to
5) and SE Asia are among the most rapidly growing
regions for LNG.
The Emergence of Emerging Markets
These new markets are having a big impact. One way to
assess the relative importance of new markets is to
examine LNG imports by vintage: when markets start to
import LNG? Classifying LNG imports that way shows
that importers who started to buy LNG after 2000 had a
19% market share in 2011. In fact, this market segment
was the second largest in 2011 and the one growing the
fastest. We classify the United Kingdom as a country
that started to import LNG in the 1960s. If this country
were marked as a “2000s” country, when imports
restarted, the market share of this grouping would go
from 19% to 27%.
Petroleum Federation of India10
Is this Demand Sustainable?
PFC Energy has identified five main structural drivers
underpinning this LNG surge (we have focused on new
LNG markets but have excluded bigger players such as
China, India, Canada, etc):
Supply Drop.
Geography.
Displace Oil.
Diversification.
Resilience.
LNG imports can either supplement or
replace domestic production. In countries where
domestic production is mature, the LNG import wedge
is driven not just by growth in demand but also by the
decline in domestic production. Argentina, Chile, Israel
(short term), Malaysia (Peninsular Malaysia) and
Thailand belong in this category.
Larger countries tend to have
disconnected sub-markets. In those cases, LNG
terminals can serve markets that are disconnected or
not sufficiently connected via pipeline. Brazil and Chile,
for example, have disparate markets, although Brazil
has made more progress in creating a national grid. In
Malaysia and Indonesia, LNG is meant to connect
demand centers that are not served well because they
are far from domestic supply sources.
Countries with insufficient gas supply
tend to burn (often imported) oil to meet their needs.
LNG in those countries serves as a cheaper power
generation source than oil. Argentina, Chile, Israel,
Indonesia, Kuwait, Singapore and the United Arab
Emirates (Dubai) had or still have significant oil use in
the power sector and where LNG imports are geared to
displacing oil. These countries may also have a higher
ability to pay for LNG given that their alternative is oil.
Countries often turn to LNG to
diversify from a heavy reliance on a few suppliers or to
protect from suppliers whose reliability the importer has
reasons to question. Brazil's LNG push aims to diversify
from Bolivia, Chile from Argentina, Israel from Egypt,
Poland from Russia, Singapore from Malaysia and
Indonesia and Thailand from Myanmar. In each of these
cases, the need for imports goes above and beyond a
mere “balances” question.
Besides overall diversification, countries
are often drawn to LNG to be able to withstand
seasonal, cyclical or other shortages. Argentina faces a
winter gas shortage as the swing in seasonal demand
far exceeds the swing in seasonal supply. Brazil is
interested in LNG to compensate for occasional drops
in hydro-electric output, while Israel has been keen to
ensure that the market can withstand interruptions to
Egyptian supply (which now appears permanent).
Poland, Singapore and Thailand are similarly
interested in creating more resilience in their system
Petroleum Federation of India 11
networks given their heavy depend on just a few
sources of supply.
More markets mean more demand for LNG. But the
importance of emerging markets rests beyond a mere
numbers game. These new LNG players are changing
the LNG market in at least three deep structural ways.
More buyers mean
more opportunities for sellers. When demand for LNG
fell in 2009 after the economic crisis, sellers were
looking for markets to place LNG. Turkey, for example,
benefited throughout 2010 and 2011 by a “push” of
Qatari LNG. As more countries enter the LNG market,
the more opportunities there will be for sellers to push
LNG. This means that when demand is sagging, there
are more players that can take in LNG at the right price.
Perhaps the biggest impact of these new LNG markets
is to create a wider floor beneath LNG prices – if the
price falls, there will be more and more prospective
buyers that will be drawn into the market to keep prices
from falling too much.
In OECD Europe and North America, the
competition between oil and gas is almost obsolete,
which is one reason that oil indexation is seen as an
increasingly archaic pricing system. But in non-OECD
markets, oil remains an important fuel for stationary
use. When examining the countries that PFC Energy
expects will be importing LNG by 2020, the non-OECD
countries among them relied on oil for an average 25%
of their power generation needs; by contrast, the share
for OECD countries is just 5% (2009 data for
consistency). The entry of these newer players thus
expands the sphere where gas and oil compete directly
– and thus provides further support for LNG prices to
track the price of oil, not just contractually but also
substantively. It is no accident that in 2011 Thailand,
Brazil, Argentina Chile paid prices comparable to
Japan, Korea and Taiwan.
With few
exceptions, these markets are approaching the LNG
market from a different angle. Some have no long-term
contracts to provide them with a steady supply of LNG.
When they do have contracts, these tend to be with
portfolio aggregators (chiefly BG, Shell or GDF SUEZ)
rather than LNG projects (Poland and Malaysia are
What Do These New Entrants Mean for the Market?
A wider floor beneath LNG prices.
Enlarge the market where gas competes directly
with oil.
Greater demand for flexible services.
exceptions). Many of these countries are also importing
LNG seasonally or using floating regasification vessels.
The growth in emerging markets, therefore, is creating
“demand” for an LNG value chain that is more flexible
and more adaptive.
New markets are therefore altering the way that LNG is
traded – they can act as a support system to prevent
prices from going very low; they are boosting the sphere
where gas competes directly with oil; and they are
creating demand for a different value chain and different
seller strategies. Together, these forces compound the
importance of new players – not only will these
countries import more LNG, but they will import LNG
differently than the established markets.
The historical symmetry between the number of
countries exporting LNG and those importing has
been shaken – by 2020, PFC Energy estimates
that 36 countries will be importing LNG while only
23 will be exporting it.
By 2011, countries that imported no LNG before
2000 accounted for a 19% market share. These
new LNG markets are also the market's fastest
growing segment.
This import demand is strong and is underpinned
by five structural drivers: a drop in indigenous
supply, a geographic need to connect remote
demand centers to supply, a desire to displace oil
use, a quest for diversification and a desire to
increase the ability of a market to withstand
supply shocks.
New markets are altering the way that LNG is
traded – they can act as a support system to
prevent prices from going very low; they are
boosting the sphere where gas competes directly
with oil; and they are creating demand for a
different value chain and different seller
strategies.
Together, these forces compound the importance
of new players – not only will these countries
import more LNG, but they will import LNG
differently than the established markets.
Conclusions
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Petroleum Federation of India12
Oil is not only an important source of energy but is the
main transportation fuel for the whole world, including
India. At present the only available forms of liquid fuels
are derived from crude oil which is largely imported and
as the Indian economy grows the demand for liquid
fuels will grow disproportionately in comparison to
other forms of energy. The long term objective must be
to meet almost 100% of the demand for liquid fuels
permanently from indigenous resources; adding 5%
ethanol to diesel and petrol as is being planned now will
only be a drop in the ocean.
Biofuels are fuels obtained from a variety of biological
sources commonly referred to as biomass such as
wood, vegetable oils sugarcane juice, aquatic plants
including algae, waste plant residues such as bagasse,
straw, etc. Different categories of liquid biofuels are
biodiesel, bioethanol and biomethanol and can be used
in any internal or external combustion engines, with
minor modification. Most of the ongoing national level
discussion on this subject revolves around technology
and cost, but hardly any thought has been given to the
resource base and this is the issue being addressed in
this paper. It should also be noted that biofuels are by
and large carbon neutral and should India be required
to introduce carbon tax, the benefits would be
significant.
Chudamani RatnamFormer Chairman, Oil India Ltd.
Biofuels: The Indian Resource Position
Land Availability
India Land Use: Million Hectares
Total 328.65
Net Sown Area
138.22
Plantation
6.77
Forest
67.00
Grassland, Grazing
8.03
Waste Land/desert
31.54
Scrub land
20.99
Water bodies
8.90
Shifting cultivation 0.26
Snow cover, etc. 4.3
Built up Land 2.06
Rann of Kutch 1.99
The crucial “raw materials” for production of biofuels
are land and water especially the former. It is therefore
necessary to examine land availability. The table below
gives a break up of India's land usage pattern.
While the total land area of India is large, because of
the population size, the amount that can be diverted to
growing fuel crops is limited; possibly no more than 30
million hectares. This will yield about 30 mtpa of
biodiesel, which in future decades will be only a very
small part of India's requirement of liquid fuels. Some
radical approaches may be required. For example, It is
estimated that about half the area under forest is highly
degraded and instead of trying to regenerate the forest, the
land could be used for oil seed cultivation. It should be
noted that a large part of the waste land shown above is
covered by the Thar desert which is truly barren and
cannot support any cultivation. Even the much touted
Jatropha requires a minimum of soil fertility and
adequate rainfall to give an acceptable yield.
The above statistics are official in nature but a more
pragmatic assessment could be as follows. In the last
60 years, India has denuded or severely degraded half
of the 76 m Ha of forest inherited at Independence. Of
this 12.6 m. Ha has been totally denuded and another
25 million Ha. has lost more than 60 per cent of its forest
Oil Seeds
It is estimated that about half the area under forest is highly
degraded and instead of trying to regenerate the forest, the
land could be used for oil seed cultivation.
Petroleum Federation of India 13
cover. India has approximately 50 million hectares of
degraded wasteland that lie outside the areas
demarcated as national forests, and another 34 million
hectares of protected forest area, in much of which tree
cover is severely degraded. A massive programme is
needed to develop energy plantations consisting of oil
seed species for biodiesel production and fast-growing
tree crops which can be converted to alcohol.
Keeping the above stated approach in view a detailed
state/district wise reassessment of land availability is
required.
Ethanol, in India is primarily a byproduct of the sugar
industry, but a small quantity is produced from grains for
potable purposes. A point to be aware of is that
sometimes industry quotes “alcohol” production
figures, which contains only about 8% ethanol, the
balance being water. To be used as a fuel it is necessary
to extract anhydrous ethanol. At present in India about 5
million hectares of irrigated land are under sugar cane
cultivation and about 2300 million litres of ethanol are
produced. Roughly 1/3 of this is used industrially, 1/3 is
consumed as liquor and the balance is available for
miscel laneous uses including blending in
transportation fuels. These quantities pale into
insignificance in the national scenario.
Ethanol can also be produced from non-food plant
cellulose (e.g. wood, leaves, bagasse or straw),but the
technology has still to be developed and proved
economically. Research on this topic, which doesn't call
for much capital or revenue expenditure, must be put on
a war footing and every laboratory in the country should
devote some effort towards this project.
Methanol appears be a silver lining to an otherwise
cloudy outlook. Methanol is the simplest form of alcohol
and is somewhat underrated as a transportation fuel. It
has in the past been used in racing cars. The earlier
turboprop aircraft such as the Fokker Friendship which
were comparatively low in power used a mixture of
methanol and water for take off as this gives greater
short term power than conventional aviation turbine
fuel. Though the calorific value of anhydrous alcohols
Ethanol
Methanol
tend to be between half and 2/3 that of petrol and diesel,
because of their superior flammability characteristics
they are equivalent on a volume basis. The main
problem to be overcome is that of corrosion. However
methanol fuel cells may eventually provide the solution.Methanol is typically produced from biomass though
where natural gas is available, methanol is made from
methane, a major component of natural gas Biomass is
converted to syn-gas(synthetic gas), by partial
oxidation, and the syn-gas is then converted to
methanol by a Fischer-Tropsch process. India is
expected to generate annually in the years to come
nearly 900 million tonnes of agricultural residue such as
straw and bagasse, much of which probably just goes
waste or is put to insignificant uses. In addition India
uses about 50 million tonnes of forest biomass and
about 300 million tonnes of fuelwood per annum.
Details are given below.
With present technology one tonne of dry biomass can
produce about 700 litres (550 kg) of methanol. It would
seem therefore that without any disruption of current
land use practices nearly 700 mtpa of methanol can be
produced replacing roughly the same amount of petrol
and diesel.
The main resource that is not available is time. The
worlds resources of crude oil are under severe strain
and there will be a severe shortfall in supplies in about
two or three decades. India must change over to
biofuels well within this time frame. India imported
about 170 MT( million tonnes) of crude oil in the
financial year 2011-2012 and it is anticipated that there
will be a demand for 500 MT per annum within a couple
of decades. The target for biofuels production must be
to restrict future imports of crude to say about 200
MTPA.
Million tonnes
Rice straw 285
Wheat straw
160
Sugar cane tops
118
Sugarcane bagasse 114 Other 213
Total Agri
890
Forest Biomass
50
Fuelwood 300
Total Forest 350
Total Biomass 1240
Petroleum Federation of India14
Globalisation and Challenges of India's Development
Pranab BanerjiProfessor of Economics
Indian Institute of Public Administration
Globalisation is one of the leading issues that have
captured the imagination of thinkers belonging to
various academic disciplines. It has been recognized
as a process of easier and accelerated trans-national
movement of commodities, persons, capital and
knowledge, which includes ideas, techniques and
culture. With technological advances facilitating
transport and communications, the processes of
production, consumption and even waste disposal
have taken global dimensions. Thus, as in the case of
many electronic goods, a technology may be
developed in Europe and put to manufacture by an
American firm in China and exported to various
countries and the waste dumped in Africa!
The growth and inevitability of globalisation was
commented upon by perceptive thinkers, as diverse as
Marx and Vivekananda, even during the previous
centuries. But it is also necessary to note that while
trans-national interactions are inevitable, and most
would agree that it is also desirable, the nature of the
transactions critically depend on institutions and on
ideas and beliefs, which influence national and global
policies.
The current phase of globalisation, which may be
traced for its origins to the 1980s, is therefore distinct
from the previous phases as it is characterized by a
distinctive set of features and influences. Section I
delineates these characteristics with a reference to
India. The consequences of the new global order and
ideas are presented in Section II, while Section III
examines the responses of leading players in dealing
with these consequences. This is followed by an
examination of policy imperatives for India and the
lessons that are emerging from the faltering global
order.
Human history has had many episodes of movement of
people, ideas and commodities across national
borders. The colonial period, as has been extensively
documented, witnessed large movements of persons
and capitaland production processes became trans-
national with increased emphasis on extraction and
foreign trade. The current phase of globalisation can
be traced to the contemporaneous occurrences of the
following events, roughly around the decade of the
1980s.
The early 1980s saw a major setback to the
autonomous path of development embarked upon by
many Latin countries. These countries, after a period of
respectable growth and industrialization of two
decades, ran into a debt-crisis, which made it virtually
impossible to continue with the strategy of self-reliant
development. The capital flows that had occurred in
the decade of 1970s allowed many developing
countries to continue on their path of independent
development but also made them more vulnerable to
external events. The increase in interest rates in the
United States precipitated the Latin American debt
crisis.
The impact of external financial crisis can be evaluated
not only by examining the effects of the crises but also
by taking into consideration the effects of the policy
response. The international financial institutions —
principally the IMF and the World Bank—provided
credit lines to countries in crisis based on a set of
conditionality that went under the broad names of
`stabilization' and `structural adjustment'. In the
decade of the 1980s, scores of developing countries
were provided structural adjustment loans. The effect
of these policies were to reduce the economic role of
governments, expand the space available to the
organized private sector and diminish barriers to entry
of foreign private capital and goods. Thus what began
as the globalisation of bank loans in the 1970s,
crystallized in the 1980s into the globalisation of direct
Section I
Petroleum Federation of India 15
and portfolio investment and the consolidation of global
commodity markets.
The role of the state in economic development was to
be further circumscribed, in addition to the effects of the
financial crisis, by the ideological formulations that now
go under the name of 'neo-liberalism'. Whereas the
earlier free-market Economics grudgingly accepted the
role of the state in rectifying 'market failures' arising out
of externalities etc., the new ideas postulated the idea
of 'government failures' following from the self-seeking
behavior of politicians and bureaucrats. The
spectacular collapse of the Soviet Union seemed to re-
enforce the impression that governments may not have
the necessary virtues to deal with the problems of
'market failure'. The neo-liberals therefore went on to
suggest mechanisms which mimicked, or
approximated, markets and set limits to the economic
role of the state. A major consequence of these
influences was the relegation of the idea of economic
equality to the background. Efficiency became the
central objective of policy and it became ̀ glorious to the
rich'.
India entered the present phase of globalisation with
the financial crisis and subsequent structural
adjustment loans in 1991. India's policy adjustments
have been slow and partial. But the fundamental
premises have been the same: namely, reduced role of
the state, de-emphasis on independent or autonomous
development and amnesia of the earlier policy goal of
relative economic equality.
The developed countries may have believed that
globalisation would open up markets for goods and
services and lead to job-creation. In fact, contrary to
expectations, globalisation began to bring greater
benefits to the developing countries from the late
1990s. The erstwhile CIS countries, which underwent a
painful decade of adjustment and decline in incomes,
began to register positive rates of growth in the late
nineties. Latin America and much of Africa, which had
witnessed a lost decade of growth in the eighties, also
started to recover in the late nineties. The East Asian
countries however experienced a major financial crisis
in 1997, but the growth rates for most of the decade was
high.
Section II
But the most spectacular success has been witnessed
by China and India in the last ten years, after a
sustained period of growth of nearly two decades.
Between 2007 and 2011, the developing countries
accounted for 77 percent of the incremental global GDP
(in PPP terms), compared to 23 percent accounted for
by the advanced countries. China's share in the
incremental GDP was 32 percent and India's 11
percent, which was higher than the contribution of large
economies like the USA (8 percent) and the European
Union (7.8 percent). Chinese and Indian companies,
many of them state owned, have grown in size and are
counted amongst the large global players. Both the
countries have now a significant number of persons
figuring in a list of world's billionaires. A robust indicator
of the growing importance of the 'south' is the increase
in south—south trade and the emergence of groupings
like the BRIC(S).
In contrast, the developed countries have fallen into a
deep and prolonged economic mess. The growth rates
of most are minimal, unemployment rates are high
(estimated 40 percent for the youth in Greece), external
indebtedness is high, the size of government debt is at
crisis levels and the stability of the financial systems are
under threat.
The developing countries success story is not based on
weak foundations. Both China and India have
sustained one of the highest rates of domestic saving
and investment over the previous decade. External
indebtedness is low and well within manageable levels.
Investment in infrastructure and education are rising,
though not adequate in India, which shall allow the large
working force in these countries to remain competitive.
Wage rates are also low by international standards.
Finally, the budgetary position is far more comfortable
than in most advanced countries.
The developments over the previous decade raise the
interesting question as to the reasons for the reversal of
economic fortunes of developed and developing
countries. One anticipated contributory factor, of
course, has been the movement of capital to take
advantage of cost differentials. The decade of 1990s,
as stated earlier, was undoubtedly marked by the flow
of foreign direct investment (FDI) to developing
countries, sometimes to take advantage of
Section III
Petroleum Federation of India16
privatisations and mergers and acquisitions. These
capital flows may have helped the processes of fiscal
consolidation, eased the balance of payments
difficulties, created jobs and demand and, thereby,
contributed to higher growth rates. But this does not
explain the reasons for the difficulties faced by the
advanced nations and the overall robustness of growth
in developing countries marked by high savings rates
and good economic fundamentals.
It may appear paradoxical that the problem of the
developed countries and the success of the developing
ones may both be due to the value system dominating
policy in the west, which sees progress as increased
consumption by individuals, without regard to social
goals like equality. In fact, the central theme of the
current phase of globalisation has been higher
consumption in an era of higher inequalities.
Inequalities increased in USA to reach levels equal to
levels prevailing just prior to the great depression.
Between 1940 and 1970, the USA registered steady
and inclusive growth with the median income doubling
in the three decades. Since then, the income of the
bottom 90 percent increased by a mere 5 percent. On
the other hand, the income of the top 1 percent of the
population is reported to have increased by 281 percent
between 1999 and 2007. It is therefore not surprising
that the rallying call of the 'Occupy Wall Street'
movement has been 'we are the 99 percent!'
One of the effects of rising inequalities, in conjunction
with other causes like longevity and rising health costs,
has been the political pressure on the state to spend
more on social sectors. Social sector spending as
proportion of GDP increased, between 1980 and 2007,
from 10 to 21 percent in Greece, from 18 to 25 percent
in Italy and from 13 to 16 percent in USA. These
increases in social sector spending, and other
increases in expenditures, were not accompanied by
commensurate increases in tax revenues. In fact, if
press reports are to be believed, the two wars fought by
America, in Iraq and Afghanistan, were not
accompanied by increased taxes. As mentioned earlier,
neo-liberalism seeks to put a limit to the size of the
state, which practically has meant that raising taxes is
against the current orthodoxy. Also the nature of politics
in most countries has made it extremely difficult to tax
the rich who wield enormous power over the
formulation of public policy. The result has been that
most developed countries have been forced to run large
fiscal deficits. The USA, for example, has an
outstanding public debt of over $ 14 trillion. With
government spending at 24 percent of GDP and taxes
at only 15 percent, the problem is likely to exacerbate.
In many cases, the public debt is not only internal but
also is significantly financed by capital inflows from
abroad. Thus countries like Greece, Italy and Spain
face severe external pressures due to their external
indebtedness arising principally out of public
indebtedness. A large part of the US public debt is
financed by China and other East Asian economies.
The ability of China and other developing countries to
lend to the USA is the also the result of reckless
consumption by US citizens. As the majority of the
population in the US found its income to be nearly
stagnant, consumption was allowed to increase with
the help of easy consumer finance, which included
housing finance. The case of the sub-prime crisis has
been well documented. The crisis only brought to fore
the fact that expenditure financed by debt has severe
limits. As the American financial system, encouraged
by government policy that could not frontally deal with
the problem of rising inequalities, provided easy credit
to both credit and non-credit worthy Americans, US
household debt as a percentage of annual disposable
income rose from 77 percent in 1990 to 127 percent in
2007. The average American household possessed
seventeen credit cards! The rate of savings became
negligible and occasionally even fell into negative
territory. The financial system also benefitted from the
lending to USA by the export surplus countries. The
current phase of globalisation has therefore been
marked by a reversal of capital flows to the advanced
countries from the developing ones.
The current crisis of globalisation has been sought to be
addressed with a mindset that remains rooted in old
ideas that are becoming increasingly irrelevant in a
globalised world. Problems have grown and taken on
international dimensions and they cannot be solved
effectively from perspectives of 'national interests'. To
take an example, the Greek economic crisis cannot be
addressed by imposing greater hardships on the Greek
people alone. The beneficiaries of the single European
Section IV
Petroleum Federation of India 17
currency also need to share the benefits with
disadvantaged countries of the Euro zone. The
inequalities,which perpetuate due to lack of movement
of labour and the absence of cross-national fiscal
transfers,do not allow an effective resolution of the
crisis faced by a number of Euro zone countries.
Similarly, it is not possible to sustain debt-driven high
consumption in one part of the world by running export
surpluses and capital outflows in other parts of the
globe for a substantial period of time.
A second lesson that is emerging is that increasing
income and wealth inequalities can no longer be
brushed under the carpet of growth fundamentalism.
The world today produces enough, on a per capita GDP
basis, to meet even an extended basic needs list of
every global citizen. Yet, in country after country,
inequalities are on the rise. Many developing countries,
including China and India, have high growth rates and
worsening Gini-coefficients. We seem to be repeating
the mistakes of the post 1970s western economies.
This could be sustained by exporting to the Western
economies. But with those economies faltering, the
need to address the problem of inequality is not only an
ideal but a practical necessity even to sustain the
growth momentum.
Finally, the 'invisible hand' has not been able to resolve
many of the problems arising out of unbridled pursuit of
self-interest. Devising systems of incentives and
disincentives does not seem to adequately address the
mismatch between personal and social ends.
The financial crisis and the subsequent response have
only highlighted the problems of free-markets and
incentive systems within organizations. There is once
again a call for regulation. But in a globalised world, the
effectiveness of regulation by individual countries is
extremely limited. The problem may be addressed by
agreeing to regulatory measures and systems that are
adopted and effectively implemented by all countries.
But this is extremely difficult to put in place, besides
having doubtful utility. Perhaps we need an alternative
world-view based on equality, justice and cooperation.
Can India contribute towards the building of a new
global vision that more effectively deals with the
inevitable process of globalization?
Courtesy: Business India
Percentage of Chinese millionaires who have considered emigrating or have already emigrated,
mainly to USA: 60
Estimated capital flight out of Russian due to stagnation, corruption and political uncertainty, in billion
dollars: 80
Rank of “Technicians' and 'Sales Representatives' among top 10 Jobs employers globally had
difficulty filling due to lack of available talent: 1 & 2
Rank of 'Production Operators' and 'Secretaries, Personal Assistants and Office Support Staff' on
talent shortage index: 9 & 10
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Petroleum Federation of India18
India is witnessing increasing challenges in meeting its
energy requirements. The Oil & Gas sector plays an
important role by contributing approx 45% of total
energy requirements. Net oil imports have grown from
102 million metric tonnes (MMT) in 2006-07 to approx
130 MMT in 2010-11, whereas the value of imports,
over the same period, has grown from US$ 40 bn in
2006-07 to US$ 70 bn in 2010-11. This has led to steep
increase in the import burden of the country including
infrastructure & pricing challenges for the Oil & Gas
industry. To enhance the Energy Security of the country
and to appraise the hydrocarbon potential of the
sedimentary basin in the shortest possible time, the
Government of India (GoI) has been making focused
efforts to accelerate and expand exploration of oil and
gas in the country. GoI also acknowledges the
importance of the role of private sector in development
of domestic resources. This has led to opening up of the
sector and introduction of an investor friendly policy
regime over the years.
Until the beginning of 1990's, wherein National Oil
Companies used to receive the Petroleum Exploration
License (PEL) on nomination basis, GoI started
opening up E&P acreage award process to private and
joint venture companies through various exploration
bidding rounds for exploration and development of
discovered fields.
The New Exploration Licensing Policy (NELP),
formulated with the approval of the cabinet, provided a
level playing field to the private investors by giving the
same fiscal and contract terms as applicable to National
Oil Companies (NOCs) for offered exploration
acreages.
On the Anvil - India Oil & Gas Upstream Licensing Regime
Manish BaghlaNeetu Vinayek
While approving NELP in February 1997, GoI through
the Cabinet Committee of Economic Affairs (CCEA)
had authorized Ministry of Petroleum & Natural Gas
(MoPNG) to prepare a Model Production Sharing
Contract (MPSC) in consultation with relevant
Ministries. MoPNG subsequently finalized the MPSC
with the approval of the Empowered Committee of
Secretaries (ECS) which had also been constituted with
the approval of CCEA, comprising Secretaries in
MoPNG, Finance and Law.
The GoI has awarded more than 200 blocks in nine
rounds of bidding under NELP. Before conducting new
bidding round, MoPNG & Directorate General of
Hydrocarbons (DGH) undertake consultation process
to seek industry inputs on the issues faced during bid
process and implementation of the PSCs. Based on the
recommendations, there have been improvements in
bidding framework in terms of parameters, weightage,
standardization and transparency in bid award process.
On some of the issues which were common to all the
players, the need was felt to adopt a streamlined
procedure of examination of each proposal before
obtaining the approval/decision of MoPNG.
Accordingly, DGH had developed and issued policy
guidelines. These policies provide a transparent basis
for deciding similar issues under various PSCs.
Following are the select policies issued by DGH:
Extension of exploration phases under NELP and
pre-NELP PSCs.
Extension of exploration phases under Coal Bed
Methane Policy (CBM).
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Petroleum Federation of India 19
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Policy for Merger of Exploration Phases of
offshore Blocks under NELP-III & NELP-IV PSCs.
Policy for substitution of Additional Metreage
Drilled against Total Metreage Commitment as a
part of Minimum Work Programme (MWP).
Determination of Cost of Unfinished Minimum
Work Programme (MWP)
These policies provide safeguards which are kept in
view before amending the terms of the contracts. The
ECS has also approved provisions for imposition of
liquidated damages (LD) on the contractors where
necessary to ensure that such dispensations are
sought only by those contractors who are serious about
their exploratory commitments.
Recently, recommendations related to the Upstream
sector were made by the Standing Committee on
Petroleum & Natural Gas in December 2011. Select
comments/recommendationsare listed below:
The Committee is surprised to note that there are
no specific penalty stipulations in PSC in case of
shortfall in achieving the production targets
envisaged in either the approved Field
Development Plan (FDP) or Annual Work
Programme and Budget, thereby giving the
operators an escape route. The Committee would
like to know how this important aspect was
overlooked while framing PSC by the
Ministry/DGH. Keeping in view the large scale
dependence on natural gas as fuel, the
unscheduled cut in its production has adversely
affected the plans of various important sectors of
economy including the priority sector. The
Committee, therefore, desiresthat the
Government/DGH review PSC Contracts entered
into with various operators and incorporate
stringent provisions therein for any breach in
approved plan by the operating companies.
While expressing displeasure on unsatisfactory
performance of public/private companies in
respect of minimum work programme, the
Committee had desired “the Government/DGH
should take necessary steps to ensure that these
upstream companies expedite their exploration
work and make sincere efforts towards at least
completing the MWP assigned to them. The
Ministry in their Action Taken Reply had stated
that the Government/DGH monitor and
periodically review the progress of various
exploration activities through the Management
Committee (MC). If Contractor fails to complete
the committed MWP within the stipulated time,
they are required to pay the cost of unfinished
work programme as per the relevant PSC
provisions and the prevailing Policy Guidelines in
this regard. The Committee is of the view that the
penalty amount that the contractor is required to
pay if he/she fails to complete the committed
MWP is very less and does not act as a deterrent
for not achieving the approved targets. Therefore,
the Committee desires that failure to complete
MWP should be seriously viewed and higher
penalty be imposed in case of shortfall. Moreover,
extension of time to the contractor may not be
given in normal course, rather it should be
granted only in exceptional circumstances.”
Expressing dissatisfaction over the very low CBM
production since awarding of blocks in 2001, the
Committee had desired the Government to make
an indepth analysis to find out reasons for the
same. Though the Ministry in their reply have
informed that by the end of 12th plan period CBM
production is projected at 4 mmscmd in 2016-17
from the present level of about 0.23 mmscmd in
October 2011, the reply is, however, silent if any
analysis has been done on scanty production of
CBM t i l l now and the moni tor ing of
Government/DGH in this regard. In view of the
past record the Committee is not convinced that
the projected target for 12th Plan can be reached
unless effective steps are taken to boost present
CBM production including through application
and import of new technology. The Committee,
therefore, reiterates its recommendation and
desires the Government/Oil PSUs to make an in-
depth analysis of the reasons for scanty
production from CBM reservoirs and take
concrete and corrective action including
application and import of new advanced
exploration technologies and technical knowhow,
if necessary.
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Petroleum Federation of India20
?After considering the Action Taken Replies of the
Ministry on the recommendations of the
Committee on development of gas hydrate, shale
gas, UGC and hydrogen as alternate sources of
oil and gas, the Committee feels that the various
programmes are not progressing at the desired
pace. Keeping in view the large potential of these
resources in meeting the energy security of the
country, the Committee desires the Government
to make concerted efforts in a time bound manner
to develop these resources.
Recognising the need for comprehensive review of
Upstream Licensing Policy, GoI has constituted a
committee under the chairmanship of Dr C.
Rangarajan, Chairman, Prime Minister's Economic
Advisory Council, to review the existing PSC. The
review would be in respect to current profit sharing
mechanism with the Pre-Tax Investment Multiple and
exploring various contract models. The committee will
also look into a suitable mechanism for managing the
contract implementat ion and governmental
mechanisms to monitor and audit the Government's
share of profit petroleum. It will also structure the
guidelines for determining the formula for the price of
domestically produced gas, and for monitoring actual
price fixation. The Committee will submit its
recommendations by August-end.
In the current environment, petroleum licensing is
expected to be widely debated and will take place in the
full glare of attention from the press and from public
opinion. We hope that the GoI will follow adequate
consultation process to modernize the licensing regime
that will break new grounds in recommending ways in
which GoIand the oil companies may devise best
practices in licensing to serve the interest of all
stakeholders and also an ethical business
environment.
Courtesy: Business India
Total number of villages in India: 6,38,588
Chances that a village in India is in Uttar Pradesh, Madhya Pradesh and Orissa: 1 in 3
Average time spent by a CEO in meetings in a 55-hour working week, in hours: 18
Average time spent by a CEO on business meals and telephones in a 55-hour working week, in hours: 5 & 3
Average time spent by a CEO working alone in a 55-hour working week, in hours: 6
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Petroleum Federation of India 21
India's POL Consumptionin 2011-12: The Year of King Diesel
Vijay K SethiAdditional Director (Demand & Economic Studies)
Petroleum Planning & Analysis Cell
I can't resist telling you another story as it beautifully
explains the POL consumption picture in 2011-12.
During my childhood I was very fond of drawing. Around
the age of 14 years I grew confident that I could draw an
accurate portrait of a person from his photograph. One
day I decided to draw a picture of Guru Rabindranath
Tagore. I spent three days putting in lot of hard work to
finalize the portrait and hid it from all and sundry in the
hope of giving a surprise to everyone by showing the
final product. On the fourth day my uncle, whom I
respected a lot came to our house. I asked him to close
his eyes for a surprise. When he opened his eyes he
did show surprise, hugged me and said “Cuckoo (my
childhood nick name) you have done a great job. The
portrait looks exactly like Vinobha Bhave. You have a
great future to be a famous artist”. It took me a little
while to realize what my uncle had said but I recovered
soon to say 'Of course, it was Vinobha Bhave's picture
that I had drawn'.
India's petroleum products consumption in fiscal 2012
has a similar surprise as the bottom line consumption
figures are perfectly on expected lines. Against the
revised demand estimates of 147.05 million metric
tonnes (MMT) the actual consumption for 2011-12 as
per provisional data is 147.99 MMT indicating that the
variation in projections and actual figures is just 0.6%.
Any economist could be proud of such accurate
projections. However, once we analyze the data one
finds that it is not the picture you thought it would be.
And the picture was changed mainly by diesel, which
became consumer's darling due to price advantage
over competing fuels.
Diesel: The King
The variation in estimated figures and actual
consumption of HSD is 939 TMT, of which 80% is due to
higher consumption of diesel during fiscal 2012. It is
diesel, which changed the face of consumption as price
of competing fuels remained lopsided during the year
putting undue pressure on diesel consumption giving it
a dubious distinction of becoming the King of
consumption. In the last few years share of diesel in the
basket of petroleum products has been increasing. It
has grown to 43.7 % in 2011-12 from 35.2% in 2002-03
at the time of deregulation. Figure-1 gives the pattern of
diesel consumption in the last 12 years.
The high growth in diesel consumption came mainly
from following factors in 2011-12:
Domestic price of FO remained higher than diesel
price almost through out the year. This resulted in
substitution of FO by diesel, which is not only
cheaper for the consumer but also a superior
product with higher calorific value
Power situation started deteriorating in the
second half of fiscal 2012 leading to use of diesel
in gensets. Figure-2 brings this out quite clearly:
Figure-1: Share (%) of Diesel in POL Consumption
Figure-2: Monthly All India Power Deficits (%)
during 2011-12
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Petroleum Federation of India22
?MS price was deregulated in June 2010, after
which preference for diesel cars started
increasing
Ever since the deregulation of petrol in June 2010, its
consumption has been under pressure. People have
begun looking seriously at alternatives like CNG and
HSD. The falling growth in MS with rising selling price
comes out clearly in Figure-3, which gives two years'
data on MS price (Delhi) and monthly growth.
The inverse relationship between MS price and growth
is well established in the last two years. This trend is
likely to become sharper as the price gap between MS
and HSD further increases.
A strange and unprecedented situation has arisen
where MS growth has dropped below HSD this year,
which is against the historical trends. We have tracked
data for 20 years since 1992-93 and Figure-4 makes
this unusual trend clear.
Petrol - Under Pressure
Unprecedented Situation
Figure-3: Retail Selling Price (Delhi) & Monthly
Growth of MS
Figure-4: MS & HSD Annual Growth (%) Trend
The falling growth of car sales did not also help the
cause of MS during the year. Car sales growth was low
at 1.7% in 2011-12. It was Utility Vehicles (UVs) sales,
which brought some cheer as their sales grew at 13.7%.
However, UVs are largely diesel driven vehicles.
Kerosene consumption consists mainly of PDS
Kerosene, which is about 98% of the total quantity. Its
consumption came down by 7.8% in 2011-12 and the
product is receiving the attention from the Government
it deserves. The rationalization process which started
in a small way a few years ago was not only carried
forward in 2011-12 but actually picked up pace. Slowly
but surely Kerosene consumption is reducing, which is
a good sign given the huge expansion of domestic LPG
in the country. Figure-5 shows the declining
consumption of SKO since deregulation of the
petroleum sector:
The rationalization process continues in the current
year also. What needs to be done is an increase in
price of PDS Kerosene, which is ridiculously low. A
bottle of mineral water costs more than Kerosene.
LPG has started making inroads in rural areas with the
domestic LPG customer base reaching a figure of 13.71
crores as on 1.4.2012. Over 122 lacs new customers
were enrolled during 2011-12, half of which are in rural
areas, besides release of 56.6 lacs DBCs. There are
1171 LPG Distributors under Rajiv Gandhi Gramin LPG
VitranYojana (RGGLVY) apart from 1665 other rural
distributors as of 1.4.2012 indicating expansion of LPG
to rural areas. LPG consumption has grown at a robust
Kerosene – Rare Good News
Figure-5: Annual SKO Consumption & Growth (%)
LPG: Moving into Rural Ares
Petroleum Federation of India 23
thCARG of 7.2 during the 11 Five Year Plan. What has
been disappointing, however, is poor performance of
Auto LPG. Despite addition to the number of Auto LPG
Stations (ALDS), there are only 652 ALDS as of
1.4.2012 and consumption has slightly shrunk during
2011-12 compared to the previous year. Despite
advantage in price over MS, Auto LPG has really not
taken off. One of the reasons for this is logistics issues.
thATF consumption growth had a dream run in the 10
Five Year Plan growing at CARG of 12%. Even on this th
high base the CARG for the 11 Five Year Plan is robust
at 6.8% with annual growth in the last two years at 9.7%
and 9% respectively. However, with Kingfisher Airlines
falling on bad times last year followed by a strike by Air
India pilots, ATF outlook is quite pessimistic this year.
Since March 2012 monthly growth in ATF is negative.
After a high of 19.9% in 2010-11, cargo traffic actually
declined by -2.9% in 2011-12. The growth in ATF came
mainly from passenger traffic which grew by 13.2% in
fiscal 2012. A sharp increase in airfares and reported
withdrawal of some carriers from certain non-profitable
routes are the reasons for deceleration.
Never has in the last over two decades FO/LSHS
consumption recorded such high negative growth.
Year 2011-12 ended with negative growth of -14.4%.
One of the major reasons was substitution of FO by
ATF: The Happy Days Are Over
FO/LSHS: Sentiments Remained Negative
HSD, domestic price of which remained cheaper
leading to consumers substituting use of FO by HSD.
Large scale substitution process led to absolute
FO/LSHS consumption volumes dropping below 1994-
95 level.
PetCoke volumes have crossed six million tonnes
putting it ahead of products like LDO, Lubes, ATF,
Bitumen and Others. Although it is a low value product,
its growing volume significantly influenced bottom line
growth in 2011-12. PetCoke growth was very high at
23.3% last year, highest among all petroleum products.
This was due to Gujarat refinery upgradation as a result
of which IOC sold major additional volume of PetCoke
during the year. High growth is expected to continue in
next year also.
Oil companies commissioned over 3100 retail outlets
during fiscal 2012 led entirely by OMCs as private
companies' outlets numbers actually shrunk during the
year due to decommissioning. Private oil companies
were not able to sell auto fuels due to price
disadvantage. Their sales volume for diesel declined by
94%, and that of petrol by 10% during 2011-12 over the
corresponding period of previous year.
(The views & opinion expressed in this article are personal of the
author & do not represent those of PPAC or Government)
PetCoke: The Growing Weight in Products Basket
General
Year in which number of deaths exceeded number of births in Japan, for the first time ever: 2005
Year in which Japan's health ministry began turning off its office lights at 4.30 p.m. to encourage
employees 'to go home early and make babies': 2011
Number of American banks that failed in 2011: 92
Number of American banks that had failed in 2009 and 2010: 140 & 157
Snippets
ee
Courtesy: Business India
Petroleum Federation of India24
Is Petroleum Refining a Sunset Industry In India?
Dr. Aradhna Aggarwal
Senior Fellow,
National Council of Applied Economic Research
India, which once struggled to keep up with domestic
demand for oil products, currently has a major excess in
refining capacity. As of June 2011, there were 21
refineries in India with a capacity of 193.4 million metric
tonnes (MMTPA) while domestic consumption was
about 148 million tonnes. This implies a fear of lower
future values for operators in this industry. Does that
mean that petroleum refining is a sunset industry in
India? This article addresses this question from four
perspectives:
The national energy security perspective
The economic perspective
The technological perspective
The global perspective
The petroleum refining industry comprises
establishments primarily engaged in refining crude
petroleum into finished petroleum products which are
used to power the residential, transportation, industrial,
commercial and electricity utility sectors. Petroleum
fuels have been the world's largest energy sources 1
since 1952 and are expected to continue to remain so.
In 1990 its share in total energy consumption was
nearly 40% which gradually declined to 33 percent by
2010. By 2035, its share will further decline to 28% but it 2
will still be the largest source of energy (IEA, 2010).
Efficient, reliable and competitively priced energy
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The National Energy Security Perspective
supply is a prerequisite for accelerating economic
growth and human development. For any developing
country, therefore, energy security is an integral part of
the overall economic strategy. In this context, petroleum
refining is one of the most crucial drivers of future
growth prospects of an economy. Any mismatch
between demand and supply of these products can
thus pose serious energy security threats. In India,
about 34.5% of the energy generation capacity comes
from oil. The demand for petroleum products has
increased at an annual average rate of 6.5% over the
period since 1970-71. To meet the growing demand,
refining capacity has also increased, in particular after
1998. Figure 1 shows that at the current level of
demand, refining capacity is in excess of the domestic
demand.
Three observations may be made here.
First, the emergence of surplus capacity is a relatively
recent phenomenon which emerged in the late 1990s.
There has been a thin balance between demand and
supply which may not be tenable in the long run due to
growing demand. According to the demand projections
made by the Working Group on Petroleum and Refining thSector for the 12 Plan, the growth in demand for middle
distillate fuels will accelerate from 5% during 2011-12
to 2016-17 to over 6% during the next five years. The
demand for heavy distillate fuels will also accelerate
while that for low distillates, Naptha and Motor Spirit will
continue to grow at the same rate of around 6%.
Figure 1: Consumption and refining capacity in
petroleum sector in India ('000 bpd)
1 Just as coal had displaced fire wood as the chief source of fuel in the US by the mid-1880s, petroleum surpassed coal by 1951.
2 IEA (2010) World Energy Outlook 2010, International Energy Agency.
Sources: Energy Statistics, 2012; Eleventh Plan Working Group Committee, 2006
Planning Commission
Petroleum Federation of India 25
Overall, demand is projected to grow at a rate of 5%
over the next 5 years which will accelerate to 5.9%
during 2017-2022 (Table 1).
While the demand will continue to grow at an
accelerated rate, refining capacity cannot grow
continuously creating mismatch between the two.
There may be a long time lag between planning of a threfinery and its commissioning. The 11 Plan projected
the refining capacity to go up to 240.96 million tonnes
per annum in the terminal year of the Eleventh Plan as
against 148.97 million tonnes per annum in the
beginning of the Plan. However, the actual installation
of capacity is 213 million tonnes which fell about 12%
short of the Eleventh Plan target.
Second, there might be excess capacity in aggregate
terms but at the disaggregated level demand for certain
important products such as LPG, Kerosene, lubricants,
Petroleum Coke and Bitumen still exceeds the capacity
(Table 2).
Finally and most importantly, the difference between
consumption and the total capacity is not a good
Table 1: Demand projections by product: 2011-12 to
2021-22 (MMT)
thSource: Working Group Committee on the 12 Plan, Planning Commission
Source: Energy Statistics, CSO
Table 2: Consumption and production of petroleum
products: 2009-10(MMT)
measure of excess capacity. This is because while the
public sector companies are directed to first meet the
domestic demand before exporting the product to
foreign markets, private companies have no such
mandate. Their business model is to maximize return
on their investment from their sales whether domestic
or international. Irrespective of the domestic demand,
private investors would sell in the international market if
returns on international sales are higher. Thus increase
in exports and domestic shortage may go in parallel.
From the energy security perspective therefore, there is
a need to look at the difference between the public
sector capacity and total consumption. Figure 2 shows
that the former is still smaller than the latter.
Considering that India is heavily dependent on imports
of oil,
given the fact that the country has been facing severe
foreign exchange constraints. The refining capabilities
within the country may counter India's disadvantages in
the domestic availability of oil. Further, heavy reliance
on imported energy may put upward pressures on
prices through supply chains, injecting inflation and
putting the indigenous industry at a competitive
disadvantage in international markets. Indeed, India
has created excess capacity in refining; but this may not
ensure energy security. With a growing demand for oil,
there is a large scope of further expansion in this sector.
There is thus need to push investments into the refining
sector.
The energy security concerns cannot be overstated.
The closure of refineries in developed countries has
raised concerns over energy security issues even
within these countries despite their ability to import an
adequate supply of petroleum products.
Figure 2 : Aggregate Consumption and refining
capacity in the public sector (000 tonnes)
Source: PPAC
import dependence for petroleum products also
can seriously jeopardize energy security in the long run
The argument
is that domestic refineries provide a much greater
Petroleum Federation of India26
degree of flexibility in the product supply chain in the
event of an unexpected supply disruption.
The Economic Perspective
Technological Perspective
The Global Perspective
From the economic perspective, at all stages of the
operat ion—processing, manufactur ing and
distribution—refineries generate jobs, incomes, new
businesses for local firms and communities, and a tax
base. The sector also has potential to contribute
significantly to the national economy through foreign
exchange earnings. The economic impacts of
petroleum refining are broader than those of most other
sectors of the economy. This is because unlike products
from other sectors, alternative petroleum supplies or
substitute products are not readily available in the case
of an emergency. And, if petroleum prices go up, the
effects are felt in the price of food and other essential
consumer goods, the costs of commuting, and the cost
of moving goods to market for businesses throughout
the economy. From the economic perspective
therefore, the promotion of the refinery sector needs to
be an important component of the industrial promotion
policy.
The world crude oil share has been getting both heavier
and sour. Most of the older refineries do not have
adequate upgrading capacity to increase the higher
valued product nor do they have the capacity to process
heavier or sourer crude to take advantage of their lower
prices. Further, over time new technologies have been
introduced in this sector driven by environmental
concerns. Old refineries are not expected to be fully
benefitted by these technologies. Finally, petroleum
product specifications have become increasingly more
stringent in terms of emissions putting further pressures
on old refineries. The technological perspective
suggests that new refineries are in a better position to
address all these issues. They are a channel through
which the latest technologies can come and meet the
demand for cleaner products.
The global consumption of oil has been increasing at
the average annual rate of 1.57 percent since 1994.
Figure 3 shows that since the early 1980s, the demand
for oil consumption has been growing faster than the
capacity.
Note: The actual growth figures have been adjusted using the Hodrick-
Prescott filter.
This points to the need for continuing investment in
refining capacity. Since alternate energy is not ready to
replace the fossil energy, dependence on oil energy is
expected to continue. According to the 2006 World
Energy Investment Outlook of the International Energy
Agency, the world needs to invest $774 billion in real
terms between 2005 and 2030 in the refining sector to
create an addition capacity of 32 million BPD. Asia will
attract the largest portion of this investment at $170
billion as traditional producers namely, the US and
Europe have been losing competitive advantage in this
sector. The most significant expansion of capacity has
occurred in China and India which have had the effect of
pulling the locus of world refining more toward the Asia-
Pacific region. India has the fifth largest refinery
capacity in the world. Reliance Industries' Jamnagar
complex is the largest oil refining complex in the world, 3with a total capacity of 1.24 million bpd . The Special
Economic Zone at Jamnagar refinery has a Nelson 4 Complexity Index of 14.0 and i most
complex India has thus created core
competencies in this sector. This perhaps is an
opportune moment for the domestic refining industry to
leverage these competencies and make India a major
refining destination rather than treating it as a sunset
industry.
Figure 3 : World consumption of oil and refinery
capacity: growth (%)
Source : BP Statistical Review (Online)
s one of the world's
refineries.
3. http://www.ril.com/html/business/refining_marketing.html
4. http://www.ril.com/html/aboutus/manufact_jamnagar.html
Petroleum Federation of India 27
LPG for household consumption is nearly 89% of the
total LPG off-take in India. The total LPG consumption
in the country for the year 2011-12 was 16.5 MMT
(Million Metric Tonnes) and is expected to grow at 8-9%
as envisaged in the Vision 2015 document of Ministry of
Petroleum and Natural Gas. OMCs are holding a
customer base of more than 135 million households
currently. More than 11500 LPG distributors home
deliver nearly 3 million domestic LPG cylinders every
day to cater to this mammoth customer base
constituting more than half of the country's population.
LPG for Domestic Cooking is heavily subsidized and
hence LPG is dual priced based on its use. LPG subsidy
for the year 2011-12 is estimated to be more than 30,
000 crore rupees. To restrict the use of subsidised LPG
only for genuine domestic customers, every household
is permitted only one registered LPG connection in the
name of one of the family members as per the LPG
Supply and Distribution Order amended in 2009.
However, every registered customer is entitled to
receive refills as per their domestic cooking need.
LPG is an exceptional fuel. It is considered as a green
fuel and has a wide range of applications. The
environment friendliness and usability for multiple
applications coined with the arbitrage available in its
pricing entice the market players to divert the product
meant for domestic cooking for other applications.
Challenges in LPG Distribution
LPG Transparency Portal
Jayadevan PChief Manager(LPG-Sales)
Indian Oil Corporation Limited
All LPG distribution operations are recorded using
robust software provided by OMCs to distributors. The
information thus generated is captured and made into
meaningful reports providing business insights to
OMCs. Hence, the market players use ways and means
outside the software realm to manipulate and take
advantage of arbitrage available in inherent
vulnerability of Subsidised Domestic LPG Marketing.
Over the years, such trends of diversion have been
facilitated by obtaining more than one LPG connection
per household violating LPG Control Order. This is
achieved through duplicate and/or fake connections.
Multiple connections in the name of existing customers
and/or fake connections in the name and address of
non-existent customers provide enough opportunity to
draw subsidised cylinders and use them for purposes
other than domestic cooking.
LPG cylinders are home delivered. At the time of
delivery, the household identity is manually verified and
the receipt acknowledged by the resident / family
member. Hence, the current process of LPG
distribution to customers has a weak form of verification
and consent from a residential consumer at the time of
acceptance of delivery. Being a manual process, the
system does not have a fool proof re-verification
mechanism. This leaves an opportunity for diversion of
the cylinder by stakeholders in the supply chain to non-
genuine customers for non-domestic applications
without the knowledge of registered customers.
The access to subsidized LPG requires sufficient proof
for local address and identity, with an increasing
migratory population, this becomes a bottle neck. In
addition, in the current system an LPG customer has
his/her connection mapped to a specific OMC
distributor in his/her locality, binding them to the
distributor. In the event of below par service by the
distributor, the customer does not have the freedom to
move to distributor offering better service.
a. Use of Fake Identities to draw subsidies.
b. Lack of strong process to verify receipt by
genuine beneficiary
c. Lack of Portability of Identity & Quality of
Service
Petroleum Federation of India28
Transparency As a Solution to Challenges
The need for transparency in subsidized domestic LPG
supply to the last mile of the supply chain as an effective
social audit mechanism to meet the challenges was first
conceived in the interim report of the Task Force on
Direct Subsidy Transfer set up by the Finance Ministry
headed by Chairman, UIDAI in which Secretaries of
various departments including P&NG were members.
The Task Force detailed a scheme for achieving direct
subsidy transfer to customers with a well-integrated
subsidy management system. It was felt that the same
would ensure to bring about real choice and
empowerment for beneficiaries, without distorting
markets in unacceptable ways. To achieve this, existing
subsidy administration process shall be re-engineered.
The path envisaged include targeting, address
leakages and diversion through transparency with use
of technology, empower beneficiaries with choice in
accessing subsidies, provide a quick and convenient
method to report grievances, a robust electronic
process for identification of beneficiaries, and
electronic transfer of funds into their bank accounts.
At a macro level the team felt that any effective subsidy
regime has to incorporate the following elements:
1. Empowerment and choice for beneficiaries
2. Transparency in subsidy administration and
information visibility
3. One price for subsidized goods
4. Efficiency in production
5. Convenient and effective grievance redressal
6. Support all types of direct subsidy transfer
models
7. Fully electronic service delivery
8. An incentive-compatible solution across
stakeholders
9. Effective MIS Reporting
A subsidy framework that conforms to above broad
elements is expected to limit incentive distortions and
minimize inefficiencies.
Transparency in Subsidy Administration And
Information Visibility
Bridging the information asymmetry is identified as an
immediate implementable area to improve the
effectiveness of any subsidy program. A large section of
the society is often unaware of their rights and the
welfare services offered by Governments. They face
formidable challenges in accessing these services,
understanding their real rights envisaged in the
Governmental orders, its implementation/availability to
all fellow beneficiaries equitably and exercising them.
For example, information about who gets LPG cylinders
at what frequency under public distribution system,
which acts as a powerful social audit instrument, comes
at a great premium. The availability and dissemination
of comprehensive information already collected and
collated by PSU Oil Marketing companies if available in
the public domain can both dramatically empower
citizens, stop distortions by the partners in supply chain
and increase the effectiveness and transparency of
subsidized LPG delivery administration.
Despite tremendous increase in awareness and
changes brought about by reforms like the Right to
Information Act, 2005, in recent years, information
asymmetry is still widespread. Even when such
information is available, in tits and pieces, it can paint a
distorted picture given the leakages and diversion in the
distribution chain.
Hence information, such as the availability of the
domestic LPG, list of beneficiaries, and details of
benefits drawn, among other things, provides a
powerful reconciliation and social audit mechanism.
Performance of appointed LPG distributors who are
servicing beneficiaries on behalf of the Government
also can be rated by the customers and published in the
OMC website. Civil society organizations, activists,
researchers, analysts, and local residents themselves
can use this information to highlight discrepancies and
irregularities in social programs.
Oil Marketing companies have been capturing the
information for better supply chain management,
monitoring performance of their distributors , optimizing
resources, planning equitable distribution etc for more
Petroleum Federation of India 29
than a decade. With the basic understanding that if
deployed effectively, information technology has the
potential to serve as a powerful tool to bring about
transparency and accountability of Government
services, efforts commenced immediately after the first
meeting of Task force in March 2011 to channelize and
publish the information. As such, the systems in place of
OMCs have reporting and analytics, data warehousing
and business Intelligence modules. While all possible
metrics cannot be fully conceptualized when the power
of information in LPG was envisaged, casting the net
wide enough and provided in an easy to consume
manner for end-users, was expected to ensure that the
data is relevant and meaningful.
As an immediate step, the OMCs have taken up the
task of setting up a transparency portal that would show
the details of all the customers of LPG who are
receiving subsidized cylinders, distributor wise. This
transparency portal would be accessible to the public
and details of the consumption of subsidized cylinders
of consumers across the country would be viewable.
The information is hosted in www.indane.co.in by IOCL,
w w w . e b h a r a t g a s . c o m b y B P C L a n d
www.hindustanpetroleum.com by HPCL. The website
of Petroleum Ministry has a
direct link to all the three portals of OMCs. The
consumption of subsidized LPG, for more than 13 crore
customers across the country is now published in
Transparency portal and is regularly updated. The
details such as customer number, name, address, the
number of cylinders consumed and subsidy amount
www.petroleum.nic.in
availed with facility to sort and search are available for
all domestic LPG customers in the portal.
As the information is expected to act as a powerful
reconciliation and social audit mechanism and Civil
society organizations, activists, researchers, analysts,
and local residents themselves could use this
information to highlight discrepancies and irregularities,
this is currently making LPG distributors more vigilant
about their deliveries to genuine customers and thereby
acting as a self-correcting mechanism against
diversion.
The portal also has facility to sort and search the
information, get refill wise booking and delivery details,
submit feedback/complaint for all visitors, and rating the
distributor and surrender connection facilities for all
registered customers. The rating of the distributor is on
five parameters including right price, correct weight,
courteous behavior and timely deliveries.
Besides the utilities to check, the portal today is helping
customers to compare their consumption with others
and conserve their cooking and eating habits, besides
adapting to the control order provisions which they were
unaware earlier.
The portal is a true mirror of the subsidy disbursement
to the rich and the poor, the elite and underprivileged,
the urban and rural households of customers and is fast
emerging as a tool for introspection for the customers
and true reflection of activities undertaken by all
interested channel partners and rule makers in the
country.
Number of world's top 10 fastest growing economies between 1980 and 2000 that were in Africa
and Asia: 1 & 9
Number of world's top 10 fastest growing economies between 2001 and 2010 that were in Africa
and Asia: 6 & 4
Number of world's top 10 fastest growing economies between 2011 and 2015 that are projected to
be in Africa and Asia: 7 & 3
Snippets
Courtesy: Business India
Petroleum Federation of India30
The oil and gas sector is one of the key catalysts in
fuelling the growth of Indian economy. Most of the
Indian companies, who want to carry out exploration
and drilling activities, require the services of various
foreign service providers. The upstream segment
substantially depends on imported services, and in the
days of peak activities in 2008 and 2009, the services
were in dire shortage and work programs had to be
deferred owing to non availability. Hence it is
imperative that we improve business environment for
service providers and make it attractive enough for
them to prefer India over other countries.
Foreign Service Providers for Drilling and
Exploration Activities
In India, upstream drilling and exploration work is
mostly undertaken by state-owned oil companies. The
leader in the upstream segment, ONGC, as well as
other oil companies, enter into contracts with various
offshore oil and gas service providers for the purpose of
drilling wells and providing various services in
connection with the exploration and extraction of
mineral oil from offshore locations in India.
In this article, we propose to cover the recent
challenges being faced by the foreign offshore oil and
gas service providers (who offer their income under the
presumptive regime provided under the income-tax law
in India)with respect to the service tax amount.
No Liability for Service Tax –But Still Pay Income-Tax On It!
Shailesh MonaniExecutive Director
PricewaterhouseCoopers Pvt. Ltd.
Bhavin ShethManager
PricewaterhouseCoopers Pvt. Ltd.
Provisions Under Income-tax Laws for Taxation of
Foreign Oil and Gas Companies
Finance Act, 1994
Under the income-tax law in India, there is a special
regime of taxability for offshore oil and gas service
providers. Under this special regime, 10% of the gross
receipts for services rendered in connection with
extraction or production of mineral oil, is deemed to be
their income chargeable to tax. For this purpose, the
gross receipts would mean any amount paid or payable
to the foreign company for the provision of facilities /
services or plant and machinery on hire.
The question that arises is whether the amount of
service tax collected by the foreign companies would be
considered as a part of gross receipts for computing
their deemed income under the presumptive scheme.
Further, what would be the position for foreign
companies not having any office in India, hence not
liable to service tax. Accordingly, such foreign
companies do not levy or collect any service tax from
the service recipient and the service recipient is liable
for service tax.
For ease of understanding, we propose to briefly
discuss the provisions of service tax laws in India.
The levy of service tax in India is governed by the
provisions of Finance Act, 1994. Under this law, service
tax is levied on the service provider in cases where they
render the specified services. The Finance Bill, 2012
Petroleum Federation of India 31
1. Indian National Shipowners Association v. Union of India (Bombay High Court). The SLP filed against this decision was dismissed by the Supreme Court
2. Techip Offshore Contracting BV (Delhi Tribunal)
3. Islamic Republic of Iran Shipping Lines (Mumbai Tribunal)
4. Siem Offshore Inc.
has introduced a negative list of services, which means
that all services rendered other than those covered
under the negative list would be liable to service tax.It is
the responsibility of the service provider to collect the
service tax from the service recipient by including the
same in the invoice raised by them for rendering the
services and deposit the service tax so collected with
the Government treasury.
However, there is an exception to the above rule
provided in cases where the service provider is a
foreign company which does not have a permanent
office or place of business in India and the services
provided by such foreign company, are received in
India. In such cases, the Indian service recipient is
deemed to be the service provider and accordingly, is
liable to service tax. This is popularly known as the
reverse charge mechanism. Hence, the foreign service
provider is not statutorily required to levy any service
tax in respect of the invoices raised by them for services
rendered.
The above position under the Finance Act, 1994 is also
supported by judicial precedents under the service tax 1
laws.
The presumptive tax scheme under the income-tax law
has been on the statute since April 1, 1983. At the time
when the presumptive scheme of tax was introduced, it
was never envisaged that service tax would be a part of
the gross receipts for computing tax under the
presumptive scheme of taxation. The service tax laws
were introduced in the statute subsequently in 1994.
Since then, there has been no clarity on the treatment of
service tax for computing the income under
presumptive scheme.
In the past, the tax officers have been making an
attempt to consider the amount of service tax collected
by foreign companies as a part of their gross receipts for
computing the presumptive income, without
Position Being Adopted by Tax Officers When
Computing Income Under Special Regime of
Income-tax Law
appreciating the fact that service tax is a statutory
liability and there is no income element.
However, of late, the tax officers have gone one step
ahead and have started including the amount of service
tax in the gross receipts of foreign companies who are
not liable to service tax under the reverse charge
mechanism of the service tax law.In these cases, the
amount of service tax to be added to the gross receipts
is either notionally computed based on the value of the
invoices raised by the foreign companies or is deemed
to be equal to the actual amount paid by the service
recipient ascertained after calling for the details from
the recipient.
Scenario 1: Where service tax is collected by the
service provider
There have been conflicting judicial precedents with
regard to the treatment of service tax for computing
income under the special regime in cases where
service tax is collected by the service provider. In one of 2
the decisions , it was held that the service tax amount
collected by the service provider should be considered
as a part of gross receipts for computing the
presumptive income under special regime.
3However, subsequently, there was another decision,
rendered in the context of computing presumptive
income for shipping companies (where the provisions
are similar to that of computing presumptive income for
oil and gas companies) wherein it was held that there is
no element of profit in the service tax collected by the
service provider and hence the same cannot be
considered as a part of gross receipts when computing
the presumptive income.
In a recent ruling of the Authority for Advance Ruling 4(AAR), it was held that service tax collected by the
service provider should be considered as a part of gross
receipts for computing the presumptive income under
special regime.
Position Under the Income-tax Law
Petroleum Federation of India32
The above position of inclusion of service tax in
computing income under presumptive scheme is
contrary to the clarification given by the Central Board
of Direct Taxes (CBDT) in the context of deduction of tax
at source from the payment of rent. As per this CBDT 5
circular, it is stated that since the service tax paid by the
tenant on the rent paid by them does not partake the
character of income, no tax should be deducted at
source on such service tax element included in the rent.
Though this circular is in the context of tax deduction at
source, the intention of the CBDT is clear that service
tax does not partake the character of income. This
rationale should be applicable even to computation of
income under the presumptive scheme.
Scenario 2: Where service tax is not collected by the
service provider and is liability of service recipient under
reverse charge mechanism
The judicial decisions discussed under Scenario 1,
though conflicting, have been rendered in the context
where service tax was atleast collected by the service
provider and included in the invoices raised by them on
the service recipient. While this view by itself is highly
debatable, the tax officers are going even a step further
and making additions for notional service tax amount
under the reverse charge mechanism, which is never
charged or collected by the service providers. This may
lead to absurdity and is contrary to the law.
Under the income-tax provisions, the tax officers are
trying to include service tax in the income of the service
provider where there is none levied under service tax
law. By doing this, the tax officers are attempting to
introduce new principle of taxation under the income-
tax laws –tax non existent receipt in the form of service
tax paid by service recipient under reverse charge
mechanism.
In cases where service tax is collected by the service
provider, while there are judicial precedents which are
available, the same are either of the Authority of
Advance Ruling or Tribunal. Hence, there would be an
on-going litigation in this regard until the matter is
settled by the Apex Court. Alternatively, the CBDT
should come out with a clarification on the position to be
adopted regarding service tax for computing the
CONCLUSION
income under presumptive scheme.
As regards the second scenario where service tax is
never collected by the service provider, it may be stated
that the reverse charge mechanism under the service
tax laws was introduced to avoid hardship for the
foreign companies which did not have any place of
business in India from compliance requirements of
service tax. Consequently the service recipient is
deemed to be the service provider and hence liable to
service tax.The tax officers are causing undue hardship
and litigation by considering the service tax, for the
purpose of computing income under presumptive
scheme.
As such, the service tax amount cannot be considered
as income in any case, since it is a statutory liability,
where the service provider merely acts as a collection
agent of service tax on behalf of the government.
However, in cases where the service provider is not at
all liable to collect or to pay any service tax, it is grossly
unfair to include such amount when computing their
income for the purposes of income-tax.
It is high time for the CBDT to come out with a
clarification on its position. At the time of making an
estimation of liabilities to bid for contracts in India, the
offshore service providers consider only the contractual
receipts as a part of their income for determining their
tax liability in India. Even in cases where service tax is
collected by them, it is not considered as income since it
is a pass through, where they merely collect the service
tax on behalf of the Government. In cases where
service tax is paid by the service recipient under
reverse charge mechanism, the question of estimating
tax liability on such service tax never arises.
In view of the tax officers treating the service tax amount
as income of the offshore service providers, their
estimation made at the time of bidding for contracts in
India goes haywire and results into substantial
reduction in their margins or possibly even into losses. It
also has an impact on their cash flow. Considering that
Indian oil and gas industry requires the services of the
offshore service providers, it would be advisable for
CBDT to clarify its position by issuing an appropriate
circular. This would give better clarity to the offshore
service providers and enable them to make better and
accurate estimation of their tax liability in India.
5. Circular No. 4/2008 dated April 28, 2008
Petroleum Federation of India 33
Pramod Narang
Dy. General Manager (Corporate Planning &
Economic Studies)
Indian Oil Corporation Limited
The last decade (2000 to 2010) has seen a spate of
petroleum refinery closures, especially in Japan, EU
and the US. Following the golden age of petroleum
refining (prior to 2008), which resulted into a wave of
new projects in various regions, the global crisis of
2008-2009 and a sluggish and uncertain recovery
thereafter, put many refiners out of business. A number
of projects have either been cancelled or put on hold,
prominently in EU, Japan, and Atlantic basin. A glance
at BP Statistics, 2012 will reveal a broad relation
between the demand and the refining capacity in a
region. Globally, in the past 10 years, while the oil
demand has grown at a CAGR of 1.32%, the refining
capacity has registered a growth of 1.10%. This has
resulted in narrowing the gap between oil demand and
refining capacity (Table – I). However, Europe and
Eurasia continue to have surplus refining capacity as
against capacity shortfall in US. Similarly, China & India
became surplus in refining capacity during the last
decade.
Realignment of Petroleum Refineries – Survival of the Fittest
A. K. RoyExecutive Director (Corporate Planning
& Economic Studies)Indian Oil Corporation Limited
Reasons for Capacity Outage
JAPAN
For the global oil market, a key consequence of the
recent downturn was the loss of several million barrels a
day of future oil products demand. Besides, there are a
variety of other reasons for outage of huge refining
capacities. Some of these reasons are general in
nature and others are specific to a country or a region,
as broadly classified hereunder:
The market condition in the local or regional area
(e. g. suppression of oil demand in Japan)
Economies of scale
High operating costs (EU)
Lesser ability to process low-cost raw materials
like heavy crudes
Lesser flexibility and ability to add value as
compared to a modern refinery
Environmental concerns/ statutory norms (US,
EU, Japan)
The following paragraphs carry out an in-depth, region-
wise analysis of the factors resulting into refining
closures in various regions.
One country where closures have been happening and
are set to occur on a significant scale is Japan. Its
demand for oil has declined to 4.4 m bbl/d in 2011 from
5.5 m bbl/d in 2000. There is little growth in population
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Table -1 (kbd)
Petroleum Federation of India34
National Development and Reforms Commission
(NDRC), China is also renewing is efforts to close some
of its local refineries. It has recently announced new
policies to increase the fuel oil consumption tax to $
18.6/ bbl from $ 2.3/ bbl and also the fuel oil import tariff
to 3% from 1%. It is intended to hasten the closure of
refineries that use fuel oil as the feed stock.
Other noteworthy closures in Asia Pacific have been
ExxonMobil's 70000 bbl/ day Port Stanvac refinery in
Australia, PT Humpuss's 63000 bbl/ day refinery in
Indonesia and Chevern Caltex 76000 bbl/ day refinery
in Philippines (Table – 4).
Shell's Clyde refinery in Australia could be another
possible candidate for outage. According to Shell, the
refinery's output of 79,000 barrels a day is too small to
compete with the large new Asian refineries that
produce more than one million barrels of refined
products on a daily basis. Shell's 110,000 bbl/ day
Tabangao refinery in Philippines and CPC Corp's
205,000 bbl/ day refinery in Taiwan also face uncertain
futures.
Despite such a huge outage since the last couple of
decades, the overall refining capacity in Asia Pacific
has grown at a CAGR of 2.83%, which is in line with the
demand growth in the region. However, the difference
between Asian capacity and oil products demand,
Closures in other Asia Pacific Countries
Table -3 (kbd)and an increasing number of people have opted for
electric, hybrid and more efficient cars.
Reportedly, refining capacity of the order of 1425 kbd at
33 sites have either been closed or mothballed in the
country since 2009, prominently by the JX Group,
Cosmo Oil, Idemitsu Kosan and Toa oil (Showa shell),
as briefed below (Table – 2):
In July 2009, Japan's Ministry of Economy, Trade and
Industry (METI) issued an ordinance that requires
meeting a cracking to crude distillation ratio of 13% by
March 2014. (Cracking under this ordinance is defined
as resid FCC plus coking, plus resid hydro-cracking,
which means it excludes vacuum gasoil FCC and
hydro-cracking). To meet this requirement, refiners are
left with a limited choice of either closing down the
distillation capacity and/ or increase resid upgrading.
Considering Japan's outlook for a continued decline in
the petroleum demand and, subsequent to the
disastrous earthquake of March 2011, refiners are
generally opting for closures over investments.
China has been one of the main drivers of oil demand.
Its oil demand has registered a sharp growth at a CAGR
of 6.6% since the turn of this century. The refining
capacity has also grown in tandem at an almost similar
rate. While China is planning to increase its overall
distillation capacity, legislation is expected to have an
overall impact on the capacity build-up. The Chinese
government has raised the minimum capacity limit for
the refineries to around 40,000 bbl/ day (~2 MMTPA).
The targets are small, but have affected numerous
independent refineries.
Year-wise details of refineries with lower capacities,
either moth balled or closed at various locations in
China since 1999 is tabulated in (Table – 3):
CHINA
Table -2 (kbd)
Table -4 (kbd)
Petroleum Federation of India 35
which had ballooned to a peak surplus of 1.7 m bbl/ day
in 2009, from a deficit of nearly 1 million bbl / day in
2004, is expected to erode in view of the likely refinery
closures in Japan and China. This is also expected to
result in better refining margins in the next 4-5 years,
before start up of the export refineries in the ME.
European refineries face the combined effect of
overcapacity and falling demand in the region
aggravated by an economic downturn and increasing
competition from more modern refineries in Asia and
the Middle East.
Closures in Europe
A majority of European refineries are old and do not
have enough flexibility to accommodate these rapid
changes. Road transportation fuel, and in particular
gasoline for which Europe has a significant capacity, is
being replaced by Diesel (Chart – I& II). Additionally,
heavy oils, bitumen, waxes and petroleum coke are no
longer in high demand as they used to be a decade
earlier. Rising biofuels supply and a requirement to pay
for a rising share of CO emissions have also been 2
instrumental in stressing the refining margins.
The misalignment between demand and supply
capabilities calls forhuge investments in hydrocracking
capacities, which is an extremely difficult choice for
European refiners at this juncture. Asian and ME
refineries on account of being younger, with big highly
complex plants, lower labour costs and less severe
environmental regulations make the competion tougher
for European refineries.
Therefore, European refiners continue to struggle to
balance their output with demand. As a result, capacity
utilization of European refineries' consistently
decreased from an average of 90% in 2005 to less than
83% in 2010 (Chart – III).Therefore, optimization and
rationalization of the EU refining system appears to be
the best choice for the refiners.
Eight refineries with a combined capacity of 864 kbd
(over 43 MMTPA) have already been closed since
2009 (Table – 5).
Many other refineries (more than 600,000 bbl/ day) are
at risk of closure. LyondellBasell has already
announced its intention to close the 105,000 bbl/day
refinery at Berre (France). Petroplus has also
announced the possible closure of three of its five
refineries – Petit Couronne refinery, France (162,000
bbl/ day), Cressier Refinery (68,000 bbl/ day) in
Switzerland, the Antwerp refinery, Belgium (107, 500
bbl/ day).
Chart –I; Source: ENI
Chart –II; Source: ENI
Chart –III; Source: ENI
Table -5 (kbd)
European refineries - capacity, throughputand utilization
18.0 mbl/d
16.0
14.0
12.0
100%
90%
80%
70%
60%2005 2006 2007 2008 2009 2010
Refining Capacity Refining throughout % Refinery utilisation rates
89.6%
83.2%
Petroleum Federation of India36
While the refiners usually look for a prospective buyer
as the first option, nine refineries (45 MMTPA capacity),
have recently been sold. The details of recent deals and
the probable motive of the buyers is listed below
(Table – 6)
In the US, the scenario is slightly different from that of
Europe. The US refineries are also adversely affected
by various factors such as decreased demand for oil,
higher crude oil prices, increasingly strict
environmental legislation and the competition offered
by new world scale refineries in ME and India.
Increased blending targets for ethanol and Corporate
Average Fuel Economy (CAFE) norms also affect the
demand for refined petroleum products. Ethanol that
accounted for about 7.2% of gasoline blends in 2009 is
likely to reach 20% in the next decade. Similarly, the
stringent sulphur limits of 15 ppm (since 2012) in the
heating oil from the earlier limit of 10,000 ppm have
added to the operating cost of refineries.
Despite the above developments, only a few US
refineries have been closed, mainly the smaller ones,
besides a few others put up for sale. Unlike European
refineries, many US refineries are well depreciated,
highly complex and flexible that can produce products
of advanced speci f icat ions. Technological
breakthroughs achieved in the production of shale gas
were successfully deployed to shale oil plays.
Consequently, rising production of domestic
unconventional oil along with steadily growing oil sands
shipments to US refineries, and the capabilities of
refineries to process these crudes provide the US
economy with the potential for a sustained resistance
towards any downturn.
Increased availability of shale gas has also come to the
aid of refiners as a lower cost alternative to the crude oil.
Closures in the US/North America
US refineries no longer bank on crude oil entirely for
meeting their fuel requirements. This development has
come as an added advantage, as they have been
increasingly exporting finished products to regions
such as Latin America and Europe. As can be seen from
the following table (Table – 7), the US has gradually
transformed itself into a net exporter of the petroleum
products.
Data compiled from various sources indicate that a total
of 1,440 kbd refining capacity has closed down in the
US/ Canada since 2009 (Table – 8).
Some of the other major US refineries that have
announced their intention of either being sold or closing
down include Sunoco's refineries at Marcus Hook
(175,000 bbl/ day) and Philadelphia (330,000 bbl/ day),
and BP's 451,000 bbl/ day refinery at Texas City and
251,000 bbl/ day refinery at Carson City, California.
However, the American downstream renaissance is not
guaranteed. A range of existing and proposed
environmental regulations pose the largest threat to the
competitiveness of the US refining industry. Among the
more important regulatory developments are proposed
gasoline specifications, growing biofuels mandate,
proposed controls on GHG emissions, low carbon fuel
standard and changes in tax treatment of product
inventories.
Table -6
Table -7 (MMT)
Table -8 (kbd)
Petroleum Federation of India 37
Recent Trends
Overall, the general outlook for refineries is for severe
competition and is a perfect case for the survival of the
fittest. Small refineries with lesser flexibility have either
been sold or have been closed down. Larger, more
complex and flexible refineries have the best chances
to survive. Therefore, though the global refining
capacity has increased in the previous decade, the
number of operating refineries has come down (Chart –
IV). According to the Oil and Gas Journal, the number of strefineries as on 1 January 2012 stood at 655 with a
combined capacity of over 88,000 kbd.
Database of Thomson Reuters(Table – 9) reveals
another set of interesting information. According to the
agency, the total number of operating refineries stood at
648 as on April 2012 with a gross refining capacity of
94860 kbd (~4743 MMTPA). While the maximum
number of refineries fall in the range of 3 to 6 MMTPA
(167 numbers), they are closely followed by refineries
of size 9 to 15 MMTPA (136 numbers) and 6 to 9
MMTPa (118 numbers). It can be taken as a
coincidence that the number of small refineries (below 1
MMTPA) and mega refineries (above 15 MMTPA), is
almost identical, transforming the data into an almost
bell-shaped curve.
Summary
The closure of refineries in various regions has been
happening, albeit in a limited manner till now. While in
Japan, there are robust chances for further closures,
the threat continues for Europe too. With a strong
imbalance in gasoline and distillate supply-demand,
stringent fuel-quality requirements, and demanding
climate policies; European refiners are facing the most
difficult situation. The phenomenon is likely to be less
severe for the U.S. due to reasons such as local
availability of shale gas and shale oil, availability of the
Canadian oil sands and high complexity of the
refineries. In the Asia Pacific, Russia, Latin America and
the ME, refiners have the opportunity to benefit from
their domestic resources, which is why the closures in
other parts of the globe have been more than offset by
construction boom in these regions. Another
development that is happening is the sale of refineries
due to which, the industry is also witnessing significant
changes in the downstream ownership. A summary of
the refinery closures (or moth-balled), as deliberated
above due to various reasons, in various countries/
regions is placed below (Table – 10)
Acknowledgments:
BP Statistical Review of World Energy; Oil & Gas Journal; FACT Global Energy; ENI –
The future of refining in Europe; World Oil Outlook, 2011/ 2010 – OPEC; Deloitte –
Changing times; Thomson Reuters; In-house support from Technical Services Group of
Refineries Division and International Trade Department of Corporate Office, IOCL
Disclaimer
The data and other information contained in this article is for general information and is
not intended as a substitute for advice to any business, investment or any other
professional and commercial use.
The article contains references to materials from third parties, whose copyright must be
acknowledged while reproducing the same or utilizing it in any form.
Table -9 (MMTPA)
Table -10 (kbd)
Petroleum Federation of India38
The Business of Innovation
Mohinish Sinha Leadership & Talent Practice Leader
Hay Group South & South East Asia, Pacific & Africa
With increasing globalization as a given, one would
hardly need to point out that international competition is
likely to grow fiercer while markets will look to get even
more diversified. The rise of India and China, coupled
with the global economic power shift towards Asia, is
reshaping the world before our very eyes.
The hunger to capture Asia's abundant business
opportunities is challenged by higher expectations,
greater business risks, and stronger market
competition. Meanwhile, the growing scarcity of
strategic resources such as water, minerals, metals and
fossil fuels looks likely to cause price hikes and lead to
social instability.
In this uncertain business environment of rapid and
irrevocable change, innovation is no longer a luxury. It is
a necessity. We believe that the only way for companies
to succeed in the new 'normal' is to innovate. Not just in
new products and services for customers, but also in
the way they treat and motivate employees, groom
leaders and conduct business. Perhaps, some of this
innovation can even be easy – but commercializing it
and building organizational discipline around it is much
more challenging.
Hay Group has conducted a lot of research around the
dynamics of leadership required for disciplined
innovation, especially for companies operating in Asia.
And our landmark study on this, the Best Companies for
Leadership (BCL) Asia, has found that while there is no
silver bullet for success, there certainly are specific
organizational practices that companies can adopt to
enable and encourage innovation.
Leading companies in the BCL survey have recognized
that meaningful innovation requires a strong and
lasting commitment. These are frontrunners that
have taken a disciplined approach to a notoriously fickle
process, and focused their efforts on creating an
environment throughout their organizations that invites
and supports innovation and allows new ideas to
flourish.
This year, Asia's five Best Companies for
Leadership –Samsung Group, Toyota Motors,
Unilever, Nestle and Tata Group – have proved that
there is plenty to learn and benchmark about the
business of innovation. These companies are clearly
driven by future-oriented innovation. Furthermore, our
research finds that employees – and not just the
managers– are constantly involved in addressing
customers' future needs, a key criterion in enabling
future innovation. This ability to translate future trends
into new product offerings has kept Asia's best ahead of
their competition.
Our experience suggests that certain business
practices can help establish and sustain a climate
conducive to meaningful innovation. Take for instance,
the Global top 20 organizations emerging from our BCL
study – which includes General Electric, Procter &
Gamble, IBM Corp, Microsoft, and the Coca-Cola
Company rounding off the top five – are all structured
towards 'organizational agility'. This gives them the
unique advantage of being able to respond to
challenges with speed and flexibility, the primary criteria
for innovation.
Further, smart innovations require a fundamental
understanding of customer needs, and a willingness to
risk rethinking them. The most innovative companies
ensure that employees understand customer needs,
and support new approaches to address them. They
are willing to support unprofitable projects, hence
postponing short-term profits in order to continue
investing in long-term innovation. Let us consider the
Tata Nano, which despite its glitches, remains an
achievement for the Tata Group. It fulfils the need for
safer transportation as Indians travel through the
streets, sometimes with four family members piled atop
a wobbly motorcycle. By all measures, the “one-lakh
car” has been regarded a breakthrough innovation,
Petroleum Federation of India 39
making a functional vehicle available to India's masses
at an extremely low cost. Furthermore, no good deed
goes unnoticed. Leaders in Tata Group regularly
recognize and publicly celebrate innovation. This
simple but vital act is a critical part of maintaining
discipline around innovation.
The next precursor to innovation is around 'diversity' –
new and different points of view are essential to
innovation! Even though talent will continue to be at a
premium and retaining employees with key skills will be
a challenge, it is important to accommodate and
motivate the generation that forms our next band of
leaders. Organizations have to encourage and
embrace different cultural and generational
perspectives, and work to broaden the viewpoints of
their employees. Global electronics giant Samsung has
come a long way from being “manufacturer” to
“innovator”. In making Samsung a responsive market
player, CEO Choi Gee-Sung said his job was to re-
orientate the organization for the next generation so
that it is constantly ready to evolve. Not surprisingly, its
culture of top-down management and obedient [1]employees were among the first to go . Today,
Samsung is responding to Chairman Lee Kun Hee's call
by encouraging creativity over obedience.
Finally, our research shows that 'rewarding
collaboration' is a key enabler to innovation. If
innovation is the product of different perspectives,
collaboration is the process that brings them
together! We find that the Best Companies do not
merely preach collaboration; they require and reward it.
Clearly, to succeed in the new normal, Asian leaders
must be game-changing innovators. They will need to
be adept at conceptual and strategic thinking, have
deep integrity and intellectual openness, find new ways
to create loyalty, and relinquish their own power in
favour of collaboration.
Going forward, the ball is in the court of Asian leaders to
set the direction and discipline for innovation, in order to
be able to run globalized companies. Insights on
individual leadership styles, ensuring strong leadership
pipelines etc., have been useful preludes, but they are
no longer enough for sustainable success in the new
economy. Lessons for innovating leadership, in our
experience, bring out the following action points:
Developing an organizational structure that
enables quick communication is fundamental
to organizational agility, its decision-making
frameworks and responsiveness to market
changes.
The Asian tradition of directive leadership will not
work. Everyone is expected to lead, even if they
have no formal position of authority, and Asian
bosses must learn to delegate their authority and
decision-making power. This, we find, will lead to [2]higher employee engagement and motivation .
Creating personally meaningful work is key.
Having an innovation strategy is no guarantee of
success, and the most innovative companies are
interested in discretionary effort. Therefore,
strategies must be decoded vertically and
horizontally so that personal interests are aligned
with corporate and interdepartmental goals.
Analogically speaking, innovation can help
organizations do more than just plant new trees – it will
enable them to weather the seasons and persist
through bad harvests. They must not just grab at low-
hanging fruits, which competitors also do. Instead, the
need of the hour is to balance current prospects with
long-term investment returns, resulting in a willingness
to explore new paths to success.
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[1]Source: Samsung aims to become a global innovation power, Bloomberg News, 5th
September 2010.
[2] Source: 2009 Hay Group study of 1,249 high-profile organizations in India, cited in
Leading Asia: It's time to change the Rules
Petroleum Federation of India40
In today's refining environment, where refining margins
are getting tighter, processing opportunity crudes
becomes ever more desirable. These crudes, however,
tend to have increased levels of contaminants and
usually contain increased amounts of VGO and
residue. Refiners in India see incentives in processing
such heavy feeds in order to maximize profitability from
conversion units. Over the last several years Indian
refiners have seen an increased demand for high
quality distillate fuels and this is expected to continue
over the next decade. Thus hydrocracking becomes
the technology of choice to address this market need.
Processing heavier feed stocks poses many
challenges to the hydrocracker. It is critical to have
detailed characterization of the feed at the molecular
leve lwith a detailed contaminant analysis. Also, as
feeds become heavier and more difficult to process, it is
important to consider various other aspects of the
hydrocracker design to maximize catalyst utilization.
Proper catalyst loading and high performance reactor
internals are always critical but with heavier feeds these
aspects become even more important to fully utilize the
catalyst. As feeds become heavier, feed filtering,
particulate and metal trapping are important
considerations and must be included within the design
of the unit. In a unit designed for high conversion and
processing a heavy, high-endpoint feedstock, attention
must be paid to the fact that a significant amount of
heavy polynuclear aromatics (HPNA) can be produced
and the design of the unit has to account for this so that
cycle limiting catalyst deactivation does not occur. This
becomes important in high conversion maximum
HPNA Management in High Conversion Hydrocrackers
Richard K HoehnSenior Engineering Fellow
UOP LLC, A Honeywell Company
Soumendra BanerjeeSenior Manager - Process & Product Development
UOP LLC, A Honeywell Company
distillate yield units where it is desirable to limit the
conversion per pass resulting in unit designs with
recycle streams of unconverted oil. High endpoint feeds
contain a higher proportion of high molecular weight
multi-ring aromatics which are not easily converted. A
natural consequence of the cracking reactions is to
produce a small amount of HPNA material from these
multi-ring aromatics. They are essentially byproducts of
the cracking reactions and when the unit is operating at
high conversion, tend to build up in the recycle liquid
(Figure 1), unless some means is put in place to limit
their concentration. Left unchecked, these HPNAs will
eventually become coke on the catalyst; with the result
that the cycle length will be shortened beyond what it
would be in the absence of HPNA compounds.
Therefore processing heavy feeds requires good HPNA
management. UOP has been active working since the
1980's in the development of methods to reject HPNAs
from the recycle oil so these compounds do not have a
chance to build up to levels that would lead to catalyst
deactivation.
Figure 1. Typical Polynuclear Aromatics Found in
Recycle Oil
Petroleum Federation of India 41
The first technology developed by UOP takes
advantage of the fact that HPNA material is relatively
easily absorbed in a bed of activated carbon. Recycle
oil is passed through a bed of activated carbon before
being routed to the reactor section and this has been
shown to be highly effective in reducing catalyst
deactivation and extending cycle lengths in units
employing this technology. The first application of this
technique was in 1989 and since then at least 6 units
have been upgraded with carbon bed technology, TMcalled the UOP HPNARM technology (Figure 2A and
Figure 2B). Activated carbon bed adsorption has not
gained wider acceptance throughout the refining
industry mainly because of carbon handling and
disposal issues. Where refiners have been able to find
a convenient destination for the spent carbon, such as
at a nearby cement plant or coal fired power station, the
HPNARM technology has proven to very beneficial to
those refiners who practice it.
Largely due to the problems associated with carbon
handling and disposal, UOP embarked on a program in
the late 1990's to develop a method for rejecting HPNAs
which does not require carbon handling. The result of
that effort is shown in Figure 3. It is a variation of divided
wall technology, although unlike divided wall designs,
one end of the inner partition contacts the bottom head.
When that occurs, the name split shell is applied.
Essentially this technique allows a column to produce
more than one bottoms product. The normal recycle oil
stream that is routed to the reactor section in recycle
operation is withdrawn from the bottom of the Product
Fractionator and this corresponds to the left-hand
stream at the bottom of the Product Fractionator in
Figure 3. A small slip stream is withdrawn from this
recycle oil stream and is routed to the HPNA Stripper,
corresponding to the section at the bottom right-hand
side of the Product Fractionator. An appropriate
amount of stripping steam is applied to the HPNA
Stripper section so that the lighter hydrocarbons are
vaporized and they eventually leave with the normal
recycle stream. The material exiting the bottom of the
HPNA Stripper is the heavier fraction of the recycle oil
and contains the non-volatile HPNA material.
According to the properties of the feed, this HPNA
Stripper bottoms stream can be as small as 0.5 vol-% of
fresh feed and still be effective such that catalyst
deactivation due to coke buildup from the presence of
HPNA material in recycle oil is not seen.
UOP currently has two units running with the patented
HPNA Stripper technology and a number of units in
design and construction.
In summary, UOP has been involved in the
development of a number of techniques for rejecting
HPNA material from hydrocrackers in order to
maximize catalyst activity and prolong cycle lengths
and has many years of successful experience in
applying this technology to various units processing
different feed stock.
Figure 2A.Process Sketch with the HPNA RM
Technology
Figure 2B.Process Sketch of the HPNA RM
Technology
Figure 3.HPNA Management via Fractionation
Process Sketch
Petroleum Federation of India42
Strategic Options For Upstream Companies
Sudipta DasAdvisory Partner & Climate Change &
Sustainability Leader (India), Ernst & Young
The oil & gas sector is of prime importance to the Indian 1economy as it constitutes around 15% of India's GDP.
However, crude also represents the key commodity
imported to India and the oil import bill increased by 2
40% to USD 140 billion in FY 12. This is contributing to 3high fiscal deficit which stands at around 5.9% in 2012
and balance of payments deficit at USD 12.8 billion in 4
the last quarter of FY12. Annual fuel subsidies amount
to around ` 110,000 crore annually which come from
the Government's budgetary support and some 5contribution by upstream oil and gas companies. The
country has seen fossil fuel price hikes in recent past at
successive and quick intervals, which is one of the
factors leading to a high Wholesale Price Index inflation
level of 8-9%. India's increased dependency on crude
oil is thus a matter of great concern. If India has to
maintain its growth story and given the likely oil
constrained future, this trend needs to be reversed and
a paradigm shift is needed to switch over to more
sustainable sources of energy.
Although there has been a significant decrease in the oil
intensity of Indian GDP from ~0.5% to~ 0.42% million
tonnes oil (eq) per real GDP (in INR billion) between
1995 and 2008, yet a lot needs to be done to reduce the
high dependency on imported oil and ensure energy 6security for the country. In the first place it is important
to reduce the subsidies for fossil fuel so that demand is
at least partly responsive to price signals. This will
create an impact of rising inflation triggering political
disturbances all over the country and increasing cost of
input materials for industries. However, in the long run
the economy would re-adjust itself in the new normal
situation leading to relatively less fossil fuel demand for
transportation. Moreover, reduction in subsidies for
carbon intensive fuel would also compel other sectors
to re-innovate their processes for improved energy
efficiency and technologies which run on low carbon
fuels and lead to low carbon emissions. For instance, in
the transport sector (highest consumer of petroleum
products in India~51%) – the auto manufacturers would
have to re-design the car engines such that they
become compatible for running on low carbon fuels.
This would in a way bring down Greenhouse Gas
(GHG) emission intensity of one of the highest GHG
emitting sectors in India i.e. transport sector which
contributes to around 7% of India's total GHG 7emissions.
The upstream oil and gas sector is a major player in the
energy value chain, ensuring energy security for the
country. These companies have a major role to play in
order to secure sustainable sources of energy.
Upstream companies need to follow a strategic
approach to ensure secured supply of energy as well as
maintain revenue growth. Some of the options that
could be explored by them include:
(I) Building a balanced and diversified portfolio of oil
and gas assets: Diversification of oil import
options would mean importing oil from oil rich yet
undiscovered destinations in Africa besides
conventional crude exporting countries like Saudi
Arabia, Venezuela, Nigeria, Qatar, Iran and other
Gulf countries. In fact, since these African
countries are in the nascent stage of oil and gas
exploration and production, Indian upstream
companies can also pick up stakes in their oil/gas
fields. This would be a win-win situation since
technology and knowledge transfer would
immensely benefit the African oil exporter while
the Indian upstream companies can ensure
security of oil/gas supply. The recent gas
discoveries in Mozambique and Tanzania are
indicators of the unexplored energy prospects in
Africa.
1. http://www.dnb.co.in/IndiasEnergySector/default.asp2. http://articles.economictimes.indiatimes.com/2012-06-13/news/32215709_1_oil-import-bill-net-oil-oil-prices3. http://timesofindia.indiatimes.com/business/india-business/Rising-fiscal-deficit-disturbing-Reserve-Bank-of-India-governor-D-Subbarao/articleshow/12682972.cms4. http://economictimes.indiatimes.com/news/economy/finance/balance-of-payment-slips-into-red-on-lower-fund-inflows/articleshow/12470135.cms5. http://www.indianexpress.com/news/remove-diesel-subsidy-jairam/876546/6. http://www.ibef.org/download/Indiafocus_28may.pdf7. http://planningcommission.nic.in/reports/genrep/Inter_Exp.pdf
Petroleum Federation of India 43
(ii) Cost effective import of LNG (combined stake
with national/international partner): Probably the
best example would be the Joint Venture formed
by Reliance Power, Shell and Kakinada Ports to
set up a LNG import terminal of annual capacity 5
million tonnes by 2014 on the eastern coast.
Upstream companies can form similar
consortiums with the relevant port authority and
International oil & gas company, who have core
competency in building and operating LNG
terminals.
(iii) Monetization of gas/associated gas produced in
remote locations: In many remote parts of India,
gas monetization has been dormant due to
absence of commercial markets, infrastructure
and inter-state and intra-state conflicts. However,
an innovative and flexible approach is to be
adopted which could include technologies for in-
situ gas-to-liquids conversion processes and
bringing the liquefied gas to market through cost
effective mobile infrastructure.
(iv) Value addition to the gas currently flared by
converting them into petrochemicals/fertilizers or
power: In many oil and gas fields, huge volumes
of gas is flared daily. The 'Zero Flare' technology
could be adopted and the recovered gas can be
sold as raw material for petrochemical/fertilizer
plants or transported to be used to generate
power using combined cycle gas turbines.
(v) Venturing into unconventional resource
exploration such as Coal Bed Methane (CBM) or
shale gas: While potential of shale gas is highly
debated and range from 6.1 to 2,000 trillion cubic 8
feet, however the reserve of CBM in India is well 9established at 160 trillion cubic foot. Conversely
development of both CBM and shale gas assets
would require a phased and structured approach,
encouraging policy environment and technology
partners
(vi) Development of gas infrastructure: This would
entail de-bottlenecking key projects to enable
building up India's natural gas resources as well
as setting up extensive pipeline network. An
extensive pipeline system would also facilitate
transmission and distribution of other forms of
gaseous fuel like shale gas and CBM.
(vii) Increasing productivity by drilling with improved
technology combined with Enhanced Oil/Gas
Recovery (EOR/EGR): Typically about 10-20%
additional stock tank oil initially in place can be 10
extracted using conventional EOR methods.
The Microbial EOR technology, which is yet to be
commercialized, is estimated to increase this
percentage to 30%. Upstream oil companies
should invest more in such R&D activities to
commercialize new and innovative technologies.
Strategic alliances and partnerships with foreign
firms to aid technology and knowledge transfer
would enable access to state-of-the-art
equipments and other intellectual property.
In strategic investment areas like projects on biofuels,
LNG terminals, petrochemicals or power, upstream
companies can participate as equity partners and bring
separate operating partners who have operating
capability and technical competency in these areas.
Typically the oil and gas exploration and production
companies are cash rich and have high market
capitalization. Significant earnings which these
companies make during high oil price regime should be
re-invested in such low carbon strategic portfolio to
secure a sustainable energy future, The upstream oil
and gas industry is a key stakeholder in the energy
security and climate change debate, and would play a
significant role in promoting clean and sustainable
energy use all along the entire oil and gas value chain
and even in other sectors like transport and industry.
The dynamic state of business environment and
regulatory/policyenablers would force Indian oil &gas
upstream companies to develop new business models,
adopt strategic approaches and embrace latest
technologies which in a way would facilitate the
transition of the economy to a low carbon sustainable
path.
(Amrita Ganguly, senior professional member with Advisory
services of Ernst & Young also contributed to the article. Views
expressed are their personal)
8. http://www.financialexpress.com/news/new-study-brings-down-indias-shale-gas-potential-drastically/938739/9. http://www.ijcea.org/papers/113-A618.pdf10. http://www.cairnindia.com/KC/Brochures/EOR.pdf
Petroleum Federation of India46
Remote Collaboration: Poised to Deliver Transformational Results
Christophe RomatierSr. Strategic Marketing Manager
Honeywell Process Solutions
During the last century and a half the oil and gas (O&G)
business has produced over one trillion barrels of oil. It
is estimated today that slightly more than one trillion
barrels could still be extracted from known fields, and
some estimate that another three trillion barrels could
be produced with the use of production techniques,
future discoveries and so-called unconventional oil.
However, the era of 'easy oil' is behind us. Current
production rates satisfy existing demand, but with
demand growing by an average of 1 to 1.5 % per year,
producing oil in environments that would have been
almost unthinkable only a few years ago must now be
considered.
In addition there is a growing need for qualified
personnel; the industry has a rapidly aging work force,
resulting in the loss of its most experienced resources
at a rapid rate. The increased geographic spread and
complexity of operations makes it ever more necessary
to incorporate and share best practices and lessons
learned across assets as rapidly as possible.
A key driver of value in this new operating paradigm is
how quickly and efficiently can an organization
leverage expertise and skills spread across
organization and geographies. Over the past decade,
operating companies in O & G have sought to use next-
generation technology to help overcome this challenge.
One such technology that is highly relevant for
operating companies and is witnessing increasing
adoption is Remote Collaboration.
Remote Collaboration
A Broader Context
Improving Work Process Consistency
Remote Collaboration is the ability to manage
operational activities in real-time, independent of their
location.
The ability to communicate and collaborate in real time
delivers several pivotal advantages for problem-
solving, problem-avoidance and productivity
improvement:
Seamless communication enables staff to work
more efficiently across multiple locations
With the right resources focused on a problem,
challenges or problems can be identified and
resolved faster
Decision - making is accelerated
Staff can share expertise and best practices
immediately between individual locations or
across the entire network
Faster access and sharing of more information
helps reduce operational risks and improve safety
Faster, wider knowledge sharing helps better
maximize resource use and return and improve
production and yield.
Honeywell has a long history of working with the
innovators in this space and has seen exciting new
developments in other industries. It believes similar
developments in O&G can broaden the industry's
implementation of remote operations, to great benefit.
Consistency in work processes is a necessary step with
in a remote collaboration implementation for O&G
especially when assets have been run independently of
one another to a large extent as a result of being widely
dispersed both physically and organizationally. Here's
?
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Petroleum Federation of India 47
a case study where a major producer of primary and
fabricated aluminum was able to implement work
process consistency and draw significant benefits.
Customer : International producer of primary and
fabricated aluminum
In alumina refining, the business case for optimal
production control is its potential for increasing
production rates and improving process efficiencies by
reducing variability and operating closer to practical
limits. For the refiner in question, reducing variability
alone meant potential savings of US $ 40 million per
year, with process control as a key enabler.
There was also a sense of the opportunity for intangible
savings associated with making real-time process
information available for process improvement and
business decisions throughout the network. Although
this is difficult to qualify and quantify, it is in many cases
the largest benefit that can be derived from such an
initiative.
Prior to the program, developed through Honeywell
collaboration with the customer, the refiner's ability to
improve process control had been constrained by a
lack of skilled resources and availability of funds
required to implement a common infrastructure and a
common application portfolio.
The solution was a program that standardized process
control infrastructure and extended control solutions
across multiple refineries in six countries. The program
generated a variety of key benefits:
Each refinery operates with process controls for
each unit operation
Variability is minimized
Operation is close to the practical limit, with
minimum operator intervention or nuisance
alarms
Alumina Refining Case Study
Opportunity:
Solution:
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Production control applications are developed
once, and implemented at many sites
The customer has gained competitive advantage
by capturing critical real-time business data to
optimize unit operations and enterprise resources
The organization has accrued more than $100 million in
benefits through the institution and enforcement of
global standards.
The key enabler for this global success was the
recognition early on that automation, process control
and instrumentation were key business drivers to
achieve a competitive advantage. This vision led to a
strong corporate investment in consistent infrastructure
across the network that in turn enabled the global
consistency and economy of scale that was achieved.
Although this effort was only focused in a specific
discipline of production control, it may seem daunting
and cost prohibitive for O&G given the complexity of
infrastructure. However, innovations such as semantic
technology found in Honeywell's Intuition™ Executive
software for enterprise-wide information integration
and real-time visualization may alleviate this by
inserting a new layer of interoperability to achieve
global scale.
Because remote collaboration programs are still fairly
new, they therefore incorporate an element of risk in
their implementation. Such programs are still highly
customized to the particular needs of an operating
company, and a well-defined, shared representation of
the outcome is usually absent until fairly late in the
program.
A large part of the supplier selection process relies on
trust and proven (and implicitly duplicable) experience.
Once the relationship is established, traditional supplier
/ operator interaction models may lead to obvious
pitfalls, despite both parties' best efforts. However there
Value Delivered:
Learning:
Maximizing Benefits of Remote Collaboration
Through a Supplier Integration Model
Petroleum Federation of India48
are motivations for shared positive outcomes and these
motivations can be further enhanced. Here is an
example of how this has been done.
One of the largest copper
producers in the world was facing a challenge because
of it's aging infrastructure in sites spread over several
thousands of miles through out Chile. Some of these
sites are at altitudes of over 12,000 feet, and staffing
these sites with experts to support their operation as
well as any new infrastructure was also a challenge.
In this particular case, in order to create a
step change in their operations, the company decided
to upgrade the infrastructure at their different sites, then
implement connectivity to Chile's capital, Santiago.
This would allow them to create a collaboration center
there and staff it with experts that could be leveraged
across their multiple sites.
They quickly realized that they lacked a core
competency regarding many of the activities
surrounding the management and support of
infrastructure and the use of advanced tools to provide
on - going optimization of their operations. To alleviate
the burden on their organization while still ensuring
Metals & Mining Case Study
Problem/Opportunity :
Solution :
optimal results, the company entered into a joint
venture with Honeywell, creating an entity that would
take ownership of the optimal operation of the
infrastructure.
This bold step created the right
incentives for both supplier and operator to act in both
companies' best interests, ensuring optimal operations
and effective collaboration throughout the life cycle of
the operation.
The critical benefit of creating this
interdependency was to better ensure the sustainability
of still-exploratory programs such as remote
collaboration. With some thought and planning, good
incentive mechanisms can be put together to foster the
right behavior to maximize continued success for these
ventures.
Remote collaboration programs provide a framework
with tremendous promise for far - reaching solutions.
However, as the different experiences outlined in this
paper demonstrate, there is high potential for
tremendous value and return for those operators willing
to push the envelope.
Value Delivered:
Learning:
Conclusion
Courtesy: Business India
Number of feet eastward that Japan's main island was moved by March 2011 earthquake and tsunami
which impacted the country's nuclear installations: 8
Ratio of amount of energy generated by this earthquake to amount of energy consumed by USA each
year: 1:1
Snippets
Petroleum Federation of India 49
Energy is one of the most important building blocks in
human development, and acts as a key factor in
determining the economic development of countries. In
an effort to meet the demands of a developing nation,
the Indian energy sector has witnessed rapid growth.
Resource exploration and exploitation, capacity
additions in refineries, and energy sector reforms have
been revolutionized.
However, increased energy demand in India due to high
population growth, rapid urbanization and progressing
economy makes it imperative that oil & gas producing
plants and downstream refineries in India need
minimize disruption of production which would enable
maximization of the use of maintenance resources to
meet operational goals for profitability, safety and
environmental compliance.
Whether attempting to maximize production from
existing, aging assets or navigating the complexities of
finding and tapping into new reserves in more difficult
environments, exploration and production operators
and refiners experience daily production challenges.
Maintenance issues abound as companies strive to
increase production while guaranteeing safety, flow
assurance and equipment reliability.
Optimized, sustainable maintenance strategies—and
improved performance and availability of production
equipment— depend on the detection and diagnosis of
Innovative Strategies to Reduce O&M Cost
Satyajit Dwivedi
Director - Energy(Asia Pacific) & Strategic Initiatives
SAS Institute Inc
the root causes of poor performance and unplanned
downtime and provision of early warnings. Three areas
that large oil and gas companies are using analytics to
ensure ongoing improvements for facility reliability and
integrity:
1. Improving product quality.
2. Resolving tricky situations.
3. Preventing product loss.
As part of comprehensive efforts to maintain its
reputation as a trusted gas feedstock provider, one of the
world's largest integrated, export-oriented oil and gas
producers wanted to improve quality control in its
production process. Leaks, evaporation and mixture
composition involving the key enabling additive glycol
were affecting performance and quality. But where in the
process were these gas corruptions occurring?
To pinpoint and correct the glycol consumption, the
company turned to SAS® Predictive Asset Maintenance
for facility integrity and reliability. The effort prevented
production deferment, generated cost savings, created
new business strategies and improved health, safety and
environmental performance. Glycol is an additive that
keeps gas from liquefying during the production process
for gas feed stocks, but special care must be taken with
its use. In the drying process, too much glycol may
penetrate the gas and decrease quality. Too little adds
humidity and other impurities. Either sends customers
elsewhere in search of higher-quality gas feedstock.
The challenge for oil and gas producers is to identify
process malfunctions and detect leaks. Glycol cannot be
measured during the drying process, but in theory the
amount of glycol added should approximate the amount
extracted. When less glycol than expected is present,
producers must find where the loss occurred by spotting
problems among the valves, vacuum seals, gauges,
pipes and tanks that make up the production process.
Improving Product Quality
Petroleum Federation of India50
That's a difficult, time-consuming chore for consultants
and engineers. And the results are often mixed – and
disappointing.
SAS takes a different approach. Chemical theory –
what goes in must come out in similar quantity – is used
in conjunction with the limited number of data collection
points spread along the production process.
SAS Predictive Asset Maintenance revealed that the
feedstock quality might require adjustments to glycol
levels during the drying process. The solution predicted
where in the process glycol needed adjustment,
depending on other factors.
The glycol adjustment predictions have several direct
benefits to the gas producer. Glycol replacement costs
are reduced. Leaks along the process are quickly
identified using data inputs and in-process
measurements. Meanwhile, by avoiding negative
effects on the environment, the company saves the cost
of penalties and fines. And it maintains its reputation for
higher quality, consistent feedstock production, which
drives demand and, in turn, increases margins.
With SAS, the company learned it can control
production processes using predictive sciences that
integrate data points with chemical theory. Realizing
the value of applied predictive analytics, the company
uses SAS Predictive Asset Maintenance in other
processes and streamlines its energy consumption
rates, finding additional savings along the way.
One of the world's largest integrated, export-oriented,
oil-and-gas-producing companies needed to remedy a
failed steam turbine/air blower complex used to remove
and transform sulfuric acid from hydrocarbons into
hydrogen and sulfur. Failure to separate the sulfur and
transform it into blocks could violate environmental
regulations and increase the likelihood of fines and
penalties. It also prevents opportunities to sell gas and
sulfur.
Resolving Tricky Situations
As the cause remained a mystery, managers worried
about health, safety and environmental (HSE) risks.
They knew that the problem could pose the risk of leaks
or even explosions. Meanwhile, the temporary fix –
using an electric motor to blow air into the process –
was a costly and inefficient remedy.
As expected when a piece of equipment fails,
everyone's attention is focused on that machine. Was it
installed correctly? Was there a malfunctioning part?
Was there a material flaw? Different groups in the
company – process and reliability engineers, operators
and maintenance crews – each had their opinions. Yet
they could not coordinate their assessments to find the
root cause and mitigate the problem. Their siloed
structure prevented them from taking a holistic view.
Using the SAS Predictive Asset Maintenance solution
and the facility integrity and reliability methodology, it
was quickly determined that the process itself was
flawed. Oxygen was being pulled into the recovery unit,
creating water. While the variations in the acid
feedstock were requiring the oxygen variations, the
turbine itself was not designed to match them. This
process flaw was causing the turbine to trip and shut
down.
The ability to gather data from historians and reports,
correlate parameters and capture occurrence
signatures helped to identify potential problem areas
within the process itself. By fixing the process, the
company has improved production uptime rates and
gained better insight into preventive maintenance or
replacement needs.
The company learned that equipment failures might be
the effect of process anomalies occurring separately
from the impact observation. SAS proved that the high
volume of mostly unused historic data could help
diagnose problems holistically, implement predictive
surveillance and improve process automation. Now
realizing the value of applied predictive analytics to
such production processes, the company uses SAS
Predictive Asset Maintenance in other processes at
larger refineries and gas plant locations.
Petroleum Federation of India 51
Preventing Production Loss
One of the world's largest integrated, export-oriented,
oil-and-gas producing companies needed to ensure
that the active magnetic bearings that drive
compressors during production function properly. The
bearings rely on sensors that detect signals – up to
15,000 times per second – to measure distances and
thereby keep the shaft and motor in position. Failures in
the sensors, and then the bearings, lead to production
losses or, sometimes, extreme equipment damage.
Any degradation in the sensors or the bearings
themselves can cause the compressor to trip, thereby
stalling production and initiating repair work. Or, sensor
degradation can wrongly inform plant operators,
causing errant process decisions, false alarms and
other delays. Various catastrophic situations can arise.
Replacement is costly and time-consuming.
On the other hand, any planned increase in production
requires additional compressors and sensors that
produce volumes of new data. Manual administration is
not an option, yet failure to appropriately integrate the
new data might trigger alarms or misinform operational
processes.
In view of these challenges, the company applied the
SAS methodology for facility integrity and reliability,
along with the SAS Predictive Asset Maintenance
solution to develop data-driven models that can predict
sensor and magnetic bearing degradation. The models
point maintenance teams to equipment that may fail
given the signals they produce, before any significant
problem or loss of efficiency occurs. Such heightened
understanding of overall facility integrity and reliability
helps oil and gas producers prevent production process
deviations. As a result, they may reduce operating
costs, develop new business strategies for
maintenance and improve health, safety and
environmental performance.
With SAS, the company can assemble data from many
platforms and systems to create a picture of what has
happened and to predict what's going to happen. Such
foresight increases production uptime by informing
smart, timely maintenance decisions.
The company uses SAS to monitor potential weak
points and proactively maintain smooth production
processes by applying predictive sciences that
intersect analytics, physics and mechanical theory.
That's possible because all systems and equipment
have a metering, monitoring or surveillance system that
produces s tagger ing vo lumes of data. a
comprehensive view across all systems and
equipment, taking into account interdependencies to
accurately monitor overall performance.
Seeing the value of applied predictive analytics to such
production processes, the company plans to implement
SAS Predictive Asset Maintenance in other processes
and replicate the success at other locations.
Predictive Asset Maintenance solution providing
early warning and rapid root cause analysis with data
driven models has played a vital role in helping global
innovative oil & gas companies achieve higher asset
utilization and reliability – and ultimately greater
competitiveness. Improving product quality,
resolving tricky situations and preventing production
loss are only a few of the many benefits that these
global companies have realized. They have also
success fully predicted equipment failures,
prevented unplanned shutdowns, improved asset
availability and reduced maintenance costs.
Predictive Asset Maintenance
Petroleum Federation of India52
Innovative Technology to Improve FCC Flexibility
The current refining scenario in India is highly dynamic
and appears to change on a daily basis. India currently
imports approximately 80% of its crude oil while India's
refining capacity is expected to grow by nearly 50% by
the year 2020. Diesel demand is also projected to grow
by 40% over current value. Competitive and affordable
energy prices help drive strong economic growth and
are an important factor in shaping the Government of
India's (GoI) fiscal policies. The rise in international
crude oil prices in recent years has created major
challenges for the GoI, given the high reliance on
imports, and has resulted in a need to maximize the
utilization and conversion of crude oil processed in the
country. UOP's RxCat™ technology allows the refiner
to optimize the catalyst circulation rate in the riser,
independent of the unit heat balance. This capability
enables improved conversion, product selectivity, and
emissions control while simultaneously reducing
operating costs. This paper will demonstrate how
RxCat technology increases the flexibility of the FCC to
shift between different processing objectives while
lowering costs and maximizing product values to meet
the challenges faced by today's refiner.
The basic concept of UOP's RxCat technology is to
recycle catalyst from the FCC reactor stripper back to
the inlet of the riser. Modern catalyst systems are
inherently more coke tolerant than their older
counterparts and can accrue appreciable quantities of
coke and still retain a substantial fraction of base
activity. Hence the recycle of catalyst from the reactor
stripper in modern units represents an additional
activity component being added to the riser. UOP has
adopted the term “carbonized” to describe this catalyst.
To date UOP has six RxCat units in operation with an
additional four units in design. Figure 1 shows the
layout of an FCC RxCat unit.
UOP RXCat Technology
RXCat Process and the FCC Heat Balance
In the traditional FCC process the catalyst circulation
rate is fixed by the heat balance. This means that
catalyst circulation only increases in response to an
increased heat demand by the reactor. Therefore, in a
conventional FCC system, the extent that regenerator
catalyst to oil ratio (cat/oil) increases can be expressed
by the following equation:
Examples of process changes that increase
regenerator catalyst circulation rate and raise the
amount of coke required to satisfy the altered heat
balance are:
Increasing riser temperature
Decreasing feed preheat
Increasing regenerator catalyst cooler duty
Injecting a heat load into the riser (steam, water,
LCO)
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Figure 1: FCC RxCat Layout
Lisa M. Wolschlag
Senior Manager –FCC, Treating and
Alkylation Research & Development
UOP LLC, a Honeywell Company
Matthew Lippmann
FCC Technology Group Leader
UOP LLC, a Honeywell Company
by
Cat/Oil Regen
Coke Yield
CpCatalyst
HRegeneration
(TRegen TReactor )
Petroleum Federation of India 53
In contrast, carbonized catalyst recycle from the reactor
stripper via the RxCat standpipe is not constrained by
the heat balance as it does not significantly alter the
total coke yield. Because catalyst is circulated from the
riser outlet, down to the riser inlet, and back up to the
riser outlet starting and ending at the same
temperature, little enthalpy change occurs in the loop,
and there is practically no impact upon the coke yield.
Thus the riser cat/oil can now be expressed as:
The RxCat process impacts the heat balance by
increasing delta coke on the catalyst circulating to the
regenerator. Delta coke is defined as the difference in
coke content between the regenerated catalyst and
spent catalyst. As the RxCat circulation rate is
increased, the delta coke increases due to RxCat
catalyst particles completing additional passes through
the riser prior to regeneration. Because regenerator
temperature is a strong function of delta coke, the
increase in delta coke from RxCat increases the
regenerator temperature and decreases the
regenerator cat/oil ratio as shown in Table 1.
Despite the decrease in regenerated cat/oil, RxCat
technology enables a refiner to increase the overall
riser cat/oil to levels considerably higher than a
traditional FCC unit while simultaneously increasing the
regenerator temperature. Reducing feed contaminants
through severe hydrotreating reduces the delta coke in
the unit, which cools the regenerator and presents a
significant challenge for refiners to keep the
regenerator hot enough to control CO and NOx
emissions below acceptable levels. RxCat technology
Table 1: Reactor/Regenerator Response to Change
in RxCat Cat/oil
provides an alternative solution to traditional methods
of maintaining high regenerator temperatures and
simultaneously enhances unit performance through
increased total riser cat/oil ratio. Table 2 shows an
economic comparison between utilizing the direct fired
air heater (DFAH) and RxCat technology to increase
regenerator temperature by an equivalent amount.
Product Pricing Source: Global Petroleum Market Outlook 2011, Purvin and
Gertz
While both approaches will achieve a higher
regenerator temperature, firing the DFAH will result in a
lower riser cat/oil ratio and consequently a loss of
conversion and margin. On the other hand, RxCat
technology increases the riser cat/oil, resulting in a
conversion increase and ultimately a gain in margin, all
without the need to consume additional fuel gas.In
addition the higher regenerator temperatures improve
burn kinetics and allow the FCC operator to lower the
excess oxygen in the regenerator while simultaneously
reducing CO and NOx emissions.
RxCat technology can also improve product yields. The
catalyst recirculating through the RxCat standpipe TM
enters the MxR Chamber at the base of the riser at
temperatures several hundred degrees Fahrenheit
below the regenerated catalyst temperature. When
these two catalyst streams are properly blended, the
resultant catalyst stream contacting the feed in the
injection zone of the riser is at a significantly lower
Table 2: Evaluation of DFAH vs.RxCat Technology
for Regenerator Temperature Control
RXCat and Dry Gas Yields
8.2
8.2
0.0
0. 6
12 60
7.0
12.0
0.7
0. 7
1300
0.0 5.0 7.5
6.5
14.0
1.2
0. 8
RxCat Cat/oil
Regen Cat/oil
Riser Cat/oil
RxCat Ratio
Delta Coke
Regen Temp 1320
Feed Rate (BPD)
RxCat C/O
Riser C/O
Fuel Gas to Air Heater (Wt-% feed)
Regenerator Temp (F)
Conversion (Wt-%)
Gross Margin ($/BBL)
Gross Margin (MM$/Year)
Case 1 Base
30,000
0.0
8.2
0.0
1260
Base
Base
Base
Case 2DFAH
30,000
0.0
6.2
1.1
1340
(3.0)
(1.35)
(14.4)
Case 3RxCat
30,000
6.2
12.0
0.0
1350
2.1
0.86
8.6
+ Cat/Oil RxCatCat/Oil Riser
Coke Yield
CpCatalyst
HRegeneration
(TRegen TReactor )
Petroleum Federation of India54
temperature, reducing thermal reactions that produce
unwanted dry gas and coke. Figure 3 shows how the
reactor feed injection zone temperature decreases as a
function of RxCat cat/oil ratio while Figure 4 shows how
dry gas decreases in response to lowering the
feedinjection zone temperature, as measured in the
UOP circulating riser pilot plant.
While RxCat technology increases riser cat/oil ratio, the
impact of coke deposition on catalyst activity must be
understood to predict the benefits of the higher catalyst
circulation rate. To determine the relationship between
coke deposition and catalyst activity, UOP conducted
Catalyst Activity Retention as a Function of Coke
testing on several commercial equilibrium catalysts
(ECATs). The physical properties of three catalysts are
described in Table 3.
ACE Pilot Plant runs were then conducted for the three
catalysts to determine activity retention as a function of
carbon content on the catalyst surface. Results are
shown in Figure 5. These data highlight a similar activity
decline for catalysts A and B and a more pronounced
decline for catalyst C.
Significant differences in activity retention as a function
of coke are not always obvious from the catalyst
physical properties. For instance, while ECAT B and C
have similar MAT activities, they do not have similar
activity retention properties. Therefore, it is important to
conduct activity retention tests when optimizing a
catalyst for RxCat technology. This testing enables the
determination of the effective cat/oil response in the
RxCat system which can be defined as:
Table 3: ECAT Physical Properties
Figure 5: Relative Activity vs Coke for Three ECATs
Figure 3: RxCat Cat/Oil vs. Feed Contact Zone Temp
OF
eed C
onta
ctzo
ne T
em
p (
F)
Figure 4: Pilot Plant Feed Contact Zone Temperature
vs. Dry Gas Yield
Dry
GasY
leld
(W
t.%
)
Ace Micro Activity Test (MAT)
UCS (A)
Total
Surface Area (m2/g)
Zeolite Surface Area (m2/g)
Matrix Surface Area (m2/g)
Micropore Volume (cc/g)
V, ppm
Ni,ppm
ZSM-5
ECAT A
74
24.267
150
61
89
0.028
500
520
No
ECAT B
66
24.292
115
40
75
0.019
6620
4160
Yes
ECAT C
64
24.270
149
93
56
0.043
610
970
Yes
Petroleum Federation of India 55
where AR is the slope of the catalyst activity retention c
as a function of coke determined in the ACE unit and K
is a constant.
To determine constant K, the three example catalysts
were tested in the UOP circulating riser pilot plant by
increasing RxCat cat/oil and maintaining a stable
regenerator cat/oil. The results are shown in Figure 6.
These data illustrate that the conversion response to an
increase in RxCat cat/oil is best achieved by ECATs A
and B which have better AR properties relative to c
ECATC.
Once the activity retention properties of the catalyst and
operating severity of the unit are understood for the
RxCat application, the remainder of the product yields
can be estimated from the calculated increase in
effective cat/oil ratio. For ECAT A the full product yield
shift in response to a change in RxCat cat/oil is
represented in Table 4. This table highlights the fact that
while riser cat/oil increases purely as a function of the
RxCat valve output and the unit heat balance, the
effective cat/oil is the primary driver of yield shifts on the
RxCat equippedFCC unit.
Figure 6: CRU Conversion Response to RxCat
Ratio for Three ECATS
RXCat Yield Benefits
Table 4: Impact of RxCat on Product Yields for ECAT A
To confirm the theoretical pilot plant data, it is important
to observe the conversion shifts in commercial RxCat
units who have optimized the catalyst formulation to
take advantage of RxCat technology. Figure 7 shows
the conversion response for an increase in RxCat for
three separate commercial units. These data were
filtered for constant feed quality and riser outlet
temperature in order to isolate the impact of RxCat ratio
on conversion. The commercial results are consistent
with the pilot plant yields, demonstrating an
approximate 2.0 to 3.5 lv% yield improvement over the
range of RxCat ratio.
Figure 7: Commercial Unit Conversion Response
to RxCat Cat/Oil
Regen Cat/oil
Riser Cat/oil
Effective C/O
Dry Gas Yield (Wt -%)
LPG Yield (Wt -%)
Gasoline Yield (Wt -%)
LCO Yield (Wt -%)
CSO Yield (Wt -%)
Coke Yield (Wt -%)
Conversion (Wt -%)
RxCat Cat/oil 0.0
8.2
8.2
8.2
Base
Base
Base
Base
Base
Base
Base
5.0
7.0
12.0
9.5
(0.4)
1.6
0.9
(0.8)
(1.3)
0.1
2.1
(0.5)
(1.3)
(1.8)
7.5
6.5
14.0
10.2
2.2
1.1
0.2
3.1
Cat/Oil Effective Cat/Oil Regen Cat/Oil RxCat +K
[1-( Coke |ARc|) ]
Petroleum Federation of India56
without major structural changes or modifying the feed
injector elevations.
UOP's RxCat technology has demonstrated in both pilot plant and
commercial testing a unique ability to manipulate overall riser cat/oil
ratio in order to increase the effective riser catalyst activity gain
outside the traditional limitations of the unit heat balance. This
added flexibility enables today's FCC operator to gain a competitive
advantage by offering improved yield selectivities, enhanced
operational controls, and reduced operating costs. While this
technology has thus far only been primarily available to new grass
roots units, the development of the UOP Double Wye Mixing Riser
design allows Refiners to revamp their existing units to gain the full
benefits that UOP's RxCat technology has to offer.
Figure 9: Revamp Comparison of MxR Chamber vs.
Double Wye Mixing Riser Design
Summary
The UOP Double Wye Mixing Riser™ Design for
Revamps
In the traditional RxCat design, regenerated catalyst
from the regenerator is combined with the carbonized
catalyst from the reactor stripper at the base of the riser
in the MxR™ Chamber, shown in Figure 8.
For new units, the MxR Chamber can easily be
incorporated into the FCC design. However,
incorporating the MxR Chamber in a revamp can prove
challenging due to the difficulty of physically fitting the
chamber within the existing configuration without major
structural modifications due to the chamber's size. To
enable the RxCat technology to be widely available for
revamp scenarios, UOP redesigned the MxR chamber
configuration and created the Double Wye Mixing Riser
design shown in Figure 9. While the MxR Chamber
would extend below grade, the Double Wye Mixing
Riser design fits within the existing configuration
Figure 8: MxR Chamber
Snippets
Courtesy: Business India
Number of cases pending in Supreme Court as of 15 march 2012: 59, 368
Number of cases pending in high courts and subordinate courts as of December
2010: 3,735,204 & 22,120,882
Number of cases on trial pending with Central Bureau of Investigation (CBI) since
last 20 years: 384
Petroleum Federation of India 57
The Guru Gobind Singh Refinery was 'Dedicated to the Nation' by
the Hon'ble Prime Minister of India, Dr. Manmohan Singh in the
presence of Hon'ble Union Minister of P&NG, Shri S. Jaipal Reddy;
Hon'ble Chief Minister of Punjab, Sardar Prakash Singh Badal;
Hon'ble Union Minister of State - P&NG, Shri R. P. N. Singh; His
Excellency Governor of Punjab Shri Shivraj V. Patil and other
distinguished guests.
Mr. R.K. Singh, C&MD BPCL and Mr. G.C. Chaturvedi, Secretary,
MoP&NG exchange documents of the MOU signed by BPCL and
MoP&NG for 2012-13.
Members' News in Pictures Members' News in Pictures
Engineers India Limited has been conferred the prestigious
commendation certificate of “SCOPE Meritorious Award in
Specialized Fields 2010-11", under the category of Best Practices in
Human Resource Management. The Award was received by Shri
A.K. Purwaha, C&MD, EIL from H.E. Smt. Pratibha Devisingh Patil,
Hon'ble President of India at a ceremony held on April 13, 2012 at
New Delhi.
ONGC received two of the top awards - Best Maharatna PSU &
Leading PSU in the Oil & Gas sector - at the Dun & Bradstreet PSU
Awards 2012 held at New Delhi. Mr. Sudhir Vasudeva, CMD, ONGC
and Mr. K S Jamestin, Director-HR, ONGC with Dr. Veerapa Moily,
Hon'ble Minister of Corporate Affairs, Government of India.
Petroleum Federation of India58
Sh. Lakshmi N Mittal, Chairman and CEO, Arcelor Mittal addressing
the gathering on the occasion of the dedication of the Guru Gobind
Singh Refinery, to the Nation at Bathinda on April 28, 2012
A panoramic view of the Guru Gobind Singh Refinery at Bathinda
Hon'ble Minister, MoPNG, Mr. Jaipal Reddy launching the LPG
Transparency portal, in the presence of Mr. GC Chaturvedi,
Secretary (Petroleum), Mr. SudhirBhargava, Additional Secretary,
Mr. Neeraj Mittal, Jt. Secretary (Marketing), Mr. LN Gupta,
Jt. Secretary (Refineries), MOP&NG, Mr. R S Butola, Chairman,
IndianOil, and CMDs of BPCL and HPCL along with all senior
officials of the Mministry as well as the oil companies
BPCL has been conferred with the AajTak Care Award for its CSR
project 'Economic Empowerment and Income Generation' under
the Livelihood Category. The award was presented by Shri Pranab
Mukherjee, Union Finance Minister, GOI and Mr. Aroon Purie, Editor
in Chief, India Today to Mr. S. P. Gathoo, Director (HR), BPCL, at an
Award Ceremony held on 6th June, 2012 at Delhi.
A landmark MoU for hydrocarbon cooperation was signed between
ONGC and CNPC (China National Petroleum Corporation), the
global energy giants with strong international presence, by Mr.
Sudhir Vasudeva, CMD, ONGC and Mr. Jiang Jiemin, Chairman,
CNPC, at New Delhi.
Petroleum Federation of India 59
Deepwater Drilling & Services Pvt. Ltd made its foray into the mid
water drilling segment with the commencement of Noble Duchess's thoperations on the East coast of India on 18 May, 2012 for a three
year contract for ONGC. The 1000 ft Drillship is deployed in KG
Basin G-1 Block for exploratory drilling.
Engineers India Limited (EIL) has been conferred with the BT Star
PSU Excellence Award 2012 by Bureaucracy Today magazine for
excellence in Human Resource Management. Shri A K Purwaha,
C&MD, EIL and Shri P K Rastogi, Director (HR), EIL received the
award from Shri Oscar Fernandes, Hon'ble Member, Rajya Sabha
at a ceremony held in New Delhi. The eminent jury was led by Shri ndTKA Nair, Advisor to the Hon'ble Prime Minister (2 from left). Shri
Nishikant Sinha, former Chairman, PESB (extreme left) was also
one of the jury members.
BPCL's Mumbai Refinery has achieved a unique record of getting
the “Performance Excellence Award” under the Ramkrishna Bajaj
National Quality Awards (RBNQA) consecutively for 5 times in a
row. Dr. Shashi Tharoor, MP & Former Minister of State for External
Affairs presented the award to Mr. P.S. Bhargava, ED I/C, Mumbai
Refinery, BPCL.
The Hon'ble Minister of Industr ies, Govt. of Goa,
Mr. Mahadev Naik(L) visits Chemtrols Industries' manufacturing
facility at Kundaim Industrial Estate, Goa on June 13, 2012. Mr.
Faizi Hashmi, MD, IDC, Goa who accompanied the Hon'ble Minister
commented that Automation processes at Chemtrols are
impressive.
Petroleum Federation of India60
Director (R&D), IndianOil (R), Dr. R.K. Malhotra, was honoured by the International Association for Hydrogen Energy (IAHE) with the prestigious Rudolf A. Erren Award, in recognition of his Leadership for Introduction of Hydrogen Economy in India through Strong Support of Hydrogen Technologies and Extensive Information Dissemination.
Shiv-vani now 'Jacked' with offshore operations.
Mr. S. Sunil – Head, Goa Operations, Chemtrols (extreme left), Mr. Mahadev Naik, Hon'ble Minister of Industries, Govt. of Goa (Centre) and Mr. Gopal – Steam Solutions, explaining the various processes to the visiting team.
Mr. Sutirtha Bhattacharya, Principal Secretary, Infrastructure and
Investment, Government of Andhra Pradesh and Mr. Philip Olivier,
President & CEO, GDF Suez LNG UK exchanging documents after
signing of Project Framework Agreement in presence of Shri S.
Jaipal Reddy, Hon'ble Minister of Petroleum and Natural Gas,
Government of India, Shri N. Kiran Kumar Reddy, Hon'ble Chief
Minister of Andhra Pradesh and Mr. B C Tripathi, Chairman &
Managing Director, GAIL (India) Limited.
Dr. Manmohan Singh, Hon'ble Prime Minister of India dedicating the
2200 km Dahej - Vijaipur - Dadri - Bawana - Nangal / Bathinda
Pipeline Network to the nation during the inaugural session of the
7th Asia Gas Partnership Summit 2012. Also seen are Shri S. Jaipal
Reddy, Hon'ble Minister for Petroleum and Natural Gas, India
(right), Shri R P N Singh, Hon'ble Minister of State for Petroleum and
Natural Gas, India (left) and Mr. B C Tripathi, CMD, GAIL (2nd from
left).
Petroleum Federation of India 61
Petroleum Federation of India02
PetroFed Awards 2011PetroFed Awards 2011
The PetroFed Oil & Gas Industry Awards 2011 for
excellence in performance in various categories were
presented by the Hon'ble Union Cabinet Minister for
Petroleum & Natural Gas, Shri S. Jaipal Reddy at a well
attended function at New Delhi on June 8, 2012.
Congratulating the Award winners the Hon'ble Minister
termed PetroFed as 'a unique organisation' which
represents both, the public sector and the private
sector. 'This institution needs to be strengthened and its
process and presentation of awards needs to be
encouraged. I shall do everything in my power to
strengthen PetroFed and the sector as a whole', stated
the Hon'ble Minister while addressing the gathering.
In view of the paucity of time available with the Hon'ble
Minister the formal welcome by Chairman, PetroFed &
Chairman, IndianOil, Shri R. S. Butola and presentation
about the Awards by Director General, PetroFed, Shri
A. K. Arora were dispensed with. The Vice Chairman,
PetroFed and President (Refinery Business), RIL, Shri
P. Raghavendra thanked the Hon'ble Minister for
encouraging the industry and sought an enabling
environment & framework to promote self sufficiency in
oil & gas for the country.
The scheme of Awards is open to all companies
operating in India in the oil & gas sector. The evaluation
is undertaken in line with pre-determined weightages
assigned to various parameters fixed after due
validation. Each award category must receive a
prescribed minimum number of applications for giving
away an award. Each award carries a trophy and a
citation. The Woman Executive of the Year award also
carries a cash prize of ` one lakh. The Innovator of the
Year individual award has a cash component of ` two
lakh while the team award has a prize of ̀ five lakh with
each member of the team getting at least ̀ 50,000/-.
The lessons learnt during awards evaluation every year
are incorporated. The application form for each award
has been carefully designed and validated to minimize
subjectivity while giving benefit of additional initiatives
taken. A significant contribution has been made by
PetroFed knowledge partner and member company,
PricewaterhouseCoopers in conceptualizing the
PetroFed Awards 2011PetroFed Awards 2011
Awards scheme and the preliminary evaluation of
applications.
The Awards Committee is headed by Dr. Prodipto
Ghosh, Distinguished Fellow, TERI and former
Secretary to the Government of India. The members of
the Awards Committee are Shri B. C. Bora, former
CMD, ONGC; Shri P. P. Bagchi, former Executive
Director, Oil Coordination Committee, and Managing
Director, United Carbon (India) Ltd.; Shri P. K. Agarwal,
Director, Human Resources Division & Senior Fellow,
TERI & former Director (Marketing) & Director (HR),
IndianOil; Shri U. K. Dikshit, Director (Programmes),
SCOPE & former ED (HR), IndianOil.
The Jury is headed by Hon'ble Mr. Justice J.S. Verma,
former Chief Justice of India. The other members of the
Jury are Dr. Abid Hussain, former Ambassador to the
United States of America and Shri Naresh Narad,
former Chairman, Public Enterprises Selection Board.
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Leading Oil & Gas Corporate of the YearAwarded toIndian Oil Corporation Limited
Exploration & Production - Company of the YearAwarded to Oil India Limited
Refinery of the Year Awarded to Essar Oil Limited
Oil & Gas Pipeline Transportation - Company of the Year Awarded to Cairn India Limited
Special Commendation Awarded to GAIL (India) Limited
Oil & Gas Marketing - Company of the YearAwarded to Indian Oil Corporation Limited
Project Management (` 500-2000 crore)- Company of the Year Awarded to Hindustan Petroleum Corporation Limited
Winners of PetroFed Awards 2011 for performance during 2010-11
Petroleum Federation of India 63
Jury (L-R): Shri Naresh Narad, Hon'ble Mr. Justice J. S. Verma, Dr. Abid Hussain.
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Project Management (above 2000 crore) -
Company of the Year
Awarded to
Indian Oil Corporation Limited (Gujarat
Refinery)
Human Resources Management - Company of the
Year
Awarded to
Oil & Natural Gas Corporation Limited
Drilling Services - Company of the Year
Awarded to
Jindal Drilling & Industries Limited
Environmental Sustainability : Company of the Year
Awarded to
Oil & Natural Gas Corporation Limited
Innovator of the Year - Individual
Special Commendation Awarded to
ArunJayendran, Officer Trainee, Palghat LPG
Plant,
Hindustan Petroleum Corporation Limited
Innovator of the Year - Team
Awarded to
Oil & Natural Gas Corporation Limited - Institute
of Oil & Gas Production Technology
Team led by Mr. Y. R. L. Rao
Team Members: P. K. Bhargava, Deputy General
Manager (Production); B. Mandal, Deputy General
Manager (Production); Sharmila Roy, Deputy
General Manager (Production); Dilip Kumar Sarma,
Chief Engineer (Production)
Woman Executive of the Year in the Oil & Gas
Industry
Awarded to
Arpana Anand, Senior Project Manager,
Indian Oil Corporation Limited
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Bharat Petroleum Corporation Limited
Chennai Petroleum Corporation Limited
GAIL (India) Limited
Hindustan Petroleum Corporation Limited
Indian Oil Corporation Limited
Numaligarh Refinery Limited
Oil India Limited
Oil & Natural Gas Corporation Limited
Reliance Industries Limited
PetroFed Awards 2011 Event Partners
Awards Committee (L-R): Shri P. K. Agarwal, Shri U. K. Dikshit,
Dr. Prodipto Ghosh, Shri B. C. Bora.
Petroleum Federation of India64
Seated (L-R): Shri A. K. Arora, Director General, PetroFed; Hon'ble Union Cabinet Minister for Petroleum & Natural Gas, Shri S. Jaipal Reddy; Shri R. S. Butola, Chairman, PetroFed & Chairman, IndianOil; Shri P. Raghavendran, Vice Chairman, PetroFed & President (Refinery Business), RIL.
Seated in first row (L-R): Shri P. K. Agarwal, Director, Human Resources Division & Senior Fellow, TERI & former Director (Marketing) & Director (HR), IndianOil; Dr. C. R. Prasad, former CMD, GAIL (India) Limited; Dr. Abid Hussain, former Ambassador to the United States of America, Shri B. C. Bora, former CMD, ONGC; Shri P. P. Bagchi, former Executive Director, Oil Coordination Committee, and Managing Director, United Carbon (India) Limited; Shri U. K. Dikshit, Director (Programmes), SCOPE & former ED (HR), IndianOil.
Ms. Arpana Anand, Senior Project Manager, IndianOil (Pipelines Division) receiving the 2011 Woman Executive of the Year Award. On the left is Shri V. S. Okhde, Director (Pipelines), IndianOil.
A section of the invitees. In front row (L-R): Shri K. K. Gupta, Director (Mktg.), BPCL; Shri S. P. Gathoo, Driector (HR), BPCL & Member, PetroFed Governing Council; Shri S. Roy Choudhury, CMD, HPCL; Ms. Nishi Vasudeva, Director (Mktg.), HPCL & Member, PetroFed Governing Council; Shri R. S. Sharma, former CMD, ONGC; Shri R. D. Goyal, Director (Projects), GAIL (india) Limited; Shri P. K. Jain, Director (Finance), GAIL (India) Limited.
Hon'ble Union Cabinet Minister for Petroleum & Natural Gas, Shri S. Jaipal Reddy being honoured by Shri R. S. Butola, Chairman, PetroFed & Chairman, IndianOil by presenting the uttaraya.
Shri R. S. Butola, Chairman, IndianOil (3rd from left) receiving the 2011 Leading Oil & Gas Corporate of the Year Award along with his team of Directors (L-R): Shri V. S. Okhde, Director (Pipelines); Shri M. Nene, Director (Marketing), Shri R. K. Ghosh, Director (Refineries).
Petroleum Federation of India 65
Shri S. Roy Choudhury, CMD, HPCL receiving the 2011 Project Management Award for projects between ` 500-2000 crore along with Shri Anil Pande, ED (Pipeline & Projects) and Shri Anuj Jain, DGM (Projects). Also seen is Ms. Nishi Vasudeva, Director (Marketing), HPCL & Member, PetroFed Governing Council (2nd from right).
ShriArunJayendran, Officer Trainee, Palghat LPG Plant, Hindustan Petroleum Corporation Limited receiving Special Commendation for 2011 Innovator of the Year, Individual Award.
Shri H. K. Khanna, Advisor, Jindal Drilling & Industries Limited receiving the 2011 Drilling Services Company of the Year Award.
Shri U. L. Dohare, Executive Director (Projects) IndianOil (4th from left) receiving the 2011 Project Management Award for projects above ̀ 2000 crore won by the Gujarat Refinery. Also seen are Shri R. S. Butola, Chairman, IndianOil (5th from left) and Shri R. K. Ghosh, Director (Refineries), IndianOil (4th from right).
Shri Sudhir Vasudva, CMD, ONGC receiving the 2011 Environmental Sustainability-Company of the Year Award along with his team of Directors (L-R): Shri A. K. Hazarika, Director (Onshore); Shri S. V. Rao, Director (Exploration); Shri K. S. Jamestin, Director (HR); Shri Aloke Kumar Banerjee, Director (Finance).
Shri Sudhir Vasudeva, CMD, ONGC (4th from left) receiving the 2011 Innovator of the Year (Team) Award along Shri Ajit Kumar, Executive Director, Institute of Oil & Gas Production Technology (3rd from left) with the award winning team members.
Petroleum Federation of India66
Shri S. K. Srivastava, CMD, OIL (3rd from left) receiving the 2011 Award for Exploration & Production Company of the Year along with his team of Directors (L-R): Shri T. K. Ananth Kumar, Director (Finance); Shri S. Rath, Director (Operations). On extreme left & right are Shri A. K. Arora, Director General, PetroFed and Shri R. S. Butola, Chairman, PetroFed and Chairman, IndianOil.
Shri Rahul Dhir, MD & CEO, Cairn India Limited (L) receiving the 2011 Award for Oil & Gas Pipeline Transportation Company of the Year along with Shri Jagdeep Chhaya, Head Pipelines, Cairn
Shri R. D. Goyal, Director (Projects), GAIL (India) Limited (2nd from left) receiving the Special Commendation for Oil & Gas Pipeline Transportation Company of the Year. Also seen in the picture is Shri P. K. Jain, Director (Finance), GAIL India Limited (2nd from right).
Shri C. Manoharan, Director (Refinery), Essar Oil Limited (L) receiving the 2011 Refinery of the Year Award.
Shri M. Nene, Director (Marketing), IndianOil receiving the 2011 Award trophy for Oil & Gas Marketing Company of the Year along with Shri R. S. Butola, Chairman, IndianOil (L).
Shri Sudhir Vasudva, CMD, ONGC (3rd from left) receiving the 2011 Human Resources Management Company of the Year Award along with his team of Directors (L-R): Shri S. V. Rao, Director (Exploration); Shri K. S. Jamestin, Director (HR); Shri A. K. Hazarika, Director (Onshore); Shri Aloke Kumar Banerjee, Director (Finance).
Petroleum Federation of India 67
Shri P. Raghavendran, Vice Chairman, PetroFed & President (Refinery Business), RIL proposing a vote of thanks A group photo of the winners of PetroFed Awards 2011 with the
Hon'ble Union Minister.
The awardees with the Chief Guest.Hon'ble Union Cabinet Minister for Petroleum & Natural Gas, Shri S. Jaipal Reddy addressing the gathering.
Petroleum Federation of India68
Events
'India's refining capacity will exceed 310 million tonnes
per annum by the end of March 2017'. Stating this while
inaugurating a two-day international conference on
'Refining Challenges & Way Forward' organised by the
Petroleum Federation of India in association with the
World Petroleum Council and with the support of
Ministry of Petroleum & Natural Gas on April 16, 2012 at
New Delhi, Shri G. C. Chaturvedi, Secretary, MoP&NG
emphasized the need for continuous technology
improvement and energy efficiency to meet the growing
demands of the country. Complimenting PetroFed for
the initiative taken he pointed out that India has
emerged as a net exporter of petroleum products since
2001-02.
Delivering the keynote address Shri Prabh Das,
Managing Director & CEO, HPCL-Mittal Energy Limited
called for a favourbale policy regime to encourage the
petroleum refining industry in the country.
Dr. Pierce Riemer, Director General, World Petroleum
Council during his address drew attention to the fact
that over 95% of the growth in energy consumption is
expected in non-OECD countries during the next two
decades and that China and India will lead the growth in
energy consumption.
Shri Dependra Pathak, Member-Congress Programme
Committee, WPC stated that this was the second event
organised by PetroFed in association with the WPC and
expressed the hope that more events would be
organised in India since the region will lead energy
consumption in the world.
Earlier Shri A. K. Arora, Director General, PetroFed
while welcoming delegates called for upgrading the
bottom of the barrel and executing projects to establish
global benchmarks.
The conference witnessed 35 presentations in eight
technical sessions with nearly a fifth of the
presentations by international experts from abroad. Of
the nearly 140 participants about 10% were
international delegates. Besides Industry members
there were representatives from technology providers,
engineering firms, consultancy, academia and R&D
and the Government.
Refining Challenges & Way Forward The sessions focused on challenges in opportunity
crude processing, upgradation of bottoms, advances in
catalysts & FCC, product quality and reliability
improvement as well as environment protection.
The session chairpersons included CEOs and MDs of
leading organisations, besides functional directors.
Mr. A. K. Arora welcoming participants.
Mr. G. C. Chaturvedi delivering inaugural address.
Dr. Pierce Riemer delivering opening address.
Petroleum Federation of India 69
Mr. Prabh Das delivering keynote address.
Mr. Dependra Pathak, Member-Congress Programme Committee, WPC and Director (E-I), MoP&NG proposing a vote of thanks during inaugural session.
Mr. B. K. Datta, Director (Refineries), BPCL delivering opening remarks while chairing Session-2 on 'Technology Options for Bottom Upgradation'. Others (L-R): Mr. Jean Paul Margotin, Managing Director, Axens India; Mr. Soumendra Banerjee, Sr. Manager (Process & Product Development), UOP; Dr. Girish Chitnis, Licensing Manager, ExxonMobil Research & Engineering; Mr. D. Bhattacharya, CRM, IndianOil (R&D).
Dr. R. K. Malhotra, Director (R&D), IndianOil delivering opening remarks while chairing Session-3 on 'Advances in Catalysts'. Others (L-R): Dr. Girish Chitnis, Licensing Manager, ExxonMobil Research & Engineering; Mr. Laxmi Narasimhan, General Manager, Shell; Mr. Vikas Sankalia, Process Specialist, Technology Services, UOP; Mr. Mohan Lal, Executive Director (Technical), Axens India; Dr. Ujjwal Manna, Conversion Technologies Lead (East), Shell; Mr. Alex Pulikottil, Research Manager, IndianOil (R&D).
Mr. Anand Kumar, Director, Perotech Society & former Director (R&D), IndianOil (centre) delivering opening remarks while chairing Session-1 on 'Challenges in Opportunity Crude Processing'. Others (L-R): Mr. S. K. Handa, General Manager (Process), EIL; Mr. Thomas Ting King Lu, Industry Development Manager (Refinery), Nalco; Mr. J. Rajaraman, Sr. Vice President, RIL; Dr. Purandar Chakravarty, General Manager (Technical), Essar Oil Limited.
A section of the participants.
Petroleum Federation of India70
Mr. Anand Kumar, Director, Petrotech Society and former Director (R&D), IndianOil (2nd from right) delivering opening remarks while chairing Session-4 on 'Developments in FCC'. Others (L-R): Mr. Martin Evans, Vice President of Engineering Technical Services, INTERCAT; Mr. Vipan Goel, Director of Sales, Grace Davison Refining Technology; Dr. Asha Masohan, Chief Scientist, IIP, Dehradun.
Mr. K. Govindarajan, CEO (Projects), Essar Oil Limited (2nd from right) delivering opening remarks while chairing Session-6 on 'Reliability Improvement & Environment Protection'. Others (L-R): Dr. Anshu Nanoti, Sr. Principal Scientist, IIP, Dehradun; Mr. J. K. Joshi, Head (Environment), EIL; Mr. Keshav Kishore, DGM (Applied Metallurgy), IndianOil (R&D).
Dr. M. O. Garg, Director, IIP, Dehradun (centre) delivering opening remarks while chairing Session-5 on 'Technologies for Improved Product Quality'. Others (L-R): Dr. Bettina Sander-Thomsen, Catalyst Specialist-Technical Support, Haldor Topsoe International A/S; Mr. Ravi Srinivas, Technology & Business Development Manager, Clean Technologies, DuPont; Mr. Michel Dorbon, Global Market Manager (Naphtha & Distillates Hydroprocessing), Axens; Mr. Sarvesh Kumar, SRM, IndianOil (R&D).
Mr. Dipak Chakravarty, Managing Director, NRL (centre) delivering opening remarks while chairing Session-7 on 'Experience Sharing' along with the Co-Chariman, Mr. P. Sur, Executive Director, Gujarat Refinery, IndianOil (4th from left). Others (L-R): Mr. Rabinder Nath Patel, SPSE, IndianOil; Mr. Jayanti Vagdoda, Jt. General Manager (Mech.), Essar Oil Limited; Mr. Dhananjoy Gosh, General Manager (Ops.), NRL; Mr. B. V. N. Prasad, Vice President (Business Consulting & Sales Ops.), AspenTech; Mr. S. K. Goel, GM (Tech.), BPCL Mumbai Refinery; Mr. Ruchir Kacker, Dy. Manager (Process), IndianOil Mathura Refinery; Mr. Jaikishen C. Nath, Sr. Manager (Electrical), BPCL Kochi Refinery.
Mr. P. Mahajan, Director (Technical), EIL delivering opening remarks while chairing Session-8 on 'Novel Approaches' along with session Co-Chairman, Mr. S. Ventakaramana, Managing Director (I/C), CPCL (3rd from left). Others (L-R): Mr. Tapash Pramanik, Vice President (Technical Services), HMEL; Mr. Prashat Dube, Sr. Process Engineer, IndianOil; Mr. T. Sudhakar, DMPS, IndianOil Mathura Refinery; Mr. A. S. Sahney, SPNM, IndianOil
A growing economy like India aiming at double digit growth in GDP
would need increasing amounts of energy. Biofuels and alternative
sources of energy have, therefore, to be appropriately encouraged,
said Mr. B. K. Chaturvedi, Member (Energy), Planning Commission
while inaugurating the 3rd international symposium organised by
PetroFed on 'Biofuels & Bioenergy' at New Delhi on April 19, 2012.
Delving into its genesis Mr. Chaturvedi, complimented PetroFed for
its perseverance on this important subject.
Biofuels & Bioenergy – International Symposium
Petroleum Federation of India 71
Delivering the keynote address at the 1½ day conference Dr. James
Rekoske, Vice President (Renewable Energy & Chemicals), UOP
LLC, Chicago sharply brought out the imperative need to focus on
biofuels and bioenergy for global energy security.
In his address at the inaugural session Dr. R. K. Malhotra, Director
(R&D), IndianOil dwelt on the developments taking place on the
subject in India and abroad and the R&D initiatives being taken in
this regard.
Welcoming participants earlier Mr. A. K. Arora, Director General,
PetroFed drew attention to the fact that the growing Indian economy
is likely to account for about 15% of the global increase in energy
demand by 2035. A WWF report, he added, presents the technical
feasibility of meeting 95% of the planet's energy requirements from
renewable sources in 2050.
The symposium witnessed 17 presentations during five sessions
spread over 1½ days. There were seven international speakers
sharing not only technologies but also country experiences in their
progression towards biofuels & bioenergy. Four expert panelists
and an eminent moderator at the concluding session gave their
perspective on the way forward. Almost 10% of the 125 participants
were international delegates. Besides participation by members of
the oil & gas industry there were substantial number of technology
providers, NGOs, policy makers, R&D, academia and foreign
diplomats.
Inaugural Session in progress.
Dr. James Rekoske delivering keynote address.
A section of the participants.
Mr. A. K. Arora welcoming participants.
Dr. R. K. Malhotra delivering his address.
Petroleum Federation of India72
Mr. B. K. Chaturvedi delivering inaugural address.
Mr. A. M. K. Sinha, Director (P&BD), IndianOil (centre) delivering opening remarks while chairing Session-I on 'Biofuels in India – Achievements and Learnings'. Others (L-R): Mr. Sandeep Chaturvedi, President, Bio Diesel Association of India; Mr. Anil Dhussa, Director, Ministry of New & Renewable Energy, Govt. of India; Mr. Abhay Chaudhari, Executive Vice President, Praj Industries; Mr. Rahul Pruthi, Asstt. Manager (Business Development), Tata Power Limited
Dr. M. O. Garg, Director, IIP, Dehradun (2nd from right) delivering opening remarks while chairing Session-II on 'Biofuels: Developments in Asia'. Others (L-R): Dr. Dadan Kusdiana, Head for Bioenergy Programme Division, Directorate General of New Renewable Energy and Energy Conservation, Govt. of Indonesia, Jakarta; Prof. Jong Moon Park, Distinguished Professor, Pohang University of Science and Technology, Korea; Dr. Loh Soh Kheang, Head Energy & Environment Unit, Malaysian Palm Oil Board, Kajang, Malaysia.
Dr. James Rekoske, Vice President (Renewable Energy & Chemicals), UOP LLC, Chicago (centre) delivering opening remarks while chairing Session-III on 'Feedstock: Options for Scale and Viability'. Others (L-R): Mr. Prabhakar Nair, Vice President (Business Development), Lanzatech, Chicago, USA; Mr. Prayas Goel, Director, Concord Blue Technology; Dr. D. K. Tuli, Executive Director, IndianOil (R&D); Dr. V. Sivasubramanian, Associate Professor (Plant Biotechnology) & Director, Vivekananda Institute of Algal Technology.
Dr. R. K. Malhotra, Director (R&D), IndianOil (centre) delivering opening remarks while chairing Session-IV on 'Conversion Technologies for Novel Fuels'. Others (L-R): Mr. Partik Lowertz, Vice President (Markets), ChemRec AB, Stockholm; Mr. David Cepla, Managing Director, Envergent Technologies, Chicago, USA; Dr. Arvind Lali, Professor & Head DBT-ICT Centre for Energy Biosciences, Mumbai; Dr. Sanjukta Subudhi, Fellow, TERI.
Mr. Anand Kumar, Director, Petrotech Society & former Director (R&D), IndianOil (centre) delivering opening remarks while chairing Session-V on 'Biofuels and Bioenergy: Sustainability and Global Perspectives'. Others (L-R): Mr. Vineet Raswant, Senior Technical Manager, International Fund for Agricultural Development, Rome; Dr. Dheeban C. Kannan, Fellow, TERI.
Petroleum Federation of India 73
Dr. Anjan Ray, Regional Commercial Director, UOP India Pvt. Limited proposing a vote of thanks.
Moderator, Dr. Renu Swarup, Advisor, Department of Biotechnology, Govt. of India (centre) giving her perspective during Session-VI on 'Panel Discussion'. Others (L-R): Dr. M. O. Garg, Mr. Anil Dhussa, Dr. James Rekoske, Dr. D. K. Tuli.
The meeting of the Energy Think Tank at New Delhi on
May 1, 2012 deliberated upon and debated a
presentation made by Shri Suresh Mathur, Director,
GSPC and former MD & CEO, Petronet LNG and Dr. C.
R. Prasad, Chairman, Everest Power and former
Chairman & Managing Director, GAIL (India) Limited on
natural gas.
The deliberations of the day were converted into
recommendations for submission to Government and
discussed at another ETT meeting on June 5, 2012 at
New Delhi.
ETT Meetings
Both meetings were facilitated and hosted by PetroFed.
The presentation and recommendations focused on
shifting customers on liquid fuels to natural gas,
augmenting and optimizing gas infrastructure,
reviewing gas pricing and changing mindset.
The ETT is expected to deliberate further and seek
additional inputs before finalising recommendations to
be put up to the Government.
Chairman, Energy Think Tank & former Secretary, MoP&NG, Shri T. N. R. Rao delivering opening remarks. Others (L-R): Dr. I. B. Gulati, former Director, IIP, Dehradun; Shri M. A. Pathan, former Chairman, IndianOil and Tata Petrodyne; Shri J. S. Oberoi, Convenor, Energy Think Tank; Shri V. S. Jain, former Member, PESB & Chairman, SAIL; Shri Y. Sahai, Director (Comm. & Mktg.), PetroFed.
Dr. I. B. Gulati sharing his view point. Others (R-L): Shri A. K. Arora, Shri Suresh Mathur, Dr. C. R. Prasad, Shri B. D. Gupta, Shri S. K. Manglik, Shri G. K. Pandey, Shri J. L. Zutshi, Shri C. Ratnam, former CMD, Oil India; Shri P. Dasgupta, Shri J. S. Oberoi, Shri T. N. R. Rao, Shri M. A. Pathan.
Petroleum Federation of India74
Shri V. S. Jain (2nd from left) giving his perspective. Others seated (L-R): Shri J. S. Oberoi, Shri Y. Sahai, Shri P. Dasgupta, former MD & CEO, Petronet LNG.
The changing dimensions of natural gas availability as
compared to that of oil were brought out by Mr. S.K.
Manglik while chairing a session on 'Challenges in
Natural Gas' organised by PetroFed in its series of
Guest Lectures and Though Leadership Programmes
on May 18, 2012 at New Delhi.
Delivering the lecture Mr. Suresh Mathur, Director,
GSPC and former CEO & MD, Petronet LNG Ltd.
pointed out that globally there were 250 years of
reserves of natural gas and because of its relative
abundance even a 20% conversion in India from oil to
gas would result in saving of about 6 billion USD per
annum. He called for a change in mindset,
augmentation of infrastructure, review of pricing and a
few bold initiatives to encourage investment to enable
India to take advantage of this situation.
In an exhaustive analysis, drawing parallels from
developments taking place in China and other South
East Asian countries, Mr. Mathur called for an
awareness campaign and national consensus on the
issue of promoting a gas based economy.
The presentation evoked intense debate and several
senior industry members voiced their opinion including
Challenges in Natural Gas
Mr. Anil Razdan, former Secretary, Power, Mr. R.S.
Sharma and Mr. BC. Bora, former CMDs, ONGC, Dr.
C.R. Prasad, former CMD, GAIL and Dr. Avinash
Chandra, former DG, DGH.
Both meetings were facilitated and hosted by PetroFed.
Mr. S.K. Manglik delivering opening remarks.
Mr. Suresh Mathur making his presentation.
A section of the participants.
Petroleum Federation of India 75
The visit of Indain oil industry technical team led by
Shri P. Kalyanasundaram, Director (IC&CA), MoP&NG
to Islamabad for meetings with the Pakistan oil industry
officials on May 28-29, 2012 was coordinated by
PetroFed. The Indian delegation comprised Shri
Rakesh Mehra, Executive Director (International
Trade), BPCL; Shri S. Thangapandian, CEO (Mktg.),
Essar Oil; Shri Mahesh Advani, Head (Director Sales),
Essar Oi l ; Shr i Rajesh Pathak, Manager,
Petrochemicals (Exports), IndianOil; Shri Tapas Kumar
Bishayi, Sr. Manager (Lube Exports), IndianOil; Shri
Rahul Bhardwaj, DGM (Commercial), IndainOil; Shri
Ashok Dhar, President (Industrial Mktg.), RIL; Shri C. S.
Sanalkumar, DGM (DistributionHPCL; Shri Suprabhat
Paul, General Manager (Commercial), HPCL; Shri Y.
Sahai, Director (Comm. & Mktg.), PetroFed; Shri S. S.
Ramgarhia, Director (Policy & Planning), PetroFed.
The Pakistani delegation was led by Shri Shabbir
Ahmad, Joint Secretary, Ministry of Petroleum &
Natural Resources, Islamabad. The joint meeting on
May 28, 2012 was also addressed by the Federal
Secretary, Ministry of Petroleum & Natural Resources,
Pakistan, Shri Muhammad Ejaz Chaudhry and the
Hon'ble Federal Minister for Petroleum & Natural
Resources of Pakistan, Dr. Asim Hussain.
On the first day after the opening remarks by the
leaders of both delegations and introduction of
delegation members a short presentation was made by
the Director (Comm. & Mktg.), PetroFed, Shri Y. Sahai.
The two-day deliberations discussed product
specifications and requirements of Pakistan and a
record note of discussions was signed by the leaders of
the delegations. It was agreed to hold an expert
committee meeting at New Delhi in the first fortnight of
July 2012.
The Indian delegation also met during their visit
members of the Islamabad Chamber of Commerce and
the Pakistan Chamber of Commerce.
A section of the participants.
Mr. Anil Razdan, former Secretary, Power sharing his perspective in Q&A Session.
Mr. Suresh Mathur addressing participants.
Oil Industry Technical Team to Islamabad
Petroleum Federation of India76
The importance of the Revised schedule VI to the
Companies Act 1956 and the Revised Guidance Note
on Accounting for Oil & Gas Producing Activities was
sharply brought out by Shri B. Mukherjee, Director
(Finance), HPCL while inaugurating a workshop
organised by PetroFed on the subject at Mumbai on
May 31, 2012 in association with member company
KPMG.
Delivering the theme address, Shri Arvind Mahajan,
Executive Director & ENR Sector Head, KPMG dwelt
on the ramifications of the changes proposed in the
Exposure Draft and the Companies Act.
Welcoming participants earlier, Shri S. S. Ramgarhia,
Director (Policy & Planning), PetroFed pointed out that
the workshop had been organised pursuant to requests
from member companies after a similar workshop last
year at New Delhi. It focussed on Revised Schedule VI
The Indian oil industry technical delegation at Islamabad. (L-R): Shri C. S. Sanalkumar, DGM (Distribution), HPCL; Shri S. Nambiar, First
Secretary Indian High Commission, Pakistan; Shri Tapas Kumar Bishayi, Sr. Manager (Lube Exports), IndianOil; Shri Rahul Bhardwaj, DGM
(Commercial), IndianOil; Shri Suprabhat Paul, GM (Commercial), HPCL; Shri S. S. Ramgarhia, Director (Policy & Planning), PetroFed; Shri
Ashok Dhar, President (industrial Mktg.), RIL; Shri Y. Sahai, Director (Comm. & Mktg.), PetroFed; Dr. Asim Hussain, Hon'ble Federal Minister
for Petroleum & Natural Resources of Pakistan; Shri Rakesh Mehra, Executive Director (International Trade), BPCL; Shri P.
Kalyanasundaram, Director (IC&CA), MoP&NG; Shri Muhammad Ejaz Chaudhry, Federal Secretary, Ministry of Petroleum & Natural
Resources, Pakistan; Shri Shabbir Ahmad, Joint Secretary, Ministry of Petroleum & Natural Resources, Pakistan; Shri Mahesh Advani,
Head (Direct Sales), Essar Oil; Shri S. Thangapandian, CEO (Mktg.), Essar Oil; Shri Rajesh Pathak, Manager, Petrochemicals (Exports),
IndianOil.
Guidance Note on Accounting and the Companies Bill
to the Companies Act 1956 and Exposure Draft:
Guidance Note on Accounting for Oil & Gas Producing
Activities (Revised) as well as certain salient features of
the Companies Bill, 2011.
The first session on the Revision of the Guidance Note
on Accounting for Oil & Gas Producing Activities was
comprehensively covered in detail by Shri Kaushal
Kishore, Chartered Accountant, KPMG. At the end of
the day he gave an overview of the salient features of
the Companies Bill, 2011 and also touched upon other
regulatory developments in the field of corporate
governance.
The key requirements of the Revised Schedule VI to the
Companies Act and the manner of their implementation
with specific reference to the oil & gas sector were
delineated by Shri Vijay Mathur, Chartered Accountant,
KPMG.
The workshop witnessed intense floor participation
from over 40 industry executives present.
Petroleum Federation of India 77
Seated (L-R): Shri S. S. Ramgarhia, Session Chairperson Shri B. Mukherjee, Shri Arvind Mahajan.
Session Chairperson Shri B. Mukherjee delivering inaugural
address.
Shri Arvind Mahajan delivering theme address.
Shri Kaushal Kishore, Chartered Accountant, KPMG making his
presentation.
Shri Vijay Mathur, Chartered Accountant, KPMG making his presentation.
A section of the participants.
Petroleum Federation of India78
In consonance with the theme of the World
Environment Day 2012 PetroFed organised a lecture
on 'What Each One of Us Can Do To Protect the
Environment?' by the eminent Dr. Prodipto Ghosh,
Distinguished Fellow, TERI and former Secretary,
Ministry of Environment & Forests on June 5, 2012 at
New Delhi in its continuing series of Guest Lectures &
Thought Leadership Programmes. The theme for the
World Environment Day 2012 was 'Green Economy:
Does it Include You?'
The Green Economy has been defined as one that
results in improved human well-being and social equity
while significantly reducing environmental risks and
ecological scarcities. Most simply put, it can be one
which is low carbon, resource efficient and socially
inclusive. And all these issues, pointed out Dr. Prodipto
Ghosh, can be addressed by citizens in their daily life at
home, at work, while commuting , and even by children
when at school. Dr. Ghosh, through examples and
easy to follow steps, elaborated on the contribution that
each one of us can make for a greener earth.
The presentation spurred a host of suggestions from
over three score participants present. There were
suggestions to mandate CFLs or LEDs and keep ACs at
25O C as in Japan. Only energy efficiency labelled
appliances should be permitted to be sold and
equipments using water should be labelled for water
efficiency like the labelling for energy efficiency.
Similarly, use of solar heating and rain water harvesting
in new constructions should be mandated. Even office
timings of an office cluster should be essentially
staggered to eliminate fuel wastage due to traffic jams.
The suggestions made deserve serious consideration.
The Director General, PetroFed, Shri A. K. Arora in his
closing remarks expressed the hope that the
conservation messages conveyed and discussed
during the session would not only be implemented but
also promoted by participants.
World Environment Day
A section of the participants.
A point being made by Shri Suresh Mathur, Director, GSPC and former MD & CEO, Petronet LNG.
Dr. Prodipto Ghosh making his presentation.
Petroleum Federation of India 79
The PetroFed Governing Council at its 28th meeting on
June 8, 2012 welcomed Shri T. K. Ananth Kumar,
Director (Finance), Oil India Limited as a member of the
Governing Council and placed on record its
appreciation of the services rendered by Shri P. N.
Baruah, Group General Manager (T&D), Oil India
Limited during his tenure as a member of the Governing
Council.
It approved and welcomed the induction of M/s Haldor
Topsoe India Private Limited as the 67th member of the
Society.
The Governing Council expressed its appreciation on
the events conducted in the recent past by the
Secretariat, particularly the international conferences
on 'refining challenges' and 'biofuels and bioenergy'
and the role played in coordinating the visit of the oil
i ndus t ry techn ica l team, led by Shr i P.
Kalyanasundaram, Director (IC & CA), MoP&NG to
Islamabad.
It noted the events and activities planned during
2012-13.
Dr. Prodipto Ghosh replying to a query. Also seen in the picture is Shri A. K. Arora.
28th Governing Council Meeting
Shri P. Raghavendran (4th from right) making a point. Others (L-R): Shri S. P. Gathoo, Director (HR), BPCL; Ms. Nishi Vasudeva, Director (Mktg.), HPCL; Shri M. A. Pathan, Honorary Member, PetroFed; Shri R. S. Butola, Shri A. K. Arora, Shri A. K. Hazarika, Director (onshore), ONGC; Shri T. K. Ananth Kumar, Director (Finance), OIL.
Shri A. K. Arora, Director General, PetroFed (R) briefing the Governing Council. Others (L-R): Shri R. S. Butola, Chairman, PetroFed & Chairman, IndianOil; Shri P. Raghavendran, Vice Chairman, PetroFed &President (Refinery Business), RIL.
The shale gas story has almost turned the United
States from a major prospective LNG market to a
potential exporter of LNG. Stating this, Shri R. S.
Butola, Chairman, PetroFed and Chairman, IndianOil
recounted his personal discussions at various levels
over the years in the US during this transformation. He
was delivering the opening remarks while chairing a
CEO/Top Management Interaction with Ms. Antonia
Bullard, Senior Director & Head of Corporate Advisory
The US Unconventionals Revolution
Petroleum Federation of India80
Practice, PFC Energy who elaborated on 'The US
Unconventionals Revolution and Implications for India'
on June 20, 2012 at New Delhi.
Ms. Antonia Bullard, who advises clients on corporate
strategy, strategic communications, investor relations
and international Government relations recounted the
process of proving, optimizing, industrializing and
rethinking in the shale gas development strategy. She
explained the implications of the unconventionals
revolution for the US and how it can lead to crude oil
flow shifts in the world besides the prospect for
replication in other economies.
Her lecture was followed by an intense interaction with
more than 90 participants including existing and former
senior bureaucrats, CEOs, academicians etc.
Session Chairman Mr. R. S. Butola delivering opening remarks. Seated (L-R): Mr. A. K. Arora, Ms. Antonia Bullard.
Ms. Antonia Bullard making her presentation.
A section of the participants.
A query being raised by Dr. Avinash Chandra, former DG of DGH & CMD, Petrobiz Consultants.
Session Chairman Mr. R. S. Butola delivering concluding remarks.
Petroleum Federation of India 81
The economic woes of several developed countries is
one of the reasons for the economic slowdown in
developing countries said Dr. B. Mohanty, Senior
Economic Advisor, Ministry of Petroleum & Natural Gas
while chairing a guest lecture on 'Post Recession
Outlook & Current Scenario' by Prof. Pranab Banerji,
Professor of Economics, Indian Institute of Public
Administration at New Delhi on June 26, 2012.
Organised under the PetroFed series of Guest Lectures
& Thought Leadership programmes, the lecture traced
major changes in economic thought globally which
have landed the world in the current economic
quagmire.
Prof. Banerji in a lucid manner tracked the current
economic downturn of the PIIGS countries (Portugal,
Ireland, Italy, Greece and Spain) to the genesis of the
sub prime crisis in the 1980s which resulted in the
global economic slowdown in 2008. Economic
inequalities and global financial transactions in trade
were highlighted by Prof. Banerji.
The lecture witnessed intense floor participation and
lively interaction.
Post Recession Outlook
Session Chairman Dr. B. Mohanty (centre) delivering opening remarks. Others (L-R): Prof. Pranab Banerji, Shri A. K. Arora.
Prof. Pranab Banerji making his presentation.
Session Chairman Dr. B. Mohanty delivering concluding remarks.
A query being raised by Shri Rajan Kapoor, General Manager, Prize Petroleum Company Limited.
Petroleum Federation of India82
Name Designation Organisation
Mr. R. S. Butola Chairman Chairman, Indian Oil Corporation Limited
Mr. P. Raghavendran Vice-Chairman President (Refinery Business), Reliance
Industries Limited
Mr. S.P. Gathoo Member Director (HR), Bharat Petroleum Corporation
Limited
Mr. T. S. Ramachandran Member Director (Technical), Chennai Petroleum
Corporation Limited
Mr. Prabhat Singh Member Director (Marketing), GAIL (India) Limited
Ms. Nishi Vasudeva Member Director (Marketing) , Hindustan Petroleum
Corporation Limited
Mr. Dipak Chakravarty Member Managing Director, Numaligarh Refinery Limited
Mr. T. K. Ananth Kumar Member Director (F), Oil India Limited
Mr. A. K. Hazarika Member Director (Onshore), Oil & Natural Gas
Corporation Limited
Mr. M. A. Pathan Honorary Member
Mr. Sarthak Behuria Honorary Member Group President, Modi Enterprises
Mr. A. K. Arora Member Secretary Director General, PetroFed
Governing Council
Our Member Organisations
S.No. Organisation
Adani Gas Ltd. Mr. Rajeev Sharma
2. Adani Welspun Exploration Ltd. Mr. Atul Sathe
3. Axens India Pvt. Limited Mr. Jean Paul Margotin
4. Bharat Petroleum Corp. Ltd. Mr. R. K. Singh
5. BP India Services Pvt. Ltd. Mr. Sashi Mukundan
6. British Gas India Pvt. Ltd. Mr. Walter Simpson
7. Bharat Heavy Electricals Ltd. Mr. B P Rao
8. Bharat Oman Refineries Limited Dr. B. K. Das
9. Cairn India Ltd. Mr. Rahul Dhir
10. Chennai Petroleum Corp. Ltd. Mr. S. Venkataramana
11. Chemtrols Industries Limited Mr. K. Nandakumar
12. Deloitte Touche Tohmatsu India Pvt. Ltd. Mr. Udayan Sen
13. Deepwater Drilling & Services Pvt. Ltd. Mr. S. M. Malhotra
14. Engineers India Ltd. Mr. A. K. Purwaha
15. Ernst & Young Pvt. Ltd. Mr. Rajiv Memani
16. Essar Oil Ltd. Mr. Lalit Kumar Gupta
17. ExxonMobil Gas (India) Pvt. Ltd. Mr. K S Kim
18. East India Petroleum Pvt. Ltd. Mr. K. Sharath Choudary
19. GAIL(India) Ltd. Mr. B.C. Tripathi
20. Great Eastern Energy Corporation Ltd. Mr. Yogendra Kumar Modi
21. Gujarat State Petroleum Corporation Limited Mr. Tapan Ray
22. Hindustan Petroleum Corp. Ltd. Mr. S. Roy Choudhury
23. HLS Asia Ltd. Mr. Rajeev Grover
24. Honeywell Automation India Ltd. Mr. Anant Maheshwari
25. HPCL Mittal Energy Ltd. Mr. Prabh Das
26. Haldor Topsoe India Pvt. Ltd. Mr. Dilip K. Dutta
27. IMC Ltd. Mr. A. Mallesh Rao
28. Indian Oil Corp. Ltd. Mr. R. S. Butola
29. Indraprastha Gas Ltd. Mr. M. Ravindran
30. Industrial Development Services Pvt. Ltd. Mr. R. K. Gupta
31. IHS CERA Mr. James Burkhard
32. IOT Infrastructure & Energy Services Limited Mr. Jayanta Bhuyan
33. Jindal Drilling & Industries Limited Mr. Raghav Jindal
34. Jubilant Oil & Gas Pvt. Ltd. Mr. Ajay Khandelwal
CEO
1.
Contd...2
35. KPMG Mr. Russell Parera
36. Kellogg Brown & Root Engineering & Mr. Vinayak PaiConstruction India Pvt. Ltd.
37. LanzaTech-NZ Limited Dr. Jennifer Holmgren
38. Lanco Infratech Ltd. Mr. L. Madhusudhan Rao
39. Mangalore Refinery and Petrochemicals Ltd. Mr. U. K. Basu
40. Mitsui Chemicals India Private Limited Mr. Shingo Shibata
41. Mitco Labuan India Pvt. ltd. Mr. Roney Zaidell
42. Naftogaz India Pvt. Ltd. Mr. Bava Mahdoom
43. Nagarjuna Oil Corp. Ltd. Mr. S. Ramasundaram
44. Niko Resources Ltd. Mr. Larry Fisher
45. Numaligarh Refinery Ltd. Mr. Dipak Chakravarty
46. Oil & Natural Gas Corporation Ltd. Mr. Sudhir Vasudeva
47. Oil India Ltd. Mr S. K. Srivastava
48. Petronet LNG Ltd. Dr. A.K. Balyan
49. PFC Energy Mr. J. Robinson West
50. PMI Organization Centre Pvt Ltd. Mr. Raj Kalady
51. PricewaterhouseCoopers Pvt. Ltd. Mr. Deepak Kapoor
52. Prize Petroleum Co. Ltd. Mr. M.R. Pasrija
53. Punj Lloyd Ltd. Mr. Atul Punj
54. Reliance Industries Ltd. Mr. Mukesh Ambani
55. Santos International Operations Pty. Ltd. Mr. Mark Shimmield
56. SAP India Pvt. Ltd. Mr. Peter Gartenberg
57. SAS Institute (India) Pvt. Ltd. Mr. Sudipta K. Sen
58. Schlumberger Asia Services Limited Mr. S. Ramamurthy
59. Shell India Pvt. Ltd. Mr. Vikram Singh Mehta
60. Sud-Chemie India Pvt. Ltd. Ms. Arshia A. Lalljee
61. Shiv-Vani Oil & Gas Exploration Services Ltd. Mr. Prem Singhee
62. Tata Petrodyne Ltd. Mr. Prasad Menon
63. Tecnimont ICB Pvt. Ltd. Mr G.Sathiamoorthy
64. Total Oil India Pvt. Ltd. Mr. B. Vijay Kumar
65. Transocean Offshore International Ventures Ltd. Mr. Sanjaya Sood
66. University of Petroleum & Energy Studies (UPES) Dr. S.J. Chopra
67. UOP India Pvt. Ltd. Mr. Mark S Turowicz
68. World L. P. Gas Association Mr. James Rockall
Journal Coordinators
Ms. Marianne Karmarkar BPCL
Mr. S. Vaidyanathan CPCL
Mr. Jignesh Vasavada GAIL (India) Ltd.
Ms. Radhika Ojha IOT Infrastructure & Energy Services Limited
Mr. R.G.Sreeram IOCL
Mr. H K Nath NRL
Mr. Pramode Seth ONGC
Mr. P.N. Barua Oil India Ltd.
Mr. Deepak Mahurkar PricewaterhouseCoopers Pvt. Ltd.
Editorial Board
No part of this journal shall be reproduced in whole or in part by any means without permission
from PetroFed.
The views expressed by various authors and the information provided by them are solely from
their sources. The publishers and editors are in no way responsible for these views and may not
necessarily subscribe to these views.
Editor : Y. Sahai
Member : A. K. Arora
S. L. Das
S. S. Ramgarhia
O. P. Thukral
Biren Das
Edited, Designed & Published by:
Petroleum Federation of IndiaPHD House, 3rd Floor, 4/2, Siri Institutional Area, August Kranti Marg, New Delhi - 110 016
Phone : 2653 7483, 6566 4067 Fax : 2696 4840, E-mail: petrofed@petrofed.org, Website:www.petrofed.org.
Printed by : PRINTEMPS INDIA Ph. : 98101 44481, E-mail : printempsindia@yahoo.com
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