The Hindu Business Line : `Refineries must improve capacity utilisation'

MANY domestic oil companies have the potential to go global while integrating their operations within the entire hydrocarbon value chain, Mr S.C. Tripathi, Secretary, Petroleum and Natural Gas, said here today.

Speaking at the `XIII refinery technology meet on maximising hydrocarbon value chain', Mr Tripathi said, however, refineries face the challenge of competing in the changing world energy scene, while being cost effective.

Citing a study conducted in partnership with Shell, Mr Tripathi said, only two refineries in the country met the better plant capacity utilisation benchmarks. This has to be extended to other plants.

The three-day refinery technology meet is aimed at addressing issues relating to country's energy security and sustaining refining business in the context of rising crude oil prices, etc.

Mr Tripathi later told newspersons on the sidelines that three grassroot refineries of HPCL, BPCL at Bhatinda (Rs 10,000 crore investment), BPCL, Oman Oil at Bina in M.P. (Rs 9,000 crore) and IOC's at Paradip (Rs 18,000-20,000 crore), were coming up.

HPCL's refinery in Vizag would double its capacity to 15 million tonnes per year with a possible foreign partner.

Mr Tripathi said as 75 per cent of the crude oil requirement is met through imports, and the country is heavily vulnerable on various external factors affecting the hydrocarbon sector. Demand for energy in India is expected to double the world average growth of 1.9 per cent.

BPCL chief sees good potential: The Chairman and Managing Director of Bharat Petroleum Corporation Ltd (BPCL), Mr Ashok Sinha, said the increase in refining capacity has lagged the growing demand for petroleum products in the last few decades.

Spare global refining capacity that reached a peak of about 35 per cent in early 1980s now stands below 3 per cent.

Given the geographical mismatch in terms of demand and supply centres, India has the potential to play a larger role and, some experts believe, could even emerge as a global hub for refining, Mr Sinha said.

On BPCL completing 50 years, Mr Sinha said that BPCL's Mumbai refinery has increased its capacity nearly six times through de-bottlenecking and brown field expansion. It has processed about 60 types of crude and is now in the process of putting up a Rs 320-crore lube oil base stock project for base oils.

Shell keen to help Indian cos go global

THE Chief Operating Officer of Shell Global Consulting Solutions Group, Mr Rik Gierman, said the company's consulting arm has set up operations in Mumbai and plans to guide Indian companies in their quest to go global.

Sharing the best practices from the Shell story, Mr Gierman said Indian companies need to address the crucial aspect of maximising hydrocarbon value chain. Often, there is this tendency to focus on new projects, which are capital intensive.

"In fact, if you can optimise your investments, this will provide with higher return on investments that can then be deployed for new projects," he said.

Citing the example of Wal-Mart, Whirlpool, Dell and Amazon.com, Mr Gierman said that petroleum companies have a lot to learn from their innovative practices in terms of managing supply chain cost-effectively.

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