Indianoil Corp pow­ers Q4 profit by 86% to `3,721 cr


Resource Digest - - CONTENTS -

Aided by higher in­ven­tory gains on crude oil, In­dian Oil Cor­po­ra­tion re­ported an 86 per cent in­crease in net profit for the fourth quar­ter of 2016-17 at Rs 3,721 crore. Net profit for the cor­re­spond­ing quar­ter of the pre­vi­ous fis­cal stood at Rs 2,006 crore. The rise in prof­its cor­re­sponds to higher Gross Refinery Margins. The GRM for the quar­ter stood at $8.95 a bar­rel. This was higher than the $2.99 per bar­rel GRM in the fourth quar­ter of 2015-16. In­ven­tory gains on crude oil stood at Rs 2,634 crore. Com­pa­ra­bly, IOCL suf­fered an in­ven­tory loss of Rs. 3,417 crore in the fourth quar­ter of fis­cal 2015-2016.

The com­pany’s Board rec­om­mended a fi­nal div­i­dend of Rs 1 a share (10 per cent on the paid-up eq­uity share cap­i­tal) for fi­nan­cial year 2016-2017. An of­fi­cial state­ment said that this is in ad­di­tion to the first in­terim div­i­dend of Rs. 13.50 per share and sec­ond in­terim div­i­dend of Rs 4.50 per share paid for 2016-17.

IOCL'S gross refinery margins for 2016-17 rose to $7.77 per bar­rel from $5.06 per bar­rel in the pre­vi­ous fis­cal. In­ven­tory gains stood at Rs. 12,477 crore.


The com­pany is star­ing at a hit in the bot­tom line af­ter the GST roll-out sched­uled from July. Di­rec­tor (Fi­nance) A K Sharma said, “Around Rs 5,000 crore of in­put credit will re­main stranded due to MS (Mo­tor Spirit or Petrol) and HSD (High Speed Diesel) not be­ing un­der the Goods and Ser­vices Tax regime.”

The com­pany is in talks with the GST coun­cil to find a way to off­set this credit. Fi­nance Min­is­ter Arun Jait­ley, dur­ing the de­bate on the GST Bill in the Lok Sabha, had said that the Con­sti­tu­tion pro­vides that petroleum prod­ucts would at­tract GST, al­though the rate has been kept at zero. Go­ing for­ward, it would re­quire only an ex­ec­u­tive de­ci­sion on set­ting a rate on petroleum prod­ucts. There has also been a call to in­clude petroleum prod­ucts un­der the GST regime.


The com­pany has also made a sav­ing in 2016-17 due to op­ti­mi­sa­tion in crude oil pro­cure­ment. Pre­vi­ous Indianoil Chair­man B Ashok had said, “Indianoil has cut down the time of fi­nal­is­ing short term crude oil pro­cure­ment ten­ders from 36 hours in 2014 to less than 2 hours. The sav­ings to In­dian Oil is to the tune of over Rs 1,000 crore.”

Indianoil has also in­creased the share of spot pur­chases in the to­tal im­port mix. Ashok said, “The term spot agree­ments com­prised 80 per cent of our crude oil re­quire­ments in 2014. This has come down to 68 per cent.”


Sanjiv Singh has taken over as Chair­man of In­dian Oil Cor­po­ra­tion Ltd (Indianoil) with ef­fect from June 1, 2017. Prior to his el­e­va­tion, he was Di­rec­tor (Re­finer­ies) on the Indianoil

Board since July 2014. Con­cur­rently, he will also be Chair­man of Chen­nai Petroleum Cor­po­ra­tion Ltd (CPCL) and Hin­dus­tan Ur­varak and Rasayan Ltd (HURL), a joint ven­ture com­pany set up to re­vive the fer­tiliser plants at Gorakh­pur, Sin­dri and Ba­rauni.

A chem­i­cal en­gi­neer from Iit-roor­kee with a Diploma in Man­age­ment, Sanjiv Singh joined Indianoil in 1981. He has served the com­pany for over 35 years, spear­head­ing refinery op­er­a­tions as well as mega-green­field and brown­field projects in re­fin­ing and petro­chem­i­cals.

With ex­ten­sive ex­pe­ri­ence in the re­fin­ing sec­tor, Sanjiv Singh played a key role in the set­ting up, com­mis­sion­ing and sta­bil­i­sa­tion of two of Indianoil’s big­gest green­field re­finer­ies at Pa­ni­pat and Paradip. The com­mis­sion­ing of Indianoil’s 11th refinery at Paradip in early 2016, with a capex of Rs. 34,555 crore, is his bench­mark con­tri­bu­tion to the In­dian re­fin­ing sec­tor. Singh has also steered the suc­cess­ful im­ple­men­ta­tion of the petro­chem­i­cal projects of Paraxy­lene/ PTA and Naph­tha Cracker with down­stream units at Pa­ni­pat Refinery.

As Di­rec­tor (Re­finer­ies) of Indianoil, Singh has en­deav­oured to im­prove the op­er­a­tion of Indianoil’s 11 re­finer­ies by re­vamp­ing, de­bot­tle­neck­ing and mod­erni­sa­tion of process units, to­gether with yield and prof­itabil­ity im­prove­ment projects, be­sides un­der­tak­ing low-cost ca­pac­ity ex­pan­sions. He fo­cussed on in­no­va­tive tech­nolo­gies to cre­ate indige­nous ca­pa­bil­ity in the field of tech­nol­ogy, while en­hanc­ing the com­pany’s prof­itabil­ity. He strongly sup­ports the com­mer­cial­i­sa­tion of indige­nous tech­nolo­gies and has led many such ‘firsts’ in Indianoil re­finer­ies like Oc­ta­max (for pro­duc­tion of high-oc­tane fuel), in­d­jet (pro­duc­tion of avi­a­tion fuel), INDSK (re­duc­tion of sul­phur in kerosene) and in­de­s­e­lect (gaso­line desul­phuri­sa­tion).

Singh has been a driv­ing force in con­cep­tu­al­is­ing In­dia’s mam­moth 60 mil­lion tonnes per an­num refinery be­ing set-up on the West coast of In­dia, which will trans­form the re­fin­ing land­scape of In­dia. Play­ing a lead­er­ship role in the en­ergy sec­tor, he is part­ner­ing In­dia’s vi­sion of emerg­ing as a ‘re­fin­ing hub’ in South Asia. A cham­pion of clean and green fu­els, Singh en­sured on-sched­ule roll­out of BS-IV fu­els across the coun­try in April 2017 and has now set a fre­netic pace for Indianoil re­finer­ies to meet the tough dead­line of in­tro­duc­ing BS-VI grade green fu­els in the coun­try by April 2020. A staunch ad­vo­cate of min­i­mum ges­ta­tion time from con­cept to com­mis­sion­ing, un­der his stew­ard­ship ap­prox Rs 40,000 crore worth of projects shall be in var­i­ous stages of im­ple­men­ta­tion in the Cor­po­ra­tion, in­clud­ing capex of nearly Rs 15,000 crore in Re­finer­ies Di­vi­sion, in the com­ing three years.

Well-known for his tech­no­log­i­cal prow­ess, in­no­va­tive ideas, busi­ness acu­men and peo­ple-cen­tric lead­er­ship, he has em­pow­ered Indianoil teams to per­form and de­liver ex­cep­tional re­sults through pos­i­tive en­gage­ment and a shared vi­sion.

Sanjiv Singh shares his rich ex­pe­ri­ence and ex­per­tise in the field as a mem­ber of sev­eral in­dus­try as­so­ci­a­tions and Govern­ment bod­ies. Aca­dem­i­cally in­clined, Singh is widely trav­elled in In­dia and abroad and has pre­sented pa­pers in sev­eral im­por­tant na­tional and in­ter­na­tional fo­rums.

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