AMITY GLOBAL BUSINESS SCHOOL, MUMBAI

SUMMER INTERNSHIP REPORT ON

HEALTH, SAFETY AND ENVIRONMENTAL POLICY
MANAGEMENT
&
FIREFIGHTING STRATEGY DEVELOPMENT FOR
STORAGE TANKS IN OIL MARKETING

Submitted by:
SAHIL MANOJKUMAR JAIN
MBA 2012-14

Under the Guidance of
Prof.Rohan Mehra


1.0 INTRODUCTION
Energy is essential for living and vital for development. Affordable energy directly contributes to
reducing poverty, increasing productivity and improving quality of life. Likewise lack of access
to reliable energy is a severe impediment to sustainable social development and economic
growth. For any developing country, the strategy for energy development is an integral part of
the overall economic strategy.
The oil and gas sector consists of three segmentsupstream, midstream and downstream. The
upstream segment primarily comprises companies that are engaged in exploration and production
activities, while the midstream segment comprises of players in storage and transportation, and
the downstream segment comprises of players that are engaged in refining, processing and
marketing of petroleum products.
A countrys economic growth is closely correlated to the energy demand. Consequently, the
demand for oil and gas, which is one of the main sources of meeting energy requirements, is
expected to increase further. The value of the Indian oil and gas sector is forecasted to grow from
US$ 117,562.9 million in 2012 (estimated) to US$ 139,814.7 million by 2015.
The objective of this report are as follows :
Over the past few years competitors like BPCL , IOCL and RIL are continuously increasing
their market share as well as the profit margin after tax deductions. This is leading to
reduction of HPCL market share thereby decreasing their annual sales turnover and crude
through put for crude oil.
Test the competitiveness of HPCL on environmental basis
To find out the Environmental Policy of sample units.
To compare the performance of environmental performance indicators of sample unit.
To analysis the extent of the disclosure of environmental information of sample units.
To give suggestion for the improvement of their environmental policy.
Recent fires at various oil storage terminal across major countries and ports lead the
management in confusion stating that if such fires occur in HPCL terminals what shall be
the strategy for prevention as well as termination and recovery of such an occurrence


2.0 LITERATURE REVIEW
HPCL is the second largest player in Indian Oil sector and in highly competitive lubricants market. It was
formed in 1974 on nationalization of ESSO India operations. HPCL has two refineries producing a wide
variety of petroleum products-one in Mumbai (West Coast) and the other in Visakhapatnam (East Coast).
The HPCL refinery in Mumbai is situated in Mahul, west coast. It is in an M.I.D.C. area, which also has
other big industries like Indian Oil Corporation limited (IOCL), Bharat Petroleum Corporation limited
(BPCL), Tata power plant etc. The Corporation also holds major equity in Mangalore Refinery and
Petrochemicals Limited, and is proposing to set up a refinery in the state of Punjab. HPCL refinery can be
classified as an analytical type of industry. It is petrochemical industry i.e. broadly speaking chemical
engineering industry. Petroleum refinery is a production industry where raw material crude petroleum is
transformed into various useful products using some chemical processes.
Each firm in this sector has been following the diversification strategy of becoming a total energy
firm by acquiring stakes in companies where they dont have a mark.
Deregulation has led to implementation of unique and consumer centric strategies by private firms.
This is highly supportive for future disruptions and also to maintain the standards (be it production
or environmental)
Each company in this sector wants to increases their market share as much as possible .
Future is highly volatile considering the global political scenario prevailing around oil & gas
The condition of all the firms is unstable. Hence, firms are moving more towards the emerging RE
market
3.0 RESEARCH METHODOLOGY
The petroleum product and crude oil is core sector for any country. Now a days this sector is open
for free market. The main benefits for exploring activity are fiscal incentives as a royalty and tax
connection by the government.
This report has various types of analysis done and each of these analyses tends to have different
variables and tools that help us to find the output.
In this research all the HSE policies, power consumption , environmental expenditure and amount
of profit after tax spent on environment is found with the help of secondary data
This research leads us to identify certain factors on which the an oil and gas company tends to
complete their environmental policy and CSR initiatives
Average power consumed for production of one unit of oil makes us realize the amount of energy
consumed.
The secondary data collected was from :
1. Annual reports
2. Internet
3. Publications
4. Indian ministry data report
5. Magazines
6. Blogs
4.0 DATA ANALYSIS
1. SWOT ANALYSIS: It helps us to determine the various strengths, weaknesses, opportunities and
threats that an oil marketing company like HPC or BPCL deals with.
2. PORTER5 FORCE MODEL : This analysis deals with different kinds of potential threats an oil
marketing company faces and help us to develop a sustainable strategy
3. COMPETATIVE ANALYSIS: Here a comparative study was done with different Indian Oil
marketing companies ,thereby stating the leader as Indian Oil with Bharat Petroleum and Hindustan
Petroleum coming in line in public sector and Reliance industries being the leader in private sector
4. ENVIRONMENTAL EXPENDITURE ANALYSIS: It is also a comparative study over the
environmental expenditure floated by Indian as well as MNCs like Shell , BP lubricants &
Chevron
5. FINANCIAL RATIO COMPARISON AND THEIR RELATIONS: This study comprises of
Different financial ratios that helps us to develop the sustainability power of these Oil marketing
companies and as well as helps us to develop a relation between them. STSAT software was used
with hypothesis formulation and correlation co-efficient was found to set up the relation.
6. HSE ZONAL ANALYSIS OF OIL TERMINALS: In India, there are overall 93 major oil terminals
which are divided into 8 different zone. HSE (health safety and environment) Index is a primary
tool used by terminal heads to report any incident or occurrence of certain unexpected delays in full
proof running of these oil terminals. HSE index for each zone was collected and tabulated resulting
in best performance comparator that finally lead to an example for others in carrying out their
respective daily processes.
7. FIREFIGHTING STRATEGY DEVELOPMENT : Recently there has been a storage tank fire at an
IOCL oil terminal in Gujarat , regarding this the management dilemma was what if such thing
occurs in one of HPCL oil terminals , thus a firefighting strategy was developed known as
HAZMAT Strategy wih the help of ISHIKAWA diagram .This strategy is based on 6 major
characteristics that are:
Hazard identification
Actions taken
Zoning area Classification
Management of Firefighting team
Assistance from External agencies
Termination and recovery
5.0 RECOMMENDATIONS
In regards to competition:
Investment in oil & gas exploration Diversification strategy
HBL (Hindustan Biofuels Limited) need to take off at a higher pace Focus strategy.
Acquiring stakes in the jet fuel sales and other related infrastructure in National and
International airports
Increase the storage capacity to maintain stock at times of disruption
Implementation of ERP systems in an improved manner.
R&D in lube oils segment to develop premier quality products.
Investing in assets outside the country so as to hedge the volatility in crude price and to lower
down the under recoveries they are suffering.
Increase refinery capacity as to meet the growing industry demands for oil and natural gas
In regards to financial analysis:
It can be concluded that the profitability of oil corporations are not adequate during the period
of study, the profitability ratios calculated shows stumpy position in all the three companies and
the correlation coefficient between ROI and other variable also shows weak position during the
study period and lastly the Multiple correlation and regression table also disclosed both the
positive and negative association.
In regards to Environment:
If a comparison is made in regards to global competitors , more environmental expenditure
should be done
Indian government should make it mandatory to spend 5 percent of PAT on environment.
The findings of the study suggest that the disclosure of environmental related information is
mandatory in nature & there should be proper accounting system which determine
environmental related costs, liabilities and expenditure and the company should asked to
submit the whole information regarding environmental issues & if the company is not
providing the information then action must be taken by regulatory body against the company.
If the environmental ,safety and health policy of these companies are compared HPCL policy
stands being more clearer and is in accordance with government standards as well as the process
and method they follow to conduct their every day to day business
In regards to HSE index
Major Recommendations for Each Zone: -
Marks should be given according to the percentages achieved.
All Internal & External safety audits should be thoroughly achieved.
Mock drills need to be taken gravely. All initial preparedness need to be checked before carrying
out Mock-Drills.
All Safety committee members shall be made aware about their role & responsibilities through
training.
Weekly review of hazard identification and the same to be summarized in the HSE index report
Following of standard operation procedure for each activity carried out and recording

6.0 CONCLUSION

The findings of this study state that if we compare all the government firms of oil and gas sector ,
we can conclude that IOCL is far better in operational control and market share than HPCL or
BPCL
Energy and petroleum products being the major products utilized by any household in India , this
industry tend to acquire major effect on the Indian economy.
The Indian companies are not at par as the various MNCS strategies they follow.
At the end it can be said that miracles do not occur over nightly but a sheer hard work will surely
makes this vision of an overall progress of oil and natural gas sector come true.
It is not possible also because India is at a developing stage and there is still more to come.
However India is facing a high rate of inflation due to which pricing of petrol is rising continuously
, which is not controlled by these companies but majorly because of import and export pricing
methods of crude oil
Indian oil and gas sector has a way ahead for its progress

7.0 BIBLIOGRAPHY
1. Annual Reports:
- HPCL 2009-12
- BPCL 2009-112
- MRL 2009-12
- KRL 2009-12
- CRCL 2009-12
2. Websites:
- www.hpcl.co.in
- www.bpcl.co.in
- www.mrpl.co.in
- www.wikipedia.org
- www.nfpa.org
- www.api.org
- www.ippart19.org
- www.google.com
- www.petroelum.nic.in
- www.iip.res.in
- www.tankstorage.mag.in
- www.shell.com
- www.bplubricants.com
3. Research reports & Journals:
- Pacific business review international- Volume 5 Issue 7 Jan 2013
- Journal of Petrotech Volume 7 Oct-Dec 2012
- IBEF report Jan 2013
- Industrial fire journal third quarter 2012
- Indian government oil directory 2012-13