Oil Economics With Emphasis On Planning For Crude Margin Optimisation - Kuldeep P

EXECUTIVE SUMMARY
Petroleum industry includes a global process of exploration, extraction, refining, transporting and marketing of petroleum products. One of the major players in petroleum market is Bharat Petroleum Corporation Limited and it has two main refineries in Mumbai and in Kochi. The study is conducted in Kochi refinery, and it is the most eco-friendly refinery, which is positioned in Gods Own Country, Kerala. The whole corporate exposure and learning is a new experience and has enabled me to relate the theoretical knowledge to practical knowledge. The whole study was concerned about the Oil economics related concepts and planning followed in BPCL-Kochi Refinery. The production planning department aims in working with accordance to all business processes and functions. The major advantage is that by the functioning of the department the margins obtained by processing crude can be dynamically optimized in order to achieve the company goals. The shift from administered pricing mechanism to market determined pricing mechanism marked the beginning of a new era in the Oil &Gas industry. When Kochi Refineries Limited, located at Ambalamugal in Kochi, decided to become a proactive player in the year 2001, Government of India sold its holdings in KR to BPCL and hence KR became a BPCL undertaking. Professional Management of the production planning where the raw material which is crude is subject to such drastic and unanticipatable changes in the market is challenging and complex task. The potential for risk is high. The implications of these potential problems are studied and discussed by project management. This helps by reducing errors and expenses during procurement and production and processing completion within a stipulated period. The main limitation for the study is the time factor. Finer details of the processes taking place in all departments were unable to cover. So before going directly into topic one has to be well versed in the crude market.
Oil economics with emphasis on planning for crude margin optimization
OBJECTIVE OF THE STUDY

To familiarize the different departments in the Organization and their functioning. To study how the organization deals with different types of problems that the company faces. To do a SWOT analysis of the company. Understand how information is used in Organization for decision making at various levels. To relate theory with practice. To study economics of oil and strategies at BPCL KR. To study about Oil Accounting. To offer suggestions, if any, to improve the efficient utilization of resources.
SCOPE OF THE STUDY

This study aims at generating the practical awareness about the management & functions of the company. This study helps to make a comparison between the class room knowledge with the real situation in an organization. This study provides an opportunity to interact with working executives and see them in action. This study also helps to get an understanding about the structure of the Company and to take a closer look into the functioning of the various departments in the Company. This study helps to develop the skills of a business executive.
REASON FOR SELECTING THE COMPANY:

I choose this organization because, BPCL is a FORTUNE 500 Company. The company has a very healthy work culture. The company gives a significant importance to Corporate Social Responsibility (CSR) The company has several accreditations :
ISRS-LEVEL-8 (International Safety Rating System). ISO 17025 Certification for Quality Control. ISO 14001 for Environmental Standards and Operational Excellency. ISO 9001 -2000 for Quality Management System (QMS) Initiatives.
LEARNING EXPERIENCE
Under going training in BPCL was a remarkable experience, in terms of corporate exposure with regard to the organization as a whole. Those days were truly fruitful to the core in which the companys staff along with the functional heads, played their part not only to educate me about BPCL, but also about working in a corporate environment filled with stress, unforeseen circumstances and professionalism, at the same time I was kept updated about the Industries latest developments. It was a dream come true for me who wished to experience as to how a huge factory works, it was a great experience working in BPCL-KR, where we can learn many things about the functioning of the company in accordance with the present market trends. The interaction with the company gave many insights and a firsthand experience of the industrial scenario in the competitive environment outside the realms of the institute. Study Unit The study is conducted at BPCL- Kochi Refinery, Ernakulam, Kerala. Data collection Both primary and secondary data has been used for the study. Primary data The primary data are those, which are collected afresh and for the first time, and thus happen to be original in character. Primary data collected through discussions and interviewed the concerned departments. Secondary data The source of Secondary data was collected from department manuals, company brochures, internal report, annual reports, Jwaladhwani (companys monthly magazine ) other financial official records and companies official web site . Besides information has also been collected from various books connected with the subject and various other websites were also been gone through.
INDUSTRY PROFILE
GENERAL INTRODUCTION
The word petroleum is a Latin word which means rock oil. Petra means rock and oleum means oil. Petroleum is a fossil fuel. It is called a fossil fuel because it was formed from the remains of tiny sea they sank to the bottom of the oceans. Here, they were buried by thousands of feet of sand and silt. Over time, this organic mixture was subjected to enormous pressure, and heat as the layers increased. The mixture changed, breaking down into compounds made of hydrogen and carbon atoms-hydrocarbons. Finally an oil saturated rock-much like a wet household sponge was formed. All organic metal do not turn into oil. Certain geological conditions must exist within the oil rich rocks. There must be a trap of non porous rock that prevents the oil from seeping out, and a seal (such as salt or clay) that keeps the oil from rising to the surface. Under these conditions only two percent of the organic material is transformed into oil. A typical petroleum reservoir is mostly sandstone or limestone in which oil is trapped. The oil in it may be as thin as gasoline or as thick as tar. Petroleum is called a non renewable energy source because it takes millions of years to form. We cannot make new petroleum reserves. Petroleum is a non renewable source of fuel which is subject to extinction from the world after a certain point of time. The price of petroleum is determined by the demand supply mechanism around the globe. Petroleum is not a domestic product and any kind of shortage in the same and has serious ramifications on all possible industries along with the economies all over the world. Oil and gas industry is the most important sector in any economy since it caters to a wide range of industries including petrochemicals, fertilizers, automobiles etc. Thus, before using this energy source, the crude petroleum required to be refined in the petroleum refineries for extracting various fractions for energy generation namely, petrol, LPG, kerosene, asphalt and many more. Production of petroleum by the petroleum Industry in USA has come up as a huge contributor to the total petroleum production in the world. It has been observed that its
contribution amounts to almost 25% of the total production of petroleum globally. The most important part of the Petroleum Industry is the Refining Industry which refines the crude oil to convert it into usable fuel. It also derives many derivative products out of the crude petroleum like toluene, naphtha etc which can be used in various ways.
INDUSTRIAL BACKGROUND
The petroleum industry includes the global processes of exploration, extraction, refining, transporting (often by oil tankers and pipelines), and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline (petrol). Petroleum is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. The industry is usually divided into three major components: upstream, midstream and downstream. Midstream operations are usually included in the downstream category.
ORIGIN OF THE INDUSTRY

Petroleum in an unrefined state has been utilized by humans for over 5000 years. Oil in general has been used since early human history to keep fires ablaze, and also for warfare. Ancient Persian language tablets indicate the medicinal and lighting uses of petroleum in the upper echelons of their society. Ancient China was also known to burn skimmed oil for light. An early petroleum industry was established in the 8th century, when the streets of Baghdad were paved with tar, derived from petroleum through destructive distillation. In the 9th century, oil fields were exploited in the area around modern Baku, Azerbaijan, to produce naphtha. A petroleum industry emerged in North America in Canada and the United States, fuelling the industrial revolution. The Industrial Revolution generated an increasing need for energy which was fuelled mainly by coal, with other sources including whale oil. However, it was discovered that kerosene could be extracted from crude oil and used as a light and heating fuel. Petroleum was in great demand, and by the twentieth century had become the most valuable commodity traded on the world market. The first large oil refinery opened at Ploiesti, Romania in 1856. The first oil drilling in the United States began in 1859, when oil was successfully drilled in Titusville, Pennsylvania. In the first quarter of the 20th century, the United States overtook Russia as the world's largest oil producer. By the 1920s, oil fields had been established in many countries including Canada, Poland, Sweden, the Ukraine, the United States, and Venezuela. In 1947, the Superior
Oil Company constructed the first offshore oil platform off the Gulf Coast of Louisiana. After World War II ended, the countries of the Middle East took the lead in oil production from the United States.
GROWTH & DEVELOPMENT OF THE INDUSTRY

Petroleum is vital to many industries, and is of importance to the maintenance of industrialized civilization itself, and thus is a critical concern for many nations. Oil accounts for a large percentage of the worlds energy consumption, ranging from a low of 32% for Europe and Asia, up to a high of 53% for the Middle East. Other geographic regions consumption patterns are as follows: South and Central America (44%), Africa (41%), and North America (40%). The world consumes 30 billion barrels (4.8 km) of oil per year, with developed nations being the largest consumers. The United States consumed 25% of the oil produced in 2007. The Indian Petroleum refining industry is now over a century old. Its growth was now over a century old. Its growth was not very significant till independence. The subsequent 25 years witnessed the emergence of several new refineries in both private and public sectors. The nationalization of oil companies in 1976 saw all Indian refineries coming under the government fold. During the independence era of 1947, the Indian Petroleum Industry was controlled by foreign companies & Indias own expertise in this sector was limited. Now refineries are operates under private sector like Reliance, Essar etc.
PRESENT STATUS OF THE INDUSTRY

The India Petroleum Industry is a case in point for exhibiting the giant leaps India has taken after its independence towards its march to attain a self-reliant economy. To meet the growing demand of petroleum products, the refining capacity in the country has gradually increased over the years by setting up of new refineries in the country as well as by expanding the refining capacity of the existing refineries. As of April, 2009 there are a total of 20 refineries in the country comprising 17 (seventeen) in the Public Sector and 3 (three) in the Private Sector. The country is not only self sufficient in refining capacity for its domestic consumption but also exports petroleum products substantially. The total refining capacity in the country as on 1.12.2009 stands at 179.956 MMTPA (Million metric tonnes per annum).
TOP WORLD OIL COMPANIES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Saudi Aramco National Iranian Oil Company Qatar Petroleum Iraq National Oil Company Petroleos de Venezuela Abu Dhabi National Oil Company Kuwait Petroleum Corp. Nigerian National Petroleum Corp. Libya NOC Sonatrach
PSUs in the petroleum industry BPCL IOCL BRPL CPCL HPCL ONGC : Bharat Petroleum Corporation Limited : Indian Oil Corporation Limited : Bongaigon Refineries Limited : Chennai Petroleum Corporation Limited : Hindustan Petroleum Corporation Limited : Oil and Natural Gas Corporation Limited
LEADING PLAYERS IN THE MARKET

There are so many refineries all over India major players are as follows

Indian Oil Corporation Limited(IOCL) Bharat Petroleum Corporation Limited(BPCL) Hindustan Petroleum Corporation Limited(HPCL) Chennai Petroleum Corporation Limited(CPCL) Numaligarh Refinery Limited(NRL) Mangalore Refinery And Petrochemicals Limited(MRPL) Tatipaka Refinery(ONGC) Reliance Industries Limited(RIL) Reliance Petroleum Limited
Essar Oil Limited(EOL)
List of refineries in India Sl. No. Name of the company 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Location of the refinery IOCL Guwahati, Assam IOCL Barauni, Bihar IOCL Koyali, Vadodara, Gujarat IOCL Haldia, West Bengal IOCL Mathura, Uttar Pradesh IOCL Digboi, Assam IOCL Panipat, Haryana IOCL Bongaigaon, Assam HPCL Mumbai, Maharashtra HPCL, Visakh Vishakapatnam, Andhra Pradesh BPCL Mumbai, Maharashtra BPCL, Kochi Kochi, Kerala Chennai Petroleum Manali, Tamil Corporation Limited Nadu CPCL, Nagapattnam Nagapattnam, Tamil Nadu Numaligarh Refinery Numaligarh, Ltd.(NRL) Assam MRPL Mangalore , Karnataka Tatipaka Refinery(ONGC) Tatipaka , Andhra Pradesh Reliance Industries Ltd, pvt. Jamnagar, Gujarat Reliance Petroleum Limited Jamnagar , (SEZ). Gujarat Essar Oil Limited (EOL): Pvt. Jamnagar,
Capacity MMTPA 1.00 6.00 13.70 6.00 8.00 0.65 12.00 2.35 5.50 7.50 12.00 9.50 9.50 1.00 3.00 9.69 0.066 33.00 29.00 10.50
Gujarat TOTAL 179.956
EXPANSION OF EXISTING REFINERIES Capacity expansions planned during XIth Five Year Plan has been given below. NO Name of the company Location of Increase in Capacity the Refinery ( MMTPA) Panipat Haldia 3.0 1.5 2.40
1 2 3 4
Indian Oil Corporation Ltd(IOCL) IOCL
Hindustan Petroleum Corporation Mumbai limited
Hindustan Petroleum Corporation Visakhapatnam 2.50 limited
5 6 7 8 9
Chennai limited
Petroleum
Corporation Manali Kochi and Mangalore
1.60 2.0 5.31 0.066 5.50
BPCL Kochi Refineries Ltd Mangalore Refinery Petrochemicals Ltd
Oil and Natural Gas Corporation Tatipaka Ltd Essar Oil Limited Vadinar 23.876
TOTAL
NATIONAL AUTO FUEL POLICY

The road map on auto Fuel Policy envisages supply of Euro III MS and HSD in the entire country and Euro IV MS and HSD in NCR and in the cities of Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad including Secunderabad, Ahmedabad, Pune, Surat, Kanpur, Agra, Lucknow and Solapur by 1 April, 2010. In order to achieve these targets, Oil Marketing Companies (OMCs) have undertaken a number of modernization and up gradation projects. The progress of these projects is being monitored regularly and a Committee comprising of Director (Marketing) & Director (Refineries) of IOCL, BPCL, HPCL and MoPNG representatives has been constituted to monitor the demand supply scenario of Euro III/IV MS/HSD keeping in view the status of up gradation projects undertaken by OMCs. In so far as supply of Euro IV MS & HSD in designated 13 cities, the same will be made available from 1 April, 2010. However, supply of Euro III st MS/HSD will start from 1 April, 2010 and was implemented in a phased manner between 1 April, 2010 to 1 October, 2010, in rest of the country.
st st st st
Indian Petroleum Retail Market

Expansion of Indian petroleum retail market is triggered by the growth in automobile sales that resulted in major foreign investments. The growth is estimated to sustain and the market is likely to expand further by 20 million every year till 2030, placing India at the world map in terms of being the biggest automobile market. Accordingly, the petroleum dealers Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation in collaboration with each other are looking forward to add 2,262 petrol pumps in India by 2010.
Investments in India Petroleum Industry
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In 2010 the state-owned oil firms are expected to splurge US$

11.34 billion on developing supplies and constructing new shipping networks for petroleum and natural gas. Indian Oil Corporation is looking forward to establish a petroleum plant in the state of West Bengal by bringing in investments worth US$ 596.63 million ONGC will bring in US$ 694 million for raising services at its oil fields in Assam and adjoining states to enhance the petroleum output. In addition it will also splurge US$ 5.65 billion on capital expenses in the next two years. GAIL (India) Limited and OVL, the international associate of leading oil and gas player ONGC, are expected to bring in investments worth US$ 250 million.
FUTURE GROWTH AND PROSPECT OF THE INDUSTRY

The future of Indian petroleum industry has good potential but it needs developmental activities in this sector to strengthen itself. The world at present is experiencing a lot of changes of mammoth proportions. The Petroleum Industry in India is one of the harbingers of huge economic growth. The arena for business has now gone global since trade boundaries are fast dissolving. These developments present India with tremendous opportunities in the future to be one of the major players in the export of petrochemical intermediaries. Today, India imports more than 70% of its oil requirements. The search for more oil led India to sift through the international markets comprising of the emerging energy-trading countries. India has made new partnerships with Venezuela, Burma, Middle East nations, and Pakistan. The long-term energy strategies of India have to emphasize on the methods of using energy effectively and efficiently, and to enhance energy self-sufficiency. To lift the Indian economy to enhanced economic standards innovation, diplomacy, creativity, and vision are the need of the hour. India has to compete for conventional energy sources and for that there must be developmental activities. The target of improvement for the growth of the economy for India should be in the area of the petrochemical sector. The need for intermediary products for the manufacturing of the end use products is an important sector to tap in. With the per capita consumption for the petrochemical products in India being low and the production of these products being high, India may become one of the leading exporters of such intermediary products. The future of Indian petroleum industry depends on:

Demand for petroleum is growing in leaps and bounds Shifting focus to more production of olefin - ethylene, propylene, butadiene
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Price and availability of crude oil and gas as feedstock would still be critical factors The demand of the end products would affect the demand of the intermediary products
COMPANY PROFILE
BACKGROUND AND INSPECTION OF BPCL-KR
Bharat Petroleum Corporation Limited is a Central Public Sector Undertaking under the Ministry of Petroleum & Natural Gas, Government of India. BPCL engages in petroleum refining and marketing of petroleum products, Petrochemical products and Lube oil. BPCL is a Fortune 500 Company occupying the 289th position in the listing of fortune 500 companies, with and equity base of Rs.300 crores. BPCL currently have Refineries at Mumbai and Kochi with a capacity of 12 Million Metric Tonnes Per Annum (MMTPA) and 7.5 MMTPA respectively for refining crude oil. NRL, BPCLs subsidiary at Numaligarh has a capacity of 3 MMTPA. The story of Kochin Refinery starts on 27 April 1963. That was when Government of India, Philips Petroleum Company of USA and Duncan Brothers Of Calcutta executed an agreement for the construction of a Petroleum Refinery in South India. Cochin Refineries Ltd, C.R.L (the original name of present BPCL-KR) formally registered in 6 September 1963 at Ernakulam. Philips Petroleum International Corporation was the prime contractor for the construction of our refinery. They entrusted the work to Pacific Procon Limited. Construction work started on, March 1964 and the first unit came on stream just after 29 months in September 1966. Former Indian Prime Minister Indira Gandhi dedicated CRL to the nation on 23 September 1966. From the date of commissioning to date, the refinery undertook three expansions in refining capacity and installation of secondary processing facilities. The capacity was first expanded from 2.5 million tonnes per annum (MMTPA) to 3.3 MMTPA in September 1973. The production of liquefied petroleum gas (LPG) and aviation Turbine Fuel (ATF) commenced after the expansion. The capacity was further increased to 4.5 MMTPA in November 1984 along with the addition of 1 MMTPA capacity Fluid Catalytic Cracking Unit. The crude processing capacity was further expanded from 4.5 MMTPA to 7.5 MMTPA in December 1994. Along with this expansion the capacity of the secondary processing facilities was enhanced to 1.4 MMTPA. A Fuel De Sulphurisation Unit (DHDS) was also installed as part of the expansion project,
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as an environmental protection measure to minimize sulphur dioxide emission from the refinery. During the year 1989, the company commissioned and aromatics production facilities with a design capacity of 87,200 tonnes per annum (TPA) of benzene and 12000 TPA of Toluene, marking KR entry into petrochemicals. A captive power plant of 26.3 MW ISO rating was commissioned in March 1991, to meet the power supply fluctuations in the state grid. During the year 1988, an additional capacity was commissioned making KR self-sufficient in power. Bharat Petroleum Corporation Limited (BPCL) acquired the Government of Indias share in KRL in March 2001, with this KRL has become a subsidiary of BPCL bought Government of Indias entire share holding in November 1988 that is 54.81% in March 2001. Pursuant to Order dated 18 August, 2006 issued by Ministry of Company Affairs the refinery has been amalgamated with Bharat Petroleum Corporation to form BPCL Kochi Refinery.
AN OVERVIEW OF BPCL
The ministry of petroleum and natural gas is responsible for policy formulation and implementation relating to petroleum sector. BPCL - KR was incorporated as public limited company in Sep 1963 with technical collaboration and financial participation from Philips petroleum company, USA. BPCL - KR refines 9.5 MMPTS and pays dividends Type Location Capacity Sales Turnover-Gross PBT Trading on Head Quarters Chairman Website Brand Ambassador : : : : : : : : : : Public Sector Unit Ambalamugal, Kochi 9.5 MMTPA Rs.131499.72 cro res (2009 - 2010) Rs 2366.05 crores (2009 - 2010) Bombay Stock Exchange Mumbai R.K Singh www.bharatpetroleum.com Mahindra Singh Dhoni, Narain Karthikeyan
MILESTONES IN REFINERY HISTORY.

Formed in Joint Sector with the Financial & Technical Participation between GOI, Phillips Petroleum Company, U.S.A & Duncan Brothers, Calcutta. Construction completed in 29 months at a cost of Rs. 27 Crores
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Commissioned on September 23, 1966 as a 2.5 MMTPA refinery. Crude oil refining capacity expanded to: 2.5 MMTPA to 3.3 MMTPA in 1973. 3.3 MMTPA to 4.5 MMTPA in 1984. 4.5 MMTPA to 7.5 MMTPA in 1994. 7.5MMTPA to 9.5 MMTPA in 2009. Installation of Secondary Processing facilities (1 MMTPA FCCU) in 1984. Capacity augmented to 1.4 in 1994 & 1.75 with Oxygen plant facility in 2005 Distributed Digital Control Systems installed in 1989. Aromatics Production facilities in 1989. Advanced Control Process Optimisation Technology (ACPOT) implemented in 1991. A Light Ends Feed Preparation Unit for Polybutenes feed stock commissioned in 1993. Cochin Refineries Balmer Lawrie Limited and thus its 5230 MT PIB unit amalgamated with CRL with effect from 1998. Company rechristened as Kochi Refineries Ltd in 2000. The 2 MMTPA DHDS Unit was commissioned in March 2000, capacity augmented to 2.5 MMTPA in 2005. Became a subsidiary of BPCL in March 2001 Project MANTRA, an ERP (SAP) initiative of KRL WENT LIVE in July 2003. LPG bottling plant was commissioned in August 2003. Erstwhile KRL merges & becomes BPCL Kochi Refinery in 2006 Completion of Shore Tank Farm(STF) in 2007 Started Capacity Expansion And modernization project in 2008 The company is to gear the Auto Fuel Policy to upgrade the quality of fuels to meet Euro 3 Standard in 2009
VISION, MISSION AND QUALITY POLICY VISION

We are a leading energy company with global presence through sustained aggressive growth and high profitability We are the first choice of customers, always We exploit profitability growth opportunity outside energy We are the most environment friendly company We are a great organization to work for We are a learning organization We are a model corporate entity with social responsibility
MISSION
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To strengthen the presence in Petroleum Refining and Marketing of Petroleum Products and to grow into the Energy and Petrochemical Sectors. To realign orientation of thinking and Philosophies to become a market driven and customer friendly organization with focus on total Quality Management. To enhance shareholder value and maximize returns through the best use of resources. To recognize employees as the most valuable asset of the organization and foster a Culture of participation and innovation for employee growth and contribution. To be a major contributor towards community development and welfare of the society at large.
QUALITY POLICY
We are committed to customer satisfaction. We shall be continually proactive to customer needs through effective management of resources.
Quality Objectives
Customer Satisfaction Continual up gradation of Technology Human Resources Development and Teamwork Congenial and Safe Working Environment Effective Resources Management
List of departments at BPCL-KR

HRM Learning & Development Security Projects Legal Project Technology Finance Internal audit Information service (IS) Manufacturing Power & utilities (P & U) Oil movement & Storage (O & MS) Maintenance Procurement & consultancy Services Technical service(TS)
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Quality control (QC)
PRODUCT PROFILE
BPCL Kochi Refinery produces wide range of petroleum products, petro-chemicals, and lube oil products. The collected crude oil and gas are of little use in their raw stage, their value lies in what created in them; fuels lubricating oils waxes and petrochemicals. The refining world is highly technical to the layman a refining appears to be strange conglomeration of illuminated towers and walls at night and an equally strange maze of pipes and tanks during the day. In reality a refinery is an organized and coordinated arrangement of manufacturing processes designed to produce physical and chemical change in crude oil and natural gas. These changes result in salable products of the quality and quantity desired by the market. A refinery also includes non-processing facilities required to store crude oil and products maintain equipment and ensure continuous operation.
As crude oil comes from the well, it contains hydrocarbon components are relatively small quantities of other material such as oxygen, nitrogen, sulphur, salt and water plus traces of certain metals. In the refinery non hydrocarbon substances are removed from the crude oil. The oil is broken down into various components. Some of the components are chemically changed to give more desirable qualities. The resulting substances are blended into useful products. The following are important among them: Motor Spirit (MS) High Speed Diesel (HSD) Jet Propellant-5 (JP-5) Light Diesel Oil (LDO) Liquefied Petroleum Gas (LPG) Low Pour High Speed Diesel (LPHSD) Low Sulphur Heavy Stock (LSHS) Aviation Turbine Fuel (ATF) Bitumen (various grades) Furnace Oil Low Sulphur High Flash Diesel (LHFD) Mineral Turpentine Oil Mixed Aromatics Solvent (MAS) Naphtha Poly Iso Butene (PIB) Special Boiling Point Spirit (SBPS) Superior Kerosene Oil Benzene Toluene
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OWNERSHIP PATTERN
Total shareholding as a CATEGORY OF percentage of total SHAREHOLDERS number of shares Number of shares held Central government 54.93 198,600,060 State government BPCL trust investment shares for in 0.86 3,111,111
Serial no 1 2
3 4 5 6
9.33 1.2 10.57 7.14
33,728,737 4,339,441 38,207,372 27,986,771
Unit Trust of India LIC of India Banks/Mutual Funds/Financial Institution Foreign Institutional investors Private Bodies Corporate
7 8 9 10 11
7.97 4.37 0.09 0.36 2.58 100
28,828,302 15,812,256 306,477 1,302,462 9,319,135 361,542,124
NRI/Overseas Corporate Bodies Employees Indian Public TOTAL
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Market Capitalization/Shares traded during 1st April 2009 to 31 March 2010

Rs. In Crores BSE Number of shares traded Number of shares Highest Share Price(as on 4 Apr2010) Lowest Share Price Closing Share Price as on 31 Mar 2010 Market Capitalization as on 31 Mar 2010 33931959 361542124 658 348.7 516.7 18681 NSE 184054710 361542124 657.6 348.6 518.05 18730
INFRASTRUCTURAL FACILITIES The facilities installed at BPCL-KR include two crude distillation units a secondary Processing unit, namely faradized catalytic cracking unit, an aromatic recovery unit, a poly isobutylene unit and bitumen blowing unit. For producing environment friendly diesel, meeting EURO-2 emission standards the company has installed diesel hydrodesulphurization unit with sulphur recovery and allied facilities. The R&D facility at BPCL-KR with single point dedication engages in developing value added products from various refinery streams. The R&D facility has contributed significantly to the industry as well to the society at large. Infrastructure facilities to employees involve congenial work atmosphere, transportation Facility, Quarters for accommodation of employees, medical center to facilitate medical Aid, well equipped library, apart from that BPCL-KR has a centralized mailing system to facilitate effective communication.
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CORPORATE SOCIAL RESPONSIBILITY BPCL-KR has always extended its helping hand to the socially and economically underprivileged and physically and mentally challenged. Regular activities include rural medical camps, housing for the homeless, rural electrification, drinking water and sanitation, employment generation Programmes and educational assistance. At the same time, other community relations activities benefiting a larger section of the people around are also planned and implemented. These include providing automatic traffic signals on the highways, maintaining public parks, providing street lights, arranging drinking water facilities and so on. BPCL-KR regularly conducts seminars, symposia and talks involving different streams of the society on areas like environment, women empowerment, child development, safety etc. Villages populated with SC/ST communities have been adopted. Facilities provided to adopted villages including drinking water, proper sanitation, construction of community hall, tailoring, typewriting, computer education etc to unemployed youth. In the area of health care, four camps are conducted every year with free medicines and follow op treatment.
AWARDS AND ACHIEVEMENTS

Runner up for outstanding Safety Performance Awards in the category of Large Size Chemical Industries by National Safety Council, Kerala Chapter. Winners for the Best Performance Award for Safety Committee by National Safety Council, Kerala Chapter. National Safety Award for 2002-03 awarded by oil industry safety Directorate. Received the 7th Annual GREENTECH Environment Excellence Award (Gold Award) in Petroleum Refinery sector for outstanding achievement in Environment Management for the year 2006. Award of excellence from Kerala State Pollution Control Board for substantial performance and sustained efforts in Pollution Control activities. BPCL won the prestigious PetroFed Oil & Gas Marketing Company of the Year for the year 2007-08.
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BPCL-KRL bagged Kerala State Pollution Control Excellence Award, 200809. BPCL has secured the 289th rank during 2008-09 in the prestigious list of Fortune Global 500.
CERTIFICATIONS
ISO 9001-2000 FOR QUALITY MANAGEMENT SUSTEMS: This is in recognition of the Quality Management system (QMS) initiatives in the refinery. The certification is valid for a period of three years starting from 19 Aug 2004 ISO 14001 FOR ENVIRONMENT MANGEMENT SYSTEMS
BPCL kochi refinery was accorded the ISO 14001 certification first in 2002 by the international agency Bureau veritas Quality International and again in 2005. The refinery was assessed and found to be in accordance with the requirements of the environmental standards and operational scope of receipts, refining, processing, storing and dispatch of petroleum products
ISO 17025 FOR QUALITY CONTROL
Quality control in BPCL Kochi Refinery received ISO 17025 certificate of accreditation from National Accreditation Board for testing & calibration laboratories(NABL), under the ministry of science & technology, Government of India, new Delhi. NABL has assessed and accredited the laboratory in accordance with ISO/IEC 17025:1999 standards. This standard stipulates the general requirements for the competence of testing.
BPCL KOCHI REFINARY RATED LEVEL 8 IN ISRS
BPCL Kochi Refinery has been rated Level 8 in the international safety rating system(ISRS) consolidating its place among the top companies and industrial units audited by the independent foundation Det Norske Veritas (DNV)
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WORK FLOW MODEL

Each refinery uniquely designed to process specific crude oils into selected products. In order to meet the business objectives of the refinery, the process designer selects from an array of basic processing units. In general, these units perform one of three functions. a) Separating the many types of hydrocarbons present in crude oils into closely related products. b) Chemically converting the separated hydrocarbons into more desirable products And c) Purifying the products from unwanted elements and compounds BPCL Kochi Refinery has a Crude Oil processing capacity of 7.5 MMTPA (Million Tonnes per Annum) in its two Crude Distillation units (CDU-1 and CDU-2). The refining capacity of CDU-2 is being increased by 2.0 MMTPA and the total capacity will be 9.5 MMTPA by June 2009. BPCL - KR currently process approximately 30% of Indigenous and 70% Imported Crude Oil. Crude Oil is transported in ships from the point of origin to Kochi and is received through a new Single Point Mooring (SPM) facility. Kochi SPM, located approximately 20 kms off the shore of Puthuvypeen, is capable of berthing VLCCs (Very large Crude Carriers with a capacity of 3.0 lakh tones of Crude oil). Crude Oil from SPM is received in offshore tanks in Puthuvypeen and is then pumped to Refinery.
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Fuel Gas
Naphtha Stabilizer
LPG Naphtha
Fuel Gas
Kochi Refinery
BENZENE
NSU
NHT
CCR
Heavy Reformate E-3 MS blend
ARU
TOLUENE
C D U
Hy. Naphtha
Kerosene
KHDS
DHDS
ATF/ JP-5 / MTO
Fuel Gas
Diesel
LSD for E3/E4 Diesel
VGO Reduced Crude Oil
VGO HDS
(RCO)
VDU
VR
F C C U
LPG
CCN for E3/4 MS
HyNap
VBU / BBU
FO / Bitumen / LSHS
CDU: Crude Distillation Unit Cracking Unit FCCU: Fluidised Catalystic
ARU: Aromatics Recovery Unit DHDS: Desulphurisation Unit Diesel Hydro
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Crude Oil is first processed in Crude Distillation Unit (CDU) where it is heated up to 350 deg C to 385 deg C (depending on the type of crude Oil) after removing impurities such as Sodium Salts, Magnesium Salts, Water and other sediments (if any). Crude Oil after heating to the required temperature is then distilled in a distillation column where lighter fractions such as LPG, Naphtha, Kerosene and Diesel vaporizes to the top of the column and gets separated out. The products are routed to respective storage locations after cooling to atmospheric temperature. LPG is treated with Di Ethanol Amine to remove the impurities before being stored as product LPG. Naphtha from Bombay High Crude Oil is processed in Aromatic Block to produce Benzene, Toluene and a solvent SBPS (Special Boiling Point Spirit). Kerosene is treated either in a Kerosene Hydro Desulphurization Unit (KHDS) to produce Aviation Turbine Fuel (ATF) and Mineral Turpentine Oil (MTO). Diesel from the CDU is processed in Diesel Hydro Desulphurization Unit (DHDS) to produce BS-II and Euro III grade Diesel. Remaining portion of the crude oil is further distilled under vacuum in Vacuum Distillation Unit (VDU) to get Vacuum Gas Oil (VGO) and Vacuum Residue (VR) as major fractions. Vacuum gas Oil (VGO) is processed in Fluidized Catalytic Cracking Unit (FCCU) to further break down the molecules to produce LPG, Petrol and Diesel. BPCL - KR is currently capable of producing both BS-II and Euro-III grade Petrol. With the commissioning of Continuous Catalyst Regeneration (CCR) type Reformer and VGO Hydro Desulphurization Unit (VGO HDS), BPCL - KR will be capable of producing 70% MS (Motor Spirit) and HSD (High Speed Diesel) meeting Euro-III specifications and 30% MS and HSD meeting Euro-IV specifications. Kochi Refinery operates a Gas Turbine (GT) with a rated capacity of 22.0 MW, a Steam Turbine Generator (STG) of 17.8 MW and a Turbo Generator (TG) of 2.5 MW to meet its power requirements. The steam requirement of the refinery is met from 8 boilers and 2 Waste Heat Boilers (HRSG), apart from small HRSGs installed in process units. Effluent Treatment Plants (ETP) takes care of the liquid effluent from the process units and other off site area. BPCL KR is the first industrial unit in Kerala, permitted by the Kerala State Pollution Control Board (KSPCB) to do so.
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PROCESS UNITS AND FUNCTIONS
1. CRUDE DISTILLATION UNIT - I

The total refining capacity of KRL is 9.5 MMTPA out of which CDU-I is having a capacity of 4.5 MMTPA and CDU-II 5.0 MMTPA. Crude from storage tanks is pumped to the unit by booster pumps. The crude, after mixing with emulsifier and water is preheated to around 140oC with pump around naphtha raw kerosene and product diesel. This crude is subjected to electrical desalting where about 90% of the salts are removed in the water phase. The desalted crude is again heated to 210 oC with pump around kerosene, product diesel, and visbreaker bottoms and then flashed from 11 kg/cm2 to 3 kg/cm2 into the pre-fractionator. About 70% of the light naphtha and LPG will be recovered from pre-fractionator. Raw naphtha collected in prefractionators overhead receiver is routed to LPG recovery unit. The pre-fractionator bottom is preheated to 250oC with heavy vacuum gas oil (HVGO) and vacuum residue (VR). The crude is then heated to around 370oC in crude charge heaters and flashed into the fractionator. The fractionator overhead is maintained at 1.2 Kg/cm2g pressure and around 115oC. The overhead vapors are partially condensed in air fin and water coolers and collected in overhead receiver. The condensed naphtha is routed to naphtha stabilizer or to LAN pool after caustic wash. Heavy naphtha drawn from chimney tray below 24th and Kero-I drawn from 19th tray, are stripped off lighter ends with steam and is cooled with water before going to storage. Kero-II drawn from 17th tray and diesel drawn from the 11th tray are steam stripped for removal of H2S. The diesel is cooled with the incoming crude and water before it goes to storage. Topped crude from fractionator bottom is stripped off lighter ends and is sent to the vacuum distillation unit.
2. LPG RECOVERY UNIT

Crude overhead gases are compressed in overhead compressor and routed to Fuel gas system. Raw naphtha from the pre-fractionator overhead receiver along with crude fractionator overhead drum is pumped to naphtha stabilizer. Stabilizer feed is preheated with stabilizer bottoms before it enters the 18th tray of the stabilizer. The top temperature and pressure are maintained at around 70oC and 8 Kg/cm2 respectively. The overhead gases are cooled to condense LPG. The LPG is then subjected to counter current washing with DEA before going to storage. The amine is regenerated in DEA regenerator. The stabilizers bottoms are cooled first in the feed preheat
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exchanger and routed to naphtha splitter unit in case of Bombay High Crude operation or to storage in case of High Sulphur Crude operation.
3. NAPHTHA SPLITTER UNIT (NSU)

Naphtha (C5-140 cut) from LPG recovery units of CDU-I and CDU-II during BH crude run is preheated to 105oC with splitter-II bottoms and is fed to naphtha splitter-I column. Splitter-I re-boiling duty is provided by steam re-boiler NE8. The top pressure and temperature are maintained at 1.6 kg/cm2 and around 70oC respectively. The overhead vapors are cooled and collected in an accumulator. C5-60 cut naphtha from accumulator is routed to LAN/HAN/gasoline pool along with 90-110 cut naphtha. The bottoms are fed to 20th tray of naphtha splitter-II column. Re-boiling duty of the splitter-II column is provided by heater N-H2 The top pressure and temperature are maintained at 0.5 kg/cm2 and around 90oC respectively. The overhead from splitter-II column is cooled and collected in an accumulator. The 60-90 cut naphtha from accumulator is sent to intermediate storage tank (tank 30) or directly to NHDS unit. The side cut 90-110 cut naphtha drawn from tray no.16 is cooled and routed to LAN/HAN/gasoline pool. The 110-140 cut naphtha from bottom is cooled and sent to diesel pool.
4. NAPHTHA HDS UNIT (NHDS)

The 60-90 cut naphtha from Tk-30 is heated to 290oC in naphtha HDS charge heater mixed with H2 rich gases from compressor discharge and is fed to the top of HDS reactor. Reactor is filled with 7000 Kg of Cobalt-Molybdenum catalyst. Catalyst contains 3% cobalt and 13% molybdenum. The sulphur present in naphtha is converted to hydrogen sulphide in the reactor. The bottoms from reactor is cooled and collected in an accumulator where liquid and gases are separated. The gases separated are routed to a knockout drum for removing the heavier hydrocarbons, compressed and sent back to reactor. The liquid from accumulator bottom is heated and fed to H2S stripper. The top temperature and pressure of H2S stripper are maintained at 120oC and 12 kg/cm2 respectively. The de-sulphurised 60- 90 cut naphtha is sent to reformer unit/Tk-290.
5. REFORMER UNIT
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De-sulphurised 60-90 cut naphtha from H2S stripper is mixed with recycle H2 from compressor discharge, preheated with reactor no.3 effluent and further heated to about 495/505oC (SOR/EOR) in coil no.1 of reformer charge heater R-H1. The vapour from R-H1 is sent to the top of reformer reactor no.1. There are three reactors in series. The reactors are filled with 16400 Kg of platinum-rhenium catalyst. The vapours from reactor no.1 bottom are fed to R-H1 coil 2, heated to back to 495/505oC (SOR/EOR), sent to reactor no.2, R-H1 coil 3 and then to reactor no.3. The vapours from reactor no.3 bottom are cooled by exchanging heat with incoming feed to reactor and sent to reactor effluent separator. The gases separated are compressed using compressor and fed to heater R-H1 along with 60-90 cut Naphtha. The liquid from accumulator is heated and is routed to 18th tray of stabilizer. The top temperature and pressure are maintained at 85oC and 12 kg/cm2 respectively. The stabilized reformate is cooled and sent to aromatics recovery unit. The gases and liquid streams from stabilizer overhead accumulator are routed to fuel gas system and LPG recovery column respectively.
6. AROMATICS RECOVERY UNIT (ARU)

Reformate from stabilizer bottom is pumped to feed surge drum and from there it is fed to extraction column. There are four-entry points viz., tray nos. 1, 21, 38 and 52 for reformate and the solvent, sulfolane, enters at the top of column. Raffinate from the top of extraction column is fed to raffinate wash column to remove any dissolved solvent. Raffinate is introduced at the bottom and water is admitted at the top of the wash column. The washed raffinate from the top is routed to raffinate purification unit for further processing or to gasoline pool. A part of raffinate, if required is recycled back to extraction column to maintain the aromatics content of feed always less than 70% by weight. Extract from extraction column bottom is pumped to the top of extract stripper to strip off non-aromatics by extractive distillation principle. The bottoms from stripper are fed to tray no.19 of solvent recovery column, which is operated under vacuum to prevent degradation of solvent. The overhead vapors from solvent recovery column is condensed and pumped to charge day tank. Lean solvent is pumped from the bottom of solvent recovery column to extractor. A part of lean solvent is sent to solvent regenerator to remove any degraded solvent. Aromatics from charge day tank is sent to clay tower to remove un-saturates and polymers. This is done to meet the color specification of products. From clay tower aromatics is fed to tray no. 31 of benzene column. Benzene is withdrawn from tray no.54 as a side product. The benzene column operates on total reflux mode.
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The bottoms of benzene column are fed to 7th tray of toluene column. Vapors from column overhead are cooled and collected in an accumulator. Toluene is routed to storage from accumulator. The bottoms from toluene column are routed to gasoline pool.
7. KEROSENE HDS UNIT (KHDS)

Raw kerosene from crude distillation unit is heated to 330oC in HDS charge heater and is mixed with Hydrogen rich gases from compressor discharge. The mixture at 300oC is sent to the top of HDS reactor where sulphur is converted to hydrogen sulphide in the presence of Co-Mo catalyst. The bottoms from reactor are cooled and are routed to accumulator. The liquid from accumulator is pre heated to 220oC with reactor effluents and is fed to 6th tray of kerosene fractionator. The top temperature and pressure are maintained at 140oC and 1.1 kg/cm2 respectively. The overhead is cooled and collected in an accumulator. Liquid from accumulator is caustic washed and sent to naphtha pool. The gases are sent to crude overhead gas knock out drum. Gases from knock out drum are compressed and sent to fuel gas header. Kerosene is drawn from tray no.17, cooled and routed to storage as SK, ATF, JP-5 or MTO. Fractionator bottoms are cooled and are routed to diesel pool/SK.
8. FEED PREPARATION UNIT (VACUUM DISTILLATION UNIT-I)

The topped crude from the crude unit is processed in vacuum unit. In the vacuum unit, the RCO entering is heated to 385oC in vacuum furnace and is flashed into the vacuum column, which is maintained at 20 mm Hg pressure. VDO condenses on the top tray from where it is pumped to diesel tanks after cooling. LVGO condenses in the second tray. This is cooled first in EE14 to produce steam. It is further cooled in air fin cooler and water cooler before going to VGO storage. HVGO is withdrawn from the third chimney tray and it is heat exchanged with flashed crude. It is then cooled with Boiler Feed Water and air fin cooler before routing to VGO. The slop distillate withdrawn from the forth tray is sent to furnace oil, visbreaker unit or LSHS pool. Vacuum residue from bituminous crude runs is pumped to bitumen unit on flow control. This stream exchanges heat with the flashed crude before entering the bitumen-blowing unit. The surplus VR on column level control goes to visbreaker unit (PG run) or LSHS (Bombay High run) Oil economics with emphasis on planning for crude margin optimization 27
9. VISBREAKER UNIT
The vacuum residue from the vacuum unit is thermally cracked in the visbreaker unit to reduce the viscosity. There is provision for adding water at the heater inlet to reduce residence time of vacuum residue in the heater. The visbreaker charge heater outlet temperature is maintained at 450oC and at a pressure of 18 kg/cm2. Heater outlet goes to soaker drum pressure which is kept at 12Kg/cm2. The cracked products are quenched with cold visbreaker tower bottoms to restrict the cracking. This is then flashed into the 4th tray of visbreaker tower. The top temperature and pressure are maintained at 140oC and 5 kg/cm2 respectively. Visbreaker naphtha, which is yielded from the top, is currently routed to FCCU. The bottom product mixed with a side-cut for correcting the flash is cooled in crude preheat exchangers, and further cooled in air fin coolers and water cooler before going to furnace oil storage tanks.
10. FLUID CATALYTIC CRACKING UNIT

Vacuum gas oil withdrawn from storage tanks is pumped through a series of preheat exchangers to heat to around 300oC. It is further heated to 340oC in the FCC charge heater. In the riser bottom, the feed meets the hot catalyst from the regenerator and vaporize, fluidizing the catalyst. The catalyst is transported to the reactor where it gets separated from the reaction products. The reactor is maintained at about 534oC. The heavy hydrocarbon molecules on the catalyst surface are stripped off with steam before the catalyst enters the regenerator. Oxygen enriched air is supplied to the regenerator to burn the coke in the catalyst. The products of combustion leave the regenerator through a set of cyclones. The heat of flue gas is recovered in the CO boiler to generate steam at 38-kg/cm2 pressure. The CO boiler flue gas is cleaned off catalyst in the electrostatic precipitator before it is let out to the atmosphere. The reaction products, which leave the reactor, enter at the bottom of FCCU fractionator. The top temperature and pressure are maintained at 111oC and 1.6kg/cm2 respectively. The overhead gases from the column are partially condensed in air fin and water coolers. Heavy naphtha collected below bed No.1 is stripped off lighter ends, cooled and pumped to MS/diesel blend. The light cycle oil (LCO) collected below bed No.3 is subjected to steam stripping before cooling and running down to storage for blending
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to diesel pool. Heavy cycle oil (HCO), which condenses below fourth bed, is stripped along with light cycle oil. The column bottoms are sent to LSHS pool after cooling. An Oxygen plant is set up to enrich the air to regenerator. It works on the principle of vacuum pressure swing adsorption and has a capacity of 110 TPD. The purity of Oxygen is 91-93%.
11. GAS CONCENTRATION UNIT

The uncondensed gases from FCCU main column are compressed in two stages using compressor, to knockout the heavy hydrocarbons. The non-condensable are further subjected to two stage absorption to recover the LPG components before they leave the unit to join the refinery fuel gas system. The condensate from the FCC column overhead receiver is used as the solvent in the first absorber. Absorber bottoms join the compressor 2nd stage discharge and are collected in high-pressure receiver. The condensate from the high-pressure receiver is stripped off lighter ends in the stripper. The feed enters at the top of stripper. The top temperature and pressure are maintained at 70oC and 13 kg/cm2 respectively. The stripper bottoms are sent to 26th tray of debutanizer and are separated into LPG and gasoline in the debutanizer. The top temperature and pressure in debutanizer are maintained at 70oC and 11 kg/cm2 respectively. LPG from the debutanizer top is condensed and pumped to the amine treated while the gasoline from the debutanizer bottom is cooled and sent to the gasoline merox unit.
12. LPG AMINE TREATER

LPG from the debutanizer is counter currently washed with di ethanol amine to absorb the hydrogen sulphide. The H2S free LPG goes to the merox unit. The H2S rich amine is regenerated in the stripper by steam re-boiling and is recycled to the absorber.
13. LPG MEROX UNIT

The amine treated LPG is first subjected to a caustic pre-wash where traces of H2S is removed. The LPG is then counter currently washed with a strong caustic solution having merox catalyst in dispersion. The mercaptans in the LPG are converted to mercaptide and are transferred to the caustic phase. The mercaptan free LPG is sent to storage after traces of caustic is separated in the sand filter.
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The caustic stream with the dissolved mercaptans is heated to 60oC and is contacted with air to oxidize the mercaptide to disulphide. The disulphide oil is recycled to the cracker feed. The mercaptide free caustic is re-circulated.
14. GASOLINE MEROX UNIT

Stabilized gasoline from debutanizer bottom is mixed with caustic and air and is passed through a bed of activated charcoal impregnated with catalyst. The mercaptans in the gasoline are converted to di sulphides. The sweetened gasoline goes to storage tank after a stability correction with antioxidant.
15. BITUROX UNIT

Bitumen bearing vacuum residue at 120-140C is heated up to 210C in preheat exchanger using hot product before entering to the Biturox reactor. In the Biturox reactor, an exothermic reaction involving oxidation of the feed takes place in presence of process air with a bed temperature of 250C at elevated pressure. The process-air is admitted in such a rate so as to limit the residual O2 in reactor off-gas to nearly 3 vol. %. For maximum utilization of oxygen present in the process-air a large surface area is required, and the reactor is equipped with a multi-stage agitator to break-up the incoming air bubbles which are collected by coalescing plates kept under each agitator disc to break-up the bubbles again. Initially, big air bubbles with small surface area are introduced via large air pipes so as to prevent fast reaction at the start so as to prevent coke formation in the reactor. The blown-bitumen product leaves the reactor bottom at 250C and is cooled down to 180C in the plate type feed/ product preheat exchanger and is mixed in a static mixer before being routed to the Bitumen storage. The off-gases from the top are routed to a KO drum where the slop oil product and off-gases are separated. Off-gases are burnt in an incinerator to generate MP steam and the generate flue gas is routed to the stack after caustic scrubbing. Biturox unit is designed to produce different viscosity grade as well as penetration grade bitumen with a capacity of 47.3 TPH.
16. SOUR WATER STRIPPING UNIT

Sour water generated from crude, visbreaker, vacuum and FCC units are collected in the surge drum from where it is pumped to the sour water stripper. The stripper feed exchanges heat with the stripper bottoms. Low-pressure steam is admitted to the stripper bottom to strip the dissolved hydrogen sulphide. The top temperature and pressure are maintained at 110oC and 0.8kg/cm2 respectively. The column overhead vapours are condensed in air fin coolers and refluxed to the column. The stripped water is cooled in preheat exchanger before it is pumped to desalter in the crude distillation unit.
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17. RAFFINATE PURIFICATION UNIT

The unit is designed to purify the raffinate from ARU into a stream suitable for blending into LAN and to convert a part of the raffinate stream into rubber solvent. The feed is a blend of raffinate stream and the BH-Naphtha 90-110 o C cut from the CDU-I in the ratio 82:18 on wt basis. The process scheme essentially consists of two columns. The feed to column I is taken at the rate of 15.25 T/Hr via a surge vessel for separating any water carry over. Column-I will remove the heavy components and colouring matter, which goes to slop or gasoline tank, after cooling, at the rate of 0.75 T/Hydrogen. The vapour stream from the top is totally condensed and this can be blended to LAN pool. A part of the top product is fed at the rate of 2.4 T/Hr to column II, the balance 12.1 T/Hr goes to Naphtha tank. In column II the lighter ends (IBP - 63o C cut naphtha) is sent to Naphtha tanks at the rate of 0.83 T/Hr. Bottoms from this column meets the specifications of rubber solvent, generated at a rate of 1.57 T/Hr, is sent to storage tanks after cooling.
18. PROPYLENE RECOVERY UNIT

This unit is designed to produce 95% purity chemical grade propylene from FCCU cracked/treated LPG containing 28.14 mol% propylene. The process takes place in two stages. The feed enters the feed surge drum at 11 kg/cm2 and 42C from where it is pumped to the C3-C4 splitter column after pre-heating in Feed/Bottom heat exchanger. The C3-C4 splitter consists of 56 single pass high capacity trays. The feed enters at 22nd, 24th, 26th trays depending on feed quality. The column bottoms at 106C is withdrawn and routed to LPG storage as lean LPG after heat exchange in C4 cooler. Provision exists for routing the column bottoms alternately to LEFPU-1 for producing feedstock for PIBU. The column top is maintained at 17 kg/cm2 and 45C, the vapours from the top is routed through C3-C4 splitter cooler to the C3-C4 splitter reflux drum. The overhead liquid from the reflux drum is routed to C3-C3 splitter column. This column consists of 98 two-pass valve trays and the feed enters at 32nd tray or alternately at 48th and 64th trays depending on feed quality. The column bottom at 58C cooled in C3-C3 bottom cooler is routed to LPG pool as lean LPG along with LPG from C3-C4 splitter. Column top is at 47.7C and 19 kg/cm2 and the overhead vapours are condensed in C3-C3 splitter condenser and a part is routed to C3-C3 splitter as reflux and remaining as propylene product to storage, the reflux ratio is maintained at 14-15 in order to achieve 95% purity for the overhead propylene product. The product is cooled to 40C in product cooler before routed to Chemical Treatment Section where impurities like COS; Mercaptans, H2S, etc. are removed using Caustic/ MEA circulation. Afterwards, propylene is bubbled through water wash Oil economics with emphasis on planning for crude margin optimization 31
drum to remove caustic/MEA followed by a water coalesce to separates water from the product. The final product is routed to mounted bullet storage YT-630 & YT-631 in the PIBU area. This unit is designed to produce 50 TMT per annum of chemical grade propylene (95%).
19. LIGHT ENDS FEED PREPARATION UNIT

The light ends feed preparation unit comprises of the following units: 1. Olefin feed preparation unit (FPU I) 2. Butane feed preparation unit (FPU II) (1) Olefin Feed Preparation Unit, FPU I: The function of this unit is to process 8 TPH of HOC return cracked LPG or directly from Propylene Splitter unit. This unit prepares 3.53 TPH Olefin feed containing a minimum of 24.4 mole % Isobutylene (also called Isobutene) for the CRBL Poly Isobutylene Plant. FPU I consists of two fractionation columns. The first one is a de-propaniser with 38 sieve trays for removing C3s from cracked LPG. The second one is a C4 Splitter having 58 sieve trays for enriching the Isobutene content in the overhead product. The feed to the de-propaniser is the return LPG stream from HOC & Propylene Splitter bottom product. The feed at design rate of 8 TPH & 40oC enters the 28th tray of the column. The top vapours at 53 deg C and 15 kg/cm2 are condensed in the O/H condenser. A part of the condensed liquid is returned back to the column as reflux and the rest is routed to LPG storage after cooling. A vertical thermosyphon type reboiler is used for this column. The heat for re-boiling is provided by LP steam. The net bottom liquid forms the feed to the C4 Splitter and enters the splitter on the 37th tray at a temp. of 87 deg C. The top products after condensation are collected in an accumulator from which a part is refluxed and rest after cooling is routed to Olefin storage tank. A vertical thermosyphon type re-boiler with LP steam as re-boiling medium is provided. The bottom products are routed to LPG storage. (2) Butane Feed Preparation Section (FPU II):
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The objective of this section is to recover and concentrate normal and isobutane from the straight run LPG from the primary unit, which is stored in sphere 610.The feed, enters the de-propaniser on the 31st tray. The de-propaniser column has 52 single pass sieve trays. The overhead vapors from the top are condensed and are collected in an accumulator. A part of the liquid collected is refluxed back to the column above the top tray. The remaining portion is cooled and routed to LPG storage. A vertical thermosyphon type re-boiler is provided for the de-propaniser with LP steam as the re-boiling medium. The liquid drawn from the bottom of the Depropaniser forms the feed for the De-butaniser and it enters the column at the 11th tray. The overhead vapors are condensed and collected in a reflux drum. A part is refluxed and the rest is the feedstock for PIBU. A vertical thermosyphon type re-boiler is provided with LP steam as Re-boiling medium. The bottom product goes to LPG storage.
20. DHDS BLOCK

Diesel Hydro De Sulphurization (DHDS) block is an environmental project. It has been set up in the year 2000 in order to decrease the sulphur content in High Speed Diesel to less than 0.25 wt% in the first stage. A second reactor was added in series to the existing reactor to reduce the sulphur in Diesel to 0.05%, in the second stage. The DHDS unit was revamped in Jan 2005 to process high sulphur VGO also on blocked out mode of operation. It is designed to reduce the sulphur content of VGO from 2% wt to 0.2 wt%. The total capacity of the unit is increased to 2.536MMTPA. A new sour water stripping unit was commissioned along with the revamp of DHDS to process 19 M3 of sour water. The major diesel blend components are derived from the crude units and FCCU. The DHDS unit is designed to hydrodesulphurise 2.536 MMTPA of blended feedstock containing Diesel base from PG crude, LGO from PG crude, LCO and Heavy Naphtha from FCCU and VBGO. The major processing units set up in DHDS project consists of: 2.536 MMTPA DHDS with process license from M/s. IFP, France. 25000 NM3/Hr Hydrogen Generation units with process license from M/s. KTI, Netherlands. 120 TPD Sulphur Recovery Unit with process license from M/s. EIL with back up Licensor M/s. Delta Hudson, Canada. Sour water stripping Units with process license from M/s. EIL 240 TPH Amine regeneration units with process license from M/s. IFP, France.
Apart from the above, feed/product tankages, fuel tankages, utility and offsite facilities are set up. Utility facilities set up includes two 60 TPH HP steam boilers, a Nitrogen plant, and instrument air system and a cooling water system.
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(a) Hydrogen Generation Unit: Design capacity 25000 NM3/Hr. Hydrogen of 99.9 % purity is produced by steam reforming of naphtha and purification by pressure swing adsorption. The sour naphtha (1000 ppm S) from the tanks YT-500/501 is desulphurised in the Pre-desulphurization Section (PDS) where the sulphur content is reduced to <10 ppm. The PDS consists of a reactor system with HR 306C1.2 catalyst, a stripper section to strip off the H2S in the liquid naphtha and a recycle gas system. The sweet naphtha is stored in sweet naphtha tanks YT-502 A/B. The sweet naphtha is pumped from the sweet naphtha tanks to the final desulphurization section. The system consists of a hydro desulphurization reactor (ICI 41-6 catalyst) with H2 from the make up gas compressor followed by a reactor with desulphurization/ dechlorination catalyst (ICI 32-4 / ICI 59-3). The desulphurised naphtha with <0.1 % sulphur is fed to the steam reformer with ICI 46-3 / ICI 46-6 catalysts. The hydrogen rich gas (H2, CH4, steam, CO & CO2) produced in the steam reformer is fed to a HT shift reactor with ICI 71-5 catalyst where CO further reacts with steam to produce H2 and CO2. The Hydrogen rich gas ex-shift reactor is fed to the 5 bed UOP-PSA (Pressure Swing Adsorption) to produce 99.9 % pure Hydrogen. (b) Diesel Hydro De Sulphurisation unit: The sour HSD/VGO from tanks YT510/520/530 (TK 34/35 in the case of VGO) is pumped to the DHDS feed surge drum through the feed filter. The feed is mixed with recycle H2 and preheated before entering the first reactor. There are two reactors in series. The first reactor is having 3 beds with H2 quench in between and second reactor is having single bed. The first reactor top bed is having HR 945 and HR 348 catalysts. The effluent from the first reactor enters the second reactor, which is in series. The Second reactor is having a single catalyst bed with HR 448 catalyst. The reactor effluent is cooled in the feed preheat and stripper feed exchangers and is collected in the hot separator. The vapor from hot separator is further cooled in air/trim coolers and is collected in cold separator. One part of the gas phase from the cold separator goes to the HP amine absorber where H2S is removed by washing with 25 wt% DEA and goes to the recycle gas KOD. The other part bypasses the HP amine absorber and is routed to the recycle gas KOD for maintaining a constant H2S content in the recycle gas. Fresh H2 is made up from the make up gas compressor, which is fed from the H2 plant. The hot separator liquid is fed to the stripper along with cold separator liquid for removing dissolved H2S and meeting the flash point. The stripped diesel is sent to sweet diesel tanks YT 540/550 through a coalescer. The stripper overhead stream combines with the stabilizer overhead is cooled and collected in the stripper/ stabilizer reflux drum. The vapor stream after mixing with the sour gases from H2 unit is sent to the LP amine absorber for removing H2S. The sweet gas is sent to the fuel gas header. The hydrocarbon liquid from the stripper/stabilizer reflux drum is fed to the stabilizer column. The stabilized naphtha from the stabilizer bottom is sent to naphtha storage. In VGO mode of operation, the stripper bottom is sent to LSVGO tanks. Coalescer and product trim coolers will be bypassed during VGO mode. (c) Sulphur Recovery Unit: The sulphur recovery unit is designed to produce 120 TPH (141 TPD after the revamp of the unit) of sulphur from Hydrogen sulphide rich gases generated from the Amine regeneration unit. The unit consists of two parallel
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trains of reaction furnace and converter systems. The process employed is the Claus recovery process in which the Hydrogen sulphide rich gases are burnt in the presence of air at 1250-1350 degree centigrade and reacted over an Alumina Catalyst to produce liquid sulphur. The liquid sulphur thus produced is solidified as pellets in the pelletiser unit and sold.
21. CRUDE DISTILLATION UNIT -II

The 5MMTPA(Bonny light case)/4.5MMTPA(AM case) unit consists of crude distillation unit, Vacuum Distillation unit, Naphtha stabilizer, Naphtha splitter unit, LPG amine treater, LPG caustic wash, LPG water wash, LPG sand filter, Naphtha caustic wash, Naphtha water wash, ATF caustic wash, ATF water wash, NSU-II, Sour water stripping unit, Sulphur Recovery Unit and an Amine absorption unit. (a) Crude Unit Crude from off sites is pumped by crude charge pumps CP221A/B through the first chain of parallel crude preheat trains (PHT-IA/1B). Crude is preheated to the desalting temperature of 1260 C by successive heat exchange with relatively low temperature fluids. Stripped water from the sour water stripper unit is used for desalting. The stripped water is stored in the desalting water vessel CV31. Desalting water pumps are used for injecting stripped water into the crude line. Water is injected in PHT-1, upstream of mixing valve and top of the Desalter. The Desalter uses a combination of AC/DC fields to separate brine from water. The electric field in the Desalter breaks the emulsion and the brine and the water separate. The brine from the desalter is cooled and drained to WWTP. The desalted crude from desalter (CV30) is pumped by crude booster pumps CP222A/B. The crude is split into two equal streams for further preheating in the second preheat train of exchangers (PHT-2A/2B). In the second preheat train the crude is heated to a temperature of 210C and enters the prefractionator. The pre-fractionator separates LPG and light naphtha from crude. The lighters separated from pre-fractionator top are fed as feed to naphtha stabilizer for separating LPG from stabilized naphtha. A very minimum quantity of fuel gas is generated which is burnt off in the crude heater. The pre topped crude from prefractionator bottom is heated to nearly 280C in parallel preheat train of exchangers (PHT-3A/3B).The crude is finally heated and vaporized in the crude heaters CH21 and CH22 to 360 degC and introduced into the flash zone of the atmospheric column (CV21). The atmospheric Distillation column is provided with 47 nos trays including six stripping trays below the flash zone where the reduced crude is stripped to remove diesel and lighter constituents. HGO, LGO, Kerosene and Heavy naphtha are withdrawn as side draw off products from the atmospheric column and are steam stripped in the side stream strippers.
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The products from the atmospheric column are withdrawn from the side strippers. In order to maximize heat recovery and balance tower loadings, heat is removed by the way of Kero CR, LGO CR & HGO CR. These CR's are withdrawn at the respective product draw off trays and are routed for heat recovery through Kero CR pumps, LGO CR pumps, and HGO CR pumps. Facility exists for routing kerosene product to Merox unit via ATF caustic wash/water wash facility. The atmospheric Column overhead vapors are totally condensed in air fin and trim condensers and the condensed product is received in the crude column overhead accumulator CV33 from which a part is pumped to the atmospheric column as reflux while the balance is sent as overhead naphtha to caustic wash/ water wash facility and finally to storage as total naphtha combined with stabilized naphtha. (b) Naphtha Stabilizer Naphtha is preheated by stabilizer bottoms before it enters the stabilizer. Necessary heat to re-boil the stabilizer is provided by LGO CR. The overhead vapors are condensed and a part of it is refluxed back to the stabilizer and a part is withdrawn as LPG product and sent to LPG amine treater unit. Stabilized naphtha from the bottom of the stabilizer is used to preheat the incoming feed, cooled and sent along with overhead naphtha directly to NSU-II or to storage. (c) Vacuum Distillation Unit (VDU-II) Hot reduced crude oil from the crude column at 350 degC, with provision for introducing coil steam is heated and vaporized in the Vacuum furnace CH223 and introduced into the flash zone of the vacuum column. The liquid portion of the feed drops into the bottom section of the tower and is withdrawn as vacuum residue. The tower bottom temperature is kept at 350 degC to reduce cracking during hold up in the tower. Quenching is achieved by returning a quench stream to the vacuum tower after heat exchange between Vacuum residue and crude. The vaporized portion rises up the tower and is fractionated into four side stream products. Slop distillate cut is withdrawn as the first side draw product. A part of the slop distillate is used as over flash to vacuum column and the balance is mixed with vacuum residue. The hydrocarbon vapor is condensed in the HVGO, LVGO, and Vac diesel sections by circulating refluxes to yield the side stream products. HVGO is withdrawn as the second side stream product along with the CR and the internal reflux to the wash zone. The circulating reflux is use to preheat crude in exchangers and is then returned to the top of the HVGO section. LVGO is the third side stream product drawn along with the CR.LVGO CR is returned to the top of the LVGO packing after exchanging heat with crude. The vacuum diesel is the fourth side stream product drawn along with CR. Vacuum diesel CR is returned to the top of the Vacuum Diesel packing after heat exchange with crude. Vacuum diesel product is routed to gas oil pool.
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Vacuum is maintained by a three stage ejector system with surface condensers. The non-condensables are routed to the vacuum furnace. Condensate from the hotwell is pumped to, the sour water surge drum. The oil collected in the hotwell is pumped to slop oil header/DHDS feed pool. Provision exists for introducing steam to vacuum column. (d) LPG Amine Treating Unit The amine-treating unit is designed to reduce sulphur present in the LPG to less than 100 ppm. The column is full of liquid with DEA the continuous phase and LPG dispersed phase. The LPG from the naphtha stabilizer enters the amine absorption column on the second tray. The amine absorption column is having 10 nos sieve trays. The Lean amine enters the column from the top. The sulphur free LPG leaves the absorber from the top, flows to an amine settle drum and then enters a two stage caustic wash facility where it is mixed with circulating caustic solution. LPG from the caustic wash flows to a water wash vessel and then to sand filter, which is, provided to entrap any entrained caustic from the caustic wash vessel. The rich amine leaves the absorber from the bottom and is regenerated in a DEA regenerator. The DEA vapors are generated in a re-boiler with LP steam. The regenerated amine is pumped back to the amine absorber. Regenerator is not operated when DEA is taken from DHDS unit (e) Sour Water stripping Unit Sour water from the CDU/VDU block enters the sour water surge drum which is, a vessel having baffles to separate oil carry over if any. Stripper feed pumps the sour water to the sour water stripper through desalter brine /feed exchanger. Sour water stripper is having 21 nos of high capacity trays.Tray#1 is replaced by chimney tray. Column was revamped as a Re-boiler column to reduce column load and eliminate steam loss as stripped water. LP steam is used for re-boiling via kettle type shell and tube exchanger. Overhead vapors are cooled in O/H condenser and the reflux is pumped back to the sour water stripper as total reflux. The overhead vapors are disposed off in the crude balancing heater. Stripped water from the stripper will be pumped to the desalting water drum. Balance if any will be cooled along with brine to run down temperature of 45 degC before it is routed to WWTP. (f) NSU-II It is designed to prepare feed for NHT/CCR. Design capacity is 76.9TPH. NSU-II is a single fractionator column with 50 nos. of valve trays. Unit is designed to take hot naphtha feed from a combination of stabilizer bottoms and overhead naphtha streams. Side stream is taken from column to restrict aromatics in CCR feed to desired level.
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Provision exists to take feed naphtha from storage also. Top cut is sent to naphtha pool/MS blending. Side cut is sent to naphtha pool and bottom cut is sent as feed to NHT. (g) Sulphur Recovery Unit The LOCAT Sulphur recovery system removes hydrogen sulphide from the fuel gas generated by the process units of the Refinery. The desulphurised fuel gas is used in the fired heaters to reduce sulphur dioxide emissions from the stacks. The LOCAT system is a liquid oxidation process which removes H2S from the fuel gas streams by converting it to elemental sulphur. The LOCAT system is designed to process 12771NM3 of fuel gas with 4.15 Vol% H2S and to yield 749 kg/hr of elemental sulphur at a removal efficiency of 99.78%. The unit is designed to process sour fuel gas from low-pressure sources as well as high pressure sources. Low-pressure gas is fed to the low pressure coalescing filters (SRG-2A/B) at a pressure of 3.50 kg/cm2g. From the coalescing filters the sour gas enters the low pressure absorber (SRV2), where the gas is contacted with the dilute LOCAT catalyst solution. Within the absorber, H2S is absorbed into the solution. The sweetened gas flows out through the top of the vessel. The high-pressure gas is delivered to a high pressure coalescing filters (SRG1A/B) at a pressure of 6.50 kg/cm2g. From the coalescing filters the sour gas is split into two streams and each stream leads to identical high pressure absorbers (SRV1A/B). Absorption takes place in the same manner as in the low-pressure absorber. Solution from the low pressure and the high-pressure absorber is then fed to a solution flash drum (SRV3) and into the LOCAT oxidizer (SRV4).The sweetened gas from the low-pressure absorber is taken to a reciprocating compressor where the pressure is boosted to 6 Kg/cm2g and is fed to the fuel gas-balancing drum. The gas from the high-pressure absorber is also fed to the fuel gas-balancing drum. Provision also exists to route LPG from the vaporizer located in the SRU area to the fuel gasbalancing drum. The gas from the fuel gas-balancing drum is the Refinery fuel gas. The oxidizer vessel SRV4 contains four oxidizer chambers, separated by vertical baffles. Three air blowers SCR-1 A/B/C provide compressed air that is sparged into four zones in the oxidizer. As the air and solution flow upward oxygen is absorbed and the iron is oxidized to Fe3+ state. Sulfur formed by the oxidation of H2S is withdrawn to the sulfur settler by a settler feed pump SRP3A/B. In the settler the sulfur is allowed to concentrate into slurry of 5-15 wt% in the conical section, from where it is pumped to a horizontal vacuum belt filter SRG3 by a sulfur slurry pump SRP4A/B. The solution drawn through the belt filter and collected as filtrate solution is pumped back to oxidizer. The sulfur cake containing some LOCAT solution remains on the moving bed where it is washed, to remove LOCAT catalyst and finally discharged through a chute into the re-slurry tank SRV7. Vacuum is pulled on the belt-filtering surface by a vacuum pump SRP5, which draws air through the sulphur to dry the sulfur cake.
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The sulfur melting circuit consists of a sulfur melter SRE3 and a sulfur separator SRV9. The sulfur melter is a down flow, single pass, shell and tube heat exchanger with steam in the shell side and sulfur slurry on the tube side. The sulfur separator is a vertical jacketed vessel. Within the separator, molten sulfur settles to the bottom while the water rises to the top. The clarified liquid is flashed in the separator prior to disposal. Molten sulfur is removed from the separator to a storage tank via an interface level control system. The storage tank will hold about 5 days of production .The tank is equipped with steam heating coils to maintain the sulfur at 127 deg C. The molten sulfur transfer pump SRP8 is provided to pump the molten sulfur out of the storage tank to sulfur yard. Provision also exists to route the molten sulfur directly to yard bypassing storage tank. Adequate chemical addition facilities are provided to inject chemicals as and when required. (h) Amine Absorption Unit (AAU) The Amine Absorption unit was installed as an alternative to the LOCAT SRU for desulphurization of Fuel Gas, along with the DHDS Project. Centralized facility for regeneration of DEA provided in the DHDS block is made use of for more efficient recovery of sulfur. Removal of sulfur from Fuel Gas is achieved by absorbing the H 2S in DEA. The H2S rich DEA is then sent to DHDS Amine unit for regeneration of the amine and recovery of sulfur. Fuel Gas from the various process units is fed to an absorption column in which DEA fed from the column top is used as absorption medium for H 2S. Regenerated DEA from DHDS is used for absorption. Desulfurised fuel gas from the column is sent to the Fuel Gas header for consumption at the various points. H2S rich DEA from the column bottom is sent to DHDS Amine unit for regeneration.
22. POLY ISO-BUTENE UNIT

Isobutene and isobutene streams are dried in molecular sieve driers and the isobutene stream is fed directly to the reactor. Isobutane stream is fed to the reactor through a saturator to dissolve the catalyst (Aluminum chloride) before entering the reactor. Isobutane stream is also used for the regeneration of the molecular sieves. In the presence of catalyst isobutene polymerizes to form polyisobutene (PIB). The reaction takes place at a temperature of 13-17OC and 1-1.5 Kg/cm2g pressure. The reaction mix is routed to PIB recovery section using reaction mix pump. Caustic is continuously circulated through the pump to neutralize the catalyst. The reaction mix is heated in a re-boiler and enters the flash zone of reject olefin separator (ROS). A side cut is withdrawn and circulated along with a part of ROS bottoms through the reboiler to the feed. Reject olefins separate out from the top of the column and is routed to LPG pool. PIB along with the light polymer (slop cut) is drawn from the bottom of the column and sent to a vacuum column to separate the slop cut. Slop cut is routed
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to the diesel pool. PIB from the bottom of the vacuum column is cooled and routed to tanks.
23. NATURAL RUBBER MODIFIED BITUMEN (NRMB) UNIT

NRMB unit is for the production of Natural Rubber Modified Bitumen. It is a mixture of Bitumen, Rubber and additives. Hot bitumen at 140 C is taken in a tank and rubber field latex is added to hot bitumen along with the diluent. Side entry mixers are provided in the tank for mixing the latex and bitumen. Water in the latex gets evaporated and the rubber will be blended with the bitumen. The capacity of the plant is 65,000 Tones per annum. NRMB is superior quality bitumen, which is sold out in drums and in bulk tanker trucks
24. LPG BOTTLING PLANT

The capacity of the LPG bottling plant is 44000 MTPA with two shift operation and rated output is 1200 cylinders per hour. The following are the equipment/machinery of the unit. 24 station electronic carousel with weight correction unit, Oring/Bung Leak detection Cylinder washing unit. Online purging unit capable of evacuating /purging 600 cyl/hour Hot air sealing unit capable of sealing 1200 cylinders/hour Valve change facilities. 19Kg manual filling m/c with electronic check scale.
25. BITUMEN EMULSION UNIT

Conventional bitumen, whether it is in packed drums or in bulk, is to be heated before application. Conventional heating with flames causes environmental pollution. Worldwide, technologies have been developed to allow cold application of bitumen by emulsifying the bitumen before application. Unlike conventional bitumen, the emulsion can be applied without heating. Bitumen Emulsions are gaining importance due to environmental friendliness in its application Bitumen emulsion is mainly a blend of bitumen, water and an emulsifying agent. It contains other additives like anti-stripping agents, stabilizers etc. All the ingredients are mixed in a colloidal mill to get a stable emulsion. The emulsion contains approximately 66 % bitumen, 30 % water and balance 4% as additives like stabilizer, emulsifier, hydrochloric acid etc.
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The emulsion is produced in a self-contained integrated skid mounted unit. Production capacity of the emulsion plant during normal operation is 10 tons per hour. The unit was commissioned in Feb 2005. Feed bitumen is stored in a cone roof tank YT 212 of 100 MT capacity (5 meter dia and 6 metre height). The emulsion produced is stored in a cone roof tank YT 213 of 100 MT capacity (5 metre dia and 6 metre height). Both tanks are located in a new dyked enclosure and are provided with steam heating coils. The skid contains the Colloidal mill unit, driven by an electric motor. In the colloidal mill, the bitumen and water/additives streams mix in a rotor-stator assembly at controlled temperatures to produce the emulsion which flows to the storage tank YT 213. The skid also contains small tanks (approx 1 KL each) for storing emulsifier and chemicals like Calcium chloride and hydrochloric acid etc. These tanks have in-built mixers, electrical heating coils and pumps. The operation of the colloidal mill is controlled from a control station mounted in a standard ISO 20 feet container. Pumps for operation of the unit are located in the skid area. Finished product dispatch pumps YP 113 A &B are also located near the skid. Any floor washings in the skid area are collected in a pit located near the skid. The washings are pumped to the existing sump at the existing drum / truck-filling area, from where they are further pumped to the Effluent treatment plant through existing pumping arrangement. Hot water is collected from the steam-trap outlets of nearby tanks and exchanger and is stored in a cone roof tank of 25-cu.m capacity (3 metre dia and 4.5 metre height). Steam heating coils and adequate number of vents are envisaged for the hot water tank. A sump tank YV 25 is envisaged for temporary storage of any mixed additives during off-spec conditions like startup or shutdown. After the unit is stabilized, this is pumped back for use from YV 25. The hot water tank and YV 25 are located 51 meters away from the compound wall. Finished product is being sold both in packed drums and in bulk tanker trucks. A truck filling gantry to accommodate two trucks and a drum filling facility to fill six drums at a time are to be provided near the existing drum / truck filling area.
26. OFFSITE FACILITIES

The offsite facilities consist of the following sections. Cochin Oil Terminal (COT) Single Point Mooring (SPM) from where crude oil receipts are affected from the tankers. North Tanker Berth and South Tanker Berth where the products are loaded to the tankers and pipeline transfers of petroleum products are given to other oil company installation. At NTB certain crude tankers are also unloaded. Bitumen drum filling plant where 60/70 & 80/100 grade asphalt are stored, filled and dispatched in drum containers. Natural Rubber Modified Bitumen (NRMB) is also made and dispatched in bulk. Tank farm which co-ordinates all the activities from the receipt of crude oil to dispatch of finished products including intermediate products and the receipt and distribution of raw water and drinking water. Oil economics with emphasis on planning for crude margin optimization
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Production, planning and co-ordination of all matters with loading / unloading of tankers, water receipt, oil companies etc. Truck loading of POL and the free trade products by KRL. Truck loading of LPG, LSHS and Asphalt. Weigh bridge operation for taking the tare weight and gross weight of all weighed products. Wagon loading of POL products and LSHS. LPG wagon loading. Effluent treatment plants for treating the effluents generated in the units (viz. CDU I, II, FCCU, DHDS, ARU, SRU) and the offsite (tank drains) to the specified Minimal National Standards (MINAS). DHDS tank farm and bulk loading of sulphur.
LPG Bottling plant. CDU I, DHDS and ARU flares. Blending of Petroleum Products at Tank Farm In tank farm, the following blending operations are also carried out. Catalytically cracked naphtha (CCN) is blended with High aromatic naphtha (HAN) to produce petrol. High aromatic naphtha (HAN) is blended with low aromatic naphtha (LAN) to produce fertilizer grade naphtha. Visbroken short residue is blended with light cycle oil (LCO) to produce on-spec furnace oil. On-spec furnace oil is blended with LCO in the ratio 10:90 to produce light diesel oil (LDO). Low sulphur content diesel produced from BH crude is blended with high sulphur content diesel produced from imported crudes to control sulphur level in diesel. Presently only line blending facilities for MS, HSD, FO, and LSHS are available in tank farm.
27. UTILITIES
Refinery is provided with facilities for generation and transmission of utilities like Steam, Power, Nitrogen, Compressed Air, De-Mineralized Water, Raw Water and Cooling Water. These utilities facilitate various unit operations performed in a refinery. (a) Steam Steam is generated in the refinery from fired Boilers, Waste Heat Recovery Boilers and Process Steam Generators. Steam is generated and consumed at three levels namely
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HP steam (@ 38kg/cm2g pressure & 3700 C ) MP steam (@ 18kg/cm2g pressure & 2650 C ) LP steam (@ 5.5kg/cm2g pressure & 1800 C )
About 260TPH of HP steam can be produced from 4 Nos of fired boilers available in the refinery and another 100TPH of HP steam can be produced from two waste heat recovery boilers available in the refinery. About 110TPH of steam at MP level can be produced from 4 Nos of fired boilers in the refinery. About 170 TPH of HP steam can be let down to MP level after driving backpressure turbines and turbo generators. About 20TPH of MP steam is produced from process steam generators. About 120TPH of LP steam is produced in the refinery mainly from the backpressure turbines (HP to LP & MP to LP) and process steam generators. (b) Power About 30MW of power is produced internally using a Gas Turbine (19 MW) and two Steam Turbines (about 11 MW). The balance power requirement of about 2 to 4MW is drawn from the state grid. (c) Nitrogen Refinery is provided with two Nitrogen Plants. One plant can produce about 600NM3/Hr of gaseous Nitrogen or 400NM3/Hr gaseous Nitrogen and 40 NM3/Hr liquid Nitrogen. The second Nitrogen Plant can produce about 500NM3/Hr gaseous Nitrogen and 150NM3/Hr liquid Nitrogen. Facilities are available to store about 2,00,000 lits of Liquid Nitrogen. (d) Compressed Air There are three compressed air units located at three different locations namely Utility area, CDU2 area and DHDS area. Compressed air system between CDU2 area and utility area are integrated. In these two areas, all together, six Nos of Air Compressors with capacity to produce about 11200NM3/HR of compressed air is available. In DHDS area, 2 No.s of air compressors (one spare and the other running) with capacities 5000NM3/HR each are available. Compressed air is mainly used as instrument air. A small quantity of compressed air is used as plant air. (e) DM water Refinery is provided with two DM plants, having two trains each (one on line and the other on regeneration) with a capacity to produce minimum of 295M3/HR DeMineralized Water. DM water is used for steam generation. (f) Raw Water About 25000 KL per day of Raw Water is received from Periyar River through a dedicated pipeline. This is treated in the raw water treatment plant for reducing its
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turbidity and for correction of pH. Treated raw water is mainly used for production of DM water and as makeup water to Cooling Water system apart from its traditional use like cleaning and drinking (g) Cooling Water Cooling water is mainly used in the refinery for removing the low level heat from the process fluids and to cool the rotating parts of some of the machineries employed in the refinery and utility operations. Cooling water is re-circulated back to Cooling Towers and reused after cooling. Ten Nos of Cooling Towers, located at different locations are available in the refinery. These Cooling Towers have a combined capacity to cool about 30,750 M3/Hr.
FUTURE GROWTH AND PROSPECTUS OF BPCL-KR

BPCL-KRs expansion proposal which includes modernization, product quality up-gradation and reduction in crude oil transportation cost are all part of BPCL-KRs strategies for meeting the challenges of the liberalized scenario. A feasibility study has been initiated for up grading the Refinery Bottoms heavy stream, into more value added products for improving the Refinery Margins and to stay competitive in the long run.
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ORGANISATIONAL STRUCTURE
Chairman & Managing Director
Director (Finance )
Director (HR)
Director (Refinery)
Director (Marketing)
ED (Refinery)
DGM (E&AS)
GM (Technical)
GM (Projects)
DGM (Finance)
DGM (Operations)
GM (HR)
SWOT ANALYSIS:
Strengths
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Highest capacity utilization Wide experience in petroleum industry Participative work culture conductive to team work Adaptability to new technological changes Crude Oil receipt facilities consisting of the Single Point Mooring (SPM) and the associated Shore Tank Farm (STF), equip the refinery to receive crude oil in Very Large Crude Carriers (VLCCs) Merger of KRL with BPCL has given it a competitive advantage in the industry
Weaknesses
Nature of raw materials Heavy dependence on imported crude countries and high crude oil price Environmental clearance problems Political intervention and trade unionism often result in loss of man hour, hartals and lockouts. Thick population and local objection. Inability to change the products to take advantage of prices due to the following constraints: Nature of new materials and Government Directions.
Opportunities
Deregulation in energy sector resulting in several business opportunities for diversification and expansion Deficit of the product like LPG continues in the supply zone of the Company. The per capita oil consumption of India is much lower than the developed countries and this will ensure the growth prospect in India. Location advantage of being a local refinery
Threats
Volatility of the international prices of crude oil and petroleum products. Excess refining capacity in the cart run and increased competition in the Petroleum sector. Mangalore Refinery (subsidiary of ONGC) which has cheaper labour cost, less labour unrest and less maintenance since it is a new refinery. Private and joint venture refineries with no reservation policies and social commitments Marketing strategies of private refineries like Reliance
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Training sessions
Day 1 Session 1 Address by DGM training Mr K K Jayan
Topics discussed Learning , Interactive learning/ interactive sessions , Learning diaries / journal, Importance of a journal, systematic feedback, back tracking / recording, report creation, Elements in learning, oppurtunities, Industrial interaction, Timely action, Positive attitude, Out of the box, thinking, Creativity, Solutions, alternatives, low order / high order answers, Competency, Knowledge, Honesty / integrity, effectiveness, Continuos and lifelong learning, Learning groups, Learning partnership
Day1 session 2 Dy Manager Shiny

Code of conduct, Discipline, Dress codeRules and regulation, Passes and entry norms, Ethics
Day2 session 1 Security Captain Haridas

Industrial secuity process, system, act differenciation Creating safe envirionment for the conduct of the business Elements of protection people, property, information, environment Security basis, Vital installations Indian official Secrets act 1923 Perception of threat Factors affecting security in an organisation CCTV, acess control, control room
Important points discussed Communication, Process mapping, Clarity of thought, Maps, Dynamics of security, Preparation, vision, mission & alignment with security, Security issues, Planning & focus, Proceedure setup & strictness, Mind, energy, Inferences from process of security
Day2 session 2 Technical Mr Anujan K
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Topics discussed - Hydrocarbons, Fractional distillation, Seperation based boiling ranges, Ideal & non ideal process, Entropy, Flash point, Refrigeration, Joule watt effect
Facts illustrated:
1MMTA 1000000TA 1 barrel = 42 gallon = 160 lt approx Barrels per day convertion laymans terms Q MMTA X 20 & add 3 zeros for barrels per day Current capacity 9.5 MMTA = 9.5 X 20 = 190 signifies 190000 barrels per day i.e 28000 MT/day 7 days crude +7 days products maintained for catering market demands i.e. 400000 tonnes crude and products stocked. 20% kerala fuel burned in KRL 100T yields 92T products rest 8% consumed. LPG propane+butane misture (c3+c4) Air provisions for complete burning, Stoichiometry High air CO2, Low air CO, No air C Furnace oil heviest residue from crude used in burning fuel 3.5% sulphur permitted in furnace oil 0.8% Sulphur furnace oil used in KRL KRL concumes 50MW of which 5 MW made in KRL 60 paise per unit is unit production cost of KSEB 7 rs is unit production cost for gasturbine Capacitor banks boosts Power factor. Higher power factor lower current lower costs. KSEB has low PF supply Higher inductive load lower PF hence capacitence load to increase PF 600T of steam produced @ KRL Cooling water, boiler feed water, utility water 300000m3 of water required at KRL, hence exclusive pipeline from periyar - aluva for KRL Boiler feed water reused. Cooling towers mass tansfer process 43 deg to 33 deg Freon compression, heat generation, 9.5 MMTA 20% from bombay remaining 80% imported API american petroleum institute
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Deg API = 141.5 / sp gravity 131.5 BIS specification for products Venezuelan crude low API high sulphur and 40 days transit time usually not used in KRL Euro 3 road map, Metros in euro 4 emission norms & euro 3 for remaining cities 4000Cr spend on fuel quality for euro 3 Total budget of 1000000Cr in India 5 Lk crore revenue of which approx 3 lakh crore from petroleum. 4$ per barrel is the revenue generated on processing Saudi crude production cost 2.5$ per barrel 36 Rs fuel supplied at pumps, 20rs central tax & 11 rs state tax Benchmark crude & price determination Brent crude between british isles & netherlands; dubai cruse; WTI west texas intermediate HP, BPCl etc marketing companies Commodity exchange Platts reporter for oil market Contract based on monthly average price, 30 days credit allowed Marketing companies 80 paise per lt revenue approx Napthalene tanks, market requirements, excess production issues. Exported to japan & korea. Naphtha prices down from 24 to 2$ per barrel.
Day2 session 3 Vigilance (organisational) Topics disussed:

Budget defence, infra, PSU/PSE 1964 santanam committee / PSU loss assesment / corruption Central vigilance commision / corruption check / 1988 statuatory PSU body of central govet with 51% or more stake Vigilance & anticorruption Kerala Central vigilance commisioner 5yrs in office or 65 yr whichever earlier for tenure description Equivalent to supreme court judge / can be impeached with2/3 paliamentary majority 3 vigilance commisioners 1 IAS, 1 IPS, I Banking official Central vigilance officers as representatives of CV I.Shashikala IRS vigilance commisioner for BPCL
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Corruption definition misuse of public power for personal benefit, misuse of position of trust Purview of public power beurocrats, political leaders, Psu officials Reasons for corruption Scarcity of goods & services Redtape delay Lack of transparency Judicial cushion Lack of social & individual values Ineffective system of government Transparency International non governmental, nonparty institute for global corruption check. CPI corruption perception index Score of 1 10 where, 1 means highest corrupt & 10 the lowest India CPI = 3.3 on 87th position of 176 countries in the world. Denmark 1st with CPI 9.3, newzealand 2nd 9.3, singapore 3rd 9.3 US on 22nd position with CPI 7.1 UK on 20th position with CPI 7.6 Somalia 178th position is most corrupt with CPI 1.1 Need for vigilance Efficiency Competitiveness Ethical conduct Rotation system among employees for ensuring no roots established Of the 4 types of people Efficient & dishonest type indulge in corruption mostly as per study Nov1 Vigilance awareness week All people in vigilance are usually on a 5 year deputation
Day 2 Session 4 Safety By safety officer K S A Panikker

Safety basics and overview
Day 3 session 1 - Oil economics By Ramachandran M K Sr Manager Production planning (Incharge) Topics discussed:
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Physical characteristics & refining Oil pricing arrangements Crude oil markets Product markets Forward & future contracts Oil futures exchange Credit control Contracts Legal and regulatory issues Controlling financial risk
World crude production locations:

North America US, Canada Latin America Peru, Mexico, Argentina, Trinidad, Venezuela, Ecuador, Colombia, Chile, Brazil, Bolivia, Cuba, Guatemala, Barbados, Susiana. Middle East Iran, Iraq, Bahrain, Saudi Arabia, Kuwait, Qatar, Israel, Abudhabi, Oman, Syria, Dubai, Sharjah, Ras Al Khaima, North Yemen, South Yemen. Africa Egypt, Morocco, Algeria, Gabon, Nigeria, Libya, Tunisia, Congo, Angola, Cabinda, Zaire, Cameron, Ivory Coast, Benin Western Europe Austria, West Germany, France, UK, Italy, Netherlands, Turkey, Spain, Norway, Denmark, Greece, Sweden. Fareast Thailand, India, Indonesia, Brunei, Australia, Burma, Pakistan, Malaysia, Japan, Taiwan, New Zealand, Philippines, Vietnam. Eastern Europe Romania, Poland, East Germany, Czechoslovakia, Albania, Hungary, Yugoslavia, Bulgaria, USSR
World energy demand 2010:

Crude 26-31% Natural gas 20% Coal 32% Nuclear 6-7% Hydropower + new energies 9%
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Major Oil companies:

Crude production Aramco Pemex NIOC INOC Exxon Royal Dutch shell PDVSA BP KNPC Pertamina Texaco Chevron Amoco Mobil Arco Processed crude Royal Dutch shell Exxon BP Chevron Texaco Mobil Pemex PDVSA Amoco CFP ARCO SUN KNPC ENI Conoco Product sales Royal Dutch shell Exxon Texaco BP Chevron Mobil PDVSA Pemex Amoco CFP SUN Conoco ARCO ENI Phillips
Types of crude (examples):

Zarzatine, Jeleh, Qatar, Alaska northslope, Arabian light, Kirkuk, Aghai Jani, Kuwait, Brent blend, Tumaiza, Safany, Lagunillas, Dubai fateh, Bachaquero, Boascar clariette, pointe clariette, Bonny light
Crude specification(examples)
Brent blend Sp gravity 0.834 / Sulphur 0.38% / pour point 15deg / asphalt 0.26% Boscar clariette Sp gravity 0.997 / sulphur 5.5% / asphalts - 16.1%
Softwares used in planning activities:

PIMS for planning & LPP modeling Orion
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Atom for oil movement tracking IP21 dynamically updated database for material and products Advisor Material balance
Crude refining product temperatures (Basics )

Product LPG Light naphtha Heavy Naphtha Kerosene Light gas oil Heavy gas oil Residue Temperature deg < 40 40-80 80-165 165-235 235-300 300-360 above 360
Note - Temperatures above 360 deg will leave a heavy coke residue hence vacuum distillation is used under reduced pressures.
Nymex New York mercantile exchange Trade contracts

3 oil futures contracts WTI, Heating oil, unleaded gasoline 4 futures contracts WTI, Heating oil, unleaded gasoline, Crack spread
Plant Visits:
Crude distillation unit -2 / electronic monitoring unit & plant (Under supervision of Mr. Mahesh C D Dy manager production) Crude distillation unit -1 Cooling towers Maintenance section vibration analysis
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Overview of work at Production planning section:

Introduction
This section has a major role to play in arranging the crude supplies which forms about 95% of the total expenses of the refinery. The various functions include: Taking a close look at the international market fluctuations to assist in long range and short term planning. Preparation of the yearly processing plan which will form part of the MoU/annual plan. Based on the monthly processing plan and term crude oils tie ups plan for tender crude purchases. Propose lay days for the crude lifting to meet the processing plan Do the back up for tanker planning / scheduling till the vessel arrives at Kochi port Prepare the basic data for the industry coordination meeting (ICM) for onward transmission to PPAC, BPCLs supply dept. Take part ion the integrated profit planning meeting / supply chain meeting of the BPCL group of refineries. Identify product surplus based on the production plan and movement plan proposed by BPCL and initiate action for export of surplus products. Provide refining economics related clarifications whenever required. Provide basic document for the quarterly performance review meeting submissions and coordinate replies to queries in this connection. Continuously strive to expand the crude basket by identifying crude oils that can be processed in the refinery.
Netback and crude selection

Days of running any crude in the refinery, without focus on the margins obtained on refining are gone. The crude basket has to be so selected to maximize the margins while trying to service the domestic market. Product sale in the domestic market is of prime importance in the deregulated regime since maximum price is obtained in the domestic market. Since deregulation refineries get the tariff adjusted imported parity price (TAIPP) for products. Any surplus products, when exported will yield only the
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exported parity price as the price which is realized will be the product price as its natural market minus transportation to the market. Exports are recommended in cases where crude refining margins are positive even after considering the debit for exports.
Netback
The priority for selection of crude is on the basis of net backs. Where Netback = Gross product worth landed cost of crude Gross product worth is the value of all products obtained by processing that crude in the refinery. Landed cost of crude considers all the price elements that add up to the crude cost which include basic cost, freight, insurance, ocean loss, import duty and wharf age. It is to be borne in mind that the yield that is obtained is a function of configuration of the unit and the operating parameters. Hence it is essential to update the theoretical yield of the crude in the refinery at least once in a fortnight so that this updated pattern is used for crude tender evaluations. Operational changes like shutting down the visbreaker for meeting the FO quality requirement has a bearing on the yield pattern. Such impacts have to be then and there incorporated. Crude prioritization based on the netbacks will give the order of selection of crude or the packing order. When a crude basket is selected manually, attempts are done to saturate the highest netback crude, then go to the next one, saturate it and move down to the third etc. until the capacity limitation of the unit is hit. Linear programs can be so as to maximize netbacks saturating crude one by one in priority of netbacks. Ad indicated earlier, saturating the crude capacity may require export of some of the surplus products since the local demand is restricted to some products especially black oil. While treating such products, due debit for the export is to be included in the pricing.
Technical limitations in crude selection

The following are the general guide lines for the selection of crude: 1. The distillation unit is designed to process crudes in the 30-40 api range. With proper blending of crude 25-45 API range could be eaisly accommodated. 2. Pour point of the crude should not be more than 24 deg as the jetty line passes through water logged areas where temperature can be low.
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3. Sulphur content of the crude is very important in choosing the unit where the crude can be processed. 4. Salt content should not be more than **PTB so that severe corrosion cannot be anticipated while processing. 5. The organic acidity of kero stream should be below ** for operational reasons. 6. Sulphur of the crude in general and bottoms in particular has to be watched as high sulphur crudes will require added down stream processing. It has to be noted that we do not have any facility for sulphur reduction of FO stream. 7. Basic nitrogen of the VGO stream has to be below 700 ppm so that a decent yield can be obtained from FCCU.
Logistical considerations
As the landed cost has to be considered for calculation of netbacks, transportation of crude plays an important role in altering the crude priority. Some crude like Badin from Pakistan is available in very small quantities and the port facilities also are limited. Hence transportation has to be done in MR tankers making this crude uneconomical. Long haul crudes like those from West African countries like Nigeria and Angola should be minimized as these will have to be transported in VLCC or at least Suez max to make economic sense. Even then simultaneous arrival of mother and daughter vessels will cause some amount of demurrage at Kochi and hence should be avoided.
Selection process
For selection of new crude, the following procedure is adopted A study of assay is done to see whether the crude meets the quality specs. Yield from the unit is calculated based on the yield as per assay and anticipated performance in FCCU based on nitrogen content and characterization factor of VGO. Approximate freight rates are also calculated and anticipated netback is arrived based on the calculated yield, crude and product prices and freight. If the netbacks are comparable with our normal basket, this crude is identified for trial processing. The same is communicated to BPC (IT). A trial cargo when picked up will undergo test run in our unit to establish the correct yield.
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If performance of the crude is good and netbacks comparable, this crude also is included in the basket along with similar crudes for tender procurement or for term lifting.
Yearly planning
The whole activity of selection of crude for the coming financial year starts from as early as September of the previous year. The numbers thus finalized form part of the annual plan, the MoU etc. ROS** are followed while finalizing the MoU targets. The various steps involved in finalizing the mix and pattern are as follows: Obtained the latest corrected yields for all crude oils approved for processing in the refinery. Obtain the price of the selected crudes and TAIIP for all the products for 18 months prior to that September. Rank the crude oils based on netbacks for 18 months. Get the priority concurrently checked by MIS. Get the shut down plan of all units in the year under consideration. Saturate the availability of crudes in the order of netback taking due consideration of specialty products like bitumen and also inventory of VGO. By trial and error reach the optimum mix and throughput. The mix and pattern are sent for the first level of internal approval. Discuss with BPC (IT) for term crude oils and if there is change, rework the mix pattern. This pattern goes for approval of the management.
To be documented:
Corrected yield pattern Shutdown schedule Ranking internally prepared MIS feedback Any communication regarding BH availability Indicated indigenous demand for BPCL. Initial mix and pattern Outcome of BPCL discussions Final mix and pattern
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Monthly planning
After the yearly throughput are pattern are finalized, activities have to start for procurement of crude for the year. Month wise allocation of term crude to be finalized with the supplier (by BPCL IT) after taking into consideration the shutdown plan. Deficit crude after taking into consideration term availability and BH plan has to be procured tenders. As per the present norms 7 days physical stock in the refinery and 6 days in transit cargo has to be considered for procurement of crude. Since the tender process may take about 2 months from tendering to physical deliveries, a 3 month forward plan has to be given to BPCL (IT). The requirement has to be specific on LS/HS break up as the tenders are floated separately. Usually, BPCL (IT) considers tenders crudes for 2 months in advance (M+2 month) Tendering and ordering will be taken care by BPCL through empowered standing committee Constitution of ESC For procurement of crude oil to PSU refineries, government of India has set up different ESC. The ESC for BPCL group of refineries consists of: 1. JS & FA, ministry of petroleum. 2. Planning 3. Chairman, BPCL 4. Director (refinery), BPCL 5. Director (finance), BPCL The offers obtained by BPCL against tender floated for our requirement are analyzed for calculating the margins for each of the orders and presented to ESC for their consideration. Based on ESC recommendation, orders are placed on the suppliers. Is ESC is not able to find a suitable crude; another tender may be floated in the next fortnight to meet the requirement. Once the firm availability is known, planning group has to work on an arrival plan taking into consideration the shutdown schedule and indicate our choice of lay days to BPCL (IT). The feedback from suppliers is generally available on the 20th of the previous month of lifting. The firm lay days are communicated to the shipping group for arranging tankers.
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The industry working group for allocation of BH takes place in the last week of the month. Since from the lay days are available by that time, BH lay days have to be planned in such a way that tanker bunching is minimized at the same time BH availability is evenly spread out.
To be documented:
Month wise lifting schedule for term crudes Crude position indicator prepared just before ESC with ESC results included later Initial tanker plan.
Product exports
From 2002 onwards, kochi refineries has been regularly exporting products to liquidate surplus products and maintain throughput. Planning group has a major role to play in the export process, which can be broken down as follows. Analyzing the product wise availability and movement plan given by BPCL (supplies), planning group has to identify surplus products for exports at right time. With the concurrence of he operating departments, planning group has to project the requirement at BPCL (IT). This will contain the quality and quantity of product and the proposed lay days. The quality of the product has to be cleared by the QC department. The technical bids / price bids evaluation are done by the BPCL (IT) and the approval is obtained Physical loading of the cargo and other activities are coordinated by S&OM department.
Data for QPRM

Process engineering provides the physical data for the quarter and its variance analysis. This is forwarded to corporate planning before the 15th of a month immediately after the closure of a quarter.
Integrated profit planning meeting

The BPCL group of refineries discusses the refinery performance on the 10th of every month. The plan for the next month is done during the end of the previous month. Refinery representative will attend the meeting
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along with the GM (O) and the S&OM. The data include throughput, product numbers, stocks, product movement, refinery margins etc. Immediately after the month closure, an internal meeting is arranged to discuss on the strategy for IPPM. This meeting has to be attended by GM (O), GM (T&D), DGMs of TS, S&OM, Manufacturing and representatives from process engineering & MIS.
Miscellaneous
PE continues to compile and furnish the following reports: Product prices on a fortnightly basis Production numbers to various government departments on a monthly basis Activity report from MD to chairman in the first week of every month Crude stock including in-transit cargo, as per ROS 88, and reasons for the variance, every fortnight.
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SALES / DISPATCHES
The dispatches from KR can be broadly classified into two: 1. Stock Transfer (STOs): Dispatches to other BPC depots/installations from KR 2. Sales: Dispatches to OMCs, direct customers, export etc. The different modes by which products are dispatched from KR are: 1. 2. 3. 4. 5. Road Rail Barge Marine Pipeline transfers (PLTs)
road(16%) rail(10%) PLT(50%) tanker(23%) barge(1%)
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Applicable Legislations:
The Factories Act 1948 amended in 1976 and 1987 The The The The The The The Petroleum Act ,1934 Indian Explosives Act, 1884, amended 1983. Indian Boilers Act, 1923. Insecticide Act, 1988. Water (Prevention and control of Pollution) Act, 1974, amended 1978. Air (Prevention and control of Pollution) Act, 1981, amended 1987. Environment (Protection) Act, 1986. - Hazardous Waste Rules - 1989 - Hazardous Chemical Rules 1989 The Public Liability Insurance Act, 1991. The National Environmental Tribunal Act, 1995. The Inflammable Substance Act, 1952. The Static and Mobile Pressure Vessels (Unfired) Rules, 1981. The Central Motor Vehicles Act, 1988. The Petroleum Rules, 1976. The Gas cylinders Rules, 1981. The Batteries (Management and Handling ) Amendment Rules 2001. The Explosive Rules, 1983. The Indian Boilers Rules, 1950 The Hazardous Waste (Management & Handling) Rules, 1989 Amendment 2003. The manufacture, use, import, export and storage of hazardous micro- organism or genetically manipulated organisms or cells rules, 1989. The Public Liability Rules 1991. The Chemical Accidents (Emergency Planning, preparedness and response) Rules, 1996. The Water Cess Act- 1977.
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Quality Management System ISO 9001:2000

Introduction
Quality of products and services is one of the crucial factors that influence the business performance of any organization. The present day business-wide needs, especially these related to quality are more and more exacting. It is possible to meet these needs and improve the economical situation at the same time by continuous quality improvement. Quality Management System which meets the requirements of ISO 9001 ensures the stable positions on the market, continues progress and development in quality. It can be achieved through planning, maintaining and continues improvement of all the processes, which leads to higher profit, effectiveness, customer satisfaction, etc. Moreover, the certificate assuring conformity of the quality management system with the requirements of the ISO 9001 standard can be very effective marketing tool.
Meaning
QMS is a tool that enables every organization to achieve better and better quality of the products and / or services through continual improvement of methods and means of performance. According to the definition QMS is that part of the organization management system that focuses on the achievements of results, in relation to the quality objectives, to satisfy the needs, expectations and requirements of interested parties as appropriate. The quality objectives compliment other objectives of the organization such as those related to growth, funding, profitability, the environment and occupational health and safety. The various parts of an organizations management system might be integrated, together with the quality management system into a single management system using common elements.
The fundamental principles of every quality management system are the concepts of continual improvement. This concept is aimed at improving on a regular basis the overall quality management system and is depicted by Plant- Do- Check- Act model introduced by Deming.
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The ISO 9000 Family The ISO 9000 family of the standards have been internationally recognized as a basis for developing, maintaining and documenting quality management systems. The newest, revised ISO9000:2000 series consists of the following, interrelated documents: o ISO 9000:2000 - Quality Management Systems Fundamentals and vocabulary o ISO 9001:2000 - Quality Management Systems - Requirements. o ISO 9004:2000 - Quality Management Systems Guidelines for performance improvements. Requirements for quality management systems are specified in the ISO 9001:2000 standard, which provides the baseline for the certification of the organizations QMS. The standard that supplements the ISO 9000 family is ISO 19011: 2002 that provides guidance on auditing quality and / or environmental management systems.
Quality principles
The following eight Quality Management principles form the basis foe the Quality Management System standards with in the ISO 9000 family. These can be used by top management in order to lead the organization towards improved performance.
1. Customer focus: Organization depends on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations. 2. Leadership: Leaders establish unity of purpose and direction of the organization. They should create and maintain internal environment in which people can become fully involved in achieving in the organizations objectives. 3. Involvement of people: People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organizations benefit. 4. Process approach: A desired result is achieved more efficiently when activities and related resources are managed as a process. 5. System approach to management: Identifying, understanding and managing interrelated processes as a system contributes to the organizations effectiveness and efficiency in achieving its objectives. 6. Continual improvement: Continual improvement of the organizations overall performance should be a permanent objective of the organization. 7. Factual approach to decision making: Effective decisions are based on the analysis of data and information.
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8. Mutually beneficial supplier relationship: An organization and its suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to create value.
Main elements of QMS according to the ISO 9001 standard

Process approach provides the basis for developing, implementing and improving the Quality Management System specified in ISO 9001. Process approach requires from the management of organization to look at its activities as a system of numerous interrelated and interacting processes, where each process has its own purpose, assigned resources and methods of surveillance. According to the standard, any activity or set of activities that uses resources to transform inputs to outputs can be considered as a process. Processes can be also activities related to products realization and/or service providing. Extremely important are processes indirectly connected with product/service realization such as: management, monitoring, measurement, communication, internal audit, and management review. According to the process approach principle, management system of an organization should be taken as a whole, starting from determining of clients requirements, through identification, implementation and management of the processes, ensuring adequate resources, monitoring measurement and analysis of results, system enhancement, and meeting clients needs and expectations as a final stage.
Benefits of an ISO 9001 based quality management system implementation and certification: Amongst the most important benefits of quality management system implementation and certification the following are to be mentioned: Better position on the competitive national and global market, as well as access to new markets, Lower production costs because of fewer nonconforming products, less rework, lowered rejection rates, streamlined processes and fewer mistakes, Higher confidence and will of cooperation from clients, contractors, and other third parties, Higher internal operational efficiency, Continuous and effective process of improvement that saves time and money and improves quality, Higher engagement, self- control, and motivation of employees, Compliance with regulatory requirements.
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SAFETY PRECAUTIONS AND PRACTICES

PERSONAL PROTECTIVE EQUIPMENT Gas Masks There are three types of gas masks available in the refinery. They are canister type mask, the fresh air and self contained breathing apparatus. Their uses are described below. Canister Mask The canister type mask utilizes a filter element to absorb the poisonous gas from the air. Different gases require different type of filters. Information about the filters may be obtained from the safety department. 1. Use this mask only in the open air or where the gas concentration is less than 2%, not in a tank or other confined space, except in an extreme emergency. A canister type mask does not protect the user against a deficiency of oxygen. A lifeline should be used in questionable locations. 2. As seal is removed from a canister mask and after one year discard it regardless of how little it has been used. 3. A record of the amount of time that the canister has been used must be kept on a tag attached to the canister. Do not exceed the permissible time for a particular canister being used. Fresh air Mask The fresh air mask has a remote air supply provided by hand operated blower through a length of hose. It is used mostly for rescue operations. 1. When a man must enter a tank, sewer or other confined area where the atmosphere is 20% or more of the lower explosive limit or contain evidence of hydrogen sulphide or other toxic material, a fresh air mask must be used. 2. The blower must be placed where only fresh air tan enter it, but not more than 100 ft of hose should be used. 3. A life belt and rope should always be used with the hand fixed so that it will not fall back into the tank or sewer. 4. Be sure that the harness is buckled close to the wearer's body so that it will not slip over his shoulder, if a rope rescue is necessary. 5. One man who knows artificial respiration must be present on the out side. Self-Contained Breathing Apparatus The self-contained breathing apparatus has a self-contained air supply carried on the back of the user. It is the only one of the three types that is completely independent of out side air. Oil economics with emphasis on planning for crude margin optimization
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1. This mask is to be used only by specially instructed personnel where there is little or no ventilation. 2. It is used principally in emergencies. 3. After use, always notify the safety fire department so that they can recharge the tank.
OIL ACCOUNTS
It includes how a company accounts for its expenses, its income and cash flow numbers and how they are reported. Accounting for Bombay High Crude oil (indigenous) Procurement (Accounting of Import crude oil from Bombay office). Invoice verification of wharf age, customs duty etc, relating to import of crude oil. Billing of sales to OMCs based on certificate jointly authorized by OM&S and OMC. Data to MIS on crude oil consumption. Generate intake certificate for crude receipts and out turn certificate for production tankers. Finalization of closing stock valuation of crude oil/ finished products/ intermediates.
OIL ACCOUNTING
GENERAL PRICING CONDITIONS OF CRUDE
BPCL-Kochi Refinery, in Kochi, Kerala, is one of the two Refineries of BPCL, with a crude oil refining capacity of 9.5 Million Metric Tonnes per Annum (MMTPA). With the prestigious Crude Oil receipt facilities consisting of the Single Point Mooring (SPM) and the associated shore tank farm in place since December 2007, the refinery is equipped to receive crude oil in Very Large Crude Carriers (VLCCs). This facility helps BPCL-Kochi refinery in reducing the freight charges to a great extent, over and above increasing flexibility in crude oil selection. This, thereby, is a major infrastructure facility to accelerate the future growth of BPCL-Kochi Refinery. Crude has two variables, mainly: High sulphur Low sulphur(high purity)
So also the Capacity Expansion cum Modernization Project (Phase-II) which was scheduled for completion in December 2009 that would enhance the refining capacity to 9.5 MMTPA and equip it to produce auto-fuels conforming to Euro-IV specifications will be getting completed shortly.
CRUDE PROCUREMENT
For each consignment of Crude, Purchase Order is created in the system by the operations department. Purchase Order is created with all the pricing conditions relevant for each parcel. Generally the pricing conditions are;
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a) b) c) d) e)
Crude cost : Payable to the supplier of crude. Freight : Payment to the vessel owner. Customs duty: Customs duty on import crude is paid to customs department. Wharf age : It is paid to Cochin Port Trust based on the tonnage of crude. Miscellaneous Payment : (survey fees paid to the surveyors, bank charges etc)
Oil accounting function in relation to crude procurement.

Invoice verification of above elements of crude in SAP, with reference to the P.O created for each consignment.. ii) Release of Payment to the party by means of cheque, bank transfer and thru NEFT. iii) Vendor/Customer clearing in SAP system to maintain the Account in discipline. iv) Clarifications & discussions with the vendor, reg. Payments and other terms. The major players in this industry are: Indian oil corporation limited Bharat petroleum corporation limited Hindustan petroleum corporation limited i)
Cost of Crude consumption is prepared for both indigenous crude and import crude on monthly, quarterly and annually, for furnishing to MIS dept. ( to declare monthly GRM) and for audit purpose. Closing stock valuation of crude is carried out in the company based on fortnightly weighted average method. The closing stock value arrived in this method is compared with the current market price of crude during the period, immediate to the close of each quarter. If the current market price is lower than the weighted average rate, closing stock value of crude is revalued based on current market price (As per the accounting Policy). PRICING OF PETROLEUM PRODUCTS: BPCL-Kochi Refinery is engaged in refining and marketing of petroleum products. Beginning with a capacity of 50,000 barrels per day(bpd),. The Company entered the petrochemical sector with benzene and toluene in 1989. Today the Refinery has a refining capacity of 150,000 barrels per day producing all fuel based refinery products viz Liquefied Petroleum Gas, Naphtha, Gasoline, Kerosene, Aviation Turbine Fuel, Gas Oil, Fuel Oil and Asphalt. The foray into direct marketing began since 1993 through marketing its aromatic products- Benzene and Toluene. The entry into the International Petroleum business stream began with its first parcel of Fuel Oil exported in January 2001. Since then the Refinery, has earned the reputation as a reliable player in the International Trade, by virtue of superior product quality and customer service. Moreover, the Fuel Oil has been benchmarked in the Singapore and Dubai Fuel Oil markets. Specialty products for domestic markets include Benzene, Toluene, White Spirit, Poly Iso Butene and Sulphur. The 150,000 barrels per day Refinery produces all fuel based refinery products:
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Liquefied Petroleum Gas (LPG) and Superior Kerosene Oil (SKO) for households and industrial uses Motor Spirit (Petrol) and Hi-speed Diesel (HSD)for automobiles Naphtha, the major raw material for fertilizer and petrochemical industries Furnace Oil (FO), Light Diesel Oil and Low Sulphur Heavy Stock (LSHS) for fuel in industries Aviation Turbine Fuel (ATF) for aircrafts Benzene for manufacture of caprolactum, phenol, insecticides and other chemicals Special Boiling Point Spirit (SBPS) used as solvent in tyre industry Toluene for manufacture of solvents and insecticides, pharmaceuticals and paint Mineral Turpentine Oil (MTO): MTO (Textile grade) and MTO (Paint grade) for use in textile and paint industry Sulphur for use in fertilizer, sugar, chemicals and tyre industry. Jet Propellant-5 (JP-5) Low Sulphur High Flash Diesel (LSHFD) Low Pour High Speed Diesel (LPHSD) Light Diesel Oil (LDO) Bitumen and natural rubber modified bitumen for road paving and for construction of roads Poly ISO Butane (PIB)
KRs exclusive premium product Natural Rubber Modified Bitumen (Rubberized Bitumen) (NRMB)
Natural Rubber Modified Bitumen (NRMB) is one of BPCL-Kochi Refinerys premium products that revolutionized road development. NRMB has been on a fast track since its introduction in 1999. Bitumen, which is derived from petroleum, is a critical component in road building. Polymer added to Bitumen enhances both quality and longevity of roads. BPCL-Kochi Refinery in association with leading research institutes made an in-depth study on feasibility of using natural rubber available in abundance in Kerala, to develop the premium product, NRMB. NRMB has improved many roads throughout the region. Its success track is evident from the smooth Seaport-Airport road in Cochin. NRMB is a superior mix of bitumen and natural rubber latex. It is superior in quality to ordinary bitumen in terms of penetration, softening point and elastic recovery. NRMB is not affected by temperature fluctuations-less bleeding at high temperature and less cracking at low temperature. Improved skid resistance and more service life are the booster effects along with prime factors like save fuel, reduces traffic noise pollution and atmospheric pollution. All this sums up to reduced road maintenance cost.
Unique Products Bitumen Emulsion Ordinary bitumen requires heating for the temporary reduction of viscosity. With bitumen emulsion, which is a ready to use product, there is no need
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for the preliminary heating. Reduced road maintenance cost, energy savers, economical, longer service life for roads and reduced atmospheric pollution during road laying/maintenance are some of the advantages of Bitumen Emulsion.
The following grades of Bitumen Emulsion are produced in BPCL-Kochi Refinery meeting IS 8887:2004 specifications. Bitumen Emulsion Rapid Setting-1 (BERS-1) Bitumen Emulsion Rapid Setting-2 (BERS-2) Bitumen Emulsion MediumSetting-1 (BEMS-1) Bitumen Emulsion Slow Setting-1 (BESS-1) Bitumen Emulsion Slow Setting-2 (BESS-2)
Diesel Additive When used along with diesel in specified proportion, it improves the combustion inside engine cylinder, thereby reducing harmful exhaust emissions and assuring better fuel efficiency. Polyisobutenes (PIB) for manufacture of lubricants, cable, jelly These products are produced from crude oil through the various process of crude distillation, isomerisation, alkylation, catalytic cracking, hydro cracker etc. Kochi Refinery is a manufacturing organization of petroleum products. The products are normally dispatched to other oil marketing companies like IOC and HPC, to our own other locations and terminals and to direct customers. Modes of dispatches are by truck, railway wagons, and pipeline transfers and through tanker movements. Intermediates (semi finished products) During the course of production, intermediates are generated from each unit like kerosene unit, diesel units, gas units etc) these products are stored in separate storage tanks; Qty. information regarding intermediates are also generated from SAP system. The goods produced in BPCL-KR are transferred to its 5SBUs out of 7SBUs.they are: Retail Aviation Industrial and commercial LPG Lubricants Oil economics with emphasis on planning for crude margin optimization
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The cost of crude oil for a ton is calculated as landed cost. The equation for its calculation is: = FOB (free on board) Cost+ Freight+ Insurance+ (customs duty) + Wharf age+ Survey fees + miscellaneous expenses Reuters and OPEC sites give the details of crude oil prices and each firm is entitled to have its subscription and renewed yearly. The insurance areas include three phases wherein the first phase is when the primary shipment of goods happens. Secondly, the marine transit coverage is included and finally is the last transport of the crude to the refineries The London Tariff Barrel Program (LTBP) sets up new rates yearly. It also publishes the World Scale Afra Rate during every new calendar year. The rate depends on: Distance from load port to dispatch port Routine transport to those areas Port specification
Average Freight Rate Applicable (AFRA) changes monthly and the amount is paid by the importer to the vessel owner. It is calculated as 1% of the total value of goods. For example, 80000 tons crude of $8 each. Here, the AFRA RATE = 1% of 80000 * 8 The AFRA relates to the vessel condition (cone or flat vessel) and, the market orientation i.e. demand and supply. Hierarchy of products produced from refining crude oil Diesel (high) 40% Naphtha Motor spirit (petrol) LPG LSHS(low sulphur high sulphur)
The special products are as follows: Benzene Toluene MTO (Mineral Turpentine Oil) Special boiling point spirit (SBPS) Propylene
These are mostly marketed industrial coordination (I&C) department. Also, the Oil Marketing Companies (OMC) and stock transfer are indulged in the marketing of four basic products such as LPG, Kerosene, Petrol and Diesel. The ministry of Petroleum and Natural gas (MoPNG) has regulated the price of petrol. Moreover, it has raised the price of diesel, kerosene and domestic liquefied petroleum gas (LPG) effective from June 26, 2010 following the decision of the empowered group
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of ministers. Consequently, the price of petrol will rise by Rs3.50/litre, of diesel by Rs2/litre, of kerosene by Rs3/litre and of LPG by Rs35/14.2 kg cylinder.
Oil production and imports (million tonnes):
2004-05 Crude oil production Onshore Offshore Crude oil imports Refinery crude import Net exports 33.98 11.59 22.39 95.36 127.42 9.39
2005-06 32.19 11.43 20.76 99.41 130.11 10.02
2006-07 33.99 11.33 22.66 111.5 146.55 15.96
2007-08 34.21 11.21 22.91 121.67 150.81 18.32
2008-09 33.51 11.27 22.23 128.16 160.77 18.65
2009-10 33.69 11.82 21.87 159.26 160.03 36.31
Source: minister of petroleum and natural gas, Petroleum planning and analysis cell
Investment by source in oil and gas industry :

Source 2004-05 Gross bank credit outstanding(Rs billion) 152.61 Ecbs and fccbs($ million) Bond issues(Rs billion) Ipos(Rs billion) FDI($ million) PEUC(Rs million) PIPE(Rs billion) 1642.23 NA 0 NA 0 2005-06 251.5 2053.5 35.34 3.73 14 0 2006-07 358.86 3607.51 0 133.61 89 210 2007-08 417.38 3478.32 0 0 1427 5000 2008-09 681.47 3688.25 NA 0 412 0 2009-10 960.26 2306.75 NA 27.77 223 800
0.1 32.61 36.72 13.98 4.37 9.35 Source: RBI, Department of Industrial Policy and Promotion, Prime database and India Infrastructure Research. Oil economics with emphasis on planning for crude margin optimization
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UNDERSTANDING GROSS REFINERY MARGIN

OMCs like IOC, BPCL and HPCL also have refineries but they are not standalone and hence performances of these refineries are not available, though these OMCs have been reporting GRMs of its refineries. BPCL has two refineries, one in Mumbai and anther one at Kochi while HPCL has two with one in Mumbai and another one at Vishakapatnam. IOC has eight refineries spread across the country. Gross Refinery Margin is the difference between crude oil price and total value of petroleum products produced by the refinery. Suppose a refinery has purchased crude at $140/barrel and has realized $155/barrel on sale of petrol, diesel, ATF, Kerosene, LPG and Naphtha etc., hence in this case GRM is at $15/barrel. The standalone domestic oil refineries are paid import parity price, which is the international price of the product plus insurance, freight and customs duty. So, higher customs duty on product would result in higher GRM. The second point which determines the GRM of a refinery is its Nelson Complexity. Higher Nelson Complexity of a refinery enables it to process sour crude which gives a better GRM, due to price differential of crude between sweet crude and sour crude. Sweet and sour depends on sulphur content or crude oil, and sweet has less than 0.5% sulphur while sour crude has more than 0.5%. India largely imports the sour variety as environmental standards in India permit higher sulphur content in petrol and diesel. Profitability of a refinery also increases due to better product mix. (Rs. in crores) GRM Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2007-08 112.42 152.77 210.15 130.76 111.7 76.7 98.38 145.08 243.7 232.78 116.85 2008-09 257.83 379.58 521.28 469.16 188.95 87.96 173.34 -202.5 -133.75 137.13 100.98 2009-10 132.52 127.52 68.07 123.02 127.61 129.56 44.77 101.19 94.92 87.12 89.09
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Mar
224.86
125.13
241.28
GRM for Apr 09-Feb 10 is Rs1125 crores (US$4.44/bbl) as against gross margin of Rs 1542 crores (US$6.48/bbl) during the corresponding period last year. The monthly gross margin is as follows. $/bbl 2007-08 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 6.66 6.88 9.88 5.91 5.18 3.78 4.76 7.19 11.26 10.52 5.91 14.01 2008-09 15.07 17.56 25.71 19.93 8.38 3.56 6.62 -10.53 -8.39 5.75 4.49 4.64 2009-10 8.51 8.38 4.71 7.46 5.12 4.86 1.78 3.61 3.09 3.03 3.36 8.99
Calculations of barrel to metric tones are calculated with respect to the exchange rates of currencies. A single contract finishes within 15 days of time period. Exports are imposed low duty by the government to gain or to develop foreign exchanges for the country. The company has two crude distillation units namely, CD1 and CD2. At present, BPCL-KR does 29000tonnes charge each day 12000tonnes indigenous and the rest is imported. The duty amount is credited and the rest is used for the next day also. On Friday, the company pays the duty for crude (import) for charge during Saturday and Sunday.
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PERFORMANCE:
Refineries Retail The retail segment of the oil market in India saw sales volume grow by 9.3% in 2009-10. The sales volume of only the public sector marketing companies grew by 7.8% over the year 2008-09. The year 2009-10 saw the resumption of retail operations by the private oil marketing companies, who had scaled down operations in the previous year, owing to their inability to absorb the high level of under-recoveries on the sales of motor spirit and high speed diesel. BPCL ended the year with a retail sales volume of 17.21MMT as compared to 16.16MMT in the year 2008-09. Industrial and Commercial Even as the economic revival commenced, the year 2009-10 saw the Industrial and Commercial (I&C) business face numerous challenges like increasing trend of crude oil and product prices, large scale import of products by traders and end users, aggressive selling of products by private marketing companies and improved availability of gas. The business continued its focus on bitumen marketing in deficit markets, which resulted in BPCL achieving the highest growth in packed bitumen sales of 4.76% even as the public sector oil companies saw a decline of 9.3%. BPCL also recorded the highest growth in the sale of products like SBP & MTO. LPG The year 2009-10 was an eventful year for the LPG business. BPCLs total LPG sales for the year 2009-10 stood at 3235.82TMT giving it a market share of 25.8%. LPG sales volume grew by 6.68% as compared to the previous year when the sales volume was 3032.9TMT. Aviation There were signs of passenger traffic increasing in the later part of the financial year and consequently, the industry sales volume of ATF which has declined in 2008-09 reflected a growth of 3% in 2009-10. BPCL ended the year 2009-10 with a sales volume of 925TMT, which represented a nominal growth of 0.91% over the previous year. Integrated information system IT remains one of BPCLs strengths. A number of strategic initiatives were launched during the year in different areas. The Indian GAAP (generally
75
accepted accounting principles) is proposed to be converged with IFRS (international financial reporting standards) from the financial year starting 1 st April 2011. The New general ledger solution in SAP R/3 addresses the requirements for the above transition and BPCL has migrated to this solution with effect from 1st April 2010. International trade and risk management Crude oil prices moved from their lows of USD45/barrel at the beginning of the financial year to around USD80/barrel at the end of financial year 2009-10. This was mainly on account of optimism in the market following the global financial recovery. During the year, the BPCL imported 14.40MMT of crude oil as compared to 12.70MMT in 2008-09. During the year, BPCL exported 2698.91TMT of refined products. This was higher than the level of 1381.88TMT exported during the previous year. R&D New products developed during the year like Passenger Car Engine Oil for a major original equipment manufacturing, fully synthetic gear oil, customer specific Metal Working Fluid, High Performance Grease etc, would bring a number of business benefits in terms of improving BPCLs market share, making available better quality products, reduce input costs etc. Awards and Recognition o o o o o o o FE EVI (Financial Express and Emergent Ventures India) Green Business Leaders Award for the year 2009-10. Best Cash Management Deal for Electronic Receipt Solution instituted by the Asset Magazine, Hong Kong, a well respected finance magazine. Asset Triple A transaction banking award is the industrys most prestigious award for banking finance, treasury and the capital markets. Fleet Enabler of the Year in the Apollo-CV Awards 2010 Reinforced standing in energy industry by ranking 97th globally, 15th in Asia and 5th in Refining and Marketing among the Asian companies, as per Platts Top 250 Global energy Companies 2009 list. Bharatgas brand has been recognized as Business Super brand 2009. BPCL won Readers Digest Most Trusted Brand Award in the Gold Category for the third year in succession.
Refinery Transfer Price

Refinery transfer price (RTP) is the price at which refinery transfers its products. It is used so that there is a notional income coming into the organization. On the other hand, it acts as a tool to calculate performance. The other indicators for performance are: GRM(gross refinery margin) Oil economics with emphasis on planning for crude margin optimization
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Fuel and Loss percentage
ONGC crude price is fixed through import parity. BPCL-KR takes the crude from ONGC ie, it acts as domestic supplier. This pricing is done and helped by the central government. Weighted average RTPs for the period 2007-2010: Details of the average cost and realization are as follows: 2007-08 27660 25523 2008-09 32849 30690 2009-10 27236 25504 2010-11 32370 30720
Average Realization Average Crude Cost
Details of the refinery gate prices of petroleum products w.e.f. 01.5.2011 is: PRODUCT DESCRIPTION HSD, 1% SUL - EXPORT LSHF - HSD SKO - PDS SKO - Non PDS FO LSFO LDO ATF - DUTY PAID ATF - BONDED LPG - Bulk DOMESTIC Auto LPG - Bulk (INDUSTRIAL) LSHS NAPHTHA( FERT & POWER) SPECIAL PRODUCTS BENZENE TOLUENE MTO SULPHUR MAK OIL ADDITIVE (PIB) HYDROGEN PROPYLENE PRICE 15oC 38683.84 42290.93 39235.98 41265.00 33245.78 33245.78 40520.00 39230.33 39153.95 PRICE IN CON.FACTOR MT NAT to MT 1.4110 1.2100 1.2850 1.2850 1.0422 1.0422 1.1720 1.2880 1.2880 (Rs.) 54550.00 50553.00 49733.00 52304.00 34305.00 34305.00 46950.00 49841.00 49744.00 41238.00 PREV. PRICE (Rs./MT) 53101.00 50471.00 48106.00 50593.00 34805.00 34805.00 46775.00 49635.00 48112.00 39985.00 DIFFERENCE
1449.00 82.00 1627.00 1711.00 1500 1500 175.00 206.00 1632.00 1253.00 1317.00 500.00 1680.00 0.00 2610.00 219.00 100 0 7100 1317.30
43361.00 42044.00 34805.00 34305.00 47105.00 45425.00 55760.00 52940.00 52981.00 8820.00 70330.00 237100 50361.10 55760.00 50330.00 52762.00 8720.00 70330.00 230000 49043.80
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Depreciation: Depreciation has been worked out on straight line method as per rates prescribed under Schedule XIV of the Companies Act 1956. Proper records showing fixed assets at the start of the year, addition/deletion during the year and net fixed assets at the end of the year are maintained.
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79
SUGGESTIONS
There is a growing need from the oil industry to ask for the implementation of Administered Price Mechanism, over the present price control measure as when the global price of crude tends to increase in the long run, customers in India too need to pay the price relating to the global price and the present Governments measure of price control and giving subsidies will tend to spit fire in the coming days and threaten the existence of all the refineries and related companies in the industry. Here, while regulating prices of diesel the government can establish a provision where the industry that uses diesel on a larger scale/quantity gives the desired amount to the refineries which in turn helps the refineries to yield back their costs. Thus, a harmony between the government, public and refineries can be achieved. GRM alone cant be taken as a performance indicator because fluctuation in the international price of crude results in a substantial margin. For better financial results, the industry should try to control the fuel loss percentage. This can in turn enhance the profitability of the firm. To improve the technology for reducing the output cost of all petroleum products and thereby reducing the consumers burden effectively. The refinery modernizes its activities as per the requirement of the statutory bodies, but when new projects like LNG come into play at Kochi, the demand for at least few of the BPCL products will be reduced. Hence the refinery should give more importance to find new areas of market and research on new products of great demand to make the refinery sustainable in the longer run.
CONCLUSION
BPCL-KR is a pioneering institution and of its kind in India. Since its inception, they have made remarkable advances in every sphere of Oil industry. The transformation from a completely protected company to a player in the highly competitive industry, the challenges posed to the company and the methods adopted by the company to tackle the situation were of great importance for the study. The study gave me a fair knowledge about the different departments/sections of the company and their functions within the limited time constraints. It also gave me an insight into the Corporate Social Responsibilities of an organization. I could also inculcate the values of team work and the importance of time management in an organization.
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ANNEXURES
Raw Material
Crude Receipts Imported Crude 1. HIGH SULPHUR Name of the crude Al Shaheen Arab Light Arab XL Arab Mix Basrah Light Kuwait Iran Mix Dubai Lower Zakum Umm Shaif Upper Zakum Urals Material Code 11516 11513 11511 11514 11515 11518 11517 11501 11510 11503 11504 11519 Jebel Dhana. UAE Zirku, Abudhabi Country of origin Al Shaheen, Qatar UAE Ras Tanura, Saudi Ras Tanura, Saudi Iraq Kuwait Kharag Island, Iran Dubai
1. MEDIUM SULPHUR
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Name of the Crude Masila Murban Essider 2. LOW SULPHUR Name of the Crude Bonny Light Brega Seria Light Champion Miri Light Tapis Azeri Sarir Yoho Nemba Saharan Blend Sirri Agbami Ouao iboe
Mtrl Code 11508 11509 11505
Country of origin Asi shihar Jebal Dhana, Abudhabi Essider Terminals, Libya
Mtrl Code 10606 10603 10613 10615 10608 10602 10610 10619 10612 10618 10620 11521 10621 10611
Country of origin Nigeria
Brunei Brunei Miri Terminal, Malaysia Malaysia Ceyhan Marine, Turkey Libiya Yoho Oil Terminal USA South Korea Algeria Nigeria Gulf of Guinea
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Labuan Forcados
MaribLight
10605 10609 Nigeria

Yemen
Indigenous Crude Mumbai High Crude 10800 Mumbai, India
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References
84
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BIBLIOGRAPHY
Oil trading manual (special edition) Petroleum refining (technology & economics) by J H gary, G E Handwerk Petroleum economics by Jean Masserson Department manual for production planning Department manual for oil movement & storage BPCL annual reports Jwaladhwani, House magazine (BPCL) http://www.bharatpetroleum.com http://petroleum.nic.in http://wikipedia.org/wiki/petroleum_industry http://britannica.com
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Oil Economics With Emphasis On Planning For Crude Margin Optimisation - Kuldeep P

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EXECUTIVE SUMMARY

Oil economics with emphasis on planning for crude margin optimization

OBJECTIVE OF THE STUDY

SCOPE OF THE STUDY

REASON FOR SELECTING THE COMPANY:

Oil economics with emphasis on planning for crude margin optimization

Oil economics with emphasis on planning for crude margin optimization

Oil economics with emphasis on planning for crude margin optimization

ORIGIN OF THE INDUSTRY

Oil economics with emphasis on planning for crude margin optimization

GROWTH & DEVELOPMENT OF THE INDUSTRY

PRESENT STATUS OF THE INDUSTRY

Oil economics with emphasis on planning for crude margin optimization

LEADING PLAYERS IN THE MARKET

Oil economics with emphasis on planning for crude margin optimization

Oil economics with emphasis on planning for crude margin optimization

Gujarat TOTAL 179.956

Indian Oil Corporation Ltd(IOCL) IOCL

Hindustan Petroleum Corporation Mumbai limited

Hindustan Petroleum Corporation Visakhapatnam 2.50 limited

Corporation Manali Kochi and Mangalore

1.60 2.0 5.31 0.066 5.50

BPCL Kochi Refineries Ltd Mangalore Refinery Petrochemicals Ltd

Oil economics with emphasis on planning for crude margin optimization

NATIONAL AUTO FUEL POLICY

Indian Petroleum Retail Market

Investments in India Petroleum Industry

Oil economics with emphasis on planning for crude margin optimization

In 2010 the state-owned oil firms are expected to splurge US$

FUTURE GROWTH AND PROSPECT OF THE INDUSTRY

Oil economics with emphasis on planning for crude margin optimization

MILESTONES IN REFINERY HISTORY.

Oil economics with emphasis on planning for crude margin optimization

VISION, MISSION AND QUALITY POLICY VISION

Oil economics with emphasis on planning for crude margin optimization

List of departments at BPCL-KR

Quality control (QC)

9.33 1.2 10.57 7.14

33,728,737 4,339,441 38,207,372 27,986,771

7.97 4.37 0.09 0.36 2.58 100

28,828,302 15,812,256 306,477 1,302,462 9,319,135 361,542,124

NRI/Overseas Corporate Bodies Employees Indian Public TOTAL

Oil economics with emphasis on planning for crude margin optimization

Market Capitalization/Shares traded during 1st April 2009 to 31 March 2010

Oil economics with emphasis on planning for crude margin optimization

AWARDS AND ACHIEVEMENTS

Oil economics with emphasis on planning for crude margin optimization

ISO 17025 FOR QUALITY CONTROL

Oil economics with emphasis on planning for crude margin optimization

WORK FLOW MODEL

Oil economics with emphasis on planning for crude margin optimization

ATF/ JP-5 / MTO

LSD for E3/E4 Diesel

VGO Reduced Crude Oil

CDU: Crude Distillation Unit Cracking Unit FCCU: Fluidised Catalystic

ARU: Aromatics Recovery Unit DHDS: Desulphurisation Unit Diesel Hydro

Oil economics with emphasis on planning for crude margin optimization

Oil economics with emphasis on planning for crude margin optimization

PROCESS UNITS AND FUNCTIONS

1. CRUDE DISTILLATION UNIT - I

2. LPG RECOVERY UNIT

Oil economics with emphasis on planning for crude margin optimization