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Oil India Ltd.

BSE: 533106 Sector: Oil & Gas
NSE: OIL ISIN Code: INE274J01014
BSE 15:40 | 16 Feb 361.50 -0.80
(-0.22%)
OPEN

365.90

HIGH

365.90

LOW

361.00

NSE 15:40 | 16 Feb 361.30 -0.70
(-0.19%)
OPEN

363.95

HIGH

364.50

LOW

360.20

OPEN 365.90
PREVIOUS CLOSE 362.30
VOLUME 52605
52-Week high 388.85
52-Week low 258.00
P/E 9.20
Mkt Cap.(Rs cr) 27,351
Buy Price 362.15
Buy Qty 24.00
Sell Price 0.00
Sell Qty 0.00
OPEN 365.90
CLOSE 362.30
VOLUME 52605
52-Week high 388.85
52-Week low 258.00
P/E 9.20
Mkt Cap.(Rs cr) 27,351
Buy Price 362.15
Buy Qty 24.00
Sell Price 0.00
Sell Qty 0.00

Oil India Ltd. (OIL) - Director Report

Company director report

OIL INDIA LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT TO THE SHAREHOLDERS OF THE COMPANY Dear Shareholders, On behalf of the Board of Directors of the Company, I take great pleasure in presenting the 53rd Annual Report on the working of the Company for the financial year ended 31st March 2012, along with the Audited Statement of Accounts, Auditors' Report and the Review of Accounts by the Comptroller and Auditor General of India. Your Company has just completed 53 eventful years of its glorious existence on 18th February 2012 and is marching ahead to meet larger goals with a renewed vision and higher levels of commitment of all OIL Indians. 1.0 SIGNIFICANT HIGHLIGHTS Your Company, a Navratna PSE, while helping the nation in attaining hydrocarbon self- sufficiency, is expected to maintain its own competitive advantage and support the nation in its drive to eventually become a global giant. PRODUCTION AND SALES Your Company has set another record of achieving the highest ever production of crude oil and natural gas. Crude Oil: * Highest ever terminal production rate of 10,765 MTPD (3.93 MTPA). * Highest total production of 3.847 MT for a year, 102.3% of planned target. Natural Gas: * Highest ever total production of 2,633.29 MMSCM in a year. * Highest ever total sale of 2,093.02 MMSCM in a year. PROFIT AFTER TAX (PAT): The Company has made a record Profit After Tax (PAT) of Rs. 3,446.92 crore during the year, a growth of 19.36% over the PAT of the previous year. ACREAGE Your Company holds 1,56,890 sqkm of acreage, including those in India and overseas, covering seventy eight blocks, of which it holds in India 13 NELP as Operator, 1 NELP as Joint Operator, 19 NELP as Non-Operator, 2 as JV, 8 Nominated PELs, 1 CBM Block and 21 PMLs. Your Company holds 3 blocks as Operator, 8 as Non-Operator and 2 as JV partner overseas. OIL AND GAS RESERVES Your Company has made a total of seven hydrocarbon discoveries in the Upper Assam basin during the year. This year the accretion to recoverable reserves is 9.54 MMSKL (O+OEG) of oil and gas, thus achieving the 'Very Good' targets set in this regard in the MOU with GOI. Your Company has a strong oil and gas reserves base as furnished below, which reflects a significant growth potential. 1P 2P 3P Crude oil (MMSKL) 43.64 95.36 139.68 Natural Gas (BCM) 31.62 54.15 77.21 O+OEG (MMSKL) 75.26 149.51 217.89 2.0 FINANCIAL HIGHLIGHTS Brief financial highlights of the Company for the year 2011-12 on a standalone basis, and a comparison with the performance in the previous year is given below: (Rs. Crore) 2012 2011 INCOME Sales 9,058.43 7,764.41 Income from transportation 460.38 243.51 Other operating income 344.42 312.68 Other income 1,445.37 873.89 Total Income 11,308.60 9,194.49 EXPENDITURE Changes in inventories of finished goods (8.82) (7.64) Employee benefit expenses 1,517.54 1,204.90 Finance cost 9.37 13.13 Depreciation, depletion, amortization and impairment 1,008.82 819.67 Statutory levies 2,394.83 2,087.59 Other expenses 1,285.00 763.64 Total Expenditure 6,206.74 4,881.29 Profit before tax 5,101.86 4,313.20 Provision for taxation Current tax (including Wealth Tax) 1,727.26 1,297.32 Deferred tax (72.32) 128.15 Total tax expenses 1654.94 1425.47 Profit after tax 3446.92 2887.73 APPROPRIATIONS Interim dividend 841.59 432.82 Tax on interim dividends 136.53 71.89 Final dividend 300.56 468.88 Tax on proposed final dividend 48.77 76.06 Transfer to general reserve 2,119.47 1,838.08 Total appropriations 3,446.92 2,887.73 a) The Shareholders' Funds as on 31.03.2012 were Rs. 17,721.34 crore. The Debt: Equity ratio of company is very healthy at 0.001:1, as against 0.066:1 in the previous year. b) Based on post bonus share capital, the earnings per share (EPS) had increased to Rs. 57.34 in 2011-12 as compared to Rs. 48.04 in 2010-11. 3.1 BONUS The Company has issued bonus shares in the ratio of 3:2 (i.e. 3 (three) equity shares of Rs. 10/- each fully paid up for every 2 (two) existing equity share of Rs. 10/- each fully paid up), by capitalization of the securities premium account. Credit/ dispatch of the bonus shares has been completed on 4th April 2012. 3.2 DIVIDEND Your Directors are pleased to recommend a final dividend of Rs. 5 per equity share (50%) on the post-bonus issue share capital, subject to the approval of the shareholders at the ensuing Annual General Meeting. In addition, your Company paid an Interim Dividend @ 250% and Second Interim Dividend @ 100% based on the provisional financial trend of the Company on the paid up capital. The total dividend for the year 2011-12 on the pre- bonus issue share capital will be Rs. 47.50 (Previous year Rs. 37.50) per equity share of Rs. 10 each. 4.0 RESEARCH AND DEVELOPMENT The Company gives due importance to continuous upgradation of technologies and expertise in various areas of activities through its own Research and Development Centre. The details of R & D activities carried out are given in Form - B of this Report. 5.0 HUMAN ASSETS Your Company has 8,096 employees on the rolls of which 1,340 personnel are in the executive cadre. Team Oil India is a workforce dedicated to meet the vision of your Company and is always endeavoring to take your Company to challenging heights. 6.0 INDUSTRIAL RELATIONS Harmonious and cordial relations were maintained with employees' recognized union, namely, IOWU and other registered unions operating in OIL. The employees' unions extended full co-operation to the Management and actively participated in sorting out employees' problems and grievances. Regular and periodic interactions with registered unions were very effective in dealing with industrial relations issues. 7.0 RECOGNITIONS 1. Company of the Year Award by Indian Chamber of Commerce supported by the Department of Public Enterprises, Government of India, for its all-round performance on the physical, financial, HSE, CSR and sustainability parameters. 2. Golden Peacock Award for Corporate Governance. 3. Greentech Environment Award 2011 in Gold Category in the Oil and Gas Sector. 4. NDTV Business Leadership Award in the Oil and Gas Sector 2010-11. 5. The SCOPE Award for Excellence and Outstanding Contribution to Public Sector Management - Individual Leader, PSE Category 2009-10. 6. IPE HR Leadership Award from the Institute of Public Enterprise (IPE) at the World HRD Congress. 7. 2nd Annual Greentech HR Gold Award 2012, in the Training Excellence category for the Corporate sector. 8.0 CORPORATE GOVERNANCE As stipulated under Clause-49 of the listing agreement, both the Management Discussion and Analysis Report and the Corporate Governance Report have been incorporated as separate sections forming part of the Annual Report. Your Company also complies with the secretarial standards issued by ICSI and the corporate governance guidelines enunciated by the Department of Public Enterprises, Government of India. The Ministry of Corporate Affairs, Govt of India has issued a set of voluntary guidelines on corporate governance in December 2009. The guidelines provide for good governance practices which may be voluntarily adopted by corporates. Oil India Limited complies with most of these guidelines and would endeavour to comply with the other guidelines that are applicable to a government company. 9.0 CHANGES IN THE BOARD OF DIRECTORS Shi N.M Borah, Chairman & Managing Director superannuated from the service of the company on 30th April, 2012. The Board wishes to place on record its sincere appreciation of his invaluable contribution to the company. In terms of the Letter No. C-31014/6/2010-CA dated 21st March, 2012 issued by the Ministry of Petroleum and Natural Gas, Shri S.K.Srivastava, Director General, Directorate General of Hydrocarbons assumed the post of Chairman & Managing Director of Oil India Limited w.e.f. 1st May, 2012 vice Shri N.M Borah. The tenure of Shri A.K.Gupta as Independent Director ended on 29.07.2011 Shri D.N Narasimha Raju, Joint Secretary, MOP&NG ceased to be Government Nominee Director on the Board of OIL w.e.f 05.01.2012 consequent to his transfer from MOP&NG. Shri Aramane Giridhar, Joint Secretary, Ministry of Petroleum & Natural Gas, of India was appointed as Government Director vide MOP&NG Letter No. C-31019/1/2006-CA dated 28.02.2012. Smt. Rashmi Aggarwal, Director (E-III), MOP&NG and Shri Atul Patne, Dy. Secretory (E-II), MOP&NG were appointed as Government Nominee Director on the Board of OIL vide MOP&NG letter No. C-31033/1/2012-CA dated 03.08.2012 vice Shri Aramane Girdhar, JS (E), MOP&NG and Dr (Smt.) Archana S Mathur, Economic Advisor, MOP&NG. 10.0 STATUTORY REQUIREMENTS Section 274(1)(g) of the Companies Act, 1956 is not applicable to government companies. However, none of the directors of your Company is disqualified as per these provisions. Your Directors have made the necessary disclosures as required under various provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement. Information as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure I which forms a part of this Report. Details of the Employees who drew remuneration exceeding the limits laid down under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 (as amended from time to time) are attached as Annexure-II. 11.0 STATUTORY AUDITORS The Statutory Auditors of your Company are appointed by the Comptroller and Auditor General of India (C & AG). M/s SRB and Associates and M/s Saha Ganguli and Associates are the joint statutory auditors for the financial year 2011-12. The auditors' remuneration for the year 2011-12 has been fixed at of Rs. 9 lakh each plus travelling and out-of-pocket-expenses. 12.0 COST AUDIT The Cost Audit Report for the financial year 2010-11 was filed with the government on 26th September 2011, a day before the due date. M/s Mani and Co. are the cost auditors of the Company for the financial year 2011-12. The report is being finalized and will be filed as per the schedule. 13.0 DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the directors' responsibility statement, it is hereby confirmed that: (i) In the preparation of the annual accounts for the financial year ended 31st March, 2012, all applicable accounting standards had been followed, along with proper explanations relating to material departures; (ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31st March 2012 and of the profit of the Company for the year ended on that date; (iii) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) The directors had prepared the accounts for the financial year ended 31st March, 2012 on a 'going concern' basis. 14.0 ACKNOWLEDGEMENT With innovative initiatives through the renewed vision of enlarging the Company's contribution and with our combined zeal, commitment, experience and expertise, your Directors look forward to another year of fruitful operations, together with an overall improvement in efficiency during the year 2012-2013. Your Directors acknowledge the guidance and support of the Ministry of Petroleum and Natural Gas, and of all other ministries and agencies in the Central and State Governments. Your Directors also express their gratitude to the shareholders, customers, suppliers and other business partners and associates for their continued co-operation and patronage. Your Directors wish to place on record their deep sense of appreciation for the exemplary services of all Oil Indians towards the Company's success. For and on behalf of the Board of Directors Sd/- (S K Srivastava) Chairman and Managing Director Dated: 08.08.2012 Place: Noida ANNEXURE-I PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 A. ENERGY CONSERVATION MEASURES ADOPTED BY OIL FOR CONSERVATION OF ENERGY DURING THE YEAR 2011-12 I. Conservation Of Crude Oil A total quantity of 4,188.40 KL of crude oil was retrieved from various sumps, pits, water cleaning plants, and through proper maintenance of trunk pipelines etc. II. Recovery Of Condensate The total volume of condensate recovered from the following work spheres during the year was about 43,123 KLs. - LPG plant, Duliajan - 42,338 KLs. - CRP unit at Moran - 393 KLs. - Rajasthan project - 392 KLs III. Conservation of Natural Gas * During the year, crude oil from OIL as well as ONGC was treated with flow improver instead of thermal conditioning and thereby a substantial amount of natural gas was conserved. * About 1.2 MMSCM of low pressure natural gas (0.7 kg/cm2) which was otherwise being flared earlier was utilized for internal consumption by using VLP (very low pressure) stabilizer booster at Moran field. * About 40,000 SCMD of HP natural gas was saved during the year by supplying gas through 100 mm NB distribution pipeline to AGCL from Baghjan EPS. * About 38.79 MMSCM of natural gas which was otherwise being flared was saved by the commissioning of BOO (Build-Own-Operate) compression services in fields by feeding into OIL's gas distribution network. IV. Conservation of Electricity * About 10,576 kWh of energy was saved by installing 28 Nos. of 1.5 ton energy efficient air conditioners in our offices at Fields. * About 3,60,400 kWh of energy was saved during the year by installing 19 Nos.of 125 Watt MV fittings, 124 Nos. of 150 Watt SON fittings, 66 Nos. of 15/20/40 Watt CFL, and 90 Nos. of 20/40 Watt T/L at various field installations/ housing areas of Naharkatia and Moran fields. * About 6,02,145 kWh of electrical energy was saved annually by incorporating a capacitor bank in the LPG plant. * About 27,450 kWh of electyrical energy was saved annually by replacement of 301 Nos. of CRT monitors with TFT monitors on PCs. V. Conservation of Diesel (HSD) * Use of solar lighting at Tanot-GGS (Rajasthan) and at a pilot plant at Baghewala (Rajasthan), resulted in considerable saving of HSD. * A considerable saving of HSD was achieved through rig dragging/ cluster drilling. * Use of PDC bits in place of TCR bits in drilling operation resulted in a saving of about 216 KL of HSD. * Average fuel consumption of rig operations has been lowered by the use of CFL in the mast structures of AC-SCR rigs. * By installing Exhaust Emission Reduction Device (TADGER) in power pack engines of 5 Nos. of AC-SCR drilling rigs, reduced HSD consumption by 99.34 KL. * The use of 2 Nos. of energy efficient (SOLAR) diesel gen sets in place of 30 KVA diesel gen sets at night for area illumination at workover locations resulted in a saving of HSD. * Installing of 10 Nos. of 30 KVA generating sets instead of using 63 KVA generating sets during rig-up and rig-down operations in drilling locations resulted in a saving of about 38.06 KL of HSD. * Replacing diesel gen sets with gas engine driven gen sets at FGGS-2 and FGGS-336 at Digboi fields resulted in saving about 39.42 KL of HSD during the year. * Substantial quantity of HSD was saved towards carrying out 204 Nos of high cost workover equivalent jobs using CTU (coil tubing unit) and NPU (Nitrogen Pumping unit). * Introducing fuel efficient vehicles in transport fleet and imparting training on fuel efficient driving techniques to vehicle operating and maintenance personnel resulted in substantial saving of fuel. * By using fuel efficient gen sets at repeater station in trunk pipelines, about 13.8 KL of HSD is being saved annually. * Monitoring the JVVNL power consumption with power factor improving capacitor at TVC instead of running DG set led to conservation of HSD. * By Commissioning of crude oil delivery line from HRZ WHPS to Makum OCS reduced bowser transportation to the tune of 550 KLPD (45 to 50 Nos of bowsers per day). VI. Reduction Of Gas Flare * Reduction in flaring of about 40,000 SCMD of HP natural gas has been achieved by supplying gas to AGCL through 100 mm NB distribution pipeline from Baghjan EPS. * Reduction of flaring of about 38.79 MMSCM of natural gas has been achieved by the commissioning of BOO (Build-Own-Operate) compression services at Bhogpara, Dikom, Makum, Chabua and Hatiyali, feeding the gas to OIL's gas distribution network. * Reduction in flaring of about 1.2 MMSCM of natural gas has been achieved through internal consumption by using a very low pressure stabilizer at Moran. VII. UTILISATION OF RENEWABLE SOURCE OF ENERGY Use of Solar Energy * Use of solar photo-voltaic cells for MART communication system has resulted in a saving of about 3451.28 kWh of equivalent electrical energy . * Maintaining and using PV cells for area lighting at GGS in Rajasthan fields resulted in a saving of HSD. * The use of solar lighting system at GGSs as non-conventional and renewable sources of energy resulted in substantial saving of HSD in Rajasthan fields. * The use of solar powered distilled water plant at the new IC shop resulted in a saving of conventional energy. * 30 KW roof top grid solar power system commissioned at Corporate Office. Use of Wind Energy: We have established our footprint in the renewable energy sector with the successful commissioning of its maiden wind energy project having a generating capacity of 13.6 MW at Ludharava in the Jaisalmer district of Rajasthan. OIL's wind farm was successfully connected to the power grid of Rajasthan Rajya Vidyut Prasaran Nigam Ltd (RRVPNL) at Amar Sagar. B. RESEARCH AND DEVELOPMENT: Form - B SPECIFIC AREAS IN WHICH RESEARCH AND DEVELOPMENT WAS CARRIED OUT BY THE COMPANY: I. EXPLORATION 1. Surface Geochemical Exploration Using Adsorbed Soil Gas Method Analysis of 175 surface soil samples from the Krishna Godavari delta region of KG-ONN-2004/1 Block , 221 samples from the Karbi Anglong Block and 460 samples from the Mizoram Block were carried out for measuring adsorbed light hydrocarbon gases, to delineate prospective areas for oil and gas. 2. Petroleum System Modelling Of Upper Assam Basin Through Integration Of Geophysical, Geological And Geochemical Data 1-D modelling for several key wells was carried out. Further, a 3-D model for the basin was generated. II. PRODUCTION AND TRANSPORTATION 3. Development Of Indigenous Bacterial Strains For MEOR Process, MOU Project With TERI: To develop indigenous bacterial strains, water samples from different oil wells have been collected. Isolation of bacteria has been successfully carried out at TERI and studies are on to characterize the different parameters. A total of 15 bacterial consortia were developed for MEOR process. In addition, work on developing of suitable nutrients for the MEOR process is in progress. 4. Microbial Paraffin/Wax Remediation In collaboration with TERI, microbial paraffin remediation was attempted in two wells (NHK#523 and Hapjan #19) which were affected by severe paraffin/wax deposition problems. Following the microbial treatment job, the oil production from these wells and the scraping frequency is constantly being monitored. Additionally, bacterial strains capable of withstanding high bottom-hole temperatures are also being developed with the help of TERI for use in high temperature environments in OIL's wells. 5. Study On Low Injectivity Problem In Water Disposal Wells at a Depth Below 1,000 M: Sulphate Reducing Bacteria (SRB) activity was continuously monitored by recommending appropriate dosing plan for SRB control in treated water at Kathaloni OCS. SRB activity was occasionally observed in the entire surface set-up for handling water produced at OCS and suitable remedial measures for a disinfection plan were recommended. 6. Study on Injection Water Quality Improvement In order to improve the quality of injection water in model station Jorajan #22, laboratory experiments were carried out to chelate / sequester iron using citric acid. Dosing of citric acid, KOH and oxygen scavenger is being carried out. We have taken up a joint study with the Institute of Reservoir Studies (IRS), ONGC for improvement of injection water quality. 7. Solvent Stimulation Job at Well No. CBA #14 The well CBA#14, which was producing @ 70 KLPD ceased to flow after the well was shut-in due to economic blockade. A well stimulation job was designed using mild acid followed by HSD + EGMBE mixture, which was squeezed using CTU. Post treatment, and the well is producing at a rate of 85 KLPD oil. 8. Control of Scale Problem in ITF and Shalmari OCS Water Flow Lines with suitable Scale Inhibitor: In order to control scale deposition problem at Shalmari OCS 1, Intermediate Tank Farm, Tengakhat and Ushapur OCS, dosing and monitoring of scale inhibitor chemicals were continued and 'ScaleChem', a scale deposition predictive software, was used for systematic study and analysis of scale deposition. 9. Development of Flow Improver A flow improver field trial was conducted successfully on the mainline crude with a newly developed flow improver product Cristol SGT-04. 10. Development of EOR formulation After commissioning of the formation response tester (FRT), successful runs were carried out to calculate both gas and liquid permeability respectively, of core, at high pressure and high temperature. Core flooding laboratory experiments on alkaline surfactant polymer (ASP) flooding and surfactant polymer (SP) flooding are in progress for development of ASP/SP formulation for enhanced oil recovery method. Interfacial tension (IFT) studies in connection with ASP/SP formulation are being carried out in the laboratory. 11. Development of IFT Data Bank Laboratory study of IFT on WHTC crude oil samples from Makum OCS were carried out for the creation of a data bank with respect to IFTs of crude . This data will be used in ASP/SP flooding studies that will facilitate identification of appropriate EOR techniques for our reservoirs. III. UNCONVENTIONAL ENERGY RESOURCES 12. Characterization of Assam Coal Derived Liquid through US-DOE funding We, in collaboration with M/s Headwaters CTL (HCTL), LLC, USA, have completed the US Department of Energy (DOE) sponsored study on 'Production and Optimization of Direct Coal Liquefaction Derived Low Carbon-Footprint Transportation Fuels' utilizing the syncrude produced by us in our DCL studies. The objective of this study was to upgrade and characterize raw DCL liquids to fuel grade products and evaluate whether these fuels meet the existing specifications for standard petroleum based fuels. 13. Characterization of Tertiary coals of Meghalaya for Hydrogenation A collaborative study on 'Characterization of Tertiary coals of Meghalaya for Hydrogenation' by OIL and the Department of Geological Sciences, Gauhati University, Guwahati has been completed. The study generated data on coal quality, availability and mine ownership. Additionally, laboratory investigations are being carried to evaluate the hydrocarbon generative potential, thermal maturity, and hydrogenation/liquefaction potential of these Tertiary coals. 14. Unconventional Gas Resource Estimation Study in OIL's Assam-Arakan and Rajasthan basin. In order to explore and exploit the resources of Shale Gas and Tight Gas deposits in our existing petroliferous basins, we carried out a study for screening of potential unconventional gas (shale gas & tight gas) with our available data in Assam-Arakan and Rajasthan Basins. The study included planning of pilot well drilling program and a broad techno-economic feasibility study for exploitation of shale gas/tight gas in these two basins. Results of the study indicated shale gas prospect to be low in our operating areas in Assam, Arunachal Pradesh and Rajasthan. IV. ENVIRONMENT 15. Ambient Air Quality Monitoring An Ambient Air Quality Monitoring Laboratory has been procured and monitoring was carried out around 21 installations during the year. The concentrations of the priority pollutants in those areas are found to well below CPCB's prescribed limits. 16. Phytoremediation of crude oil and oily sludge-contaminated soil A collaborative project was taken up with the Institute of Advanced Study in Science and Technology (IASST), Guwahati on field application of the phytoremediation technique for oil and oily sludge - contaminated soil and successfully completed well-site pit. V. OTHER INITIATIVES 17. Collaboration with Universities In order to foster closer ties between industry and academia, we initiated interaction with the following institutes: 1. Indian Institute of Technology, Guwahati 2. Indian Institute of Technology, Mumbai 3. Indian School of Mines, Dhanbad 4. Indian Institute of Technology, Chennai and 5. National Geophysical Research Institute (NGRI) Interaction with the above institutions included technical discussion on various proposals. The proposals are being evaluated for their usefulness and relevance to our activities. Further action will be taken based on merits of individual projects. BENEFITS DERIVED AS A RESULT OF THE ABOVE R&D EFFORTS a. Surface geochemical exploration by the analysis of adsorbed soil gas is a cost-effective risk-reduction tool that is expected to add to the geosciences data base for the blocks/basins analysed and, through integration with geological and geophysical data, will aid exploration efforts in the basin. b. Microbial treatment for paraffin inhibition is expected to improve oil characteristics and reduce scraping frequency in producing wells. c. Study on low injectivity in water disposal wells has resulted in reduction of SRB activities in the produced water in Kathaloni OCS. d. Dosing of citric acid and oxygen scavenger has helped in improving the injection water quality in Jorajan#22 model station. e. Solvent stimulation has been found to be effective in the revival of oil production and, therefore, some more wells are being lined up for similar stimulation. f. Dosing of scale inhibitor chemicals has helped in reducing scale deposition problem in Shalmari OCS. g. The newly developed flow improver product was established as field- approved, and provided a much needed alternative source of procurement for this critical specialty item. h. Selection of an expert agency/consultant through collaboration with reputed academic institutions will help in identifying the techno- economically most appropriate flow assurance options for Digboi branchline and other areas of E&P operations. i. Development of data bank of base IFT values of our crude at BHT is expected to be useful for ASP / SP flooding studies, that helps in identifying appropriate EOR techniques. j. The US-DOE funded characterization study on the raw direct coal liquefaction liquids has generated valuable data and has demonstrated that coal liquids can be upgraded to finished transportation fuels conforming to existing Euro norms. k. Results of characterization of Assam coal derived liquid indicate that the coal-derived syncrude can be upgraded to finished grade transportation. l. The study of geochemical evaluation of tertiary coals has helped in the evaluation of hydrocarbon generative potential, thermal maturity and hydrogenation potential. m. Ambient air quality monitoring jobs will help in maintaining a cleaner environment in OIL's operational area. n. Implementation of the phytoremediation technique has helped in reclaiming oil contaminated soil in Jorajan#22 area. 0. The results of basin modelling will be useful in enhancing our understanding of the basin and in future exploration for oil and gas. VI. FUTURE PLAN OF ACTION * R&D efforts will be intensified in finding techno-economically feasible solutions to the problems faced by your Company in the areas of exploration, drilling, production and transportation of crude oil and natural gas. * Adoption and implementation of new technology will be given the highest priority. * A biotechnology laboratory will be setup to carry out research work for application of microbial techniques to combat various challenges, such as enhanced oil recovery and paraffin remediation, in an environmentally friendly manner. * Interaction with academic institutions will be further strengthened for mutual benefit. VII. R&D EXPENDIDTURE (Rs. in Lakh) Year 2009-2010 2010-2011 2011-2012 Capital 18 251 212 Revenue 2231 1728 2487 Total 2249 1979 2699 C. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. A pilot project on Low Frequency Passive Seismic as a new technology in OIL's operational areas of Naharkatiya & Digboi as Direct Hydrocarbon Indicator has been successfully completed. The anomalies identified and inferred in the course of study indicated possibility of fluid presence which has given an insight to the existing information and idea of the subsurface in both the study areas of Nahorkatiya and Digboi. 2. A state-of-the-art Virtual Reality Centre(VRC), has been established at Duliajan, where high-end computers create a virtual, interactive environment and multi-disciplinary teams can visualize and interpret the subsurface data in a realistic three dimensional work frame and analyze the hydrocarbon prospects in a particular area. Geological and Geophysical Interpretation projects can be visualized in virtual collaborative environment of the VRC. The VRC is also connected with 'Decision Centre' in OIL's Corporate Office at NOIDA with desk top sharing facility for effective collaboration and communication between geo-scientists at Fields Headquarter, Duliajan and E&D Team at NOIDA and facilitate effective and prompt decision making. 3. PETREL reservoir engineering core software has been upgraded. The upgraded version can be combined and applied to different reservoir engineering needs. Using the petrel reservoir engineering core, simulation models can be built directly from geological models, adding fluid properties, well completion, production history, event scheduling, organizing geological realization and development scenarios into cases. 4. Eclipse, the existing Black Oil simulation software, has been upgraded to the Eclipse 2010.1 version. The upgraded version makes it possible to meet the challenge of producing from complex reservoirs. It allows optimizing recovery through dedicated work-flows. 5. Eclipse parallel, a module of eclipse simulator suite, software has been installed. The usefulness of the software becomes critical when multiple uncertainty scenarios need to be run in a given time frame, which is quite common in field development studies nowadays when large dynamic models are run. Reservoir models of Oil India Limited are of the order of 1.5-2 million grid cells. Eclipse parallel works by dividing the whole model into smaller parts for reducing the runtime and recombining all the parts of the model at one point after simulation for the current set of variables. This becomes beneficial for running multiple uncertainty scenarios within the given time frame. 6. State-of-the-art HP Superdome II system has been installed in the ERP database centre. This high end server is presently having 4 Nos. of cell boards, which will be expandable to another 4 Nos of cell boards in future. 7. A GSM system has been introduced for the monitoring of gas parameters supplied to different customers from remote stations. GSM based gas monitoring data is now available at SCADA MCS and data can be retrieved through SMS from mobile phone. 8. Foundation fieldbus technology in SCADA and NA Gas Field Development Project is under implementation. 9. Ultrasonic Flow meter for custody transfer natural gas metering at Madhuban CGGS is under installation. 10. To improve the cement bond quality in gas wells a new chemical Silica Fume was introduced as a cement additive at Loc BGO (Bhagjan field). 11. Surface controlled sub surface safety valve at a gas well - NHK 552 has been installed. 12. Level measurement in crude oil storage tanks using RADAR technology has been implemented at tank farms and OCSs. 13. Coriolis based mass flow metering for measurement of the flow of crude oil in OCS outlets has been installed. 14. Flow activated CTU down hole tools for well servicing have been inducted in operations. 15. Vehicle tracking system has been introduced in crude oil bowsers for optimized management of bowser utilization. 16. Mass flow metering based terminal automation system for both LPG and condensate tanker filling has been inducted. 17. In the LPG Plant, old pneumatic level transmitters, analog transmitters, pneumatic valve positioners and pneumatic versa valve have been replaced by electronic level transmitters, digital smart transmitters, electronic digital valve controllers and electronic versa valve respectively. 18. Radar and Servo type level transmitter with state-of the-art tank firm management system in LPG mounded bullet has been installed. 19. Eco-Friendly Chemicals for Drilling /Workover Fluid Management such as biocide 'CangurdTM Ultra BIT 20 DPG, Aphron-ICS fluids, linseed oil etc.were successfully used. 20. Silica Fume was introduced as a cement additive to improve the cement bond quality in high GOR/gas well production casing cement jobs. 21. Three ageing oil-type transformers at sub-stations #D, GCS-4, Well-240 have been replaced by Dry type Transformers. 22. Ageing DC-PCRs have been replaced by the state of the art, PLC based PCRs. 23. Ageing Diesel engine generating sets have been replaced by gas engine generating sets at in FGGS Kushijan #2 and FGGS#336. 24. Diesel Engine driven pumps have been replaced by Gas engine driven Pumps in Mud Plants at Kathalguri, Shanti & Mud Plant-7. 25. Petroleum Sorbent booms and Petroleum Sorbent pillows, have been tested in the fields. 26. Introduced mobile effluent treatment plants for drilling locations in order to reduce environmental pollution. 27. To increase the soundness of soil in locations, 6 (six) nos Vibratory Soil Compactors have been commissioned. D. FORIGN EXCHANGE EARNINGS AND OUTGO (Rs. in crore) 2011-12 2010-11 (i) Foreign Exchange Earnings 1.64 1.56 (ii) Foreign Exchange Outgo 284.57 333.74 MANAGEMENT DISCUSSION AND ANALYSIS REPORT 1.0 THE NATIONAL ECONOMY In the current scenario of highly inter-related economies of the world, any significant event in any major economy does impact the economic situation in other countries. However, despite several disturbances in the Euro Zone, Indian economy has broadly survived the adverse trends. Our real GDP growth rate in 2011-12 was 6.5% and is expected to rise to around 7.3% in the coming year. However, high international oil prices, persistent high level of inflation and the recent sharp depreciation of Rupee against major international currencies may pose a big challenge for sustaining the high growth. 2.0 INDUSTRY SCENARIO Primary energy consumption worldwide rose to 2.5% in 2011, down from 5.1% in 2010. The fall in consumption growth was mainly caused by the OECD countries, dominated by USA. The growth in consumption of primary energy in USA in 2011 was negative as against the positive growth of 3.3% in 2010. Despite the slowdown in growth, the consumption of oil increased by 0.7%. Growth in the consumption of natural gas in 2011 was lower at 2.2% compared to 7.6% in the previous year. During 2011 oil consumption was 88 million barrels per day while its production stood at 83.5 million barrels per day. Global natural gas consumption grew by 2.2% against a production growth of 3.1%. World proved reserves grew marginally by 2% .Venezuela crossed Saudi Arabia as the largest proved reserve holder and Iraq's proved reserves increased by 24% based on new exploration. Indigenous reserves increased to 9.04 bn bbls. While domestic production of crude oil remained at around 1% of global production, oil consumption grew to 4% of the world consumption. India currently imports around 84% of its crude oil requirement, which will grow further with the commissioning of new refineries. From 1.6% in the previous year, our natural gas production in 2011 came down to 1.4% of the global production, while domestic consumption of natural gas continues to be around 1.9% of the global consumption. The growth in global oil demand in 2012 will gradually accelerate throughout the year, with total demand expected to grow to 1.2 million b/d. The domestic fuel demand is expected to maintain its growth trend of 3.8% in fiscal 2012. With 7.4% rise in crude oil production in fiscal 2012, your Company increased its share in the country's total production to 10%, from 9.6% in the previous financial year. Our natural gas production also increased by 12% during 2011-12. At this level, our share in the nation's total natural gas production has increased from 4.5% in 2010-11 to 5.1% in the current year. 3.0 RISKS AND CONCERNS Until a few years ago, theories were being propounded that oil has reached its peak production levels and future growth in oil production will not be sufficient to meet the rising consumption levels. While the days of easy oil are clearly over, the high oil price regime of around $100/bbl for the last several years has increased the risk appetite of oil producers and has attracted large investments in exploration/ production of oil and gas. Additional oil buffers are becoming available in topographically and logistically much more difficult terrains, at much more depth than earlier and at much higher operating costs. Accessing the remote logistically difficult areas increases the infrastructure requirement, thereby increasing the operating costs. The soaring prices in the international markets, though driven in a large measure by speculation, also reflect the need for higher investments to meet the techno-scientific concerns for improving recovery rates and for increasing exploration activities in logistically remote and inaccessible areas and in complex geological formations. The sustained rise in demand from certain consumption zones, mainly China and India, is also a large contributor to the high level of oil prices. The speculative market is however not likely to continue considering that there was a substantial increase in oil discoveries worldwide during 2011 which trend, we are hopeful, would continue in view of the fact that voluminous investments have been focused worldwide on increasing productivity by improving recovery and on exploration and exploitation in the recent past and the situation is also likely to ease with the entry of Iraq in the immediate future. Increased energy efficiency and use of alternatives and renewables will also improve the situation. In pursuit of improving its footprints in the country as well as in other parts of the world, we ventured in many prospective areas through participation in NELP bidding rounds, as well as by securing exploration blocks in several parts of the world, many of them with the high risk of political uncertainty. However, the recent disturbances in Middle East countries mandated withdrawal of our personnel from Libya and slowed down our progress in Egypt and Yemen. The economic sanctions on Iran have also led us to hold back our expansion plans for developing discovered fields there. Our exploration efforts in Timor Leste and in two blocks in Libya have proved noncommercial. In deep water NELP Blocks in Cauvery basin and KG Basin where we have a participating interest, exploration has not been successful. Another area of concern is the delay in land acquisitions. In certain areas, the delay is very significant, which is affecting our E&P activities. Though the GOI introduced a National policy on Rehabilitation and Resettlement 2007 in October, 2007. the desired legal backing would be forthcoming upon the promulgation of the Land Acquisition Bill, 2011 to replace the archaic Land Acquisition Act of 1894, which is under active consideration of GOI. We are also examining a comprehensive acquisition policy with domain experts in order to hasten the process through adequate measures without compromising on the rights of the land affected. Nevertheless,we are extremely conscientious regarding the rights of the underprivileged and land-deprived people, and are able to mitigate the problems to a large extent through effective CSR in our areas of operations. Even though our Crude oil sales are based on international pricing norms, however, the GOI policy to subsidize the products, poses challenges to us to increase productivity and optimize the costs. With the likelihood of incremental productivity worldwide, as aforesaid, the imbalance in the demand -supply position would ease out and the speculation may be reduced in this inelastic commodity and may be confined to political vicissitudes in the producing areas, the likelihood of which is remote, considering the shambles in the economic conditions universally, the universal efforts towards more energy efficiency and use of alternatives and renewables and the fact that no economy can afford high prices of crude oil. Due to the foregoing, and considering that fiscal corrections are being envisaged by GOI to cap/reduce the subsidy along with others measures, the domestic economy will overcome the temporary slump it is currently facing. On the supply side, since our areas of present operations are in the North Eastern region, we are totally dependent on the four refineries in the state of Assam for our entire crude oil supplies. In the event of any disruption in the refineries, such as the prolonged shut-down in the previous financial year, our production of crude oil gets adversely affected. 4.0 OPPORTUNITIES AND THREATS In spite of constraints, we increased our crude oil production by 7% and natural gas production and sale by 12% in the current fiscal. With the commissioning of the BCPL plant in late 2013, our natural gas production and sale will get a significant boost. Since refineries in the NE region are not operating at full capacity due to low local crude oil production and the limitations of the facilities to bring crude oil from outside the region, we continue to have a ready market for our growing crude oil production. For our inorganic growth, we are assessing many properties globally and are hopeful of bringing them to successful acquisition in the near future. IOCL continues to be our partner in these ventures. Shale/non-conventional gas has also emerged as an area of interest. In our nominated blocks our studies through a reputed consultant have not proved decisive for further exploitation of these prospects. With the expansion of the gas markets in India, city gas grids/ distribution and LNG import, terminal construction and distribution are a also envisaged as dominant areas of future growth towards which we have actively strategized. Due to our core competence in almost all areas of upstream operations, as also due to a paucity of the availability of quality services indigenously, and because world-wide demand for oil field services is expected to outpace capacity additions, we have re-strategized for not only enhancing our core capabilities through capacity augmentation but are also envisaging entering the services sector. Currently we are focusing our overseas E&P activities in Gabon and Venezuella. In NELP Blocks, our primary focus is on KG Basin and Mizoram, which have high prospects for finding oil and gas. In the North East of India, where we have a significant presence, we have almost doubled our risk-bearing activities during the Twelfth Five Year Plan compared to the previous Plan due to the higher probability of success in that region. The probability of success in our exploration ventures would require incremental resources for investment in development and since the company is presently lowly geared these would be met at the appropriate time from other sources of funding, if necessary. With India also envisioning a 20% shift to alternative sources of energy, we have set our footprints with the establishment of a 13 megawatt wind energy farm in the Jodhpur district of Rajasthan. We have plans to set up an additional 50 megawatt wind energy farm in Rajasthan in 2012-13. We are also planning introduction of biodiesel as fuel in our Diesel Engines deployed in the operations to not only inure saving of costs on this account but also to mitigate environmental pollution. Trial runs to measure operational effectiveness will be conducted shortly. 5.0 KEY PERFORMANCE INDICATORS PHYSICAL HIGHLIGHTS Performance in respect of the key parameters of the Company for the year ended on 31 March 2012 in comparison to the previous year is given below: Sl. Item Unit 2010-11 2011-12 No. 1. Crude oil production MMT 3.586 3.847* 2. Crude oil sales MMT 3.556 3.80* 3. Natural gas Production MMSCUM 2352.71 2633.29* 4. Natural gas Sales MMSCUM 1808.61 2093.02* 5. LPG Production Tonnes 45010 52,020 6. Drilling Metreage 120800 127994 * Highest ever for the company. CRUDE OIL PRODUCTION: We have been maintaining a rising trend in indigenous crude oil production in the recent past and achieved the highest ever production of 3.847 MMT during the year 2011-12. A terminal production rate of 3.93 MMTPA was achieved against 3.80 MMTPA of the previous year. A number of progressive measures in its main producing fields of Assam and Arunachal Pradesh were undertaken to increase productivity. A few of them are furnished below: Well stimulation and servicing Many activities like production testing of drilling and workover wells, sand cleaning, well activation and enlivening, wax removal, fish recovery, acidization, backwashing, etc were vigorously and routinely carried out. In the year 2011-12, a total of 584 Nos. of well stimulation jobs were carried out, of which 204 jobs were equivalent to high cost workover operations. Wire line services and hot oil circulation jobs Complex crude rheology coupled with other contributing factors results in paraffinization and subsequent deposition of wax in the production tubings which restricts the flow area for production of crude oil, resulting in loss of production. In order to prevent this loss in production, de-waxing of the tubular by both mechanical scrapping and hot oil circulation are carried out round the year. In the year 2011-12 a total of 19,637 Nos. of both heavy and light scrapping operations were completed in oil producing wells. Additionally, 221 Nos. of well maintenance jobs by hydraulic winches were carried out. Flow assurance Meticulous monitoring and remedial actions were taken to address flow assurance related problem. In the fiscal, 1586 Nos. of steam heating jobs were carried out using 9 Nos. of mobile steam generators. 11 Nos. of indirect heaters were installed at various field locations. 2 Nos. of microbial treatment jobs for paraffin remediation were carried out in HJN#19 and NHK #524. Periodic pigging operations of different COD lines were also carried out from time to time. Pour point depressant injection started in HRZ WHPS. These measures sustained flow assurance and minimized production loss. NATURAL GAS PRODUCTION We achieved the highest ever production and sale of 2633.29 MMSCM and 2093.02 MMSCM respectively during the year. The achievement is more significant in view of the frequent disruptions in field activities due to local problems, gas evacuation problem from Baghjan, a prolific producing field and low upliftment by our sole customer at Rajasthan. We also notched up a significant achievement in gas flare reduction in Assam from 7.2 % of production in 2010-11 to 5.94 % during the year by collecting low pressure low volume gas through the deployment of low capacity gas compression facility on the build, own and operate (BOO) basis. During the year eight workovers were carried out on shut-in gas wells, eleven LCP jobs were carried out and one new well was drilled to augment the production potential. The present gas production potential is about 7.0 MMSCMD from our Assam and Arunachal Pradesh fields and about 0.80 MMSCMD from the Rajasthan fields. We are working towards building up its gas production potential to a level of 10 MMSCMD in the North East by drilling of non-associated gas wells and workover of shut-in gas wells and adoption of the new well completion technology. At present, we are envisaging the completion of high caliber gas wells, for which gas availability study has been initiated. In the near future we are committed to supply 1.35 MMSCMD of gas to Brahmaputra Cracker and Polymer Limited. We have already taken up all the necessary steps to build up non associated gas field infrastructure such as central gas gathering station, field gathering station, pipeline network etc to fulfill this commitment. LPG Plant Operations During the year, the LPG recovery plant was in operation for 360 days, processing an average of 2.17 MMSCMD of gas with an average butane content of 1.33% (v/v) in the feed gas. LPG production was 52,020 tonnes which is 15.73% above of MOU target. Plant efficiency in terms of butane recovery was 99.53% compared to the design figure of 98%. Along with LPG, a total of 28,790 tonnes of condensate was also produced as by-product which is the highest production of condensate since the inception of the plant. On the sales front, a total of 52,430 tones of LPG were sold to IOCL, the sole marketing agency. PIPELINE OPERATIONS All the three segments of pipeline operations ensured uninterrupted throughput, achieving a throughput of 99.57% of the off-take in 2012 against 99.5% in 2011. The crude off-take at 6.740 MMT was 11.15% higher in 2012 from 6.064 MMT in 2011. Fields Offtake Delivery 2010-11 2011-12 2010-11 2011-12 OIL+JVC 3.683 3.909 3.659 3.891 ONGCL 1.138 1.189 1.134 1.188 RAWA 1.243 1.642 1.237 1.627 PRODUCT 1.069 1.582 1.068 1.58 TOTAL 7.133 8.322 7.098 8.286 INORGANIC GROWTH OPPORTUNITIES FOR INORGANIC GROWTH As part of our ongoing efforts on inorganic growth, your Company has been continuously scouting /evaluating various upstream opportunities and is actively pursuing producing properties in US, Canada, Africa and Latin America, among others. OTHER PROJECTS Research & Development Characterization of Assam Coal Derived Liquid Through US-DOE Funding: Department of Energy (DOE), USA sponsored a study on 'Production and Optimization of Direct Coal Liquefaction Derived Low Carbon-Footprint Transportation Fuels' utilizing the sync rude produced by OIL in its DCL studies. The objective of this study was to upgrade and characterize raw DCL liquids to fuel grade products and evaluate whether these fuels meet the existing specifications for standard petroleum based fuels. In addition, this study provides an engineering assessment of carbon emissions, water use and preliminary economics of a moderate scale DCL facility to produce fuel grade products. This study has been completed and results indicate that the coal derived sync rude can be upgraded to finished grade transportation. Characterization of Tertiary Coals of Meghalaya for Hydrogenation: The collaborative study on 'Characterization of Tertiary Coals of Meghalaya for Hydrogenation' by R&D Department, Oil India Limited and the Department of Geological Sciences, Gauhati University, Guwahati was completed in June, 2011. The study generated data on coal quality, availability and mine ownership, besides highlighting the socio-political issues of mining in the state of Meghalaya. The project report was finalized in July. Geochemical Evaluation of Tertiary Coals of Meghalaya: 107 coal samples collected from seven coalfields of Meghalaya viz. Bapung and Sutunga coalfields of Jaintia Hills, Pynursia and Laitryngew coalfields of East Khasi Hills, Langrin coalfields of West Khasi Hills, West Daranggiri and Siju coalfields of South Hills were analyzed in R&D laboratory using Rock-Eval pyrolysis and CHNS elemental composition to evaluate the hydrocarbon generative potential, thermal maturity, and hydrogenation potential of these tertiary coals. The generated data has been interpreted and an R&D note has been compiled on the study. MOUNDED LPG BULLETS The project job of replacement of 3 Nos. old aboveground LPG storage bullets with new mounded bullets was completed and the new system was commissioned on 22nd March 2012. The project was taken up on safety and security grounds as mounded bullets are considered to be much safer and secure compared to above ground storage. 6.0 KEY FINANCIAL PARAMETERS Fiscal 2012 compared with Fiscal 2011 Revenues Our total revenue increased by 22.99% to Rs. 11,308.60 crore in fiscal 2012 from Rs. 9,194.49 crore in fiscal 2011. The increase was primarily due to increase in sales revenue from crude oil, natural gas, income from transportation of crude oil and refined petroleum products and interest income on surplus fund. Sales Revenues Our sales revenues increased by 18.87% to Rs. 9,518.81 crore in fiscal 2012 from Rs. 8,007.92 crore in fiscal 2011, primarily due to a significant increase in sale of crude oil and natural gas and income from transportation. Our volume of crude oil sold has increased by 7.20% to 27.528 million barrels in fiscal 2012 from 25.672 million barrels in fiscal 2011. Our sales revenue from crude oil increased by 15.14% to Rs. 7,931.09 crore in fiscal 2012 from Rs. 6,888.24 crore in fiscal 2011. Though the average internationally traded price per barrel for the relevant basket of crude increased by 33.13%, to US$ 114.65 in fiscal 2012 from US$ 86.12 in fiscal 2011, net realized price after subsidy could increase to only US$ 59.82 in fiscal 2012 from US$ 58.54 in fiscal 2011. In Rupee terms, the net realised price increased to Rs. 2,866.76 per barrel in fiscal 2012 from Rs. 2,667.04 per barrel in fiscal 2011. The increase in net price realised lower than the increase in international price of crude oil was due to a 123.05% increase in our contribution towards sharing of the under-recoveries of the Public Sector Oil Marketing Companies. Our contribution towards sharing of the under-recoveries of the Public Sector Oil Marketing Companies increased to Rs. 7,351.77 crore in fiscal 2012 from Rs. 3,293.08 crore in fiscal 2011. During fiscal 2012, our contribution under the subsidy sharing mechanism was fixed at US$56/ bbl of our production. At this rate, the upstream sharing ratio increased to 39.70% in fiscal 2012, as compared to 38.75% in fiscal 2011. Volume of gas sold has increased by 15.70% to 2093 million standard cubic meters in fiscal 2012, from 1809 million standard cubic meters in fiscal 2011. Due to the increase in sales volume and increase in price of natural gas by 15.54% to Rs. 4,913.93 per thousand standard cubic meters in fiscal 2012 from Rs.4,252.93 per thousand standard cubic meters in fiscal 2011, the sale of Natural Gas has increased by 34.20%, to Rs.1,032.75 crore in fiscal 2012 as compared to Rs.769.55 crore in fiscal 2011. Sale volume of LPG grew by 17.59% to 52430 tonne in fiscal 2012 from 44586 in fiscal 2011. The gross price of LPG also increased to Rs.44172.56/ MT in fiscal 2012 from Rs.36043.35/MT in fiscal 2011. However, lower revenue on sale of LPG during fiscal 2012 was due to accounting of higher subsidy payout as compared to fiscal 2011. Revenues from Transportation Our revenue from transportation increased by 89.06% to Rs. 460.38 crore in fiscal 2012 from Rs. 243.51 crore in fiscal 2011. The increase was primarily due to revision of pipeline transportation tariff for forward pumping sectors and increase in crude oil transportation by 11.32% to 6.62 MMT in fiscal 2012 from 5.947MMT and in refined products transported through Numaligarh-Siliguri roduct pipeline by 47.80% to 1.58 MMT in fiscal 2012 from 1.069 MMT in fiscal 2011. Other Operating Revenues Our other operating revenues increased by 10.15 % to Rs. 344.42 crore in fiscal 2012 as compared to Rs. 312.68 crore in fiscal 2011. This was primarily due to 9.51% increase in our budgetary allocation from the government of India for gas sales at subsidized price to power and fertilizer sectors, to Rs. 321.17 crore for fiscal 2012 from Rs. 292.28 crore in fiscal 2011. Other Income Our other income has increased by 65.39% to Rs. 1,445.37 crore in fiscal 2012 from Rs. 873.89 crore in fiscal 2011. This was primarily due to: 69.21% increase in interest income from term deposits with banks, inter corporate deposits to Rs. 1,291.36 crore for fiscal 2012 from Rs. 763.15 crore for fiscal 2011 and 279.08% increase in dividend from Mutual Fund to Rs. 40.22 crore in fiscal 2012 from Rs. 10.61 crore in fiscal 2011. Expenditure Our total expenditure increased by 27.15 % to Rs. 6,206.74 crore for the fiscal 2012 from Rs. 4,881.29 crore for the fiscal 2011. This increase was primarily due to an increase in statutory levies, well write-offs and provisions thereof and pay scale arrears adjustments relating to earlier years. For the fiscal 2012, the total expenditure was 54.89% of total revenue, as compared to 53.35%% for fiscal 2011. Employee benefit expenses Though the direct emoluments increased by 14.21% compared with the previous year,our total employee cost increased by 25.95% to Rs. 1,517.54 crore in fiscal 2012 from Rs. 1,204.90 crore in fiscal 2011. This was primarily because of the additional provision for superannuation benefit as per DPE guidelines. For the fiscal 2012, employee costs charged were 13.42% of total revenue, as compared to 13.10% for fiscal 2011. Depreciation, Depletion Amortization and Write-off: Our depreciation, depletion amortization and write off expenses have increased by 23.08% to Rs. 1,008.82 crore in fiscal 2012 from Rs. 819.67 crore in fiscal 2011. The increase was primarily due to higher write-off towards dry wells in various nominated and NELP blocks and higher depletion on producing property due to higher production during the year. For the fiscal 2012, these were 8.92 % of total revenue, as compared to 8.91% for fiscal 2011. Statutory Levies The statutory duties increased by 14.72 % to Rs. 2394.83 crore in fiscal 2012 from Rs. 2087.59 crore in fiscal 2011 due to increase in sales volume of crude oil and natural gas For the fiscal 2012, statutory levies were 21.17% of total revenue, as compared to 22.70% for fiscal 2011. Other expenses Our other expenses increased by 68.27 % to Rs. 1,285.00 crore in fiscal 2012 from Rs. 763.64 crore for fiscal 2011. For the fiscal 2012, other expenses were 11.36% of total revenues, as compared to 8.31% for fiscal 2011. This increase was primarily due to higher provision against uncertain wells and cost of non fulfillment of MWP in few NELP blocks upon relinquishment. Profit before Tax Our profit before tax increased by 18.28% to Rs. 5,101.86 cror