OIL INDIA LIMITED
ANNUAL REPORT 2011-2012
TO THE SHAREHOLDERS OF THE COMPANY
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
PRODUCTION AND SALES
Your Company has set another record of achieving the highest ever
production of crude oil and natural gas.
* 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
* 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.
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:
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
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
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.
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.
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
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.
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
2. Golden Peacock Award for Corporate Governance.
3. Greentech Environment Award 2011 in Gold Category in the Oil and Gas
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
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
(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
For and on behalf of the Board of Directors
(S K Srivastava)
Chairman and Managing Director
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
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
* 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
* 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
* 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
* 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
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
* 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
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
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
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.
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
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
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
* Adoption and implementation of new technology will be given the highest
* 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
* Interaction with academic institutions will be further strengthened for
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
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
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
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)
(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
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
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
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
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
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
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
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
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
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
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
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.
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
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
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
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.
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
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.
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
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.
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
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.
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.
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
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.
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
Profit before Tax
Our profit before tax increased by 18.28% to Rs. 5,101.86 cror