A BPCL CASE STUDY presented at the 11TH OIL & GAS HR ROUND TABLE by Ms Dipti sanzgiri, Bharat Petroleum Corp. Ltd.

1. COLLABORATIVE BUSINESS RELATIONSHIP:
OPTIMIZING THE VALUE OF STRATEGIC
OUTSOURCING : BPCL CASE STUDY
11TH OIL & GAS HR ROUND TABLE
11th Oil & Gas HR Round Table

2. Bharat Petroleum Corporation Ltd….
 Integrated Petroleum Refining and Marketing Company
 Fortune 500 & Forbes 2000 company
 Sales Volume 29 Million MT
 Revenue US $ 31 Billion per annum
 Two Refineries at Mumbai & Kochi, a subsidiary Refinery at Numaligarh
and a JV Refinery at Bina
 Large distribution network across India – 425 locations
 Network of 9300 Retail Outlets and 2,450 LPG Distributors
 7 Subsidiary companies and 11 Joint Venture Companies
 14000 Employees
1
11th Oil & Gas HR Round Table

3. Why have we invested in collaborative business relationship /
outsourced
Aspirations
&
Challenges
11th Oil & Gas HR Round Table

4. Aspirations…
To be a high growth, integrated energy company
 Exploration & Production
 Gas & Power
 Alternate fuel/energy
 Petrochemicals
11th Oil & Gas HR Round Table

5. Challenges
 Continuing, increasing pressure on cash and profits
 Major shifts in Business models of certain products - Aviation
 Upgradation of refineries for future fuels requiring high levels of
investments
 Building marketing infrastructure in synch with substantial growth and
sources of products
 High cost manpower
 Procurement of land
 Retention of talent
11th Oil & Gas HR Round Table

6. Collaborative strategic business relationship – the initial journey
 Learnt through the journey of Bharat Shell, first of its kind for
marketing lubricants, and Bharat Oman Refineries Limited – business
joint ventures
and
 Collaborative effort in growing in pioneering initiatives in the country
for loyalty programmes for Fleet and Urban customers in Retail
business, struggle and growth alongwith three partners – loyalty
programme manager, technology provider and technology manager –
today turnover stands at Rs.16000 Crs
11th Oil & Gas HR Round Table

7. What did we learn?
 Never underestimate the power of aspirations and pride of your own
employees as well as the partner’s
 Have clarity on the assumptions and protocols agreed on
 Respect for the partner for what he brings on the table irrespective of
the size – ours and theirs
 Treat vendors associated in strategic initiatives as partners. Work with
them for ideation and creative processes
 Learn to manage the challenge of PSU framework and continuing
relationship with the vendors
 Expose young talent to this collaborative process to build internal
talent
 Maintain learning orientation – remember we are talking ‘strategic’
11th Oil & Gas HR Round Table

8. Collaborative strategic business relationship – current
 Exploration & Production – partnering with major operators like
Anadarco and Petrobras. Gained informal status of preferred partner.
 Bharat Renewable Energy Limited – partnered with technology
provider, Nandan Biomatrix Ltd and Shapoorji Palonji
 4 CGDs with GAIL, one of them being the first and the most
successful – IGL.
 Bharat Star Services Private Limited – for now competitive business of
into plane fueling
 Matrix Bharat Marine Services – for international bunkering
 Delhi Aviation Fuel Facility Private Limited – Partnering with DIAL
and IOC for survival
 Several JVs for gas pipelines – strategic access to critical infrastructure
11th Oil & Gas HR Round Table

9. Outsourcing – current
 Marketing logistics operation
 Construction of new terminals – on CUT (Common User Terminals)
basis for OMCs
 BOO, BOOT basis with private parties
 Operations and Maintenance contracts for running the terminals
 Tankage hiring from parties like Aegis, IOTL, Ganesh Benzoplast,
etc.
 LPG Bottling by Private Bottlers instead of proliferating beyond
supply source
 Lube Oil toll Blending by Third Parties like Ballmer Lawrie
 IS infrastructure maintenance
 Maintenance of automated installations/Ros
 Non core jobs contracted out at existing plants
11th Oil & Gas HR Round Table

10. Outsourcing – current
 Refineries
 LSTK contracts for turnaround
 BOO basis contracts for packets of large projects
11th Oil & Gas HR Round Table

11. Outsourcing – future
 Retention of talent in the company
 Strengthening shared services operations in finance thereby reducing
embedded manpower in the business – also look for outsourcing
options
 ERP Competency centre - outsource transactional jobs, provide
consulting on value adding consulting
 HR shared services – explore outsourcing post retirement of existing
manpower
11th Oil & Gas HR Round Table

12. Key contributors to positive outcomes...
 Belief in the need for collaborative partnership demonstrated by the top
leadership
 Inclusive conversations for strategic partnership decisions
 A well thought-out governance regime that retains flexibility and control
 Development of scoping /contracting skill
 Re-skilliing /Up-skilling and redeployment to new roles in nearby locations
of Internal excess resources
 Ensuring statutory compliances through suitable contract provisions and
onsite audits/inspections
 Extending some of the onsite benefits to contract employees such as canteen
facility, health check-up, safety equipments, operations training etc. which
were hitherto available to company employees only
11th Oil & Gas HR Round Table

13. Constraints and Obstacles to scaling Outsourcing
 Mindset, belief that control can be achieved only by doing it
yourself
 Expectations from Public Sector Enterprises on social
responsibility
 Sunk cost of existing, in pockets, surplus manpower
 Not enough expertise, experience of oversight on outsourced
processes
Uncertain and volatile oil markets along with financial markets,
will teach us to think and be differently in ways we have never
done in the past
11th Oil & Gas HR Round Table

14. Please feel free to contact Jayesh Shah or Chaityparna Banerjee on 022-22713120 / 3186 in case you need any support from us.
th
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15. Outsourcing can help addressing the challenges….
 Reduce risks, shorten cycle times and create better responsiveness to
customer needs
 Reduction in operational cost
 Reduction in capital invested
 To focus on core competencies – activities that create a sustainable
competitive edge
 To gain access to external competencies and to improve quality
 To transform fixed costs into variable costs
 To improve measurability of cost
 To gain control over internal departments by eliminating time spent on
managing peripheral activities
11th Oil & Gas HR Round Table