The document discusses the petroleum industry and supply chain in India. It provides background on the industry, including historical pricing set by the government and expected investments. It also summarizes key aspects of the supply chain such as crude oil purchase, refining, storage, transportation and distribution to consumers. Challenges in the Indian refinery supply chain are outlined as well, including complex operations, lack of end-to-end visibility and fragmented networks. Recommendations are made around enhancing partnerships, applying strategic sourcing, adopting new technologies and leveraging best practices from other industries.

2. Introduction:-
•The petroleum industry traditionally had prices decided by the Government
of India.
•Effective from August 1, 2004, the Government put in a revised
methodology allowing oil companies to revise the prices of motor spirit and
High Speed Diesel (HSD).
•The total investment estimated in the petroleum sector from 1995 till 2010, is
expected to be Rs. 4,32,000 cr (US$120 bn), out of which Rs. 2,58,000 cr
(US$80 bn), are for the upstream sector alone
•Petrochemical industry in India employs around 40,000 people directly and
around 4 lakh indirectly

5. Total Exports and Imports of Refined
Petroleum Products in India
0.04 18.66 14.96 14.4 75.77 96.62
53.12 60.42
2.56
172.99
32.86
1.68
127.07
0
50
100
150
200
250
Motor Gasoline Jet Fuel Kerosene Distillate Fuel Oil Residual Fuel Oil LPG Others
ThousandBarrelsperDay
Imports Exports
Net Imports: 220.45
Net Exports: 450.70

7. 3.1
3.2
3.3
3.5
3.7
3.7
4
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
2008
2009
2010
2011
2012
2013
2016
Oil Consumption In India (MBPD)
Oil Consumption In…

8. SUPPLY CHAIN IN PETROLEUM
INDUSTRY
Crude
Purchase
Retailing /
Consumer
(Demand Centre)
Crude
Storage
Product
Transptn/Distribution
(Tanker/PL/Rail/Road)
Mktg Product
Storage
(Terminal/ Depot/ Port)
Refining
Supply Planning
Distribution Planning
Crude
Transptn.
(Tanker/PL)

9. Name of Pipeline Length in KMs Capacity in MMTPA
1. Mumbai Pune Sholapur Pipeline
(MPSPL)
508 4.30
2. Visakh Vijayawada
Secunderabad Pipeline (VVSPL)
572 5.38
3. Mundra Delhi Pipeline (MDPL) 1054 5.00
4. Ramanmandi Bahadurgarh
Pipeline (RBPL)
243 4.71
5. Ramanmandi- Bathinda Pipeline
(RBhPL)
30 1.13
6. Awa Salawas Pipeline (ASPL) 93 2.30
7. Bahadurgarh Tikrikalan Pipeline
(BTPL)
14 0.75
Total 2514 23.57
Pipelines in Operation of India

10. IMPORTANCE OF SUPPLY CHAIN
IN PETROLEUM INDUSTRY
•Petroleum industry is highly asset intensive
•Like other chemical companies supply chain
can account for upto 70% of overall cost .
•Highly specialized business processes
encourages fragmentation.
•Chemical supply chains are typically non-
linear in nature
• Supply chain optimization at a strategic and
operational level is a value creating opportunity
for chemical companies and a potential source
of competitive advantage

11. Petroleum Supply Chain In India
Ministry of Petroleum & Natural Gas
Upstream
Exploration & Production
Downstream
Refining & Marketing
Industry Bodies
• Petroleum
Planning &
Analysis Cell
• Centre for High
Technology
• PCRA
• PetroFed
• Oil Industry Safety
Directorate
• Petroleum India
International
• Engineers India
Limited
• Director General
of Hydrocarbon
ONGC
OVL
Oil India
Limited
Pvt E&P
Cos.
IndianOil
CPCL, BRPL
Reliance
Industries
Ltd.
Bharat
Petroleum
NRL
Hindustan
Petroleum
MRPL

12. PETROLEUM FINISHED PRODUCTS IN
INDIA

13. OBJECTIVES OF A SUCCESSFUL SUPPLY CHAIN IN PETROLEUM
• Minimization of material procurement
• Maximization of manufacturing capacity and sales
• Meet demand numbers
• Respond quickly to market opportunity by purchasing
the production shortfall from other players
• Objective of each production unit would be to
maximize the throughput and its margin
• Procurement would purchase the feedstock with not
the best yields at lowest cost

14. Supply chain of Oil and Gas Industry
• Exploration includes seismic, geophysical and geological operations.
• Production operations include drilling, reservoir, production, and
facilities engineering.
• Refining is a complex operation and its output is the input to
marketing.
• In the oil and gas industry, almost all significant and important
operations are planned in advance.
• The whole process can be massaged and fine-tuned into a high
performance money making machine

15. Financial Comparison
INDIAN OIL CORPORATION
2014 2013 2012 2011 2010
Number of Days In Working Capital 18.76 33.14 30.55 26.43 13.2
Inventory Turnover Ratio 7.31 7.54 8.15 7.56 8.37
Return On Capital Employed(%) 9.11 8.64 13.08 10.32 15.83
Operating Profit Margin(%) 3.31 3.07 4.2 3.8 5.6
Average Raw Material Holding 58.23 62.8 60.85 56.27 45.53
Average Finished Goods Held 22.8 24.65 26.32 23.96 24.77
ONGC
2014 2013 2012 2011 2010
Number of Days In Working Capital 6.1 47.82 80.99 46.43 151.48
Inventory Turnover Ratio 14.26 14.55 14.81 16.59 87.82
Return On Capital Employed(%) 23.53 24.6 28.56 28.38 34.54
Operating Profit Margin(%) 52.72 52.53 60.01 58.81 62.57
Average Raw Material Holding 2.34 2.5 3.4 1.5 0.27
Average Finished Goods Held 8.5 9.21 6.24 10.8 7.42

16. Problems in the supply chain of Indian refineries:
• Complex operations- logistical coordination for large complicated projects
becomes a problem
• End to end visibility- this is also an issue since there exits a time lag between
operations on the ground or at sea and information available to the
management in the offices
• Fragmented supply chains- since there are numerous stakeholders and
multiple drilling sites, visibility of materials becomes an issue and this results
in fragmented supply chains
• Unpredictability- Due to presence of multiple stakeholders and with data
management and materials monitoring being an issue there exists a degree of
unpredictability in the supply chain which is undesirable

17.  Segment Customers Based Their Needs:
 Form Partnerships to Enhance Supply-Chains
 Apply Strategic Sourcing
 Adapt a Supply-Chain Wide Technology Strategy
 Usage of new industry pipeline systems and storage units will act effective for
optimizing the supply chain as storage is a very important factor.
 Best practices of other industries could be profitably adopted by the petroleum
downstream and how they could be implemented
Recommendations and Suggestions

18. Formerly a supply chain has been recognized and coordination mechanism is in place,
it can still be enhanced. Today, petroleum organizations are looking for new ways in
civilizing working & supply chain effectiveness. In some cases technology may allow
several mechanisms for configuration across the supply chain. Generally oil & gas
organization should view their supply chain pattern & coordination systems as worthy
of improvement.
This process involves relationship management by the company. Both customer and
supplier relations are key to effective coordination of supply chain.
Very few industries other than the oil & gas industries can benefit by maximizing the
supply chain efficiency.
A successful supply chain strategy development will need to carefully establish plans
for process re-engineering, change management, and information technologies design
and implementation.
Conclusion

19. Thank you