Information Needs of the Kochi Refinery

Information system needs of

Kochi Refinery

Contents

Objective: 1

Introduction: 1

Shareholding pattern 2

Indian Petroleum Industry вЂ" Oil Refining sector: 2

Industry level CSF 4

Analysis of Business environment 4

Power of Customers 5

Power of suppliers 5

Threat of substitutes 6

Threat of new entrants 6

Industry Rivalry 6

Firm level CSFs 7

Vision statement 7

Mission statement: 7

Analysis of strategy based on Miles and Snow Typology 8

Environmental analysis 9

National and international economy: 10

Technology: 10

Government and political climate: 10

Natural resources: 10

Identified CSF’s 11

CSF Tree 11

CSF identified vis-Ð" -vis IS implementation status 18

1. Meet the demand of petroleum product by ensuring steady supply of products at specified quality norms 18

2. Maximise net margins through reduced processing costs, optimized crude sourcing etc 20

3. Develop value added products (like aromatics, propylene, poly-butene) 21

4. Improve operational efficiency through improvement in distillate yield, reduction in plant fuel, maintain high levels of plant safety and improve energy management 22

5. Adopting and implementing new technologies for operational efficiency and quality upgradation 24

6. Gain representation to influence national level policy formulation on fuel quality and product pricing issues including subsidy sharing 24

Improving the IS support to the CSFs through various information technologies and possible pitfalls in the application of the technology: 25

Objective:

This report has been prepared for submission as part of the project on identifying the Information Systems needs for the organization (Kochi Refinery) that we worked for. The methodology adopted during the study was to identify the major critical success factors applicable to the organization considering its vision, the strategic / competitive forces that influence the organization and the industry it belonged to, as well as the various environmental factors that are relevant considering the requirements of effective functioning.

The critical success factors (CSF) applicable to the organizationвЂ" Kochi Refinery have been arrived at considering the competitive forces applicable on Indian Refining industry using Michael Potters 5 forces model, firm level requirements based on categorization as per Miles & Snows Typology and also environmental aspects. The various Information System needs have then been listed based on the identified CSFs and a comparison has also been made on the identified requirements vis-Ð" -vis the implemented ones. Our personal level observations on the effectiveness / utilization of the various Information Systems implemented and recommendations for improving the IS support to the CSFs have also been highlighted in this report.

Introduction:

Kochi Refineries Ltd, formerly known as Cochin Refineries Ltd, was incorporated as a Public Limited company on 6th September 1963 with technical and financial collaboration of Phillips Petroleum, USA. The company was promoted by Govt. of India, Phillips Petroleum, USA and Duncan Brothers of Calcutta. In May 2000 the name of the Company was changed from Cochin Refineries Ltd to Kochi Refineries Ltd.

In March 2001 Bharat Petroleum Corporation Limited (BPCL) acquired the Government of India's shares in KRL. With this, KRL became a subsidiary of BPCL. Subsequently KRL was merged with BPCL, and has now become an SBU and has been rechristened as Kochi Refineries (KR).

Kochi Refinery was commissioned on 23rd September 1966 with crude processing capacity of 2.5 MMTPA. Over the years, the refining capacity has been enhanced and is currently at 7.5 MMTPA

KR’s core business is petroleum refining. Key activities related to this are receipt of crude oil, refining it in to different products and selling the products to BPCL and at times on demand to other oil marketing companies. i.e. IOCL & HPCL.

The major products of KR are Liquefied Petroleum Gas (LPG), Naphtha, Motor Spirit (MS), Aviation Turbine Fuel (ATF), Superior Kerosene Oil (SKO), High Speed Diesel (HSD), Low Sulphur heavy Stock (LSHS), Furnace Oil (FO) and Bitumen. KR also produces petrochemical products like Benzene, Toluene, Special Boiling Point Spirit (SBPS), Polyisobutene (PIB) etc.

Shareholding pattern

Shareholders % holding

Bharat Petroleum Corporation Ltd 54.81

Indian Public 11.70

Life Insurance Corporation of India 9.79

Foreign Institutional Investors 8.79

The Government of Kerala 5.06

Other Insurance Companies 4.24

Others 5.61

Indian Petroleum Industry вЂ" Oil Refining sector:

Oil refining and marketing is one of the sub sectors of Indian Petroleum Industry. At present, there are 18 refineries operating in the country, 17 in Public Sector and 1 in Private Sector, the latter belonging to Reliance Industries Limited.

The total installed capacity for the refineries are 99.47 mmtpa (million metric tones per annum) in PSU sector and 33 mmtpa in private sector.

The private sector’s