In this list
Agriculture | Electric Power | Natural Gas | Oil | Metals | Petrochemicals

India CEO series: From oil to hydrogen, IOC says energy transition to have room for all

Agriculture | Biofuels | Energy | Coal | Thermal Coal | Oil | Crude Oil | Refined Products | Metals | Steel | Raw Materials | Shipping | Containers | Dry Freight | Marine Fuels | Tankers | Coronavirus

Shipping market faces logistical challenges as India continues fight against COVID-19 pandemic

Agriculture | Biofuels

Platts Biofuelscan

Crude Oil | Coal | Coronavirus | Natural Gas

S&P Global Platts Client Analytics Seminar

Electric Power | Nuclear | Renewables | Natural Gas

Extended heatwave 'could hike EU prices Eur5/MWh': Platts Analytics

Energy | Electric Power | Renewables

Insight Conversation: Toby Ferenczi, founder, EnergyTag

India CEO series: From oil to hydrogen, IOC says energy transition to have room for all

Highlights

Refining, fuel marketing will continue to be core focus areas

Keen to diversify crude sourcing to prevent supply risk

Petrochemicals, electric mobility, hydrogen offer growth window

Singapore — The S&P Global Platts India CEO Series is a compilation of exclusive interviews with the leaders of top oil and gas companies in India. Get insights on how they are planning their growth roadmap at a time when energy transition is changing the industry's landscape, how companies are finding their way through the COVID-19 pandemic, as well as solutions needed to meet the country's insatiable appetite for energy.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Indian Oil Corp. is embarking on a strategic growth path that will aim to maintain focus on its core refining and fuel marketing businesses, while making bigger inroads into petrochemicals, hydrogen and electric mobility over the next 10 years, its chairman told S&P Global Platts.

Shrikant Madhav Vaidya - Indian Oil Corp | Platts India CEO Series 2021
Shrikant Madhav Vaidya, chairman, Indian Oil Corp.

Highlighting his vision for the country's biggest state-run refiner, Shrikant Madhav Vaidya said the COVID-19 pandemic won't alter India's robust long-term energy demand fundamentals despite creating short-term hurdles, making it imperative to pursue refining expansion as well as expand footprint in compressed natural gas, LNG, biodiesel and ethanol.

"Petroleum refining and marketing will continue to be our core businesses with much higher petrochemicals integration. I see a much enlarged role of various gaseous fuels. Given our plans in the electric mobility space and growth opportunities in this area, I see a growing presence of this in our portfolio 10 years down the line," Vaidya said in an exclusive interview.

Vaidya said IOC would look to pursue a crude diversification strategy that would suit its commercial needs, while keeping in mind the country's strategic and economic interests.

"The Middle East continues to remain geopolitically sensitive and issues such as Iran sanctions, Yemen Houthi rebels' frequent attacks, the Syrian civil war, continue to threaten supply stability from the region," Vaidya said.

"The world has seen new production from US shale oil in the last 4-5 years and more recently from geopolitically relatively stable geographies such as Norway, Brazil, Guyana and other suppliers. It is IOC's constant endeavor to source crude oil from diversified geographies ranging from as far as the Americas to the Middle East," he added.

Transport fuel outlook

Vaidya said IOC was carving out its expansion path keeping in mind the anticipated slowdown in transportation fuels demand that would come in a decade or two.

"Hence, petrochemicals integration is the way forward for all our refinery investments. The high demand growth trajectory for Indian petrochemicals demand coupled with the high and growing imports of petrochemicals further strengthen the case for this in the Indian context," Vaidya said.

In the future, some specific refinery locations, such as Panipat and Paradip, would achieve a Petrochemical Intensity Index, or PII, of 15%-20% following the implementation of ongoing projects. As a long-term strategy, IOC has plans to enhance its petrochemical integration to 14%-15% PII by 2030, he said.

"We are also looking at crude-to-chemicals, which is a technology frontier to capture the opportunity presented by the immense potential in petrochemicals demand, but it comes with very high CAPEX demand. So, we are carefully evaluating various options to take forward our C2C ambition," Vaidya said.

Commenting on the near-term outlook, Vaidya said India's oil products demand could fall 8%-9% year on year in April because of the second wave of COVID-19 infections, but added that overall demand in the 2021-2022 (April-March) fiscal year would likely grow about 8%-10% from the previous fiscal year.

S&P Global Platts Analytics revised down India's 2021 year-on-year oil demand growth estimate for the second time to 350,000 b/d, from 400,000 b/d in April and from the original growth estimate of 440,000 b/d in March, as the country grapples with record COVID-19 cases.

"We are ensuring adequate stocks at all supply locations to maintain uninterrupted supplies, by operating all supply locations, retail outlets and LPG distribution centers. We are strictly following COVID-19 protocol. We are ensuring that all IOC employees are vaccinated as per government guidelines," he added.

Also in the Platts India CEO Series:

ExxonMobil eyes bigger footprint in India's energy transition journey: Bill Davies, ExxonMobil South Asia CEO

Shell sees opportunity for India to recover 'cleaner and faster': Nitin Prasad, Shell Companies - India CEO

India aims to cushion oil shock by doubling strategic petroleum reserves: H.P.S. Ahuja, ISPRL CEO

Cairn Oil & Gas says oil price recovery will support India's upstream push: Prachur Sah, Cairn Deputy CEO

Retail gas, LNG by trucks, hydrogen figure in H-Energy's growth vision: Darshan Hiranandani, H-Energy CEO

Clean and green

Vaidya said the gas sector remains integral to India's decarbonization strategy, and added that gas demand in IOC's refineries would grow manyfold to reach around 9.50 million mt/year by 2028, compared with the current 2.76 million mt/year.

Vaidya said IOC was pushing ahead with research on carbon capture, utilization and storage technologies -- a space where it is seeking global collaboration to meet its Paris climate goals. "We are at an advance stage of embracing such technologies for energy transition."

Vaidya said hydrogen would be a fuel of the future. As a result, it is planning to set up several hydrogen production units on a pilot basis.

"Today, 50 buses in Delhi are being fueled by hydrogen-spiked compressed natural gas, or H-CNG, which has 18% hydrogen content. About 15 fuel-cell powered buses, with the fuel cells entirely India-made, are expected to ply in the second half of 2021. Since running these buses would require hydrogen, IOC is setting up a plant, whose capacity could be anywhere between 200 mt and 400 mt per day," he added.

Vaidya said IOC had already commissioned battery swapping stations across many cities.

"We are also working on new battery technologies, such as metal-air pathway, as we feel they are capable of addressing the many challenges for EVs, and we are trying to forge tie-ups wherever possible," Vaidya said.

IOC had already installed 286 charging stations, including swapping stations, across the country, Vaidya said, adding that it had plans to have 3,000 EV charging stations by the end of this decade.

IOC had invested in solar and wind projects across India and would continue to allocate more funds in those areas. "Also, emboldened by the policy support for biofuels, we are expanding into bio-energy, compressed biogas, 2G Ethanol, waste-to-fuel and used cooking oil to biodiesel," Vaidya said.

As the spread of COVID-19 across India continues to intensify, local communities are critically in need of resources and support. S&P Global has announced USD $1M in grants from the S&P Global Foundation to directly support India relief efforts, which will be allocated to Médecins Sans Frontières (MSF), Direct Relief, Nirmaan Organization and Project HOPE. These funds will support their efforts to strengthen healthcare centers and emergency response, as well as distribute critically needed oxygen supplies across India. Click here to learn more about the S&P Global Foundation.