Risk Management Techniques Adopted By Hpcl Finance Essay

Bitumens, LPG, CNG, and downstream crude oil merchandises.

Bharat Petroleum Corporation Limited ( BPCL ) is one of India ‘s largest PSU companies, with Global Fortune 500 rank of 287 ( 2008 ) . Its corporate office is located at Ballard Estate, Mumbai. As the name suggests, its involvements are in crude oil sector. It is involved in the refinement and retailing of crude oil merchandises.

Bharat Petroleum is considered to be a innovator in Indian crude oil industry with assorted path-breaking enterprises such as Pure for Sure run, Petro card, Fleet card etc.

BPCL ‘s growing post-nationalization ( in 1976 ) has been phenomenal. One of the individual figure Indian representatives in the Fortune 500 & A ; Forbes 2000 listings, BPCL is frequently referred to as an “ MNC in PSU attire ” . It is considered a innovator in marketing enterprises, and employs “ Best in Class ” patterns.

Bharat Petroleum Corporation Limited ( BPCL ) specializes in refinement, processing, and administering crude oil merchandises. It offers gasoline, Diesel, air power fuel, liquefied crude oil gas ( LPG ) and lubricators. The company chiefly operates in India, where it is headquartered in Mumbai and employs about13, 968 people.

The company recorded grosss of INR1, 112,431 million ( about $ 27,632.8 million ) in the financial twelvemonth ended March 2008, an addition of 13 % over 2007. Its net net income was INR17, 696 million ( about $ 439.6 million ) in financial 2008, a lessening of 17.5 % compared to 2007.

MAJOR PRODUCTS & A ; SERVICES

Merchandise:

Gasoline

Diesel

LPG

Gasoline

Kerosene

Lubricants

Aviation fuel

Fuels & A ; Solvents

Servicess:

Convenience shops

Standard atmosphere

Car washes

Free air & A ; H2O

Lubricant top-ups

Energy audits

E-Banking services

Consultancy & A ; proficient services

Online telling

Company OPERATIONS

HPCL is the 2nd largest participant in Indian Oil sector and in extremely competitory lubricators market. HPCL has two refineries bring forthing a broad assortment of crude oil products-one in Mumbai ( West Coast ) and the other in Visakhapatnam ( East Coast ) . The HPCL refinery in Mumbai is situated in Mahul, west seashore. It is in an M.I.D.C. country, which besides has other large industries like Indian Oil Corporation limited ( IOCL ) , Bharat Petroleum Corporation limited ( BPCL ) , Tata power works etc.

The Corporation besides holds major equity in Mangalore Refinery and Petrochemicals Limited, and is suggesting to put up a refinery in the province of Punjab.

Type OF INDUSTRY

HPCL refinery can be classified as an analytical type of industry. It is petrochemical industry i.e. loosely talking chemical technology industry.

Petroleum refinery is a production industry where natural stuff petroleum crude oil is transformed into assorted utile merchandises utilizing some chemical procedures.

RISK MANAGEMENT

Hazard is the ultimate four-letter word of concern, investing and authorities. There are as many existent hazard direction techniques as there are types of concerns, but one time a hazard has been identified and assessed, most attempts at extenuating the hazard autumn into four basic classs irrespective of the context.

Hazard Avoidance

Hazard Decrease

Hazard Transference

Hazard Retention

So, if we talk about the hazards related to HPCL, as it is based on purely operations. We would hold a expression on different RISK MANAGEMENT TECHNIQUES related to operation adopted by HPCL.

Get downing with

LOCATION SELECTION CRITERIA

Oil Refineries procedure 1000000s of gallons of oil that have been drilled from the Earth ‘s crust. Choosing the location of an oil refinery is non an easy undertaking because a figure of environmental and safety concerns need to be taken into history.

India does non hold high petroleum oil militias, and hence it depends wholly on import of crude oil petroleum oil. Gulf states are the chief providers to India. Transportation systems and refinement costs are really high for any refinery and hence these factors take precedence in sing works location.

Oil Refineries are frequently located on the seashore and off from busy metropoliss. When taking the location for an oil refinery, the undermentioned factors need to be taken into consideration:

Seashore: HPCL is located at its Chembur in Mumbai and Vizag in Andhra Pradesh because of the propinquity of sea paths from the works location. As for transit intent, the natural stuff used in the production in HPCL i.e. rough oil can be easy transported via the sea paths. There is a rail path specially built for transit of coal, from vadala to refinery country. Almost all oil refineries like BPCL, IOCL are situated at the Mahul gaon location at Chembur in Mumbai. HPCL crude oil refinery is on Mumbai west seashore because by and large polishing is carried on along the seashore, where low cost H2O transit can be used.

Transportation system: – The oil refinery must be near to inveigh, route or sea links and near to the site the oil has been drilled. HPCL has port near to it.

AVAILABLE WORKFORCE: It may be alluring to construct an oil refinery in a distant location where no people or animate beings can be affected. However, a refinery needs workers populating comparatively nearby. Even though HPCL refinery is far from residential country, conveyance installations from workers quarters is available.

AVAILABLE Customers: Oil refineries need to be within easy range of clients. It is indispensable to hold good conveyance links. Some refineries are grapevines as a method of transit.

AIR POLLUTION: Although industries are regulated by rigorous controls sing the sum of pollution they release into the ambiance, oil refineries emit figure of fouling gases. To cut down the effects of air pollution on people, refineries should be built off from the built-up countries. One can see boards stipulating tallness from sea degree in full HPCL refinery country.

WATER Pollution: Some refineries use H2O from local rivers and watercourses for chilling intents. This means that the H2O is pumped out of the river or watercourse, circulated around a chilling tower and returned to the river at a higher temperature. This addition in H2O temperature is called thermic pollution. HPCL has taken attention of this excessively.

NOISE POLLUTION: Machinery that operates 24 hours a twenty-four hours can do a batch of noise for people populating nearby. Lorries and trains that come to pick up refined merchandises besides contribute to the noise.

SPECIAL SITES OF Interest: Like other edifices, oil refineries must avoid countries of particular scientific involvements. These can include parts where rare animate beings are being protected.

Top position of HPCL refinery, Mahul Mumbai on Google Earth

Another step is

ENTERPRISE RESOURCE Planning AT HPCL

To beef up concern direction and better client service, HPCL implemented an advanced endeavor resource planning ( ERP ) system based on scope of JD Edwards Enterprise One application from Oracle.

The ERP system was implemented at more than 430 locations across India from 2003 to 2005, and is used by over 2,000 employees. HPCL is continuously looking at advanced ways of heightening client satisfaction by leveraging engineering.

The existent clip, online handiness of information from across all the geographically dispersed locations of the corporation on a centralised system, has enabled HPCL to better efficiencies in the Ares of tracking and extenuate different hazards like client receivables, recognition direction, stock list direction by monitoring and supply enhanced service to clients and other interest holders.

Upgrading to an integrated concern direction platform gave HPCL an enterprise-wide position of its finance, fabricating human resources, and gross revenues and distribution procedures. Online entree to information ensured directors could maintain path of procurance, stock list, production agendas, and client orders.

The company besides standardized concern patterns, guaranting procedure consistence across multiple locations. A papers archival system is an built-in portion of the ERP system, leting HPCL to hive away bills, purchase orders, cheques, and other stuff. This ensures the company can turn up critical paperss rapidly and expeditiously.

QUALITY CONTROL & A ; MANAGEMENT

Quality control is achieved in HPCL by following ways:

All material supplies are affected from approved providers and manufactures merely.

All points procured are inspected /tested.

Sampling of the merchandises is done thrice a twenty-four hours and analysis at each phase is carried out. Rigorous quality control is ensured.

Phase wise review and enfranchisement of occupations by inspectors.

In HPCL extremely experienced and extremely skilled craftsmen handle occupations. Prequalified and extremely skilled Engineers inspect quality sections. Even refinery workers, welders etc are tested and certified for occupation.

Maintenance plays a important function in the production procedure in the Refineries / Petrochemical workss. A works may be regarded as successful when it operates without breaks, which can nevertheless be achieved merely when its installations are in perfect working order at all times. So after following these stairss HPCL has made its place strong among the rivals.

ENVIRONMENTAL MANAGEMENT

Crude oil is a major beginning of energy and feedstock for petrochemicals. Oily sludge, bio-sludge and chemical sludge are the major sludges generated from the procedures and outflowing intervention workss of the refineries engaged in rough oil refinement operations. Refineries in India generate about 28,220 dozenss of sludge per annum. Assorted types of pollutants like phenols, heavy metals, etc. are present in the sludges and they are treated as risky waste. Petrochemical workss generate solid waste and sludges, some of which may be considered risky because of the presence of toxic organics and heavy metals.

So for these

EFFLUENT & A ; SOLID WASTE ANALYSIS IN HPCL PETROCHEMICAL REFINERY: On regular footing analytical surveies of wastewaters and dirt samples where deposits from the treated wastewaters are dumped is carried out. These are so analyzed for physicochemical belongingss, metallic and non-metallic ions.

IN HP GAS SAFETY, HEALTH & A ; ENVIRONMENT is given primary importance. In an attempt to better energy efficiency and cut down pollution, assorted pieces of equipment are interconnected in ways that complicate their operation.

Safety section of the refinery performs following maps:

Accident and incident investigationA

Root-cause analysis ( RCA ) A

Fire and detonation analysisA

Fire protection engineeringA

Fitness-for-service evaluationA

Specification, corrosion control, and failure analysis of materialsA

Evaluation of force per unit area alleviation systems, vass, and pipingA

Analysis of atmospheric releases, spills, and environmental fateA

Groundwater and dirt redress supportA

Conformity with criterions and regulationsA

Hazard and dependability analysis and quantitative hazard assessmentA

Procedure jeopardies analysis ( PHA ) A

Hazard and operability analysis ( HAZOP ) A

Failure manners and effects analysis ( FMEA ) A

Review of procedure safety direction ( PSM ) and risk direction plan ( RMP ) A

Safety and wellness trainingA

Environmental impact and baseline assessmentsA

Site security and exposure analysisA

Site probe and remediationA

Hydrology and groundwater monitoringA

Project direction, public presentation, programming, and building hold analysis

After following all the above steps HPCL has changed its Prima facie of its operations wholly and avoid sufficient sum of hazards which could go hinderances or I should state set hard state of affairss in forepart of HPCL which are truly hard to manage and impact the whole concern.

Cardinal FINANCIALS

AFTER THE RISK MANAGEMENT TECHNIQUES

FIXED ASSETS

Particulars

Amount ( Rs )

Gross Block

19570.04

Less: Depreciation

7640.77

Net Block

11929.27

Capital Work-in-Progress

3315.95

Sum

15245.22

CURRENT ASSETS LOANS & A ; ADVANCES

Particulars

Amount ( Rs )

Inventories

12020.28

Assorted Debtors

1710.66

Cash and Bank Balances

294.01

Other Current Assetss

49.46

Loans and Progresss

5222.96

Sum

19297.37

Income

Particulars

Amount ( Rs )

Sale Of Merchandises

103837.43

Less: Excise Duty Paid

7394.51

Net Gross saless

96442.92

Recovery Under Subsidy Schemes

8260.84

Other Income

1197.97

Sum

105901.73

Book Value of Assets = Fixed Assets + Current Assetss

=15245.22 + 19297.37

=Rs.34542.59/-

RETURN ON INVESTMENT

Return of Investment ( ROI ) of the company = Net Income / Book Value of Assetss

=105901.73 / 34542.59

=3.0658

REFRENCES:

Web sites

www.hpcl.com

www.hindustanpetroleum.com

www.managementarticles.com

www.moneycontrol.com