India’s Refining Is Sector on the Cusp of Change!

India’s Refining Sector Is on the Cusp of Change!

January 16, 2019

This past weekend in Mumbai, the key senior leaders of the Indian refining industry, together with about 1,200 technologists and managers in the leading Indian refinery and petrochemical enterprises, gathered to talk about the present and future of the vibrant refining sector on the subcontinent.


Early Saturday morning, from the window of my hotel breakfast room, I watched a majestic hawk soar over the mist covering the Sanjay Gandhi National Park in the center of Mumbai. I thought, maybe this symbolizes the vision and strategic purpose needed by India’s refining leaders to navigate the changes which will inexorably and quickly confront the energy sector in India — and certainly worldwide.


The event, the 23rd edition of this high-powered event, focused discussion around the theme of “Towards a Sustainable Future,” although the subtheme very much was the digital transformation racing across all the enterprises in India.   


A few interesting stats to set the stage:


  • India today is the third-largest energy consumer in the world.

  • Reliance’s Jamnagar refinery is today the world’s largest refinery, with a capacity of 1.24 million barrels of oil per day.

  • A forecast presented during the event’s opening session predicts the demand for gasoline in India will continue growing through at least 2035 — and probably through 2040. India is expected to lag behind some other regions in terms of evolution to electric cars, attributable to infrastructure and structural challenges.

  • In the journey toward meeting that growth demand, and in the race toward transforming hydrocarbon production for a petrochemical future, India’s main advantage remains its CAPEX cost structure advantage, an advantage that the leaders present were urged to take advantage of.



Digital Transformation Will Enable the Industry to Pivot


But what about this theme of “aligning refineries towards a sustainable future?” What does it mean?  India’s ministry of energy provided an energetic and directed introductory call for action at this meeting. 


India’s refining industry, it was stated, is already arguably a success story, but it is “at the cusp of big change” and needs to react in a holistic way to that change. A number of ways to address this change were discussed and suggested, but most certainly digital transformation is at the heart and soul of it, especially in technology-enthusiastic India.


India’s refining sector, the audience was reminded, is at a moment of irreversible change. But what are the key challenges and opportunities?


There are four overriding energy goals for India: 

  1. Meet energy demand.

  2. Transform refining to a sustainable future,  both as energy sources and uses evolve and with respect to carbon footprint.

  3. Ensure all of India has access to energy (and this is a singularly Indian imperative, with an estimate of well over half their population not having the access to energy needed to improve their standard of living).

  4. Assure energy security.   


This, the opening speakers revealed, will involve both policy and technical challenges. But digital transformation, the audience was advised, will be a key enabler of this change. This theme was continued throughout the weekend, as a number of exciting projects and holistic digital transformation strategies were presented by leading Indian organizations such as BPCL, HPCL, IOCL, EIL, Nayara and, of course, Reliance. (I’ll delve into some of the more interesting of those in an upcoming blog.)


One of the goals in India is to pursue vigorously a rapid drive toward integration of petrochemicals and refining, responding to trends in the surround region. India remains a net importer of petrochemicals, and has the objective of becoming a net exporter. Remember, as I said earlier, India is the world’s third-largest energy consumer (behind China and the U.S.), and similar numbers exist for chemicals.