Case Study on Indian Oil Corporation

International Marketing Management Group - 3 Bhanu Dora- 17 Bharat Bhushan Narang - 18 Geeta Cheema- 23 Kumar Pranav - 34 Rajesh Kumar Tiwary - 53 Soniya Rakesh Agnihotri- 72

Indian Oil Corporation Ranked 83 in the Fortune 'Global 500' listing, in 2012
rd

Business Verticals Refining Pipeline Transportation Marketing of petroleum products

Exploration & Production of crude oil & gas

Marketing of natural gas and petrochemicals Shale Gas. 34,000+ strong workforce as on 31.03.2012 Sales turnover of $ 85000 million and profits of $ 825 million in 2012
Source

of Data

Indian Oil Website Annual Report 2011-12

Newspaper articles
Wikipedia

Overseas Presence
Fully Owned Subsidiaries Indian Oil (Mauritius) Ltd. into Terminalling, Retailing & Aviation refueling Lanka IOC PLC. into Retailing, Terminalling & Bunkering IOC Middle East FZE Lube into blending & Marketing of Lubricants IOC Sweden AB , an Investment company for E&P Project in

Venezuela

Overseas Presence
Overseas portfolio Two blocks (86 and 102/4) in Sirte Basin and Areas 95/96 in Ghadames basin of Libya, Farsi Exploration Block in Iran, onshore farm-in arrangements in one block in Gabon, one on land block in Nigeria,

one deepwater offshore block in Timor-Leste

Two onshore blocks in Yemen Scouting for new business opportunities in Asia and Africa. Actively looking for Globalization of its downstream operations Incorporated Ind-OIL Overseas Ltd. a SPV for acquisition of overseas E&P assets in partnership with Oil India Ltd.

Identify main reasons behind IOC expansions into global markets Strategic move for globalization Economy of scale Production capacity Potential customers and demand globally hence market size Capitalization on global recognition at 83rd in world. To identify new source of oil and gas Established R&D Center for new products

IOC adopted mix of entry, factors affecting IOC selection of these entry mode
External factors
Market Size Demand for oil and gas across the Aferica and Asia Market growth IOC expected huge growth Govt. Regulation Been govt. owned company targeting market like Africa and Asia was the soft target for expansion. Level of risk Reduced risk with export, JV and turn key projects
Political Economical Operational

Internal factors
Company objectives mission and vision statement Availability of company resources Flexibility International experience first mover experience and hence capitalization

Entry Marketing Mix

Country Sri Lanka Mauritius Entry Marketing Mix Wholly Owned Subsidiary Direct Export Wholly Owned Subsidiary Turn Key Operations Strategic Alliance Joint Venture Wholly Owned Subsidiary Wholly Owned Subsidiary Consortium Joint Venture

UAE Sweden Venezuela Nigeria

USA

Wholly Owned Subsidiary Joint Venture

In view of emerging economic and political scenarios, evaluate IOCs entry into Sri Lanka and other countries Entering Sri Lanka Direct Export First move in Globalization Long term commitment for export in other countries as well Wholly Owned Subsidiary Lanka IOC PLC (LIOC) 75% stake Economical and political factors Mixed risks & gain strategy First Strategic Move Next level Growth High degree to administrative Control Turnover INR 2556.86 Cr with profit of 38.33 Cr in 2011-12 Investment in Ceylon Petroleum Storage Terminal Limited worth INR 176.03

Mauritius Entering Strategy WOS - Indian Oil (Mauritius) Ltd. - 100% stake
Economical and political factors Strategic step to serve as the supply base of petroleum products Increase market share and profit Turnover INR 1192.34 Cr with profit of 36.87 Cr in 2011-12

Turn Key Operations

Showcase their capabilities Done through WOS Indian Oil tanking ltd.

Strategic Alliance
Internal strategic company mission and vision

Joint Venture
JV with Caltex

UAE Entering Mode

Wholly Owned Subsidiary - IOC Middle East FZE 100% stake Economical and political factors Strategic investment to boost its business in future in other Middle east countries Turnover INR 95.43 Cr with profit of 3.91 Cr in 2011-12

Sweden Entering Mode Wholly Owned Subsidiary IOC Sweden AB 100% Strategic investment to promote and facilitate overseas E&P investments. Venezuela - Restrictions on foreign ownership and Risky Country. With a consortium of five other companies, ICO Sweden AB has holds a 3.5 per cent. stake in Carabobo Heavy Oil project. The Carabobo Project is expected to produce and upgrade 3 billion barrels over the project life of 25 years. Turnover NIL with profit of 17.01 Cr in 2011-12 Investment in Indoil Netherlands B.V worth INR 191.52 Cr Total Asset INR 388.88 crore

Entering Mode USA Wholly Owned Subsidiary IOCL (USA) Inc 100% The subsidiary was opened in 2012 to invest in shale gas projects in USA. At present, IOCL USA Inc. has acquired 10% of Carrizo's interest in approximately 60,000 net acres and OIL will buy remaining 20 per cent Huge reserves- Daily production of 1,850 barrels of oil equivalent Joint Venture Indo Cat Pvt Ltd with Intercat USA for manufacturing 15000 tones per annum of FCC catalysts and additives.

Entering Mode Nigeria Joint Venture With Suntera Nigeria 205 Ltd 50% Shares To avoid Country Risk To gain domestic knowledge through partner firm Suntera owns Oil Prospecting License 205 for 20 years.