Hpcl Operations Mgmt

A

Project Report on

‘Operation Management’

SUBMITTED BY:

Anushree Kulkarni Ashmita Mahakul

Deepak Doddamani Dinky Chhabria

Pankaj Dashmukhe Rahul Mahadik

Rohini Varadkar Sonal Jog

Submitted in partial

fulfillment of the requirement

of Ist Semester of MMS course,

Mumbai University

Bharti Vidyapeeth’s Institute of Management Studies and Research 2008-2009

OPERATIONS MANAGEMENT

PROJECT REPORTPROJECT REPORT

HINDUSTAN PETROLEUM CORPORATION LIMITED

By

Sonal JogSonal Jog

Rohini VaradkarRohini Varadkar

Dinky ChhabriaDinky Chhabria

Asmita MahakulAsmita Mahakul

Anushree KulkarniAnushree Kulkarni

Pankaj DashmukhePankaj Dashmukhe

Deepak DoddamaniDeepak Doddamani

Rahul MahadikRahul Mahadik

Operations Management Project Report

ACKNOWLEDGEMENT

We wish to express our deep gratitude towards all the persons who

contributed for this project and helped develop ideas and approach in

report writing.

We thank Mr. Shailendra Thasale, Senior Engineer, Honeywell, and all

officials of HPCL Mahul refinery who guided us in this project.

We are grateful to Professor N. K. Agarwal, Faculty of subject

Operations Management, MMS-I, B.V.I.M.S.R. (Belapur, Navi Mumbai),

for his guidance throughout our project work.

We would like to thank Prof. Dr. D.Y Patil, the director of Bharti

Vidyapeeth’s institute of management studies and research, Belapur,

Navi Mumbai for his kind permission to carry on our project work and

his cooperation.

Last but not the least we would like to thanks all our college friends for

their encouragement and morale support.

Sonal Jog

: (19)

Rohini Varadkar :

(07)

Dinky Chhabria :

(08)

Asmita Mahakul :

(30)

Anushree Kulkarni :

(26)

Pankaj Dashmukhe :

(09)

1


Deepak Doddamani :

(11)

Rahul Mahadik :

(29)

2


Table of Contents

1 Introduction......................................................................................4

2 HPCL – COMPANY AND OPERATIONS.........................................52.1 Profile.................................................................................................................................5

2.2 Background of company and operations............................................................................5

2.3 Type of Industry.................................................................................................................5

2.4 Capacity..............................................................................................................................6

2.5 Location selection criteria..................................................................................................6

2.6 Functional Groups..............................................................................................................9

2.7 Production strategy:..........................................................................................................11

2.8 PLANT LAYOUT:...........................................................................................................12

2.9 PROCESS LAYOUT:......................................................................................................14

2.10 Production Planning and Scheduling..............................................................................15

2.11 Materials management....................................................................................................16

3 ENTERPRISE RESOURCE PLANNING AT HPCL...............................183.1 Boosting Service to Customers and Vendors...................................................................19

3.2 Streamlining Distribution Workflows..............................................................................19

3.3 Training Encourages Greater User Acceptance................................................................19

4 QUALITY MANAGEMENT.........................................................214.1 Quality Control & Maintenance.......................................................................................21

4.2 Asset Integrity Management (AIM).................................................................................22

4.3 High tech infrastructure and stringent quality control......................................................22

4.4 Fully AUTOMATION......................................................................................................22

4.5 Import and Storage facilities:...........................................................................................23

4.6 Quality Assurance.............................................................................................................23

5 WORK MEASUREMENT..........................................................255.1 WORK MEASUREMENT:............................................................................................25

5.2 LABOR STANDARDS:...................................................................................................25

5.3 RECRUITMENTS AND PROMOTIONS:......................................................................26

6 ENVIRONMENTAL MANAGEMENT..............................................286.1 Effluents and Solid Waste Analysis in HPCL Petrochemical Refinery:..........................29

6.2 Analysis of Waste Water and Effluent Treatment Methods:............................................30

6.3 Safety and Hazards Management:....................................................................................31

3


7 VALUE ENGINEERING............................................................337.1 Feasibility Phase...............................................................................................................33

7.2 Conceptual Phase..............................................................................................................33

7.3 Basic Engineering.............................................................................................................34

7.4 Detailed Engineering and Construction............................................................................34

7.5 Commissioning and Start-Up...........................................................................................35

8 KEY FINANCIALS.................................................................368.1 Fixed Assets......................................................................................................................36

8.2 Current Assets, Loans and advances................................................................................36

8.3 Income..............................................................................................................................36

8.4 Return on investment........................................................................................................36

9 BIBLOGRAPHY....................................................................38

4


1 INTRODUCTION

Operations management is understood as the process whereby

resources or inputs are converted into more useful products.

A petrochemical industry basically converts petroleum and natural gas

in useful products. Petroleum refinery use crude petroleum as a raw

material and converts it into different products like petrol, kerosene,

diesel, low-density oils, hydrocarbons like propane and propylene,

butane and butylene, pentane, hexane, toluene, benzene, and other

products like tar, lubricants base, etc.

5

HPCL REFINERY


2 HPCL – COMPANY AND OPERATIONS

2.1 PROFILE

Name : Hindustan Petroleum Corporation Limited (HPCL)

Incorporation : 1974

Constitution : Public Limited Company

Sector : Petroleum Refinery

Industry : Petroleum

Activities : Bitumen, LPG, CNG, and downstream petroleum products.

2.2 BACKGROUND OF COMPANY AND OPERATIONS

HPCL is the second largest player in Indian Oil sector and in highly

competitive lubricants market. It was formed in 1974 on nationalization of

ESSO India operations.

HPCL has two refineries producing a wide variety of petroleum products-one

in Mumbai (West Coast) and the other in Visakhapatnam (East Coast). The

HPCL refinery in Mumbai is situated in Mahul, west coast. It is in an M.I.D.C.

area, which also has other big industries like Indian Oil Corporation limited

(IOCL), Bharat Petroleum Corporation limited (BPCL), Tata power plant etc.

The Corporation also holds major equity in Mangalore Refinery and

Petrochemicals Limited, and is proposing to set up a refinery in the state of

Punjab.

2.3 TYPE OF INDUSTRY

HPCL refinery can be classified as an analytical type of industry. It is

petrochemical industry i.e. broadly speaking chemical engineering industry.

Petroleum refinery is a production industry where raw material crude

petroleum is transformed into various useful products using some chemical

processes.

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2.4 CAPACITY

HPCL Mumbai refinery has a capacity 5.5MMPTA.HPCL Mumbai is operating

one of the largest lube oil refinery in the country which has a capacity of

335TMT. This Lube Refinery accounts for over 40% of the India's total Lube

Base Oil production. The refining capacity steadily increased from 5.5 million

tonnes in 1984/85 to 13.70 million metric tonnes (MMT) presently.

According to Auto Fuel Policy, EURO-IV norms are to be followed in metro

cities by 2010.To supply it in future additional capacity planning is being

done. Diesel hydro treating (DHT) of about 2.2MMTPA will be introduced in

HPCL. Majority of EURO-IV HSD will be produced in HPCL, Mumbai.

2.5 LOCATION SELECTION CRITERIA

Oil Refineries process millions of gallons of oil that have been drilled from the

Earth’s crust. Choosing the location of an oil refinery is not an easy task

because a number of environmental and safety concerns need to be taken

into account.

India does not have high crude oil reserves, and hence it depends totally on

import of petroleum crude oil. Gulf countries are the main suppliers to India.

Transportations and refining costs are very high for any refinery and hence

these factors take priority in considering plant location.

7

Refinery (west coast) Mumbai.


Oil Refineries are often located on the coast and away from busy cities. When

choosing the location for an oil refinery, the following factors need to be

taken into consideration:

Coast: HPCL is located at its Chembur in Mumbai and Vizag in Andhra

Pradesh because of the proximity of sea routes from the plant location. As for

transportation purpose, the raw material used in the production in HPCL i.e.

crude oil can be easily transported via the sea routes. There is a rail route

specially built for transportation of coal, from vadala to refinery area. Almost

all oil refineries like BPCL, IOCL are situated at the Mahul gaon location at

Chembur in Mumbai. HPCL petroleum refinery is on Mumbai west coast

because generally refining is carried on along the coast, where low cost water

transportation can be used.

Transportation: – The oil refinery must be near to rail, road or sea links and

close to the site the oil has been drilled. HPCL has port near to it.

Available workforce: – It may be tempting to build an oil refinery in a

remote location where no people or animals can be affected. However, a

refinery needs workers living relatively nearby. Even though HPCL refinery is

far from residential area transport facilities from workers quarters is

available.

Available customers: – Oil refineries need to be within easy reach of

customers. It is essential to have good transport links. Some refineries are

pipelines as a method of transportation.

Air pollution: – Although industries are regulated by strict controls regarding

the amount of pollution they release into the atmosphere, oil refineries emit

number of polluting gases. To reduce the effects of air pollution on people,

refineries should be built away from the built-up areas. Care should be also

taken to position the refinery so that prevailing winds do not carry pollution in

the direction of towns and cities. One can see boards specifying height from

sea level in entire HPCL refinery area.

Water pollution: – Some refineries use water from local rivers and streams

for cooling purposes. This means that the water is pumped out of the river or

stream, circulated around a cooling tower and returned to the river at a

8


higher temperature. This increase in water temperature is called thermal

pollution. Some species of fish are unable to survive in these conditions.

Waste products from refinery may also be washed into local rivers and

streams.

Noise Pollution: – Machinery that operates 24 hours a day can make a lot of

noise for people living nearby. Lorries and trains that come to pick up refined

products also contribute to the noise.

Special sites of interest: – Like other buildings, oil refineries must avoid

areas of special scientific interests. These can include regions where rare

animals are being protected.

9

Top view of HPCL refinery, Mahul Mumbai on Google earth


2.6 FUNCTIONAL GROUPS

HPCL refinery is spread over a very large area. It has many plants within its

campus area. So management of such a big organization becomes very

challenging. HPCL has managed it very well till now by organizing itself into

appropriate functional departments.

The various departments are as under:

Human resource: HPCL HR department has taken number of HR initiatives

to make the Corporation a great place to work. The ‘Balanced Scorecard’ tool

to set up performance targets and evaluation, Competency Mapping and

Development Centers to enhance employee capabilities. Six Sigma for quality

improvement have yielded rich dividends and are being constantly upgraded

to higher levels of sophistication. A significant HR event of the period was the

conduct of an International Program on ‘Emotional Intelligence’ in association

with TISS wherein a large number of professionals and students participated

and appreciated the program.

The Corporation continues to give utmost importance to training by

nominating employees both for in-house and external programs.

HPCL has bagged DMA Erehwon Innovative HR Award because it has

successfully taken an HR idea from concept to reality and has sustained

results.

They also got Amity HR Excellence Award for achieving enviable position of

one of the best and most admired companies due to innovative strategies for

Human Resource Management and Development

Finance: The finance function involves keeping record of financial data

related to fixed assets, intangible assets, which forms most important part of

a refinery operation. Additionally it also monitors the construction period

expenses on projects occurring on monthly and quarterly basis and keeps

record of other important financial depreciation, impairment of assets, foreign

transactions, investments, inventories, duties on bonded stocks, Grants

provision, exploration and production expenses, employee benefit, sales of

10


products, research and development., Taxes on income, contingent liabilities

and commitment capitals, accounting, classification of expenditure and

income.etc.

Marketing: LPG Marketing in India has traditionally been confined to

domestic & non-domestic consumers in urban/semi urban markets and all

efforts till date have been in meeting the demands of these markets. With the

saturation of urban and semi urban markets and the adequate availability of

LPG in India, there is a need to look for alternative markets. Rural India

presents a big opportunity for growth of LPG in India.

HPCL is a major bunker fuel supplier to the ships (vessels) at major Indian

ports viz Calcutta, Haldia, Visakhapatnam, Kakinada, Chennai, Cochin,

Mangalore, Goa-Vasco, Mumbai, Kandla.

HPCL also supplies other petrochemicals like hydrocarbons, lube base oils,

tar, petrol, and diesel, ATF etc. Hence it has very good chain of distributors.

11


2.7 PRODUCTION STRATEGY:

A very high priority is attached by the Government of India to conservation of

petroleum products in view of the need to reduce gap between demand of

petroleum products and indigenous supply of crude oil.

Sporadic tension in the Middle East region that is the main source of our oil

imports as well as a heavy import bill is a potent reason for continued

emphasis on conservation and sparing use of petroleum products.

Accordingly, strategic storage of crude oil becomes very important. HPCL,

Mumbai plant has high capacity tanks for storage of crude oil as well as

finished products. Every shipment of raw materials is after 15 days. But

continuous production is carried out to make-to-stock the products.

HPCL has trying to do backward integration by taking part in exploration and

production process in country and outside country in joint ventures with some

of the big companies. But more emphasize is given to production of high

products length which are kept in stocks.

HPCL, in partnership with consortium, currently has 20 E & P blocks in India

and two overseas, including a service contract for the western offshore

marginal fields under cluster-7 near Mumbai High.

Its upstream JVC Prize Petroleum Company, which was formed in 1998,

currently operates marginal fields in Gujarat and Mumbai High and onshore

blocks in Gujarat and Madhya Pradesh.

HPCL has been participating in the new exploration licensing policy’s (NELP)

fourth round. During NELP-VI, HPCL participated along with major operators

like ONGC, OIL, GSPC and GAIL.

The Centre has awarded 15 blocks in which HPCL’s participation interest

ranges from 10 to 20%. The 15 blocks include 11 deepwater ones in Krishna

12


Godavari and Cauvery basins, two shallow water blocks in Mumbai High and

two onshore blocks in Rajasthan.

2.8 PLANT LAYOUT:

LAYOUT OF HPCL REFINERY, MUMBAIDHPS : De-hydrocarbonaton de-sulphurisationLR : Lube RefineryCPP : Captive Power PlantGF : Green FuelFR : Fuel RefineryOMS : Oil Management & SupplyQM : Quality managementF&G : Fire and GasTA : Tank AreaLPG : LPG Storage and Supply

13

DHDS LR

CPP

FR OMS

F & G LPG TA

B

QM GF


STORAGE AREA OVERVIEW

STORAGE AREA OVERVIEW

14

GHASLET GHASLET

SOLVENT CRUDE OIL


2.9 PROCESS LAYOUT:

PROCESSES IN HPCL:

There are many different units in petroleum refineries, for carrying out

different processes like distillation, separation, filteration etc. Depending

on the products produced by the refineries process HPCL layout in a such

way that

a) There be very short distance between reactors or units of plant

that has to be followed according to requirement.

b) Less piping and cooling, heating expenses.

c) Pumps, valves and other materials required between successive

processes should be limited and controllable in number.

d) Waiting time for the next process should be minimum.

e) Very little manual labor is required and automation and

instrumentation can be done effectively.

f) Planning and scheduling of specific product can be done accurately

and storage and distribution should be properly maintained.

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2.10 PRODUCTION PLANNING AND SCHEDULING

The main objective of this work is to discuss planning and scheduling

applications for refinery operations in HPCL, Mumbai.

Major Steps Involved In Planning:

STEP 1: Nonlinear planning model for refinery production is developed. The

model represents a general refinery topology and allows the implementation

of nonlinear process models as well as blending relations.

STEP 2: Optimization model is developed considering the market limitations

for each oil derivative usually supplied by the refinery. The optimization

model defines all operating points, thus increasing the production of more

valuable products, while satisfying all specification constraints.

Major Steps Involved In Scheduling:

STEP 1: To overcome scheduling problems in oil refineries mixed integer

optimization models are formulated that rely on both continuous and discrete

time representations. This model takes care of the problem of crude oil

inventory management that involves the optimal operation of crude oil

unloading from pipelines, transfer to storage tanks and the charging schedule

for each crude oil distillation unit.

STEP 2: Development and solution of optimization models for short-term

scheduling of a set of operations that includes: product receiving from

processing units, storage and inventory management in intermediate tanks,

blending in order to attend oil specifications and demands, and transport

sequencing in oil pipelines.

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2.11 MATERIALS MANAGEMENT

HPCL has emerged a front-runner, in providing excellent services to the

customers, and also delivering state - of - art - products.

Various products of HPCL are as under:

Bitumen: Bitumen is one such product being manufactured and

marketed at HPCL refineries at Mumbai. They produce and

market all the three grades of bitumen viz., 80/100, 60/70 &

30/40. The quality control measures are observed very

stringently, and the bitumen is tested as per the requirement of

the BIS. HPCL has made a foray into newer products such as

rubberized and polymerized bitumen.

Fuels: HPCL produces variety of fuels. Some of them are listed

below.

o Petrol (MS), EURO-II, EURO-III

o High Speed Diesel (HSD)

o Furnace Oil (FO)

o Light Diesel Oil (LDO)

o Low Sulphur Heavy Stock (LSHS)

o Naphtha

o Lube base oils

o ATF

Marine – Bunker Fuels: The bunker fuels offered are:

o Heavy oil 180 cst (fuel oil: FO)

o Marine diesel oil (light diesel oil: LDO)

17


o Marine gas oil (high flash diesel: HFHSD)

Marine Lubes: HPCL is the Marine Lube partner of Total

Lubricants, France and manufactures TOTAL brand primary

marine Lube grades. Secondary grades are of HPCL formulations

and are certified by TOTAL as equivalents. Bunker lubes are

supplied duty free & duty paid for international and coastal - run

vessels respectively. ELF marine lubes offered are:

o Atlanta Marine D3005

o Talusia HR 70

o Disola M 3015 & M 4015

o Aurelia 3030 & 4030

o Aurelia XT 4040 & XT 4055

Special Products: The products include:

o Hexane

o Propylene

o Jute Batch Oil

o Solvent 1425

o Turpentine Oil (MTO 2445)

o Carbon Black Feed Stock (CBFS)

o Molten Sulphur

LPG & ATF: LPG is the very important product produced by

HPCL.HP gas has large customer base and very large distribution

network. LPG is sold at very subsidized rate that is loss for the

company. But it recovers that loss by selling ATF at very high

margin.

18

LUBE REFINERY OF HPCL


HYDROCARBONS : HPCL also produces solvents like propane,

hexane, benzene, toluene, and many other hydrocarbons, which

are separated by distillation.

19


3 ENTERPRISE RESOURCE PLANNING AT HPCL

To strengthen business management and improve customer service,

HPCL implemented an advanced enterprise resource planning (ERP)

system based on range 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 innovative ways of enhancing customer

satisfaction by leveraging technology.

The real time, on-line availability of information from across all the

geographically spread locations of the corporation on a centralized

system, has enabled HPCL to improve efficiencies in the Ares of

tracking and monitoring customer receivables, credit management,

inventory management and provide enhanced service to customers

and other stake holders.

Upgrading to an integrated business management platform gave HPCL

an enterprise-wide view of its finance, manufacturing human

resources, and sales and distribution processes. Online access to

information ensured managers could keep track of procurement,

inventory, production schedules, and customer orders.

The company also standardized business practices, ensuring process

consistency across multiple locations. A document archival system is

an integral part of the ERP system, allowing HPCL to store invoices,

purchase orders, checks, and other material. This ensures the company

can locate critical documents quickly and efficiently.

20


3.1 BOOSTING SERVICE TO CUSTOMERS AND VENDORS

In keeping with HPCL’s aim of enhancing customer satisfaction, the

company designed portals that draw on information gathered by its

ERP system to provide clients with dispatch details, account

statements, and a history of sales transactions completed over the

past three years. Customers log in to the portal using a secure user ID

and password. Separate portals for aviation, direct sales, LPG, and

retail customers were established.

HPCL also developed an electronic payment system to promote

smoother and faster payments to its vendors, contractors,

transporters, and other service providers. The system is integrated

with the company’s banking institution, enabling payment information

to be seamlessly transmitted between the two organizations and

ensuring timely payment to suppliers.

3.2 STREAMLINING DISTRIBUTION WORKFLOWS

HPCL realized another efficiency improvement when it streamlined its

distribution processes and implemented new notification alerts. For

example, the company’s dealers and distributors now receive e-mails

and text messages via their cell phones informing them of impending

shipments. This information is sent to dealers and distributors

immediately following the generation of an invoice, enabling them to

keep track of their orders.

3.3 TRAINING ENCOURAGES GREATER USER ACCEPTANCE

A change management program was established to facilitate a smooth

transition to the new system for employees. Comprehensive training

was provided to staff during the implementation, followed by refresher

courses post-deployment.

21


Competency development programs for specific user groups such as

regional managers, finance staff, heads of terminal/depot/LPG plants,

sales officers, project engineers, HR officers and clerical staff are also

conducted regularly.

HPCL organizes virtual training sessions from time to time to allow staff

in remote locations to learn about new system features. This reduces

travel time and cost for participants and enables quick dissemination of

new information to users.

A state-of-the-art data center at HPCL’s head office at Mumbai houses

powerful IBM enterprise servers that run the database and applications.

The company uses a virtual private network (VPN), dedicated

telephone lines, very small aperture terminals (VSATs),

22


4 QUALITY MANAGEMENT

Quality refers to the sum of the attributes of properties that describe a

product.

In petrochemical industry quality is generally expressed in terms of

specific product characteristics such as color, specific gravity, viscosity

etc.

HPCL have latest quality control technology that is mandatory for

improvement of refinery throughput, quality and yield.

Its quality control department has been successful in carrying out

improvement in crude oil viscosity, API gravity, and reduction /removal

of sulfur, increase crude distillation yield and overcome other

operational problems from time to time using upgraded technologies in

petroleum refineries.

4.1 QUALITY CONTROL & MAINTENANCE

Quality control is achieved in HPCL by following ways:

1) All material supplies are affected from approved suppliers and

manufactures only.

2) All items procured are inspected /tested.

3) Sampling of the products is done thrice a day and analysis at

each stage is carried out. Strict quality control is ensured.

4) Stage wise inspection and certification of jobs by inspectors.

5) In HPCL highly experienced and higly skilled craftsmen handle

jobs. Prequalified and highly skilled Engineers inspect quality

departments. Even refinery workers, welders etc are tested and

certified for job.

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Maintenance plays a crucial role in the production process in the

Refineries / Petrochemical plants. A plant may be regarded as

successful when it operates without interruptions, which can however

be achieved only when its facilities are in perfect working order at all

times. The strategic importance of maintenance increases with

increasing sophistication. The overall objective is to maximize

production output at minimum total cost.

4.2 ASSET INTEGRITY MANAGEMENT (AIM)

This type of program involves world-class standards of inspection and

maintenance of refinery facilities and pipelines to ensure the

uninterrupted, reliable and efficient operation. This program, which

utilizes advanced technologies and methodologies, is vital to minimize

the risks and vulnerabilities of large scale petroleum operations,

protect the safety of the workforce and neighboring population, and to

maximize energy security for India. HPCL will be adopting it in near

future.

4.3 HIGH TECH INFRASTRUCTURE AND STRINGENT QUALITY

CONTROL

HP the second largest integrated oil company of India has 40 well

spread out bottling plants and 2 tap off points on Jamnagar Loni LPG

pipeline of GAIL with online automatic quality control equipment

ensures total quality checks of cylinders at bottling plants. These

equipments are upgraded from time to time.

4.4 FULLY AUTOMATION

HPCL has adopted a strategy of complex pipelines so as to decrease

the idle times of plants and machineries. It is highly automated.

Controlling of process is done from control rooms of HPCL.

24


HPCL have 20 electronic carousel of automatic type which fills cylinders

automatically basis. Filling of cylinders are interlocked in the system.

4.5 IMPORT AND STORAGE FACILITIES:

HPCL have LPG storage facility of 65000 tons of LPG bottling plants and

import terminals.

Storage facilities of three types:

1) Above grounds bullets of capacity 50 MT TO 150 MT each.

2) Spheres of capacity 600 MT TO 1400 MT each.

3) Mounded storage of capacity 200 MT to 1000 MT each.

4.6 QUALITY ASSURANCE

Refinery crude processing is based on crude with all impurities as

input. Step by step it tries to reduce impurities by changing it to less

harmful component or remove after converting to separable

component. Processes like desulfurization, hydrogenation, hydro

cracking etc. are used to achieve this.

1) Viscosity

Viscosity reduction is achieved by removing impurities that contributes

to higher viscosity, which includes polycyclic aromatics.

Reduction of viscosity is carried out using some chemical processing

which enables more rapid and uniform feedstock management,

improved heat transfer, faster mixing and shorter residence time

ensuring consistent quality.

2) API Gravity

25


API gravity is the most frequently used measure to estimate the quality

of a crude oil. It is one of the parameters focused for determining the

price of crude oil, the thickness of oil is reduced and fluidity is

increased.

3) Sulphur

De-sulphurization unit in HPCL removes sulfur with complex molecules

selectively from crude oil. These are normally high boiling sulfur

compounds, i.e. boiling at 565oC and ends up partly in residue and gas

oils. Lower boiling sulfur compounds are separated and treated.

Removal of sulfur from crude is mainly done in gaseous form.

Quality control and quality assurance both are very important aspects

of quality management in refineries. It helps reduce production cost

and increase productivity. At the same time quality is the main weapon

in competition. HPCL has high customer loyalty due to its high quality

products.

26

CONTROL ROOM OF HPCL,MAHUL


5 WORK MEASUREMENT

Work measurement is a process of establishing a time that a given task

would take when performed by a qualified worker working at a defined

level of performance.

5.1 WORK MEASUREMENT:

Work measurement is the process of establishing the time that a given

task would take when performed by a qualified worker working at a

defined level of performance.

A qualified worker is one who has acquired the skill, knowledge and

other attributes to carry out the work in hand to satisfactory standards of

quantity, quality and safety

Work measurement also refers to the process of estimating the amount

of worker time required to produce one unit of output.

goal of work measurement is to develop labor standards that can be

used for planning and controlling operations.

5.2 LABOR STANDARDS:

A labor standard is the number of worker-minutes required to complete

an element, operation, or product under ordinary operating conditions.

Labor standards are used in:

Cost estimation

Pricing of products and services

Incentive pay systems

Capacity planning

Production scheduling

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5.3 RECRUITMENTS AND PROMOTIONS:

Upon successful completion of training, OTs are absorbed at the entry

level in the Management Cadre in Salary Grade "A" .

After absorption, the officer is on probation for next 6 months.

On successful completion of probationary period, the officer is confirmed

as the employee of the Corporation.

Officers

Most of the recruitment is made at entry level only. However, HPCL may

recruit Officers at senior levels, through open advertisements, to meet

some specific requirements, like Exploration & Production, R&D etc. for

which expertise may not be available internally.

IT Officers and Accounts Officers are also directly recruited through open

advertisement in S/G ‘A’.

Campus Recruitment:

HPCL also visits Engineering & Management Institutes for campus

recruitment of

Engineers – From IITs,NITs, etc.

MBAs – Premier Management Institutions

Chartered Accountants – Institute of Chartered

Accountants of India (ICAI).

All Officers are entitled to other applicable benefits:

Contributory Provident Fund

Contributory Medical Insurance Scheme

Group Savings Linked Insurance Scheme

Group Personal Accident Insurance Scheme

Gratuity and are members of the HPCL Employees Superannuation

Benefit Fund Scheme

DA, HRA, Conveyance etc.

Benefits like Furniture Loan, Vehicle Loan, Housing Loan, Medical,

Home Lease etc. are also available to Officers satisfying minimum

service criteria.

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http://www.hindustanpetroleum.com/recruitment.htm#Campus

http://www.hindustanpetroleum.com/recruitment.htm#Campus


Learning & Development and Career Progression

Systematic & continuous quality Training and Job rotation is provided to

all Employees to gain wider exposure which facilitates overall

development of the Officer.

HPCL believes in pro-active Human Resource Development and nurtures

the internal talent of the organization by practicing the following, to

name a few :

Reward and Recognition Schemes Providing challenging work environment

Balanced Score Card based performance appraisal system along

with Competency Development Programme

Profit sharing and Performance Linked Incentive Scheme

At HPCL the work measurement practice followed is “Standard

operating procedure” (SOP) and Job definition (JD). The process is

standardized based on time and motion studies. It aims to make it a

function of time and efforts.

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HIGHLY COMPLEX NATURE & AUTOMATION HELPS IN TIME MINIMIZATION & IDLE TIME REDUCTION


6 ENVIRONMENTAL MANAGEMENT

Crude oil is a major source of energy and feedstock for petrochemicals.

Oily sludge, bio-sludge and chemical sludge are the major sludges

generated from the processes and effluent treatment plants of the

refineries engaged in crude oil refining operations.

Refineries in India generate about 28,220 tons of sludge per annum.

Various types of pollutants like phenols, heavy metals, etc. are present

in the sludges and they are treated as hazardous waste.

Petrochemical plants generate solid waste and sludges, some of which

may be considered hazardous because of the presence of toxic

organics and heavy metals.

Accidental discharges as a result of abnormal operation can be a major

environmental hazard, releasing large quantities of pollutants and

products into the environment. The presence of objectionable

conditions such as offensive odors and accumulation of debris have

been reported to decrease the proper value and recreational uses of

water.

Wastewaters released by petrochemical industries are characterized by

the presence of large quantities of polycyclic and aromatic

hydrocarbons, phenols, metal derivatives, surface-active substances,

sulphides, naphthylenic acids and other chemicals.

Ineffectiveness of purification systems can become seriously

dangerous, leading to the accumulation of toxic products in the

receiving water bodies with potentially serious consequences on the

ecosystem. Several investigations have shown positive correlation

between pollutions from petrochemical effluents and the health of

aquatic organisms.

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6.1 EFFLUENTS AND SOLID WASTE ANALYSIS IN HPCL

PETROCHEMICAL REFINERY:

On regular basis analytical studies of effluents and soil samples where

sediments from the treated effluents are dumped is carried out. These

are then analyzed for physicochemical properties, metallic and non-

metallic ions.

These parameters are compared with established international

standard (FEPA). Effluents were classified as:

PROCESS WASTE WATER (PWW) : Process waste water (PWW) is water that is

intended to come into contact with hydrocarbons or treated chemicals at the

petrochemical plant.

CLARIFIED WATER (CW): Clarified water (CW) is a combination of PWW

and sewage.

FINAL DISCHARGE (FD): The final discharge water (FD) is the effluent,

which has undergone both chemical and biological treatment to

eliminate or reduce waste contents to acceptable levels.

Some of the Effluent Treatment Methods Used:

The treatment procedure of the effluent in the company is as shown

below:

1) Equalization

2) Sedimentation

3) Flocculation

4) Floatation Dissolved Air Basin

5) Biodegradation

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6.2 ANALYSIS OF WASTE WATER AND EFFLUENT TREATMENT

METHODS:

Waste Water Analysis: Determinations of major parameters are

carried out according to standard methods.

1. Determination of Biological Oxygen Demand (BOD),

2. Determination of Dissolved Oxygen (DO),

3. Determination of Chemical Oxygen Demand (COD),

4. The determination of Total Dissolved Solid (TDS),

5. Total suspended solid (TSS),

6. Total Hydrocarbon (THC),

7. pH determination

8. H) Level of Cl-, (PO4) 3-, (SO4) 2- and NO3

9. I) Determination of the heavy metals including nickel (Ni), lead

(Pb), zinc (Zn), iron (Fe), copper (Cu), cobalt (Co) and cadmium

Analysis of Sediments: Sediment samples are air-dried by thinly

spreading on a clean laboratory bench surface at room temperature,

and brought to a relatively homogenous state by thoroughly mixing,

and sieving with 2 mm mesh before being treated. In the case of fresh

samples, large stones and roots were picked out before mixing and

weighing.

Moisture determination of duplicate samples of the sediment was

carried out for dry weight correction. The sediment samples are then

prepared (extraction method) for the various physicochemical

determinations.

Various physicochemical properties are determined by various

analytical methods.

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6.3 SAFETY AND HAZARDS MANAGEMENT:

Causes of Accidents in Refineries: Refinery accidents are often the

result of unexpected interaction between automated process

equipment and operators. Equipment failures or operator errors can

lead to sudden and unexpected changes in the plant operation. If these

disruptions to normal process operation exceed the capabilities of the

operators or the capacity of the safety systems, a severe accident can

occur, potentially producing a devastating fire, explosion, or toxic

release.

Safety Department: Special team of experts is present in HPCL to

investigate loss in such accidents, including material failures, fires, and

explosions. These investigations range from high-loss disasters to small

incidents.

In the drive to improve safety and reliability, chemical process facilities

tend to rely heavily on automation using sophisticated instrumentation,

computers, and programmable logic controllers to run their plants.

Honeywell does all the instrumentation work for HPCL Mahul, Mumbai.

In an effort to improve energy efficiency and reduce pollution, various

pieces of equipment are interconnected in ways that complicate their

operation.

Safety department of the refinery performs following functions:

1. Accident and incident investigation

2. Root-cause analysis (RCA)

3. Fire and explosion analysis

4. Fire protection engineering

5. Fitness-for-service evaluation

6. Specification, corrosion control, and failure analysis of materials

7. Evaluation of pressure relief systems, vessels, and piping

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8. Analysis of atmospheric releases, spills, and environmental fate

9. Groundwater and soil remediation support

10. Compliance with standards and regulations

11. Risk and reliability analysis and quantitative risk

assessment

12. Process hazards analysis (PHA)

13. Hazard and operability analysis (HAZOP)

14. Failure modes and effects analysis (FMEA)

15. Review of process safety management (PSM) and risk

management program (RMP)

16. Safety and health training

17. Environmental impact and baseline assessments

18. Site security and vulnerability analysis

19. Site investigation and remediation

20. Hydrology and groundwater monitoring

21. Project management, performance, scheduling, and

construction delay analysis

Benefits of Having Safety Department includes better understanding of

employee exposures to potentially hazardous situations, current

knowledge of asset vulnerabilities, identification of opportunities for

cost-effective mitigation measures to reduce potential losses, and

better knowledge of loss exposures from an insurance perspective.

Their experience provides engineers and scientists unique insights in

addressing various risk and reliability issues and assessing

environmental and health impacts, to help increase the safety of

workers, processes, and facilities and minimize operational disruptions

and property loss.

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7 VALUE ENGINEERING

Value engineering at HPCL is carried out in the following steps:

7.1 FEASIBILITY PHASE

During the initial phase, current constraints such as product quality, current market demand, existing refinery capacity and existing refinery condition are established. Typically, this type of investigation includes physical on site examination of equipment as well as a review of inspection and other records. A process simulation will be performed to obtain a model for use in further design and to establish the operating constraints.

Existing legislation and product standards, locally and internationally, are reviewed to establish likely future product requirements. Market research based on current economic conditions and expected future conditions, are used to predict demand. This research is often done using the expertise of consultants with appropriate local experience.

This phase could take 4 to 6 weeks, depending on the complexity of the system.

7.2 CONCEPTUAL PHASE

The predicted future demand is used to establish various revamp scenarios. Using the simulation and existing equipment data, the extent of revamp required to reach different demand cases is determined. Using conceptual estimating techniques, an order-of-magnitude cost estimate for the different scenarios is obtained. The emphasis for this type of cost estimate is on establishing the differences between different options.

The cost estimates for different demands are compared with revenue generated and the information is used to plan a revamp process to meet demand for the required period into the future.

At this stage, a formal value engineering exercise is carried out to establish where opportunity exists for increasing value. Typically, a number of alternate designs or options are generated, the best of which are investigated further. The optimum alternatives are then incorporated into the design for further engineering. As the design progresses and more detail and firmer costs become available, it is often useful to perform another value engineering exercise.

The conceptual phase takes 6 to 8 weeks depending on the required estimating accuracy, complexity of solutions/options and the number of scenarios to be estimated. Typically at the end of this phase the following are available:

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Process flow diagrams, mass and energy balances

Equipment lists

Preliminary equipment sizing

Order-of-magnitude cost estimates

Economic evaluation

7.3 BASIC ENGINEERING

After the concept has been finalised and agreed with the refinery management, the design proceeds to firm up details. Process conditions are frozen and detailed equipment specifications are produced. Input from mechanical, piping, control systems, electrical and civil engineering disciplines is included to complete the design. Experts are used from other organisations where specialised skills are required. Detailed Piping and Instrumentation Diagrams (P&ID's) are produced showing the requirements of all disciplines. Equipment, instrumentation and material specifications are sent to suppliers to obtain quotations and details of required items. Global procurement is used to source material in the most effective manner, from both cost and schedule considerations.

During this phase, which could last about 3 months, reviews are held with clients, suppliers and internally to ensure the refinery's requirements are met and that the suppliers understand their requirements. Suppliers are often selected at this stage, although orders are not yet placed.

At the end of this phase a Hazard and Operability study (HAZOP) is held to ensure the design is workable and safe. The cost estimate is updated with an improved accuracy, based on the additional information.

7.4 DETAILED ENGINEERING AND CONSTRUCTION

Once all the planning and analysis is complete, the engineering departments get into full swing. Orders are placed for equipment, especially long delivery items. Any items not yet firmed up are defined and engineering completed. Any changes or updating are extremely tightly controlled to prevent omissions, schedule threats or escalating costs. The duration of this phase normally depends on equipment delivery. Careful planning is required to reconcile delivery times and commissioning and start-up requirements. Material must arrive on site

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in time to facilitate construction. Effort is concentrated on expediting and inspection to ensure that items reach site on time and are correct.

Any delays during engineering can cause an impact on the construction team, who need the flexibility to respond appropriately. A key consideration during construction phase is the safety of construction labour and other people in the vicinity of the site. At the end of construction the site is normally handed back to the owner for commissioning and start-up.

7.5 COMMISSIONING AND START-UP

During this final phase, the process of transferring the revamped refinery back to the operations department is done.

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Crude oil pipe line is connected from Alibagh to Mahul, LPG distribution is from Mahul to Ahemednagar & other cities.

Designing a plant in cost effective way is also a part of Value engineering


8 KEY FINANCIALS

8.1 FIXED ASSETS

Particulars Amount (Rs)Gross Block 19570.04Less: Depreciation 7640.77Net Block 11929.27Capital Work-in-Progress 3315.95TOTAL 15245.22

8.2 CURRENT ASSETS, LOANS AND ADVANCES

Particulars Amount (Rs)Inventories 12020.28Sundry Debtors 1710.66Cash and Bank Balances 294.01Other Current Assets 49.46Loans and Advances 5222.96TOTAL 19297.37

8.3 INCOME

Particulars Amount (Rs)Sale Of Products 103837.43Less:Excise Duty Paid 7394.51Net Sales 96442.92Recovery Under Subsidy Schemes 8260.84Other Income 1197.97TOTAL 105901.73

Book Value of Assets= Fixed Assets + Current Assets =15245.22 + 19297.37 =Rs.34542.59/-

8.4 RETURN ON INVESTMENT

Return Of Investment (ROI) Of the company= Net Income / Book Value of Assets =105901.73 / 34542.59 =3.0658

Other Than Intangible Assets

Gross Block At Cost As At 01-

Additions/Reclassifications

DeducTions/ReClassifiCations

Gross Block At Cost As At 31-03-

DeprecIation

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04-2007 2008Land - Freehold

477.68 22.94 - 500.62 -

Roads and Culverts

771.66 228.05 1.25 998.46 15.58

Buildings 1,498.73

333.82 2.73 1,829.82 36.19

Leasehold Property – Land

90.04 15.36 - 105.40 3.50

Railway Siding and Rolling Stock

281.40 0.90 0.43 281.87 12.88

Plant and equipment

12,043.51

3,227.21 42.55 15,228.17

750.07

Furniture, Fixtures and Office/Lab Equipment

321.50 103.31 8.56 416.25 28.93

Transport Equipment

100.50 22.22 2.41 120.31 3.96

Unallocated capital Expenditure on Land Development

0.20 - - 0.20 -

Unallocated Capital Expenditureand Materials at Site 2,647.14 3,683.14Advances for Capital Expenditure 372.72 83.68Capital Stores 19.46 33.44Capital Stores lying with Contractors 17.07

109.87Capital goods in transit 24.58 124.62

3,080.96 4,034.75

Construction period expenses pending apportionment(Net of recovery):Establishment charges 29.80 57.36Interest 102.05 130.06Other Borrowing Cost * 103.06 21.09Depreciation 0.08 0.30

234.99 208.81 3,315.95 4,243.56

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9 BIBLOGRAPHY

Refernces:

1. Production and operations management :Ashwathappa/ Bhat

2. Operations management : Roberta Russell/Bernard Taylor

3. Productions operations management : Buffa/Sarin

Website:

1. www.hpcl.com

2. www.hindustanpetroleum.com

3. www.managementarticles.com

4. www.moneycontrol.com

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http://www.moneycontrol.com/

http://www.managementarticles.com/

http://www.hindustanpetroleum.com/

http://www.hpcl.com/

Hpcl Operations Mgmt

Education

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