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Indian Oil and Acounting

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project report on indina and oil acconting

From the very starting of human development energy has been primary need of human being


ATMathura Refinery

(A Unit of IOCL)In the partial fulfillment for the award of degree of

Master of Business Administration (2006-08)

Submitted To:

Submitted By:Mr. Vinay Kandpal Dhruvesh SaraswatFaculty of Management

MBA (Finance)

IMS, Dehradun


Institute of Management Studies, Dehradun (Affiliated to Uttarakhand Technical University)DECLARATION

I, hereby declare that the project report submitted by me on OIL ACCOUNTS EXCISE & CUSTOMS is absolutely original and consists of true facts.

Dhruvesh SaraswatMBA (IInd Sem)


At the onset we must bow down in reverence to the Almighty who blessed us with the understanding and perseverance that is needed in this kind of project.

I would like to thanks Mr. Vijay Mohan, Chief Manager (MS& TRG) IOCL (Mathura Refinery) for giving us the opportunity to work with them and providing me with necessary resources for our project.

I take this opportunity to extend my sincere thanks to Mr. L.P Bhattrai (Finance Manager) and my project guide in the company. Mr. Anshul Bansal (Accounts Officer), and Mr. Anivesh Prasad (Accounts Officer) Mathura Refinery without whose co-operation, carrying out this project would have been impossible.

I would also like to thanks the whole Finance Department & Internal Audit Department, IOCL Mathura Refinery for making me familiar with the intricacies of project development and ensuring that work is in a systematic way.

Also, I would like to extend our gratitude to Mr. Pradeep Suri (HOD, Management) and Mr. Vinay Kandpal (Faculty of Management) for giving us an opportunity to have a practical experience of job.

A warm thanks to all our Colleague Trainees for their cooperation and support throughout the development process of this project.







INTRODUCTIONFrom the very starting of human development, energy has been primary need of human being. As the human developed a lot of energy started consuming into various forms, transportation, burning, industry, domestic use etc. It led to the development of many of the sources for the fulfillment of its energy needs. But a discovery inform of crude oil in 18th century changed the complete outlook of energy sector.

Crude oil, which is a mixture of various hydrocarbons, sulfur, traces of metals etc.

This crude oil led to development of debatably most crucial industry in 21stcentury in form of oil and gas industry.

Oil and gas, which caters to the more than half of the world energy needs, can be broadly classified into two parts-

1. Upstream 2. Downstream.

While upstream deals with the exploration and production of oil and gas, downstream involves refining of crude oil in various products, their marketing and petrochemical operationsThe major players in upstream part of oil and gas industry in India are-OIL (Oil India limited) and

ONGC (Oil and natural gas Corporation).

The major players in downstream sector are

IOCL (Indian oil corporation limited),

HPCL (Hindustan petroleum corporation limited),

BPCL (Bharat petroleum corporation limited),

RIL (Reliance industries limited),

ESSAR OIL etcAmong these only last two are private companies others are public sector units. Oil industry is perhaps the most exiting industry in the history of civilization. Although the history of oil traces back to seepages of oil as early as 3000 B.C., the real thrill of it started with the oil boom in the USA. Oil business has been responsible for prosperity, war intrigues and adventure. Search of oil and gas leads us to some of the most exotic forests, deserts, and ocean. Perhaps some of the most beautiful man made sights in the world are offshore platform in Deep Ocean, array of offshore rigs in remote desert or jungle or an illuminated petrochemical complex at night. Let us understand the importance of oil and gas industry by looking at its share in the energy supply to the world is provided by oil and gas. More than 60% of the energy needed in the world is provided by oil and gas.

To understand oil and gas business, one needs to understand a whole spectrum of activities from oil well to petrochemicals. Its also important to understand the trend and future of the industry in terms of technology, economics and pricing of energy resources. Energy price is very important for the economy of any country. Oil prices have been controlled from time to time to a high level by the petroleum is that now natural gas is overtaking oil. During the year 2000, the increase in the energy consumption of the world was 180 million tons of oil. Out this, share of oil was 20%, share of gas was 55% and that of coal was 15%. It is expected that gas will replace oil as dominant energy provider in near future. Its cleaner, cheaper and new discoveries and reserves of gas field are coming up in many parts of the including India.

Very often the question comes up how long the hydrocarbon resources

(Oil and gas) will last. Many predict oil and gas will start depleting in another 20 to 30 years. Its a fact that although the oil and gas industry will continue to dominate for several decades from now, at some point of time other forms of energy will take over. So its just the oil industry but its energy industry.

The first step is to understand what is oil? And what is gas? How it originated and what we get out of it.

What is petroleum?

Petroleum is a word derived from the Latin words Petra (rock) and Oleum (oil). It essential comprises of naturally occurring hydrocarbons i.e. compounds made of carbon and hydrogen atoms. These hydrocarbons are trapped below of oil and gas.

From where did the hydrocarbons come? There are various theories. The most accepted theory is the organic theory:

It is now largely believed that generation of petroleum is an organic process.

Hydrocarbons came from remains of the bodies of prehistoric land based animals, marine organisms (plankton) and vegetation, which were washed away and buried below the earth during upheavals on the earths surface millions of years ago. It is formed by decay of large masses in shallow swamps in deeper stagnant water where no oxygen exists. (Anaerobic condition).

Under this condition, decay reduces organic matters into waxy residuum, which is called adipocere rich in fatty acid. These are then attacked by bactreria, which release the hydrocarbons. The organic matter is chiefly in the form of a mineraloid called kerogen. The hydrocarbons got trapped in the porous the rocks and were covered by hard sedimentary rocks that formed over it. They acted as cap or seal to prevent hydrocarbonds from escaping.

Crude Oil and Natural Gas

The first processing step in an oilfield is separation between crude oil, natural gas and produced water.

What is crude oil?

Crude oil is a mixture of about 500 organic chemicals, predominantly hydrocarbons (molecules made of carbon and hydrogen). Its recovered from underground reservoirs, normally 1000-5000 meters down the earth.

Crude oil can be of wide variety and characteristics. It could be very fluid, very viscous or semisolid. The color could be black, dark brown, amber or light brown.

What is Natural Gas?

Natural gas is a mixture of the lightest hydrocarbons like methane, ethane, propane and butane. It also contains water to its saturation limit.

When natural gas comes out of the well along with crude oil, it is called associated gas.

When the well produces mainly gas with very little liquids, it is called free gas.

Various Forms of Natural Gas

There often exists a lack of understanding regarding the various terminologies or nomenclature used in the industry in describing components or forms of natural gas. The most commonly used ones are NGL, LPG, LNG, and CNG.

Composition of Crude Oil

Crude oil is predominantly made of hydrocarbons.

Its composed of three main hydrocarbon groups:




Commonly Used measurement Units in Petroleum Industry

Units weight or volumeConversion Factor

1 Metric Ton (Tonne)=7.33 Barrels

=1.165 Cubic Meters

1 Barrel (Bbl)=0.136 tonnes

=0.159 Cubic metres

1 Cubic Meter (CuM)=1 Kilo Liter (KL)

=0.858 Tonnes

=6.289 Barrels

1 Million Tonne of Crude= 1.111 Billion CuM of Natural Gas

= 39.2 Billion Cubic Feet Natural Gas

= 0.805 Million Tonnes LNG

1 Billion CuM of natural Gas = 0.90 Million Tonnes Crude Oil

= 0.73 Million Tonnes LNG

1 million Tonnes of LNG=1.38 Billion CuM of natural gas

=1.23 Million Tonnes Crude Oil

1 Million Tons Per Year of crude=20000 Barrels per standard day of crude


INDIAN OIL CORPORATION LIMITED - PROFILEIndian Oil Corporation Ltd. (IndianOil) was formed in 1964 through the Merger of Indian Oil Company Ltd. (Estd. 1959) and Indian Refineries Ltd. (Estd. 1958).

It is currently Indias L

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