Oil India and NRL agree to cut costs

Vol 24, PW 19 (12 Aug 21) News in Brief

Oil India and Numaligarh Refinery managers have begun streamlining their operations to increase efficiency, cut costs and eliminate overlap.

In a symbolic ceremony, NRL held its first Board meeting at the Duliajan HQ of its new owner Oil India on August 9 (2021), attended by Oil India chairman SC Mishra, director finance Harish Madhav and director operations PK Goswami. From NRL came managing director SK Barua, director technical BK Phukan and director finance Indranil Mitra.

"They discussed how to collaborate," confirms an Oil India source. "When buying common items they agreed to list areas where they can buy together and introduce financial discipline."

He adds Goswami and Phukan would "sit together" to "thrash out" the details of a common procurement policy. Other areas discussed were a common recruitment policy and how each company could leverage the other's strengths: NRL's experience with ethanol and bio-fuels; Oil India's expertise in pipeline projects driven by its pipeline division headquartered in Guwahati.

"NRL's expansion to 9m t/y will require more staff," we hear. "NRL also has plans to lay more product pipelines and can use Oil India's help."

As a former BPCL company, Oil India admits it can also learn from NRL's sophisticated internal processes. When it acquired NRL, Oil India became the largest equity stakeholder with 77.06%, followed by the Assam government with 18.57% and Engineers India with 4.37%, according to the NRL website.

On March 26 (2021), Oil India enhanced its stake in NRL to 80.16%.