dr. neeti ioc_case

8/6/2019 Dr. Neeti IOC_Case

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International Journal of Management and Strategy http://www.myresearchpie.com(IJMS) 2011, Vol. No.II, Issue II, January-June 2011 ISSN: 2231-0703

INTRODUCTION

The Indian Oil was celebrating its 50 th anniversary year but it became a blazing funeral with the devastating week-

long inferno at its oil depot 20 kilometres away from Jaipur, the famed "Pink City" in north western India. An

estimated 12 people died and more than 150 were injured in the oil fire that blazed from the night of October 29,

2009. The fire was a major disaster in terms of deaths, injury, loss of business, property, man-days, displacement of

people and environmental impact. The people who were in the vicinity of Indian Oils Sitapura Oil Terminal felt

presence of petrol vapour in the atmosphere around 4:00 p.m. on the ill fated day. Within next few hours the

concentration of petrol vapour had intensified making it difficult to breathe. The Met department recorded a tremor

measuring 2.3 on the Richter scale around the time the first explosion at 7.36 pm which resulted in shattering of glass

window nearly 3 km from the accident site. The police, civil administration and fire emergency services were unable

to handle the situation developing in the Oil Terminal.

GLOBAL ENERGY DEMAND


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PROFILE OF INDIAN OIL CORPORATION

Indian Oil is the largest commercial enterprise of India and maintains its dominance in the market place and clock the

highest ever sales of over 66 million tons of petroleum products, registering a growth of 5.67% over the previous year.

Indian Oil takes a very bullish stand on petrochemical business. A well laid-out road map of vertical integration-

upstream into oil exploration and production (E&P) and downstream into petrochemicals- and diversification into

natural gas marketing in addition to globalisation of its downstream operations is the key to its sustained success. It

ranked 105th on the Fortune Global 500 List in 2009. Indian Oil and its subsidiaries account for a 47% share in the

petroleum products market, 40% share in refining capacity and 67% downstream sector pipelines capacity in India.

The Indian Oil Group of Companies owns and operates 10 of Indias 19 refineries with a combined refining capacity

of 60.2 million metric tonnes per year. The turnover (inclusive of excise duty) of Indian Oil for the year ended 31 st

March 2009 was Rs. 2,85,337 crore. The external revenue was Rs.3, 05,448 crore and operating profit was Rs.6950

crore.

Being Indias largest public sector petroleum refiner, Indian Oil has ranked No.1 in the FE 500, 2009 -10, rankings

th b i f t l (Th FE 500 i l ti i ki bli h d b i b i d il


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One after another, the three personnel went to the spot and fell unconscious due to the overpowering fumes.

Non-availability of a self-contained breathing apparatus and fire suit immediately left the entire response team as

mere helpless spectators in preventing the incident.

Since none of the shift staff was available and the senior management could not reach the site, the leak continued for

75 minutes.

Around half past six the staff in the terminal having failed to contain the leak and flow of petrol panicked and

reported the matter to the nearby Sanganer Sadar Police Station. Within next half an hour the local police chief and

the District Collector were on the spot along with Indian Oil General Manager, but with no plan to deal with the

situation. The nearby industries, which were running second shifts, were cautioned to vacate the area.

At 7:35 p.m. a huge ball of fire with loud explosion broke out engulfing the leaking petrol tank and other

nearby petrol tanks with continuous fire with flames rising 3035 meters and visible from 30 km radius. It was

estimated that the nearly 1000 tonnes of motor spirit had leaked out, which led to an explosion equivalent to 20


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Incidences of other Fire Accidents

On March 23, 2005, a fire and explosion occurred atBP's Texas City Refinery in Texas City, Texas, killing 15

workers and injuring more than 170 others.

The Buncefield fire was an inferno caused by a series of explosions on 11 December 2005 at the Hertfordshire Oil

Storage Terminal, England. The terminal was the fifth largest oil-products storage depot in the United Kingdom, with

a capacity of about 60,000,000 imperial gallons (272,765,400 l) of fuel.

Production at the 67,000 barrel per day Alon USA Energy Inc refinery in Big Spring, Texas, was shut by a blast on

February 18, 2008.

An explosion and fire at a Washington state oil refinery shook homes and shot flames into the night sky on April 2,

2010, killing five people and critically injuring two others. The blaze occurred while maintenance work was being

performed

Inquiry Committee Report
http://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/Texas_City,_Texashttp://en.wikipedia.org/wiki/Explosionhttp://en.wikipedia.org/wiki/Hertfordshire_Oil_Storage_Terminalhttp://en.wikipedia.org/wiki/Hertfordshire_Oil_Storage_Terminalhttp://en.wikipedia.org/wiki/Hertfordshire_Oil_Storage_Terminalhttp://en.wikipedia.org/wiki/Hertfordshire_Oil_Storage_Terminalhttp://en.wikipedia.org/wiki/Hertfordshire_Oil_Storage_Terminalhttp://en.wikipedia.org/wiki/Explosionhttp://en.wikipedia.org/wiki/Texas_City,_Texashttp://en.wikipedia.org/wiki/BP


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Even after the leak started, the accident could have been managed if safety measures provided in the control roomwere taken, said Lal, adding that the lack of shutdown from the control room, absence of senior officers and any

emergency response for 75 minutes led to the uncontrolled explosion.

Among the major recommendations was the strengthening of the safety function in Indian Oil Corporation by

improving the quality of the cadre and making it directly report to the head. It also asked for strengthening the

internal safety auditing functions by making it cross-functional and providing professional safety auditing training.

The Disaster Management

THE DISASTER MANAGEMENT ACT, 2005 envisages that each revenue District must have a Disaster

Management Plan. While 31 revenue Districts of Rajasthan had placed the Disaster Management Plan on Rajasthan

Government website Jaipur District did not have any Disaster Management Plan. A Disaster Management Plan for

Jaipur District has been put on Internet on 17 November 2009 i.e. 20 days after the accident took place on 29 October

2009.
http://en.wikipedia.org/wiki/Jaipur_Districthttp://en.wikipedia.org/wiki/Jaipur_District


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of hostels in 10 engineering and technical colleges and a medical college were evacuated in the wake of the incidentafter which power supply in the area was cut off. (Exhibit 3)

Residents complained of lack of water and electricity. Officials insisted that they were supplying water to the

residents through tankers as electricity supply had been cut.

AFTERMATH OF THE TRAGEDY

Health and Environment Hazard

Compounding the woes of the people, a dark cloud of smoke covered a vast area. People experienced difficulty in

breathing as well as itching in the eyes.

Meanwhile, doctors said that the smoke, which was emitting many harmful gases, might create serious health hazards

to the people of surrounding areas and advised them to cover their faces with mask of cloth.

Acute problems will occur due to emission of gases like carbon monoxide that replaces oxygen, carbon-dioxide, and

nitrous oxide. This would lead to health hazards like chest heaviness, breathing problems and uneasiness, warned Dr.

P dh Sh


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The state pollution control board monitored the air pollution level. The department of environment constituted apanel to assess the impact of the fire.

Financial Implications

Beyond the immediate destruction - IOC lost US$300 million in destroyed infrastructure, equipment and 50,000

kiloliters of burnt oil, executive director, N Srikumar, told Asia Times Online. The fire damage reached far into theregional economy; 450 of the approximate 1,000 factories in the Sitapura industrial area either suffered extensive

damage or were gutted. Estimated losses crossed $200 million. Victims including exporters had their businesses burnt

out in a night.

The IOC also said that it would take at least 15-18 months to rebuild the facility in Jaipur.

Some of the industrialists who visited their units for the first time after the fire broke out were shocked to see the

extent of damage.


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Shares of the Indian Oil Corp scrip fell over 7.5 percent on 30th

October on the Bombay Stock Exchange. The sharesof the state-run refinery major fell to Rs.291.50 in early trade, down from its previous close at Rs.315.25, but

stabilised marginally at Rs.308.10 later

Complaints and Litigations

An executive of a private company filed a complaint against Indian Oil Corporation (IOC). With four of the 11 tanks

in the depot still ablaze on the sixth day, the IOC was charged with criminal negligence.

As per the orders passed on 4 December 2009 by the Chief Judicial Magistrate, Jaipur Mr. Mahaveer Swami, the

Police Station Adarsh Nagar, Jaipur has registered FIR 337/09 under sections 166, 304A, 511, 120B against the 20

top management officials of IOC.

The Industries & Education Institutions in Sitapura Industrial Area have filed about 150 complaints with Sanganer

Sadar police station about deaths, injury and loss of property due to negligence of Indian Oil Corporation Limited.


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REFERENCES

http://www.iocl.com/print/aboutus/Distinctions21.htm

http://www.iocl.com/AboutUs/Profile.aspx

http://www.reuters.com/article/idUSN1817354220080218

http://www.click2houston.com/news/4311459/detail.html

http://www.guide-xt.com/5-die-in-wash-refinery-blast-and-fire/

http://en.wikipedia.org/wiki/Buncefield_fire

http://ehsjournal.org/http:/ehsjournal.org/martyn-ramsden/buncefield-process-safety-report-fuel-storage-facilities-

uk/2010/

Final Report on Safety & Environmental Standards for Fuel Storage Sites, The United Kingdom Process Safety

L d hi G (PSLG) 11 D b 2009
http://www.iocl.com/print/aboutus/Distinctions21.htmhttp://www.iocl.com/AboutUs/Profile.aspxhttp://www.iocl.com/AboutUs/Profile.aspxhttp://www.reuters.com/article/idUSN1817354220080218http://www.click2houston.com/news/4311459/detail.htmlhttp://www.guide-xt.com/5-die-in-wash-refinery-blast-and-fire/http://en.wikipedia.org/wiki/Buncefield_firehttp://ehsjournal.org/http:/ehsjournal.org/martyn-ramsden/buncefield-process-safety-report-fuel-storage-facilities-uk/2010/http://ehsjournal.org/http:/ehsjournal.org/martyn-ramsden/buncefield-process-safety-report-fuel-storage-facilities-uk/2010/http://ehsjournal.org/http:/ehsjournal.org/martyn-ramsden/buncefield-process-safety-report-fuel-storage-facilities-uk/2010/http://ehsjournal.org/http:/ehsjournal.org/martyn-ramsden/buncefield-process-safety-report-fuel-storage-facilities-uk/2010/http://en.wikipedia.org/wiki/Buncefield_firehttp://www.guide-xt.com/5-die-in-wash-refinery-blast-and-fire/http://www.click2houston.com/news/4311459/detail.htmlhttp://www.reuters.com/article/idUSN1817354220080218http://www.iocl.com/AboutUs/Profile.aspxhttp://www.iocl.com/print/aboutus/Distinctions21.htm


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http://en.wikipedia.org/wiki/2009_Jaipur_fire

http://www.atimes.com/atimes/South_Asia/KK05Df01.html

The World Energy Outlook, The International Energy Agency, 2009

EXHIBITS
http://en.wikipedia.org/wiki/2009_Jaipur_firehttp://www.atimes.com/atimes/South_Asia/KK05Df01.htmlhttp://www.atimes.com/atimes/South_Asia/KK05Df01.htmlhttp://en.wikipedia.org/wiki/2009_Jaipur_fire


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Exhibit 2: All Eyes on IOC


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International Journal of Management and Strategy http://www.myresearchpie.com/(IJMS) 2011, Vol. No.II, Issue II, January-June 2011 ISSN: 2231-0703

International Journal of Management and Strategy ISSN: 2231-0703

Causal Analysis

Critical Factors Immediate Cause Root Cause Policy Issues

1. Uncontrolled loss ofprimary containment inthe form of a jet ofgasoline

- Wrong operation of valves byoperator

- Improper equipment (HammerBlind Valve)

- Absence of second operator- Lack of supervision

- Ineffective Training- Poor design awareness- Indiscipline- Poor leadership at supervisory

level- Ineffective internal safety audit- No external safety audit in 6

years

- Safety not given adequate priority- Lack of enforcement of discipline- Leadership development program- Safety function not independent/

autonomous- No ESA conducted in last 6 years

2. Operating personnelincapacitated

- All operating crew overcome byleaking gasoline liquid and

vapour- Second operator attempting

rescue also entered the affectedarea and was overcome

- No PPE (Personnel ProtectiveEquipment)

- Lack of operational skills andpoor mental alertness

- Lack of training in emergencymanagement- Non-availability/lack of

awareness on PPE use

- Lack of risk awareness- Lack of training program

3. Loss of secondarycontainment

- Open dyke valve in tank 401Adyke

- Poor operating discipline- Lack of supervision- Position not monitored in control

room

- Leadership development not effective- Independence of safety functions lacking- Risk awareness

4. Inadequate mitigationmeasures

- MOV closure from control roommade defunct

- Non-availability of self containedbreathing apparatus (SCBA)

-

No emergency plan for thescenario- No emergency responder- Absence of command and control

during emergency

- No Management of Changeprocedure

- Improper PPE Policy- Quantitative Risk Assessment

not done- Absence of Training inEmergency Management

- Inadequate leadership- Ineffective internal safety audit- No external audit in 6 years

- Safety not given adequate priority- Risk perception- Risk awareness- Emergency awareness-

Leadership development not effective- Independence of safety functions lacking

5. Shortcomings in designand engineering

- Selected device for positiveisolation is potentially hazardous

- Operating area was inside dyke- MOV operation was from inside

- Old practice not reviewed- No hazard analysis- Improper HAZOP- No hazard analysis done

- Acceptance of status quo- No formal structure to scan latest industry

development/best practices etc. andpicking up best industry practice


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dyke- Operating area access/escape

unsatisfactory- MOV was used for tank isolation

as Hammer Blind isolation. Nofall back provision

- Improper HAZOP

6. Absence from site ofone operator

- Poor operating discipline- Lack of supervisory control

- Lack of supervision andmonitoring through surprisechecks

- Laxity in strict enforcement ofconduct & discipline rules

- Incompetency at supervisorylevel

- Inadequate monitoring by seniormanagement

- Leadership development not effective

7. Absence of immediateresponse to on-site andoff-site emergency

- Poor emergency awareness- No emergency responders- Unavailability of PPE

- Lack of understanding of hazardpotential

- Absence of training inemergency management

- Lack of PPE

- Risk awareness- Safety not given adequate priority- Lack of risk perception

EXHIBIT5


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EXHIBIT - 6

INCIDENT SCENARIO ANALYSISHYDROCARBON LEAK TOOK PLACE

WHY

HB & MOV BOTH OPEN

WHY

NORMAL OPERATING PROCEDURE WAS NOT FOLLOWED

WHY WHY WHY WHY

WHYWHYWHY

WHY

POSSIBILITY 1

DID NOT SEE HAMMER BLINDVALVE IN OPEN POSITION

POSSIBILITY 3

MOV WAS PASSING

POSSIBILITY 2DELIBRATE BYPASSING

PROCEDURE

POSSIBILITY 4

HOV WAS OPEND

POOR LIGHTING / ASSUMED IN

CLOSED POSITION

WORK AFETR DARK 6 PM

KR MEENA ABSENT FROM SITE,

ONLY RN MEENA PRESENT, NO

COMM. BETWEEN THEM

A GUPTA DID NOT SUPERVISE

HOV WAS OPEN

LEAK STARTED WHEN HB WASOPENED(PRESSURE OF MS IN THE LINECOULD NOT BE CHECKED ASVALVE WAS NOTPROVIDED/INSTALLED)

BAD PRACTICE OF OPENING HOV

FIRST MAY HAVE PREVALENT TO

REDUCE PASSING EFFECT OF MOV

MOV/HOV WAS CRACKED

OPEN TO PRESSURIZE LINE

BEFORE TAKING DIP

(HOV WAS FULL OPEN)

WHY HOV WAS FULL OPENRN MEENA WAS NOT AWARE OF

THIS.

OPENED HAMMER BLIND MORE

RN MEENA WANTED TO PRESS

CLOSE BUTTON BUT PRESSED

THE OPEN BUTTON BY

MISTAKE IN A STATE OF PANIC

WHEN RN MEENA OPENED

HAMMER BLIND MS STARTED

LEAKING ON ACCOUNT OF

REVERSE FLOW.

(REMOTE POSSIBILITY)BAD PRACTICE FROM THE PAST

TO CONTROL BACK PRESSURE

dr. neeti ioc_case

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