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Click to edit Master title style Indian Oil and Gas Industry

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  • Slide 1
  • Click to edit Master title style Indian Oil and Gas Industry
  • Slide 2
  • Contents Market Overview Government regulations & policy Business opportunities and Advantage India
  • Slide 3
  • Indian Oil and Gas Industry - Prime mover of the Indian economy Oil and Gas Industry Size is estimated at USD 110 bn (about 15% of Indian GDP) Contributes to about 64% of gross revenues of Government (both Central and State together) through Taxes and Duties Total Contribution to Government exchequer in 2004-05 = USD 27 bn Contributes to about 45% of Indias primary energy consumption Constitutes 30.87% of Indias imports in 2005-06 Accounts for 11.21% of Indias exports in 2005-06 India is the Sixth largest crude consumer in the world India is the Ninth largest crude importer in the world Indias has the sixth largest refining capacity - 2.56 million barrels per day representing 2.99% of world capacity India is the Fifth largest energy consumer in the world Primary Energy Consumption (2005) 387.3 MMTOE Oil and gas accounts for 44% of Indias primary energy consumption Compounded Annual Growth rate of Energy Consumption (1996-2005) 3.62% Energy-GDP Elasticity = 0.58 Source: Integrated Energy Policy; BP Statistical Review 2006, Ministry of Commerce, MoP&NG, Stg Comm Report, FICCI Report, ABN AMRO, IMaCS Analysis Indias GDP would fall by 1.5% for every USD 10 increase in the price of oil per barrel
  • Slide 4
  • Supply has failed to keep pace with demand Source: DGH Presentation Yawning Demand-Supply Gap : Need to Intensify exploration efforts to convert the remaining prognosticated hydrocarbon reserves to established reserves Increase recovery factor of producing fields Tie up crude oil and gas imports setting up of LNG Regasification terminals/ laying of transnational pipelines Scout for equity oil and gas from abroad Explore new technologies like coal gasification, coal to oil conversion, gas hydrates exploration, coal bed methane extraction etc.
  • Slide 5
  • Intensive Exploration & Production a must . Sedimentary Area 3.14 million sq km Only 19% of the area extensively explored Domestic Hydrocarbon Scenario (as on 1.04.2006): Prognosticated Resources (Oil + Oil Equivalent Gas) 28-32 BMT Established Geological reserves (O + OEG)8.2 BMT O + OEG already produced1.42 BMT Balance Recoverable Reserves (O + OEG)1.85 BMT Current Oil Production32.19 MMT Current Gas Production88.22 MMSCMD Source: DGH / MoP&NG
  • Slide 6
  • Exploratory measures initiated by Government. New Exploration Licensing PolicyCoal Bed Methane Policy 110 Production Sharing contracts in 5 New Exploration Licensing Policy (NELP) rounds 30 discoveries with hydrocarbon in-place reserves of over 600 MMT in last 3-4 years Investment commitment of about USD 5 bn in exploration phases under NELP Perception of prospectivity of Indian sedimentary basins reflected in NELP VI response Exploratory Measures 16 Blocks already awarded with production potential of 25 MMSCMD under Coal Bed Methane (CBM) I & II rounds Significant commercial finds in blocks held by RIL and ONGC First commercial production of CBM by 2007-08 54 Bids received for 10 CBM blocks offered in the third round Award of blocks in near future
  • Slide 7
  • GSPCRIL OILHOEC ONGC Cairn British Gas Governments exploratory measures bearing fruits.. Major Upstream PlayersMajor Discoveries YearDiscoveryOperator 2000Gas Gulf of CambayCairn 2001 Oil & Gas Krishna Godavari Deep waters Cairn 2002 Gas KG Basin Deep waters (Worlds biggest discovery for the year) RIL 2003 Oil in Barmer-Sanchor basin (Rajasthan) Cairn 2004 Gas in Mahanadi basin shallow waters RIL 2005Gas in KG Basin shallow watersGSPC 2005Oil in KG Basin shallow watersRIL Source: DGH
  • Slide 8
  • Oil Refining Capacity from shortage to surplus Refinery Capacity in MMT RefineriesNoJune 062006-072011-12 IOC Group1060.2 72.2 BPC Group322.5 30.5 HPC213.016.225.2 ONGC/ MRPL 29.8 RIL133.0 60.0 Essar12.0 18138.5153.7210.0 Refinery Throughput 127 MMT (2005) Imported Crude 78% Domestic Crude 22% Source: MoP&NG, BP Statistical Review 2006 Refining Capacity more than doubled between 1998 and 2006
  • Slide 9
  • Petroleum product exports - a major Foreign Exchange earner Consumption 2005-06 (MMT)Exports ProductMMT% Diesel40.235.9% Petrol8.67.7% LPG10.39.2% Kerosene9.48.4% FO/LSHS12.711.4% Naphtha12.210.9% Bitumen, ATF, Lubes, Solvents 18.516.5% 111.9100% Sector with vast export potential Exports increased by about 65% from 2004-05 to 2005-06 Source: MoP&NG, Ministry of Commerce & Industry
  • Slide 10
  • Inland Petroleum transportation gradual shift from railways to pipelines Source: MoP&NG, Infraline, IMaCS analysis Mode of Transportation Share of pipeline transportation in India much lower as compared to USA, inspite of its advantages Total POL pipeline length currently under operation in India 12,204 kms POL pipelines under implementation 5,561 kms (Investment of USD 1.5 bn)
  • Slide 11
  • Presence of both State and Private players in the Indian oil market Marketing Infrastructure Oil Marketing Companies Source: MoP&NG Company Retail Outlets LPG Distributors SKO Dealers IOC11,7394,8563,564 HPCL7,3132,2021,648 BPCL7,3182,1231,014 IBP3,46889381 29,8389,2706,607 Marketing Infrastructure Others Company Retail Outlets ONGC1 NRL58 RIL1,218 Shell12 Essar516 Controlled Pricing Market Determined Pricing Administered Pricing
  • Slide 12
  • Massive Investments planned in gas pipelines Total Investment required in the proposed projects is about USD 15-20 bn Transnational Gas pipelines planned Iran-Pakistan-India pipeline Myanmar-India Pipeline Turkmenistan-Afghanistan- Pakistan-India pipeline Source: MoP&NG, Infraline, IMaCS Research
  • Slide 13
  • Contents Market Overview Government regulations & policy Business opportunities and Advantage India
  • Slide 14
  • Government regulations have evolved over time in tune with domestic compulsions and international hydrocarbon scenario. 1947-19621962-19701970-1990 1990-2000Post 2000 Upstream Downstream Setting up of Public Sector Upstream Oil Companies ONGC (1956) and OIL (1959) Free Investment Multinationals like Shell, Caltex, and Esso conducting operations Dismantling of APM (2002) Passing of Petroleum and Natural Gas Regulatory Board Act, 2006 Nationalization of foreign Companies (1970) Strict Government controls Increasing Government participation Formation of national oil refining companies Coexistence of Public and Private Sectors Liberalised FDI regime Delicensing of Refinery sector (MRPL 1996) Open marketing of many products Selective private participation Government, the only player Offer of exploration blocks to international oil companies (1979 onwards) Setting up of regulator DGH (1993) Introduction of NELP Implementation and award of NELP blocks CBM policy
  • Slide 15
  • Policy initiatives to attract Foreign Direct Investment Upto 100% FDI through automatic route Through incorporated/ unincorporated Joint Ventures or directly Upto 100% FDI if set up as a private Indian company Upto 26% in case of state owned companies Upto 100% FDI through automatic route Upto 100% FDI allowed Approval required from Foreign Investment Promotion Board. Exploration & Production Refining Marketing Product Pipelines Natural Gas/ LNG pipelines
  • Slide 16
  • Contents Market Overview Government regulations & policy Business opportunities and Advantage India
  • Slide 17
  • India offers significant advantages for the domestic and global oil and gas majors Strategic location Nearness to the premier crude oil and gas supply market (Middle East) Geographical Proximity to the major petroleum product importers China and Japan Well Developed Maritime infrastructure Government policies conducive to the growth of the sector tax holidays, Special Economic Zones for Petroleum products Availability of experienced manpower at lesser costs Cost advantage Existence of hi-tech indigenous EPC Companies lower construction periods Large domestic market Anchor customer of the various petroleum products Possibility of achieving economies of scale Source: IMaCS Research 71 183
  • Slide 18
  • Significant Business Opportunities exist for foreign players NELP rounds and Open acreage system (Opportunities for providers of services platforms, rigs, Offshore vessels etc.) Redevelopment of existing fields to improve recovery factor Offer of CBM blocks through Competitive bidding route. Natural gas hydrate programme Underground coal gasification Coal to oil conversion Refining Expansion of existing capacities, setting up of new refineries, acquiring stakes in these refineries Ethanol and Biodiesel production cultivation of Sugarcane and Jatropha Petroleum marketing setting up of retail outlets, new product pipelines. LNG imports Setting up of LNG Regasification terminals. Offshore Transshipment (Single Buoy Mooring) Laying of cross country gas grid and transnational gas pipelines City Gas Distribution including laying of CGD and CNG networks Upstream Midstream/ Downstream
  • Slide 19
  • Key Players in the Indian Oil and Gas Sector Company Fortune 500 Rank Profile 153 Indias largest company by sales (Turnover of USD 37 bn) Indias flagship Downstream company - Along with subsidiaries accounts for 47% of Petroleum market share among Public Sector Oil Companies, 41% of National

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