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Market Report On Indian Oil & Gas By TheEquicom Research

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  • www.TheEquicom.com +919200009266+919200009266 Page 1

    REPORT ON OIL & GAS EXPLORATION

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    PREFACE:

    This report has been compiled for the investors & readers with an interest in the oil and gas production industry. It is an overview of the main processes and

    equipment. When we searched for a suitable introduction to be used for new

    investors. We discovered that mush of the equipments described in standards,

    equipment manuals and project documentation. But little material was found to

    quickly give the readers an overview of the entire upstream area, whilst still

    preserving enough detail to let the engineer have an appreciation of the main

    characteristics and design issues.

    This report is by no means a complete description on the detailed designed of any

    part of this process, and many details have omitted in order to summarize a vast

    subject. We have included some comments on the control issues, since that is part

    of my own research. For the same reason, the description will be somewhat

    biased towards the different companies.

    The material has been compiled from various online resources as well as

    companys document and upcoming events. We are grateful to our companion in

    the different industries for providing their valuable inputs and comments. We

    have included many Charts, Bars & Photos to give investors & readers an

    impression that what typical facilities or equipments look like.

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    TABLE OF CONTANTS:

    Overview on oil & gas

    Overview of the Indian economy

    Outlook on Indian oil and gas market

    Technical view on major Oil Companies in India

    Indias upstream sector

    Investment in oil and gas sector in India

    Gas transmission and distribution

    NELPS Report

    Gas industry in India

    A note on Shale gas

    Overview of the Indian taxation regime

    Conclusion

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    OVERVIEW ON OIL & GAS:

    Without oil and gas exploration and production the World would literally grind to a halt. The dependency on oil & gas products, the everyday materials and

    resources from oil and gas are evident in all aspects of our daily lives. How are oil

    and gas deposits located? How are they safely and efficiently extracted for

    onward processing without detrimental environmental impacts? This is a short

    but comprehensive course designed to give an overview and to introduce oil &

    gas operations to personnel who are new to the industry. It includes videos and

    interactive sessions to explain and discuss the impacts of the oil & gas industry

    and future industrial demands.

    The oil and gas sector in India has been instrumental in fuelling the growth of the

    Indian economy, hence presenting a significant opportunity for investors in the

    years to come. The government has also been doing its bit in recent times to

    deregulate the industry and encourage greater foreign participation. The New

    Exploration Licensing Policy (NELP), conceived to address the increasing demand

    supply gap of energy in India, has proved to be successful in attracting the

    interest of both domestic private sector players and some foreign players with

    eight rounds of bidding, with Reliance Industries, ONGC, BPCL, IOC, GAIL and

    Cairn being particularly active in this arena . Other segments such as Refining,

    LNG, City Gas Distribution etc. are also seeing some action.

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    OVERVIEW OF THE INDIAN ECONOMY:

    INDIA GDP GROWTH RATE:

    The Gross Domestic Product (GDP) in India expanded 0.60 percent in the third quarter of 2012 over the previous quarter. GDP Growth Rate in India is reported

    by the OECD. Historically, from 1996 until 2012, India GDP Growth Rate averaged

    1.6 Percent reaching an all time high of 6.1 Percent in March of 2010 and a record

    low of -1.5 Percent in March of 2004. In India, the growth rate in GDP measures

    the change in the seasonally adjusted value of the goods and services produced

    by the Indian economy during the quarter. India is the worlds tenth largest

    economy and the second most populous. The most important and the fastest

    growing sector of Indian economy are services. Trade, hotels, transport and

    communication; financing, insurance, real estate and business services and

    community, social and personal services account for more than 60 percent of

    GDP. Agriculture, forestry and fishing constitute around 12 percent of the output,

    but employs more than 50 percent of the labor force. Manufacturing accounts for

    15 percent of GDP, construction for another 8 percent and mining, quarrying,

    electricity, gas and water supply for the remaining 5 percent. This page includes a

    chart with historical data for India GDP Growth Rate.

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    According to the latest estimates available on the Index of Industrial Production

    (IIP), the index of mining, manufacturing and electricity, registered growth rates

    of 1.8 per cent, 0.2 per cent and 2.8 per cent, respectively in Q3 2012, as

    compared to the growth rates of (-) 4.1 per cent, 3.4 per cent and 10.5 per cent in

    these industries in Q3 2011. The key indicators of construction sector, namely,

    cement and consumption of finished steel registered growth rates of 5.1 per cent

    and 2.3 per cent, respectively.

    Outlook on Oil & Gas market:

    Global demand for energy continues to grow, especially in developing countries such as China and India, as the oil and gas industry continues to search for new

    sources of energy. Increasingly, oil and gas are found in challenging areas, such as

    deep water, arctic regions and politically challenged regions of the world.

    For the past five years, however, the headline for the industry has been the

    dramatic development of unconventional oil and gas in the U.S., such as shale gas

    and tight oil. Unlocked by technological advancements, development of these

    resources continues to change the global landscape of oil and gas.

    India has significant potential to discover new oil and gas basins since about 80%

    of the countrys sedimentary area is yet to be explored. Recent large-scale oil and

    gas discoveries in the Krishna Godavari and Rajasthan basins have amply

    demonstrated this potential. Public sector corporations dominate the Indian

    exploration and production sector. In terms of the percentage share in total

    production Oil and Natural Gas Corporation accounts for the highest share.

    Furthermore, the report gives reliable projections of Indias supply and demand of

    crude oil, petroleum products, natural gas and coal to 2025.

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    Annexure-I

    Share of future energy supply in India (%)

    Year Coal Oil Gas Hydel Nuclear

    1997-98 55 35 7 2 1

    2001-02 50 32 15 2 1

    2006-07 50 32 15 2 1

    2010-11 53 30 14 2 1

    2024-25 50 25 20 2 3

    Share of hydel energy remains constant considering the planned capacity

    addition upto 2012 and projected at the same level upto 2025.

    Annexure-II

    Per capita Energy consumption in minion tones of oil equivalent (MTOE)

    Country/Region 1987 1997

    World 1.5 1.5

    India 0.2 0.3

    China 0.6 0.7

    North America 5.8 6.3

    Europe 3.1 3.1

    Former Soviet Union 4.7 3.2

    Rest of the World 0.6 0.7

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    TECHNICAL VIEW ON MAJOR OIL COMPANIES IN INDIA:

    Cairn India

    As per our technical view Cairn India has consolidation phase so investors may enter in it above 340 for the target 370.

    Indian Oil Corporation

    As per our technical view Indian Oil Corporation is showing a bearish trend so investors should avoid it & do not make any fresh position at this time. Investors

    might take long position at our 1st support level (275) for the target 310.

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    ONGC

    As per our technical view ONGC is showing consolidation here so investors should avoid it to make any fresh position at this time. This stock seems risky to

    take any long position.

    BPCL

    As per our technical view investors may take long position above 395 for the target 440. It has made a 10 year high as before.

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    INDIAS UPSTREAM SECTOE:

    ICRA Research has come out with its report on Indian oil & gas upstream sector. According to the research firm, India is expected to remain an energy

    deficit country with imports accounting for 76-77% of total domestic crude oil

    demand.

    Domestic oil and gas production dipped 5% year on year to 86 million metric tons

    of oil equivalent (MMTOE) in FY 13 on the back of 9% degrowth in gas production

    to 47.55 billion cubic meters (BCM) following disappointments in Reliance

    Industries Limiteds (RIL) flagship KG D-6 block and tepid 1% growth in crude oil

    production to 38 million metric tons (MMT). Oil and Natural Gas Corporation

    Limited (ONGC) continues to dominate Indias exploration and production (E&P)

    landscape, acc

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