Platts 3rd Annual Asian Refining Summit March 3-4, 2016, Singapore

BPCL (Fortune 500: 280, Platts 250: 59): Key Business Verticals

BPCL: Refineries

BPCL: Ongoing / Upcoming Projects

Kochi Refinery: Integrated Refinery Expansion Project (IREP) for increasing refining capacity from 9.5 MMTPA (190 KBD) to 15.5 MMTPA (310 KBD)

Mumbai Refinery: Replacement of CDU I & II and DHT Installation

Bina Refinery: Incremental Capacity Expansion from 6 MMTPA (120 KBD) to 7.8 MMTPA (156 KBD)

Investments in Gas pipelines

Expansion of marketing infrastructure across all business areas

Funding for upstream developments and new assets

Significant Expansion in Downstream & Marketing network to drive future growth

Expected Capital Expenditure of around USD 15 Billion on Upcoming and Ongoing project by BPCL group over the period of FY 2016-17 to 2020-21

India – Oil and Gas Demand

Significant potential for domestic Oil & Gas companies given the low per-capital oil consumption and growing demand

Indian Refining Industry Overview

Indian Refining Sector – Current Scenario

Over the last decade, close to 70 refineries have closed globally, whereas India has grown at CAGR of 6% along with adoption of eco-friendly fuels

Refining Sector – Crude Oil Scenario

Indian Demand of Transport Fuels (% Growth)

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

MS HSD TOTAL

Response from Refineries on Higher Gasoline Demand

5.0

10.0

15.0

20.0

1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

NAPHTHA GASOLINE HY ENDS

Post Dismantling of APM, India Became Net Exporter of Petroleum Products

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

PETROL DIESEL TOTAL

(MMT/A)

Indian Refining Sector – Product Scenario

India currently has a surplus production of 58 MMTPA, which is equivalent to 35% of its consumption. Country has exported Petroleum Products worth $ 47.3 billion in 2014-15

Source: India Africa Hydrocarbon Conference 2016

0

30000

60000

90000

120000

150000

180000

TMT

Total Product Demand Petrol Diesel

Refining Sector - Product Demand

Source: PPAC

Indian Oil Industry

Strategic position in the Indian economy with way to deregulation of fuel sector in the country

Indian Refining Sector – Performance

Source: India Africa Hydrocarbon Conference 2016

Refinery benchmark-High Utilization rates, topping capacity & Conversion ratio among Asian countries

Source: India Africa Hydrocarbon Conference 2016

How Government has benefited from lower prices

Source: Motilal Oswal

Different components of retail prices of petrol and diesel – how it has changed b/w Apr-14 and Nov-15

Retail fuel prices in different part of India

What Indians pay for Retail fuel?

Source: Economic Times

Source: Economic Times

Stronger Cracks Helped Indian Refiners

Response from Investors

Low crude benefit partially passed to Indian Consumers

Government has increased excise duty on petroleum products, thus passed a part of low price benefit to consumers

Helps government to make up for missed revenue collection targets (dis-investment); push infrastructure development

Under Recoveries on Petroleum Products

2013-14 2014-15 2015-16 (APR-DEC)

DIESEL RS/LIT. 8.39 2.7 DEREGULATED

KERO RS/LIT. 33.98 27.93 15.54

LPG RS/CYL. 499.52 409.72 153.62

DIESEL RS. CRORES 62837 10935 DEREGULATED

KERO RS. CRORES 30574 24799 9993

LPG RS. CRORES 50327 40551 12092

TOTAL RS. CRORES 143738 76285 22085

Impact on Forex

As per PPAC,

India to cut its oil import bill to $64.22 billion during 2015-16, down 43% from $112.75 billion in 2014-15

Every USD 10 /BBL fall in Brent Prices

Current Account To lower the current account by -0.4 -0.5% of GDP

Inflation / Monetary Policy CPI Inflation to be lower by 20 bps

WPI Inflation to be lower by 30-90 bps (immediate & long-run)

Open rooms for rate cuts by Central Bank (RBI)

Fiscal Deficit Lower crude prices and diesel deregulation helps shield the government’s B/S from volatile oil prices

Fiscal deficit to narrow by 0.5% of GDP; includes elimination of diesel subsidy (-0.3% of GDP)

Currency Unlikely to have a significant direct impact on the rupee

Considering overall net importer position; low oil prices are beneficial to India

Source: DBS Economic Research 2015

Iranian crude oil: Production and Exports “Implementation Day” of the JPCOA (Joint

Comprehensive Plan of Action) marks the start of Iran’s return to international crude markets.

Oil in floating storage is >40-m bbls (though <40% is thought to be crude).

Iran may add 300-500 kbpd to supplies in 2016 - This will head to both Europe and Asia, where the fight for market share is already fierce between Saudi Arabia, Russia and Iraq.

Source: Citibank Research

Iran crude exports: - Pre and Post Sanctions

Source: Harvard Kennedy School, Decoding Iran Nuclear Deal

Figures in barrels per day

Iranian crude and competitive grades

Indian crude oil imports from Iran

Current Bilateral trade b/w Iran and India is about $ 14 bn; with balance heavily in Tehran’s favor.

India adopted a “rupee-based payment mechanism” with Iran for payment of imported crude

State-owned Bank tied up with Iranian lenders — Parsian, Pasargad, Saman and EN Banks — for settlement

Payment in cash and cash equivalent (rice, automobile components, tools, motors, chemicals etc)

Strategic Partnership: - India and Iran

India in talks for developing Chabahar port in Southern Iran (India already extended a $150 million credit line to Iran)

Signed contract to supply rail tracks to develop Iran railways

India’s Pharmaceuticals and IT companies to boost business with Iran

Agricultural goods trade likely to increase

Conclusion

Low crude oil prices as well as lifting of sanctions on Iran: both beneficial to India

Iranian grades are attractive to Indian refiners with Iranian share as high as 16% in India’s oil imports. Competitive pricing and other related terms could make deal more attractive

For More Information, please contact Cell No. +91 9892 32 9892 Email trivedika@bharatpetroleum.in

31

Thank You