31
Bankers Meet 28 th April 2010
Bankers Meet 28th April 2010
1
IOCL – An Important Pillar in Indian Economy
Oil Industry In India
IOCL – An Overview
IOCL’s Core Operations
Strategic Initiatives
Financial Performance
Ongoing Projects
2
India’s largest commercial enterprise and flagship national oil company and downstream petroleum major
First Rank Indian corporate in Fortune Global 500 – ranked 105 in 2009
Revenues of Rs 285,000 crore (approx. USD 62 Billion)
Major supplier to core sector
Supplier of fuel (more than 80% of requirement) to Government organizations i.e. army, railways, state road transport, air force & navy
Key sectors like fertilizer, power & aviation are largely supplied by IOCL
Credit Profile
International:
Baa3 Stable : by Moody’s
BBB- Negative : by Fitch
Domestic
Long Term: AAA/Negative; Short Term P1+ : by CRISIL
Long Term: AAA/Negative : by Fitch
IOCL – An Important Pillar in Indian Economy
Note: Revenue ending FY09; USD-INR: 46 (Average Rate for 2008-09)
Fortune Ranking
3
Accolades
#33 in Platts Top 250 Global Energy Rankings 2009
#1 in BW Real 500 Rankings – Business World, November 2009
#1 in “ET 500” – Economic Times listing of India's corporate giants for 2009
SCOPE MoU Excellence Award in the Petroleum Sector during FY2010
“Most Trusted Brand” – Reader’s Digest, Petrol Station Category in India, 2009
“World Petroleum Congress Excellence Award 2008” in Madrid, Spain for R&D work in hydro-
processing technology for Green Fuels
“One of the Best Employers” – Hewitt Associates survey, 2009
4
IOCL – An Important Pillar in Indian Economy
Oil Industry In India
IOCL – An Overview
IOCL’s Core Operations
Strategic Initiatives
Financial Performance
Ongoing Projects
5
Oil Industry In India – An Overview
Oil & Natural Gas Corporation Ltd. (ONGC) 1UPSTREAM
(Exploration & Production)
Oil India Ltd.
Reliance, Cairn Energy, HOEC, Premier Oil
Indian Oil Corporation Ltd. 2
Hindustan Petroleum Corporation Ltd. (HPCL)
Bharat Petroleum Corporation Ltd. (BPCL) 3
Reliance Industries Ltd. (RIL) / Essar Oil Ltd. / Shell
DOWNSTREAM (Refining, Marketing
& Pipelines)
Mangalore Refinery & Petroleum Ltd. (MRPL) 4
GAS (Transport & Distribution)
GAIL (India) Ltd.Petronet India Ltd. (PIL)IndianOil Corporation Ltd.
1 – includes subsidiary ONGC Videsh Ltd (OVL); 2 – includes subsidiary Chennai Petroleum Corporation Ltd. (CPCL); 3 – includes subsidiary Numaligarh Refinery Ltd.; 4 – a subsidiary of ONGC Ltd.
6
Growth of Petroleum Products
Consumption (MMT) 13 3
10 8
112
12 9
12 1
113
100
110
120
130
140
FY04 FY05 FY06 FY07 FY08 FY09
Over the last 5 years, consumption of petroleum products grew at CAGR of 4.36%
Source: Petroleum Planning & Analysis Cell, Ministry of Petroleum & Natural Gas, Govt. of India,
7
IOCL – An Important Pillar in Indian Economy
Oil Industry In India
IOCL – An Overview
IOCL’s Core Operations
Strategic Initiatives
Financial Performance
Ongoing Projects
8
Overview of Operating Structure
…. also into Petrochemicals, E&P, Gas and Wind Power
9
IOCL’s dominance in Downstream Oil sector
Refining – % Share Products Pipelines - %Share
BPCL13%HPCL
7%ONGC
5%
IOCL34%Private
Refiners41%
Source: Petroleum Planning & Analysis Cell , IOCLKey: BPCL – Bharat Petroleum Corporation Limited Group; HPCL – Hindustan Petroleum Corporation Limited; ONGC – Oil and Natural Gas Corporation Limited; RIL – Reliance Industries Limited; PIL – Petronet India Limited
BPCL17%
HPCL21%
PIL8%
IOCL54%
7
18
19
46
10Others
RIL
HPCL
BPCL
IOCL “ IOCL – a leader in Downstream Oil
industry “
Industry Capacity –177.97 MMT Industry Capacity –
62.34 MMT
Petroleum Products Market – % ShareIndustry Size –133.40 MMT
10
IOCL – An Important Pillar in Indian Economy
Oil Industry In India
IOCL – An Overview
IOCL’s Core Operations
Strategic Initiatives
Financial Performance
Ongoing Projects
11
Refining – Portfolio
Owned by IOCL
Owned by IOCL’s subsidiary, CPCL
Owned by Other Companies
MumbaiVizag
Chennai
Cochin Narimanam
Bongaigaon
Mangalore
Panipat
Guwahati
Haldia
Barauni
Mathura
Koyali
Digboi
Jamnagar
Tatipaka
Numaligarh
Controls 10 Refineries spread across the country (60.20 MMT – 34% of Industry)
Only company to have presence in high consumption North Indian region – Two of the Refineries are located in high consumption North Indian region consisting of Uttar Pradesh, Punjab, Haryana, Rajasthan, HimachalPradesh, Uttaranchal, Jammu & Kashmir
Refining Industry Capacity 177.97 MMTPA
IOCL’s share of Total Capacity 34%
IOCL’s share among PSUs 57%
Source: Petroleum Planning & Analysis Cell
12
Refining – Operating highlights
50.751.37
47.40
FY08 FY09 FY10
102103.38
100.11
FY08 FY09 FY10
75.2075.20
73.80
FY08 FY09 FY09
Refinery Throughput (MMT) Distillate Yield (%)Capacity Utilization (%)
Strategic inland refinery locations with most effective supply and evacuation system through pipelines
Panipat, Haldia & Mathura refineries meet product specification requirements in line with environmental regulations;
remaining refineries to meet product specification requirement by June 2010
Key Facts for FYE 2010
Panipat (13.63 MMT), Barauni (6.19 MMT) & Guwahati (1.08 MMT) achieved highest ever thr’put
Successful completion of Planned Shutdowns at Gujarat, Haldia & Mathura Refinery
744 TMT of intermediate stream sharing to utilize the spare capacity of secondary treating facilities
Flare Gas Recovery System at Barauni & Gujarat registered with United Nations Framework Convention on
Climate Change (UNFCCC) : 36154 Certified Emission Reduction (CER) Credit earned
13
Wide Network of Cross Country pipelines10,329 Kms of crude & product pipelines (capacity 71.61 MMT)
Provides low cost crude transportation to all of the Company’s refineries
Getting closer to the clients: Recently completed product pipelines
290KM long Chennai Bangalore Product Pipeline
265km long Koyali-Ratlam product pipeline
274km long Panipat-Jalandhar LPG pipeline
36km long ATF pipeline connecting IOCL’sDevanagonthi terminal to BangaluruInternational Airport
95km long pipeline connecting CPCL’sManali refinery to Meenambakkam AFSFigures of IOC Group including Gas
Length (KM)
Capacity (MMTPA)
Market Share Downstream
Crude Oil Pipelines
4,366 38.20 100%
Product Pipelines
5,963 33.41 54%
14
Pipelines – Operating highlights
21.2721.38
22.58
41.4038.2435.86
FY08 FY09 FY10
57.1359.62
Product
Crude
63.98
Capacity Utilization (%)
86.1788.06
95.76
FY08 FY09 FY10
Pipelines Throughput (MMT)
Highest ever throughput achieved by IOCL’s pipelines in FYE 2010. An increase of 7.31% over previous year throughput
Mathura-Delhi Pipeline became the first pipeline to transport Euro IV MS Fuel to National Capital Region
Lower capacity utilization due to commissioning of recently completed pipelines
15
Marketing – Reach
About 35,000 touch points (55% of industry)
Cross country retail network comprising of 18,643 (47%) outlets
Continued Rural thrust : 2,947 Kisan Seva Kendras
LPG supply to over 56 million households with 5,096 (53%) LPG distributorship
Reaching the doors of bulk customers : Bulk Consumer Pumps 7,593 (89%)
Source: Industry Data of IOCL; Figures in () indicate % share in industry; All figures as on FYE 2010
About 35,000
Customer touch-points
LPG Bottling Plants 89
LPG Distributorships 5,096
SKO / LDO Dealerships 3,964
Terminal / Depots 140
Aviation Fuel Stations 99
Retail Outlets18,643
Bulk Consumer Pumps7,593
16
Marketing – Operating highlights
64.7
4.2
62.6
59.3
3.6
3.3
FY 08 FY 09 FY 10
Export
Inland
62.6
66.2
5.7%
(MMT)
68.9
4.1%
Market Leader – dominant domestic market share (petroleum products): 46%
Highest ever sales of about 69 MMT of petroleum products registering 4.1% growth over previous year
Unchallenged market leader in Retail. Continue to be market leaders in highly competitive bulk consumer segment (2.4% increase in Market share in PSUs), finished lubes (1.4% gain in market share), aviation fuel requirements (61.1% market share) and branded auto fuel segment
All figures as on FYE 2010Figures of IOCL Group including Gas
17
Diversified Customer Base & Product Suite
Diversified range of core sector customers
The sales growth is insulated from the cyclical demand fluctuations due to diversified customer base
Diversified Customer Base
RailwaysPower HouseFertiliser PlantsDefence
AviationCoalTransport
Diversified Products & Brands
Branded Products
Branded Services
Petrochemicals
“ SERVO – India’s No. 1 lubricant
brand “
Xtra Premium PetrolXtra Mile Diesel
Indane LPGSERVO Lubricants
Kisan Seva Kendra Xtra Care Outlets
18
R&D Providing The Cutting Edge
Lube formulations – 181 developed, 147 commercialized, 65 approvals obtained from user Industries / OEMs
Deployment of in-house technologies
Trials of DHDT Catalyst INDICAT-DH-IV for EURO IV quality Diesel progressing well in CPCL since May 2009.
High Metal Tolerant metal passivation Catalyst additive INDVI successfully demonstrated at Haldia Refinery.
MoU signed with (i) NREL, USA & (ii) Honeywell, USA for development & commercialization of Green Fuel Technologies from non-food feed stocks.
MoU signed with leading academic institutions like IITs, Deakin University-Australia, TERI under Indian Oil Research fellowship scheme for Industry-Academia interface.
Patents Active – 229, Commercialized (India) – 32
India USA Others Total
104 51 74 229
Lubes Refinery Others Total
44 85 100 229
All figures as on FYE 2010
19
IOCL – An Important Pillar in Indian Economy
Oil Industry In India
IOCL – An Overview
IOCL’s Core Operations
Strategic Initiatives
Financial Performance
Ongoing Projects
20
Spreading the Wings – E&P and Petrochemicals
Domestic Exploration Blocks
NELP – 8 blocks with ONGC / OIL / GAIL / GSPC / Petrogas / HPCL (15-100% participating
interest)
Coal Bed Methane – 2 blocks with ONGC (20% participating interest)
Farm-in – 1 block
International Exploration Blocks
Total 10 blocks – Bidding (8) and Farm-In (2)
Backward Integration into E&P
Forward Integration into Petrochemicals
Petrochemical plants at Gujarat, Panipat and Bongaigaon
Petrochem Turnover: Rs 2760 crore (FYE 2009)
LAB sales 126 TMT (No.1 in Domestic Market : about 34% share)
Export 19 TMT to 13 countries
Footprint in Malaysia, South Africa, Saudi Arabia and Peru
PTA sales: 535 TMT (No.2 in Domestic Market : about 27% share)
Naphtha Cracker Unit at Panipat - commissioned
SBR Project at Panipat - planned
Key: LAB: Linear Alkyl Benzene; PTA: Purified Terephthalic Acid; SBR: Styrene Butadiene Rubber; NELP: New Exploration Licensing PolicyPhysical Sales figures for FYE 2010
21
Diversification in Other Energy Sources
Gas – LNG / CNG Wind Power, Biofuels & Solar Energy
Wind Power
Commissioned 21MW plant at Kachchh,
Gujarat in Jan 09
Biodiesel
Joint Venture with Chhattisgarh
Renewable Energy Development Agency
for plantation of Jatropha
Jatropha Plantation initiated in Jhabua
Distt of MP; Agreement with Ruhi Soya for
Jatropha Plantation in UP
Solar Energy
2 pilot solar charging stations
commissioned in Uttar Pradesh in August
& September 2008
First commercial solar charging station
commissioned in Orissa in December
2009
Gas Turnover: Rs 2425 crore in FYE 2009
Gas sales of 1.89 MMT in FYE 2010 as
against 1.7 MMT in FYE 2009,
Franchise Agreements with City Gas
Distributors (CGD) to sell CNG through IOCLs
Retail Outlets
MoUs with several companies for sourcing of
gas for marketing in various states
Nuclear Power
On 4th November 2009, IOCL entered into an
MOU with Nuclear Power Corporation of India
to establish a 1500-2000 MW nuclear power
plant
22
Strides Beyond Borders
Sri LankaLanka IOC Ltd. started retailing operations in February 2003
Largest private sector company in Sri Lanka, with healthy growth in sales: Diesel sales up 18.7%, Lube Sales up 18%
Share in bunkering business: 41%
Overall Market Share: 20%
MauritiusIndian Oil Mauritius Ltd. incorporated in October 2001
Overall sales grew by 10% to 237 thousand KL vis-à-vis 217 thousand KL last year
Market leader in aviation business with market share of about 42%
Overall Market Share : 24.4%
Maiden dividend issued
DubaiWholly-owned subsidiary IOC Middle East FZE, incorporated in April 2006, actively pursuing lubricant business in Middle East and Africa
Servo distributors appointed for Oman, Qatar and Bahrain
All figures as on FYE 2010
23
IOCL – An Important Pillar in Indian Economy
Oil Industry In India
IOCL – An Overview
IOCL’s Core Operations
Strategic Initiatives
Financial Performance
Ongoing Projects
24
Strong Results Against Odds
Turnover (Rs Thousand Crore) Net Profit (Rs Thousand Crore)
CAGR 15.91% ( FY 06 to FY 09)
Net Worth (Rs Thousand Crore)EBITDA (Rs Thousand Crore )
183221
247285
199
75.0
150.0
225.0
300.0
FY06 FY07 FY08 FY09 FY10 (Dec09)
4.92
7.50 6.96
2.95
4.66
1.5
4.5
7.5
FY06 FY07 FY08 FY09 FY10 (Dec09)
Turnover grew at 15.91% CAGR over last 4 years - growth rate higher than that of Indian Economy
9.93
14.62 14.3311.32
9.70
3.0
6.0
9.0
12.0
15.0
FY06 FY07 FY08 FY09 FY10 (Dec09)
2935
41 44 49
10.0
20.0
30.0
40.0
50.0
FY06 FY07 FY08 FY09 FY10 (Dec09)
25
Strong Financials with Conservative Capital Structure
0.90.78 0.86
1.02
0.91
FY06 FY07 FY08 FY09 FY10 (Dec09)
Debt/Equity
Debt/EBITDA
2.66 1.85 2.483.97
3.43
FY06 FY07 FY08 FY09 FY10 (Dec09)
Conservative gearing – Debt to Equity of 0.91:1, Debt to EBITDA of 3.43:1
26
Investments vis-à-vis Debt
42.842.3
36.2
31.5
27.1
35.5
45.0 44.4
0
5
10
15
20
25
30
35
40
45
50
FY07 FY08 FY09 FY10(Dec09)
Investments * Debt
Rs Thousand Crore
Substantial Investments vis-à-vis debt
Net of Investments : Virtually a Debt Free Company
* Investments include Market Value of shares held in ONGC Ltd., GAIL (India) Ltd., OIL India Ltd., shares held in Trust from merger of IBP Co. Ltd. and Bongaigaon Refinery & Petrochemicals Ltd and Special Oil Bonds
27
2.29.8 7.91.5
1.5
1.5
1.211.9 4.3
0.6
13.9
19.0
40.4
4.5
18.2
14.3
FY07 FY08 FY09 FY10 (Dec09)
Oil Bonds / Budgetary Support #Discount from Refiners Discount from Upstream Companies
Subsidy from the GOINet Under Realization
Rs Thousand Crore
TOTAL GOVT. OF INDIA SUPPORT30.1
44.6
60.1
Compensation of Under Realization
17.9
Under Realization: Difference between Normal Market Price and Controlled Price of 4 sensitive products, i.e. Motor Spirit, Superior Kerosene Oil (Public Distribution System) , High Speed Diesel and Liquefied Petroleum Gas (Domestic)
# Oil Bonds till FY09; Budgetary Support during April 09 to Dec 09
28
IOCL – An Important Pillar in Indian Economy
Oil Industry In India
IOCL – An Overview
IOCL’s Core Operations
Strategic Initiatives
Financial Performance
Ongoing Projects
29
Major Ongoing Projects & Outlay
Project Estimated Cost (Rs Cr)
Anticipated Completion
Residue up gradation & MS/HSD Quality improvement at Gujarat
6989 Jun-10
MS quality up gradation at Barauni 1492 Jun-10
MS quality up gradation at Guwahati
325 Jun-10
MS quality up gradation at Digboi 300 Jun-10
DHDT at Bongaigaon 1675 Jun-10
MS Quality up gradation at Bongaigaon
294 Jun-10
Panipat Refinery expansion: from 12 to 15 MMTPA
1060 Aug-10
Branch PL from KSPL, Viramgramto Kandla
349 Dec-11
Paradip New Sambalpur RaipurRanchi PL
1793 Sep-12
Grassroots Refinery at Paradip 29777 Nov-12
Major Ongoing Planned ProjectsCapex Outlay: 2010-11
Pipelines, 967Other **, 682
Refining *, 8680
Marketing, 307
Petchem, 2189
TOTAL CAPEX Outlay : Rs 12,825 Crore
* Includes refineries’ capacity additions, yield & quality improvement** Includes R&D and diversifications such as Natural Gas and E&P etc.
Thank You
