    

 

World’s fourth-largest energy consumer

Fourth-largest consumer of oil and petroleum products

Sixth-largest LNG importer in 2011

•

India’s energy demand is expected to double to 1,464 mtoe by 2035 from 559 mtoe in 2011. Moreover, the country’s share in global primary energy consumption would increase twofold by 2035

•

Oil consumption is estimated to reach 4.0 mbpd by FY16, expanding at a CAGR of 3.2 per cent during FY08–FY16F

•

LNG imports accounted for about one-fourth of total gas demand. India's gas demand is estimated to more than double over the next five years

Source: US Energy Information Administration (EIA); Ministry of Petroleum & Natural Gas; Aranca Research Notes: mtoe – Million Tonnes of Oil Equivalent; mbpd – Million Barrels Per Day, F - Forecast

Growingdemand demand Growing

FY08 Oil demand: 3.1 mbpd; Gas demand: 31.5 bcm

•

•

India is the world’s fourth-largest energy consumer (2011); oil and gas account for 37.3 per cent of total energy consumption Buoyant economic growth is the main factor driving the country’s energy requirements

•

•

Skilled workforce

FY16F

About 139,068 people were employed in the petroleum industry at the end of FY12 The University of Petroleum and Energy Studies in Dehradun, Uttarakhand, is Asia’s first and only energy university

Oil demand: 4.0 mbpd; Gas demand: 165.2 bcm

Advantage India Policy support

Supportive FDI guidelines •

•

100 per cent Foreign Direct Investment (FDI) is allowed in upstream and private sector refining projects The FDI limit for public sector refining projects has been raised to 49 per cent

•

Government has enacted various policies such as the New Exploration Licensing Policy (NELP) and Coal Bed Methane (CBM) policy to encourage investments across the industry’s value chain

Source: Business Monitor International (BMI); World Oil Outlook 2012; Ministry of Petroleum & Natural Gas; Aranca Research Notes: mbpd – Million Barrels Per Day; bcm – Billion Cubic Meters

India is the world’s fourth-largest energy consumer The country has 5.47 billion barrels of proven oil reserves, with oil production of 0.8 mbpd (FY2013) India has 43.8 tcf of gas reserves in FY13 and produced 40.7 bcm of gas in FY13 •

The upstream segment is dominated by the state-owned ONGC

•

It is the largest upstream company in the exploration and production (E&P) segment, accounting for approximately 60 per cent of the country’s total oil output (FY13)

Midstream segment – Storage and transportation

•

IOCL operates a 11,214 km network of crude, gas and product pipelines, with a capacity of 1.6 mbpd of oil and 10 mmscmd of gas

•

This is around 30 per cent of the nation’s total pipeline network

Downstream segment – Refining, processing and marketing

•

IOCL is the largest company, operating 10 out of 22 Indian refineries

•

Reliance launched India’s first privately owned refinery in 1999 and has gained a considerable market share (28 per cent)

Upstream segment Exploration and production

Indian oil and gas sector

Source: US Energy Information Administration, Ministry of Petroleum & Natural Gas; Aranca Research Notes: bcm – Billion Cubic Meters; tcf – Trillion Cubic Feet; mbpd – Million Barrels Per Day; mmscmd – Million Metric Standard Cubic Meter Per Day, ONGC – Oil & Natural Gas Corporation of India; IOCL – Indian Oil Corporation Ltd

Oil consumption in India and current reserves

Oil consumption is estimated to expand at a CAGR of 3.4 per cent during FY2008–16F to 4.0 mbpd by 2016 5.0

Owing to this strong expected growth in demand, India’s dependency on oil imports is expected to increase further

5,800 4.1 3.9

4.0

3.2 3.0

4.3 3.7

3.9

4.0

3.5

3.1

5,700 5,600 5,500 5,400 5,300

2.0

5,200 5,100

1.0

5,000 4,900

0.0

4,800 FY08 FY09 FY10 FY11 FY12* FY13F FY14F FY15F FY16F

Oil Consumption (mbpd) - LHS Proven Oil Reserves (mn bbl) - RHS

Source: Ministry of Oil & Natural Gas; BMI forecasts; Aranca Research Notes: F – Forecast; CAGR – Compound Annual Growth Rate; mbpd – Million Barrels Per Day; mn bbl – Million Barrels; * - Provisional

Imports and domestic oil production in India

In FY13, imports accounted for approximately 80 per cent of the country’s total oil demand 5.0

Backed by new oil fields, domestic oil output is anticipated to grow to 1.0 mbpd by FY16

4.5 4.0 3.5 3.0

2.5 2.0

3.3

3.4

3.7

3.2

0.8

0.8

0.8

2.5

2.7

0.7

0.7

0.7

FY08

FY09

FY10

2.7

2.9

3.0

1.0

1.0

1.0

1.5 1.0 0.5 0.0 FY11 FY12* FY13* FY14F FY15F FY16F

Oil Production (mbpd)

Oil Imports (mbpd)

Source: Ministry of Oil & Natural Gas; BMI forecasts; Aranca Research Notes: F – Forecast; mbpd – Million Barrels Per Day; * - Provisional

800

1,330

1,330

1,330

1,330

1,330

1,149

1,115

1,000

1,278

1,200

1,330

1,400

1,090

175

150

137 40

46

51

200

47

400

165

600

32

Demand is not likely to simmer down any time soon, given strong economic growth and rising urbanisation; during FY2008–17F, gas consumption is likely to expand at a CAGR of 21.0 per cent

Proven reserves and total gas consumption in the country (bcm)

31

With India developing gas-fired power stations, consumption is up more than 160 per cent since 1995

0 FY08 FY09 FY10 FY11 FY12* FY13* FY14F FY15F FY16F FY17F

Gas Consumption

Proven Gas Reserves

Source: PPAC, Ministry of Oil & Natural Gas; Aranca Research Notes: F – Forecast; bcm – Billion Cubic Meters; CAGR – Compound Annual Growth Rate, * - Provisional

Domestic gas production and imports (bcm)

Domestic production accounts for more than three-quarters of total gas consumption in the country Imports constitute the rest; in 2012, the share of imports was 22.0 per cent

56

India increasingly relies on imported LNG; the country was the sixth-largest LNG importer in 2011 and accounted for 5.3 per cent of global imports India’s LNG imports are forecast to increase at a CAGR of 33 per cent during 2012–17

48

12 32

12

12

13

23

47

52

48

41

32

32

44

47

11 33

51

64

FY08 FY09 FY10 FY11 FY12 FY13* FY14F FY15F FY16F FY17F

Gas Production

Gas Imports

Source: Ministry of Oil & Natural Gas; Aranca Research Notes: F – Forecast; bcm – Billion Cubic Meters; * - Provisional

Crude oil production (mmt)

Total crude oil production was 37.9 mmt during FY13 ONGC accounted for 59.5 per cent of total crude oil production in India

40

35 30 25

4.8 3.1

4.6 3.2

5.1 3.1

4.7 3.5

9.7

10.5

11.6

3.6

3.6

3.8

3.7

5.3

20 15 10

24.4

26.1

25.9

25.4

24.9

24.4

23.7

22.6

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

5 0 ONGC

OIL

Private/JV

Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt – Million Metric Tonne; JV – Joint Venture

Annual gas production (bcm)

Total gas production was 40.7 bcm during FY13 The contribution from Private/JV has decreased over the last couple of years.

26.8

22.0

21.6

14.5

7.7 2.3

8.1 2.3

2.4

2.4

2.6

2.6

22.3

22.5

23.1

23.1

23.3

23.5

FY08

FY09

FY10

FY11

FY12

FY13

ONGC

OIL

Private/JV

Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: bcm - Billion Cubic Meters; JV – Joint Venture

During FY12, 1,631,000 meters of wells were explored and developed in India During the same period, 756 wells were drilled in the country Most upstream drilling and exploration work is undertaken by state-owned oil companies ONGC is the leader in the upstream segment and accounts for 62 per cent of total crude oil output in India

Exploration activities (FY12*) (‘000 meters)

Development drilling activities (FY12*) (‘000 meters)

129

295

62 87

740

467 409

198 Wells Onshore

Metreage Offshore

Wells

Metreage Onshore

Offshore

Source: Ministry of Petroleum & Natural Gas; Aranca Research Note: * - Provisional

India has a network of 9,537 km of crude pipeline having a capacity of 138.3 mmtpa In terms of length, IOCL accounts for 45.9 per cent (4,376 km) of India’s crude pipeline network; moreover, the company has the country’s longest pipelines, namely the Salaya-Mathura-Panipat Pipeline (1,870 km) and the Haldia-Barauni / Paradip-Barauni Pipeline (1302 km) In terms of capacity, ONGC leads the pack with a share of 47.4 per cent (65.5 mmtpa), followed by IOCL at 29.2 per cent (40.4 mmtpa)

Shares in crude pipeline network by length (out of 9,537 km)

Shares in crude pipeline network by capacity (out of 138.3 mmtpa)

6.1%

12.5% OIL

11.9% 45.9%

OIL 29.2% ONGC

ONGC

IOCL

47.4%

IOCL

Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: km – Kilometre; mmtpa – Million Metric Tonnes Per Annum

Of the 11,274 km of refined products pipeline network (capacity of 70.7 mmtpa) in India, Indian Oil Corporation (IOC) accounts for 54 per cent (6,127 km) Gas Authority of India Limited (GAIL) has largest share (88 per cent or 2,038 km) of the country’s LPG pipeline network (2,312 km)

Shares in product pipeline network under operation by length (out of 11,274 km)*

Shares in LPG pipeline network by length (out of 2,312 km)*

3% 6%

3%

12% HPCL

15%

IOC

BPCL

54%

GAIL

OIL PCCK

19% PMHB

88%

Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: km – Kilometre; mmtpa – Million Metric Tonnes Per Annum, LPG - Liquefied Petroleum Gas, IOC - Indian Oil Corporation, HPCL - Hindustan Petroleum Corporation Ltd, BPCL - Bharat Petroleum Corporation Ltd, OIL - Oil India Limited, PMHB - Mangalore Hasan Bangalore, PCCK - Cochin-Coimbatore-Karur * - As on 30th September 2012

Refinery crude throughput (mmt)

State-controlled entities dominate the downstream segment as well India has 19 refineries in the public sector and 3 in the private sector In FY13, public sector refineries accounted for 69.4 per cent of total refinery crude throughput

80.7

90.7

112.2

112.1

FY09

FY10

43.6

48.6

112.5

FY08

Public Sector

49.1

55.5

115.3

120.9

126.2

FY11

FY12

FY13

Private Sector

Source: Ministry of Petroleum & Natural Gas; Aranca Research Note: mmt – Million Metric Tonne

Total crude throughput rose from 130.1 mmt in FY06 to 181.7 mmt in FY13* In FY13, the sector’s total installed refinery capacity was 215.06 mmt In FY13, IOC emerged as the largest domestic refiner with a capacity of 54.2 mmt

Shares in India's total refining capacity (FY’13)

Total installed capacity (mmt) 250

IOC

200

9% HPCL 25%

78

80

135

135

FY12

FY13

150

BPCL

13%

100 CPCL NRL

7%

MRPL 11%

1% 5%

RPL

50 0 Public Sector

13%

Private/JV Sector

EOL Source: Ministry of Petroleum & Natural Gas; PPAC; Aranca Research Notes: mmt – Million Metric Tonne; * - Provisional, HPCL - Hindustan Petroleum Corporation Ltd, BPCL - Bharat Petroleum Corporation Ltd, OIL - Oil India Limited, ONGC - Oil and Natural Gas Corporation, IOCL - Indian Oil Corporation Ltd, CPCL - Chennai Petroleum Corporation Limited, NRL - Numaligarh Refinery Limited, MRPL - Mangalore Refinery and Petrochemicals Limited, RPL - Renegade Petroleum Ltd, EOL - Essar Oil Ltd

During FY13, 217.8 mmt of petroleum products were produced Petroleum products derived from crude oil include light distillates such as LPG, naphtha; middle distillates such as kerosene; and heavy ends such as furnace and lube oils, bitumen, petroleum coke, paraffin wax The production of petroleum products is expected to reach 1199.7 mmt during the 12th Plan period (2012–17)

Petroleum products from natural gas (mmt)

Petroleum products from crude oil (mmt)

2.2 35

35

94

100

103

35 23

28

26

2.2

80

32

38

40

40

51

55

58

FY06

FY07

FY08

FY09

FY10

FY11

FY12*

Middle Distillates

2.1 2.1

77

Light Distillates

2.2

30

71

64

2.2

2.2

Heavy Ends

FY06

FY07

FY08

FY09

FY10

FY11

FY12*

LPG Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt – Million Metric Tonne; * - Provisional

In FY13, total sales of petroleum products by companies was 146.7 mmt, up 4.2 per cent from the previous fiscal year

Downstream distribution statistics (‘000 tonnes) 200,000

The total number of retail outlets (including private companies) increased to 49,077 in April 2013 from 45,104 in April 2012

150,000

IOC owns the maximum number of retail outlets in the country (48.8 per cent of total), followed by HPCL (26.7 per cent) and BPCL (24.5 per cent); the remaining outlets are owned by private firms

50,000

100,000

0 FY06

FY07

FY08

Product Pipeline

As of April 1, 2013, there were 12,610 LPG distributors in India

Pipeline

FY09

LPG Pipeline

FY10

FY11

FY12*

Crude Pipeline

Capacity (mmtpa) Length (km) As of April 1, 2012 As of April 1, 2012

Product Pipeline

76.3

11,218

LPG Pipeline

3.9

2,312

Crude Pipeline

138.3

8,528

Total

218.5

22,057

Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt – Million Metric Tonne; mmtpa – Million Metric Tonnes Per Annum * - Provisional

Energy consumption pattern in 2011

In 2011, coal accounted for 41 per cent of total primary energy demand Energy demand in the Asia-Pacific region is expected to reach 5,627 Mtoe by 2020 and 6,861 Mtoe by 2035

5%

Coal

8% Petroleum

India’s energy demand is expected to double by 2035 to 48.7 quadrillion BTU

41% Solid biomass & waste

23%

Natural gas

23%

Nuclear & other renewables

Source: US Energy Information Administration (EIA); Asia-Pacific Economic Cooperation (APEC); Aranca Research Notes: mtoe – Million Tonne of Oil Equivalent BTU – British Thermal Unit

Consumption pattern expected in 2035

Over the next few years, the dependence on gas, hydro power and nuclear power is expected to increase relative to oil and coal The government aims to quadruple India’s nuclear power generation capacity to 20 GW by 2020; currently, seven nuclear power reactors of 4,930 MWe capacity are under construction

Coal

8% 11%

Petroleum 42% Solid biomass & waste

15%

Natural gas

24%

Nuclear & other renewables

Source: International Energy Agency (IEA); 12th Five-Year Plan; Aranca Research

Company

Ownership (per cent)

FY13 Turnover (USD billion)

Indian Oil Corporation Limited

78.9 per cent stateowned

84.7

Reliance Industries

Public Listed

73.0

Bharat Petroleum Corporation Limited

54.9 per cent stateowned

44.5

Hindustan Petroleum Corporation Limited

51.1 per cent stateowned

39.7

ONGC

69.2 per cent stateowned

29.7

GAIL India Limited

57.3 per cent stateowned

9.4

Oil India Limited

68.4 per cent stateowned

1.8

Source: Bloomberg; Aranca Research Notes: FY – Indian Financial Year, April–March

Company

Ownership (per cent)

Global Turnover (USD billion)

Cairn Energy India Pvt Ltd

Private Sector

1.5 (H114)

Shell

Private Sector

341.9 (Nine months 2013)

BG Group

Private Sector

13.7 (Nine months 2013)

BP

Private Sector

285.4 (Nine Months 2013)

Source: Bloomberg; Aranca Research

•

Coal Bed Methane (CBM)

Government approved the CBM policy in 1997 to boost the development of clean and renewable energy resources • CBM is an eco-friendly natural gas (methane), which is absorbed in coal and lignite seams • CBM policy was designed to be liberal and investor friendly; the first commercial production of CBM was initiated in July 2007 at about 72,000 cubic metres per day •

Underground Coal Gasification (UCG)

The technology was first widely used in the US in the 1800s, and in India (Kolkata and Mumbai) in the early 1900s • UCG is currently the only feasible technology available to harness energy from deep un mineable coal seams economically in an eco-friendly manner • Reduces capital outlay, operating costs and output gas expenses by 25–50 per cent, visà-vis surface gasification •

Gas hydrates and biofuels

The government initiated the National Gas Hydrate Programme (NGHP), a consortium of national E&P companies and research institutions, to map gas hydrates for use as an alternate source of energy • Bio-fuels (bio-ethanol and bio-diesel) are alternate sources of energy from domestic renewable resources; these have lower emissions compared to petroleum or diesel

Installed capacity, as of April 2012 (mt)

Crude throughput for 2011–12 (mt)

Gujarat

91.7

104.8

Maharashtra

18.5

20.9

Haryana

15.0

15.5

Karnataka

15.0

12.8

Tamil Nadu

11.5

10.6

Kerala

9.5

9.5

Andhra Pradesh

8.4

8.8

Uttar Pradesh

8.0

8.2

West Bengal

7.5

8.1

Assam

7.0

6.7

Bihar

6.0

5.7

Punjab

9.0

-

Madhya Pradesh

6.0

-

213.1

211.4

State

Source: Ministry of Petroleum & Natural Gas; Aranca Research Note: mt – Million Tonne

Total

Growing demand Growing demand

India is fourth largest energy consumer

Rise in population and economic growth to fuel demand

Increasing industrialisation and usage of gas

Increasing investments

Policy support

Supportive FDI policies Inviting

FDI in FY13* was USD2.03 billion Resulting in

Promoting of investments in the sector

Cumulative# FDIs in oil & gas totalled USD5.4 billion

Introducing policies such as CBM and NELP

Huge investments planned under Eleventh Plan

Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: * - Provisional; # - April 2000–September 2013

Robust domestic market; expected to expand

• • •

India is the world’s fourth-largest energy consumer Oil consumption is expected to rise 42.5 per cent during 2010–20 The country accounted for 10.3 per cent of total demand for gas in Asia-Pacific in 2011

•

Increasing demand for natural gas

Several industries are increasing the usage of natural gas in operations; this has boosted natural gas demand in India • Some of the main industries that use natural gas – pulp and paper, metals, chemicals, glass, plastic and food processing

Abundant raw material

• • •

The nation has large coal, crude oil and natural gas reserves Oil reserves amounted to 5.47 billion barrels in FY13 Natural gas proved reserves stood at 1.24 tcm in FY13

•

Favourable policies

100 per cent FDI allowed in E&P projects/companies; 49 per cent allowed in refining under the automatic route from earlier approval route • Policies to promote investments in the industry such as New Exploration Licensing Policy (NELP) and Coal Bed Methane (CBM)

Source: Ministry of Petroleum & Natural Gas; US Energy Information Administration, BP Statistical Review of World Energy, June 2012; BMI; Aranca Research, Notes: tcm - Trillion Cubic Meters, E&P - Exploration and Production

•

Huge investments

Investments worth USD75 billion is expected across the oil & gas value chain under the 12th Plan (2012–17) • Since April 2000-September 2013, FDI worth USD5.4 billion has been invested in India’s petroleum and natural gas sector •

Skilled labour

The nation offers abundant skilled labour at much competitive wages compared to other countries • The University of Petroleum and Energy Studies in Dehradun, Uttarakhand, is Asia’s first and only energy university

•

Natural gas discoveries

Several domestic companies (such as ONGC, Reliance and Gujarat State Petroleum) have reportedly found natural gas in deep waters • This offers significant expansion opportunity for the next decade

Source: Ministry of Petroleum & Natural Gas; BMI; Aranca Research

Integrated Energy Policy (IEP), 2006 Petroleum and Natural Gas Regulatory Board (PNGRB) Act, 2006

Auto Fuel Policy, 2003

National Biofuel Policy, 2002 Freight Subsidy (for farflung areas) Scheme, 2002

NELP, 1999

•

Outlines goals for dealing with challenges faced by India’s energy sector

•

To regulate refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas

•

To provide a roadmap to comply with various vehicular emission norms and corresponding fuel quality upgrading requirements over a period of time

•

To promote bio-fuel usage, the GoI has provided a 16 per cent concession on the excise duty on bio-ethanol and exempted bio-diesel from excise duty

•

To compensate public sector Oil Marketing Companies (OMCs) on the freight incurred to distribute subsidised products in far-flung areas

•

To provide a contract framework for E&P of hydrocarbons; licenses for exploration are awarded through a competitive bidding system; nine rounds of bidding completed till 2011 Source: Ministry of Petroleum & Natural Gas; Aranca Research Note: NELP - New Exploration Licensing Policy

•

The E&P segment’s FDI limit is 100 per cent, and the refining segment’s limit is 49 per cent

Coal Bed Methane (CBM) Policy, 1997

•

To encourage exploration and production of CBM gas as a new eco-friendly source of energy

Petroleum Rules, 1976

•

Provisions for regulations governing pollution, safety, and other operating standards

•

An act establishing a board to develop the oil industry and levy excise duty on crude and natural gas

Petroleum and Minerals Pipelines Act, 1962

•

Acquisition of user’s rights by the government of India on land demarcated for laying pipelines to transport petroleum and other minerals from one area to another

Petroleum and Natural Gas Rule, 1959

•

Regulates the grant of petroleum and natural gas exploration licenses and mining leases, which belong to the government

FDI Policies

Oil Industry (Development) Act, 1974

Source: Ministry of Petroleum & Natural Gas; Aranca Research

Oil Field (Regulation and Development) Act, 1948

•

An act to regulate oilfields and develop mineral oil resources

Source: Ministry of Petroleum & Natural Gas; Aranca Research

Cumulative FDI inflows during April 2000 – September 2013 in India’s petroleum and natural gas sector stood at USD5.41 billion (2.6 per cent of total FDIs) Across sectors, cumulative FDI inflows during April 2000 - September 2013 was USD204.8 billion, with the services sector accounting for the largest share (18.8 per cent), followed by construction development (11.12 per cent) and telecommunication (6.3 per cent)

FDI inflows into petroleum and natural gas (USD million)

FDI inflows into India (USD billion) 40

35.1 31.4

2,030.0

30

25.8

24.6

22.4

21.4

16.8

20

1,427.0

12.5 10 556.0 412.0 14.0 FY06

89.0 FY07

0

266.0

FY08

FY09

FY10

FY07 FY11

FY12*

FY08

FY09

FY10

FY11

FY12

FY13 FY14**

Source: Department of Industrial Policy & Promotion; Aranca Research Notes: * - Provisional ** - Data for the period April-September 2013

Date announced

Acquirer name

Target name

Value of deal (USD million)

Oct 2013

ONGC Videsh Ltd

Parque das Conchas, Brazilian Oilfield

529

Jun 2013

ONGC Videsh Ltd (in partnership with Oil India Ltd)

Rovuma Area 1 Offshore Block

2640

Nov 2012

ONGC Videsh

ConocoPhillips (Kashagan Field)

5000.0

Nov 2012

Inpex Corp

Oil and Natural Gas Corp’s exploration block KG-DWN-2004/6

Not disclosed

Sep 2012

ONGC Videsh

Hess Corp (Azrei oilfield)

1000.0

Apr 2012

Trafigura Pte Ltd

Nagarjuna Oil Co Ltd

130.0

Apr 2011

Sesa Goa Ltd

Calm India Ltd

1492.0

Feb 2011

BP PLC

Reliance Industries Ltd

9,000.0

Aug 2010

BPRL

EP413

13.4

Aug 2010

Sesa Goa Ltd

Cairn India Ltd

1,180.8

Aug 2010

Vedanta Resources PLC

Cairn India Ltd

6,568.5

Aug 2010

Reliance Industries Ltd

Marcellus Shale Natural Gas

391.6

Jun 2010

Reliance Industries Ltd

Infotel Broadband Svcs Ltd

Apr 2010

Sim Siang Choon Hardware

Interlink Petroleum Ltd

1,026.7Aranca Research Source: Thomson Banker; 17.8

Date announced

Acquirer name

Target name

Value of deal (USD million)

Apr 2010

Reliance Industries Ltd

Atlas Energy Inc-Marcellus

339.0

Mar 2010

Investor Group

Gulfsands Petroleum PLC

573.3

Mar 2010

Natural Power Venture Pvt Ltd

Great Offshore Ltd

11.8

Feb 2010

Investor Group

Republic of Venezuela-Carabobo

4,848.0

Source: Thomson Banker; Aranca Research

ONGC revenue growth (USD billion)

15.3 13.0

• • Highest reserve accretion in the last • ONGC two registered decades highest– 83.5 ever oil million production toe

• • ONGC reported net Domestic profit of crude USD3.9 production billion in up 2.1 per 2011 cent • Highestever dividend payout of USD1.6 billion

14.2

15.3

15.9

15.2

13.1

ONGC recorded net profit of USD3.6 billion in 2013 FY07

FY08

FY09

FY10

FY11

FY12

FY13

ONGC’s position in the Indian market • ONGC is the largest upstream oil company • ONGC accounts for 60 per cent of India’s total crude oil output and 57 per cent of total gas production (FY13) Source: Company Reports; BMI, Aranca Research Note: TOE - Tonne of Oil Equivalent

Reliance Industries is a leading company in the petrochemical, refining and oil & gas industry The company was ranked 99th in the Fortune Global 500 list 2012 It contributes 14 per cent to India's exports (Mar 2011) and 4.6 per cent of total market capitalisation in the country

FY12

FY13

Turnover

USD66.8 billion

USD68.4 billion

EBITDA

USD7.3 billion

USD7.1 billion

Net Profit

USD3.9 billion

USD3.9 billion

• Turnover increased by 9.2 per cent in FY13 • Exports increased by 15 per cent to USD44.1 billion • Record crude throughput at 68.5 million tonnes • US shale: FY13 revenue and EBITDA at USD616 million and USD483 million respectively

Reliance Industries has entered into JVs with various companies across segments to align growth opportunities; it signed JVs with Atlas, Pioneer, Carrizo SIBUR, and D.E. Shaw as well as entered into a strategic alliance with BP recently. Source: Company Reports; Aranca Research

Upstream segment

Midstream segment

Downstream segment

• Locating new fields for exploration: 78

• Expansion in the transmission network

• Development in city gas distribution

per cent of the country’s sedimentary area is yet to be explored

of gas pipelines

(CGD) networks, which are similar to Delhi and Mumbai’s CGDs

• LNG • Development

of unconventional resources: CBM fields in the deep sea

imports have increased significantly; this provides an opportunity to boost production capacity

• Opportunities for secondary/tertiary oil

producing techniques • Increased demand for skilled labour

and oilfield services and equipment

• To

construct new refineries considering advantages such as low operation costs, lesser freight charges and favourable policies

• In light of mounting LNG production,

huge opportunity lies for LNG terminal operation, engineering, procurement and construction services

• Expansion of the country’s petroleum

product distribution network

• India has 63 tcf of recoverable shale gas reserves • The Cambay, Krishna Godavari, Cauvery, and the Damodar Valley are the most prospective sedimentary basins for carrying

out shale gas activities in the country • Around 20 tcf of gas has been classified as technically recoverable reserves in the Cambay basin in Gujarat (the largest

basin in the country), spread across 20,000 gross square miles with a prospective area of 1,940 square miles • It is estimated that the Krishna Godavari (KG) basin encloses a series of organically rich shales, containing around 27 tcf of

technically recoverable gas. KG basin, located in Eastern India, holds the country’s largest shale gas reserves, extending over 7,800 gross square miles with a prospective area of around 4,340 square miles • India is likely to launch bidding for shale gas exploration toward the end of 2013 • In April 2012, the Directorate General of Hydrocarbons (DGH) submitted its draft policy on exploitation of shale gas to the

Ministry of Petroleum and Natural Gas

Source: E&Y; Aranca Research Note: tcf – Trillion Cubic Feet

Name

Address

Oil Industry Development Board (OIDB)

301, World Trade Centre, Babar Road, New Delhi – 110001

Petroleum Conservation Research Association (PCRA)

Contact person

Telephone

E-mail

Mr T S Balasubramanian, Financial Adviser and Chief Accounts Officer

91-11- 23413298 91-11- 23414692

[email protected]

Sanrakshan Bhavan, 10 Bhikaji Cama Place, New Delhi – 110066

Mr Arun Kumar, ED

91-11- 26198799 Ext.301

[email protected]

Bureau of Energy Efficiency (BEE)

Ministry of Power, 4th floor, SEWA Bhawan, RK Puram, New Delhi – 110066

Dr Ajay Mathur, Director General

91-11- 26178316, 91-11- 26179699

[email protected], [email protected]

Oil Industry Safety Directorate

Ministry of Petroleum & Natural Gas, 7th floor, “New Delhi House”, 27 Barakhamba Road, New Delhi – 110001

Mr J B Verma, ED

91-11- 23316798

[email protected]

Petroleum Planning and Analysis Cell (PPAC)

Ministry of Petroleum & Natural Gas, 2nd floor, Core-8, SCOPE Complex, 7 Institutional Area, Lodhi Road, New Delhi – 110003

Dr Basudev Mohanty, Director

91-11- 24362501, 91-11- 24361380

-

Directorate General of Hydrocarbons

Ministry of Petroleum & Natural Gas, C-139, Sector 63, Noida – 201301

Mr S K Srivastava, Director General

0120 - 4029401

[email protected]

B/D (or bpd): Barrels Per Day MBPD (or mbpd): Million Barrels Per Day BCM (or bcm): Billion Cubic Metres CBM: Coal Bed Methane CGD: City Gas Distribution E&P: Exploration and Production FDI: Foreign Direct Investment FY: Indian financial year (April to March) So FY12 implies April 2011 to March 2012 GoI: Government of India INR: Indian Rupee LNG: Liquefied Natural Gas

MMT (or mmt): Million Metric Tonne MMTPA (or mmtpa): Million Metric Tonnes Per Annum EBITDA: Earning Before Interest Taxes Depreciation Amortisation NRL: Numaligarh Refinery Limited CPCL: Chennai Petroleum Corporation Limited HPCL: Hindustan Petroleum Corporation Limited BPCL: Bharat Petroleum Corporation Limited IOC: Indian Oil Corporation Ltd EOL: Essar Oil Ltd RPL: Reliance Petroleum Limited MRPL: Mangalore Refinery and Petrochemicals Limited PCCK: Petronet Cochin-Coimbatore-Karur PMHB: Petronet Mangalore-Hassan-Bangalore

NELP: New Exploration Licensing Policy TOE (or toe): Tonnes of Oil Equivalent USD: US Dollar ONGC: Oil and Natural Gas Corporation of India IOCL: Indian Oil Corporation Limited mn bbl: Million Barrels CAGR: Compound Annual Growth Rate JV: Joint Venture UCG: Underground Coal Gasification NGL: Natural Gas Liquids OMCs: Oil Marketing Companies NHGP: National Gas Hydrate Programme Wherever applicable, numbers have been rounded off to the nearest whole number

Exchange rates (Fiscal year)

Exchange rates (Calendar year)

Year

INR equivalent of one USD

Year

INR equivalent of one USD

2004-05

44.95

2005

45.55

2005-06

44.28

2006

44.34

2006-07

45.28

2007

39.45

2007-08

40.24

2008

49.21

2008-09

45.91

2009

46.76

2009-10

47.41

2010

45.32

2010-11

45.57

2011

45.64

2011-12

47.94

2012

54.69

2012-13

54.31

2013

57.72

2013-14

59.23 Average for the year

India Brand Equity Foundation (“IBEF”) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the

content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.