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India :Oil and gas Sector Report_August 2013

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

India is the world’s fourth-largest energy consumer in the world; 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.

India has 5.6 billion barrels of proven oil reserves, with an average oil production of 0.8 million barrels per day (MPBD). Oil consumption is estimated to expand at a compounded annual growth rate (CAGR) of 3.4 per cent during FY2008-16 to 4 MPBD by 2016. India has 1,330 billion cubic meters (BCM) of gas reserves and produced 47.6 BCM of gas in 2012.

The Government of India 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. 100 per cent foreign direct investment (FDI) is allowed in the exploration and production (E&P) projects/ companies; and 49 per cent is allowed in refining.

Liquefied natural gas (LNG) imports have increased significantly; offering huge opportunities for LNG terminal operation, engineering, procurement and construction services.

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  • 1.       
  • 2. World’s fourth-largest energy consumer • 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 Fourth-largest consumer of oil and petroleum products • Oil consumption is estimated to reach 4.0 mbpd by FY16, expanding at a CAGR of 3.2 per cent during FY08–FY16F Sixth-largest LNG importer in 2011 • 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
  • 3. • The engineering sector is delicensed; 100 per cent FDI is allowed in the sector • Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period Growing demand 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 Growing demand • India is the world’s fourth-largest energy consumer; 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 • 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 Policy support • 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 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 FY08 Oil demand: 3.1 mbpd; Gas demand: 31.5 bcm FY16F Oil demand: 4.0 mbpd; Gas demand: 165.2 bcm Advantage India
  • 4. Source: BP Statistical Review, June 2012; Ministry of Petroleum & Natural Gas; Aranca Research Notes: bcm – Billion Cubic Meters; mbpd – Million Barrels Per Day; ONGC – Oil & Natural Gas Corporation of India; IOCL – Indian Oil Corporation Ltd India is the world’s fourth-largest energy consumer The country has 5.6 billion barrels of proven oil reserves, with an average oil production of 0.8 mbpd (2012) India has 1,330 bcm of gas reserves and produced 47.6 bcm of gas in 2012 Indian oil and gas sector Midstream segment – Storage and transportation Downstream segment – Refining, processing and marketing • IOCL operates a 11,163 km network of crude, gas and product pipelines, with a capacity of 1.6 mbpd • This is around 30 per cent of the nation’s total pipeline network • 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 • 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 62 per cent of the country’s total oil output
  • 5. Oil consumption in India and current reserves 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 Oil consumption is estimated to expand at a CAGR of 3.4 per cent during FY2008–16F to 4.0 mbpd by 2016 Owing to this strong expected growth in demand, India’s dependency on oil imports is expected to increase further 3.1 3.2 3.9 4.1 4.3 3.5 3.7 3.9 4.0 4,800 5,100 5,400 5,700 6,000 0.0 1.0 2.0 3.0 4.0 5.0 FY08 FY09 FY10 FY11 FY12* FY13F FY14F FY15F FY16F Oil Consumption (mbpd) - LHS Proven Oil Reserves (mn bbl) - RHS
  • 6. Imports and domestic oil production in India Source: Ministry of Oil & Natural Gas; BMI forecasts; Aranca Research Notes: F – Forecast; mbpd – Million Barrels Per Day; * – Provisional In FY12, imports accounted for approximately 81 per cent of the country’s total oil demand Backed by new oil fields, domestic oil output is anticipated to grow to 1.0 mbpd by FY16 0.7 0.7 0.7 0.8 0.8 1.0 1.0 1.0 1.0 2.5 2.7 3.2 3.3 3.5 2.5 2.7 2.9 3.0 FY08 FY09 FY10 FY11 FY12* FY13F FY14F FY15F FY16F Oil Production (mbpd) Oil Imports (mbpd)
  • 7. Proven reserves and total gas consumption in the country (bcm) Source: Ministry of Oil & Natural Gas; Aranca Research Notes: F – Forecast; bcm – Billion Cubic Meters; CAGR – Compound Annual Growth Rate; * – Provisional With India developing gas-fired power stations, consumption is up more than 160 per cent since 1995 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 31 32 47 51 46 109 137 150 165 175 1,090 1,115 1,149 1,278 1,330 1,330 1,330 1,330 1,330 1,330 FY08 FY09 FY10 FY11 FY12* FY13F FY14F FY15F FY16F FY17F Gas Consumption Proven Gas Reserves
  • 8. Domestic gas production and imports (bcm) Source: Ministry of Oil & Natural Gas; Aranca Research Notes: F – Forecast; bcm – Billion Cubic Meters; * – Provisional 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 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 32 33 47 52 48 43 44 47 51 64 12 11 12 12 13 23 32 32 48 56 FY08 FY09 FY10 FY11 FY12* FY13F FY14F FY15F FY16F FY17F Gas Production Gas Imports
  • 9. Crude oil production (mmt) Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt – Million Metric Tonne; * – Provisional; JV – Joint Venture Total crude oil production was 38.0 mmt during FY12 ONGC accounted for 62 per cent of total crude oil production in India 24.4 26.1 25.9 25.4 24.9 24.4 23.7 3.2 3.1 3.1 3.5 3.6 3.6 3.8 4.6 4.8 5.1 4.7 5.3 9.7 10.5 FY06 FY07 FY08 FY09 FY10 FY11 FY12* ONGC OIL Private/JV
  • 10. Annual gas production (bcm) Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt – Million Metric Tonne; * – Provisional; JV – Joint Venture Total gas production was 47.6 bcm during FY12 The contribution from Private/JV has drastically increased over the last couple of years, following the development of the Reliance - Krishna Godavari (KG) basin 22.6 22.4 22.3 22.5 23.1 23.1 23.3 2.3 2.3 2.3 2.3 2.4 2.4 2.6 7.4 7.0 7.7 8.1 22.0 26.8 21.6 FY06 FY07 FY08 FY09 FY10 FY11 FY12* ONGC OIL Private/JV
  • 11. Exploration activities (FY12*) (‘000 meters) Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: * – Provisional 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 Development drilling activities (FY12*) (‘000 meters) 198 46787 295 Wells Metreage Onshore Offshore 409 740 62 129 Wells Metreage Onshore Offshore
  • 12. Shares in crude pipeline network by length (out of 9,537 km ) Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: km – Kilometre; mmtpa – Million Metric Tonnes Per Annum 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 (1870 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 capacity (out of 138.3 mmtpa) 12.5% 11.9% 45.9% OIL ONGC IOCL 6.1% 47.4% 29.2% OIL ONGC IOCL
  • 13. Shares in product pipeline network by length (out of 11,218 km ) – FY12 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 Of the 11,218 km of refined products pipeline network (capacity of 76.3 mmtpa) in India, Indian Oil Corporation (IOC) accounts for 55 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 LPG pipeline network by length (out of 2,312 km ) – FY12 0% 55% 19% 15% 6% 2%3% IOC HPCL BPCL OIL PCCK PMHB 12% 88% IOC GAIL
  • 14. Refinery crude throughput (mmt) Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: * – Provisional; mmt – Million Metric Tonne State-controlled entities dominate the downstream segment as well India has 19 refineries in the public sector and 3 in the private sector In FY12, public sector refineries accounted for 57 per cent of total refinery crude throughput 93.1 96.9 108.2 112.5 112.2 112.1 115.3 120.9 34.3 33.2 38.4 43.6 48.6 80.7 90.7 90.5 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12* Public Sector Private Sector
  • 15. Shares in India's total refining capacity (FY 2012) Source: Ministry of Petroleum & Natural Gas; 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 Total crude throughput rose from 130.1 mmt in FY06 to 211.4 mmt in FY12* In FY12, the sector’s total installed capacity was 213.1 mmt, up 13.7 per cent from the previous fiscal year In FY12, Reliance emerged as the largest domestic refiner with a capacity of 60 mmt (Jamnagar Refinery) Total installed capacity (mmt) 26.0% 10.0% 7.0% 6.0% 1.0% 7.0% 28.0% 9.0% 7.0% IOC BPCL HPCL CPCL NRL MRPL RPL EOL JV 117 135 71 78 FY11 FY12 Public Sector Private Sector
  • 16. Petroleum products from crude oil (mmt) Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt – Million Metric Tonne; * – Provisional During FY12, 198.8 mmt of petroleum products (including 2.2 mmt of LPG from natural gas) 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) 32 38 40 40 51 55 58 64 71 77 80 94 100 10323 26 28 30 35 35 35 FY06 FY07 FY08 FY09 FY10 FY11 FY12* Light Distillates Middle Distillates Heavy Ends 2.2 2.1 2.1 2.2 2.2 2.2 2.2 FY06 FY07 FY08 FY09 FY10 FY11 FY12* LPG
  • 17. Downstream distribution statistics (‘000 tonnes) Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt – Million Metric Tonne; mmtpa – Million Metric Tonnes Per Annum; * – Provisional In FY12*, total sales of petroleum products by companies was 148.0 mmt, up 4.9 per cent from the previous fiscal year The total number of retail outlets of public sector oil marketing companies (OMCs) increased to 42,138 in April 2012 from 38,964 in April 2011 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 As of April 1, 2012, there were 11,489 LPG distributors in India 0 50,000 100,000 150,000 200,000 FY06 FY07 FY08 FY09 FY10 FY11 FY12* Product Pipeline LPG Pipeline Crude Pipeline Pipeline Capacity (mmtpa) As of April 1, 2012 Length (km) 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
  • 18. Energy consumption pattern in 2011 Source: US Energy Information Administration (EIA); Asia-Pacific Economic Cooperation (APEC); Aranca Research Notes: Mtoe – Million Tonne of Oil Equivalent 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 India’s energy demand is expected to double by 2035 41% 23% 23% 8% 5% Coal Petroleum Solid biomass & waste Natural gas Nuclear & other renewables
  • 19. Consumption pattern expected in 2035 Source: International Energy Agency (IEA); 12th Five-Year Plan; Aranca Research 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 4,890 MWe capacity are under construction 42% 24% 15% 11% 8% Coal Petroleum Solid biomass & waste Natural gas Nuclear & other renewables
  • 20. Source: Bloomberg; Aranca Research Notes: FY – Indian Financial Year, April–March Company Ownership (per cent) FY13 Turnover (USD billion) Indian Oil Corporation Limited 78.9 per cent state- owned 84.7 Reliance Industries Public Listed 73.0 Bharat Petroleum Corporation Limited 54.9 per cent state- owned 44.5 Hindustan Petroleum Corporation Limited 51.1 per cent state- owned 39.7 ONGC 69.2 per cent state- owned 29.7 GAIL India Limited 57.3 per cent state- owned 9.4 Oil India Limited 68.4 per cent state- owned 1.8
  • 21. 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 3.2 (FY13) Shell Private Sector 460.0 (1Q2013) BG Group Private Sector 20.8 (1Q2013) BP Private Sector 370.9 (1Q2013)
  • 22. 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 unmineable coal seams economically in an eco-friendly manner • Reduces capital outlay, operating costs and output gas expenses by 25–50 per cent, vis- à-vis surface gasification Gas hydrates and bio- fuels • 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
  • 23. Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mt – Million Tonne State 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 - Total 213.1 211.4
  • 24. Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: * – Provisional; # – April 2000–February 2013 Growing demand Inviting Resulting in Growing demand Increasing investmentsPolicy support India is fourth largest energy consumer Rise in population and economic growth to fuel demand Increasing industrialisation and usage of gas Supportive FDI policies Promoting of investments in the sector Introducing policies such as CBM and NELP FDI in FY1* was USD2.03 billion Cumulative# FDIs in oil & gas totalled USD5.4 billion Huge investments planned under Eleventh Plan
  • 25. 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 5.6 billion barrels in FY12 • Natural gas reserves stood at 1.3 tcm in FY12 Source: Ministry of Petroleum & Natural Gas; BP Statistical Review of World Energy, June 2012; BMI; Aranca Research, Note: TCM - Trillion Cubic Meters, E&P - Exploration and Production Favourable policies • 100 per cent FDI allowed in E&P projects/companies; 49 per cent allowed in refining • Policies to promote investments in the industry such as New Exploraton Licensing Policy (NELP) and Coal Bed Methane (CBM)
  • 26. Huge investments • Investments worth USD75 billion is expected across the oil & gas value chain under the 12th Plan (2012–17) • Since April 2000, FDI worth USD5.4 billion has been invested in India’s petroleum and natural gas sectors 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
  • 27. Integrated Energy Policy (IEP), 2006 • Outlines goals for dealing with challenges faced by India’s energy sector Petroleum and Natural Gas Regulatory Board (PNGRB) Act, 2006 • To regulate refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas Auto Fuel Policy, 2003 • To provide a roadmap to comply with various vehicular emission norms and corresponding fuel quality upgrading requirements over a period of time Source: Ministry of Petroleum & Natural Gas; Aranca Research, Note: NELP - New Exploration Licensing Policy National Biofuel Policy, 2002 • 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 Freight Subsidy (for far- flung areas) Scheme, 2002 • To compensate public sector Oil Marketing Companies (OMCs) on the freight incurred to distribute subsidised products in far-flung areas NELP, 1999 • 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
  • 28. FDI Policies • 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 Source: Ministry of Petroleum & Natural Gas; Aranca Research Oil Industry (Development) Act, 1974 • 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
  • 29. 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
  • 30. FDI inflows into petroleum and natural gas (USD million) Source: Department of Industrial Policy & Promotion; Aranca Research Notes: * – Provisional Cumulative FDI inflows during April 2000–February 2013 in India’s petroleum and natural gas sector stood at USD5.4 billion (2.8 per cent of total FDIs) Across sectors, cumulative FDI inflows during April 2000–February 2013 was USD191.9 billion, with the services sector accounting for the largest share (19.4 per cent), followed by construction development (11.5 per cent) and telecommunication (6.6 per cent) FDI inflows into India (USD billion) 14.0 89.0 1,427.0 412.0 266.0 556.0 2,030.0 FY06 FY07 FY08 FY09 FY10 FY11 FY12* 5.5 12.5 24.6 31.4 25.8 21.4 35.1 22.4 FY06 FY07 FY08 FY09 FY10 FY11 FY12* FY13*
  • 31. Source: Thomson Banker; Aranca Research Date Announced Acquirer Name Target Name Value of Deal (USD million) 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 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 1,026.7 Apr 2010 Sim Siang Choon Hardware Interlink Petroleum Ltd 17.8
  • 32. Source: Thomson Banker; Aranca Research 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
  • 33. ONGC’s position in the Indian market • ONGC is the largest upstream oil company • ONGC accounts for 62 per cent of India’s total crude oil output and 49 per cent of total gas production ONGC revenue growth (USD billion) Source: Company Reports; BMI, Aranca Research Notes: TOE – Tonne of Oil Equivalent • ONGC registered highest- ever oil production • Highest reserve accretion in the last two decades – 83.5 million toe • Domestic crude productio n up 2.1 per cent • ONGC reported net profit of USD3.9 billion in 2011 • Highest- ever dividend payout of USD1.6 billion • ONGC recorded highest-ever net profit of USD5.2 billion in 2012 13.0 15.3 14.2 13.1 15.3 15.9 15.2 FY07 FY08 FY09 FY10 FY11 FY12 FY13
  • 34. Source: Company Reports; Aranca Research 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 Net Profit USD3.9 billion USD3.9 billion EBITDA USD7.3 billion USD7.1 billion Turnover USD66.8 billion USD68.4 billion FY13 • 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.
  • 35. Upstream segment Midstream segment Downstream segment • Locating new fields for exploration: 78 per cent of the country’s sedimentary area is yet to be explored • Development of unconventional resources: CBM fields in the deep sea • Opportunities for secondary/tertiary oil producing techniques • Increased demand for skilled labour and oilfield services and equipment • Expansion in the transmission network of gas pipelines • LNG imports have increased significantly; this provides an opportunity to boost production capacity • In light of mounting LNG production, huge opportunity lies for LNG terminal operation, engineering, procurement and construction services • Development in city gas distribution (CGD) networks, which are similar to Delhi and Mumbai’s CGDs • To construct new refineries considering advantages such as low operation costs, lesser freight charges and favourable policies • Expansion of the country’s petroleum product distribution network
  • 36. • 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 Notes: tcf – Trillion Cubic Feet
  • 37. Name Address Contact person Telephone E-mail Oil Industry Development Board (OIDB) 301, World Trade Centre, Babar Road, New Delhi – 110001 Mr T S Balasubramanian, Financial Adviser and Chief Accounts Officer 91-11- 23413298 91-11- 23414692 oidb@hotmail.com Petroleum Conservation Research Association (PCRA) Sanrakshan Bhavan, 10 Bhikaji Cama Place, New Delhi – 110066 Mr Arun Kumar, ED 91-11- 26198799 Ext.301 pcra@pcra.org 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 dg-bee@nic.in, amathur@beenet.in 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 verma.jb@gov.in 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 dg@dghindia.org
  • 38. 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
  • 39. 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
  • 40. 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
  • 41. Year INR equivalent of one USD 2004-05 44.95 2005-06 44.28 2006-07 45.28 2007-08 40.24 2008-09 45.91 2009-10 47.41 2010-11 45.57 2011-12 47.94 2012-13 54.31 Exchange Rates (Fiscal Year) Year INR equivalent of one USD 2005 45.55 2006 44.34 2007 39.45 2008 49.21 2009 46.76 2010 45.32 2011 45.64 2012 54.69 2013 54.45 Exchange Rates (Calendar Year) Average for the year
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