South & South East Asia New Challenges, New Opportunities


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SV Nair Cairn India Director Strategy & Integration speaks on South & South-East Asia New Challenges, New Opportunities at CERA Week - March 2013 in Houston.

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South & South East Asia New Challenges, New Opportunities

  1. 1. © 2013 Cairn India Limited S V Nair, Chairman – Technical Advisory Board South & South-East Asia New Challenges, New Opportunities CERA Week - March 2013. Houston
  2. 2. CERA Week March 2013 2 Disclaimer This material contains forward-looking statements regarding Cairn India and its affiliates, our corporate plans, future financial condition, future results of operations, future business plans and strategies. All such forward- looking statements are based on our managements assumptions and beliefs in the light of information available to them at this time. These forward-looking statements are by their nature subject to significant risks and uncertainties; and actual results, performance and achievements may be materially different from those expressed in such statements. Factors that may cause actual results, performance or achievements to differ from expectations include, but are not limited to, regulatory changes, future levels of industry product supply, demand and pricing, weather and weather related impacts, wars and acts of terrorism, development and use of technology, acts of competitors and other changes to business conditions. Cairn India undertakes no obligation to revise any such forward-looking statements to reflect any changes in Cairn Indias expectations with regard thereto or any change in circumstances or events after the date hereof. Unless otherwise stated the reserves and resource numbers within this document represent the views of Cairn India and do not represent the views of any other party, including the Government of India, the Directorate General of Hydrocarbons or any of Cairn India’s joint venture partner.
  3. 3. CERA Week March 2013 3 Energy Demand to Increase with Growing GDP  GDP growth projected to increase: Real GDP Growth Rates (%) Projection 15  Despite near term 11 slowdown, GDP growth projected 7 to rebound to > 6% 3 -1  Emerging market economies will -5 continue to lead Global growth 2006 2003 2004 2005 2007 2008 2009 2010 2011 2012 2013 2014 World Advanced economies India China Source: IMF World Economic Outlook Update, Jan 2013  Energy demand to grow: India Energy Consumption by Fuel (in Mmtoe)  Total primary energy consumption 600 534 to almost double from 559 mmtoe 400 to 1010 mmtoe over this decade 296 293 200 162  Gas demand to grow 55 30 99 54 7 13 proportionately, assuming gas 0 share in India’s energy mix stays 2011 2020 at 10% Coal Oil Gas Hydro Nuclear Source: 2011 data from BP Statistical Review 2012 2020 forecast @ 6.7% growth p.a.(CAGR 2002-2011)
  4. 4. CERA Week March 2013 4India – Growing Demand Center With High ImportDependence 10.0 9.0 Liquids Production 8.0 Liquids Consumption 7.0 Million barrels per day 6.0 Import Bill to reach 5.0 $400 Billion 4.0 3.0 Import Bill for 2011 at 2.0 $120 billion 1.0 0.0 2006 2007 2008 2009 2015 2020 2025 2030 2035 Historically, India has imported more than 70% of its oil demand and this is forecast to grow Source: International Energy Outlook 2011
  5. 5. CERA Week March 2013 5 India – Opportunity for Exploration Producing Emerging Status of exploration of Indian sedimentary basins, FY 2011-12* Immature Frontier Moderately to Poorly Well Explored, 22% Explored, 22% Unexplored, 1 2% Exploration Initiated, 44% More than 75% of Indian Sedimentary Basins not well explored * Source : Directorate General of Hydrocarbons
  6. 6. CERA Week March 2013 6 India – The Gas Story  Natural Gas is clean, cheap and plenty  Currently it represents only 10% of Indian fuel mix – US it is about 25%  Demand is constrained by supply and inadequate infrastructure  LNG imports to play a key role in meeting widening supply deficit  Potential for domestic supply through conventional and unconventional sources  Opportunity for developing infrastructure including pipelines, LNG import and regasification and City Gas Markets
  7. 7. CERA Week March 2013 7 India Pipeline Network , LNG & City Gas Markets
  8. 8. CERA Week March 2013 8 India : Potential Shale Gas Basins India Shale gas potential Satpura Basin  Geological conditions indicate Rewa Basin potential in several Indian basins Damodar Assam  Shale gas policy being finalised, a Basin Basin shale gas round expected in 2013 ONGC Shale gas pilot Infrastructure Challenges  Central Indian basins lack gas infrastructure and are not near major Son Mahanadi Basin markets Chattisgarh Basin  Other potential basins need more Cambay Pranhita Godavari Basin Basin infrastructure Krishna Godavari Basin  Service sector support available will need to significantly enhanced Cauvery Basin  Water and environment management challenges Gas Pipelines
  9. 9. CERA Week March 2013 9 Cairn India – Historic Overview Well poised for further Growth International Foray Execution Success Exploration Success Sri Lanka deepwater discoveries World class Early S Africa entry Rajasthan Beginnings development Rajasthan & CB/OS- 2 discoveries Ravva Re- Cairn India Vedanta development IPO (2007) Acquisition 1999 2007 2012 Market Cap (US$) 0.5bn* 6.0bn 12bn *Market Cap of Cairn Energy PLC end 1999
  10. 10. CERA Week March 2013 10 Rajasthan – Frontier Basin to World-Class AssetResource Future Development & Prospective Under Development Total ResourcePotential(mm boe) Gross 2,168 2,010 EXPLORATION3,100 MBARS BH + 19 Disc. 7,278 In Place Gross EUR 1,044 (~48%) 165 (~8%) 530 1,739 (~17%)ExpectedGross The 300kbopd will represent ~35% of Indias current domestic crude 300**Production production(kbopd) 200 - 215 ~175 Note- Gross EUR Includes EOR potential of 238 mmbbls; balance 70mmbbls booked as reserves MBARS – Mangala, Bhagyam, Aishwariy a, Raageshwari, Saraswati Company upgraded the numbers as on 31 March 2012 *By end FY 2013-14 * *Subject to approvals Apr-12 FY 2013-14* Block Map with 25 discoveries to date
  11. 11. CERA Week March 2013 11 Social License to Operate - The Bishnoi Community Bishnoi Community - known as the first environment conservationists in the world Reverence for nature and all forms of life is what makes them a true ‘BISHNOI’ While countries are trying hard to educate the masses on environmental protection and eco conservation, this small community has surpassed other economies by virtue of it simple approach to life Social, demographic, and economic organization, must be considered against the background of change brought about especially by modern technology and inputs in addition to the continuous socio-economic change Success of future developments will depend on how we manage the local environment
  12. 12. CERA Week March 2013 12 Integrating local communities Driving growth of local society  Establishing learning centre - Enterprise Center  Creating pools of skilled manpower Partnering with communities through our principles of respect, relationship and responsibility Promoting education and social Areas of Focus awareness through long-term sustainable programs Education Infrastructure Development Aspiring leadership in corporate citizenship Economic Development Health