Jaspal Singh India Head and Director of Operations

1. INDIA - A GLOBAL REFINING HUB Jaspal Singh India Head and Director of Operations

2. Contents • Global Oil Scenario • Indian Scenario • India – Robust Economy • India – A Global Refining Hub • Refining Challenges • Conclusion

3. Global Oil Scenario

4. Proven Oil Reserves Source: BP Stats, 2010

5. World Crude Production By Region Source: BP Stats, 2010

6. Source: Purvin & Gertz

7. Oil Production & Consumption Oil Production,2009 Oil Consumption,2009 Source: BP Stats, 2010 Changing dynamics in oil trade linked to production / consumption matrix

8. Regional product balance, 2009 Source: BP Stats, 2010

9. World Refinery Utilization World Refining capacity 2010 Refinery capacity Refinery throughput Total: 90.7 mbpd Source: BP Stats, 2010 • World oil demand grown faster than refining capacity-better capacity utilization

10. Indian Scenario

11. India - Refineries Existing All data in kbpd as per 1.10.2009 and XIth five year plan New / Additions BHATINDA (180) PANIPAT (240+60) BONGAIGAON (47) DIGBOI (7) MATHURA (160) NUMALIGARH (60) GUWAHATI (20) BARAUNI (120) BINA (120) BARODA (274) HALDIA (120+30) JAMNAGAR (RIL 1240) ESSAR 210+ 110+360) PARADEEP (300) MUMBAI (BPCL 240) (HPCL 110 + 48) VISAKH (150+50) TATIPAKA (1.4 + 1.4) MANGLORE (194 +106) CHENNAI (190+ 34) KOCHI (190 + 40) NARIMANAM (20)

12. India – Oil Trade Crude Oil Import mbpd Net Product Export Product Export India will continue to be product surplus Import/Export requirement for crude/products to be quite substantial Source: Purvin & Gertz

13. India - Refinery Utilization Refinery throughput Refinery capacity Over 100% utilization inspite of Product Surpluses Source: PPAC

14. Refining Hubs

15. Major Refining Hubs Middle East Refinery Capacity: 7.7 mbpd Product Export: Asia Pacific, Europe Rotterdam Refinery Capacity: 0.4 mbpd Product Export: Continental Europe, US Jamnagar Refinery Capacity: 1.5 mbpd Product Export: Europe, US US Gulf Coast (USGC) Refinery Capacity: 8.5 mbpd Product Export: US East Coast, Mexico Singapore Refinery Capacity: 1.42 mbpd Product Export: Asia Pacific

16. Success Factors Middle East Availability of feed stock Ample funds Technological partners Leveraging crude reserves advantage Rotterdam Largest port in Europe Access to hinterland – navigable rivers Favorable policy regime Well developed infrastructure Jamnagar Economies of Scale State of the art Technology Efficient Logistics Enabling Regulations Superior Product Quality US Gulf Coast (USGC) Discovery of oil & gas along coast/ offshore Easy access to shipping Favorable policy regime Robust infrastructure back-up Singapore Strategic location, at cross roads of Indian and Pacific oceans – busiest international waterways, Deep water berths Well established infrastructure incl. storage terminals

17. Grabbing the Opportunity Compete with existing or emerging hub

18. India - Robust Economy

19. India - High GDP Growth (%) Source: RBI

20. India - Per Capita Income on the rise… People Getting Richer 25.5 Annual Growth 6 – 9% Source: RBI

21. Foreign Capital Inflows ( US $ Billion) Expanding Foreign Investment 2010 -11 * - Figure only till June 2010 Source: RBI

22. What it takes to Succeed

23. India - A Global Refining Hub

24. Critical Success Factors

25. Cost Competitiveness Cost competitiveness driven by lower wages Access to large, technically skilled manufacturing base and construction workforce Indigenous procurement Labor Productivity Resulting in low capital and cash operating costs

26. Strategic Location Located in the major maritime route from Middle East to Far East West and southwest coast - as transit landfall for middle-east crude Established refineries on west coast Geographical advantage to serve western and eastern markets

27. Robust Domestic Demand Strong Domestic Demand - an anchor to provide an effective hedge against market fluctuations. Source: PPAC

28. Quality of Automotive Fuels

29. Infrastructure World’s 5th largest refiner with 4% of world refining capacity 4th largest consumer (3.8%) Over 12,700 KM products pipeline network > 40,000 sale points Excellent maritime infrastructure: POL facilities at 14 locations – 39 berths 2 barge jetties 13 SPMs

30. Refining Challenges

31. Refining Challenges Changing Feed Quality and Availability Challenges in processing…. Configuration/ Complexity Product Mix Variation Environmental Regulations

32. Changing Feed Quality and Availability Quality – 0API / Sulfur / Acidity Availability Declining trend of low sulfur crude oils Growing supply of Heavier, Sour and high TAN crudes New Frontiers - Unconventional sources - Tar sands, Oil shales Designing/ Configuration Challenges - Dovetailing units to absorb natural gas - for processes and as fuel Widening of crude basket

33. Source: Purvin & Gertz

34. Refinery Configuration New capacity creation based on: Processing cheap heavy, high TAN and high sulfur crudes Stringent automotive fuel quality norms Upgrading BOB – Zero Resid Energy Efficiency Reliability: Capacity utilization and Peak processing requirements Above measures contribute to improve refining margins

35. Indian Refinery Configuration – Historical Perspective • 1970’s and earlier • Hydro-skimming with DCU based on indigenous crudes • FCC or lube blocks based on import crudes. Residue used for bitumen or FO. • Early 1980’s- six FCC units & Upgraders with capacity expansion, product quality not stringent • Late 1980’s & 1990’s -Hydrocrackers added to meet Increasing demand for middle distillates, followed by HCU+FCC combinations to improve flexibility & product slate.

36. Indian Refinery Configuration – Historical perspective …Cont’d Late 1990’s – Stringent product quality stringent - Hydrotreating. Post 2000 – More stringent Auto fuel specs. New technologies/ unit - Isom / Alkyl Integration with petrochemicals - PX, PTA, Polymers etc Most refineries have undertaken capacity expansion and product quality improvement projects. Refinery configurations are now driven by improved product quality and margins. Refinery configurations have undergone a sea change in their level of complexity

37. Typical Refinery BFD

38. Recent trends show increasing Crude - Natural gas price differentials Oil $/Bbl Natural Gas $/MM BTU Hydrogen Addition Carbon Rejection The time for “Hydrogen Addition” is now here

39. Refinery of the Future C4- Slurry Phase HC – Stage 1 Distillation Unit SDA Slurry Phase HC – Stage 2 Naphtha Crude Middle Distillates Recycle VGO Residue

40. Product Mix variation Address growing demand amidst tighter product specifications Shifting regional balance of demand as western markets mature and new markets grow rapidly in Asia Disposal of surplus Naphtha, especially from hinterland refineries Production of synthetic fuels through CTL / GTL routes

41. Integration: Petrochemicals • Major capacity additions post 1991 have significantly reduced import dependence • India’s per capita consumption at 5 kg - much lower than global average of 25 kg • Largely naphtha (61%) based ethylene cracker capacity • Petroleum Chemicals and Petrochemicals Investment Regions (PCPIR) being set up Aggregate Petrochemical Demand in ‘000T Demand for polymers alone has the potential to reach 12.5 MMT by the end of the 11th Five-Year Plan, growing at a CARG of 18%. Growing rapidly at 1.5 - 2.5 times the GDP growth rate

42. Success Factors: India Advantage Cost Competitiveness HIGH Flexibility of Product Mix MEDIUM to HIGH Location HIGH Quality of Products MEDIUM to HIGH LOW to MEDIUM Infrastructure Government Support LOW to MEDIUM

43. Way Forward Leverage strategic advantage of coastal locations Consolidate with current/proposed location Proposed PCPIRs Timely project completion is the key Economies of scale in setting up the hub Cost competitiveness to position the product in target markets Integration with petrochemicals, derivative and utility units, for maximizing value addition Environmental norms and product quality specs to meet the export markets

44. In Conclusion Global Opportunity for India to emerge as a Refining Hub is real & attractive

45. Thank You