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INDIA ‘S ENERGY AND PETRO- RETAIL OUTLOOK SUMITA BOSE ROY General Manager - International Trade

INDIA ‘S ENERGY AND PETRO- RETAIL OUTLOOK SUMITA BOSE ROY General Manager - International Trade Bharat Petroleum Corporation Ltd. Universal access and consumption options for all income groups. Defining India’s Energy Outlook. Price stability.

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INDIA ‘S ENERGY AND PETRO- RETAIL OUTLOOK SUMITA BOSE ROY General Manager - International Trade

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  1. INDIA ‘S ENERGY AND PETRO- RETAIL OUTLOOK SUMITA BOSE ROY General Manager - International Trade Bharat Petroleum Corporation Ltd

  2. Universal access and consumption options for all income groups Defining India’s Energy Outlook • Price stability • Ability to compete across world markets • Meeting local and global environmental norms

  3. India’s Hydrocarbon Vision - 2025 • Develop a globally competitive hydrocarbon sector through technology upgradation and capacity building • Ensure energy security through indigenous production and equity abroad • Ensure cleaner greener fuel to enhance quality of life • Have free market for healthy competition and customer service

  4. India’s oil scenarios at a glance • Oil and gas accounts for 45% of total energy needs • India’s demand for primary energy is growing by 5% p.a. • Oil demand is growing by 3.3% p.a. and is currently • 2 million bbl/day • India’s refining capacity matched its demand in 1998 and • has remained positive • Net exporter of Naphtha, Gas oil, Gasoline, Fuel oil and • importer of LPG • Domestic Crude Oil is currently short of demand by 69% • Bold reforms initiated to boost exploration and production

  5. World oil demand growth

  6. India’s demand for energy Annual average demand for primary energy expected to grow by 5%

  7. Shift in energy consumption pattern Demand (Mtoe) vs Share

  8. Oil demand versus refining capacity MMTPA • * Projections at the end of Eleventh Five Year Plan • Demand growth projected at CAGR 5.4%, • against actual 2003-04 growth of 9% • Optimum refining capacity planned to cope with • anticipated spurt in demand in 2005/12

  9. Net imports / Exports MMTPA

  10. Net product imports & exports (TMT) LNG will impact F.Oil/Naphtha exports

  11. MMTPA Crude oil production versus demand * Based on presently known oil basins Wide Gap Between Production and Demand

  12. Natural gas demand / supply projections 391 * 400 Supply 313 350 CBM 300 Demand 231 250 MMSCMD--- 200 151 150 15 10 2 100 50 70 95 95 95 0 2001-02 2006-07 2011-12 2024-25 * Supply projections based on present reserves 30% increase due to recent discoveries in Pvt./JV. Sector

  13. Demand and supply for gas in India • Emerging fuel of the future • Demand is 150 mmscmd against availability of 70 mmscmd • 10 mmscmd contracted from Qatar in 2004 • Several new fields discovered in India. The world’s largest discovery of gas in 2002 was reported by Reliance / Niko Resources in NEC-25, off Orissa State (35/40 mmscmd for next 15/20 years) • Reliance/Niko Resources have made further major discoveries this year in the same block

  14. ANNAPURNA PADMAVATI 0 2 0 0 4 0 0 K m New significant discoveries DISCOVERIES DISCOVERIES IPRE-NELP NELP NANUWALA Delhi GUDA PRODUCING RajasthanBasin SARASWATI Kolkata RAVVA CambayBasin RJ-E-1 I N D I A BHIMA DISCOVERIES Mumbai LAKSHMI DHIRUBHAI - 1, 2, 3 & 4 K-G Basin D-6 AMBE D-5 Chennai GAURI BAYOF BENGAL KANAKDURGA PARVATI Oil Gas

  15. Oil sector reforms introduced by Indian Government in 1999 to boost exploration activities Paradigm shift for gaining crude oil/gas security ‘New Exploration Licensing Policy’ (NELP) notified, - permitting private/foreign participation. - allowing FDI up to 100% - Awarding acreage on international competitive bidding - offering fiscal incentives, like royalties, tax concessions, market driven prices, etc Thrust on acquisition of equity oil and reserves abroad, development of R&D, deep sea drilling

  16. Proposed LNG terminals • Nine LNG terminals proposed for 160 mmscmd, of which, 30 mmscmd are being currently set up by Petronet LNG and Shell • Future projects are dependent of firm consumer demand and based on price as compared to alternate fuel • Sources of gas will also depend on domestic gas discoveries

  17. Pricing of petroleum products deregulated from 2002 • and linked to international price • Import duties and freight added to import price to arrive • at the domestic price • Prices revisions permitted on fortnightly basis alongside • international prices • Gasoline and gas oil price revisions are permitted • within Government norms • Liquefied Petroleum Gas and Kerosene are subsidised Regulations and pricing mechanisms

  18. ------MMTPA------ 2003-04 Indian oil industry

  19. PRTRO -RETAIL OUT LOK OF BHARAT PETROLEUM CORPORATION LTD

  20. Refining Marketing Infrastructure 180,000 bbl/d at Mumbai Retail outlets 5,530 Installations 12 Depots 129 Tankage (mn kl) 3.08 Aviation stations 19 LPG Plants 42 LPG Distributorships 1922 150,000 bbl/d 54.81% holding 60,000 bbl/d 62.96% holding Industry Share Pipelines Marketing 22% Refining 17% Mumbai-Manmad-Indore 580 km (under extension to Delhi) Cochin-Karur 292 km Significant Joint Ventures Technology Petronet LNG Limited (PLL) 12.5% (LNG import facility of 5 MMPTA at Dahej) Indraprastha Gas Limited (IGL) 22.5% (Supply of CNG to households/auto sector in metros; agreement signed) BPC & KRL fully on SAP system BPC upgraded to SAP Enterprise State of Art Data Center E-Banking/ E-Business B2B BPC Group – positioned well

  21. BPC existing facilities Srinagar Leh Jammu & Kashmir Existing Product Pipeline BPC depot locations Existing Refinery Jammu Dhamatal Kulu BPC Installations Himachal Pradesh Pathankot Industry locations Hoshiarpur Amritsar Jallandar Shimla Punjab Patiala Parwanoo Uttaranchal Kotkapura Bathinda Ambala Sangrur Panipat Hanumangarh Haryana Hissar Kathgodam Meerut Najibabad Rewari Shakurbasti Bikaner Bijwasan Bareilly/ Aonla N. Lakhimpur Doimukh Uttar Pradesh Biswanath charali Tinsukia Jaipur Bharatpur Gonda Gangtok NRL Ajmer Mathura Missamari Rajasthan Digboi Banthra Basti Rangpo Agra Gorakhpur Chaksu Gauhati Jorhat Jodhpur Amousi Assam Bongaigon Baitalpur Khot koti Raxaul Forbesganj Dalgaon Nagaon Kanpur Gwalior/Rayaru Siliguri Barauni Betkuchi Lumding Kota Jhansi/ Karari Mughalsarai Katihar Barapani Dimapur Udaipur Patna Bhagalpur Bihar West Bengal Silchar Imphal Dharmanagar Gujarat Sidhpur Malda Sabarmati Bina Satna Bokaro Rajbandh Dhanbad Agartala Jharkhand Kandla Salaya Sagar/Nairoli Vairangte Ranchi Vadinar Viramgam Ahmedabad Nishatpura/Bakania Budgebudge Jabalpur/ Bhitoni Ratlam Sikka Madhya Pradesh Singrauli/Jayant Tatanagar Rajkot Bilaspur Essar Koyali Indore Itarsi Khandwa Dehri Bhavnagar Bisrampur Surat/ Hazira Dhule/ Shirud Haldia Rourkela Balasore Raipur Badnera Borkhedi Valsad/ Vapi Jalgaon Gondia Bhilai Sambalpur Orissa Chattisgarh Manmad Paradeep Tadali Akola/Gaigaon Cuttack/Jatni Akolner Aurangabad Chandrapur Maharashtra Mumbai Berhampur Vashi Jagdalpur Sholapur/ Pakni Nizamabad Loni Vizag Warangal Miraz/Hazarwadi Gulbarga Rajahmundry Cherlapalli Bijapur Raichur Vijaywada Andhra Pradesh Karnataka Goa Ongole Desur Karwar Hubli/Navalur Guntakal Cuddappah Tada Shimoga Renigunta Chennai Devangonthi Hassan Mangalore Tondiarpet Tamil Nadu Mysore Cannanore Shankari Salem Neyveli Irugur Calicut Palghat Karur Trichy Kerala Kochi Narimanam Madurai Map not to scale Quilon Trivandrum Tirunelveli

  22. Refining – growth in margins Singapore Dubai Refinery Margins BPCL Group Refinery GRMs Domestic margins are higher by US$1.5-2/bbl than regional margins Gross Margins Rs14.34 bn (Rs11.75 bn) Crude Throughput 8.76 MMT (8.71) Flexibility 60 plus crude types Safety ISRS Level – 8 Refinery Capex Rs7.9 billion in FY04 Sharp recovery in regional margins – margin up trend expected to continue in medium term coinciding with Group capacity enhancement

  23. Sales Turnover Return on Net Worth (RONW) Earnings per Share (EPS) Book Value per Share BPC financials Delivering shareholder value over the years Return on net worth at 20%+ throughout last decade

  24. Leveragingon retail • Speed: Branded Fuel • First branded Fuel in India • Launched in July 02 • Represents 9.8% of total petrol volumes in FY04 • Available at 1100 outlets across country • 49% market share of premium fuel • Launch of SPEED 93, 93 Octane petrol in Aug. 03 • Launch of Hi-Speed Diesel in July 04 In & Out Stores: Discover Convenience • 235 convenience stores at retail outlets • Available in more than 80 cities • Total turnover Rs.300 mn/ Income Rs.37 mn • Enhance fuel sales proposition • Classic convenience • Range of products and service offerings Pure for Sure (PFS) – pioneering program guaranteeing fuel Quality and Quantity 48% of retail network under PFS contributing 68% of Petrol and 62% Diesel sales PFS helped in building a strong retail foundation Other initiatives followed : it paid to be always the first

  25. Thank You

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