Indian Oil Sector a Perspective

1. Indian Oil Sector a Perspective Click on to Continue “A THOUGHT AT THE RISING INDUSTRY” PREPARED BY: ANKUR AGGARWAL

2. ORGANISATION INDIA'S POWER ,OIL & GAS SECTOR

3. Legend

5. G.O.I Holdings I Oil Companies in which Government of India have a share holding (as on 01.04.2002).

6. Fuel Consumption in India (Year - 2000) 1 QUAD = 2.52 x 1014 K .CAL

7. Sectoral energy consumption by fuel (%): 1999/2000 Sector Coal Natural  gas Petroleum products Power Total Agriculture 0 1.3 9.5 89.2 100 Industry 73.1 2.4 13.6 10.9 100 Transport 0 0 98.5 1.5 100 Residential 0 1.1 71.3 27.6 100 Others 0 33.9 60.9 5.2 100 Sectoral Consumption (Year 2000)

8. Sectoral Consumption(Year 2000) The industrial sector is the largest consumer of energy, consuming about half of the total commercial energy consumption in 1999/2000 . Coal and lignite meet over half of industrial commercial energy requirements. The transport sector is the next biggest consumer at 22% of total commercial energy consumption.

9. PETROLEUM PRODUCTS - HISTORICAL DEMAND GROWTH • Consumption grew at a CAGR of 3.4% p.a. over the last 5 years • Production registered a CAGR of 12.5% p.a. during the same period

10. PETROLEUM PRODUCTS DEMANDGOING FORWARD • Demand expected to grow at a CAGR of 3.7% p.a. during X Plan period • Demand registered over 5% growth during FY2003

11. Key Facts • Total Consumption of Energy = 3 % of World’s Total. • Ranking = 6th in Terms of Overall Consumption Rank. • Major Demand Drivers • Continued Economic Development • Fast Population Growth

12. Total Primary Energy ProductionVSTotal Primary Energy Consumption 1 QUAD = 2.52 x 1014 K .CAL

13. THE OIL UPSTREAM SECTOR

14. CRUDE SELF SUFFICIENCY LEVELS • Self sufficiency levels have declined over the years

15. Oil Estimate • Crude Oil Reserves: 4.7 Billion Barrels • Offshore Basin Area: 380,000 Square Kilometers • Onshore Basin Area: 1.34 million Square Kilometers • Total Area Explored : Less Than 25 % • Estimated Reserves : 30 Billion Tons 1 Barrel = 0.159 Tons

16. NELP The government in order to increase exploration activity, approved the New Exploration Licensing Policy (NELP) in March 1997 which would level the playing field in the upstream sector between private and public sector companies  in all fiscal, financial and contractual matters.  

17. Salient Features - NELP 1)No mandatory state participation 2)The two public sector upstream companies would compete for petroleum exploration licenses, instead of the existing system of granting of licenses on nomination basis. The public sector Companies will also be able to avail of the fiscal and contract benefits available to private companies. 

18. Salient Features - NELP 3)  Open availability of exploration acreage to provide a continuous window of opportunity to companies.   4) Freedom to the contractors for the marketing of crude oil and gas in the domestic market.  5) Royalty payments & encouragement in Deep Water Exploration

19. Numbers - NELP

20. Share of Blocks awarded to Various Players in 2002

21. Exploration & New Discoveries(2002-03) Major Areas: • Cambay Basin • K-G Basin • North East India

22. Major Finds National Oil Companies ONGC and OIL, made 9 significant hydrocarbon in year 2002 discoveries of which 6 are onland and 3 offshore. • Onland Discoveries in Upper Assam like Baghjan , Banamali & Rajastan Basin at Chinnewala Tibba • Offshore Wells in K G Basin & Vasai West

23. Private / JV Companies Players Involved • Reliance Industries. • Cairn Energy • Niko Resources • Essar-POGC consortium Three major areas : • Krishna-Godavari offshore, • Gulf of Cambay • Onland Rajasthan.

24. Apart from Cairn Energy Pty. Ltd. (CEIL) The consortium of Reliance Industries Ltd. (RIL) and Niko Resources Ltd., made a spectacular series of gas discoveries in their deep water block KG-DWN-98/3 through the drilling and testing of Dhirubhai wells 1,2,3 and 4. In fact, the Dhirubhai-1 discovery was the world’s largest gas discovery in 2002. • Gulf of Cambay block CB-OS/2, operated by Cairn Energy, • In block CB-ONN-2000/2 of on land Cambay basin, Niko Resources • In the Rajasthan on land block RJ-ON-90/1 in the Barmer-Sanchor basin, Operated by Cairn. In block RJ-ON-90/5 of the Bikaner-Nagaur basin, Nanuwala Well No.1, by the Essar-POGC consortium.

25. THE OIL UPSTREAM SECTOR

26. Petroleum Production Vs Consumption in India (1995 – 2001) Unit :Thousand b/d

27. Crude Production Vs RefiningCapacity • The gap being met through imports

28. The Refinery Network Major Players • IOCL • Reliance

29. Annual Refinery Output Refining Capacity 114.7 MMT

30. India’s Refinery Output • Present Out Put : 121.68 million Tons • Estimated Demand : 163.8 million Tons • Major Items Imported: • Kerosene • Distillate Fuel Oil

31. Future Projection • Major Proposed Refiniries include: • Proposed by IOCL at Paradip (Orissa) • Essar Group at Vandinar ( Gujarat) • Bharat Oman Refinery Limited by BPCL (Bina ) • IOCL & Kuwait Petroleum Corporation at (Abahya Chandrapur, Orissa) • BPCL - SHELL in Madya Pradesh • Punjab Refinery Project ( Bhatinda)

32. Approved Private Investments

33. Expansions Total of five expansion projects are underway of the Public Sector Undertaking (PSU) refineries during the Ninth Five Year Plan. These include: Indian Oil Corporation Ltd. (IOCL),  Koyali (Gujarat)- 4.20 million metric tonnes (MMT); Hindustan Petroleum Corporation Ltd., Visakhapatnam (Andhra Pradesh) - 3.00 MMT; IOCL Barauni (Bihar) - 2.70 MMT; IOCL Haldia (West Bengal) - 2.25 MMT; IOCL Mathura (U.P.) - 0.50 MMT.     Further three expansion programmes of PSU refineries are under implementation for commissioning in the Tenth Five Year Plan. These are: IOCL Panipat (Haryana) 6.00 MMT; Bharat petroleum Corporation Ltd., Mumbai -–5.10 MMT; Chennai Petroleum Corporation Ltd., Chennai – 3.00 MMT.

34. INFRASTRUCTURE • The Pipeline Network • LNG Terminals • LPG Terminals

35. The Pipelines • Major Players • OIL • ONGC • PETRONET India Ltd ( IOCL+ BPCL+HPCL & OTHER PRIVATE PLAYERS) The Oil Pipeline Network

36. Pipeline Over-View Product Pipelines 49.79 MMT Crude Pipelines 28.5 MMT IOC is the only downstream company that owns crude pipelines

37. SUMMARY Oil India Ltd. (OIL) transports all crude oil produced in northeast India to five refineries (Digboi, Numaligarh, Guwahati, Bongaigaon, and Baurani) via a 1,157 kilometer pipeline. The Oil and Natural Gas Corporation Ltd. (ONGC) has a 7,900 kilometer onshore pipeline network, while its offshore activities include a 3,200 kilometer pipeline network. India transports just 45% of its petroleum products via pipeline. Petronet India Ltd. (PIL) was created by in 1998 under a directive of the Government of India with the objective to constructing additional product pipelines. PIL is owned by three of India's oil refining companies (IOCL, BPCL, and HPCL) and other outside investors (including Gaz de France);

38. FUTURE PROJECTIONS PIL is building pipelines that are expected to add 500,000 b/d to India's present 325,000 b/d of pipeline capacity for the transportation of refined oil products. Of its eight projects, two are in operation (the Vadinar Kandla pipeline in Gujarat and the Kochi Karur pipeline in Kerala and Tamil Nadu states), two others are under construction (the Mangalore Bangalore pipeline in Karnataka and the Chennai Madurai pipeline in Tamil Nadu), two more have been approved (the Bina Kanpur pipeline in Madhya Pradesh, the Paradip Rourkela pipeline in Orissa, with one more in planning (the Bhatinda Pathankot pipeline in Punjab).

39. Gas Pipeline Network Major Player • GAIL

40. Gas Transmission The Gas Authority of India Ltd. (GAIL) is the largest gas transmission and marketing company in the country TOTAL SHARE – 95% Pipeline network – 4400 KM. Major Pipelines • 2300 KM H.B.J Pipeline • World’s Longest LPG Pipeline 1250 KM ( Gujarat – Rajastan – Delhi)

41. GAS DEMAND

42. ENERGY SCENARIOGOING FORWARD • Gas to replace the demand for oil and is expected to constitute 20% of the energy supply by 2025 Source: Hydrocarbon Vision 2025

43. SUPPLY VS DEMAND INDIA

44. MAJOR MARKET DRIVERS

45. The Future Projections(Cross – Country)

46. The Future Projections(Within - Country)

47. LNG Market

48. LNG Terminals India is investing heavily in LNG infrastructure importing up to 50 million metric tons per year (mmt/y) of LNG. These terminals would be located at Jamnagar, Dahej, Hazira, Pipavav, Trombay, Dabhol, Mangalore, Kochi, Ennore, Kakinada, Gopalpur, and Paradeep. PIL will be the largest player in their construction and operation . The first of these that will come into operation will be at Dahej in Gujarat state, which may come online in early 2004. Petronet is now constructing it, and has plans to build another at Kochi in Kerala state. RasGas of Qatar has contracted to supply the Dahej and Kochi terminals with 7.5 million tons of LNG per year for 25 years. Reliance Industries is involved with terminals at Hazira and Janmagar which will be able to handle 5 mmt/y. Shell is involved in the 2.5 mmt/y Hazira terminal for which Oman is scheduled to provide the natural gas

49. LPG Bottling Plants • Main Players • IOC • SHV • SPIC-CALTEX • Shri Shakti • Bharat Shell • HALPG • GCTPCL

50. LPG Consumption India