Oil and Gas Industry

1
Oil and Gas Industry Dynamic and Growing
2
Oil and Gas

• India - An Overview
• Market and Growth Potential
• Players
• Opportunities
• Contact in India

3
India - An Introduction
Over 1 bn 35 3.3 mn sq kms 22 English US
534 US 650 bn

• Population
• States/UTs
• Geographical Area
• Languages recognised
• Business language
• Per Capita Income
• GDP

(at factor cost at current prices) 1USD43.54
INR (as on July 4 2005)
SourceCSO Statistics
4
India - Fast pace Growth

• Largest democracy
• 4th largest economy by PPP index
• 6th largest energy consumer
• ForEx reserves skyrocket from US 42 bn (2001)
  to
• US 133 bn (February 2005)
• GDP growth to continue between 6-8
• 3rd largest economy by 2050 Goldman Sachs
• Leading in IT BPO
• Oil Gas and Biotechnology sunrise industries

5
India - Leading the world

• Hero Honda - largest manufacturer of motorcycles
• Moser Baer - among the top three media
  manufacturers
• in the world
• Pharmaceutical Industry - 4th largest in world
• Walmart GAP Hilfiger sources more than
• USD 1bn worth apparel from India
• 100 Fortune 500 have set RD facilities in India
• including GE Delphi Eli Lilly HP Heinz
  and Daimler
• Chrysler

6
Oil and Gas

• India - An Overview
• Market and Growth Potential
• Players
• Opportunities
• Contact in India

7
Oil and Gas Market
Size US 90bn (16.5 of GDP)
Employment 650000
Contribution to over 30 treasury
Energy requirement 35 served by sector
8
Upstream

• Domestic crude oil production 33.38 mn tonnes
• Over 100 operating PSCs
• CBM - 16 blocks awarded
• Overseas EP acreage in 9 countries
• Recent foray in deepwater drilling

9
Midstream

• Product pipelines
• Gas pipelines
• City gas supply networks exist in 3 cities - to
• expand to 72 cities
• First LNG terminal (5 MMTPA) commissioned
• First LNG ship commissioned

10
Downstream

• 10th largest refining capacity (2.28 mn bopd)
• -- 18 refineries
• Largest grassroots refinery (540000 bopd)
• and 7th largest refinery
• Longest LPG pipeline of 1270 kms
• Existing outlets Petro retail (19800)
• LPG distributors (8100)
• SKO dealers (6500)
• Construction of 3 refineries under progress

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Energy Consumption
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Oil and Gas

• India - An Overview
• Market and Growth Potential
• Players
• Opportunities
• Contact in India

13
Domestic Players
Bharat Petroleum Corporation Ltd (BPCL)
Indian Oil Corporation Ltd (IOCL)
ONGC Videsh Ltd
Reliance Industries Ltd (RIL)
Hindustan Petroleum Corporation Ltd (HPCL)
Essar Oil Ltd
GAIL India Ltd
14
Foreign Investments
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Foreign Interests

• BP
• Kuwait Petroleum Corporation
• Saudi Aramco
• Abu Dhabi National Oil Co
• Petronas

Foreign companies participating in
acquisition opportunities (Over US 0.5 bn to US
1.5 bn)
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Oil and Gas

• India - An Overview
• Market and Growth Potential
• Players
• Opportunities
• Contact in India

17
Investment Potential

• Next 5 years US 18-20 bn
• Upstream sector US 13.05 bn
• Downstream sector US 8.03 bn

Next 25 years US 110 bn
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Business opportunities

• NELP rounds
• EOR projects (Estimated
• investments US 3 bn)
• Oil Field services (Committed
• investments US 2.5 bn)
• Deep Water drilling
• Farm in Opportunities
• Coal Bed Methane
• Underground coal gasification
• Gas hydrate

Upstream
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Business Opportunities

• Refineries (Upgradation)
• Planned product pipelines -
• 12272km (US 5 bn)
• New retail outlets planned
• (US 7 bn)
• New Terminals depots LPG
• infrastructure

Midstream and downstream
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Business Opportunities

• Building strategic oil reserves
• Planned gas distribution
• pipeline 14915 kms (USD 7 bn)
• City gas projects - 22 cities

Midstream and downstream
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Business Opportunities

• Indian Downstream companies are scouting for
  investment opportunities
• Africa
• CIS
• Bangladesh
• Srilanka
• Nepal
• SE Asia

JV Cooperation
22
Policy Advantage

• 100 FDI permitted under automatic approval
  route in
• following sectors
• - petroleum product marketing
• - petroleum product pipelines
• - oil exploration in small medium sized
  fields
• 100 FDI permitted for natural gas / LNG
  pipelines
• subject to approval from FIPB
• LNG exempt from CVD / excise duty.

23
Union Budget 2005-06

• Key Features
• A financial Special Purpose Vehicle (SPV) to be
  established to finance infrastructure
  projects.
• Service tax on pipeline transmission at 10.2
• Crude oil customs duty reduced to 5. Peak duty
  reduction on petroleum products to 10.
• Customs duty on coking coal cut from 15 to 5.

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Evolving Regulatory Regime

• New Exploration Licensing Policy (NELP)
• -Entire value chain has been privatised
• -EP acreage offered under competitive
  bidding (since 1999)
• -Decontrol of Oil sector since April 2002
• Draft petroleum natural gas policy released
• Draft gas pipeline policy released
• Common Carrier Pipeline Policy allows 2 or
• more companies to use single pipeline
• Indian Hydrocarbon Vision 2025

25
Oil and Gas

• India - An Overview
• Market and Growth Potential
• Players
• Opportunities
• Contact in India

26
Contact in India
Confederation of Indian Industry (CII) 249-F
Sector 18 Udyog Vihar Phase IV Gurgaon
122015 Tel [phone]-67 Fax [phone]
5014080/5013874 E mail v.raghuraman_at_ciionline.org