World s fourth-largest energy consumer. Fourth-largest consumer of oil and petroleum products. Fifth-largest LNG importer in 2013

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3 World s fourth-largest energy consumer India s energy demand is expected to double to 1,464 Mtoe by 2035 from 595 Mtoe in Moreover, the country s share in global primary energy consumption is projected to increase two fold by 2035 Fourth-largest consumer of oil and petroleum products Oil consumption is estimated to reach 4.0 mbpd by FY16, expanding at a CAGR of 3.2 per cent during FY08 FY16F. By 2025, India is expected to overtake Japan to become the third-largest consumer of oil Fifth-largest LNG importer in 2013 LNG imports accounted for about one-fourth of total gas demand. India's gas demand is estimated to more than double over the next five years Source: US Energy Information Administration (EIA); Ministry of Petroleum & Natural Gas; Aranca Research Notes: Mtoe Million Tonnes of Oil Equivalent; mbpd Million Barrels Per Day

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5 2013 Oil demand: 3.7 mbpd; Gas demand: 51.4 bcm Growing demand India is the world s fourth-largest energy consumer (2013); oil and gas account for 37 per cent of total energy consumption Buoyant economic growth is the main factor driving the country s energy requirements Supportive FDI guidelines The government allows 100 per cent Foreign Direct Investment (FDI) in upstream and private sector refining projects The FDI limit for public sector refining projects has been raised to 49 per cent Advantage India Skilled workforce About 136,347 people were employed in the petroleum industry at the end of FY13 The University of Petroleum and Energy Studies in Dehradun, Uttarakhand, is Asia s first and only energy university Policy support Government has enacted various policies such as the New Exploration Licensing Policy (NELP) and Coal Bed Methane (CBM) policy to encourage investments across the industry s value chain FY16F Oil demand: 4.0 mbpd; Gas demand: bcm Source: Business Monitor International (BMI); World Oil Outlook 2012; Ministry of Petroleum & Natural Gas; BP Statistical Review 2014; Aranca Research Notes: mbpd Million Barrels Per Day; bcm Billion Cubic Metres

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7 India is the world s fourth-largest energy consumer The country has 5.7 billion barrels of proven oil reserves India had 47.8 tcf of gas reserves and produced 33.7 bcm of gas in 2013 Upstream segment - Exploration and production State-owned ONGC dominate the upstream segment It is the largest upstream company in the Exploration and Production (E&P) segment, accounting for approximately 60 per cent of the country s total oil output (FY13) Indian oil and gas sector Midstream segment Storage and transportation IOCL operates a 11,214 km network of crude, gas and product pipelines, with a capacity of 1.6 mbpd of oil and 10 mmscmd of gas This is around 30 per cent of the nation s total pipeline network Downstream segment Refining, processing and marketing IOCL is the largest company, operating 10 out of 22 Indian refineries, with a combined capacity of 1.30 mbpd Reliance launched India s first privately owned refinery in 1999 and gained considerable market share (30 per cent) Essar s Vadinar refinery has a capacity of 20 mmtpa, currently accounting for around 10 per cent of total refining capacity Source: BP Statistical Review 2014; US Energy Information Administration, Ministry of Petroleum & Natural Gas; Aranca Research Notes: bcm Billion Cubic Metres; tcf Trillion Cubic Feet; mbpd Million Barrels Per Day; mmscmd - Million Metric Standard Cubic Metre Per Day, ONGC Oil & Natural Gas Corporation of India; IOCL Indian Oil Corporation Ltd

8 Oil consumption is estimated to expand at a CAGR of 3.3 per cent during FY F to reach 4.0 mbpd by 2016 Due to the expected strong growth in demand, India s dependency on oil imports is likely to increase further Rapid economic growth is leading to greater outputs, which in turn is increasing the demand of oil for production and transportation With rising income levels, demand for automobile is estimated to increase Oil consumption in India and current reserves 6, , ,600 5,400 5,200 5,000 4,800 4, * Oil Consumption (mbpd) - LHS Proven Oil Reserves (mn bbl) - RHS Source: Ministry of Oil & Natural Gas; BP Statistical Review 2014, BMI forecasts; Aranca Research Notes: F Forecast; CAGR Compound Annual Growth Rate; mbpd Million Barrels Per Day; mn bbl Million Barrels *- Up to March 2016

9 In FY13, imports accounted for approximately 80 per cent of the country s total oil demand Backed by new oil fields, domestic oil output is anticipated to grow to 1.0 mbpd by FY Imports and domestic oil production in India FY08 FY09 FY10 FY11 FY12 FY13* FY14* FY15F FY16F Oil Production (mbpd) Oil Imports (mbpd) Source: Ministry of Oil & Natural Gas; BMI forecasts; Aranca Research Notes: F Forecast; mbpd Million Barrels Per Day; * - Provisional

10 ,115 1,149 1,115 1,278 1,330 1,355 1,330 With India developing gas-fired power stations, consumption is up more than 160 per cent since 1995 Proven reserves and total gas consumption in the country (bcm) Demand is not likely to simmer down any time soon, given strong economic growth and rising urbanisation. Gas consumption is likely to expand at a CAGR of 21.0 per cent during FY F 1,400 1,200 1, * Gas Consumption Proven Gas Reserves Source: PPAC, BP Statistical Review 2014, Ministry of Oil & Natural Gas 2014; Aranca Research Notes: F Forecast; bcm Billion Cubic Metres; CAGR Compound Annual Growth Rate * - Up until March 2017

11 Domestic production accounts for more than three-quarter of the country s total gas consumption Imports constitute the rest; in 2013, imports of LNG stood at 17.8 bcm India increasingly relies on imported LNG; the country was the fifth-largest LNG importer in 2013, accounting for 5.5 per cent of global imports Demand is expected to increase due to higher economic growth, ensure less dependency on imported crude and a desire to use cleaner fuel India s LNG imports are forecast to increase at a CAGR of 33 per cent during Domestic gas production and imports (bcm) FY08 FY09 FY10 FY11 FY12 FY13 FY14FFY15FFY16FFY17F Gas Production Gas Imports Source: Ministry of Oil & Natural Gas; BP Statistical Review 2014; Aranca Research Notes: F Forecast; bcm Billion Cubic Metres; * FY14 provisional gas imports number

12 Total crude oil production in FY14 stood at 37.9 mmt ONGC accounted for 59 per cent of total crude oil production in India Crude oil production (mmt) FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 ONGC OIL Private/JV Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt Million Metric Tonne; JV Joint Venture

13 Total gas production was 35.4bcm in FY14 Annual gas production (bcm) Contribution from Private/JV decreased over the last couple of years FY08 FY09 FY10 FY11 FY12 FY13 FY14 ONGC OIL Private/JV Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: bcm Billion Cubic Metres, JV Joint Venture

14 During FY12, 1,631,000 metres of wells were explored and developed in India During the same period, 756 wells were drilled in the country State-owned oil companies undertake most of the upstream drilling and exploration work ONGC, the leader in the upstream segment, accounts for 59 per cent of India s total crude oil output Exploration activities (FY13*) ( 000 metres) Development drilling activities (FY13*) ( 000 metres) Wells Onshore Metreage Offshore Wells Onshore Offshore Metreage Source: Ministry of Petroleum & Natural Gas; Aranca Research Note: * Provisional

15 India has a network of 9,785 km of crude pipeline having a capacity of mmtpa* In terms of length, IOCL accounts for 45.5 per cent (4,448 km) of India s crude pipeline network. Moreover, the company has the country s longest pipelines: Salaya-Mathura-Panipat Pipeline (1,870 km) and Haldia-Barauni/Paradip-Barauni Pipeline (1302 km) In terms of capacity, ONGC leads the pack with a share of 47.4 per cent (65.5 mmtpa), followed by IOCL at 29.2 per cent (40.4 mmtpa) Shares in crude pipeline network by length (out of 9,785 km) (FY13) Shares in crude pipeline network by capacity (out of mmtpa) (FY13) 6.0% IOCL ONGC 41.0% 45.5% ONGC 29.0% 41.5% OIL Others IOCL 13.5% Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: km Kilometre; mmtpa Million Metric Tonnes Per Annum, *Approximately

16 With 11,722 km of refined products pipeline network (capacity of 82.7 mmtpa) in India, Indian Oil Corporation (IOC) leads the segment Gas Authority of India Limited (GAIL) has largest share (88 per cent or 2,042 km) of the country s LPG pipeline network (2,316 km) Shares in product pipeline network under operation by length (out of 11,722 km) (FY13) Shares in LPG pipeline network by length (out of 2,316 km) (FY13) 6% 2% 3% IOC 12% 14% 21% 54% HPCL BPCL OIL PCCK GAIL IOC PMHB 88% Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: km Kilometre; mmtpa Million Metric Tonnes Per Annum, LPG - Liquefied Petroleum Gas, IOC - Indian Oil Corporation, HPCL - Hindustan Petroleum Corporation Ltd, BPCL - Bharat Petroleum Corporation Ltd, OIL - Oil India Limited, PMHB - Mangalore Hasan Bangalore, PCCK - Cochin-Coimbatore-Karur

17 State-controlled entities dominate the downstream segment as well India has 19 refineries in the public sector and three in the private sector In FY14, public sector refineries accounted for 53.4 per cent of total refinery crude throughput Refinery crude throughput (mmt) FY08 FY09 FY10 FY11 FY12 FY13 FY14 Public Sector Private Sector Source: Ministry of Petroleum & Natural Gas; Aranca Research Note: mmt Million Metric Tonne

18 Total crude throughput rose from mmt in FY06 to mmt in FY14 In FY14, the sector s total installed refinery capacity was mmt In FY14, IOC emerged as the largest domestic refiner with a capacity of 54.2 mmt Shares in India's total refining capacity (FY14) 250 Total installed capacity (mmt) 25% IOC BPCL % 5% 7% 7% 10% HPCL MRPL CPCL Others FY13 FY14 Public Sector Private Sector Source: Ministry of Petroleum & Natural Gas; PPAC; Aranca Research Notes: mmt Million Metric Tonne; * Provisional, HPCL - Hindustan Petroleum Corporation Ltd, BPCL - Bharat Petroleum Corporation Ltd, OIL - Oil India Limited, ONGC - Oil and Natural Gas Corporation, IOCL - Indian Oil Corporation Ltd, CPCL - Chennai Petroleum Corporation Limited, NRL - Numaligarh Refinery Limited, MRPL - Mangalore Refinery and Petrochemicals Limited, RPL - Renegade Petroleum Ltd, EOL - Essar Oil Ltd

19 During FY13, India produced mmt of petroleum products Petroleum products derived from crude oil include light distillates such as LPG, naphtha; middle distillates such as kerosene; and heavy ends such as furnace and lube oils, bitumen, petroleum coke and paraffin wax Production of petroleum products is expected to reach 1,195.8 mmt during the 12 th Five-Year Plan period ( ) Petroleum products from crude oil (mmt) FY06 FY07 FY08 FY09 FY10 FY11 FY12* Light Distillates Middle Distillates Heavy Ends Petroleum products from natural gas (Fractionators) (mmt) FY06 FY07 FY08 FY09 FY10 FY11 FY12* LPG Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt Million Metric Tonne; * Provisional

20 In FY13, total sales of petroleum products by companies were mmt, up 4.2 per cent from the previous fiscal year 70,000 Downstream distribution statistics ( 000 tonnes) The total number of retail outlets increased to 49,077 (including private) in April 2013 from 42,138 in April 2012 IOC owns the maximum number of retail outlets in the country (48.8 per cent of total), followed by HPCL (26.4 per cent) and BPCL (25.2 per cent); private firms own the remaining As of April 1, 2013, there were 12,610 LPG distributors in India 60,000 50,000 40,000 30,000 20,000 10,000 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12* Product Pipeline LPG Pipeline Pipeline Capacity (mmtpa) As of April 1, 2013 Length (km) As of April 1, 2013 Product Pipeline ,722 LPG Pipeline 4.7 2,316 Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: mmt Million Metric Tonne; mmtpa Million Metric Tonnes Per Annum, * Provisional

21 In 2013, coal accounted for 55 per cent of total primary energy demand Energy consumption pattern in 2013 Energy demand in the Asia-Pacific region is expected to reach 5,627 Mtoe by 2020 and 6,861 Mtoe by % 5% 3% Coal India s energy demand is projected to double to 48.7 quadrillion btu by % 55% Oil Natural gas Hydro-electric Renewables& Nuclear energy Source: US Energy Information Administration (EIA); BP Statistical Review 2014 Asia-Pacific Economic Cooperation (APEC); Aranca Research Notes: Mtoe Million Tonne of Oil Equivalent BTU British Thermal Unit

22 Over the next few years, dependence on gas, hydro power and nuclear power is expected to increase relative to oil and coal Consumption pattern expected in 2035 The government aims to quadruple India s nuclear power generation capacity to 20 GW by 2020; currently, seven 11% nuclear power reactors of 4,930 MWe capacity are under construction 42% 15% 8% Coal Petroleum Solid biomass & waste Natural gas 24% Nuclear & other renewables Source: International Energy Agency (IEA); 12 th Five-Year Plan; Aranca Research

23 State Installed capacity, as of April 2012 (mt) Crude throughput for (mt) Gujarat Maharashtra Haryana Karnataka Tamil Nadu Kerala Andhra Pradesh Uttar Pradesh West Bengal Assam Bihar Punjab Source: Ministry of Petroleum & Natural Gas; Aranca Research Note: mt Million Tonne Madhya Pradesh Total

24 Company Indian Oil Corporation Limited Ownership (per cent) 78.9 per cent stateowned FY14 turnover (USD billion) 78.5 Reliance Industries Public listed 67.0 Bharat Petroleum Corporation Limited Hindustan Petroleum Corporation Limited ONGC GAIL India Limited Oil India Limited 54.9 per cent stateowned 51.1 per cent stateowned 69.2 per cent stateowned 57.3 per cent stateowned 68.4 per cent stateowned Source: Bloomberg; Aranca Research Notes: FY Indian Financial Year, April March

25 Company Ownership (per cent) Global turnover (FY 14) (USD billion) Cairn Energy India Pvt Ltd Private sector 2* Shell Private sector 459 BG Group Private sector 19 BP Private sector Source: *- Indian counterpart Bloomberg; Aranca Research, Company websites Notes: FY Indian Financial Year, April March

26 Coal Bed Methane (CBM) Government approved the CBM policy in 1997 to boost the development of clean and renewable energy resources CBM is an eco-friendly natural gas (methane), which is absorbed in coal and lignite seams The CBM policy was designed to be liberal and investor friendly; the first commercial production of CBM was initiated in July 2007 at about 72,000 cubic metres per day Underground Coal Gasification (UCG) The technology was first widely used in the US in the 1800s, and in India (Kolkata and Mumbai) in the early 1900s UCG is currently the only feasible technology available to harness energy from deep unmineable coal seams economically in an eco-friendly manner The technology reduces capital outlay, operating costs and output gas expenses by per cent vis-à-vis surface gasification Gas hydrates and biofuels The government initiated the National Gas Hydrate Programme (NGHP), a consortium of national E&P companies and research institutions, to map gas hydrates for use as an alternate source of energy Bio-fuels (bio-ethanol and bio-diesel) are alternate sources of energy from domestic renewable resources; these have lower emissions compared to petroleum or diesel

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28 Competitive Rivalry Competitive rivalry is low as just one-two players operate in Upstream, Midstream and Downstream segments Although a few private operators have entered the industry in the last couple of years, they do not pose any major threat as of now Threat of New Entrants (Low) Threat of New Entrants Substitute Products Threat of new entrants continues to be low, due to the capital intensive nature of the industry and economies of scale Threat is low, as other sources of energy like solar, wind, coal and hydro electric power are less developed. Pressure from alternative sources might rise in future Bargaining Power of Customers (Low) Competitive Rivalry (Low) Substitute Products (Low) Bargaining Power of Suppliers Bargaining power is medium as despite few players operating, government at times delays subsidy payment to oil companies, thereby increasing losses Bargaining Power of Customers Customers have low/non existent bargaining power as they have no say in price determination Bargaining Power of Suppliers (Medium) Source: Aranca Research

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30 Expansions Companies in India are currently setting up bases in newer geographies like Africa, and thereby increasing their global footprints. For example, ONGC Videsh Limited (OVL), which is ONGC s subsidiary, has acquired significant space in Africa They are forming JVs and strategic tie ups with foreign companies to increase their technical know-how and knowledge base Diversification Oil companies are focusing on vertical integration for next stage of growth. For instance, oil producer Oil India Ltd is planning to build and operate refineries, while Indian Oil is planning to enter oil & gas exploration Companies are diversifying into alternative energies such as wind power, solar and biofuels Move to nonconventional energy resources Most Indian companies are now targeting shale gas reserves as a source of energy in future Companies are looking forward to developing JVs and technical partnership with foreign companies to improve capabilities to develop shale reserves Investments to enhance production Indian companies are enhancing production through redevelopment plans to increase recovery rates of hydrocarbon from oil wells; ONGC in Mumbai High achieved success in implementing this With exploration increasing not only in the country but also in outside geographies, companies are pumping up R&D to focus on gasification technology and bio energy Source: Aranca Research

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32 Growing demand Policy support Increasing investments India, fourthlargest energy consumer Inviting Supportive FDI policies Resulting in FDI in FY14 at USD111.9 milion Rise in population and economic growth to fuel demand Promoting investments in the sector Cumulative FDIs in oil & gas at USD5.5 billion Increasing industrialisation and usage of gas Introducing policies such as CBM and NELP Huge investments planned under the Eleventh Plan Source: Ministry of Petroleum & Natural Gas; Aranca Research Notes: * Provisional; # April 2000 March 2014

33 Robust domestic market; expected to expand India is the world s fourth-largest energy consumer Oil consumption is expected to rise 42.5 per cent during The country is the fifth-largest importer of LNG Increasing demand for natural gas Several industries are increasing the usage of natural gas in operations; this has boosted natural gas demand in India Some of the main industries that use natural gas are pulp and paper, metals, chemicals, glass, plastic and food processing Abundant raw material The nation has large coal, crude oil and natural gas reserves Oil reserves amounted to 5.7 billion barrels in 2013 Proved reserves of natural gas stood at 1.4 tcm in 2013 Favourable policies The government has allowed 100 per cent FDI in E&P projects/companies; and 49 per cent in refining under the automatic route from the earlier approval route It has also introduced policies to promote investments in the industry such as New Exploration Licensing Policy (NELP) and Coal Bed Methane (CBM) Source: Ministry of Petroleum & Natural Gas; US Energy Information Administration, BP Statistical Review of World 2014 Energy, June 2012; BMI; Aranca Research, Notes: TCM - Trillion Cubic Metres, E&P - Exploration and Production

34 Huge investments Investments worth USD75 billion is expected across the oil & gas value chain under the 12 th Plan ( ) FDI worth USD5.5 billion has been invested in India s petroleum and natural gas sector during April 2000 March 2014 Skilled labour The nation offers abundant skilled labour at much competitive wages compared to other countries The University of Petroleum and Energy Studies in Dehradun, Uttarakhand, is Asia s first and only energy university Natural gas discoveries Several domestic companies (such as ONGC, Reliance and Gujarat State Petroleum) have reportedly found natural gas in deep waters This offers significant expansion opportunity over the next decade Source: Ministry of Petroleum & Natural Gas; BMI; Aranca Research

35 Integrated Energy Policy (IEP), 2006 Outlines goals to deal with challenges faced by India s energy sector Petroleum and Natural Gas Regulatory Board (PNGRB) Act, 2006 Regulate refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas Auto Fuel Policy, 2003 Provide a roadmap to comply with various vehicular emission norms and corresponding fuel quality upgrading requirements over a period of time National Biofuel Policy, 2002 A 16 per cent concession on the excise duty on bio-ethanol and exemption of bio-diesel from excise duty to promote bio-fuel usage Freight Subsidy (for farflung areas) Scheme, 2002 NELP, 1999 Compensate public sector Oil Marketing Companies (OMCs) for the freight incurred to distribute subsidised products in far-flung areas Provide a contract framework for E&P of hydrocarbons, licenses for exploration are awarded through a competitive bidding system; nine rounds of bidding completed until 2011 Source: Ministry of Petroleum & Natural Gas; Aranca Research Note: NELP - New Exploration Licensing Policy

36 FDI Policies The E&P segment s FDI limit is 100 per cent, and the refining segment s limit is 49 per cent Coal Bed Methane (CBM) Policy, 1997 Encourage exploration and production of CBM gas as a new eco-friendly source of energy Petroleum Rules, 1976 Provisions for regulations governing pollution, safety, and other operating standards Oil Industry (Development) Act, 1974 An act establishing a board to develop the oil industry and levy excise duty on crude and natural gas Petroleum and Minerals Pipelines Act, 1962 Acquisition of user s rights by the Government of India on land demarcated for laying pipelines to transport petroleum and other minerals from one area to another Petroleum and Natural Gas Rule, 1959 Regulates the grant of petroleum and natural gas exploration licenses and mining leases, which belong to the government Source: Ministry of Petroleum & Natural Gas; Aranca Research

37 Oil Field (Regulation and Development) Act, 1948 An act to regulate oilfields and develop mineral oil resources Shale Gas & Oil Exploration Policy Approved in September 2013, it allows companies to explore energy resources trapped within rocks to meet India s growing energy needs Source: Ministry of Petroleum & Natural Gas; Aranca Research

38 Cumulative FDI inflows in India s petroleum and natural gas sector stood at USD5.5 billion (2.5 per cent of total FDIs) during April 2000 March 2014 In Oil & Gas, FDI inflows totalled USD2.3billion and USD111.9 million in FY13 and FY14, respectively 6 5 FDI inflows into petroleum and natural gas (USD billion) FDI inflows into India (USD billion) FY10 FY11 FY12 FY13 FY14 0 FY10 FY11 FY12 FY13 FY 14 Source: Department of Industrial Policy & Promotion; Aranca Research Note: * Provisional

39 Date announced Acquirer name Target name Value of deal (USD million) Mar 2014 IOCL Progress Energy Canada Ltd Not disclosed Oct 2013 ONGC Videsh Ltd Parque das Conchas, Brazilian Oilfield 529 Jun 2013 ONGC Videsh Ltd (in partnership with Oil India Ltd) Rovuma Area 1 Offshore Block 2640 Nov 2012 ONGC Videsh ConocoPhillips (Kashagan Field) 5,000.0 Nov 2012 Inpex Corp Oil and Natural Gas Corp s exploration block KG-DWN-2004/6 Not disclosed Sep 2012 ONGC Videsh Hess Corp (Azrei oilfield) 1,000.0 Apr 2012 Trafigura Pte Ltd Nagarjuna Oil Co Ltd Apr 2011 Sesa Goa Ltd Calm India Ltd 1,492.0 Feb 2011 BP PLC Reliance Industries Ltd 9,000.0 Aug 2010 BPRL EP Aug 2010 Sesa Goa Ltd Cairn India Ltd 1,180.8 Aug 2010 Vedanta Resources PLC Cairn India Ltd 6,568.5 Aug 2010 Reliance Industries Ltd Marcellus Shale Natural Gas Source: Thomson Banker; Aranca Research Jun 2010 Reliance Industries Ltd Infotel Broadband Svcs Ltd 1,026.7

40 Date announced Acquirer name Target name Value of deal (USD million) Apr 2010 Reliance Industries Ltd Atlas Energy Inc-Marcellus Apr 2010 Sim Siang Choon Hardware Interlink Petroleum Ltd 17.8 Mar 2010 Investor Group Gulfsands Petroleum PLC Mar 2010 Natural Power Venture Pvt Ltd Great Offshore Ltd 11.8 Feb 2010 Investor Group Republic of Venezuela-Carabobo 4,848.0 Source: Thomson Banker; Aranca Research

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42 Upstream segment Midstream segment Downstream segment Locating new fields for exploration: 78 per cent of the country s sedimentary area is yet to be explored Development of unconventional resources: CBM fields in the deep sea Opportunities for secondary/tertiary oil producing techniques Higher demand for skilled labour and oilfield services and equipment Expansion in the transmission network of gas pipelines LNG imports have increased significantly; this provides an opportunity to boost production capacity In light of mounting LNG production, huge opportunity lies for LNG terminal operation, engineering, procurement and construction services Development in City Gas Distribution (CGD) networks, which are similar to Delhi and Mumbai s CGDs Construct new refineries considering advantages such as low operation costs, lesser freight charges and favourable policies Expansion of the country s petroleum product distribution network

43 India has 63 tcf of recoverable shale gas reserves The Cambay, Krishna Godavari, Cauvery, and the Damodar Valley are the most prospective sedimentary basins for carrying out shale gas activities in the country Around 20 tcf of gas has been classified as technically recoverable reserves in the Cambay basin in Gujarat (the largest basin in the country) spread across 20,000 gross square miles with a prospective area of 1,940 square miles It is estimated that the Krishna Godavari (KG) basin encloses a series of organically rich shales, containing around 27 tcf of technically recoverable gas. KG basin, located in Eastern India, holds the country s largest shale gas reserves, extending over 7,800 gross square miles with a prospective area of around 4,340 square miles In April 2012, the Directorate General of Hydrocarbons (DGH) submitted its draft policy on exploitation of shale gas to the Ministry of Petroleum and Natural Gas India launched its policy on shale gas exploration to tap the non-conventional energy resource in order to boost output Source: E&Y; Ministry of Petroleum & Natural Gas; Aranca Research Note: tcf Trillion Cubic Feet

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45 ONGC revenue growth (USD billion) 40 Registered highestever oil production Highest reserve accretion in the last two decades 83.5 million toe Domestic crude production up 2.1 per cent Reported net profit of USD3.9 billion in 2011 Highest-ever dividend payout of USD1.6 billion Recorded net profit of USD4.5 billion in 2013 Recorded net profit of USD4.4billion in ONGC s position in the Indian market 28.7* FY08 FY09 FY10 FY11 FY12 FY13 FY14 ONGC is the largest upstream oil company It accounts for 59 per cent of India s total crude oil output and 57 per cent of total gas production (FY13) Source: Company Reports; BMI, Aranca Research Notes: TOE Tonne of Oil Equivalent, *- Revenue fallen due to negative translation effect

46 Indian Oil Group of Companies owns and operates 10 of India s 22 refineries with a capacity of 1.30mbpd The company was ranked 88 th in the Fortune Global 500 list 2013 Its network of crude oil and product pipelines runs to about 11,214 Km Subsidiary CPCL accounts for 49 per cent of market share in petroleum products FY13 FY14 Revenue in FY14 has risen in INR terms Second-largest player in India s petrochemical market Has interests in 13 domestic and 11 overseas blocks Turnover USD84.9 billion USD80.7 billion* EBITDA USD2.9 billion USD2.8 billion Foraying into alternative sources of energy like wind and solar Net profit USD0.7 billion USD1.2 billion Source: Company Reports; Aranca Research Note: *Revenue fallen due to negative translation effect

47 Reliance Industries has the biggest petrochemical refining complex in the world The company was ranked 99 th in the Fortune Global 500 list 2012 It contributes 14 per cent to India's exports and is going to invest around USD30billion to improve its businesses in the next three years Turnover increased by 8.1 per cent in FY14 (in INR terms) Exports surged by 4.5 per cent to USD46 billion Record crude throughput at 68.5 million tonnes US shale: FY13 revenue and EBITDA at USD616 million and USD483 million, respectively FY13 FY14 Turnover USD73 billion USD68.3 billion* EBITDA USD6.1 billion USD5.9 billion Net Profit USD3.9 billion USD3.7 billion Reliance Industries has entered into JVs with various companies across segments to align growth opportunities; it signed JVs with Atlas, Pioneer, Carrizo SIBUR, and D.E. Shaw as well as entered into a strategic alliance with BP recently Source: Company Reports; Aranca Research Note: *Revenue fallen due to negative translation effect

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49 Name Address Contact person Telephone Oil Industry Development Board (OIDB) 301, World Trade Centre, Babar Road, New Delhi Mr T S Balasubramanian, Financial Adviser and Chief Accounts Officer oidb@hotmail.com Petroleum Conservation Research Association (PCRA) Sanrakshan Bhavan, 10 Bhikaji Cama Place, New Delhi Mr Arun Kumar, ED Ext.301 pcra@pcra.org Bureau of Energy Efficiency (BEE) Ministry of Power, 4th floor, SEWA Bhawan, RK Puram, New Delhi Dr Ajay Mathur, Director General , dg-bee@nic.in, amathur@beenet.in Oil Industry Safety Directorate Ministry of Petroleum & Natural Gas, 7 th floor, New Delhi House, 27 Barakhamba Road, New Delhi Mr J B Verma, ED verma.jb@gov.in Petroleum Planning and Analysis Cell (PPAC) Ministry of Petroleum & Natural Gas, 2 nd floor, Core-8, SCOPE Complex, 7 Institutional Area, Lodhi Road, New Delhi Dr Basudev Mohanty, Director , Directorate General of Hydrocarbons Ministry of Petroleum & Natural Gas, C-139, Sector 63, Noida Mr S K Srivastava, Director General dg@dghindia.org

50 B/D (or bpd): Barrels Per Day MBPD (or mbpd): Million Barrels Per Day BCM (or bcm): Billion Cubic Metres CBM: Coal Bed Methane CGD: City Gas Distribution E&P: Exploration and Production FDI: Foreign Direct Investment FY: Indian Financial Year (April to March) So FY12 implies April 2011 to March 2012 GoI: Government of India INR: Indian Rupee LNG: Liquefied Natural Gas

51 MMT (or mmt): Million Metric Tonne MMTPA (or mmtpa): Million Metric Tonnes Per Annum EBITDA: Earning Before Interest Taxes Depreciation Amortisation NRL: Numaligarh Refinery Limited CPCL: Chennai Petroleum Corporation Limited HPCL: Hindustan Petroleum Corporation Limited BPCL: Bharat Petroleum Corporation Limited IOC: Indian Oil Corporation Ltd EOL: Essar Oil Ltd RPL: Reliance Petroleum Limited MRPL: Mangalore Refinery and Petrochemicals Limited PCCK: Petronet Cochin-Coimbatore-Karur PMHB: Petronet Mangalore-Hassan-Bangalore

52 NELP: New Exploration Licensing Policy TOE (or toe): Tonnes of Oil Equivalent USD: US Dollar ONGC: Oil and Natural Gas Corporation of India IOCL: Indian Oil Corporation Limited mn bbl: Million Barrels CAGR: Compound Annual Growth Rate JV: Joint Venture UCG: Underground Coal Gasification NGL: Natural Gas Liquids OMCs: Oil Marketing Companies NHGP: National Gas Hydrate Programme Wherever applicable, numbers have been rounded off to the nearest whole number

53 Exchange rates (Fiscal Year) Exchange rates (Calendar Year) Year INR equivalent of one USD Year INR equivalent of one USD Q Average for the year

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