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TOLANI INSTITUTE OF
MANAGEMENT STUDIES

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INTRODUCTION TO THE OIL
AND GAS INDUSTRY
• Oil and gas sector is one of the key catalysts in fuelling the
growth of Indian economy.
• With a 1.2 billion population and an economy that has
consistently at approximately 8 per cent annually, India's
energy needs are increasing fast, warranting a robust
demand for oil and natural gas in the country.
• India has emerged as the 5th largest refining country in the
world, accounting for 4 per cent of the world's refining
capacity.
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TOLANI INSTITUTE OF
MANAGEMENT STUDIES

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• The share of oil and natural gas in India's total primary energy demand is 40 percentage. petroleum refineries. according to KPMG's November 2011 sector report. KBuzz. oil and gas pipelines. 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 4 . city gas distribution networks and petrochemical plants. R-LNG terminals. • The planned investments span across the oil and gas value chain including exploration and production.

• The petroleum and natural gas industry in India has attracted foreign direct investment (FDI) worth US$ 3.• India is the world's fourth largest importer of oil. The Department further recorded US$ 144 million during April–September 2011-12.280.72 million from April 2000 to September 2011. 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 5 . in the industry. • According to the data provided by Department of Industrial Policy and Promotion (DIPP).

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 Ample cash requirement RESULT: HIGH .PORTERS FIVE FORCES MODEL THREAT OF NEW ENTRENCE  Highly specialized workers required to operate the equipment and to make key drilling decisions.

pipeline. etc.POWER OF SUPPLIERS  The large amounts of capital investment tend to weed out a lot of the suppliers of rigs. RESULT: MEDIUM . refining.

POWER OF BUYERS  Oil drilling services are not that much different from another's company. RESULT: HIGH 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 11 .

THREAT OF SUBSTITUTES • The substitutes are coal. RESULT: MEDIUM 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 12 . hydroelectricity and even nuclear energy. gas. solar power. wind power.

COMPETITIVE RIVALRY • Slow industry growth rates and high exit barriers RESULT: HIGH 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 13 .

56 ONGC 225137.25 2 4 1 14 .06 5 ESSAR 7265.COMPANY MARKET CAP.(RS CR) RANK ABAN OFF 1503.35 8 GAIL 49781. 27392.71 10 BPCL 17128.72 3/27/2013 PETRONET LNG TOLANI INSTITUTE OF MANAGEMENT STUDIES 11891.95 INDRAPRASTHA 5307.4 HPCL 8546.49 OIL INDIA LTD.41 3 7 9 IOC 60844.

41 10 TOLANI INSTITUTE OF MANAGEMENT STUDIES ABAN OFF 1503.35 9 INDRAPRASTHA 5307.71 15 .RANK 3/27/2013 COMPANY MARKET CAP.) 1 ONGC 225137.4 4 OIL INDIA LTD.56 5 BPCL 17128.72 2 IOC 60844. 27392.49 3 GAIL 49781.95 8 ESSAR 7265. (RS Cr.25 7 HPCL 8546.06 6 PETRONET LNG 11891.

7 7.41 7.83 10.45 10.51 3.42 13.82 0.41 30.32 Roe (%) P/E ratio P/B ratio 21.96 86.04 1.77 ROCE(%) 15.89 1.47 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 16 .64 15.1 30.06 14.Indian oil LTD 2006-07 2007-08 2008-09 2009-10 2010-11 Eps in rs.06 87.64 6. payout ratio(%) Earning retention ratio(%) 64.67 29.88 30.94 3.72 62.08 64.81 0.31 30.66 16.39 24.525 2.74 42.11 0.59 9.21 58.97 14.97 52.

86 6.93 13.03 73.2 61.13 11.27 89.73 86.01 1.51 58.17 20.92 16.78 92.79 Roe (%) P/E ratio P/B ratio 15.95 91.11 ROCE(%) 12.Aban offshore 2006-07 2007-08 2008-09 2009-10 2010-11 Eps in rs.74 9.68 14.75 15.97 15.29 35.48 14.7 12.49 1.84 9.29 8.91 20.04 86.32 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 17 .71 85.07 2.91 15.99 16. payout ratio(%) Earning retention ratio(%) 23.65 20.05 47.35 17.

94 41.66 37.BPCL 2006-07 2007-08 2008-09 2009-10 2010-11 Eps in rs.29 1.12 13.37 14.75 72.32 68.78 37.05 1.17 12.35 42.84 6.84 Roe (%) P/E ratio P/B ratio 12.72 20.42 15.12 9.53 42.64 88.06 12 9.72 38.57 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 18 .11 9.27 6.14 1.5 1.88 11.97 11.65 37.4 1.05 14.82 88.06 18.27 58 ROCE(%) 16. payout ratio(%) Earning retention ratio(%) 49.

06 59.54 70.85 0.3 33.93 12 7.5 77. payout ratio(%) Earning retention ratio(%) 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 19 .57 74.HPCL 2006-07 2007-08 2008-09 2009-10 2010-11 46.28 0.51 16.41 6.48 9.32 0.36 5.82 5 15.45 45.98 38.74 7.93 Roe (%) P/E ratio P/B ratio 16.41 35.47 36.85 11 8.09 10.96 Eps in rs.43 45.84 0.23 9.93 10.72 ROCE(%) 11.8 39.62 0.2 7.17 36.

3 34.74 20.02 49.54 33.09 75.48 2.67 19.6 49.12 45.39 22.65 3.02 45.29 34.58 0.12 36.18 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 20 .5 0.67 ROCE(%) 37.52 19.14 78.98 54.21 3.97 Roe (%) P/E ratio P/B ratio 25.6 48.4 78.41 13. payout ratio(%) Earning retention ratio(%) 73.54 53.65 49.59 50.14 0.ONGC 2006-07 2007-08 2008-09 2009-10 2010-11 Eps in rs.26 3 0.98 49.11 0.75 23.

74 20.ONGC 2006-07 2007-08 2008-09 2009-10 2010-11 Eps in rs.09 75.21 3.5 0.67 19.58 0.67 ROCE(%) 37.14 0.48 2.11 0.65 3.18 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 21 . payout ratio(%) Earning retention ratio(%) 73.52 19.12 45.26 3 0.29 34.98 54.41 13.54 53.14 78.59 50.98 49.02 49.39 22.65 49.02 45.6 48.75 23.97 Roe (%) P/E ratio P/B ratio 25.4 78.6 49.12 36.54 33.3 34.

5 0.64 9.35 2009-10 -4.ESSAR OIL 2006-07 2007-08 Eps in Rs.63 553 4.6 TOLANI INSTITUTE OF MANAGEMENT STUDIES 22 .14 -583 6.28 3.38 -0.71 1.95 25.25 -87.32 -1.25 --- 4.32 Roe (%) P/E ratio P/B ratio -2.27 --- --- --- --- 2010-11 0.99 2.79 --- 100 100 13.72 9.49 16.59 ROCE(%) -0.96 3/27/2013 2008-09 -0.08 -1. payout --ratio(%) Earning retention --ratio(%) -0.99 2.

05 2009-10 24.07 52. payout ratio(%) Earning retention ratio(%) 2006-07 28.16 61.31 20 18.23 27.55 24.29 25.09 TOLANI INSTITUTE OF 18.61 2007-08 30.69 16.95 6.09 18.55 3.22 40.96 Roe (%) P/E ratio P/B3/27/2013 ratio 20.84 2.03 2008-09 22.98 9.95 ROCE(%) 23.83 63.GAIL Eps in rs.65 64.76 38.5 16.56 3.1 37.06 23 MANAGEMENT STUDIES .36 2010-11 28.24 1.72 68.6 27.75 35.2 11 1.07 31.

59 2 18.73 11.55 2.09 36.OIL INDIA Eps in rs.96 10.59 0 62.62 TOLANI INSTITUTE OF MANAGEMENT STUDIES 2009-10 108.56 22.63 0 59.34 64.58 18.29 3.31 11.57 36.016 12.11 24 .98 2007-08 83.89 ROCE(%) Roe (%) P/E ratio P/B3/27/2013 ratio 23.94 14. payout ratio(%) Earning retention ratio(%) 2006-07 76.59 29.58 2010-11 120.07 28.88 3.07 2.81 68.38 2008-09 101.01 0 65.51 2.

09 61.46 35.22 TOLANI INSTITUTE OF MANAGEMENT STUDIES 65.31 68.INDRAPASTH GAS 2006-07 Eps in rs.54 --- 2010-11 18.55 31.15 29.82 3.32 37.14 2.61 --- 30.61 8.21 2.24 30.64 26 14.16 25 .55 64.52 10.69 25.85 15. payout ratio(%) Earning retention ratio(%) 9.39 37.99 2008-09 12.61 ROCE(%) --Roe (%) P/E ratio P/B3/27/2013 ratio 2007-08 34.88 16 4.13 3.98 62.26 25.24 10.23 --- 2009-10 12.

01 2007-08 6.39 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 26 .56 10 2.93 71.PETRONET LNG Eps in rs.33 11.91 29.61 2009-10 5.1 2.78 71.19 ROCE(%) 21.14 5.22 15.46 18. payout ratio(%) Earning retention ratio(%) 2006-07 4.26 28.12 14.25 25.62 1.33 27.13 62.31 21.69 3.46 29.1 3.25 26.1 14.39 37.18 35.61 71.97 56.45 18 Roe (%) P/E ratio P/B ratio 24.83 2010-11 8.55 23.72 2008-09 6.

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RISK TAKER 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 30 .

RISK AVERSE 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 31 .

RISK NETURAL 3/27/2013 TOLANI INSTITUTE OF MANAGEMENT STUDIES 32 .

3/27/2013 SACHIN ABDA 10001 PRATIK CHAUTHANI 10020 NIRAV JOSHI 10046 DHAVAL KHAROD 10051 ADITYA PARMAR 10076 JAY SHAH 10094 DHARMIK VYAS 10119 TOLANI INSTITUTE OF MANAGEMENT STUDIES 33 .

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