Professional Documents
Culture Documents
AUGUST 2015
Executive Summary.....3
Advantage India...4
Strategies Adopted....30
Growth Drivers...33
Opportunities .................41
Useful Information.48
AUGUST 2015
At the end of 2014, India had 222.4 MMTPA of provisional refining capacity, making it the
second largest refiner in Asia an. By 2017 the oil refining capacity of India is expected to
rise and reach more than 310 million tonnes. Private companies own about 29.31 per cent
of total capacity
Indias energy demand is expected to double to 1,464 Mtoe by 2035 from 595 Mtoe in
2013. Moreover, the countrys share in global primary energy consumption is projected to
increase two fold by 2035
In 2014, India consumed 3.85 mbpd oil, while the consumption is estimated to reach 4.0
mbpd by FY16, expanding at a CAGR of 3.2 per cent during FY08FY16F. By 2025, India
is expected to overtake Japan to become the third-largest consumer of oil
Worlds fourth-largest
energy consumer
In 2014, Fourth-largest
consumer of oil and
petroleum products
Fourth-largest LNG
importer in 2014
LNG imports accounted for about one-fourth of total gas demand. India's gas demand is
estimated to be more than double over the next five years
India increasingly relies on imported LNG; the country was the fourth-largest LNG importer
in 2014 and accounted for 5.68 per cent of global imports
AUGUST 2015
ADVANTAGE INDIA
AUGUST 2015
2014
Oil
Consumption:
3.85 mbpd;
Gas
Consumption:
50.6 bcm
Supportive FDI
guidelines
Skilled workforce
Advantage
India
FY16F
Oil
Consumption:
4.0 mbpd;
Gas
Consumption:
119.05 bcm
Policy support
Source: Business Monitor International (BMI), World Oil Outlook 2012, Ministry of Petroleum & Natural Gas, BP Statistical Review 2015, TechSci Research
Notes: mbpd Million Barrels Per Day, bcm Billion Cubic Metres, F - Forecast
AUGUST 2015
Midstream
segment
storage and
transportation
Downstream
segment
refining,
processing and
marketing
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 nations total pipeline network
Source: BP Statistical Review 2015, US Energy Information Administration, Ministry of Petroleum & Natural Gas, TechSci 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
AUGUST 2015
3.08
3.24
3.32
FY09
FY10
3.49
3.69
3.73
3.85
FY12
FY13
FY14
4.00
FY11
FY16*
AUGUST 2015
2.5
2.7
0.7
0.7
3.3
3.4
3.7
3.2
0.7
0.8
0.8
0.8
2.7
2.9
3.0
1.0
1.0
1.0
1.0
0.0
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15F FY16F
Oil Production (mbpd)
Source: Ministry of Oil & Natural Gas, BMI forecasts, TechSci Research
Notes: F Forecast, mbpd Million Barrels Per Day; * - Provisional
AUGUST 2015
1,278
1,115
1,149
1,330
1,355
1,330
1,115
175
41
52
63
61
59
51
2008
2009
2010
2011
2012
2013
Gas Consumption
2017*
AUGUST 2015
10
56
48
12
11
32
33
12
12
13
23
47
52
48
41
32
32
44
47
51
64
FY08 FY09 FY10 FY11 FY12 FY13 FY14F FY15F FY16F FY17F
Gas Production
Gas Imports
AUGUST 2015
11
5263
3572
9682
2582
10527
11640
12077
11654
3847
3661
3466
3600
24855
24420
23716
22611
22246
23510
FY09-10
FY10-11
FY11-12
FY12-13
FY13-14
FY14-15
ONGC
21255
20063
18421
18203
19637
16429
18027
19441
19585
19126
FY10-11
FY11-12
FY12-13
FY13-14
FY14-15
OIL
Private/JV
21869
11821
FY09-10
Onshore
AUGUST 2015
Offshore
12
26774
21609
2416
2350
2633
2639
9497
2626
10482
2838
23096
23095
23316
23549
23284
24000
FY09-10
FY10-11
FY11-12
FY12-13
FY13-14
FY14-15
21985
ONGC
14491
OIL
Private/JV
119.6
106.4
105.4
87.1
72.3
66
68.2
24
23.8
23.5
24.9
24.3
24.7
FY08-09
FY09-10
FY10-11
FY11-12
FY12-13
FY13-14 FY14-Dec 15
Onshore
AUGUST 2015
23.92
Offshore
13
1065
620
298
459
529
285
104
153
Offshore
Onshore
Wells
Metreage
Offshore
Onshore
Wells
Metreage
AUGUST 2015
14
8.0%
IOCL
2544
24.00%
OIL
11%
4448
ONGC
695
Others
15%
1193
Source: Ministry of Petroleum & Natural Gas, TechSci Research
Notes: km Kilometre, mmtpa Million Metric Tonnes Per Annum, *Approximately
AUGUST 2015
15
Total
industry
IOCL
BPCL#
HPCL##
GAIL
OIL
ONGC###
Cairn
6,358
1,697
2,446
2,038
654
590
205
9,368
205
23,218
Length (Kms)
Product
Pipeline
Crude oil
Pipeline
4,448
937
1,017
1,193
695 +488
(Onshore
and
Offshore)
Total
10,806
2,634
3,463
2,038
1,847
695
590
13,850
36.16
10.84
23.02
3.83
1.72
81.94
Crude oil
Pipeline
40.40
6.0
9.0
8.40
23.39
8.50
102.69
Total
76.56
16.84
32.02
3.83
10.12
23.39
8.50
184.63
As on December, 2014
AUGUST 2015
16
11.85%
14.37%
GAIL
53.83%
20.70%
IOC
88.15%
IOCL
HPCL
BPCL
OIL
PCCK
PHMB
AUGUST 2015
17
80.7
81.7
81.2
88.2
88.3
87.8
43.6
48.6
112.5
112.2
112.1
115.3
120.9
120.3
119.5
121.4
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
Public Sector
Private Sector
AUGUST 2015
18
IOC
26%
BPCL
78
80
135
135
FY13
FY14
HPCL
45%
MRPL
10%
CPCL
7%
5%
7%
Others
Public Sector
Private Sector
AUGUST 2015
19
62.82
27.50
27.69
2.24
28.08
24.57
2.21
2.19
2.16
66.38
71.12
75.03
79.42
82.70
81.84
2.17
2.13
2.14
2.09
2.06
38.40
39.72
39.00
41.44
43.87
46.27
FY08
FY09
FY10
FY11
FY12
FY13
Light Distillates
Middle Distillates
Heavy Ends
47.75
FY14
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Source: Ministry of Petroleum & Natural Gas; TechSci Research
Notes: mmt Million Metric Tonne; * Provisional
AUGUST 2015
20
3.63
3.77
3.83
52.10
55.52
58.98
57.65
59.30
FY10
FY11
FY12
FY13
FY14
3.50
3.34
2.75
36.16
FY08
41.85
FY09
LPG Pipeline
Pipeline
Product Pipeline
Capacity (mmtpa)
Length (km)
As of April 1, 2014 As of April 1, 2014
Product Pipeline
77.41
11,811.90
LPG Pipeline
4.53
2,312
AUGUST 2015
21
2.19%
4.64%
1.23%
7.14%
56.47%
Coal
Oil
Natural Gas
Hydro electric
Renew- ables
Nuclear Energy
AUGUST 2015
22
Coal
8%
11%
Petroleum
42%
Solid biomass &
waste
15%
Natural gas
24%
AUGUST 2015
23
Crude throughput
f or 2014 (m t)
Gujarat
93.7
100.19
State
Assam
173.1
Gujarat
135.0
Maharashtra
18.5
20.46
Rajasthan
45.0
Haryana
15.0
15.5
Andhra Pradesh
11.5
Karnataka
15.0
14.59
Tamil Nadu
9.1
Tamil Nadu
11.5
10.6
Arunachal Pradesh
3.0
Kerala
9.5
10.29
Nagaland
2.7
Andhra Pradesh
8.37
7.83
Tripura
0.1
Uttar Pradesh
8.0
8.16
Total Onshore
379.4
West Bengal
7.5
7.95
Western Offshore
327.3
Assam
7.0
6.38
Eastern Offshore
56.1
Bihar
6.0
6.48
Total Offshore
383.4
Punjab
9.0
9.27
Madhya Pradesh
6.0
5.45
215.07
222.50
AUGUST 2015
Total
24
FY14 turnover
(USD billion)
75.66
Reliance Industries
Public Listed
56.39 (FY15)
Bharat Petroleum
Corporation Limited
44.94
Hindustan Petroleum
Corporation Limited
37.07
ONGC
15.08
9.5
1.86
Company
Indian Oil Corporation
Limited
AUGUST 2015
25
Company
Ownership
(per cent)
Global turnover
(FY14)
(USD billion)
Private Sector
2.4
Shell
Private Sector
BG Group
Private Sector
7.97(Half Yearly
Data)
BP
Private Sector
65.42
AUGUST 2015
26
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 2550
per cent vis--vis surface gasification
Open Acreage
Licensing Policy
AUGUST 2015
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
The Open Acreage Licensing Policy (OLAP) has been initiated in parallel with NELP to
increase foreign participation by global E&P companies like Shell, BP, Conoco Phillips etc.
27
Threat
of
new entrants
continues to be low, due to the
capital intensive nature of the
industry and economies of
scale
Threat of New
Entrants
(Low)
Substitute Products
Bargaining
Power of
Customers
(Low)
Competitive
Rivalry
(Low)
Substitute
Products
(Low)
Customers
have
low/non
existent bargaining power
Customers are price-taker not
a price maker
Bargaining
Power of
Suppliers
(Medium)
AUGUST 2015
29
STRATEGIES ADOPTED
AUGUST 2015
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 ONGCs 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
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
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
Expansions
Diversification
AUGUST 2015
31
Investments to enhance
production
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
In recent years, major discoveries in the Barmer basin in Rajasthan and the offshore
Krishna-Godavari basin by smaller companies such as the Gujarat State Petroleum
Corporation and Andhra Pradesh Gas Infrastructure Corporation hold some potential to
diversify the countrys production
Government of India has come up with guidelines on allocation of domestic gas for
household and transportation sectors*, to boost the demand of natural gas in India
Oil and Natural Gas Corp (ONGC) has started Shale Gas exploration by spudding the first
Shale Gas well RNSG-1 in Burdwan District of West Bengal.
AUGUST 2015
32
GROWTH DRIVERS
AUGUST 2015
Growing demand
Expanding
production and
distribution
facilities in India
Supportive FDI
policies
Driving
Inviting
Increasing
investments
Innovation
Resulting
Petroleum and
Natural Gas sector
attracted an FDI of
US6,519.53 million
between 2000-15
Rise in population
and economic
growth to fuel
demand
Promoting
investments in the
sector
Increased R&D
activity
Cumulative FDIs
in oil & gas at
USD5.5 billion
Increasing
industrialisation
and usage of gas
Introducing
policies such as
CBM and NELP
Providing support
to global projects
from India
Huge investments
planned under the
Twelfth Plan
AUGUST 2015
34
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
The nation has large coal, crude oil and natural gas reserves
Oil reserves amounted to 5.7 billion barrels in 2014
Proved reserves of natural gas stood at 1.4 tcm in 2014
India held nearly 5.86 billion barrels of proven oil reserves at the beginning of 2014
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)
AUGUST 2015
35
Huge investments
Investments worth USD75 billion is expected across the oil & gas value chain under the
erstwhile 12th Plan (201217)
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 Asias first
and only energy university
The countrys natural gas pipeline network amounted to over 18,080 kms in 2014 and a
proposed expansion of 30,000 kms is envisaged by 2018-19
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
AUGUST 2015
36
In 2014, the pricing for CNG (transport) and PNG (domestic) were examined by the
Ministry while the disclose of prices of the CNG and PNG commodities were made
compulsory
Allows companies to apply for shale gas and oil rights in their petroleum exploration
licenses and petroleum mining leases
Promotes bio-fuel usage, the Government of India has provided a 12.36 per cent
concession on excise duty on bio-ethanol and exempted bio-diesel from excise duty
Integrated Energy
Policy (IEP), 2006
AUGUST 2015
37
Provide a roadmap to comply with various vehicular emission norms and corresponding
fuel quality upgrading requirements over a period of time
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
Compensate public sector Oil Marketing Companies (OMCs) for the freight incurred to
distribute subsidised products in far-flung areas
AUGUST 2015
38
CAGR:
16.06%
3.2
5.4
6.6
5.5
170.4
3.3
2.7
FY10
115.7
FY11
FY12
248.63
256.09
FY15
FY16*
217.7
FY13
FY14
FY15
FY16
FY10
193.4
129.8
FY11
FY12
FY13
FY14
AUGUST 2015
39
Acquirer name
Target name
Jun 2014
7.13
Mar 2014
IOCL
Not disclosed
Oct 2013
529
Jun 2013
2640
Nov 2012
ONGC Videsh
5,000.0
Nov 2012
Inpex Corp
Not disclosed
Sep 2012
ONGC Videsh
1,000.0
Apr 2012
130.0
Apr 2011
1,492.0
Feb 2011
BP PLC
9,000.0
Aug 2010
BPRL
EP413
13.4
Aug 2010
1,180.8
Aug 2010
6,568.5
Aug 2010
391.6
Source: Thomson Banker, TechSci Research
AUGUST 2015
40
OPPORTUNITIES
AUGUST 2015
Midstream segment
of gas pipelines
LNG
Development
of
unconventional
resources: CBM fields in the deep sea
imports
have
increased
significantly;
this
provides
an
opportunity to boost production
capacity
producing techniques
Higher demand for skilled labour and
Downstream segment
AUGUST 2015
42
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 countrys largest shale gas reserves, extending over
7,800 gross square miles with a prospective area of around 4,340 square miles
In April 2013, the Directorate General of Hydrocarbons (DGH) submitted its policy on exploitation of shale gas to the Ministry of
AUGUST 2015
43
SUCCESS STORIES
AUGUST 2015
24.1
Reported
net profit
of USD3.9
Dome billion in
stic
2011
Highest crude
reserve produ Highestaccretion ction
ever
in the last up 2.1 dividend
Registered two
per
payout of
highestdecades cent
USD1.6
ever oil
83.5
billion
production million toe
Recorded
net profit
of
USD4.5
billion in
2013
Record
ed net
profit of
USD4.
4billion
in 2014
In the year
2015
company
produced
25.94
million
tonnes of
crude oil
and 23.52
bcm of gas
FY08
29.8
28.7
26.39
25.8
22.9
FY09
21.5
FY10
FY11
FY12
FY13
FY14
FY15
AUGUST 2015
45
Subsidiary CPCL accounts for 49 per cent of market share in petroleum products
FY15
FY14
Turnover
USD73.57 billion
USD80.7 billion*
EBITDA
USD1.7 billion
USD2.8 billion
Net profit
USD0.8 billion
USD1.2 billion
AUGUST 2015
46
FY15
FY14
Turnover
USD61.4 billion
USD68.3 billion*
EBITDA
USD6.1 billion
USD5.9 billion
Net profit
USD3.8 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, TechSci Research
Note: *Revenue fallen due to negative translation effect
AUGUST 2015
47
USEFUL INFORMATION
AUGUST 2015
Address
Contact person
Telephone
Mr T S Balasubramanian,
Financial Adviser and Chief
Accounts Officer
91-11- 23413298
91-11- 23414692
oidb@hotmail.com
Petroleum Conservation
Research Association
(PCRA)
Mr Arun Kumar, ED
pcra@pcra.org
Bureau of Energy
Efficiency (BEE)
91-11- 26178316,
91-11- 26179699
dg-bee@nic.in,
amathur@beenet.in
Mr J B Verma, ED
91-11- 23316798
verma.jb@gov.in
Dr Basudev Mohanty,
Director
Directorate General of
Hydrocarbons
Mr S K Srivastava, Director
General
0120 - 4029401
dg@dghindia.org
AUGUST 2015
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