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Harneet Kaur Bhusari(9402) Prajakta Joshi(9407) Apoorva Puranik(9413) Disha Shah(9418)
Niche and Magazine Journalsim Assignment 1
The Sector Overview
• One of the largest and most important sectors for fuelling economy • India- 5th largest refining country accounting to 4% of world’s refining capacity • Oil consumption, currently 40 % in India is projected to increase by 4-5 per cent per annum by 2015, indicating a demand of 4.01 million b/d by 2015. • India depends on imported crude to meet 75% of domestic demand.
Niche and Magazine Journalsim Assignment 2
Niche and Magazine Journalsim Assignment 3 . oil and gas is dominated by stateowned entities • 5. refining and marketing of petroleum products and gas constitutes over 15 per cent of the GDP.000 B/D • The petroleum and natural gas sector which includes transportation.• In India.8 billion barrels of proven oil reserves • Average oil production. 815.
operating 10 out of 19 Indian refineries Reliance launched India’s first privatelyowned refinery in 1999.4 million B/D This is around 75 per cent of the nation’s total domestic oil pipeline network IOCL is the largest company. processing and marketing . and has gained a considerable market share (41 per cent – 2Q 2011) Niche and Magazine Journalsim Assignment 4 Midstream segment Storage and transportation Downstream segment Refining.329 km network of crude and product pipelines with a capacity of 1. accounting for approximately 75 per cent of the country’s total oil output IOCL operates a 10.Upstream Segment Exploration and production The upstream segment is dominated by the state-owned ONGC It is the largest upstream company in the exploration and production (E&P) segment.
compared to 93. as compared to the 21.44 million metric tonnes (MMT) for April-October 2011.4 million cubic metres (MCM) during April-October 2011 • During April-October 2011.54 MMT in AprilOctober 2010 • Natural Gas production was 28.Growth Rate of the Sector • Crude Oil production was recorded at 22.58 MMT of oil refined during corresponding period in 2010 (According to the provisional production data released by the Ministry of Petroleum and Natural Gas in a press release) Niche and Magazine Journalsim Assignment 5 .95 MMT of crude oil was refined.431. 96.
• GAIL has entered into a deal with Carrizo Oil and Gas Inc for acquiring 20 per cent stake in Eagle Ford shale acreage.Key Developments • 41 Km. • ONGC Videsh’s 25% stake in Kazakhstan's Satpayev acreage. petroleum pipeline between India and Nepal at a cost of about Rs 100 Crore. • RIL and British Petroleum Plc (BP) have announced the formation of India Gas Solutions.Magazine Journalsim Assignment Niche and 6 . • BPCL plans to achieve refining capacity of nearly 42 MT by 2015-16 where the focus will be on low-cost expansions.
permits 100 per cent FDI for small and medium sized oil fields via competitive bidding • Public-private partnerships (PPP) as well as only private investments can foray into the refining sector. implemented by Government of India. Niche and Magazine Journalsim Assignment 7 .Government Initiatives • The India Hydrocarbon Vision 2025 envisages a demand of about 391 million standard cubic feet per day (MMSCMD) of gas by the year 2020-25 • New Exploration Licensing Policy (NELP).Oil & Gas .
natural gas.159 million from April 2000 – April 2011 Niche and Magazine Journalsim Assignment 8 .FDI in Oil and Gas • FDI permitted upto 100% through competitive bidding. LNG etc) since 2003. pipeline. • The FDI totalled USD574 million in the oil and natural gas sector during Financial Year 2011 • Total FDI inflows in Indian petroleum and natural gas has been USD3. (petroleum.
• Excise Duty on diesel was also reduced by US$ 0. • The Government has eradicated the Customs Duty on Crude Oil and trimmed Customs Duty on petroleum products by 5 per cent.• 100 per cent FDI is allowed for petroleum products and pipeline sector as well as natural gas/ LNG pipeline.056 per litre Niche and Magazine Journalsim Assignment 9 .in case of trading and marketing. • Minimum 26 per cent equity is covered over five years.
Niche and Magazine Journalsim Assignment 10 . • Except for Reliance Industries. the upstream sector of oil and gas production and distribution is dominated by government owned companies which are heavily regulated. • Most of the companies are huge with billion dollar balance sheet and huge operations as is the case with the Oil and Gas Industry worldwide.Top Five Companies • India’s Oil and Gas Industry has an interesting mix of Oil & Gas companies from the government and private sector.
5 billion. Niche and Magazine Journalsim Assignment 11 .• Oil and Natural Gas giant • One of the biggest exporters in India • One of the largest petrochemical and oil refining complexes. • Sold a stake in its valuable Godavari Basin to BP for a whopping $7.
235. • Market cap of Rs. Niche and Magazine Journalsim Assignment 12 . produced 803 Million Metric Tonnes of crude and 485 Billion Cubic Meters of Natural Gas from 111 fields. within a year.000 Crores. • Created a record of sorts by turning Mangalore Refinery and Petrochemicals Limited (MRPL) to the BSE Top 30.• Ranks 3rd in Oil & Gas Exploration & Production (E&P) Industry globally. with 40 Oil & Gas projects in 15 countries. (OVL) is the biggest Indian multinational. • ONGC Videsh Ltd.
000 crores. Niche and Magazine Journalsim Assignment 13 .• Market cap Rs. 58. • GAIL is one of the best performing stocks in the Energy Industry. • The revenue earned was 24.000 crores (2011-12) with a net profit margin of 11% • Responsibility of reviving the LNG terminal at Dabhol and sourcing LNG.
A pipeline has also been constructed to transport the crude from Barmer to Bhogat in the Gujarat coast.and Magazine Journalsim Assignment Niche 14 . • One of the biggest private exploration and production companies currently operating. • A subsidiary of the British company Cairn. • The company has set up a Processing terminal in Barmer (Rajasthan) to process the crude from fields.its growth has been nothing short of phenomenal after winning a bid to explore oil blocs in Rajasthan in the NELP.• It is the second largest Oil and Gas private company listed on the Indian stock exchange.
cooking gas and diesel in the Indian market.000 crores.• Major distributor of petroleum.Bharat Petroleum produces a diverse range of products. Niche and Magazine Journalsim Assignment 15 . 21. • . from petrochemicals and solvents to aircraft fuel. • The company has a market capitalisation of Rs.
Turnover (net of Excise) up by 27% Niche and Magazine Journalsim Assignment 16 .Major Developments and Issues • Oil producers to take a Rs 60 billion hit on cess increase • Rs 2000 billion oil losses next year may play havoc with govt plans • Will take corrective steps to deal with oil prices: FM • GAIL third quarter PAT up by 13%. Turnover (net of Excise) up by 35% • GAIL nine months PAT up by 14%.
Government Policy • Government invites global oil & gas companies to bid for license under NELP • NELP-IX • Fiscal incentives to attract more companies to invest in the Indian oil & gas sector. • Deregulation of petrol prices (2011) Niche and Magazine Journalsim Assignment 17 .
and auto fuel quality in a cost-efficient manner while ensuring the security of fuel supply Niche and Magazine Journalsim Assignment 18 .National Auto Fuel Policy • Policy aims to comprehensively and holistically address the issues of vehicular emissions. vehicular technologies.
petroleum product marketing and petroleum refining in the private sector • FDI up to 26% is permitted with prior Government approval in petroleum refining by the PSU. • Actual trading and marketing petroleum products.Policy to Attract FDI • Permits FDI up to 100% under the automatic route in exploration.fdi to 100% with condition that 26% foreign equity would be divested in favor of Indian public Niche and Magazine Journalsim Assignment 19 .
in petroleum refining by PSUs without involving any divestment or dilution of domestic equity in the existing PSUs. and ii) Allow FDI up to 49%. Niche and Magazine Journalsim Assignment 20 .It has been decided to… i) Delete the condition of compulsory divestment of up to 26% equity within 5 years for actual trading and marketing of petroleum products. with prior approval of FIPB.
• The companies were also calling for an extension of the tax holiday for both exploration and refining activities by 10 years.Expectations and Provisions • The oil companies were expecting 100% compensation for the under-recoveries in line with year 2008-09. BUT the government restrained from any such moves in the budget presented. Niche and Magazine Journalsim Assignment 21 . as in case of power sector BUT this pitch did not materialize as per the market expectations.
Expectations and Provisions • All eyes were pinged on the potential decontrol measure on diesel. possibly citing the escalating inflationary levels in the country. BUT government backed off from such shift. • Expected issue of Diesel Deregulation. BUT no proposal was provided to deregulate it Niche and Magazine Journalsim Assignment 22 . • Expected a decline in the import duty on rising crude oil prices BUT. and no concern for the rising Crude Oil prices. With only consideration to LPG and Kerosene.
BPCL and IOC. abolition of excise duties and special duties prevailing on branded fuels BUT did not materialize • Expected flexibility to claim tax holiday in a block of 10 years • The budget is NEGATIVE for the entire sector including companies HPCL. Niche and Magazine Journalsim Assignment 23 .Expectations and Provisions • Expected more freedom to revise petrol prices.
THANK YOU! Niche and Magazine Journalsim Assignment 24 .
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