Few Thoughts Over a Barrel

27 August 2009

What's in Store for You

� Trends in Oil & Gas Sector

� What's happening in India

� Survival is tough in the “Brown Jungle”

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� Survival is tough in the “Brown Jungle”

� Leadership experience in Cairn

� Finally, few thoughts on the topic !!!!!

Claimer

� Sorry, couldn't avoid Power Point and Statistics

� It’s a Research – I have not stolen the idea from one source!!!

� Intention is certainly not to preach

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Power of Oil & Gas – It’s a Big Business

� World consumes $8 bn* worth of oil & gas every single day

� International daily trade (OTC & Exchanges) at $50 bn*

� 9 Oil companies occupy the top 20 positions in Fortune 500 list

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NOC

IOC

Independent

2008

* July’09 PricesSource – Goldman Sachs Research Report

Oil Resource – God has not been fair

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55% 5% 9% 15% 11% 6%Population

Source – World Bank & BP Statistical Review of World Energy 2009

3% 6% 10% 10% 11% 60%

Brown Jungle – Entry is only Adults!!!!

Offshore Well

Deep Water Well

$80mm

Exploration

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Onshore Well

$2mm

Offshore Well

$15mm

$80mm

� Exploration – It’s a search for pins in a dark room

� Its Transformational – Go to bed as a child and wake up as an Adult

More Players, More Risk Investment & More Discoveries (2000-2008)

� Total Discoveries – 183

� Discovery of Oil in 2004 by Cairn in Rajasthan

� India’s largest on-shore oil discovery in over two

decades

� World class resource base of 3.7bn barrels

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� At production peak to contribute ~20% of India’s

domestic production

� First Oil – H2 2009

� Discovery of Gas by Reliance in Andhra Offshore

� World’s largest gas discovery for the year

� Doubles the India’s gas production

� Triggers downstream investment in gas pipeline

and City Gas Distribution

Source – DGH India

Gas will enter your Kitchen & Drive your Car

21%

9%

5%

41%

24%

65%

OECD - 2008

Coal

Oil

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51%

1% 7%

32%

9%

41%

India - 2008

Coal Nuclear Hydro Oil Gas

Gas

Source – BP Statistical Review of World Energy 2009

Rules are Shaky in Brown Jungle

Commitments Uncertainties

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Market Cap

3.5

2.7

2.4

Vastar Resources

Oryx

Gulf Canada

1998-2002: Half of the mid-sized E&Ps were acquired...

Acquired by Shell 2002

Acquired by ENI 2000

Acquired by BP 2000

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4.8

4.8

Enterprise Oil

LASMO

$bn1997

Source – McKinsey & Co Research

Acquired by Kerr McGee 1998

Acquired by Conoco 2001

Big Fish don’t let you swim for long!!

But... Those survived grew 4-6X

�Effective

Leadership

Secret of Survival

Apache

Devon

CNR

Market Cap 1997 2009

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Leadership

0 5 10 15 20 25 30 35

Woodside

Anadarko

$bn

Source – McKinsey & Co Research

If you manage to escape you could be

the Big Fish!!

Leadership – To Add Value and Make a Difference

Innovation

in

Excellence

InMaterial

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in

Strategy

In

Execution

Material

Growth

Leadership – How do you experience it ? - What I Experienced in Cairn !!!!

� Leadership by Visioning (Back in the Early Nineties…)

� Leadership by Being (Walk the Talk !!)

Leadership by Winning (Part of a winning team !! )

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� Leadership by Winning (Part of a winning team !! )

Leadership – How do others experience yours?

� If I can, then everyone has the leadership potential !!!

� Do you enjoy being led by others?

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� Job of a Leader is to create more leaders

Its all about People !!!

� Grain to Bread - Value Addition 5 times

� Uncut Diamond to Finished Diamond – 10 times

� When u learn the Art of turning ordinary people to do extraordinary things- Can u quantify the value addition ????

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things- Can u quantify the value addition ????

� Two things that every Individual and Company aspire for :

I. Recognition

II. Respect

Broad banding The Leadership Profile

• Future growth

• Materiality

• Excellence in Execution

• Spirit of Entrepreneur

• Responsibility of a Trustee

Ownership Focus

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• Integrity

• Commitment

• Corporate Governance

• Build the Team

• Build the Brand

Trust Communication

Leadership – Experience it!

Col. Wahi Dr. A.K. Malhotra A.S. Soni

Leaders who continue to inspire me

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And one day… I hope to make it to the list of those who work in my team!!

S.C. Varma John Doran Rich Paces

Sir Bill Gammell