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Oil & Gas Sector in India PREPARED BY: SUBMITED TO: DIVYARAJSINH CHUDASAMA(16MCL001) DR.DEBASIS SARKAR MATANGI DAVE (16MCL002)

Oil & Gas sector in india

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Oil & Gas Sector in India

Oil & Gas Sector in IndiaPrepared by:Submited to:Divyarajsinh Chudasama(16mcl001)Dr.debasis SarkarMatangi Dave (16mcl002)

Content IntroductionOil & Gas sector in India Segments of sectors Exploration & Distillation Process Energy Consumption Supply & Demand Strategies & Growth drivers Policies FDI Advantage India Opportunities 12th five year plan Glimpse of few oil & gas compnies

IntroductionIndia produces 4 fuels, 11 metallic, 52 non-metallic and 22 minor minerals. Which includes Coal ,Iron ore ,Mica ,Bauxite ,Chromite ,Natural Gas ,Diamonds ,Limestone etc. found in various regions of india.India'soil reserves, found inBombay Highoff the coast ofMaharashtra,Gujarat,Rajasthanand in easternAssammeet 25% of the country's demand. Oil & Gas are used as fuel, Lubricant , Asphalt ,Synthetic Fibre , Chemicals etc in Daily Life.

Oil Sector in IndiaIndia had about 750 Million metric tonne of proven oil reserves as April 2014 or 5.62 billion barrels which is the second-largest amount in the Asia-Pacific region behind China.Most of India's crude oil reserves are located in the western coast (Mumbai High) and in the northeastern parts of the country, although considerable undeveloped reserves are also located in the offshoreBay of Bengaland in the state ofRajasthan.In 2010, India produced an average of about 33.69 million metric tonne of crude oil as on April 2010or 877 thousand barrels per day.

India has 1,437billion cubic metre of confirmed natural gas reserves as of April 2010. A huge mass of India'snatural gasproduction comes from the western offshore regions, particularly theMumbai Highcomplex. The onshore fields inAssam,Andhra Pradesh, andGujaratstates are also major producers of natural gas.Gas Sector in India

Segments of Oil & Gas India has become the 3rd energy consumer in 2015Up Stream Segmentexploration 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 59.43 per cent of the countrys total oil output (FY15)

Mid Stream Segment storage and transportationIOCL 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

Downstream Segment:Refining, Processing and Marketing IOCL is the largest company, control 10 out of 22 Indian refineries, with a combined capacity of 1.31 mbpd. Reliance and Essar (Vadinar) refineries consider 30% & 10% market share respectively of total refining capacity.

Oil & Gas Exploration

Distillation Process

Indias Energy consumptionIn 2014, coal accounted for 56.47 per cent of total primary energy demand.Indias energy demand is projected to double to 48.7 quadrillion by 2035. Over the next few years, dependence on gas, hydro power and nuclear power is expected to increase relative to oil and coal.

(Source:IEA)

Oil Supply & DemandIn June 2015, total crude oil imports were valued at USD8.7 billion. In FY14, imports accounted for more than 80 per cent of the countrys total oil demand.Despite being a net importer of crude oil, India has become a net exporter of petroleum products by investing in refineries designed for export, particularly in Gujarat.

(Source: Ministry of Oil & Gas,BMI Forecast)

Gas Supply & Demand India had 1.4 trillion cubic meters of proven natural gas reserves at the beginning of 2014. Approximately 34 % of total reserves are located onshore, while 66 % are offshore. Domestic production accounts for more than three-quarter of the countrys total gas consumption. India increasingly relies on imported LNG; the country was the fourth-largest LNG importer in 2014, accounting for 5.68 % of global imports.

(Source: Ministry of Oil & Gas,BMI Forecast)

CompanyOwnership(percent) as onFY14-15FY16* turnover (USD billion)Indian Oil Corporation Limited68.57%state-owned30.58Reliance IndustriesPublic Listed25.91Bharat Petroleum Corporation Limited54.93 %state-owned4.19Hindustan Petroleum Corporation Limited51.1 %state-owned15.35ONGC68.94 %state-owned11.27GAIL India Limited56.11 %state-owned43.78Oil India Limited67.64 %state-owned1.00

Domestic oil & Gas company

(Source: Ministry of Oil & Gas,BMI Forecast)

StateBalance recoverablereservesof crude oil, 2015 ( MMT)Assam169.42Gujarat138.49Rajasthan37.33Andhra Pradesh1.63Tamil Nadu10.80Arunachal Pradesh1.63Nagaland2.69Tripura0.07Total Onshore373.61Western Offshore333.42Eastern Offshore56.42Total Offshore389.86

State wise crude reserve(Source: Ministry of Oil & Gas,BMI Forecast)

Crude pipe line network India has a network of 9,573 km of crude pipeline having a capacity of 947.04 mmtpa. In terms of length, IOCL accounts for 46.47 per cent (4,448 km) of Indias crude pipeline network. Moreover, the company has the countrys longest pipelines: Salaya-Mathura-Panipat Pipeline (1,870 km) and Haldia-Barauni/Paradip-Barauni Pipeline (1,302 km)

(Source: Ministry of Oil & Gas,BMI Forecast)

Strategies Adopted Expansion:They are forming JVs and strategic tie ups with foreign companies to increase their technical know-how and knowledge base. Diversification: 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 bio- fuels.

Investment to increase production Increase recovery rates of hydrocarbon from oil wells; ONGC in Mumbai High achieved success in implementing. Focus on R & D of gasification technology to enhance production More focus on small Companies 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. Focus On city gas network Providing Gas in house using pipelines.

Growth Drivers(Source: Ministry of Oil & Gas,BMI Forecast)

Robust & Domestic MarketOil consumption is expected to rise by 42.5 per cent during 2010204th largest Consumer in worldIncrease Demand for natural gasMain industries that use natural gas are pulp and paper, metals, chemicals,glass, plastic and food processing. Abundant Raw Materialoil reserve 763.476 MMT in fy15large crude oil & coal reserve

Favorable policies 100% FDI in exploration and production49% FDI in refiningHuge Investment USD 75 Billion according to 12th five year planSkilled Labors Uni of petroleum & energy studies trained skilled labors offer more wagesMassive gas pipe line 17,241 km in 2015Expansion upto 30,000km according to 12th five year plan

Policies Pricing of CNG & PNG (2013) Shale oil & gas Exploration policy National biofuel policy (2009): exempted 12.36% duty from biofuel Domestic Natural gas policy (2014) Integrated energy policy (2006): outline goals with various energy sources Auto fuel Policy (2003): Vehicular emission norms

FDI in oil & Gas sectorCumulative FDI inflows in Indias petroleum and natural gas sector stood at USD6.6 billion (2.5 per cent of total FDIs) during April 2000September 2015.Between FY10 and FY16*, FDI inflows into petroleum and natural gas grew at 16.06 per cent.

(Source: Department of industries policy & promotion)

(Source: Ministry of Oil & Gas, Business Monitor International world Outlook 2012)

Opportunities Upstream Segment Locating new fields for exploration: 78 per cent of the countrys sedimentary area is yet to be explored Higher demand for skilled labour and oilfield services and equipment Development of unconventional resources: CBM fields in the deep sea Midstream Segment Expansion in the transmission network of gas pipelines In light of mounting LNG production, huge opportunity lies for LNG terminal operation, engineering, procurement and construction services

Down stream segmentIndia is already a refining hub with 21 refineries and expansions planned for tapping foreign investment in export-oriented infrastructure, including product pipelines and export terminals.Development of City Gas Distribution (CGD) networks, which are similar to Delhi and Mumbais CGDsExpansion of the countrys petroleum product distribution network

12th five year plan (2012-17) Petroleum Demand is Increasing by 4.7% per Year. Consumption of petroleum product 147.98 MMT in 11th five Year plan (2007-12) 186.21 MMT in 12th Five Year plan (2012-17)

Gas Sector Demand is increasing BY 19.2% per year. Target to cover 300 cities under city gas distribution with in 12th five year Plan.

Focus on R &D Spend 6326 Crores focus on Producing wax Crude4D Seismic mappingLong heated insulation pipesExploration of unconventional energy sources

Glimpse of oil & gas companies in India

IOCL: flagship of Indian refining Indian Oil Group of Companies owns and operates 10 of Indias 22 refineries with a capacity of 1.30 mbpd. In 2015, Its network of crude oil and product pipelines runs to about 11081 Km. Second largest petro chemical player in india. Turn over of 30.21 billion USD & profit of 1 Billion USD in Fy16.

(Source: Company reports)

Reliance industries Indias largest petrochemical complex refining in the world. It contributes 14 per cent to India's exports and is going to invest around USD30 billion to improve its businesses in the next three years Turn over 25.91 billion USD & 2.12 billon USD Profit In Fy16. Reliance industry has refining plant in Jamnagar and petrochemical plant in hazira.(Source: Company reports)

Bombay High aka Mumbai HighRegion: Gulf Of khambhatLocation: 176 kms from the shores of MumbaiOperator : ONGCDiscovery : 1965Start production : 1974Production : 347,197 Barrels/day

Bombay High has three blocks separated by east-west trending faults, all three with differentgas-oil contactsbut approximately 1355 m deep.

Crude oil produced from Bombay High is of very good quality as compared to crudes produced in middle east.

Bombay High crude has more than 60% paraffinic content while light Arabian crude has only 25% paraffin

Reference Ministry of petroleum & Natural gas 12th five year plan (2012-17) Economic sector Part-2 IBEF Indian Brand equity foundation (www.ibef.org)