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OIL & GAS
July 2021
For updated information, please visit www.ibef.org
Table of Contents
Executive Summary 3
Advantage India 4
Market Overview and Trends 6
Sector Drivers 9
Recent Trends and Strategies 24
Growth Drivers 30
Opportunities 36
Key Industry Contacts 38
Appendix 40
2
Executive summary
2. WORLD’S THIRD-LARGEST 3. THIRD-LARGEST
ENERGY CONSUMER CONSUMER OF OIL
India’s consumption of petroleum
According to IEA (India Energy Outlook
products grew 4.5% to 213.69 MMT in
4. FOURTH-LARGEST
2021), primary energy demand is expected to
nearly double to 1,123 million tonnes of oil FY20 from 213.22 MMT in FY19. LNG IMPORTER
equivalent, as the country's gross domestic India retained its spot as the third-largest
product (GDP) is expected to increase to consumer of oil in the world in 2019. LNG import in the country accounted
USD 8.6 trillion by 2040. for about one-fourth of total gas
demand, which is estimated to double
over the next five years. To meet this
rising demand the country plans to
1. SECOND-LARGEST increase its LNG import capacity to
REFINER IN ASIA 50 MT in the coming years.
India increasingly relies on imported
As of May 01, 2020, India’s oil LNG. It is the fourth-largest LNG
refining capacity stood at
259.3 million metric tonnes
2 3 importer.
India’s LNG import stood at 33.68
(MMT), making it the second- billion cubic meters (bcm) in FY20.
largest refiner in Asia. Private
companies owned about
35.19% of the total refining
capacity in FY20.
India is planning to double its
refining capacity to 450-500
1 4
million tonnes by 2030.
Notes: MMT - Million Metric Tonnes, Mtoe - Million Tonnes of Oil Equivalent; mbpd - Million Barrels Per Day, LNG - Liquified Natural Gas
3
Advantage India 4
Advantage India
2. GROWING DEMAND 3. RAPID EXPANSION
In July 2021, the Minister for Road Transport and Highways, Mr.
India is the world’s third-largest energy consumer
Nitin Gadkari inaugurated India’s first liquefied natural gas (LNG)
globally.
facility plant in Nagpur, Maharashtra.
Diesel demand in India is expected to double to
In July 2021, Oil & Natural Gas Corporation (ONGC) announced to
163 MT by 2029-30.
spend Rs. 300 billion (US$ 4.03 billion) in FY22 to boost the oil &
According to the International Energy Agency
gas output.
(IEA), consumption of natural gas in India is
In February 2021, Prime Minister Mr. Narendra Modi announced
expected to grow by 25 billion cubic metres
that the Government of India plans to invest ~Rs. 7.5 trillion (US$
(bcm), registering an average annual growth of
102.49 billion) on oil and gas infrastructure in the next five years.
9% until 2024.
The industry is expected to attract US$ 25 billion investment in
exploration and production by 2022. Refining capacity in the
country is expected to increase to 667 MTPA by 2040.
4. POLICY SUPPORT
1. SUPPORTIVE FDI
In Union Budget 2021, the
GUIDELINES government allocated funds
worth Rs. 12,480 crore (US$
The Government has allowed 100%
1.71 billion) for direct benefit
foreign direct investment (FDI) in
transfer of LPG (liquefied
upstream and private sector refining
projects.
2 3 petroleum gas) and Rs. 1,078
crore (US$ 147.31 million) to
The FDI limit for public sector
feedstock subsidy to
refining projects has been raised to
BCPL/Assam Gas Cracker
49% without any disinvestment or
Complex.
dilution of domestic equity in
In Union Budget 2021, the
existing PSUs.
Finance Minister announced to
1 4 provide 1 crore more LPG
connections under Pradhan
Mantri Ujjwala Yojana (PMUY)
scheme.
5
Market Overview And Trends 6
State-owned companies dominate oil and gas in India
India remained the third-largest energy consumer in 2019.
India’s crude oil production in FY20 stood at 32.2 MMT.
Crude oil production stood at 4.9 MMT in FY22 (April-May 2021) and was 30.5 MMT for FY21.
Assam, Gujarat and Rajasthan account for more than 96% of oil production in India.
India’s existing strategic oil reserves (SPR) is ~5.3 million tonnes.
India had 4.7 thousand million barrels of proven oil reserves and produced 37.5 million tonnes in 2019.
Oil production is expected to rise and reach 36 bcm^ by 2021.
State-owned ONGC dominate the upstream segment.
Upstream segment
- exploration and It is the largest upstream company in Exploration and Production (E&P) segment, accounting
production
for approximately 70.0% of the country’s total oil and gas output.
Midstream IOCL operates a 14,701 km network of crude, gas and product pipelines, with a capacity of
Indian Oil and
segment - storage 94.6 million metric tonnes per annum of oil and 20.0 million metric standard cubic meters per
Gas sector
and transportation day of gas.
IOCL is the largest company, controls 11 out of 22 Indian refineries, and has a combined
capacity of 80.7 MTPA.
Downstream
segment - refining, Reliance launched India’s 1st privately owned refinery in 1999 and has gained considerable
processing and market share (30%). In January 2021, the company operated its plant at 96.1% capacity.
marketing
Nayara Energy Limited’s (NEL’s) Vadinar refinery has a capacity of 20 mmtpa, accounting for
almost 10% of the total refining capacity.
Notes: bcm - Billion Cubic Metres, mbpd - Million Barrels Per Day, mmscmd - Million Metric Standard Cubic Metre Per Day, mmtpa -- million metric tons per annum, ^As per IEA
Source: BP Statistical Review 2020, US Energy Information Administration, Petroleum Planning and Analysis Cell
7
Oil supply and demand in India
Imports and domestic oil production in India (mbpd)
0.68 0.64
0.72 0.64
0.74
0.61
4.41 4.53 4.54
4.28
4.06 3.96
0.10
0.62
FY16 FY17 FY18 FY19 FY20 FY21 FY22*
Oil Imports Oil Production
Diesel was the most consumed oil product in India and accounted for 39% of petroleum product consumption in 2019. It is used primarily for
commercial transportation and further, in the industrial and agricultural sectors.
Oil demand is expected to rise by 5.8 mbpd in 2040 from 5.27 mbpd in 2019.
Oil demand increased 3.11% to 5.27 mbpd in 2019 from 5.11 mbpd the previous year.
Rapid economic growth is leading to greater outputs, which in turn is increasing the demand of oil for production and transportation
In FY21, crude oil imports decreased to 3.96 mbpd from 4.54 mbpd in FY20.
Note: CAGR - Compound Annual Growth Rate, mbpd - Million Barrels Per Day, P - Provisional, ^As per OPEC, Based on 50 MMT = 1 MBPD, * - Until May 2021
Source: Ministry of Petroleum and Natural Gas, BP Statistical Review 2020
8Sector Drivers 9
Gas supply and demand in India
Total Gas Consumption in the Country (MMSCM) Domestic Gas Production and Imports (BCM)
70000 70.00
60000
64,451
64,144
60.00
60,798
60,646
59,170
57,367
55,697
50000 50.00
52,517
52,375
51,300 28.74 33.89
24.69 26.33 32.86
40000 40.00 21.39
30000 30.00 32.88
31.24 30.92 31.80 31.18
28.67
10,485
20000 20.00
10000 10.00
5.24
0.00 5.39
0
FY16
FY17
FY18
FY19
FY20
FY21
FY22*
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22*
Gas production Gas Imports
Demand is not likely to simmer down anytime soon, given strong economic growth and rising urbanisation.
Gas consumption is projected to reach 143.08 bcm by 2040. The Government is planning to invest US$ 2.86 billion in the upstream oil and gas
production to double the natural gas production to 60 bcm and drill more than 120 exploration wells by 2022.
According to the International Energy Agency (IEA), India’s medium-term outlook for natural gas consumption remains solid due to rising
infrastructure and supportive environment policies. Industrial consumers are expected to account for ~40% of India’s net demand growth. The
demand is also expected to be driven by sectors such as residential, transport and energy.
India’s natural gas imports increased at a CAGR of 6.92% between FY16 and FY21.
LPG penetration rate of households reached ~97% in early 2020 compared with 56% in 2016.
Note: F - Forecast, bcm - Billion Cubic Metres, CAGR - Compound Annual Growth Rate, * - Until May 2021
Source: PPAC, BP Statistical Review 2020
10Exports of petroleum products from India
Product-wise Exports of Petroleum Products from India in FY22*
Exports of Petroleum Products from India (MMT)
(thousand metric tonnes)
80 6,000
70 5,000
4,806
60 65.5 66.8 65.7 4,000
61.1
2,268
60.5
50 56.8 3,000
40 2,000
957
688
494
312
30 1,000
88
3
0
1
0
-
20 0
9.60
MS!
Naphtha$
Petcoke / CBFS
LPG
ATF#
Fuel Oil
LDO
SKO
Others%
HSD
LOBS/ Lube Oil
Bitumen
10
0
FY16
FY17
FY18
FY19
FY20
FY21
FY22*
India is one of the largest exporters of refinery products due to the presence of various refineries.
Exports of petroleum products from India reached 56.8 MMT in FY21 from 60.5 MMT in FY16.
The total value of petroleum products exported from the country increased to US$ 35.8 billion in FY20 from US$ 34.89 billion in FY19.
HSD was the major export item among petroleum products, followed by MS, ATF and Naptha.
Note: MMT - Million Metric Tonnes, P - Provisional, HSD - High speed Diesel, MS - Motor Spirit, ATF - Aviation Turbine Fuel, LPG - Liquefied Petroleum Gas, LDO - Light Diesel Oil, SKO -
Superior Kerosene Oil, LOBS - Lubricating Oil Base Stocks, ^Others includes Hexane, Benzene, MTO (Mineral Turpentine Oil), Sulphur, etc, *- Until April 2021
Source: PPAC, BP Statistical Review 2020
11Upstream segment: crude oil and gas production… (1/2)
Annual Crude Oil Production (in MMT) Crude Oil Production (in MMT)
40 40.0
35 19.1 35.0
18.4 18.1 18.1
11.4 10.4 9.9
30 16.0 30.0 9.6 8.4
15.4 7.4
25 25.0
3.4
3.3 3.4 3.1 2.9
20.0 22.4 3.3
20
20.9 20.8 20.6 20.2
19.6
15 17.9 17.6 17.5 17.5 15.0
16.2
15.1
10 10.0
1.2
5 5.0
0.5
2.4 3.2
- 2.6 -
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY16 FY17 FY18 FY19 FY20 FY21 FY22*
Onshore Offshore ONGC OIL Pvt/JV
Almost half of India’s crude oil production is from offshore fields, although this share is diminishing in the past few years as production from the
large, ageing Mumbai High field has declined.
In India, crude oil production stood at 30.5 MMT in FY21 and was 32.2 MMT in FY20
Onshore production accounted for 49.53%, while offshore contributed the remaining 50.47%.
ONGC accounted for ~66.19% of the total crude oil production in India in FY21.
Notes: MMT - Million Metric Tonne, JV - Joint Venture, P-Provisional, * - Until May 2021
Source: Ministry of Petroleum and Natural Gas
12Upstream segment: crude oil and gas production… (2/2)
Annual Gas Production (million metric standard cubic metre) Annual Gas Production (million metric standard cubic metre)
50,000 35,000
2,881 2,722
2,838 2,937 2,668
45,000
30,000 2,480
43,645.1
6,338 5,477
40,000 8,235 6,872 4,766
38,474.8
35,000 25,000
4,319
24,675
23,746
23,429
31,802.3
30,000
22,088
20,000
21,177
25,000
26,395.2
24,860.6
23,011.7
15,000
22,117.1
22,038.2
22,010.6
20,000
20,631.1
10,045.8
18,427.2
9,903.9
9,893.4
9,601.0
21,872
9,293.9
9,237.5
9,083.8
15,000
9,011.7
8,876.9
8,795.6
8,577.0
10,000
10,000 445
1,623.5
5,000
3,652.2
5,000 1,579
3,368
0 -
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY21
FY22*
FY20
FY16 FY17 FY18 FY19 FY20 FY21 FY22*
Onshore^ Offshore ONGC Pvt/JV OIL
Note: JV - Joint Venture, ^Including CBM production, * - Until May 2021
Source: Ministry of Petroleum and Natural Gas
13Upstream segment: exploration and development activities
Development drilling activities (FY19P) Exploration activities (FY19P)
1200 400
350
1000 266
649 300
800
250
600 200
149
150
400
100
338
200 85
165 50
59
0 63 0
Offshore Onshore Offshore Onshore
Wells Meterage ('000 metres) Wells Meterage ('000 metres)
In FY19P, 1,228,000 metres of wells were explored and developed and 545 wells were drilled in the country.
State-owned oil companies undertake most of the upstream drilling and exploration work.
The Government is planning to invest US$ 2.86 billion in the upstream oil and gas production to double the natural gas production to 60 bcm and
drill more than 120 exploration wells by 2022.
Notes: P- Provisional, *OALP - Open Acreage Licensing Policy
Source: Ministry of Petroleum and Natural Gas, BMI
14Pipelines: crude pipeline network
Shares in Crude Pipeline Network by Length Shares in Crude Pipeline Network by Capacity
(out of 10,419 kms, as of June 01, 2021) (out of 147.9 mmtpa, as of June 01, 2021)
IOCL
ONGC
20.08%
25.36%
OIL
40.97% IOC
6.09%
50.88%
12.31% ONGC
OIL
11.45% 32.86%
Others*
Others*
As of June 1, 2021, India had 10,419 kms of crude pipeline, with capacity of 147.9 mmtpa.
In terms of length, IOCL accounts for 50.88% (5,301 kms) of India’s crude pipeline network.
In terms of actual capacities, ONGC leads with 40.97%, followed by IOCL at 32.86%.
Note: km - Kilometre, mmtpa - Million Metric Tonnes Per Annum, *Others includes HMEL, BPCL and Cairn
Source: Ministry of Petroleum and Natural Gas
15Pipelines: existing pipelines in India
Length and capacity of products and crude oil pipeline by company (as of June 01, 2021)
IOCL BPCL(1) HPCL(2) OIL ONGC Cairn HMEL Others (GAIL and Petronet India.) Total industry
Length (kms)
Product
9,400 2,241 3,775 654 - - - 2,395 18,465
Pipeline
Crude oil
5,301 937 - 1,193 1,283 688 1,017 - 10,419
Pipeline
Total 14,701 3,178 3,775 1,847 1,283 688 1,017 2,395 28,884
Capacity of Crude Oil Pipelines (mmtpa)
Product
47.5 19.5 34.7 1.7 - - - 9.4 112.2
Pipeline
Crude oil
48.6 7.8 - 9 60.6 10.7 11.3 - 147.9
Pipeline
Total 94.6 27.3 34.7 10.7 60.6 10.7 11.3 9.4 260.1
Government of India is planning to invest Rs. 70,000 crore (US$ 9.97 billion) to expand the gas pipeline network across the country.
Note: kms - Kilometres, mmtpa - Million Metric Tonnes Per Annum, (1)Includes Petronet Cochin-Coimbatore-Karur Product pipeline, (2)Includes Petronet Mangalore-Hassan-Bangalore
Product Pipeline
Source: Ministry of Petroleum and Natural Gas
16Pipelines: refined products and LPG pipeline network
Shares in Products Pipeline Network under Operation by Shares in products pipeline network under operation by length
Length (out of 18,465 kms, as on June 01, 2021) (out of 17,016 kms, as on December 31, 2020)
1.82% 0.91%
6.13% GAIL
IOC
12.97%
GSPL
8.53%
3.54% HPCL
PIL
12.14% 13.23%
BPCL
50.91%
Reliance
OIL
69.39% IOCL
20.44%
Others Others
With 9,400 kms of refined products pipeline in India, the Indian Oil Corporation (IOC) leads the segment with 50.91%, as of June 01, 2021.
Top three companies IOCL, HPCL and BPCL contribute more than 80% of the total length of product pipeline network in the country.
As of December 31, 2020, Gas Authority of India Ltd. (GAIL) had the largest share (69.39% or 11,884 kms) of the country’s natural gas pipeline
network (17,126 kms).
In November 2020, oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) simplified the country's gas pipeline tariff structure to
make fuel more affordable for distant users and attract investment for building gas infrastructure.
Note: km - Kilometre, mmtpa - Million Metric Tonnes Per Annum, LPG - Liquefied Petroleum Gas, IOC - Indian Oil Corporation, HPCL - Hindustan Petroleum Corporation Ltd, BPCL -
Bharat Petroleum Corporation Ltd, OIL - Oil India Limited, (1)Others include GAIL and Petronet India
Source: Ministry of Petroleum and Natural Gas
17Downstream segment: refinery crude throughput… (1/2)
Refinery Crude Throughput (MMT)
300
250
91.16 88.04 89.50
91.09
88.53 88.66
200 88.27 88.23
81.18 78.00
74.44 81.38
150 169.16 164.80
38.29 48.54 154.30 160.77
33.43 134.22 134.73 144.20 143.80
100 122.58 130.57
108.03 112.5 112.17 112.13 115.11
13.80
50
25.10
0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22*
Public sector Private sector
India has 23 refineries - 18 are in the public sector, two in the joint sector and three in the private sector.
India’s state refineries have upgraded their facilities to comply with a new government requirement to produce oil products with the equivalent of
Euro VI emission standards.
Crude oil throughput of public sector refineries increased at a CAGR of 2.06%, from 108.03 MMT in FY07 to 143.8 MMT in FY21. At the same
time, crude oil throughput of private sector refineries recorded a CAGR of 6.24%, from 33.43 MMT to 70.0 MMT.
The share of private sector refineries throughput in the total crude throughput grew from 29.99% in FY07 to 35.19% in FY20.
Note: MMT - Million Metric Tonne, Public Sector includes IOCL ,BPCL ,HPCL, CPCL and ONGC, Private sector includes RIL and NEL, * - Until May 2021
Source: Ministry of Petroleum and Natural Gas
18Downstream segment: refinery crude throughput… (2/2)
Shares in India’s Total Refining Capacity
Total Installed Refinery Capacity (MMT)
(as of June 01, 2021)
300.00
4.60%
IOC 250.00
6.04%
110.00
88.20
88.20
88.20
105.50
95.00
95.00
27.89% RIL 200.00
95.00
95.00
95.00
93.00
8.00%
76.50
BPCL 150.00
162.10
161.70
161.70
142.10
142.07
139.00
135.07
10.84%
249.9 MMT
120.07
120.07
120.07
120.07
100.00
116.89
HPCL
50.00
NEL
15.33% 0.00
ONGC
27.29%
CPCL
Public sector Private sector (incl JV)
As of June 01, 2021, the sector’s total installed provisional refinery capacity stood at 249.9 MMT and IOC emerged as the largest domestic refiner,
with a capacity of 69.7 MMT.
In FY21, the top three companies, IOC, RIL and BPCL, contributed 70.6% to India's total refining capacity.
Note: MMT - Million Metric Tonne; HPCL - Hindustan Petroleum Corporation Ltd, BPCL - Bharat Petroleum Corporation Ltd, OIL - Oil India Limited, ONGC - Oil and Natural Gas
Corporation, IOCL - Indian Oil Corporation Ltd, CPCL - Chennai Petroleum Corporation Limited, * - Until April 2021
Source: Ministry of Petroleum and Natural Gas, PPAC
19Downstream segment: petroleum products
Production of Petroleum Products by Fractionators (TMT)
4,931.22
4,759.56
4,608.00
4,212.18
3,657.15
3,457.75
3,377.16
699.00
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22*
Consumption of petroleum products in India increased to 213.7 MMT in FY20 from 194.60 MMT in FY17.
Petroleum products derived from crude oil include light distillates such as LPG, naphtha; middle distillates such as kerosene; and heavy ends such
as furnace, lube oils, bitumen, petroleum coke and paraffin wax.
Production of petroleum products by fractionators reached 4,212.18 TMT in FY21.
Note: MMT - Million Metric Tonne, TMT - Thousand Metric Tonne, P – Provisional, * - Until May 2021
Source: Ministry of Petroleum and Natural Gas
20Downstream segment: distribution and marketing
The total number of OMC retail outlets increased to 77,331, as of Downstream distribution statistics (MMT)
June 01, 2021 (P), from 59,595 in FY17.
250.0
In India, IOCL, as of June 01, 2021 (P), owned the highest number of
retail outlets (32,177), followed by BPCL (18,652) and HPCL
(18,692). 200.0
102.36
107.50
107.58
93.69
93.69
96.61
As of June 01, 2021 (P), there were 25,104 LPG distributors (under
97.36
109.72
97.36
150.0
PSUs) in India.
100.0
114.30
112.20
111.30
111.30
110.50
104.50
97.70
89.57
85.10
50.0
0.0
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22#
Product pipeline Natural Gas Pipeline*
Capacity (mmtpa) Length (kms)
Pipeline as of as of
June 01, 2021 June 01, 2021
Crude Pipeline 147.9 10,419
Product Pipeline 112.2 18,465
Natural Gas Pipeline* 337.3 17,126
Note: MMT - Million Metric Tonne, mmtpa - Million Metric Tonnes Per Annum, OMC - Oil Marketing Companies, (P) - Provisional, PSU - Public Sector Unit, *- on December 31, 2020 for
natural gas pipeline, #- on June 1, 2021 for product pipeline
Source: Ministry of Petroleum and Natural Gas
21State-wise list of CNG stations in the country
State CNG Stations as of November 30, 2020 State CNG Stations as of November 30, 2020
Andhra Pradesh 72 Madhya Pradesh & Rajasthan* 2
Assam 1 Madhya Pradesh & Uttar Pradesh* 2
Bihar 9 Maharashtra 397
Maharashtra & Gujarat 12
Chandigarh, Haryana, Punjab & 15
Himachal Pradesh*
National Capital Territory of Delhi 421
(UT)
Dadara & Nagar Haveli 7
Odisha 19
Daman and Diu 4
Puducherry & Tamil Nadu* 1
Daman and Diu & Gujarat 9
Punjab 69
Goa 4
Rajasthan 39
Gujarat 709
Tamil Nadu 2
Haryana 137
Telangana 73
Haryana & Himachal Pradesh* 2
Tripura 11
Haryana & Punjab* 4
Uttar Pradesh 340
Himachal Pradesh 1
Uttar Pradesh & Rajasthan* 25
Jharkhand 13
Uttar Pradesh & Uttarakhand* 1
Karnataka 37 Uttarakhand 10
Kerala 12 West Bengal 13
Madhya Pradesh 70 Total 2,543
Source: Ministry of Petroleum and Natural Gas
* Some of the GAs authorized by PNGRB span areas in more than one state; Compressed natural gas (CNG)
22Key domestic oil and gas companies
Total Income from
Ownership
Company Operations in FY20
(%) as of FY20
(US$ billion)
56.98%
Indian Oil Corporation Limited 79.97
state-owned
Reliance Industries Public Listed 87.1
Bharat Petroleum Corporation 54.31%
46.78
Limited state-owned
51.11%
Hindustan Petroleum
state-owned (through 37.83
Corporation Limited
ONGC)
68.07%
ONGC 13.57
state-owned
53.59%
GAIL India Limited 9.43
state-owned
66.13%
Oil India Limited 1.93
state-owned
Note: : FY - Indian Financial Year from April-March
Source: Company’s Annual Report 2019-20
23Recent Trends and Strategies 24
Notable trends in the oil and gas sector
1. Coal Bed Methane (CBM) 5. Open Acreage
• CBM policy was designed to be liberal and Licensing Policy
investor-friendly. The 1st commercial • Open Acreage Licensing Policy (OALP),
production of CBM was initiated in July which allows an explorer to study the data
2007 at about 72,000 cubic metres per day. available and bid for blocks of his choice,
5
• Production in 2019-20 stood at 655.44 has been initiated to increase foreign
million cubic metres.
1
participation by global E & P companies like
. Shell, BP, Conoco Phillips etc.
• In January 2020, Open Acreage Licensing
2. Underground Coal Programme Bid Round-V offered 8
sedimentary basins and 11 blocks with a
Gasification (UCG) total area of 19,789.04 sq.km.
• The technology was first widely used in
2 4
the US in 1800s and in India (Kolkata and
Mumbai) in early 1900s.
• UCG is currently the only feasible 4. Oil Pricing
technology available to harness energy • Organisation of the Petroleum Exporting
from deep unmineable coal seams Countries (OPEC) meets 78% of India's
3
economically and in an eco-friendly crude oil demand, 59% LPG needs and
manner. It reduces capital outlay, ~38% LNG consumption as of 2020.
operating costs and output gas expenses • In November 2020, the Indian
by 25-50% vis-a-vis surface gasification. government urged OPEC to remove
3. Gas hydrates and bio-fuels pricing anomalies for different regions
with a view to help the Corona-battered
• The Government initiated the National Gas Hydrate global oil industry get back to normalcy.
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.
25Strategies adopted … (1/4)
1
Expansion
To expand beyond the natural gas business, in July 2021, GAIL (India) Ltd. announced to invest ~Rs. 5,000 crore (US$ 670.18
million) to establish a portfolio of renewable energy targeting a capacity of at least 1 gigawatts and build plants for both compressed
biogas and ethanol.
In June 2021, the government announced that it will auction unmonetised large oil and gas fields of state-owned ONGC and OIL to
boost hydrocarbon production.
In February 2021, Petronet LNG announced its plans to increase in its Dahej terminal's capacity by 29% to 22.5 million tonnes per
annum (mtpa) to meet the rising demand.
Key Indian oil retailers such as Bharat Petroleum and Hindustan Petroleum have announced plans to increase the capacity of their
outlets in rural areas in 2021.
In February 2021, ONGC announced that by May 2021, it would increase natural gas output from a KG basin block to 2.5-3 million
standard cubic meters per day.
In February 2021, the government launched key oil & gas projects in Assam, such as INDMAX Unit at Indian Oil’s Bongaigaon
Refinery, Oil India Limited's secondary tank farm at Madhuban, Dibrugarh and a ‘Gas Compressor Station’ at Hebeda Village,
Makum and Tinsukia remotely from Dhemaji in Assam.
In February 2021, the government launched key oil and gas projects such as the Ramanathapuram – Thoothukudi natural gas
pipeline and Gasoline Desulphurisation Unit at Chennai Petroleum Corporation Limited, Manali.
As per the Union Budget 2019-20, under scheme ‘Kayakave Kailasa’, the Ministry of Petroleum & Natural Gas enabled SC/ST
entrepreneurs in providing bulk LPG Transportation. State run energy firms Bharat Petroleum, Hindustan Petroleum and Indian Oil
Corp have plans to spend US$ 20 billion on refinery expansions to add units by 2022.
India targets US$ 100 billion worth investment in gas infrastructure by 2022 and to add another 228 cities to the gas distribution
(CGD) network. This would include setting up RLNG terminals, pipeline projects, completion of the gas grid and setting up of CGD
network in more cities.
On September 15, 2020, the Prime Minister, Mr. Narendra Modi inaugurated the three petroleum sector projects in Bihar which cost
more than Rs. 900 crores (US$ 122 million)
In October 2020, Torrent Gas Ltd. announced plan to spend Rs. 8,000 crore (US$ 1.1 billion) over the next five years to expand its
urban gas operations with the aim of setting up 500 CNG dispensing pumps by March 2023.
Source: Bloomberg reports, News Articles
26Strategies adopted… (2/4)
2
Diversification
• 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 and gas exploration
• In July 2021, India diversified procurement for crude by announcing its first shipment from Guyana scheduled next month. This move also
indicates a future roadmap for extended alliance with Guyana in the oil & gas sector.
3
Investments to enhance production
• In July 2021, Bharat Petroleum Corporation Ltd. (BPCL) announced plan to establish its first-generation ethanol production plant in
Telangana at an estimated investment of Rs. 1,000 crore (US$ 134.04 million).
• The Indian oil and natural gas sector is likely to witness an investment of US$ 206 billion in the next eight to ten years.
• Indian Oil Company (IOC) is planning to invest Rs. 1.43 lakh crore (US$ 22.19 billion) to double its oil refining capacity to 150 million
tonnes by 2030.
• ONGC plans to invest more than US$ 500 million in Mumbai High.
• In February 2020, Indian Oil Corporation (IOC) announced plans to invest Rs. 500 crore (US$ 71.54 million) at Chitradurga in Karnataka.
• In December 2020, the Indian Oil Corporation (IOCL) announced plans to invest Rs. 1,689 crore (US$ 228.81 million) in new projects in
Andhra Pradesh. This includes Rs. 1,522 crore (US$ 206.19 million) on petro products infrastructure and Rs.167 crore (US$ 22.62
million) on LPG storage facilities.
4
Commercial use of oil
• In October 2020, the Cabinet Committee on Economic Affairs (CCEA) allowed Abu Dhabi National Oil Co. (ADNOC) to commercially use
50% of the oil it had stored in Indian underground strategic reserves.
• This flexibility will encourage the company to store more oil in the three strategic petroleum reserves built at Visakhapatnam, Mangalore,
and Padur and will act as an insurance against supply and price disruptions.
Notes: ISEER - Indian Seasonal Energy Efficiency Ratio
Source: News Articles, techARC1
27Strategies adopted… (3/4)
5
Pilot project Initiated for Shale Gas Production 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.
• In 2018, Great Eastern Energy Corp (GEECL) announced to invest US$ 2 billion over the next ten years in West Bengal to explore shale
gas reserves.
• As of March 2017, 22 assessment wells (5 exclusive shale gas in Cambay basin and 17 dual objective wells) in 19 Petroleum Mining
Lease (PML) blocks have been drilled and required data are being generated/evaluated for shale gas/oil assessment.
6
Move to non-conventional energy resources
• The Government is planning to set up around 5,000 compressed biogas (CBG) plants by 2023.
• In July 2021, ONGC, an upstream oil company, and NTPC announced plan to expand the offshore wind energy development in India and
accelerate presence in the renewable energy space.
• JBM signed an MoU with the Ministry of Petroleum and Natural Gas (MoPNG), Govt. of India, for the development of Compressed
Biogas (CBG) Projects.
• In December 2020, the Minister for Petroleum & Natural Gas and Steel Mr. Dharmendra Pradhan laid the foundation stone for the
Leafiniti Bioenergy’s CBG plant in the Bagalkot district of Karnataka. This plant will utilise 200 TPD (tonnes per day) of press mud and will
be commissioned at an estimated cost of Rs. 42 crore (US$ 5.6 million).
7
More focus upon small companies
• Private sector units like Adani, Sun Petrochemicals and few new entrants have bagged 1/3rd of small oil and gas fields.
Source: CEAMA, India Retail Report, Business Line, IMAP India, News Sources
28Strategies adopted… (4/4)
8
Innovate for India
• In February 2021, IndianOil Corp. Ltd. signed a ‘statement of intent’ with Greenstat Hydrogen India Pvt. Ltd. to establish a centre of
excellence for Hydrogen value chain and other related technologies such as hydrogen storage, fuel cells, etc.
• In December 2020, the Minister for Petroleum & Natural Gas and Steel Mr. Dharmendra Pradhan has appealed to the scientific
community to Innovate for India (I4I) and create competitive advantages to make India ‘Aatmanirbhar’.
9
High Octane Petrol
• In December 2020, Indian Oil launched a world-class premium grade Petrol (Octane 100) in India. Branded as XP100, the premium-
grade petrol was launched in 10 cities.
10
ONGC Videsh
• In June 2021, ONGC Videsh is in the process to raise US$ 525 million in overseas foreign money loans from a mixture of home and
overseas lenders to repay bonds maturing in the subsequent months.
• ONGC Videsh, the abroad arm of the state-run explorer Oil and Natural Gas Corporation, is in discussion with half a dozen international
and domestic banks for the loan and intends to close the deal this month and draw down next month.
Source: CEAMA, India Retail Report, Business Line, IMAP India, News Sources
29Growth Drivers 30
Growth drivers
Growing demand Favourable business condition Government support
Robust growth in domestic 100% FDI investment
Abundant raw material
market allowed
Increasing demand for
Skilled labour Favourable policies
natural gas
Notes: TCM - Trillion Cubic Metres, EandP - Exploration and Production
Source: Ministry of Petroleum and Natural Gas, US Energy Information Administration, BP Statistical Review of World 2015 Energy, June 2012; BMI
31Rising demand
Crude oil consumption and forecast (MT) Natural gas consumption and forecast (BCM)
160
CAGR 3.60% CAGR 4.18%
600
140
143.08
500 120
500.00
400 100
80
300
60
200
58.10
40
221.56
100 20
0 0
2017 2040F 2018 2040F
Energy demand of India is anticipated to grow faster than energy demand of all major economies on the back of robust economic
growth.Consequently, India’s energy demand as a percentage of global energy demand is expected to rise to 11% in 2040 from ~6% in 2017.
Crude oil consumption is expected to grow at a CAGR of 3.60% to 500 million tonnes by 2040 from 221.56 million tonnes in 2017.
Natural Gas consumption is forecast to increase at a CAGR of 4.18% to 143.08 million tonnes by 2040 from 58.10 million tonnes in 2018.
Diesel demand in India is expected to double to 163 million tonnes (MT) by 2029-30.
As of May 20, 2020, Oil Marketing Companies (OMCs) delivered 6.8 crore LPG cylinders to Pradhan Mantri Garib Kalyan Package (PMGKP)
beneficiaries.
India’s oil demand is projected to rise at the fastest pace in the world to reach 10 million barrels per day by 2030, from 5.05 million barrel per day
in 2020.
According to government data, India's natural gas production increased by 22.7% YoY in April 2021, as Reliance Industries Ltd. and its partner,
BP plc, increased production in the KG-D6 block on the east coast.
Notes: F-Forecast, MT - Million Tonnes, BCM - Billion Cubic Metres
Source: BP Statistical Review of World Energy 2019, BP Energy Outlook 2019
32Regulatory overview of the industry
1
National Policy on Biofuels, 2018
• Proposed an indicative target of 20% blending of ethanol in petrol and 5% blending of biodiesel in diesel by 2030.
• Promoted advanced biofuels through a viability gap funding scheme of Rs. 5,000 crore (US$ 745.82 million) in six years for 2G ethanol
Bio refineries along with additional tax incentives.
2
Ethanol Procurement Policy
• The Ministry of Petroleum and Natural Gas released an ‘Ethanol Procurement Policy’ on a long-term basis under the ‘Ethanol Blended
Petrol (EBP) Programme’ (October 11, 2019), which covers modalities for long-term ethanol procurement, proposed mechanisms for
long-term procurement contracts, pricing methodology and other topics.
3
Liquefied natural gas (LNG) policy
• The Ministry of Petroleum and Natural Gas released a draft LNG policy that aims to increase the country's LNG re-gasification capacity
from 42.5 million tonnes per annum (mtpa) to 70 mtpa by 2030 and 100 mtpa by 2040.
4
Open Acreage Licensing
Launched in June 2017, it allowed companies to carve out area for petroleum exploration and production. The policy, launched under
Hydrocarbon Exploration and Licensing Policy (HELP), replaced New Exploration and Licensing Policy under which bidders did not have
the freedom of carving out areas for E&P.
Source: CEAMA, India Retail Report, Business Line, IMAP India, News Sources
33FDI investments in petroleum and gas in India
FDI Inflow in Petroleum and Natural Gas between April 2000 and September 2020 (US$ billion)
8.00
0.81 7.82
0.18 0.03 0.14
7.00 1.10 0.07
6.00
2.10 0.10
5.00
4.00
2.70 0.10
3.00
2.00
1.00
0.00
FY01-FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY01-FY20
FDI inflow in India’s petroleum and natural gas sector stood at US$ 7.92 billion between April 2000 and March 2021.
India has invited global firms to invest in its strategic petroleum reserves (SPRs) owing to the country’s rising energy consumption. India’s share in
global energy consumption is set to rise from 7% to 12% in 2050.
Source: Department Of Promotion Of Industry And Internal Trade
34M&A activities in the Indian oil and gas sector
Date announced Acquirer name Target name Value of deal (US$ million)
Oil India Ltd. (54.16%), Engineers India Bharat Petroleum Corporation (Numaligarh
Mar 2021 1,361
(4.4%) and Government of Assam (3.2%) Refinery 61.5% stake)
Jan 2021 Total Adani Green Energy (20% minority stake) 2,500
Bharat Oman Refineries (BORL)
Dec 2020 Bharat Petroleum Corporation Not disclosed
(36.62% stake)
East West Pipeline (EWPL) (Previously
Mar 2019 Brookfield known as Reliance Gas Transportation 1,800
Infrastructure)
Apr 2018 Indian Oil Corporation Ltd (IOCL) Shell Exploration & Production, Oman 329
Feb 2018 ONGC HPCL (51.11% stake) 57,020.39
Abu Dhabi National Oil Co (10% stake in
Feb 2018 ONGC Videsh 600
offshore oilfield)
Aug 2017 Rosneft Essar Oil (49% stake) 1,290
Dec 2016 Oil and Natural Gas Corp's Gujarat State Petroleum Co's 1,200
Dec 2015 ONGC Videsh Ltd. (OVL) Vankor oil field 1,260
Jan 2015 Bharat Forge Mecanique Generale Langroise 12.82
Jun 2014 Gulf Petrochem Ltd. Sah Petroleums Limited 7.13
Mar 2014 IOCL Progress Energy Canada Ltd. Not disclosed
Mar 2014 IOCL Progress Energy Canada Ltd. Not disclosed
Mar 2014 IOCL Progress Energy Canada Ltd. Not disclosed
Source: Thomson Banker, News Articles
35Opportunities 36
Opportunities
3. Upstream segment
1. Midstream segment
Locating new fields for exploration: 78%
1
Expansion in the transmission network of of the country’s sedimentary area is yet to
gas pipelines. be explored.
LNG imports have increased significantly. Increasing the share of natural gas: The
This provides an opportunity to boost government is working towards increasing
production capacity. the share of gas from 6.2% (currently) to
In light of mounting LNG production, huge 15% of the energy mix by 2030.
opportunity lies for LNG terminal Development of unconventional
operation, engineering, procurement and resources: CBM fields in deep sea.
construction services. Opportunities for secondary/tertiary oil
producing techniques.
2 3
Higher demand for skilled labour and
oilfield services and equipment.
.
2. Down stream
segment
India is already a refining hub with 21 refineries, and expansion is planned for tapping foreign
investment in export-oriented infrastructure, including product pipelines and export terminals.
Development of City Gas Distribution (CGD) networks similar to Delhi and Mumbai’s CGDs.
• India is set to expand India’s natural gas grid to 34,500 kms by adding another 17,000 km
gas pipeline. The regasification capacity of the existing 42 MMT per annum will be expanded
to 61 MMT per year by the year 2022.
Indian companies are expected to spend Rs.100 billion (US$ 1.35 billion) over three years on
1,000 liquefied natural gas (LNG) stations along main roads and industrial corridors and in
mining areas to cut diesel consumption.
As per preliminary data of gasoline sales, fuel consumption in India registered growth in June
2021 and is expected to further recover by end-2021. Gasoline sales by state refiners stood
at 2.12 million tonnes in June 2021, registering an increase of 5.7% YoY.
37Key Industry Contacts 38
Contact information
Name Address Contact person Telephone E-mail
Oil Industry 3rd Floor, Tower C, Plot No. 2, Mr. Ajay Srivastava,
0120-2594630
Development Sector - 73, Noida, Uttar Financial Adviser and facao.oidb@nic.in
0120-2594603
Board (OIDB) Pradesh - 201301 Chief Accounts Officer
Petroleum
Conservation Sanrakshan Bhavan, 10 Bhikaji
91-11- 26198799
Research Cama Place, New Delhi - Mr. Alok Tripathi, ED pcra@pcra.org
Ext.301
Association 110066
(PCRA)
Ministry of Power, 4th floor,
Bureau of Energy Mr. Abhay Bakre, 91-11- 26178316,
SEWA Bhawan, RK Puram, dg-bee@nic.in
Efficiency (BEE) Director General 91-11- 26179699
New Delhi - 110066
Ministry of Petroleum & Natural
Gas,
Oil Industry Safety 8th Floor, OIDB Bhawan, Plot Mr. Varanasi
0120-2593800 rao.vj@gov.in
Directorate No 2, Janardhana Rao, ED
Sector-73, Noida, Uttar
Pradesh-201301
Ministry of Petroleum and
Petroleum Planning Natural Gas, 2nd floor, Core-8, Mr. Vinod Kumar,
and Analysis Cell SCOPE Complex, 7 Institutional Deputy Director - 011-24306153 webadm@ppac.gov.in
(PPAC) Area, Lodhi Road, New Delhi - Information Technology
110003
Ministry of Petroleum and
Directorate General Mr. Atanu Chakraborty,
Natural Gas, OIDB Bhawan, 0120 - 2472001 dg@dghindia.org
of Hydrocarbons Director General
Plot No 2, Sector 73, Noida
39Appendix 40
Glossary B/D (or bpd): Barrels Per Day MBPD (or mbpd): Million Barrels Per Day BCM (or bcm): Billion Cubic Metres CBM: Coal Bed Methane CGD: City Gas Distribution EandP: Exploration and Production FDI: Foreign Direct Investment FY: Indian Financial Year (April to March) FY20 implies April 2019 to March 2020 GoI: Government of India Rs.: Indian Rupee PM: Prime Minister LNG: Liquefied Natural Gas MMT (or MMT): Million Metric Tonne MMTPA (or mmtpa): Million Metric Tonnes Per Annum EBITDA: Earning Before Interest Taxes Depreciation Amortisation NRL: Numaligarh Refinery Limited CPCL: Chennai Petroleum Corporation Limited HPCL: Hindustan Petroleum Corporation Limited BPCL: Bharat Petroleum Corporation Limited 41
Glossary IOC: Indian Oil Corporation Ltd EOL: Essar Oil Ltd RPL: Reliance Petroleum Limited MRPL: Mangalore Refinery and Petrochemicals Limited PCCK: Petronet Cochin-Coimbatore-Karur PMHB: Petronet Mangalore-Hassan-Bangalore OALP: Open Acreage Licensing Policy TOE (or toe): Tonnes of Oil Equivalent US$ : US Dollar ONGC: Oil and Natural Gas Corporation of India IOCL: Indian Oil Corporation Limited mn bbl: Million Barrels CAGR: Compound Annual Growth Rate JV: Joint Venture UCG: Underground Coal Gasification NGL: Natural Gas Liquids OMCs: Oil Marketing Companies NHGP: National Gas Hydrate Programme Wherever applicable, numbers have been rounded off to the nearest whole number 42
Exchange rates
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Year Rs. Equivalent of one US$ Year Rs. Equivalent of one US$
2004-05 44.95 2005 44.11
2005-06 44.28 2006 45.33
2006-07 45.29 2007 41.29
2007-08 40.24 2008 43.42
2008-09 45.91 2009 48.35
2009-10 47.42 2010 45.74
2010-11 45.58 2011 46.67
2011-12 47.95 2012 53.49
2012-13 54.45 2013 58.63
2013-14 60.50 2014 61.03
2014-15 61.15 2015 64.15
2015-16 65.46 2016 67.21
2016-17 67.09 2017 65.12
2017-18 64.45 2018 68.36
2018-19 69.89 2019 69.89
2019-20 70.49 2020 74.18
2020-21 73.20 2021* 72.68
Note: As of June 2021
Source: Reserve Bank of India, Average for the year
43Disclaimer India Brand Equity Foundation (IBEF) engaged Sutherland Global Services Private Limited to prepare/update this presentation. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF, delivered during the course of engagement under the Professional Service Agreement signed by the Parties. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Sutherland Global Services’ Private Limited and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Sutherland Global Services Private Limited and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability, damages or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Sutherland Global Services Private Limited nor IBEF shall be liable for any special, direct, indirect or consequential damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation. 44
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