Bharat Petroleum Corporation Ltd. August 2019 - Investor Presentation
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Bharat Petroleum Corporation Ltd.
Investor Presentation
August 2019
Disclaimer
No information contained herein has been verified for truthfulness completeness, accuracy, reliability or otherwise whatsoever by anyone. While the
Company will use reasonable efforts to provide reliable information through this presentation, no representation or warranty (express or implied) of any
nature is made nor is any responsibility or liability of any kind accepted by the Company or its directors or employees, with respect to the truthfulness,
completeness, accuracy or reliability or otherwise whatsoever of any information, projection, representation or warranty (expressed or implied) or
omissions in this presentation. Neither the Company nor anyone else accepts any liability whatsoever for any loss, howsoever, arising from use or
reliance on this presentation or its contents or otherwise arising in connection therewith.
This presentation may not be used, reproduced, copied, published, distributed, shared, transmitted or disseminated in any manner. This presentation is
for information purposes only and does not constitute an offer, invitation, solicitation or advertisement in any jurisdiction with respect to the purchase or
sale of any security of BPCL and no part or all of it shall form the basis of or be relied upon in connection with any contract, investment decision or
commitment whatsoever.
The information in this presentation is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may
not contain all material information concerning the Company. We do not have any obligation to, and do not intend to, update or otherwise revise any
statements reflecting circumstances arising after the date of this presentation or to reflect the occurrence of underlying events, even if the underlying
assumptions do not come to fruition.
2
Table of Contents
1. Corporate Overview 4
2 Business Overview 8
3. Industry Overview 23
3
1. Corporate Overview
Credit Highlights
4
Introduction
• India’s 6th largest company by turnover over INR 3,376 bn in MMT
FY19 and INR 2,773 bn in FY18 FY19 43.1
Market Sales
FY18 41.2
• India’s 2nd largest Oil Marketing Company (OMC) with FY17 37.7
domestic sales volume of over 43.07 MMT in FY19 and 41.21 FY16 36.5
MMT in FY18 FY15 34.5
0 10 20 30 40 50
− Domestic market share of 21% during FY19
• Majority Govt. of India shareholding of 53.29% and explicit Govt.
MMT
support through under-recovery compensation mechanism
Refining Capacity
• # 275 ranking on Fortune 2019 global list; ranks 6th among the
only seven Indian companies on the list
36.5 38.3 38.3
30.5 30.5
• The Govt. of India conferred BPCL with “MAHARATNA” status
in Sep 2017
FY16 FY17 FY18 FY19 Jun-19
• Well positioned to meet market demand across India through
INR bn
Strategically located Refineries and Marketing Infrastructure 939.79 927.25
Market Capitalization^
833.65 851.32
• Successful foray into upstream business. 653.9
• Ratings at par with the Sovereign
− Baa2 (Outlook Positive) by Moody’s / BBB- (Outlook
Stable) by Fitch
FY16 FY17 FY18 FY19 Jun-19
^ Market capitalization figures as on period end
FY means Financial year ending 31st March
Source: National Stock Exchange
India’s Leading Oil and Gas Company with presence across the Hydrocarbon Value Chain
5
Important Milestones
GoI acquired Burmah BPCL and GAIL BPCL entered the LNG MR Kochi CCR1 unit at Formation of Bharat Gas
Shell Refineries. Name formed a JV, market by signing a gas capacity Refinery Mumbai Resources Limited for focus
changed to BPCL in IGL, for sales purchase enhanced capacity Refinery on Gas business
1977 distribution of agreement with Petronet to 12 enhanced commission 2018
Natural Gas in LNG MMTPA to 9.5 ed in March Bina capacity enhanced to
entire capital MMTPA 2014 7.8 MMTPA
2017
region
2016
2015
2014
2012 conferred with
“MAHARATNA”
2011 status in Sep
2017
2009 KR modernized
2008 and capacity
2007 enhanced to 15.5
2006 MMTPA
2003
2002 Acquisition of upstream
1976 1998 assets in Russia
Integrated Refinery
Expansion Project
(IREP) at Kochi
Started operations at its Refrigerated
Bina refinery by launching LPG storage
and handling Commissioned Energy
Entered into its crude distillation unit Efficient CDU IV with
facility at
Restructured business into upstream business Commissionin
JNPT and replacement of CDU I & II at
corporate centre, Strategic First in the Indian and formed Bharat Euro III / IV products g of 6 MMTPA Mumbai Refinery
Oil Industry to roll Uran LPG
Business Units (SBU) and Petro Resources launched at Mumbai and Bina Refinery Commissioned Kota Jobner
out ERP Solution plant
Shared Entities Limited (BPRL) Kochi Refinery Pipeline and Terminal
commissioned
6Major Subsidiaries/ JVs
Subsidiaries Joint Ventures & Associates
City Gas Aviation
Upstream Refining Refining Pipelines Trading Activities
Distribution Services
100.00% 61.65% 50.00% 50.00% 50.00%
50.00% 22.50%
Bharat Oman Kochi Salem Bharat Stars
Indraprastha Gas Matrix Bharat
Refineries Limited Pipeline Pvt. Services Pvt
Limited Pte Limited
Limited Limited
25.00% 25.00% 11.00% 37.00%
Bharat
Numaligarh Ratnagiri Refinery Delhi Aviation
PetroResources Central UP Gas GSPL India
Refinery Limited & Petrochemicals Fuel Facility (P) LNG
Limited Limited Transco
Limited Limited
12.50%
22.50% 11.00% 21.68%
Maharashtra Kannur
GSPL India Petronet LNG
Natural Gas International
Aviation Gasnet Limited
Gas Limited Airport Ltd.
Services
49.94% 25.00%
100.00% 74.00%
Bharat Gas BPCL-KIAL Fuel Mumbai Aviation
Sabarmati Gas Others
Resources Farm Facility Pvt. Fuel Facility (P)
Limited
Limited Ltd. Limited
50.00%
20.73%
Haridwar Natural
Gas Private FINO Paytech
Limited Ltd
7 50.00%
7
Goa Natural Gas
Pvt. Ltd.2. Business Overview
Credit Highlights
8Diversified Product Offering and Presence Across Value Chain
Industrial/
Refinery
Aviation Retail LPG Aviation Lubricants Gas
Commercial
Refining capacity 26% market 26.68% market Currently 8,000+ 26% market 18.83% market 50+ major LNG
of 38.3 MMTPA share1 share1 customers share1 in ATF share1 customers
15% of the 14,802 retail Currently 5,907 56 Aviation Currently 16,000
country’s outlets distributors service stations customers
refining capacity 123 depots 52 LPG bottling More than 1000+
/installations plants grades of
products
Strategically Pan India Various Reliable, Present at all Major OEM tie Emerging
located presence across Innovative innovative and the major ups such as Markets
refineries products offerings with caring supplier gateways and Tata Motors,
ventures in of I&C products airports for into Honda, Genuine
allied business plane services Oil, TVS etc.
100% subsidiary
Four refineries Pioneer in Current Pioneer in IT Fuel Farm Product BGRL for focus
in Mumbai, branded retail customer base integration and Operations customization on Gas business
Kochi, outlets, branded of 68mn incl. Supply Chain through City gas
Numaligarh and fuels ex: Speed retail and bulk Management MAFFFL and distribution
Bina DAFFL networks in 10
cities + 13 new
GAs
1. Market share includes sale by PSU as well as private oil marketing companies. All figures as of 30th June 2019
2. Source : Ministry of Petroleum and Natural Gas.
9Refining Coverage
Installed Capacity Refining Throughput
Refining Capacity
Mumbai – 12 MMTPA
Kochi – 15.5 MMTPA
BORL – 7.8 MMTPA
Numaligarh – 3 MMTPA
MMTPA
Capacity Utilization consistently above nameplate capacities
State of the art refinery at Bina
* Bina Refinery throughput is considered proportionately because it’s a 50:50 JV
Four Strategically located Refinery Utilization rates above 935-km cross country pipeline to
refineries across India name-plate capacities source crude to BORL
10Bina Refinery
Bharat Oman Refineries Limited (BORL) – BPCL
Interest 50% with 7.8 MMT Refining capacity at
BINA
State of art technologies - High Nelson Complexity
Index 9.1
NRL Refinery
Associated Facilities – SPM, Crude Oil Terminal,
935-km cross country crude oil pipeline from
Vadinar to Bina (VBPL)
Mumbai Refinery
Bina Kota Pipeline for evacuation of products
Low cost capacity expansion from 6 MMTPA to 7.8
MMTPA
Kochi Refinery
GRM of $7.5/bbl during Q1FY20 and $9.8/bbl
during FY19
Pipelines :
Bina refinery to consolidate refining portfolio required to support downstream retailing market in Northern and Central India
11Numaligarh Refinery
Numaligarh Refineries Limited (NRL) – BPCL Interest 61.65% with 3 MMT Refining capacity in the north-
eastern state of Assam
Largest producer of paraffin wax in the country
GRM of $10.67/bbl during Q1FY20 and $11.8/bbl during FY19
Expansion Plans Other Projects
Capacity expansion from from 3 to 9 MMTPA Diesel Hydrotreater Project with capex of
Rs.1031 crores completed in Jan 2018
Total Project Cost of Rs.22,594 crores
Bio-refinery through JV planned at a cost of
Integrated with an 8 MMTPA 1,398 km crude Rs.1,259 crores at Numaligarh
pipeline from Paradip to Numaligarh
129.5 km India Bangladesh Product Pipeline
Integrated with a 6 MMTPA 650 km product at a cost of Rs.346 crores including
pipeline from Numaligarh to Siliguri Government Grant-in-Aid of Rs.285 crores
Numaligarh refinery to consolidate refining portfolio required to support downstream retailing market in North-eastern India
12Marketing Operations and Efficiencies
SBU Market Sales (MMT) Retail Market Share of
MS & HSD *
42.00 41.21 43.07
36.53 37.68
37.00 34.45
32.00
MS > 28.60%
Retail
27.00 Lubes
22.00 Direct
17.00 Aviation HSD > 28.67%
12.00 LPG
7.00
2.00
(3.00) FY15 FY16 FY17 FY18 FY19
LPG Bottling Plant Capacity (TMTPA) Thru’put per Outlet BPC Vs. Industry (KL/month)
4500
4212 250
4300
225 200
4100 3957 176
200 169 178
3900
3687
3700 175
3500 3363 Capaci ty 150
3300 125
3075 Apr-Jun 19
3100 100
2900 75
2700 50
2500 25
FY15 FY16 FY17 FY18 FY19
0
BPC IOC HPC Industry
* Market share is PSU Market share on Jun 19
Leading Player with a Diversified product portfolio and a well-established Marketing and Distribution network
13Ongoing projects – thriving to be self sufficient integrated source of fuel supply
Kochi Refinery – MS Block Project for Euro VI grade gasoline
Mumbai Refinery – Gasoline Hydro-treatment Unit
Kochi – Diversification into Niche Petrochemicals – Propylene Derivatives Petrochemical
Project (PDPP)
Retail : Network expansion with infrastructure growth and upgradation
LPG import terminal at Haldia, West Bengal
Bina Kanpur Product Pipeline
Significant Expansion in Downstream & Marketing network to drive future growth
14Upcoming projects
Investments in Mozambique – FID completed
Refineries – Upgrade/ Expansion / De-bottlenecking
NRL Refinery –Capacity Expansion from 3 MMTPA to 9 MMTPA
Investments in Gas – 11 GAs in 9th round and 2 GAs in 10th round
Expansion of marketing infrastructure across all business verticals
Bio-refinery at Bargarh
Polyol Project at Kochi
New facilities at Rasayani near Mumbai
6000 new retail outlets in the next three years
More expansions in Upstream, Downstream business & Marketing network
15Capex Strategy
Capital Expenditure / Plan* (Rs.Bn)
147.79
109.82 124.88
89.98 79.50
FY18 FY19 FY20 FY21 FY22
FY18 FY19 FY20 FY21 FY22
* Capex Plan excludes investment in Mozambique and projects pending approval
Strategically expanding upstream activities through inorganic and organic growth opportunities
Investment in refining and distribution capacity to bridge the gap between sales volumes and production
Expand capacities and improve efficiencies at existing installation and refineries
Create opportunities with the manufacture of niche and bulk petrochemicals
Improve margin and value through facility upgrades
Significant Expansion in Upstream and Downstream business to drive future growth
16Improved Financial Performance
Net Worth (INR bn) Total Debt / EBITDA
341.31 367.38 377.08 2.3x
296.68
1.7x
1.6x
1.5x
FY17 FY18 FY19 Jun-19
FY17 FY18 FY19 Jun-19
Total Debt / Equity
0.78x 0.79x
0.68x 0.66x
FY17 FY18 FY19 Jun-19
Stable Earnings and Sound Financial Leverage driving Credit Strength
17Improved Financial Performance
90.00
80.00
70.00
Net Profit (Rs. bn)
60.00
50.00
70.56 71.32
40.00 80.39 79.19
30.00 50.85
40.61
20.00 26.43
10.00
-
FY13 FY14 FY15 FY16 FY17 FY18 FY19
Profit after Tax (Rs. Bn)
Adjusted Debt-Equity Ratio (1) Adjusted Capital Employed (INR Billion) (1)
400 700
0.80 0.54 0.65 0.52 Net Worth Borrowings Capital employed
0.60 350 607 600
0.40 300 523 500
475
250
- 380 400
200
FY17 FY18 FY19 Jun 19 305 300
150
200
100
De bt: Equity ratio
50 100
(1) Adjusted for bonds outstanding as on period end - -
FY15 FY16 FY17 FY18 FY19
Stable Earnings and Sound Financial Leverage driving Credit Strength
18BPRL’s Upstream Story over the years…….
2019
2018
2017
2016
2015
2013 Overseas
Onshore
2012 Entry in Lower Operatorship –
Declaration of Zakum Abu Dhabi
Commerciality
2011 22 Russian approved in Mozambique
Acquisition Operatorship
FID
discoveries
(cumulative) block
Schedule B
2010
Indonesia Lead
entry operator
2009 Joint
operator
Shale gas
2008 entry Australia
NELP VI
(5 blocks)
Brazil
2007
& Mozambique
acquisition
2006
Formation
of BPRL
2003
Formation of E&P
setup in BPCLUpstream Global Spread
BPCL through its subsidiary BPRL has Participating Interests in 26 blocks across 6 countries and Equity Participation in Vankor and Taas in Russia
−Estimated recoverable reserves of about 75 TCF till date in Rovuma basin (Mozambique)
−Production 20 MMTPA by Vankor (currently at peak) and 1.2 MMTPA by Taas
26 Exploration Discoveries
2 TAAS 9.86%
Russia#
2 Vankorneft 7.88%
Country Nos Name of Block PI%
Block in Appraisal stage
Producing Blocks
FID completed
3 Cauvery Basin 20 % - 100%
3 Rajasthan 33.3, 100%
India 3 Cambay 25%
1 Assam-Arakan 20%
3 Mumbai Basin 20,100%
Indonesia 1 Nunukan 12.5%
1 BM-C-30 12.5% East Timor 1 JPDA 06/103 20%
Brazil* 3 BM-SEAL-11 20%
10%
Mozambique 1 Area 1 Offshore
2 BM-POT-16 10%
Discovery location Israel 1 Block 32 25%
* Held through 50-50 JV with Videocon Ind.
Australia # Held through SPVs with OIL & IOCL
1 EP413 28%
1 Lower Zakum 3% ^ Held through SPV with ONGC Viesh and IOCL
UAE
1 Onshore1Global Upstream Footprint
Partnership with established Oil and Gas operators expected to generate optimal returns for BPCL.
Within India Brazil Australia and East Timor
BPCL BPCL
Exploration Block Operator Partners BPCL Exploration Block Operator Partners
Stake Exploration Block Operator Partners Stake
Stake1
NELP—IV GSPC,
BM-SEAL-11
Petrobras 20.0% Videocon Videocon,
CY/ONN/2002/2 ONGC 40.0% ONGC (3 blocks)
Japan
NELP—VI JPDA 06-103 Oilex 20.0%
BM-C-30 Videocon, Energy, Pan
CY/ONN/2004/2 ONGC 20.0% ONGC BP* 17.85% Pacific
(1 block) Total
NELP—VII Petroleum
BM-POT-16 Videocon, Norwest
RJ/ONN/2005/1 HOEC, BPRL 33.33% IMC Petrobras 10.0% EP-413 27.8% AWE Perth Pty
(2 blocks) Petrogal, BP Energy Limited
NELP—IX
GAIL, EIL, BIFL, Mozambique Russia
CB/ONN/2010/11 25.0%
BPRL MIEL BPCL BPCL
Exploration Block Operator Partners Block Operator Partners
AA/ONN/2010/3 OIL 20.0% ONGC Stake Stake
BPRL, EIL, BIFL, PTTEP, Rosneft,
CB-ONN-2010/8 25.0% Vankor
GAIL MIEL Mozambique Mitsui and Vankorneft 7.89%2 OIL, IOCL,
Anadarko 10.0% (2 Blocks)
MB-OSN-2010/2 OIL 20.0% HPCL Rovuma Basin Co., ENH, ONGC
OVL-OIL
DSF 2016 TAAS- Yuryakh Rosneft, BP,
TYNGD 9.87%3
5 Blocks BPRL 100.0% - (2 Blocks) OIL, IOCL
United Arab Emirates
OALP-I BPRL 100.0% -
Indonesia Block Operator
BPCL
Other Partners
Israel
Stake
BPCL BPCL
Exploration Block Operator Partners CNPC, INPEX, ENI, Exploration Block Operator Partners
Stake Stake
Lower Zakum ADNOC 3% Total, Falcon Oil,
Nunukan PSC, Videocon IOCL ONGC
Pertamina 12.5% Block 32 25% IOCL, OIL
Tarakan Basin Industries (50:50 SPV of BPRL
Videsh
Urja
Onshore 1 50%
Bharat & IOCL)
1. BPCL’s effective stake held through 50:50 JV with Videocon.
2. BPCL’s effective stake held through its 33% stake in the JV with Oil India and Indian Oil for the 23.9% stake acquisition of JSC Vankorneft (Vankor)
3. BPCL’s effective stake held through its 33% stake in the JV with Oil India and Indian Oil for the 29.9% stake acquisition of Tass-Yuryakh Neftegazodobycha (TYNGD)
4. BPCL’s effective stake held through SPV with ONGC Videsh & IOCL
* The operator, Anadarko
21 resigned from the operatorship and withdrew from the concession contract in March 2018. BP has been selected as the new Operator and formal approval is being obtained from the Regulator for PI redistribution and
appointment of new Operator.Highly Experienced Management Team
223. Industry Overview
Corporate Overview
Credit Highlights
23India – Attractive Industry Dynamics
Significant potential for domestic O&G companies given low per-capita oil consumption and growing demand.
Per Capita Oil Consumption India Oil Demand
bbl/day per 1,000 People Million Tonnes
India 3 83.5
FY19 28.3
China 9 24.9
81.1
Brazil 15
FY18 26.2
23.3
Russia 22
76.0
UK 24 FY17 23.8
21.5
Germany 29
74.6
FY16 21.8
Australia 42
19.0
US 60 69.3
FY15 19.1
Singapore 242 17.6
Diesel Petrol LPG
Source: Oil Consumption from BP Statistical Review 2016,Population from World Bank, Estimates 2015 Source: PPAC
24Indian Oil Industry
Positive Policy actions
• Petrol Prices De-regulated completely
• Gasoil (Retail) – Deregulation announced effective 19th October 2014
• Gasoil – Bulk sales completely deregulated since January 2013
• Restricted supply/Targeted subsidies for cooking fuel products
• LPG DBTL scheme - Domestic LPG fully enrolled
• SKO PDS DBTK scheme – launched on pilot basis in 4 districts and now implemented in the state of
Jharkhand
• Govt. has consistently compensated OMCs including BPCL for under recoveries and ensured reasonable
profitability
Strategic position in the Indian economy with way to deregulation of fuel sector in the country
25Thank You
You can also read
