India Oil and Gas Report Q3 2012

While India’s upstream oil prospects appear to be limited, the discovery and ongoing development
of significant gas resources has changed the import picture for the better, but has thrown the gas sector into
turmoil as the industry struggles to assess its future LNG needs. Demand trends remain healthy and there is a
requirement for continued investment in refining capacity and a growing reliance on foreign crude. Licensing
remains a hit and miss process, with disappointing results from the most recent round likely to trigger changes
to the licensing process.

We highlight these trends and developments in India’s oil and gas sector:

• India’s average oil and liquids production for 2012 is assumed by BMI to be 1.03mn barrels per day (b/d). We are predicting 1.11mn b/d of peak production in 2015, which we expect to decline to 1.04mn b/d by 2021. Given forecast consumption of 4.95mn b/d, implied 2021 oil imports are put at 3.96mn b/d. BMI’s demand outlook suggests consumption of an estimated 3.28mn b/d in 2011 will rise steadily to 4.09mn b/d by 2016.
• Gas demand is rising fast across the industrial, residential and power sectors. Consumption has risen more than 160% since 1995. Average annual demand growth of at least 6% is forecast over the next several years, accelerating as domestic field development and liquefied natural gas (LNG) import deals make more gas available. We are assuming 2012 gas production will be around 55bn cubic metres (bcm). We are predicting total gas consumption of around 91.5bcm in 2016, up from an estimated 71.1bcm in 2012. By 2021, demand is put at 128.3bcm, requiring imports of 43.3bcm.
• Growth in near-term oil production is expected from the Rajasthan block, while we see gas production in the KG Basin recovering following BP’s farm-in with Reliance. Greater development of offshore and unconventional gas resources should result in a rise in gas production, although this rise will not be enough to reduce LNG imports, which will also rise concomitant with demand.
• In March 2012, India''s government announced the results of the NELP IX licensing round, almost a year since its conclusion. Of the 34 blocks on offer, only 16 blocks have been awarded licenses. Staterun oil companies dominated the tender, obtaining operating rights for almost half of the awarded blocks. Also significant is the number of unsuccessful bids for deepwater blocks. India could hold its first shale licensing round by end-2013, according to Prime Minister Manmohan Singh. On March 23 2012, he said: ''The mapping of India''s shale gas resources has been undertaken and we are working to put in place a regulatory regime for licensing rounds by end-2013.''
• India’s refining segment will enjoy rapid expansion over the coming decade, with new projects adding to the country’s already-large refining capacity. India is set to overtake Singapore as Asia’s top exporter of refined fuels over the forecast period (2011-21).
• India’s import dependency will become increasingly expensive. At the time of writing we assume an OPEC basket oil price for 2012 of US$111.47/bbl, falling to US$107.00/bbl in 2013. For 2012, oil and gas import costs are put at US$105.4bn, but could reach US$117.8bn in 2016 and rise to US$159.3bn by 2021.

Indian Oil and Gas Industry Report Q3 2012

Published: June 2012         No. of Pages: 111          Price:  US $ 1175         

Table of Contents

BMI Industry View 7
SWOT Analysis 9
India Oil & Gas SWOT... 9
Global Energy Market Outlook. 10
Table: Oil Production Forecasts, 2010-2016 (‘000 b/d) .. 10
Table: Oil Consumption Forecast, 2010-2016 (‘000 b/d) 16
Regional Energy Market Outlook. 17
India Energy Market Overview . 22
Table: India – Upstream Project Database .. 23
Industry Forecast Scenario .. 24
Table: Oil & Gas – Historical Data And Forecasts, 2009-2016. 24
Table: Oil & Gas – Long-Term Forecasts, 2014-2021 25
Oil And Gas Reserves . 26
Oil Supply And Demand.. 27
Gas Supply And Demand 29
Unconventional Gas 30
LNG. 32
Refining And Oil Products Trade ... 33
Revenues/Import Costs 34
Key Risks To BMI’s Forecast Scenario.. 34
Oil and Gas Infrastructure 35
Oil Refineries . 35
Table: Refineries In India.. 35
Bina Refinery . 36
Vizag Refinery 36
Paradip Refinery 37
Bhatinda Refinery .. 37
Other Refinery Projects . 37
Service Stations.. 38
Oil Storage Facilities. 38
Oil Pipelines .. 38
LNG Terminals .. 38
Table: LNG Terminals In India. 39
Ratnagiri LNG ... 39
Kochi LNG. 40
Orissa LNG 40
Gas Storage Facilities ... 40
Gas Pipelines . 41
Regional and Country Risk/Reward Ratings .. 43
Table: Upstream Risk / Reward Ratings ... 47
Table: Downstream Risk / Reward Ratings .. 47
India Upstream Rating – Overview... 48
India Upstream Rating – Rewards 48
India Upstream Rating – Risks.. 48
Regional Downstream Risks/Rewards... 49
India Downstream Rating – Overview .. 49
Competitive Landscape 50
Table: Key Players – India Oil And Gas Sector ... 51
Overview/State Role 52
Licensing and Regulation .. 52
Government Policy 53
Licensing Rounds... 55
International Energy Relations . 57
Table: Key Upstream Players 58
Table: Key Downstream Players... 58
Company Monitor .. 59
Oil & Natural Gas Corporation (ONGC) .. 59
Indian Oil Corporation (IOC) 62
Reliance Industries.. 65
Oil India Ltd (OIL).. 69
Hindustan Petroleum Corporation Ltd (HPCL). 72
Bharat Petroleum Corporation Ltd (BPCL)... 75
GAIL (India) 77
Cairn India.. 80
Essar Oil.. 82
Gujarat State Petroleum Corporation 85
Petronet LNG.. 88
BP – Summary ... 90
BG Group – Summary ... 90
Shell – Summary 91
Total – Summary 91
Oilex – Summary 92
Eni – Summary... 92
Asia – Regional Appendix 94
Table: Oil Consumption (000b/d), 2009-2016. 94
Table: Oil Consumption Long-Term Forecasts (000b/d) . 94
Table: Oil Production (000b/d), 2009-2016 95
Table: Oil Production Long-Term Forecasts (000b/d). 96
Table: Refining Capacity (000b/d), 2009-2016 96
Table: Refining Capacity Long-Term Forecasts (000b/d) 97
Table: Gas Production (bcm), 2009-2016 98
Table: Gas Production Long-Term forecasts (bcm) . 98
Table: Gas Consumption (bcm), 2009-2016 . 99
Table: Gas Consumption Long-Term forecasts (bcm) 100
Table: LNG Exports (bcm), 2009-2016... 100
Table: LNG Exports (bcm), 2014-2021... 101
Methodology And Risks To Forecasts .. 102
Glossary Of Terms... 103
Table: Glossary of Terms 103
Oil And Gas Risk/Reward Ratings Methodology.. 105
Ratings Overview .. 105
Table: BMI’s Oil & Gas Business Environment Ratings – Structure. 106
Indicators .. 106
Table: BMI’s Oil & Gas Upstream Ratings – Methodology... 106
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology. 107
BMI Methodology. 109
How We Generate Our Industry Forecasts .. 109
Energy Industry. 109
Cross checks.. 110
Sources .. 110Table: Oil Production Forecasts, 2010-2016 (‘000 b/d) . 10
Table: Oil Consumption Forecast, 2010-2016 (‘000 b/d) . 16
Table: India – Upstream Project Database . 23
Table: Oil & Gas – Historical Data And Forecasts, 2009-2016. 24
Table: Oil & Gas – Long-Term Forecasts, 2014-2021. 25
Table: Refineries In India. 35
Table: LNG Terminals In India. 39
Table: Upstream Risk / Reward Ratings . 47
Table: Downstream Risk / Reward Ratings . 47
Table: Key Players – India Oil And Gas Sector . 51
Table: Key Upstream Players. 58
Table: Key Downstream Players. 58
Table: Oil Consumption (000b/d), 2009-2016. 94
Table: Oil Consumption Long-Term Forecasts (000b/d) . 94
Table: Oil Production (000b/d), 2009-2016 . 95
Table: Oil Production Long-Term Forecasts (000b/d). 96
Table: Refining Capacity (000b/d), 2009-2016 . 96
Table: Refining Capacity Long-Term Forecasts (000b/d). 97
Table: Gas Production (bcm), 2009-2016 . 98
Table: Gas Production Long-Term forecasts (bcm) . 98
Table: Gas Consumption (bcm), 2009-2016 . 99
Table: Gas Consumption Long-Term forecasts (bcm). 100
Table: LNG Exports (bcm), 2009-2016. 100
Table: LNG Exports (bcm), 2014-2021. 101
Table: Glossary of Terms . 103
Table: BMI''s Oil & Gas Business Environment Ratings – Structure. 106
Table: BMI''s Oil & Gas Upstream Ratings – Methodology. 106
Table: BMI''s Oil & Gas Business Environment Downstream Ratings – Methodology. 107