India Oil and Gas Report at MarketReportsOnline.com

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. However, the gas sector has been
thrown into turmoil as the industry struggles to assess its future LNG needs. Oil demand trends are being
distorted by subsidies and price differentials 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 set to trigger changes.

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

• BMI estimates Indian total liquids production at 984,000 barrels per day (b/d) in 2011. This figure is set to remain at around this level during 2012, before edging higher in 2013 on the back of rising production from the Bhagyam and Mangala fields in the Rajasthan block. Production at Mangala has ramped up to the currently approved plateau rate of 125,000b/d. In addition, Bhagyam has the potential to produce 40,000b/d and Aishwariya another 10,000b/d.
• The second largest field, Bhagyam, came onstream in January 2012. Following the government’s approval of higher Mangala offtake of 150,000b/d, production at the block has been raised to 175,000b/d. Beyond 2015, we have pencilled in a year-on-year (y-o-y) decline in Indian production, pending the commercialisation of new oil discoveries. Oil imports are forecast at 2.41mn b/d in 2012 and are set to exceed 3.0mn b/d by 2016. BMI’s demand outlook suggests consumption of an estimated 3.40mn b/d in 2012 will rise steadily to 4.04mn b/d by 2016. Given forecast consumption of 4.89mn b/d, implied 2021 oil imports are put at 3.96mn b/d .
• Gas demand is rising fast across the industrial, residential and power sectors and 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 LNG import deals make more gas available. We expect 2012 gas production to be around 48bcm. We are predicting total gas consumption of almost 113bcm in 2016, up from an estimated 77bcm in 2012. By 2021, demand is put at 152bcm, requiring net imports of 77bcm.
• India has set up a committee to review the country''s existing production sharing contracts (PSCs) with il and gas companies. According to an official statement, the objective is to ''look into the design of future PSCs in order to ‘enhance production of oil and gas and the government''s share’ while ‘minimising procedures for monitoring the expenditure of producers’. The main issues in this review are: profit-sharing mechanism in PSCs; alternative models that can maximise output (and the government''s associated share) more effectively; how to improve the management of PSC implementation; and possible reforms to the gas price regulatory mechanism. India Oil & Gas Report Q4 2012 © Business Monitor International Ltd Page 8
• In March 2012, India''s government announced the results of the NELP IX licensing round, almost a year after its conclusion. Of the 34 blocks on offer, only 16 blocks have been awarded licences. 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 import dependency will become increasingly expensive. At the time of writing we assume an OPEC basket oil price for 2012 of US$107.10/bbl, falling to US$99.10/bbl in 2013. For 2012, oil and gas import costs are put at US$109.9bn, but could reach US$131.4bn in 2016 and rise to US$167.3bn by 2021.

India Oil and Gas Report

Published: September 2012                      No. of Pages: 118                      Price: US $ 1175

 

Table of Contents

BMI Industry View ... 7
SWOT Analysis 9
India Oil & Gas SWOT 9
Global Energy Market Outlook .. 10
Oil: Getting Closer To Emerging Markets Inflection Point 10
Regional Energy Market Outlook .. 18
India Energy Market Overview .. 24
Industry Forecast Scenario ... 27
Oil And Gas Reserves .. 29
Oil Supply And Demand ... 30
Gas Supply And Demand . 32
Unconventional Gas 33
LNG . 34
Refining And Oil Products Trade . 36
Revenues/Import Costs. 37
Key Risks To BMI’s Forecast Scenario 37
Oil and Gas Infrastructure . 38
Oil Refineries .. 38
Bina Refinery .. 39
Vizag Refinery . 39
Paradip Refinery . 40
Bhatinda Refinery ... 40
Other Refinery Projects .. 40
Service Stations ... 41
Oil Storage Facilities .. 41
Oil Pipelines ... 41
LNG Terminals ... 41
Ratnagiri LNG 42
Kochi LNG .. 43
Orissa LNG . 43
Gas Storage Facilities 43
Gas Pipelines .. 44
Regional And Country Risk/Reward Ratings .. 46
O&G Asia Risk/Reward Ratings . 46
India Upstream Rating – Overview . 50
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India Upstream Rating – Rewards .. 50
India Upstream Rating – Risks ... 51
Regional Downstream Risks/Rewards. 51
India Downstream Rating – Overview 51
Competitive Landscape 52
Table: Key Players – India Oil And Gas Sector .. 53
Overview/State Role . 54
Licensing and Regulation ... 54
Government Policy . 55
Licensing Rounds 57
International Energy Relations ... 60
Company Monitor .. 62
Oil & Natural Gas Corporation (ONGC) 62
Indian Oil Corporation (IOC) .. 65
Reliance Industries .. 68
Oil India Ltd (OIL) .. 72
Hindustan Petroleum Corporation Ltd (HPCL) ... 75
Bharat Petroleum Corporation Ltd (BPCL) . 78
GAIL (India) 82
Cairn India .. 85
Essar Oil .. 89
Gujarat State Petroleum Corporation .. 92
Petronet LNG ... 95
BP – Summary 97
BG Group – Summary . 97
Shell – Summary . 98
Total – Summary . 98
Oilex – Summary. 99
Eni – Summary 99
Asia – Regional Appendix ... 101
Methodology And Risks To Forecasts ... 109
Glossary Of Terms .. 110
Oil And Gas Risk/Reward Ratings Methodology .. 112
Ratings Overview 112
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Indicators 113
BMI Methodology 116
How We Generate Our Industry Forecasts .116
Energy Industry ..116
Cross checks ...117
Sources ...117