Oil India Limited

Presentation

March, 2014
Strictly Private and Confidential

Oil India: Brief Overview

Rich Heritage

Independent Indias first commercial oil discoveries, with the

first one being made in 1953

Integrated O&G Player

Presence across Oil & Gas Value Chain (E&P, Transportation

and Downstream)

World Class Infrastructure to support growth

Large Acreage

Strong Reserve Base

Strong Financials

Domestic acreage: 86,194 square kilometers (55 blocks)

International acreage: 39,325 square kilometers

Total 2P reserves of over 909 mmboe; with reserve

replacement ratio of over 164% in FY13

Total Revenue: Q3 FY14 - Rs 3,052 crore, 9M FY14 -8,686 crore

PAT : Rs. Q3 FY14 - Rs 903 crore, 9M FY14 - 2,416 crore

Indias Premier Oil & Gas Navratna Company Engaged in the Exploration, Development,
Production and Transportation of Crude Oil and Natural Gas in India
2

OIL Shareholding Structure

Others
15.1%
DII
6.9%

Listed on BSE / NSE

FII
9.6%

Number of shares: 601.14 mn

GOI

68.4%

Dividend FY13
Dividend/Share: Rs.30

Share price (52 Week High / Low) : Rs.629 / Rs.415

Market Cap: Rs.27,667 crore

(1) Market cap as on 12.02.2014

Key shareholders

% Shareholding

Indian Oil Corporation

4.45%

Bharat Petroleum Corporation

2.23%

Hindustan Petroleum Corporation

2.23%

HSBC Bank (Mauritius) Ltd.

1.99%

HDFC Standard Life Insurance Co. Ltd.

1.01%

Life insurance Corporation of India

0.93%

HDFC Trustee Co. Ltd. - Top 200 Fund

0.90%

HDFC Trustee Co. Ltd.- HDFC Equity Fund

0.88%

ICICI Prudential Life Insurance Co. Ltd.

0.76%

Evolution and Key Milestones

OIL enters the field of installation,
commissioning and maintenance
of Crude oil pipelines

LPG plant setup using Turbo

Expander
Technology

Completed construction of a
401km pipeline from Duliajan to
Guwahati and a 756km pipeline
from Guwahati to Barauni

1959

1961

Formed as a
JV with
Burmah Oil
Company

19621963

Transformed into
equal
partnership JV
company
between Burmah
Oil Company
and Government
of India

1981

1982

Became a wholly
owned
Government of
India enterprise

Entered into a MoU

with IOCL for
pursuing overseas
exploration and
production
opportunities

1999

2004

Participated first
time in NELP

"Company of the year" among all

Navratna and Miniratna companies at
the PSE Excellence Award
E&P Company of the Year Award
by Petrofed for the year 2010-11
Wind energy project commissioned
Baa2 Credit Rating by Moody and
BBB-2 (stable) by Fitch.

2008

NRL-Siliguri
Product
Pipeline
(660km)
commissioned

20092013

IPO in September 2009

raising a total of Rs.27.7 bn
Received Navratna status
10% OFS by GOI
Acquired E&P assets in
Mozambique

Presence Across Value Chain

Exploration

Production

Domestic: 56 E&P blocks

(including 1 CBM Block)

50 years of experience

Crude Oil

Advanced recovery

1,157 km pipeline

International

techniques to maximize
production

US,Venezuela, Gabon, E
gypt, Libya, Nigeria, Yeme
n, Bangladesh and
Mozambique
New Discoveries:

9M FY14 Produced
2.713 MMT of Crude oil:

41 installations
1,602 km pipelines

(1)

29 Small to Medium
size discoveries (reserve
size less than 30mn
barrels) during last four
years (FY10-FY13)

9M FY14 Produced
2.002 bcm of Natural

~6MMT capacity
Multi-product

660km pipeline;
1.72MMT capacity
Overseas Pipeline

10% stake in 741km

pipeline (Sudan)

Gas:

Natural Gas

29 installations

23% stake in 192 km

730 km pipelines

Transportation

Downstream

Refining & Marketing

Petroleum Products

26% equity stake in

NRL
Gas Cracker Project

10% equity stake in

BCPL
City Gas Business

Signed MOU with

GAIL, HPCL, IOCL and
BPCL/ONGC

DNPL in North East

NRL Numaligarh Refinery Limited.

BCPL Brahmaputra cracker and Polymer Limited.
DNPL Duliajan-Numaligarh Pipeline Limited.

Our Vision

Fastest Growing Energy Company with Highest Profitability

Delight Customers with Quality Products and Services at Competitive Prices

Team, Committed to Honesty, Integrity, Transparency and Mutual Trust creating
Employee Pride

Fully Committed to Safety, Health and Environment

Learning Organization, Nurturing Initiatives, Innovations and Aspirations with
Best Practices

Responsible Corporate Citizen Deeply Committed to Socio-economic

Development in its Areas of Operations

The Fastest Growing Energy Company With a Global Presence Providing Value to Stakeholders
6

Strategic Plan 2020-21

Growth

Maintain & Enhance Reserves & Production from Current Fields

Accelerated Exploration Initiatives

2012

Inorganic Growth (India and Overseas)

Vertical Integration Along the Oil & Gas Value Chain

Selectively Diversify in Alternative Energy

Diversify into Unconventional Hydrocarbons

Be World Leader in the Field of IOR / EOR

Decades of Experience
7

2020

Robust Demand Outlook

Steady Growth in Domestic Energy Consumption
Driven by Indias Economic Growth Story
(mmtoe)

345

Energy Sources
(%)

367

390

420

447

512

484

535

563

Energy SourcesIndia
Nuclear &
Hydro Renew ables
3%
5%

Natural Gas
9%

Coal
53%

2004

2005

2006

2007

2008

2009

2010

2011

2012

Crude Oil
30%

Significant Supply Deficit in the Domestic Market

Crude Oil (mmtoe)
Total
Consumption

Energy SourcesGlobal

Natural Gas (bcm)

3652

54.6

Hydro
7%

26%

2758

Crude Oil
33%
Imports

Deficit

Source: BP Statistical Review of World Energy, June 2013.

8
Key Credit Strengths

Coal
30%

Natural Gas
24%

75%

894
Production

Nuclear &
Renew ables
6%

Domestic Asset Overview

Significant India Presence in Regions with Proven Commercial Production or Known Accumulation of Hydrocarbons
Blocks

Op

N/Op

Total

NELP
Pre-NELPJV
PEL (Nom)
PML
CBM
Total

12
5
21
38

15
2
1
18

27
2
6
21
1
56

AA-ONN-2010/2




RJ-ONN-2004/2

RJ-ONN-2005/2

ASSAM +AP
 ASSAM +AP




60%

75%

AA-ONN-2002/3

30%

MN-OSN-2000/2

50%


KG-OSN-2009/4

CY-OSN-2009/2

KG-ONN-2004/1

90%

KG-DWN-2004/6

30%

Nomination ML(s)/PEL(s)
JVC Blocks
CBM Blocks


+
9

OIL as Operator
Joint Operator

Strong
presence in
prospective
East Coast

50%

AA-ONN-2009/4

50%

Kharsang

40%

AS-CBM2008/IV

40%

AA-ONN-2009/3

50%

AA-ONN-2004/1

85%

AA-ONN-2010/2

40%

AAP-ON-94/1

16%

AA-ONN-2001/3

15%

AA-ONN-2002/4

10%

MZ-ONN-2004/1

85%

WB-ONN-2005/4

25%

KG-DWN-2004/5

10%

15%

10%

+
NELP I - IX

30%

20%
KG-DWN-2009/1

MB-OSN-2010/2

AA-ONN-2005/1

100%

AA-ONN-2004/2

Rajasthan

GK-OSN-2010/1 30%

40%

AN-DWN-2009/3
AN-DWN-2005/1

10%

AN-DWN-2009/1

30%
AN-DWN-200918

AN-DWN-2009/2

40%

40%

30%

International Asset Overview

Dominant International Footprint with Balanced Presence in Exploration Acreages & Producing Properties

US
Colorado
Julesburg Basin

288 sqkm

20%

LIBYA
Area 95/96

6,629sq.km

SUDAN
Pipeline

17.5% (Summit)

3.5%

2,095sq.km

203sq.km
180sq.km

45%

3,761sq.km

NIGERIA
OPL 205

Bangladesh
SS-04
SS-09

VENEZUELA
Carabobo 1 North
Carabobo 1 Central

YEMEN
Block 82
Block 83

Rovuma Area-1

Area (Sq. km)

OILs Participating Interest (%)

10

741 km

10%

7,269sq.km
7,026sq.km

45%
(OVL)

1,857sq.km
364sq.km

12.75%
(Medco)

9,653sq.km

4.00%
(Anadarco)

MOZAMBIQUE

GABON
Shakti

Operator

Total Area 39,325

25% (Sonatrach)

Major Projects
Project Carabobo
(Onshore, Venezuela)

Two blocks (383

sq. km) in Orinoco
heavy oil belt in
Venezuela.
Production
from
first well started in
December,2012
Current production
from six wells are
4900 bopd.

11

Mizoram
MZ-ONN-2004/1
(NELP-VI)

Gulf of Mannar
CY-OSN-2009/2
( NELP-VIII)

Area: 3,761.65 Km

Area: 3,213 Sq. Km

Area: 1,621 Sq. Km

Area: 549 Sq. Km

Less explored, geopolitically stable, oilrich country

Pre-drilling
in
progress, 5 locations
released for drilling

Processing
acquired
completed.

of
data

Pre-drilling
in
progress, 4 locations
released for drilling.

3 wells have been

drilled so far. There is
a discovery in the 3rd
well.

1352 LKM of 2D
seismic and 171 km
3D survey completed.

Data
sent
Interpretation.

for

Drilling of 1st well

expected soon.

Block Shakthi
(Onshore Gabon,
West Africa)

Drilling of appraisal
wells
is
under
consideration.

LoI for Rig package

issued. Mobilisation to
be completed soon.

KG Basin
KG-ONN-2004/1 (
NELP-VI)

2D API 511 LKM, 3D

API 1621 SQKM and
three well 2D and 3D
acquisition
and
processing
completed.

Overseas acquisitions Focus and Available Resources

Focus for Overseas acquisitions
Balanced overseas portfolio
Acquire producing/development
/discovered blocks

Available Resources
Dedicated Multifunctional Team pursuing
M&A opportunities
Utilising Expertise of International M&A
Advisers and Technical consultants to
identify and pursue opportunities

Both, Oil & Gas Offshore/Onshore

Individual Target Production level upto
30,000 boe/d
Operatorship in On-shore blocks
Joint operator/Active non-operator in
off-shore blocks

Adequate Knowledge Base/

Technical and Commercial capabilities
across Organisation
Strong Financial Resources
(Cash/Borrowing Capability)
IOCL as Partner International network/
complete Value chain
Active and Focused Management Support
for M&A

12

International Acquisition Strategy

International Strategy
Prepared by International consultants and adopted by Board
Seek to acquire exploration acreages / producing properties
Employ capital in the midstream and downstream, limited for
the purpose of creating additional value in the upstream
A Two Period Strategy:

Build Period

Launch platforms for international core areas

Sustain and
and Grow
Sustain
GrowPeriod
Period

OIL focuses its international efforts to:

Make organizational change to operate assets

Acquire companies/enter partnerships as a non-operator

Build skills in new onshore, offshore and gas plays

13

Sustain its core areas as an Asset manager

Acquire companies and enter partnerships to grow its
core areas launched in Period I
Develop partnerships with technology companies to
achieve efficiencies

International Partnerships and Alliances

Implement its acquisition strategy utilizing joint ventures with
other leading players in the industry
Partnering strategy with potential midstream and downstream
investments in order to retain focus on capital employed in
E&P

Significant Reserve Base

1P Reserves represent:

10

11

Years current production of Crude Oil

Years current production of Natural Gas

Total Reserves (1)

(mmboe)

Natural Gas

Years current production of O+OEG

Proved and Developed Reserves Split by Type

Proved developed reserves of approximately 261 mn barrels of crude oil and
natural gas reserves of 174 mn barrels

1298

Crude Oil

10

909

447
435

310

174
261

599

851

1P

2P

3P

Crude Oil,
60%

Gas, 40%

Consistent Reserve Replacement Ratio Over One

2.14

FY08

1.78

1.74

FY09

FY10

1.50

1.37

FY11

FY12

O+OEG

14

1.64

FY13

Excellent Oil and Gas Infrastructure

Infrastructure to Support E&P Activities

Production and Storage Facilities

One 2D and
Two 3D Seismic
crew

Six
Logging Trucks

70 Production
Installations

14 W/over Rigs

14 Drillings
Rigs

5,000km O&G
Pipelines

In-house Expertise and Integration across Energy Infrastructure

15

Source: Company presentation

~150k KL
Crude Storage

Presence Across Value Chain

Drilling
Seismic API
(2D and 3D)

Wireline
Logging

In-House Expertise
Field
Development

Transportation

IOR/EOR

Field/Reservoir
Management

OIL is a fully self-serviced E&P company

16

Production

Downstream Operations
OIL intends to continue an active strategy of vertical integration into downstream sectors such as refining,
processing, distribution and retailing, cracking and fractionation of gas
This vertical integration strategy is aimed at to achieve following objectives
Diversification of revenue sources
Improving profitability by extending operations into higher-margin segments of the product value chain

Refining and Marketing

Gas cracker Project

City Gas / LNG projects

26% equity stake in Numaligarh

Refinery Limited (NRL).

10% equity stake in Brahmaputra

cracker and Polymer Limited
(Assam)

MOUs with HPCL, BPCL, ONGC

and IOC for laying, building,
operating or expanding city gas
distribution networks.

The other equity holders in NRL

are BPCL and the Government of
Assam

Process natural gas, naphtha or

any other petroleum product
Distribute and market
petrochemical products in India
and abroad

17

Commissioned Wind Energy

Project in Rajasthan.
LNG: MOU with Kakinada
Seaports

Strong Government Linkage

Government Owned Enterprise with GOI holding 68.43%.
Continued government support evidenced by awarding Navratna status to the company making it
more autonomous.
2nd Largest Public Sector E&P company
Management Independence
Navratna company: Board fully empowered to take decisions on domestic operations.
Domestic: Upto Rs 1000 crore or 25% of Net Worth whichever is lower.
International : Upto Rs 3000 crore or 25% of Net Worth whichever is lower.
Contributed over Rs.6725 crores to the exchequer in the FY 201213..

Contribution to Exchequer (Rs. Crore)

State Government

Central Government
3136

18

3909

4875

1515

1865

1850

Plan outlay expenditure

Rs/crore

2890

2050
1743

1632

1557

FY09

FY10

1210

FY08

19

FY 11

FY 12

FY 13

Significant Investment Lined Up

Annual Plan 201314: Rs.3,581 crore

XII 5year Plan: Rs.19,003 crore

Overseas
17%

Investments
1%

Survey
12%

Capital
Equipment
17%

Exploration
32%

Development
21%

Exploratory Drilling
No. of well

32

Development Drilling
No. of well

38

21
19

FY13

FY14

FY13

FY14

Substantial Increase in Exploratory and Development Drilling Planned

20

Operating Performance

21

Crude Oil and Natural Gas Production

Crude Oil Production

Natural Gas Production

(in mm bbl)

26.0

27.8

(in mm scm)

2,633
26.4

2,639

2,352
2,002
19.4

FY11

22

FY12

FY 13

9M FY14

FY11

FY12

FY 13

9M FY14

Attractive Cost Structure

OIL has the Advantage of Low Finding and Development Costs
OIL's integrated oil and gas infrastructure enables the company to manage costs efficiently by optimizing manpower costs, using inhouse services, adapting cost-saving technology, effectively using geological data and expertise

Finding & Development Cost (USD/BOE)

5.5

5.5

3.8

Crude Oil Production Cost (USD / bbl)

5.2

3.8

4.0

17.1

17.3

20.5

7.62

8.23

8.11

FY 11

FY 12
Raising Cost

Levies

FY 13

Natural Gas Production Cost (USD/ MMBTU)

0.4
2.7
FY 11

Fy 12

Finding Cost

23

0.4

0.4

2.4

2.5

FY 13

F&D cost

FY 11

FY 12
Raising Cost

Levies

FY 13

Natural Gas Pricing

Natural Gas Price at USD 4.2/mmbtu for 10000 Cal (inclusive of royalty) was last approved in
May,2010.
OILs cost of natural Gas production is around USD 3.06/mmbtu.
Cost of exploration and Development in NELP block is much higher.
To make Natural Gas production attractive, there is need for price revision.
Govt. formed Rangarajan committee for reviewing pricing of Natural Gas.
The committee had recommended Natural Gas price as average of :

 Net back Price of Indian LNG import at well head of exporting countries
 Average price prevailing at major natural gas market.
For every USD one increases in Natural Gas Price:

 OILs PAT will improve by ~Rs 220 crore.

 OILs contribution to exchequer will be increased by ~Rs 254 crore ~Rs 78 crore to State
Govt and ~Rs 176 crore to Central Govt
24

India Gas Price Evolution

Gas Pricing Evolution
2004

PMT price
raised from
US$3.1 to
US$5.6
5.7/mmbtu

2007

KG landfall
price of
US$4.2/
mmbtu

May 2010

June 2010

APM price
raised from
US$1.8 to
US$4.2/
mmbtu

Aug 2010

US$4.85.3/
mmbtu for
ONGC's new
production

GEECL
US$6.8/
mmbtu for
Raniganj

Disparity Between Domestic Gas Prices and Imported LNG

(US$/mmbtu)

Dec 2010

2011

ONGC and
Oil India
US$5.25/
mmbtu for
non-priority
APM

4QFY12

Ashok Chawla report

recommends
market-based
framework

Essar to charge
US$5.25/mmbtu
for Raniganj

2012

Ranagrajan Committee
recommends a market
based formula for gas
Put on hold because of
model code of conduct

Most
recommendations of
the panel accepted

Potential Indian Gas Pricing Trends

(US$/mmbtu)
LNG Spot

$12.5 - $17.4
US$10+
US$8
$7.0 - $9.0
US$6
$2.5 - $5.3

$4.2

APM Gas

Non-APM Gas

$4.2 - $5.7

$4.2
US$4

PMT

KG Basin

Term R-LNG

Spot R-LNG

US$0
Current Price Range

Source: Report of Dr. C. Rangarajan Committee on the PSC Mechanism in Petroleum

Industry, December 2012.

25

Future/Potential Domestic Gas Price

Sharing of Subsidy by Upstream Companies

Rs. in crore

% Sharing

Rs. In cr.

% Sharing

201011

2011-12

2012-13

9M 13-14

ONGC

82%

81%

81%

84%

6,389

OIL

11%

13%

14%

13%

2687

1,400

GAIL

7%

6%

5%

3%

60,000

47,971

Total

100%

100%

100%

100%

201011

2011-12

2012-13

9M 13-14

ONGC

24893

44,465

49,421

40,182

OIL

3293

7,352

7892

GAIL

2111

3,183

Total

30297

55,000

Realised Price (USD/Barrel)

114.7

109.6

108.1

106.4

86.1
68.5
58.7

58.5

56.2
39.8

FY 10

41.4

FY 11

52.1

50.4

41.3
33.1

Gross Realized Price

25

53.6

FY 12

FY13

Realized Price after Subsidy/Discount

31.5

9M FY14
Net Realized Price

33.2

Q3 FY 14

Financial Performance

26

Growing Revenue and Profit

Revenue

EBITDA

(Rs.crore)

(Rs.crore)

11,280
9,194

FY11

5,996

11,456

4,577

8,686

FY12

FY 13

9M FY14

FY11

Net Profit

FY12

FY13

(As a % of Profit)

2,888

FY11

3,447

3,589
2,416

FY12

FY 13

9M FY14

Dividend Payout Ratio

(Rs.crore)

27

6,123

5,145

9M FY14

50%

31%

31%

33%

FY10

FY11

FY12

FY13

Leverage Remains Low

Earnings Per Share

Book Value Per Share

(in Rs.)

(in Rs.)

48

FY11

57

295

320

FY12

FY13

260

60
40

FY12

FY13

FY11

9M FY14

Net Worth

15602

FY11
Source: Company financials
28

360

17721

FY12

19212

FY13

21615

9M FY14

9M FY14

Awards and Accolades

OIL was awarded the prestigious BUSINESS LEADERSHIP AWARD in OIL & GAS
SECTOR by NDTV Profit on 7th January 2012.
Oil & Gas Transportation Company of the Year Award at the Petrofed Oil & Gas Industry
awards for the year 2010-11
PSU 360 Degree Growth award for 2011 from Dalal Street
BT Star Best PSU 2013 award from Bureaucracy Today
Best Environment Management and Sustainable Development Award by Indian
Chamber of Commerce
Golden Award in Petroleum Sector for Outstanding Achievement in Safety Management
by the Greentech Foundation
Performance Excellence Award 2011 by Indian Institute of Industrial Engineering
Golden Peacock Award for CSR for 2012
1638th Rank for 2013 from Forbes Global 2000

29

Awards and Accolades

OIL was awarded the prestigious BUSINESS LEADERSHIP AWARD in OIL & GAS
SECTOR by NDTV Profit on 7th January 2012.
E&P Company of the Year Award at the Petrofed Oil & Gas Industry awards for the year
2010-11
First Prize for Oil Industry Safety Award in Oil & Gas Assets (Onshore) Category
Motivational Leadership Award for 201011 at the World HRD Congress
Best Environment Management and Sustainable Development Award by Indian
Chamber of Commerce
Gold Award in Petroleum Sector for Outstanding Achievement in Safety Management by
the Greentech Foundation
Greentech HR Gold Award 2012 for training excellence
Performance Excellence Award 2011 by Indian Institute of Industrial Engineering
Golden Peacock Award for CSR for 2012

29

Conclusion

Steady and sustained Growth

Sound Financial Health
Strong operating track record
More than 5 decades of E&P expertise
Spreading its wings: NE - Pan India - Global
Large prospective E&P acreage
Pioneer in Pipeline transportation
Entry into Offshore/ Deep Water Blocks
Entry into discovered assets in Venezuela, Acquisition thrust continues
Diversifying into new areas. Core Focus remains in E&P

30

Thank You