OIL AND GAS

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OIL AND GAS

POLICY INITIATIVES

2

MARKET Size, Trends and Players

6

OPPORTUNITIES

22

CONTACT FOR INFORMATION

24

POLICY INITIATIVES Estimated to be a US$ 90 billion industry, the oil and gas industry is among the largest contributors to the central and state exchequers in India. Its share approximates US$ 13.58 billion. The Government is promoting the industry through investments, healthy competition and an institutionalised regulatory regime. Multi-pronged initiatives and actions have been taken by the Government of India to address the gap in energy demand and supply the non-availability of energy sources. These actions are yielding results in the sector.

Key government initiatives

New Exploration Licensing Policy

Over 100 Production Sharing contracts have been signed. The estimated investment committed to the NELP programme is over US$ 4 billion during 2003-2006. 36 discoveries have been made over the past seven years (1997-2004) and more than 800 million tonnes of oil and oil equivalent gas have been discovered.

Deepwater exploration

Apart from the Reliance deepwater gas discovery, ONGC, a national oil company, has ventured into deepwater exploration. It is estimated that there are hydrocarbon reserves worth 1 billion tonnes of oil equivalent (btoe) in the deepwaters of India. The ONGC deepwater exploration programme involves an estimated investment of US$ 0.75 million per day.

Redevelopment initiatives

ONGC plans to invest over US$ 2 billion for undertaking an Enhanced Oil Recovery programme in 14 oilfields across the country. On an average, ONGC proposes to improve the recovery factor from 28 per cent to 40 per cent.

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India imports 73 per cent of its oil requirements. With a view to mitigating the risks of short-term supply disruptions, the Government proposes to build strategic reserves of crude oil to provide for the initial 15 days (consumption equivalent) in the event of any unforeseen/foreseen contingencies.

Strategic crude oil reserves

The Government has granted licences to companies for setting up LNG regassification terminals to facilitate LNG imports by them. Petronet LNG recently commissioned its LNG terminal at Dahej, Gujarat. Shell is in an advanced stage of completing its LNG project in Hazira, Gujarat. Many new LNG gassification plants are also being planned.

LNG imports

The Government is seriously evaluating various cross border gas imports to bridge the demand-supply gap.

Pipeline gas imports

In order to tap an otherwise wasted opportunity, CBM is being considered as an important source of gas. The Government has awarded a total of 16 contracts for Exploration and Production under the CBM programme.

Coal Bed Methane (CBM)

ONGC Videsh has the mandate to invest in overseas acreages to garner equity oil. This is also expected to securitise India from price and supply uncertainties. Proposals of other Indian oil and gas companies to hold interests overseas are being evaluated by the Government. Companies are aggressively pursuing overseas markets.

Overseas equity oil

Significant policy changes relating to oil and gas have enhanced private and foreign interest in this sector. A proactive Foreign Direct Investment (FDI) policy is attracting several foreign players to the sector, leading many players to focus on India as one of the key areas of operation in the global context.

Impetus to growth

The Hydrocarbon Vision 2025 released by the Indian government provides the vision statement and acts as a framework for future government policies concerning the oil and gas industry in India till the year 2025.

Key policy milestones No

Catalysts

Key Highlights

1

New Exploration Licensing Policy, 1999 (for Exploration & Production)

100% foreign participation allowed Licences are awarded through international competitive bidding Provide fiscal stability in contract Model Production Sharing Contract and Petroleum Tax Guide provided upfront More rounds planned 5th round stated to be rolled out in early 2005

2

Attractive Fiscal Incentives,1999-2003

Corporate Tax deduction and allowances available to companies prospecting for oil and gas 7 year tax holiday Capital expenditures incurred in respect of exploration and drilling operations fully tax deductible Oilfield service provider taxable on 10% of gross receipts Reduction of duty on project imports from 25% to 10% Reduction of import duty on ATF from 16% to 8% Duty free import of fuel for exporters Reduction of subsidy on domestic LPG and kerosene sold through the public distribution system

3

Draft Petroleum & Natural Gas Regulatory Bill, 2004 (for Downstream Oil and Natural Gas Operations)

The Government has tabled a Draft Petroleum & Natural Gas Bill in the Parliament, which proposes a Petroleum & Natural Gas Regulator to regulate all downstream activities in India (which include refining, processing, storage, transportation and gas transmission and distribution, setting up LNG terminals and gas retailing etc) alongwith ensuring that marketing companies comply with retail regulations.

4

Common Carrier Pipeline Policy, 2002 (for Product Pipelines)

Pipelines are built on a common carrier principle. The Policy allows two or more companies to use a single pipeline. Entities laying pipelines will have to provide 25% extra capacity. This extra capacity will be available to other users on the common carrier principle.

5

Draft Gas Pipeline Policy, 2003

Proposed Regulator to authorise laying of new pipelines Any entity desirous of transporting gas owned by it will negotiate with the pipeline owner on terms of transportation as may be mutually agreed The Regulator, in consultation with the state governments, will prepare a long-term plan for the Gas Pipeline Network, for its growth in various states and across various regions to enable industrial growth Non-captive pipelines on common carrier principle Regulator to lay down cap for negotiable tariffs

6

Draft Auto Fuel Policy

A comprehensive policy on auto fuels, their availability and security of supplies, vehicle technology, and emission reduction in a cost effective manner

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FDI limits S.No.

Particulars

Position prior to Jan 28, 2004

Latest Position

1

Oil Exploration

100% for small fields, 60% for unincorporated joint venture & 51% for incorporated joint venture for medium size fields

100% (automatic)*

2

Petroleum Product Pipeline sector

51% (non-automatic)

100% (automatic)*

3

Natural Gas / LNG Pipeline

100% (automatic)

100% (non-automatic)**

4

Petroleum Products Marketing

74% (non-automatic) - for infrastructure related to marketing and marketing of petroleum products 100% (non-automatic) - for actual trading and marketing, minimum 26% Indian equity is required over 5 years

100% (automatic)* After capital expenditure (CAPEX) requirement of US$ 500 million is met

*Automatic Route: No approvals required **Non-automatic: Approvals required from the Foreign Investment Promotion Board (FIPB), Government of India

MARKET Size, Trends and Players Energy Consumption Scenario India is the sixth largest energy consumer in the world and is one of the world’s fastest growing energy consumers. The energy consumption matrix in India is dominated by coal, followed by oil and natural gas. While this pattern contrasts with the World Energy Consumption Matrix, which is dominated by oil and natural gas, it is important to note that the consumption of oil and gas has been growing over the years in India, in comparison with coal. India vs World energy consumption matrix

Source: BP Statistical Review 2004

The Tenth Five Year Plan of India estimates that the consumption of oil will increase at the rate of 3.7 per cent annually, faster than the projected annual growth rate of 2 per cent for the world.

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Projections up to 2025 show an exponential growth in the demand for gas. India energy consumption matrix 2003

Source: BP statistical review 2004

India energy consumption matrix 2025

Source: India Hydrocarbon Vision 2025

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The Indian Government has earmarked US$ 12.77 billion for Exploration & Production and US$ 7.88 billion for the Downstream sector under the Tenth Five Year Plan. The India Hydrocarbon Vision 2025 has committed investments of US$ 49.46 billion and US$ 29.02 billion for the refining and marketing sectors respectively.

Oil India’s demand for oil has consistently been far in excess of its domestic production. It meets 66 per cent of its demand for crude oil through imports from Middle East and the balance is from other countries. The dependence on oil imports is expected to increase in the future. The Hydrocarbon Vision 2025 provides a scenario for the future of oil demand and supply. The following diagram shows demand and supply (comprising domestic production and overseas oil equity that Indian companies will own) based on Hydrocarbon Vision 2025 projections.

Source: India Hydrocarbon Vision 2025

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India has one of the largest refining capacities in the world. The country has attained self-sufficiency in refining crude oil. In 2003-04 the refining capacity stood at 126 MMTPA, against the annual consumption of about 107.7 MMTPA. In 2003-04, the length of the crude pipelines were 5918 kms and that of the product pipelines were 7033 kms.

Liquid pipeline infrastructure

With the Administered Pricing Mechanism (APM) dismantled, the Government of India is encouraging healthy competition in the petroleum retailing sector. Its directed aim is to improve competitiveness and quality of service to the customer. Private sector participation in the retail market is being particularly promoted.

Petro retail

Petro retail companies today offer a slew of customer friendly initiatives such as online support to customers, strengthening market share through advertising and product differentiation, premium products and customer loyalty programmes. These initiatives have contributed to a progressively changing petro retail market in India, translating into quality service for the consumer.

Retail outlets - 2003 Type of outlets

IOCL*

HPCL

BPCL

Retail Fuel Pumps

9930

4944

4926

SKO/LDO Dealers

3867

1658

985

LPG Dealers

4232

1922

1928

*IOCL Retail Outlets include IBP Retail Outlets Source: ICRA Industry Report, 2003

The Government has recently granted licences to many companies. A table giving the names of companies and the number of licences granted is provided below.

Status of licences granted Company

No. of Retail Licences

ONGC, MRPL

1100

Shell

2000

Reliance

5849

Essar

1700

Numaligarh Refinery

510

IOCL, BPCL, HPCL

2900 Source: ICRA Industry Report, 2003

Ethanol blended fuel

The National Programme for 5 per cent blending of ethanol with petrol was launched on January 1, 2003, in the sugarcane producing states, in the phase I. Majority of the other states are planned to be covered in Phase II. These states are Uttar Pradesh, Punjab, Maharashtra, Haryana, Gujarat, Goa, Andhra Pradesh and Karnataka as well as the Union Territories of Chandigarh, Dadra and Nagar Haveli and Daman & Diu. States like Tamil Nadu, Uttaranchal and Madhya Pradesh and the rest of the country would be covered in the second phase.

Natural gas Demand - supply scenario

The share of natural gas in India’s energy mix has increased from 2.5 per cent in the early 1980s to around 8 per cent in 2003. It is expected to increase substantially to 20 per cent by 2025. The gas supply would be met through domestic production, LNG imports from LNG terminals at Dahej, Hazira, future projects and monetisation of Krishna Godavari basin (KG basin) gas find by 2005-2006 as well as any future finds.

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Discovery of gas in KG Basin off the Eastern Coast has given a major boost to the Indian gas industry. About 45 MMSCMD gas is expected to be produced from 2006 onwards from these wells. Additional discoveries await announcement by the Oil and Natural Gas Corporation (ONGC). Exploration efforts are therefore moving at a fast pace, leading to positive sentiments about potential major discoveries. Keeping in mind the environmental problems emanating from coal and naphtha, which is also the feedstock for the power industry and the fertiliser industry, it makes a good case switching over to natural gas fuel. The Government has realised the importance of natural gas fuel. To this end, it has taken major sectoral initiatives to build a roadmap for the natural gas industry segment in India. To supplement the present and future domestic gas production, two major LNG regassification projects totalling a capacity of 7.5 MMTPA were planned. One of them has been commissioned while the other is expected to be commissioned by early 2005. LNG imports are being considered a viable option to cover the demand supply deficit. Additionally, the Indian Government is exploring possibilities of importing economic natural gas from Iran, Myanmar, Bangladesh and Turkmenistan.

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The natural gas demand-supply projections by Government of India based on the ‘Hydrocarbon Vision 2025’ are given below in the diagram: Natural gas demand - supply projection

Source: India Hydrocarbon Vision 2025

Import of LNG

An increasing thrust on LNG imports has led to positive developments on the supply front. Realising the ease of transporting natural gas as LNG and the growing demand for the fuel in India, Petronet LNG (of which GAIL, ONGC, IOC and BPCL are the main promoters) has set up an LNG terminal in Dahej. It is also planning to set up another one in Kochi while Shell would be commissioning a terminal in Hazira. Petronet LNG has signed a gas purchase contract with RasGas, Qatar, for the import of 5 MMTPA of LNG to Dahej, Gujarat, in western India and 2.5 MMTPA to Kochi, Kerala in southern India. The regassified LNG is to be transported to customers in diverse industries - power, fertiliser, transportation – and also to households in seven states in northern and western India.

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The existing gas pipeline infrastructure covers a distance of 6,269 km, of which 4,500 km has been laid by GAIL (2003). Over the next six years, India is expected to add 10,000 km of gas pipeline infrastructure.

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Domestic gas pipeline infrastructure

The Ministry of Petroleum & Natural Gas (MoPNG) had solicited views from the stakeholders and industry bodies on a draft Natural Gas Pipeline Policy. The Policy is aimed at introducing a regulator to monitor progress in this segment to create a competitive as well as an investor and consumerfriendly operating environment. The bill is still in its draft format. Due priority is being given to having a retail gas infrastructure in place in the near future as gas transportation infrastructure is improving and additional gas is becoming available. CNG has been successfully adopted by automobiles in the capital city of Delhi. Noting its positive impact on the environmental pollution levels, the project is to be replicated in many other cities of India. The highest judicial court in the land, the Supreme Court, has made it mandatory to convert all commercial automobiles in 11 select cities to CNG fuel. The industry is proactively expanding this target to many more cities. Availability of natural gas is also expected to catalyse growth of city gas distribution projects countrywide. Several companies like GAIL India, BPCL, BG, GSPCL, Adani have drawn out ambitious programmes to equip Indian cities with retail distribution networks for domestic, commercial and automobile usage.

City gas distribution projects

Emerging sources of natural gas

Underground coal gassification

India is endowed with vast coal resources of around 200 billion tonnes and 24 billion tonnes of lignite. Underground coal gassification offers a potential for extracting gas from deep-seated deposits. The gas can be used both for power generation and as feedstock in the manufacture of methanol/gasoline etc.

Gas Hydrates The Ninth Plan Working Group had proposed the phased implementation of the National Gas Hydrate Programme for India, involving an outlay of approximately US$ 46.3 million. The National Gas Hydrate Programme for India Stage

Activities Cost (US$ million)

Phase – I Examine existing geological, geophysical data

2.17

Phase – II Acquisition and processing of seismic data

8.26

Phase – III Stratigraphic drilling, coring 3-5 wells.

3.26

Phase – IV Drilling and completion of 3-5 wells

32.6 Source: India Hydrocarbon Vision 2025

Coal Bed Methane (CBM) The Government has committed an investment of US$ 43 million. It has signed a total of 16 contracts for Exploration and Production under the CBM programme. The estimated CBM reserves in these 16 blocks are over 800 million cubic metres (mcm). ONGC and Reliance bagged bulk of the blocks under the two CBM rounds.

OIL AND GAS

Trends and Players Consolidation in the hydrocarbon value chain Oil and gas companies in India are consolidating across the value chain to leverage economies of scale. Consolidation is being primarily effected through mergers and acquisitions or by entering into strategic partnerships or joint ventures. Indian companies are expanding overseas by way of acquisitions and joint ventures. Consolidation in the hydrocarbon value chain S No

Company

Acquirer

Current Stake

1

IBP (Retailer)

IOCL

33.58%

2

MRPL (Refiner)

ONGC

72%

3

IPCL (Petrochemicals)

RIL

26%

4

Kochi Refineries(Refiner)

BPCL

55%

5

Chennai Petroleum Corporation (Refiner)

IOCL

52.5%

6

BRPL (Refiner)

IOCL

96%

7

NRL (Refiner)

BPCL

19%

8

RPL (Refiner)

RIL

100%

Source: CrisInfac; PricewaterhouseCoopers Research Team

Certain Public Sector Undertakings (PSUs) in the sector have also been partially disinvested. PSUs partially disinvested

Companies

% put for disinvestment

ONGC

10 through public offer

GAIL

10 through public offer Source: CrisInfac

P A G E 15

Indian oil & gas industry - going global

Indian companies are expanding overseas by way of acquisition and joint ventures ONGC’s subsidiary ONGC Videsh with a mandate for overseas investments in the Exploration & Production sector, has made huge international investments through acquisitions of exploration and production assets in countries like Sudan, Russia, Libya, Myanmar, Iran, US and Vietnam. GAIL has been offered overseas assets of Shell in Egypt and is planning to expand into other countries. A consortium of Indo-Korean companies comprising OVL, GAIL, Kogas recently discovered gas in Myanmar in a block in A-1 offshore of Myanmar. In the downstream sector, Indian Oil Corporation Limited (IOCL) has acquired retail outlets in Sri Lanka, making its first international foray into distribution. IOCL has also expressed interest in buying BP’s distribution assets in Singapore and Malaysia. It has also displayed an interest in the Middle East markets. Similarily, Bharat Petroleum Corporation Limited (BPCL) has bid for retail outlets of Ceylon Petroleum Corporation in Sri Lanka. GAIL is eyeing the Egyptian and UK markets for gas distribution.

India - a regional hub for energy cooperation

India has been playing an important role in energy development and management in the South Asian region by way of analysing energy policies and energy scenarios in the region. Energy cooperation in the region is receiving due attention. Indian firms are pursuing downstream opportunities in Sri Lanka. Talks are also underway for laying cross border gas pipelines to transport gas to India from Iran, Turkmenistan, Bangladesh and Myanmar.

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Efforts are being made to conserve oil and gas and develop alternative fuels. In recent years, discussions on energy development for South Asia have been underway. These discussions are largely being held under the auspices of the South Asia Regional Energy Coalition (SAREC) and the India Energy Forum. Both these fora focus on energy development, management and conservation throughout South Asia. The fora, which are based in India, have received considerable support from neighbouring countries like Sri Lanka, Pakistan, Bangladesh, Bhutan and Nepal.

Select domestic players

(in alphabetical order)

BPCL is India’s second largest downstream oil company in terms of market share. It produces petrochemicals, speciality chemicals, aviation fuels, lubricants and solvents. It recently ventured into upstream segment and has been awarded some blocks under NELP in alliance with ONGC. Its subsidiaries include Numaligarh Refinery and Kochi Refineries, besides various joint ventures. The firm is expected to invest US$ 300 million in future Exploration and Production ventures.

Bharat Petroleum Corporation Ltd (BPCL)

EOL is part of the US$ 3.7 billion Essar Group. It is a fully integrated oil company with a presence in Exploration and Production, midstream and downstream sectors. The Essar Group has a presence in core sector businesses in India.

Essar Oil Ltd (EOL)

GAIL handles 95 per cent of the country’s natural gas business through its pipeline network of 4500 km across the country. It is also one of the largest LPG producers in India. It has joint ventures with Mahanagar Gas, Indraprastha Gas and Petronet LNG. Along with city gas projects, National Gas Grid, the company plans to integrate across the value chain through Exploration and Production activities, both in India and overseas in consortium, for gas in future.

GAIL India Ltd

Gujarat State Petroleum Corporation Ltd (GSPCL)

GSPCL is one of the five companies that comprise the GSPC group. Its subsidiary, Gujarat State Petronet Ltd (GSPL), is the only gas transmission company in India operating on Common Carrier Principle. GSPC is also acquiring huge acreages in Indian sedimentary basins.

Hindustan Petroleum Corporation Ltd (HPCL)

The company engages in refining, marketing and pipeline operations. It has recently forayed into Exploration and Production by entering into an alliance with ONGC. It has interests in overseas petro retail markets. The firm is expected to invest US$ 300 million in future Exploration and Production ventures.

Indian Oil Corporation Ltd (IOCL)

IOCL primarily focuses on refining, marketing and pipelines. Its subsidiaries include Indian Oil Blending, Chennai Petroleum Corporation, Bongaigaon Refinery & Petrochemicals, IBP Co and Lanka IOC, besides numerous other joint ventures. IOCL’s future plans include the Indo-Bangladesh gas pipeline project, exploring opportunities in East Africa, CIS region and South East Asia, and diversifying its products portfolio.

Oil India Ltd (OIL)

OIL is a fully integrated Exploration and Production public sector undertaking in the upstream sector. Apart from ONGC, OIL is the other premier Exploration & Production firm. It owns and operates a wide array of facilities and equipment. Its overseas ventures include a 20 per cent stake in Farsi Block in Offshore of Iran and acquisition of equity shares of Sakhalin India Inc, Texas, USA. OIL plans to accelerate exploratory efforts and lay down more crude pipelines in the future.

Oil and Natural Gas Corporation (ONGC)

ONGC is the premier upstream state owned company in India. It is the largest Exploration and Production enterprise, contributing 80 per cent of India’s oil and gas production. Its subsidiaries include ONGC Videsh and MRPL. Its future plans include expansion in retail & brand creation/management, entry into value added products, investments in oil fields in Iran, modernisation of MRPL and strategic/business alliances.

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ONGC Videsh Ltd, a 100 per cent subsidiary of ONGC, is associated with overseas Exploration and Production business. OVL operates exclusively in foreign markets and holds Exploration and Production interests in Vietnam, Sakhalin, Iran, Iraq, Sudan, Myanmar, Syria, Libya and Angola. OVL’s future plans include exploring new opportunities in Iran and Myanmar. OVL has invested more than US$ 4 billion in overseas ventures, making it the single largest foreign investment ever made by an Indian corporate firm.

ONGC Videsh Ltd (OVL)

Four major oil PSUs namely, ONGC, BPCL, IOC and GAIL, came together and formed Petronet LNG to address the increasing demand for gas in the country by setting up LNG terminals. PLL has signed a long-term supply contract with Ras Laffan Liquified Natural Gas Company Ltd (RasGas) for Dahej and Kochi LNG Terminals. Its suppliers of LNG are to take up 10 per cent equity in the company.

Petronet LNG Ltd (PLL)

Reliance Industries Limited is the largest private sector company in India with its production of petroleum products and petrochemicals accounting for 3 per cent of India’s GDP. Reliance has a presence in Exploration and Production, midstream and downstream activities. It holds an interest in 32 exploration acreages in India, covering an area of 290,000 sq kms, in consortium with other Exploration and Production companies. Gas Transportation and Infrastructure Co. Ltd, a company promoted by RIL, plans to invest around US$ 1 billion in laying a network of 5,895 kms of product pipelines across the country. RIL has the largest grassroots refinery in the world at Jamnagar, Gujarat in western India. RIL’s future plans include increased exploration activities, setting up 1000-1500 retail outlets in 2004-05 and a major gas-based power plant in the state of Uttar Pradesh in India.

Reliance Industries Ltd (RIL)

Select foreign players

(in alphabetical order)

British Gas (BG)

India is one of the six core geographic areas of operation for the BG group. BG India, a business of BG Group Plc, UK, has a presence in Exploration and Production, upstream and downstream segments in the country. BG operates in the gas distribution segment through Gujarat Gas Company Limited (GGCL), which is India’s largest private natural gas distribution company, and Mahanagar Gas Ltd (MGL), Mumbai. The company plans to increase its focus on gas distribution in the future.

BP

BP has operational interests in the gas business in India and Iran, as well as the downstream sector, lubricant and solar power in India. It has a presence in the lubricant segment through Castrol India, which is among the largest private lubricant companies and a market leader in the retail automotive lubricants market in India. It is also the market leader in solar power products in India and makes substantial export sales. BP plans to focus on the downstream sector in the future.

Cairn Energy

Cairn Energy has a presence in the upstream sector and is engaged in offshore Exploration & Production as well as onshore exploration operations in India. It has become a player to reckon with since its 3 discoveries in Rajasthan.

Canoro Resources Ltd.

Canoro Resources is a public Canadian oil and gas company with a focus on developing opportunities outside North America. Its Indian operations include working interest in two exploration blocks in the Assam Basin in north-east India.

ExxonMobil Lubricants (P) Ltd.

ExxonMobil, with a presence in about 200 countries, is the world’s largest non-governmental marketer of equity natural gas. In India, ExxonMobil holds a 30 per cent stake in RasGas. It will be setting up a subsidiary to provide consultancy and

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P A G E 21

advisory services to gas, power, petroleum and related sectors in India. It proposes to invest US$ 200,000 in the subsidiary over the next five years. GDF is the French national gas company with a global presence in 20 countries, including India. In India, GDF holds a 10 per cent stake in Petronet LNG Ltd (PLL) alongwith other equity partners.

Gaz De France (GDF)

Hardy is a Wilmington, Delaware, US based company with offices in London (UK) and Chennai (India). It has a strong operational presence in India and is involved in various Exploration and Production ventures in India, both offshore and onshore.

Hardy Exploration & Production

Niko Resources is a Canadian company with operations focused on the Exploration and Production sector. Niko has Production Sharing Contracts (PSCs) for five fields located in Gujarat in western India, namely, Hazira, Bhandut, Cambay, Matar and Sabarmati. It also holds a 10 per cent interest in two offshore blocks and 100 per cent interest in the onshore Surat block.

Niko Resources

OAO Gazprom Group of the Russian Federation, operates one of the largest gas pipeline systems in the world. It is a major producer and exporter of gas to other European countries. In India, OAO Gazprom holds a 50 per cent stake in a block in consortium with GAIL India.

OAO Gazprom

Premier Oil focuses on Exploration and Production in the UK and Asia. Its presence in India is restricted to the Exploration and Production segment. It operates and holds a stake in Ratna and R-series fields, AAP-ON-94/1 and CR-ON-90/1 in India.

Premier Oil

In India, Shell holds interests in natural gas, lubricants, LPG, petrochemicals and solar energy. It would like to develop a presence in the oil/fuels sector. The Shell Group consists of Shell India, Shell Hazira Gas, Hazira Port, Hazira LNG, Shell India Production Development BV, Bharat Shell, Shell Solar India and Shell Gas (LPG).

Shell Group of Industries

Total operates in India through its subsidiaries that include Atofina, Elf Lubricants India (lubes business) and Total Gas and Power India (TGPI). It has a joint venture with HPCL, South Asia LPG Co Ltd (SALPG) is to execute India’s first underground mined rock LPG cavern project.

Total

OPPORTUNITIES The Tenth Five Year Plan provides for the following commitments in investments outlay in the oil and gas sector for the period 2002-2007: • Upstream Sector: US$ 13.05 billion • Downstream Sector: US$ 8.03 billion A total investment approximating US$ 110-120 billion is expected to be made in the Indian oil and gas industry over the next 25 years. The oil and gas sector provides attractive opportunities for investment to the domestic and foreign investors, which are as follows:

Upstream • New Exploration Licensing Policy Rounds • Coal Bed Methane • Enhanced Oil Recovery Projects • Oil Field Services • Deepwater Exploration and Drilling • Farm-in opportunities • Overseas Acreages in Middle East, West Africa, Russia and South East Asia.

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Midstream & Downstream • Proposed Refineries and Upgradation of capacities of existing refineries • Planned Product Pipelines covering 12,272 kms, involving an investment of US$ 5 billion • New Retail Outlets being opened by private players involving an estimated investment of US$ 7 billion • New Terminals, Depots and LPG infrastructure • Strategic Oil Reserves • Gas Pipelines – an investment of US$ 7 billion • City Gas Projects for 22 cities • Underground Coal Gassification and Natural Gas Hydrates • Overseas Downstream acquisitions in South Asia, South East Asia and Africa

P A G E 23

CONTACT FOR INFORMATION Explore, invest and partner with India to profit and advantage

Information on the market and opportunities for investment in the oil and gas sector in India can be obtained from the Ministry of Petroleum & Natural Gas of the Government of India and the Energy Division of the Confederation of Indian Industry at the following addresses respectively: Ministry of Petroleum & Natural Gas Shastri Bhavan Dr Rajendra Prasad Road New Delhi 110001 India Tel: + 91 11 2338 1462 Fax: + 91 11 2338 6118 E-mail: [email protected] Website: www.petroleum.nic.in Confederation of Indian Industry (CII) Plot No. 249F, Sector 18, Udyog Vihar Phase IV, Gurgaon 122 015, Haryana India Tel: + 91 11 501 4060-67 Fax: + 91 11 501 4080 Email: [email protected] Website: www.ciionline.org

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