Oil India Limited
Presentation
May, 2013
Strictly Private and Confidential
Oil India: Brief Overview
Rich Heritage
 Independent India’s 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: 86,729 sq. km over 58 blocks
 International acreage: 38,944 sq. km
 Total 2P reserves of over 941 mmboe; with reserve
replacement ratio of over 123% in FY12
 Market cap : Rs. 35,366 cr *
 FY13 Total Revenue: Rs 11,456 cr
 FY13 PAT : Rs. 3589 cr
India’s Premier Oil & Gas “Navratna” Company Engaged in the Exploration, Development,
Production and Transportation of Crude Oil and Natural Gas in India
* Market cap as on 27.05.13
2
OIL Shareholding Structure
Others
16.0%
Listed on BSE / NSE
DII
7.9%
FII
7.7
Number of shares: 601.12 mn
GOI
68.4%
Dividend FY13
1st Interim Dividend/Share: Rs.11.00
2nd Interim Dividend/Share: Rs.12.00
Final Dividend/share: Rs.7.00
Share price (52 Week High / Low) : Rs.618 / Rs.431
Market Cap: Rs.35,366 crore
Source: Company Reports.
(1) Shareholding data as on 27.05.2013
(2) The share price data has been adjusted for the bonus issuance
Key shareholders
% Shareholding
Indian Oil Corporation
4.45%
Bharat Petroleum Corporation
2.23%
Hindustan Petroleum Corporation
2.23%
HSBC Bank (Mauritius) Ltd.
2.68%
HDFC Standard Life Insurance Company Limited
1.04%
HDFC Trustee Company Limited-Top 200 Fund
0.90%
HDFC Trustee Company Limited- HDFC Equity
Fund
0.84%
ICICI PRUDENTIAL LIFE INSURANCE
COMPANY 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
1962–1963
Transformed into
equal partnership
JV company
between Burmah
Oil Company and
Government of
India
Entered into a MoU
with IOCL for
pursuing overseas
exploration and
production
opportunities
"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
1981
1982
Became a wholly
owned
Government of
India enterprise
1999
2004
Participated first
time in NELP
2008
NRL-Siliguri Product
Pipeline (660km)
commissioned
2009–2013
IPO in September
2009 raising a
total of Rs.27.7 bn
Received
Navratna status
10% OFS by GOI
4
Integrated Oil & Gas Player
Exploration
Domestic: 65 E&P
blocks
International: US,
Venezuela , Gabon,
Egypt, Iran, Libya,
Nigeria, Timor Leste, and
Yemen
New Discoveries: 19
Small to medium size
discoveries (reserve size
less than 30 mn bbls)
during last three years
(FY10–12)
Production
50 years of experience
Crude Oil
Advanced recovery
techniques to maximize
production
– 1,157 km pipeline
FY’13 Produced 3.7
MMT of Crude oil:
– 39 installations
– 1,544 km pipelines
FY’13 Produced 2.64
~6MMT capacity
Multi-product
– 660km pipeline;
1.72MMT capacity
Overseas Pipeline
– 10% stake in 741km
pipeline (Sudan)
bcm of Natural Gas:
– 26 installations
– 583 km pipelines
PSC for 3 blocks has been signed under NELP IX
5
Transportation
Natural Gas
– 23% stake in 192 km
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
Domestic Industry Environment
Steady Growth in Domestic Energy Consumption
Driven by India’s Economic Growth Story
(mmtoe)
Energy Sources
Energy Sources – India
524
346
364
381
FY04
FY05
FY06
FY07
(%)
480
445
415
559
FY08
FY09
Hydro electricity
Renewables
5%
2%
Nuclear energy
1%
FY10
Natural gas
10%
Coal
53%
FY11
Source: BP Statistical Review of World Energy, June 2012.
Oil
29%
Significant Supply Deficit in the Domestic Market (1)
Crude Oil (mmtoe)
Total Consumption
Energy Sources – Global
Natural Gas (bcm)
(%)
162.3
61.1
Deficit
15
121.9
Hydro electricity
6%
24.5%
Nuclear energy
5%
Deficit
Renewables
2%
Oil
33%
75.1%
46.1
Coal
30%
40.4
Deficit
8
Production
Source: BP Statistical Review of World Energy, June 2012.
Natural gas
24%
Robust Domestic Fundamentals
India – A Fraction
of Global
Reserves (2)
India –
Significantly
Under-explored (3)
Among largest net
importers of oil globally
0.65% of World’s
Oil reserves (2)
Dependence on
Imports in past decade
0.77% of World’s
Gas reserves (2)
Only 22% of India
well explored (as of
31 March 2011)
India Remains a
Net Importer of
Crude (1)
Strong Domestic
Demand
India - the 4th largest
Energy consumer in
world (2)
Robust long-term
consumption outlook
Domestic Consumption Outlook
Gas
Oil
BCM
mmbpd
% of Total Oil Consumption
India: Exploration Status
FY2011
2030
4.3
125
Imports
81%
Poorly
Explored
22%
2005
36
Unexplored
12%
2.6
Initiated
Explor'n
44%
9
(1) Source: MoPNG.
(2) Source: BP Statistical Review of World Energy June 2012.
(3) Source: DGH, HEDA report 2010.
Explored
22%
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
7
21
40
15
2
1
18
27
2
7
21
1
58


RJ-ONN
RJ-ONN
ASSAM +AP
ASSAM +AP



GK-OSN-2010/1
AA-ONN-2004/2
Overseas (PI)
38,749
PEL
Nomination
1,445
NELP
(Operator)
18,464
KG-OSN
40%
KG-DWN
10%
KG-ONN
90%
AA-ONN
50%
AA-ONN
85%

AA-ONN
40%

AAP-ON
16%
AA-ONN
15%
AA-ONN
10%
MZ-ONN
85%
WB-ONN
25%
KG-DWN
10%

+
CY-OSN-2009/2
50%

15%
KG-DWN
20%
AN-DWN
10%
AN-DWN
40%
AN-DWN
30%
AN-DWN
40%
AN-DWN
30%

NELP I-VIII
Nomination ML(s) / PEL(s)
JVC Blocks

+
OIL as Operator
Joint
Map Not to Scale
Source: Company information.
11 NO – Non-operator
PI – Participatory Interests
40%
20%
MN-DWN 20%
KGDWN

100%
30%
NELP (NO)
61,296
Total Area – 125,478Sq km
30%
Kharsang
20%
Strong
presence in
prospective
East Coast
JV/PSC (NO)
316
CBM
113
AA-ONN

AA-ONN-2009/4 50%
30%
MN-OSN
PML
Nomination
5,095
40%
AS-CBM2008/IV
60%
75%
AA-ONN
AA-ONN
With Dominant International Footprint
Dominant International Footprint with Balanced Presence in Exploration Acreages & Producing Properties
50 sqkm
20%
50%
50%
25%(Sonatrach)
17.5% (Summit)
7,087sq.km
2,710sq.km
6,629sq.km
1,295sq.km
EGYPT
Block 3
Block 4
US
Colorado
Julesburg Basin
SUDAN
Pipeline
LIBYA
Area 86
Area 102/4
Area 95/96
IRAN
Farsi Offshore
NIGERIA
OPL 205
TIMOR LISTE
Block K
45%
3.5%
3,761sq.km
203sq.km
180sq.km
741sq.km
3,500sq.km
1,788sq.km
25%
(GSPC)
10%
20%(OVL)
12.5%
(Reliance)
GABON
Shakti
YEMEN
Block 82
Block 83
VENEZUELA
Carabobo 1 North
Carabobo 1 Central
Total Area –38,749sq.km
Operator
Area (Sq. km)
OIL’s Participating Interest (%)
12
6,725sq.km
2,600sq.km
1,853sq.km
364sq.km
12.75%
(Medco)
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 three well is
1800 bopd.
Mizoram
MZ-ONN-2004/1
(NELP-VI)
Gulf of Mannar
CY-OSN-2009/2
( NELP-VIII) –
Area: 3,761.65 Km²
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.
2 locations released
for drilling
1352 LKM
seismic
completed.
Data
sent
Interpretation.
for
Drilling of 1st well
expected to start by
June end.
Block Shakthi
(Onshore Gabon,
West Africa)
Drilling of third well is
in progress.
of 2D
survey
3D survey expected to
start 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
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
Available Resources
Dedicated Multifunctional Team pursuing
M&A opportunities
Utilising Expertise of International M&A
Advisers and Technical consultants to
identify and pursue opportunities
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
17
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:
OIL focuses its international efforts to:
Build Period
– Launch platforms for international core areas
– Acquire companies/enter partnerships as a non-operator
and Grow
Sustain and
Period
GrowPeriod
Sustain
– Build skills in new onshore, offshore and gas plays
18
– Make organizational change to operate assets
– 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 and Production Scale
1P Reserves represent:
10
12
Years current production of Crude Oil
Years current production of Natural Gas
Total Reserves (1)
11
Years current production of O+OEG
Proved and Developed Reserves – Split by Type
(mmbbl)
Proved developed reserves of approximately 225 mn barrels and natural gas
reserves of 199 mn barrels
473
Consistent Reserve Replacement Ratio Over One
2.04
FY08
19
1.69
FY09
1.65
FY10
Crude OIL
Source: Company Information
Note: (1) Data as of April 1, 2012.
1.42
FY11
1.23
FY12
Steady Production Growth
10.30
5.10
FY08
9.40
5.60
9.70
5.90
FY09
FY10
Production Accretion
5.90
8.40
FY11
Accretion
6.84
8.41
FY12
IOR/EOR Initiatives
Improvement in Production
Improvement in crude oil reserve
(in mm bbl)
(in mm bbl)
20.21
5.19
4.47
4.26
12.72
3.46
11.04
2.62
FY08
8.10
FY09
FY10
FY11
FY12
FY08
FY09
FY10
OIL has made investments in excess of Rs.2425 crore
in IOR/EOR initiatives during last five years
26
FY11
Excellent Oil and Gas Infrastructure
Infrastructure to Support E&P Activities
Production and Storage Facilities
Two 2D and
One 3D Seismic
crew
Six
Logging Trucks
72 Production
Installations
14 W/over Rigs
11 Drillings
Rigs
5,000km O&G
Pipelines
In-house Expertise and Integration across Energy Infrastructure
20
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
21
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
22
Commissioned Wind Energy
Project in Rajasthan.
LNG: MOU with Kakinada
Seaports
Strong Government Linkage
Government Owned Enterprise and continued government support evidenced by the recently awarded
“Navratna” status to the company making it more autonomous.
2nd Largest Public Sector E&P company
– Contributed Rs.68 bn to the exchequer in the FY2011–12
Management Independence
– A Navratna company with liberty to take financial decision upto Rs.10 bn, ability to raise Rs.30 bn
– Board power has been enhanced to USD 600mn for acquisition.
Contributions to Exchequer
(Rs. in bn)
Central Government
State Government
39.1
15.2
FY10
0.1
0.1
FY11
Royalty
Note: (1) Others include Service Tax, Custom Duties.
(2) Others include PEL Fees and Electricity Duties.
5.0
5.0
0.2
3.5
(1)
23
18.6
13.4
14.2
11.5
39.1
13.5
31.3
VAT/Sales Tax
FY12
Others
Plan outlay expenditure
Rs/crore
2890
2050
1743
1632
1557
FY09
FY10
1210
FY08
FY 11
FY 12
FY 13
Significant Investment Lined Up
XIIth 5year Plan: Rs.1,90,030 mn
Annual Plan 2013–14: Rs.35,809 mn
Overseas
17%
Investments
1%
Survey
12%
Capital
Equipment
17%
Exploration
32%
Development
21%
3D Seismic Surveys
Sq km
Exploratory Drilling
No. of well
1,795
32
Development Drilling
No. of well
38
21
19
500
FY13
FY14
FY13
FY14
FY13
Substantial Increase in Exploratory and Development Drilling Planned
24
FY14
Operating Performance
25
Crude Oil and Natural Gas Production
Crude Oil Production
Natural Gas Production
(in mm bbl)
(in mm scm)
2,633
2,639
FY12
FY 13
27.53
26.21
25.57
FY10
26
2,415
25.67
FY11
2,352
FY12
FY 13
FY10
FY11
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
5.45
(US$/boe)
5.51
4.22
2.4.11
4.02
3.80
3.80
2.99
5.19
2.82
FY09
FY10
FY11
Finding Costs
FY12
FY13
F&D Costs
Crude Oil Production Cost
Natural Gas Production Cost
USD/Barrel
USD / MMBTU
0.35
FY09
5.2
FY10
Raising Cost
27
Source: Company Information.
5.32
FY11
Depreciation
1.14
5.85
FY12
Depletion
0.08
0.08
0.09
0.08
0.25
0.27
0.22
0.19
0.08
0.25
0.27
1.23
0.17
2.19
2.11
0.33
0.43
8.11
8.23
1.97
1.61
1.35
5.1
7.62
7.24
6.80
1.22
1.38
1.27
0.94
0.96
1.02
0.89
0.89
FY09
FY10
FY11
FY12
FY13
5.67
FY13
Raising Cost
Depreciation
Depletion
Natural Gas Pricing
Natural Gas Price at USD 4.2/mmbtu for 10000 Cal (inclusive of royalty) was last approved in
May,2010.
OIL’s 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:
 OIL’s PAT will improve by ~Rs 220 crore.
 OIL’s contribution to exchequer will be increased by ~Rs 254 crore – ~Rs 78 crore to State
Govt and ~Rs 176 crore to Central Govt
Sharing of Subsidy by Upstream Companies
Rs. in crore
% Sharing
Rs. In cr.
% Sharing
2009–10
2010–11
2011-12
2012-13
ONGC
80%
82%
81%
81%
7892
OIL
11%
11%
13%
14%
3,183
2687
GAIL
9%
7%
6%
5%
55,000
60,000
Total
100%
100%
100%
100%
2009–10
2010–11
2011-12
2012-13
ONGC
11,554
24893
44,465
49,421
OIL
1,549
3293
7,352
GAIL
1,326
2111
Total
14,430
30297
Realised Price (USD/Barrel)
119.7
114.7
111.4
109.6
86.1
68.5
2.3
2.3
2.6
56.2
1.5
2.7
2.6
59.8
58.5
1.8
41.4
39.8
2.7
42.5
2.7
1.9
2.7
55.4
53.6
1.9
38.9
33.1
34.7
24.9
0
FY08
FY 10
FY09
FY 11
Gross Realized Price
28
FY 12 FY10
FY13
Realized Price after Subsidy/Discount
FY11
Q4 FY12
Net Realized Price
0
0
FY12
Q4 FY13
Financial Performance
29
Growing Revenue and Profit
Revenue
EBITDA
(Rs.mn)
(Rs.mn)
72,414
79,056
83,206
FY09
FY10
FY11
98,632
99,476
FY12
FY 13
35,680
FY09
Net Profit
48,050
FY10
FY11
61,234
FY12
FY13
Dividend Payout Ratio
(Rs.mn)
(As a % of Profit)
21,617
26,105
28,879
FY10
FY11
FY09
Source: Company financials
30
43,800
61,110
34,469
35,893
FY12
FY 13
50%
30%
31%
31%
33%
FY09
FY10
FY11
FY12
FY13
Leverage Remains Low
Earnings Per Share
(in Rs.)
114
101
120
143
Book Value Per Share
FY13 EPS is based
on post bonus issue
share capital
(in Rs.)
572
FY10
FY11
FY12
FY13 Book Value is
based on post bonus
issue share capital
436
60
FY09
649
738
320
FY09
FY 13
FY10
Total Debt
FY11
FY12
FY13
Total Equity
(Rs.mn)
10,578
(Rs.mn)
192,115
177,213
10,143
156,019
137,637
93,310
565
FY09
375
101
FY10
Source: Company financials
31
FY11
FY12
FY13
FY09
FY10
FY11
FY12
FY13
Guidance: FY’14
2013-14
(Target)
Crude oil production
Natural gas production
3.95 MMT
2,740 mmscm
 Increase in Exploratory and Development Drilling Meterage
 Increase in Work Overs
 Enhanced Water Injection
 Endeavour to Enhance LPG production through NGL Recycling
 Endeavour to Reduce Gas Flaring by Inducting LNG Technology
32
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 2010–11 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
33
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
34
Thank You