OIL and GAS
For updated information, please visit www.ibef.org November 2017 Table of Content
Executive Summary……………….….…….3
Advantage India…………………..….……...4
Market Overview and Trends………..……..6
Porters Five Forces Analysis.….…..……...28
Strategies Adopted……………...……….…30
Growth Drivers……………………...... 33
Opportunities…….………...... …………..…40
Success Stories…………...... …..…...…....43
Useful Information………...... ………….….46 EXECUTIVE SUMMARY
. In FY17, India had 234.5 MMTPA of refining capacity, making it the 2nd largest refiner in Asia. By the end of Second largest refiner in 2017, the oil refining capacity of India is expected to rise and reach more than 310 million tonnes. Private Asia companies own about 38.21 per cent of total refining capacity
World’s fourth-largest . India’s energy demand is expected to double to 1,516 Mtoe by 2035 from 723.9 Mtoe in 2016. Moreover, the energy consumer country’s share in global primary energy consumption is projected to increase by 2-folds by 2035
Fourth-largest consumer . In 2016-17, India consumed 193.745 MMT of petroleum products. In 2017-18, up to October, the figure stood of oil and petroleum at 115.579 MMT. products . India was 3rd largest consumer of crude oil and petroleum products in the world in 2016.
. LNG imports into the country accounted for about one-fourth of total gas demand, which is estimated to further increase by two times, over next five years. To meet this rising demand the country plans to increase its LNG import capacity to 50 million tonnes in the coming years. Fourth-largest LNG . India increasingly relies on imported LNG; the country is the fourth largest LNG importer and accounted for importer in 2016 5.68 per cent of global imports.
. India imported 18.787 MMT of LNG during 2016-17, in comparison to16.217 MMT in 2015-16. LNG imports in 2017-18, up to September, were 9.39 MMT.
Notes: MMTPA - Million Metric Tonnes Per Annum, Mtoe – Million Tonnes of Oil Equivalent; mbpd – Million Barrels Per Day; Figures mentioned in this slide is as per latest data available Source: US Energy Information Administration (EIA), Ministry of Petroleum and Natural Gas
3 Oil and Gas For updated information, please visit www.ibef.org Oil and Gas
ADVANTAGE INDIA ADVANTAGE INDIA
. India is the world’s 4th largest energy . The University of Petroleum and Energy consumer; oil and gas account for Studies in Dehradun, Uttarakhand, is 35.61 per cent of total energy Asia’s 1st and only energy university consumption in India . Indian Oil is going to invest Rs 1.8 trillion . Demand for primary energy in India is over the next five to seven years to to increase 3-fold by 2035 to 1,516 expand its refining capacity. million tonnes of oil
ADVANTAGE INDIA
. The government allows 100 per cent . Government has enacted various Foreign Direct Investment (FDI) in policies such as the New Exploration upstream and private sector refining Licensing Policy (NELP) and Coal Bed projects Methane (CBM) policy to encourage investments . The FDI limit for public sector refining projects has been raised to 49 per cent . New domestic natural gas pricing without any disinvestment or dilution of guidelines has been enforced on 10th domestic equity in the existing PSUs January 2014
Note: mbpd – Million Barrels Per Day, bcm – Billion Cubic Metres, F – Forecast; Figures mentioned in this slide is as per latest data available Source: Business Monitor International (BMI), World Oil Outlook 2012, Ministry of Petroleum and Natural Gas, BP Statistical Review 2015,
5 Oil and Gas For updated information, please visit www.ibef.org Oil and Gas
MARKET OVERVIEW AND TRENDS STATE-OWNED COMPANIES DOMINATE OIL AND GAS IN INDIA
. India became the 3rd largest energy consumer in 2015 and continued to remain so in 2016.
. In FY17, oil production in the country reached 36.008 million metric tonnes as compared to 36.942 million metric tonnes in FY16. In 2017-18, up to September, oil production stood at 18.025 million metric tonnes. As of 2016, the country had 600 million metric tonnes (MMT) of proven oil reserves
. India had 1.2 million cubic metres of proven gas reserves at the end of 2016 and produced 30.84 bcm of gas in FY17 which is expected to rise and reach 34.119 bcm by the end of 2017.
. State-owned ONGC dominate the upstream segment. Upstream segment - exploration and . It is the largest upstream company in Exploration and Production (EandP) segment, production accounting for approximately 61.5 per cent of the country’s total oil output (FY17).
. IOCL operates a 11,214 km network of crude, gas and product pipelines, with a capacity of Midstream Indian Oil and segment – storage 1.6 mbpd of oil and 10 mmscmd of gas Gas sector and transportation . This is around 30 per cent of the nation’s total pipeline network
. IOCL is the largest company, controls 10 out of 22 Indian refineries, with a combined capacity of 1.31 mbpd Downstream segment – refining, . Reliance launched India’s 1st privately owned refinery in 1999 and has gained considerable processing and market share (30 per cent) marketing . Essar’s Vadinar refinery has a capacity of 20 mmtpa, currently accounting for around 10 per cent of total refining capacity
Notes: bcm – Billion Cubic Metres, tcf – Trillion Cubic Feet, mbpd – Million Barrels Per Day, mmscmd - Million Metric Standard Cubic Metre Per Day, tcm -- trillions of cubic meters, mmtpa - - million metric tons per annum Source: BP Statistical Review 2015, US Energy Information Administration, Ministry of Petroleum and Natural Gas, Aranca Research
7 Oil and Gas For updated information, please visit www.ibef.org OIL SUPPLY AND DEMAND IN INDIA (1/2)
. Oil consumption has expanded at a CAGR of 2.98 per cent during Oil consumption in India (2008-17) (mbpd) FY2008–17E to reach 4.13 mbpd by 2017.
. Due to the expected strong growth in demand, India’s dependency 4.50 on oil imports is likely to increase further
4.00
. Rapid economic growth is leading to greater outputs, which in turn is
4.13
increasing the demand of oil for production and transportation
4.00 4.00
3.50 3.85
3.73
. With rising income levels, demand for automobile is estimated to 3.69
increase, in turn leading to augmented demand for oil and gas 3.49
3.00
3.32
3.24 3.08 2.50
2.00
1.50
1.00
0.50
0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E
Note: F – Forecast, CAGR – Compound Annual Growth Rate, mbpd – Million Barrels Per Day, mn bbl – Million Barrels, E- Estimated Source: Ministry of Oil and Natural Gas, BP Statistical Review 2015 BMI Forecasts, Aranca Research
8 Oil and Gas For updated information, please visit www.ibef.org OIL SUPPLY AND DEMAND IN INDIA (2/2)
. In FY17, total crude oil imports were valued at US$ 80.3 billion as ImportsVisakhapatnam and domestic port oil trafficproduction (million in Indiatonnes) (mbpd ) compared to US$ 70 billion in FY16. In FY17, imports accounted for 82 per cent of the country’s total oil demand. In FY18, up to 6.00 September, Crude Oil Production and Imports stood at 0.36 and 2.14 mbpd respectively.
. In March 2017, the Indian Strategic Petroleum Reserve Ltd (ISPRL) 5.00 4.27 and Abu Dhabi National Oil Company (ADNOC) of UAE signed an 4.05 agreement, to fill up 0.81 MMT or 5,860,000 million barrels of crude 3.69 3.78 3.79 oil at ISPRL storage facility at Mangalore, Karnataka. 4.00 3.43 3.27 3.18 . According to the Organisation of the Petroleum Exporting Countries (OPEC), the demand for oil across the world will grow by 1.26 million 3.00 barrels per day (mb/d). Moreover, majority of the oil demand across the globe is expected to originate from India. 2.14 2.00
1.00
0.67 0.75 0.76 0.76 0.76 0.75 0.74 0.72 0.00 0.36 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY181
Oil Production (mbpd) Oil imports(mbpd)
Note: F – Forecast, mbpd – Million Barrels Per Day, FY181-Up to September Source: Ministry of Oil and Natural Gas, BMI forecasts, Aranca Research
9 Oil and Gas For updated information, please visit www.ibef.org GAS SUPPLY AND DEMAND IN INDIA (1/2)
. India’s gas consumption has increased at a CAGR of 2.3 per cent Proven reservesVisakhapatnam and total gasport consumption traffic (million in tonnes)the country (bcm) between 2007 and 2016.
. Demand is not likely to simmer down anytime soon, given strong 1600 economic growth and rising urbanisation. Gas consumption is 1,427 projected to reach 216 bcm by 2021-22. 1400 1,330 1,355 1,278 1,252 1,227 1200 1,155 1,149 1,090 1,055 1000
800
600
400
200 40 42 52 63 64 59 51 51 47 49 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Gas Consumption Proven Gas Reserves
Note: F – Forecast, bcm – Billion Cubic Metres, CAGR – Compound Annual Growth Rate Figures mentioned in this slide is as per latest data available Source: PPAC, BP Statistical Review 2015, Ministry of Oil and Natural Gas 2014, Aranca Research;
10 Oil and Gas For updated information, please visit www.ibef.org GAS SUPPLY AND DEMAND IN INDIA (2/2)
. Domestic production accounts for more than three-quarter of the Domestic gas production and imports (bcm) country’s total gas consumption
. Demand is expected to increase due to higher economic growth, 70 ensure less dependency on imported crude and a desire to use cleaner fuel 18 60 13 . India’s LNG imports increased at a CAGR of 9.55 per cent during 12 17 FY08–FY17. 25 50 22.7 51 17 21.6 . Domestic gas production in India stood at around 30.84 billion cubic 47 metres in FY17. 45 40 11 11 . In India, auto LPG sector registered sales growth of 4.9 per cent in 40 the fiscal year 2016-17. Moreover, the sales volume growth was 35 12 30 33 about 8.18 per cent in March 2017, as against March 2016. In 32 32 32 31 addition, the auto LPG sales in India grew to 346 TMT in 2016-17, in comparison to 330 TMT in 2015-16 20 24
10
0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Gas production Gas Imports
Note: bcm – Billion Cubic Metres, TMT – Thousand Metric Tonnes, Estimated Figures Source: Ministry of Oil and Natural Gas, BP Statistical Review 2015, Aranca Research
11 Oil and Gas For updated information, please visit www.ibef.org UPSTREAM SEGMENT: CRUDE OIL AND GAS PRODUCTION (1/2)
Annual crude oil production (“000” Tonnes) Crude Oil Production (“000” Tonnes)
40000 40000
35000
35000
10527
11640 12076
30000 11785
19089
11356 5263
30000 10839
18421
17918
17419
16330
16230 19116 25000 3572 19794 25000 3847 3661
3466 3412 3226 3480
20000
20000
24855
15000 23716
22561
22368
22264 22246
15000 22218
19536
19431
18472
18016 17853 10000 17588 16411 10000
5000 11809 5000 0 0
FY11 FY12 FY13 FY14 FY15 FY16 FY17
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2009-10 ONGC OIL Pvt/JV Onshore Offshore
. In 2016-17, crude oil production stood at 36 million tonnes. . ONGC accounted for 61.7 per cent of total crude oil production in India.
Notes: mmt – Million Metric Tonne, JV – Joint Venture P - Provisional Source: Ministry of Petroleum and Natural Gas, Aranca Research, petroleum.nic.in;
12 Oil and Gas For updated information, please visit www.ibef.org UPSTREAM SEGMENT: CRUDE OIL AND GAS PRODUCTION (2/2)
Annual gas production (million metric standard cubic meter) Annual gas production (million metric standard cubic meter)
50000 60000
45000
50000
40000
43645 35000 26774
40000
21609
38811 38475
30000
25000 30000 14491
6872
31802
9497
8912
8235 20000 2350 2633 2639 2626
2722
2838 2937
26395
24861 20000
15000
23012
22038
23549
23316
23284
23095 22088
10000 22023
21177
10000
5000
8685 8574 9084 8877 9012 8797 9237 9294 0 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Onshore Offshore OIL ONGC Pvt/JV
. Total gas production in FY17 was 31.21 bcm. . Annual gas production increased between FY09-10 and FY16-17, reaching 31,896 mmscm
Note: bcm – Billion Cubic Metres, mmscmd-- Million Metric Standard Cubic Meter Per Day, JV – Joint Venture Source: Ministry of Petroleum and Natural Gas; Aranca Research
13 Oil and Gas For updated information, please visit www.ibef.org UPSTREAM SEGMENT: EXPLORATION AND DEVELOPMENT ACTIVITIES
Development drilling activities (FY171)) Exploration activities (FY17(1))
1000 350 900 628 300 227 800 700 250 600 200 500 150 400 119 300 100 222 312 102 200 50 100 86 40 0 0 Offshore Onshore Offshore Onshore
Wells Meterage ('000 metres) Wells Meterage ('000 metres)
. During FY17(1), 1,245,000 metres of wells were explored and developed and 540 wells were drilled in the country. . State-owned oil companies undertake most of the upstream drilling and exploration work.
Notes: FY17(1) - Provisional Source: Ministry of Petroleum and Natural Gas, Aranca Research, BMI
14 Oil and Gas For updated information, please visit www.ibef.org PIPELINES: CRUDE PIPELINE NETWORK
Shares in crude pipeline network by length (out of 10,299km) Shares in crude pipeline network by capacity (out of 139.2 (September 2017)1 MMTPA) (September 2017)1
IOCL ONGC 17.03% 25.38% OIL 6.03% 42.03% IOC
51.47%
11.56% ONGC OIL
11.58% 34.91% Others Others
. As on 1st September 2017, India had a network of 10,299 km of crude pipeline having a capacity of 139.2 mmtpa(1) . In terms of length, IOCL accounts for 51.47 per cent (5,307 km) of India’s crude pipeline network in September 2017. . In terms of actual capacities, ONGC leads the pack with a share of 42.03 per cent, followed by IOCL at 34.91 per cent
Note: km – Kilometre, mmtpa – Million Metric Tonnes Per Annum, (1)Approximate Source: Ministry of Petroleum and Natural Gas, Aranca Research
15 Oil and Gas For updated information, please visit www.ibef.org Pipelines: Existing Pipelines in India
IOCL BPCL(1) HPCL(2) OIL ONGC(3) Cairn HMEL Others (GAIL and Petronet India.) Total industry
Length (Kms)
Product 7,503 1,936 3,333 654 - - - 2,688 16,114 Pipeline
Crude oil 5,301 937 - 1,193 1,191 660 1,017 - 10,299 Pipeline
Total 12,804 2,873 3,333 1,847 1,191 660 1,017 2,688 26,413
Capacity of Crude Oil Pipelines (MMTPA)
Product 48.6 14.9 34.6 1.7 - - - 9.3 105.6 Pipeline
Crude oil 40.4 6.0 - 8.4 58.5 8.7 9.0 - 139.2 Pipeline
Total 89.0 20.9 34.6 10.1 58.5 8.7 9.0 9.3 227.3
Note: kms – Kilometres, mmtpa – Million Metric Tonnes Per Annum, (1) Includes Petronet Cochin-Coimbatore-Karur Product pipeline, (2) Includes Petronet Mangalore-Hassan-Bangalore Product Pipeline, (3) Data as on 1st September, 2017 Source: Ministry of Petroleum and Natural Gas, Aranca Research
16 Oil and Gas For updated information, please visit www.ibef.org PIPELINES: REFINED PRODUCTS AND LPG PIPELINE NETWORK
Shares in products pipeline network under operation by length Shares in Natural Gas pipeline network by length (out of 16,454 (out of 16,441km, FY182) km) (FY183)
1.00% GAIL IOC 4.97% 16.35% Reliance HPCL 15.87% 3.98% GSPL
47.62% BPCL 11.78% 10.84% ARN
OIL 67.32% Others 4
20.27% 1 Others
. With 16,441 km of refined products pipeline network (capacity of 105.6 mmtpa) in India, Indian Oil Corporation (IOC) leads the segment with 47.62 per cent of the total length of product pipeline network, as of October 1, 2017. . Top 3 companies IOC, HPCL and BPCL contribute 79.77 per cent of the total length of product pipeline network in the country. . In September 2017, Gas Authority of India Ltd. (GAIL) has largest share (67.32 per cent or 11,077 km) of the country’s natural gas pipeline network (16,454 km) Note: km - Kilometre, mmtpa – Million Metric Tonnes Per Annum, LPG - Liquefied Petroleum Gas, IOC - Indian Oil Corporation, HPCL - Hindustan Petroleum Corporation Ltd, BPCL - Bharat Petroleum Corporation Ltd, OIL - Oil India Limited, (1)Others include GAIL and Petronet India, (2)As of October 1, 2017, (3)As of September 1, 2017, (4)Others include IOCL and ONGC Source: Ministry of Petroleum and Natural Gas, Aranca Research
17 Oil and Gas For updated information, please visit www.ibef.org DOWNSTREAM SEGMENT: REFINERY CRUDE THROUGHPUT… (1/2)
. State-controlled entities dominate the downstream segment as well VisakhapatnamRefinery crude port throughputtraffic (million (mmt tonnes)) . India has 19 refineries in the public sector and 3 in the private sector
. Private companies such as Reliance Industries Ltd. and Essar Oil 250
have become major refiners
. In 2017, up to September, public sector refineries accounted for
89 89
200
88 88 88 88
62.81 per cent of total refinery crude throughput 88
81 81
82 82
81 81
. Private sector refineries’ total crude throughput grew at a CAGR of 68.4 10.11 per cent, reaching to 91.1 mmt during FY08-17.
150
49 49
44 44
100 126.3
121.4
120.9
120.3
119.5
115.5
115.3
112.5
112.2 112.1
50
0 2008 2009 2010 2011 2012 2013 2014 2015 2016 20171
Public sector Private sector
Note: mmt – Million Metric Tonne, (1)Upto September 2017 Source: Ministry of Petroleum and Natural Gas, Aranca Research
18 Oil and Gas For updated information, please visit www.ibef.org DOWNSTREAM SEGMENT: REFINERY CRUDE THROUGHPUT… (2/2)
Shares in India's total refining capacity (FY17) Total installed capacity FY17 (mmt)
250
95 200 80 RIL IOC 80 22.68% 25.59% 150
135.1 139.5 5.12% 120.1 BPCL HPCL 100 6.70% 50 10% 29.51%
CPCL Others 0 FY15 FY16 FY17
Public sector Private sector
. In FY17, the sector’s total installed provisional refinery capacity was 243.5 mmt. IOC emerged as the largest domestic refiner with a capacity of 69.2 mmt . Top three companies - RIL, IOC and BPCL contribute around 65.5 per cent of India's total refining capacity
Note: mmt – Million Metric Tonne; HPCL - Hindustan Petroleum Corporation Ltd, BPCL - Bharat Petroleum Corporation Ltd, OIL - Oil India Limited, ONGC - Oil and Natural Gas Corporation, IOCL - Indian Oil Corporation Ltd, CPCL - Chennai Petroleum Corporation Limited, Others include: NRIL - Numaligarh Refinery Limited, MRPL - Mangalore Refinery and Petrochemicals Limited, RPL - Renegade Petroleum Ltd, EOL - Essar Oil Ltd, ONGC, BORL, HMEL Source: Ministry of Petroleum and Natural Gas, PPAC, Aranca Research
19 Oil and Gas For updated information, please visit www.ibef.org DOWNSTREAM SEGMENT: PETROLEUM PRODUCTS
. Consumption of petroleum products in India stood at 183.5 mmt in Consumption of Petroleum Products FY17 (mmt) FY15, 184.6 mmt in FY 16 and 193.75 mmt in FY17. 250.0 . Petroleum products derived from crude oil include light distillates such as LPG, naphtha; middle distillates such as kerosene; and 200.0 heavy ends such as furnace, lube oils, bitumen, petroleum coke and 46.4 150.0 31.6
paraffin wax 28.1 29.0 31.4
24.9
27.7 24.6 27.5
27.7 88.9 100.0
. Light distillates with the highest growth rate grew at CAGR of 4.78
81.9
82.8
81.8
82.7
79.4
75.0 71.1
per cent, while middle distillates and heavy end segment witnessed a 66.4 50.0 62.8 CAGR of 3.93 per cent and 5.89 per cent respectively, during the 50.9 54.7 58.5 38.4 39.7 39.0 41.4 43.9 46.3 47.6 year FY08-17. 0.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 . During FY17, the production of petroleum products by fractionators was 3,458 thousand metric tonnes. Production reached 2,239 tmt Light Distillates Middle Distillates Heavy Ends between Apr-Sep 2017. Production of Petroleum Products by Fractionators (tmt)
5000
4000
4,363
3000 4,191
4,175
4,169
4,089
4,084
3,996
3,872
3,657
3,458 3,377 2000
1000 2,239
0
FY FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY18*
Note: mmt – Million Metric Tonne, tmt – thousand metric tonne, FY18* - up to September Source: Ministry of Petroleum and Natural Gas, Aranca Research
20 Oil and Gas For updated information, please visit www.ibef.org DOWNSTREAM SEGMENT: DISTRIBUTION AND MARKETING
. In FY17, total consumption of petroleum products by private sector Downstream distribution statistics (MMT) increased to 22 per cent from 20 per cent in FY16. 250.0 . The total number of OMC retail outlets increased to 59,595 at the
end of FY17 from 56,190 at the end of FY16.
200.0
. IOC, as of March 31, 2017, owned the maximum number of retail
107.58
96.61
150.0 97.36
outlets in the country (44.0 per cent of total), followed by HPCL (24.2
97.36
109.72
per cent) and BPCL (23.5 per cent); the remaining being owned by
100.0
private firms
97.7
105.6 104.5
50.0 89.6 . As of March 21, 2017, there were 18,786 LPG distributors in India. 85.1
0.0 1 FY14 FY15 FY16 FY17 FY18
Product pipeline Natural Gas Pipeline
Capacity (mmtpa) Length (km) Pipeline As of October 1, 2017 As of October 1, 2017
Product Pipeline 105.6 16,441
Natural Gas Pipeline1 107.58 16,454
Note: MMT – Million Metric Tonne, mmtpa – Million Metric Tonnes Per Annum, OMC – Oil Marketing Companies, 1As of September 2017 Source: Ministry of Petroleum and Natural Gas, Aranca Research
21 Oil and Gas For updated information, please visit www.ibef.org INDIA’S ENERGY CONSUMPTION MIX … (1/2)
. Energy demand in the Asia-Pacific region is estimated to be around 5,579.7 Mtoe at the end of 2016 and is expected to reach 5,627 Mtoe by 2020 and 6,861 Mtoe by 2035
. India’s energy demand is projected to double to 48.7 quadrillion BTU by 2035
. The primary energy consumption of India rose by 5.66 per cent in 2016 and 3.24 per cent in 2015.
. In 2016, coal maintained its dominancy and accounted for 56.9 per cent of total primary energy demand.
. According to the International Energy Agency (IEA), India is expected to account for almost one-third of the global growth in energy demand by 2040.
Note: Mtoe – Million Tonne of Oil Equivalent, BTU – British Thermal Unit; Figures mentioned in this slide is as per latest data available Source: US Energy Information Administration (EIA), BP Statistical Review 2015, Asia-Pacific Economic Cooperation (APEC), Aranca Research
22 Oil and Gas For updated information, please visit www.ibef.org INDIA’S ENERGY CONSUMPTION MIX … (2/2)
. Over the next few years, dependence on gas, hydro power and Consumption pattern expected in 2035 nuclear power is expected to increase relative to oil and coal
. The government aims to quadruple India’s nuclear power generation capacity to 20 GW by 2020; currently, 7 nuclear power reactors of Coal 4,930 MWe capacity are under construction 8.00%
. In coming decades, a major portion of consumption dependability of 11.00% Petroleum energy mix is expected to shift from coal and petroleum to other resources like natural gas, solid biomass and waste and nuclear and 42.00% other renewable sources 15.00% Solid Biomass and Waste
Natural Gas
24.00%
Nuclear and other renewables
Note: 1As of September 2017 Source: International Energy Agency (IEA), Aranca Research
23 Oil and Gas For updated information, please visit www.ibef.org STATE-WISE CRUDE RESERVE, CAPACITY AND THROUGHPUT
Balance recoverable reserves Installed capacity, Crude throughput for State State of crude oil, 2017 (MMT) as of April 2017 (mt) FY 2017 (mmt)
Assam 159.96 Gujarat 93.7 105.01 Maharashtra 19.5 22.05 Gujarat 118.61 Haryana 15.0 15.64 Rajasthan 24.55 Karnataka 15.0 15.97 Tamil Nadu 9.00 Tamil Nadu 1.5 0.53 Andhra Pradesh 8.15 Kerala 12.4 11.82
Nagaland 2.38 Andhra Pradesh 8.396 9.42
Arunachal Pradesh 1.52 Uttar Pradesh 8.0 9.23 West Bengal 7.5 7.69 Tripura 0.07 Assam 7.0 6.57 Total Onshore 324.24 Bihar 6.0 6.53 Western Offshore 239.20 Punjab 9.0 10.52
Eastern Offshore 40.67 Madhya Pradesh 6.0 6.36
Total Offshore 279.87 Odisha 15 8.23
Himachal Pradesh 10.5 9.76
Total 234.496 245.33
Note: Mmt – Million Metric Tonne, mt – Million Tonne Source: Ministry of Petroleum and Natural Gas, Aranca Research
24 Oil and Gas For updated information, please visit www.ibef.org KEY DOMESTIC OIL AND GAS COMPANIES
Ownership FY17 turnover Company (per cent) as on FY16-17 (US$ billion)
57.34% Indian Oil Corporation Limited 55.29 state-owned
Reliance Industries Public Listed 48.46
Bharat Petroleum Corporation 54.93% 31.13 Limited state-owned
Hindustan Petroleum 51.11% 29.26 Corporation Limited state-owned
68.07% ONGC 11.99 state-owned
54.97% GAIL India Limited 7.68 state-owned
66.60% Oil India Limited(1) 1.69 state-owned
Note: : FY – Indian Financial Year, April–March (1) - Data for half year ended September 2015 Source: Bloomberg, Aranca Research
25 Oil and Gas For updated information, please visit www.ibef.org KEY INTERNATIONAL OIL and GAS COMPANIES OPERATING IN INDIA
Ownership Global turnover Company (per cent) (2016) ( US$ billion)
Cairn India Pvt Ltd Private Sector 0.639
Shell Private Sector 233.6
BP Private Sector 186
Source: Indian counterpart, Bloomberg, Aranca Research, Company websites
26 Oil and Gas For updated information, please visit www.ibef.org NOTABLE TRENDS IN THE OIL AND GAS SECTOR
. Government approved the CBM policy in 1997 to boost the development of clean and renewable energy Coal Bed Methane resources (CBM) . The CBM policy was designed to be liberal and investor friendly; the 1st commercial production of CBM was initiated in July 2007 at about 72,000 cubic metres per day
. The technology was first widely used in the US in the 1800s and in India (Kolkata and Mumbai) in the early 1900s Underground Coal Gasification (UCG) . UCG is currently the only feasible technology available to harness energy from deep unmineable coal seams economically in an eco-friendly manner and it reduces capital outlay, operating costs and output gas expenses by 25–50 per cent vis-à-vis surface gasification
. The government initiated the National Gas Hydrate Programme (NGHP), a consortium of national E and P Gas hydrates and bio- companies and research institutions, to map gas hydrates for use as an alternate source of energy fuels . Bio-fuels (bio-ethanol and bio-diesel) are alternate sources of energy from domestic renewable resources; these have lower emissions compared to petroleum or diesel
. The Open Acreage Licensing Policy (OLAP), which allows an explorer to study the data available and bid for Open Acreage Licensing blocks of his choice has been initiated in parallel with NELP to increase foreign participation by global E and P Policy companies like Shell, BP, Conoco Phillips etc
27 Oil and Gas For updated information, please visit www.ibef.org Oil and Gas
PORTERS FIVE FORCES ANALYSIS Porter’s Five Forces Framework Analysis
Threat of Substitutes
. Low - Threat is low, as other sources of energy like solar, wind, coal and hydro electric power are less developed. Pressure from alternative sources might rise in future
Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers
. Medium - Bargaining power is . Low - Competitive rivalry is low as . Low - Customers have low/non medium as despite few players just one-two players operate in existent bargaining power operating, government at times delays Upstream, Midstream and . Customers are price-taker not a price subsidy payment to oil companies, Downstream segments maker thereby increasing losses . Although a few private operators have entered the industry in the last couple of years, they do not pose any major threat as of now
Threat of New Entrants
. Low - Threat of new entrants continues to be low, due to the capital Positive Impact intensive nature of the industry and Neutral Impact economies of scale Negative Impact
Source: Aranca Research
29 Oil and Gas For updated information, please visit www.ibef.org Oil and Gas
STRATEGIES ADOPTED STRATEGIES ADOPTED … (1/2)
. Indian Oil Corp plans to make an investment of US$22.91 billion, including US$7.64 billion for expanding its existing brownfield refineries, in the next 5 to 7 years. Moreover, the company plans to lay the nation's longest LPG pipeline of 1987 km, from Gujarat coast to Gorakhpur in eastern Uttar Pradesh, to cater to growing demand for cooking gas in the country
. State run energy firms Bharat Petroleum, Hindustan Petroleum and Indian Oil Corp plan to spend US$ 20 billion on refinery expansions to add units, by 2022
. India targets US$100 billion worth investments in gas infrastructure by 2022, including an addition of another 228 cities to city gas distribution (CGD) network. This would include setting up of RLNG terminals, pipeline projects, completion of the gas grid and setting up of CGD network in more cities. Expansions . As of May 2017, the Indian government is in talks with major Asian countries including China, South Korea, Taiwan and Japan to push for an Asian Natural Gas Trading Company in order to reduce the impact of oil price volatility on the Asian market. Open Acreage Licensing Policy . In August 2017, the Board of Indian Oil approved its expansion of its Gujarat refinery from 13.7 MMTPA to 18 MMTPA at a cost of US$ 2.31 billion.
. The country’s state owned oil companies aim to sustain spending at a 3 year high due to increasing demand and declining oil services costs. In 2017, Hindustan Petroleum plans to increase its spending by 17 per cent and Indian Oil by 25 per cent.
. Indian Oil plans to expand its refining capacity and build new businesses, for which it will be spending US$ 27.94 billion over the next 5-7 years.
. Oil companies are focusing on vertical integration for next stage of growth. For instance, oil producer Oil India Ltd is planning to build and operate refineries, while Indian Oil is planning to enter oil and gas exploration
Diversification . As of March 2017, Bharat Petroleum Corp. Ltd. (BPCL), an Indian state-controlled oil and gas company, plans to enter the country’s travel business with the launch of its startup named as “Happy Roads”. The app,which is available on Android Play Store, documents itineraries and assists the users in planning a fun-filled trip
Source: Aranca Research
31 Oil and Gas For updated information, please visit www.ibef.org STRATEGIES ADOPTED … (2/2)
Move to non- . Companies are looking forward to developing JVs and technical partnership with foreign companies to improve capabilities conventional energy to develop shale reserves resources
. Indian companies are enhancing production through redevelopment plans to increase recovery rates of hydrocarbon from Investments to enhance oil wells; ONGC in Mumbai High achieved success in implementing this. production . Bharat Petroleum Corporation (BPCL) has planned to invest US$ 1.53 billion during FY17 to enhance and expand its refining capacity
. Private sector units like Adani, Sun Petrochemicals and few new entrants have bagged 1/3rd of small oil and gas fields. More focus upon small companies . In February 2017, Genesis, London, bagged a contract from RIL’s (Reliance Industries) to design deep water field front end engineering at KG Basin in West India.
Pilot project Initiated for . Oil and Natural Gas Corp (ONGC) has started Shale Gas exploration by spudding the first Shale Gas well RNSG-1 in Shale Gas Production in Burdwan District of West Bengal. India
. By March 2017, state-owned natural gas company, GAIL, plans to start distributing piped cooking gas in Bhubaneswar and Varanasi. Piped Cooking Gas . As of August 2017, Indian Oil has initiated doubling of its capacity of gas and piped natural networks from15,000km to 30,000km.
Notes: ATM - Automated Teller Machine, FIP – Financial Inclusion Plan, RBI – Reserve Bank of India Source: India Banking Association, Reserve Bank of India, Aranca Research
32 Oil and Gas For updated information, please visit www.ibef.org Oil and Gas
GROWTH DRIVERS GROWTH DRIVERS … (1/2)
. India is the world’s 4th largest energy consumer Robust domestic market; . Oil consumption is expected to rise by 42.5 per cent during 2010–20 expected to expand . The country is the 4th largest importer of LNG
Increasing demand for . Several industries are increasing the usage of natural gas in operations; this has boosted natural gas demand in India natural gas . Some of the main industries that use natural gas are pulp, paper, metals, chemicals, glass, plastic and food processing
. The nation has large coal, crude oil and natural gas reserves Abundant raw material . Proven Oil reserves amounted to 600MMT in 2016 . Proved reserves of natural gas stood at 1.2 tcm in 2016
. The government has allowed 100 per cent FDI in E and P projects/companies; and 49 per cent in refining under the automatic route from the earlier approval route Favourable policies . It has also introduced policies to promote investments in the industry such as New Exploration Licensing Policy (NELP) and Coal Bed Methane (CBM)
. Investments worth US$ 75 billion is expected across the oil and gas value chain under the erstwhile 12th Plan (2012–17)
Huge investments . ONGC plans to incure capital expenditure of US$ 4.31 billion in FY2017-18, for developing their offshore oil and gas fields in Gamji, Bassein, Daman on the West coast and Vasishta and Nagyalanka on the East coast.
Notes: TCM - Trillion Cubic Metres, EandP - Exploration and Production Source: Ministry of Petroleum and Natural Gas, US Energy Information Administration, BP Statistical Review of World 2015 Energy, June 2012; BMI, Aranca Research
34 Oil and Gas For updated information, please visit www.ibef.org GROWTH DRIVERS … (2/2)
. The nation offers abundant skilled labour at much competitive wages compared to other countries Skilled labour . The University of Petroleum and Energy Studies in Dehradun, Uttarakhand, is Asia’s first and only energy university
Massive gas pipeline . In September 2017, country’s natural gas pipeline network spanned over 16,454 km in length and the proposed expansion network of 30,000 kms is envisaged by 2018-19
. Several domestic companies (such as ONGC, Reliance and Gujarat State Petroleum) have reportedly found natural gas in deep waters
. In March, ONGC started production at two oil wells located in Jorhat, Assam. These oil wells were discovered in 2016-17, and are producing 50 tonnes per day, which increased the overall production of Jorhat asset from 350 tonnes per day to Natural gas discoveries 400 tonnes per day. . In April 2017, ONGC claimed to have made 23 new gas and oil discoveries in the fiscal 2016-17 and the company has set new record in exploring and production activities.
. In June 2017, Oil India Ltd. has made a oil discovery in the Baghjan area of upper Assam basin. The discovery was made by Baghjan Petroleum Mining Lease (PML).
Notes: Kms- Kilometres Source: Ministry of Petroleum and Natural Gas, BMI, Aranca Research
35 Oil and Gas For updated information, please visit www.ibef.org REGULATORY OVERVIEW OF THE INDUSTRY… (1/2)
Pricing of CNG and PNG . In 2014, the pricing for CNG (transport) and PNG (domestic) were examined by the Ministry of Petroleum and Natural Gas by CGD Entities (2014) while the disclosure of prices of the CNG and PNG commodities were made compulsory
The Policy on Shale Gas . Allows companies to apply for shale gas and oil rights in their petroleum exploration licenses and petroleum mining leases and Oil, 2013
Shale Gas and Oil . Approved in September 2013, it allows companies to explore energy resources trapped within rocks to meet India’s Exploration Policy growing energy needs
The National Biofuel . Promotes bio-fuel usage, the Government of India has provided a 12.36 per cent concession on excise duty on bio-ethanol Policy, 2009 and exempted bio-diesel from excise duty
Integrated Energy Policy . Outlines goals to deal with challenges faced by India’s energy sector (IEP), 2006
Source: Ministry of Petroleum and Natural Gas, Aranca Research
36 Oil and Gas For updated information, please visit www.ibef.org REGULATORY OVERVIEW OF THE INDUSTRY… (2/2)
Petroleum and Natural . Regulate refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products Gas Regulatory Board and natural gas (PNGRB) Act, 2006
. Provide a roadmap to comply with various vehicular emission norms and corresponding fuel quality upgrading Auto Fuel Policy, 2003 requirements over a period of time
National Biofuel Policy, . A 16 per cent concession on the excise duty on bio-ethanol and exemption of bio-diesel from excise duty to promote bio- 2002 fuel usage
Freight Subsidy (for far- . Compensate public sector Oil Marketing Companies (OMCs) for the freight incurred to distribute subsidised products in far- flung areas) Scheme, flung areas 2002
Domestic Natural Gas . New domestic natural gas pricing formula has been formed, which will be revised on an half yearly basis. Pricing Formula, 2014
Notes: NELP - New Exploration Licensing Policy Source: Ministry of Petroleum and Natural Gas, Aranca Research
37 Oil and Gas For updated information, please visit www.ibef.org FDI INVESTMENTS IN PETROLEUM AND GAS IN INDIA
Cumulative FDI inflows into petroleum and natural gas (US$ billion)
8.00 CAGR 14.22%
7.00
6.86
6.00 6.85
6.67
6.60
5.00
5.50 5.40
4.00
3.00
3.30 3.20
2.00 2.70
1.00
0.00 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18*
. Cumulative FDI inflows in India’s petroleum and natural gas sector stood at US$ 6,861.66 million (2 per cent of total FDIs) during April 2000 -June 2017. . Between FY10 and FY17 (April 2000 – June 2017), FDI inflows into petroleum and natural gas sector grew at CAGR 14.25 per cent.
Note: FY18* - Up to June 2017 Source: : Department of Industrial Policy and Promotion, Aranca Research
38 Oil and Gas For updated information, please visit www.ibef.org MandA ACTIVITIES IN THE INDIAN OIL AND GAS SECTOR
Date announced Acquirer name Target name Value of deal (US$ million)
Dec 2016 Oil and Natural Gas Corp's Gujarat State Petroleum Co's 1200 Dec 2015 ONGC Videsh Ltd (OVL) Vankor oil field 1260 Jan 2015 Bharat Forge Mecanique Generale Langroise 12.82 Jun 2014 Gulf Petrochem Ltd Sah Petroleums Limited 7.13 Mar 2014 IOCL Progress Energy Canada Ltd Not disclosed Oct 2013 ONGC Videsh Ltd Parque das Conchas, Brazilian Oilfield 529 ONGC Videsh Ltd (in partnership Jun 2013 Rovuma Area 1 Offshore Block 2640 with Oil India Ltd) Nov 2012 ONGC Videsh ConocoPhillips (Kashagan Field) 5,000.0 Oil and Natural Gas Corp’s exploration block Nov 2012 Inpex Corp Not disclosed KG-DWN-2004/6 Sep 2012 ONGC Videsh Hess Corp (Azrei oilfield) 1,000.0 Apr 2012 Trafigura Pte Ltd Nagarjuna Oil Co Ltd 130.0 Apr 2011 Sesa Goa Ltd Calm India Ltd 1,492.0 Feb 2011 BP PLC Reliance Industries Ltd 9,000.0 Aug 2010 BPRL EP413 13.4 Aug 2010 Sesa Goa Ltd Cairn India Ltd 1,180.8 Aug 2010 Vedanta Resources PLC Cairn India Ltd 6,568.5 Aug 2010 Reliance Industries Ltd Marcellus Shale Natural Gas 391.6
Source: Thomson Banker
39 Oil and Gas For updated information, please visit www.ibef.org Oil and Gas
OPPORTUNITIES OPPORTUNITIES
. Locating new fields for exploration: 78 per cent of the country’s sedimentary area is yet to be explored
. Development of unconventional resources: CBM fields in the deep sea Upstream segment . Opportunities for secondary/tertiary oil producing techniques
. Higher demand for skilled labour and oilfield services and equipment
. Expansion in the transmission network of gas pipelines
. LNG imports have increased significantly; this provides an opportunity to boost production capacity Midstream segment . In light of mounting LNG production, huge opportunity lies for LNG terminal operation, engineering, procurement and construction services
. India is already a refining hub with 21 refineries and expansions planned for tapping foreign investment in export-oriented infrastructure, including product pipelines and export terminals Downstream segment . Development of City Gas Distribution (CGD) networks, which are similar to Delhi and Mumbai’s CGDs
. Expansion of the country’s petroleum product distribution network
41 Oil and Gas For updated information, please visit www.ibef.org SHALE GAS PROSPECTS OF INDIA
. India has technically recoverable shale gas resources of nearly 96 tcf.
. The Cambay, Krishna Godavari, Cauvery and the Damodar Valley are the most prospective sedimentary basins for carrying out shale gas activities in the country
. Around 20 tcf of gas has been classified as technically recoverable reserves in the Cambay basin in Gujarat (the largest basin in the country) spread across 20,000 gross square miles with a prospective area of 1,940 square miles
. It is estimated that the Krishna Godavari (KG) basin encloses a series of organically rich shales, containing around 27 tcf of technically recoverable gas. KG basin, located in Eastern India, holds the country’s largest shale gas reserves, extending over 7,800 gross square miles with a prospective area of around 4,340 square miles
. In April 2013, the Directorate General of Hydrocarbons (DGH) submitted its policy on exploitation of shale gas to the Ministry of Petroleum and Natural Gas
. India launched its policy on shale gas exploration to tap the non-conventional energy resource in order to boost output
Notes: tcf – Trillion Cubic Feet Source: EandY; Ministry of Petroleum and Natural Gas, Aranca Research
42 Oil and Gas For updated information, please visit www.ibef.org Oil and Gas
SUCCESS STORIES IOCL: FLAGSHIP OF INDIAN REFINING
. Indian Oil Group of Companies owns and operates 10 of India’s 22 refineries with a capacity of 1.614 mbpd
. In September 2017, its network of crude oil and product pipelines runs to about 12,804 Km
. Subsidiary CPCL accounts for 49 per cent of market share in petroleum products
. In FY17, the gross refining margin (GRM) was estimated to be US$ 7.77 per bbl as compared to US$ 5.06 per bbl in FY15
. In May 2017, Indian Oil Corporation revealed its fourth quarter profit for the fiscal 2016-17. The profits surged 85 per cent to reach US$553.47 million.
FY 16 FY 17
. Second-largest player in Turnover US$ 61.04 billion US$ 65.3 billion India’s petrochemical
market
. Has interests in 13 domestic and 11 overseas EBITDA US$ 2.7 billion US$ 3.5 billion blocks
. Foraying into alternative sources of energy like wind Net profit US$ 2.7 billion US$ 1.7 billion and solar
Notes: bbl - barrel Source: Company reports, Aranca Research
44 Oil and Gas For updated information, please visit www.ibef.org RELIANCE INDUSTRIES: WELL POSITIONED FOR GROWTH
. Reliance Industries has the biggest petrochemical refining complex in the world
. It contributes 14 per cent to India's exports and is going to invest around US$ 30 billion to improve its businesses in the next 3 years
. For FY17, Reliance Industries recorded profit of US$ 48.46 billion.
FY 16 FY 17
. Exports surged by 4.5 per Turnover US$ 45.23 billion US$ 47.39 billion cent to US$ 46 billion in 2016
. Record crude throughput at EBITDA US$ 7.9 billion US$ 6.34 billion 69.6 million tonnes
. US shale: Shale Gas Production in FY16 205 Bcf. Net profit US$ 4.2 billion US$ 4.64 billion
Notes: (1) Revenue fallen due to negative translation effect, Data from April – June 2016 Source: Company reports, Aranca Research
45 Oil and Gas For updated information, please visit www.ibef.org Oil and Gas
USEFUL INFORMATION CONTACT INFORMATION
Name Address Contact person Telephone E-mail
Oil Industry Mr Ajay Srivastava, Financial 3rd Floor, Tower C, Plot No. 2, Sector 0120-2594630 Development Board Adviser and Chief Accounts [email protected] – 73, Noida, Uttar Pradesh - 201301 0120-2594603 (OIDB) Officer
Petroleum Conservation Sanrakshan Bhavan, 10 Bhikaji Cama 91-11- 26198799 Research Association Mr Alok Tripathi, ED [email protected] Place, New Delhi – 110066 Ext.301 (PCRA)
Ministry of Power, 4th floor, SEWA Bureau of Energy Mr Abhay Bakre, Director 91-11- 26178316, Bhawan, RK Puram, [email protected], Efficiency (BEE) General 91-11- 26179699 New Delhi – 110066
Ministry of Petroleum & Natural Gas, Oil Industry Safety 8th Floor, OIDB Bhawan, Plot No 2, Mr Varanasi Janardhana Rao, 0120-2593800 [email protected] Directorate Sector-73, Noida, Uttar Pradesh- ED 201301
Ministry of Petroleum and Natural Mr Vinod Kumar, Deputy Petroleum Planning and Gas, 2nd floor, Core-8, SCOPE Director – Information 011-24306153 [email protected] Analysis Cell (PPAC) Complex, 7 Institutional Area, Lodhi Technology Road, New Delhi – 110003
Ministry of Petroleum and Natural Directorate General of Mr Atanu Chakraborty, Gas, OIDB Bhawan, Plot No 2, Sector 0120 - 2472001 [email protected] Hydrocarbons Director General 73, Noida
47 Oil and Gas For updated information, please visit www.ibef.org GLOSSARY
. B/D (or bpd): Barrels Per Day
. MBPD (or mbpd): Million Barrels Per Day
. BCM (or bcm): Billion Cubic Metres
. CBM: Coal Bed Methane
. CGD: City Gas Distribution
. EandP: Exploration and Production
. FDI: Foreign Direct Investment
. FY: Indian Financial Year (April to March)
• FY17 implies April 2016 to March 2017
. GoI: Government of India
. INR: Indian Rupee
. LNG: Liquefied Natural Gas
. MMT (or mmt): Million Metric Tonne
. MMTPA (or mmtpa): Million Metric Tonnes Per Annum
. EBITDA: Earning Before Interest Taxes Depreciation Amortisation
. NRL: Numaligarh Refinery Limited
. CPCL: Chennai Petroleum Corporation Limited
. HPCL: Hindustan Petroleum Corporation Limited
. BPCL: Bharat Petroleum Corporation Limited
48 Oil and Gas For updated information, please visit www.ibef.org GLOSSARY
. IOC: Indian Oil Corporation Ltd
. EOL: Essar Oil Ltd
. RPL: Reliance Petroleum Limited
. MRPL: Mangalore Refinery and Petrochemicals Limited
. PCCK: Petronet Cochin-Coimbatore-Karur
. PMHB: Petronet Mangalore-Hassan-Bangalore
. NELP: New Exploration Licensing Policy
. TOE (or toe): Tonnes of Oil Equivalent
. US$ : US Dollar
. ONGC: Oil and Natural Gas Corporation of India
. IOCL: Indian Oil Corporation Limited
. mn bbl: Million Barrels
. CAGR: Compound Annual Growth Rate
. JV: Joint Venture
. UCG: Underground Coal Gasification
. NGL: Natural Gas Liquids
. OMCs: Oil Marketing Companies
. NHGP: National Gas Hydrate Programme
. Wherever applicable, numbers have been rounded off to the nearest whole number
49 Oil and Gas For updated information, please visit www.ibef.org EXCHANGE RATES
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Year INR Equivalent of one US$ Year INR Equivalent of one US$
2004–05 44.81 2005 43.98
2005–06 44.14 2006 45.18 2006–07 45.14 2007 41.34 2007–08 40.27 2008 43.62 2008–09 46.14 2009 48.42 2009–10 47.42 2010 45.72 2010–11 45.62
2011–12 46.88 2011 46.85
2012–13 54.31 2012 53.46
2013–14 60.28 2013 58.44
2014-15 61.06 2014 61.03 2015-16 65.46 2015 64.15 2016-17 67.09 2016 67.21 Q1 2017-18 64.46 H1 2017 65.73 Q2 2017-18 64.29
Source: Reserve bank of India, Average for the year
50 Oil and Gas For updated information, please visit www.ibef.org DISCLAIMER
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF.
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This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.
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