Oil India Limited Investor Presentation
November, 2016 Table of Contents
Company Background
Asset Overview
Strategic Strengths
Operating and Financial Performance
Growth Strategy
1 Company background Oil India Ltd.: An Introduction
S Over 5 decades of presence in oil & gas sector Rich Heritage S Owns and operates a fully-automated cross country crude oil pipeline
Strong Parentage with S GoI ownership of 67.64% Govt. of India S Awarded ‘Navratna’ status in 2010
Integrated & fully S Presence across Oil & Gas Value Chain serviced Oil & Gas Co. S Integrated infrastructure and In-house expertise
Domestic and Global S Domestic: 39 blocks; 23,722 sq. km Presence S International: 15 blocks; 77,972 sq. km
S 2P reserves: Oil – 80.74 MMT, Gas – 119.45 BCM Strong Reserve Base S Reserve replacement ratio consistently well over 100%
Experienced S Senior management team with strong in-house Management Team technical expertise in Company’s core business
Consistent Growth and S Q1 FY17 Revenue: Rs.2,461 crore, PAT: Rs.494 crore Robust Balance Sheet S FY16 Revenue: Rs.11,141 crore, PAT: Rs.2,330 crore
2 Milestones and Track Record
IPO –Raised Formed as a JV with Participates first time in Rs.2777 crore. ‘Baa2’ Credit Rating Acquisition in Rovuma Offshore Burmah Oil Company NELP Listed in Stock by Moody's and BBB- Block in Mozambique and Exchanges by Fitch License 61 Block in Russia
1959 1981 1999 2009 2010 2013 2014 2016
Became wholly owned Raised offshore Acquisition in TYNGD Awarded Navratna 10% OFS by GoI Government of India Completes fifty years FCB and JSC Vankorneft in Status (Rs.3,145 crore) enterprise of US$ 1 billion Russia
3 Strong Parentage and Experienced Management Team
Strong Parentage of Govt. of India Best In-Class Management Team
Utpal Bora S Appointed Chairman & Managing Director in July, 2016 2nd Largest Public Sector E&P company Chairman & MD Over 33 years of S Experience in diverse fields of exploration management of onshore and offshore fields Industry experience and overseas blocks S Became a Public Sector Undertaking in 1981
S Govt. Presently holds 67.64% equity in OIL R S Borah S Appointed Director (Finance) in October, 2013 Director (Finance) S Experience in diverse fields of financial S CPSEs and LIC hold another 17.96% Over 31 years of management, audit and strategic planning Industry experience S 2 Govt. nominee Directors on the Board Sudhakar Mahapatra S Appointed Director (E&D) in August, 2014 Director (Expl. & Dev.) S Experience in diverse fields of exploration Over 34 years of management under PSC/JV regimes, E&P Awarded ‘Navratna’ Status in 2010 Industry experience business development process S Status accords complete autonomy in domestic operations. Biswajit Roy S Appointed Director (HR & BD) in May, 2015 Director (HR & BD) S Experience in diverse functions including Authority for M&As or equity investment in a Over 33 years of Marketing, Operations, Business S Industry experience Development, Human Resources, single JV/ Wholly owned subsidiary P K Sharma S Appointed Director (Operations) in June, 2015 SDomestic: Upto Rs.1,000 crore or 15% of net Director (Operations) S Experience in the E&P industry in India and worth Over 34 years of abroad Industry experience SInternational: Upto Rs.3,000 crore or 25% of net worth
4 Shareholding Structure
Corporate Others 3.65 Bodies 11.53
DII 13.50 Listed on BSE / NSE
Number of shares 601.14 mn FII 3.68 GOI 67.64
Dividend FY16 Key shareholders % Shareholding Rs.16 /Share Government of India 67.64
Life Insurance Corporation of India 7.38 Share price (52 Week High / Low) Rs.421 / Rs.301 Indian Oil Corporation Limited 4.45 Bharat Petroleum Corporation Limited 2.23 1 Market Cap Hindustan Petroleum Corporation Limited 2.23 Rs.25,247 crore ICICI Prudential Life Insurance Co. Ltd. 2.00
LIC of India P&GS Fund 1.67 1. As on 31.10.2016
5 Share Price Movement of OIL vis-à-vis BSE ‘OIL & GAS’ Index
13000 440
12500 420 12000
11500 400
11000 380
10500
360 10000
9500 340
9000 320 8500
8000 300 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16
OIL&GAS OIL
Share Price of OIL moving in line with BSE Oil & Gas Index
6 Integrated and Diversified Oil & Gas Player
Non Conventional Exploration Production Transportation Downstream Energy SDomestic: SCrude oil SCrude Oil SRefining and SWind Energy 39 E&P blocks S41 installations S1,157 km marketing SCapacity: 121.6 SInternational: S1,602 km pipeline; Over 6 petroleum MW MMT capacity products Presence in US, pipelines S54 MW under Russia, SMulti-product S26% equity implementation Venezuela, SNatural gas stake S660 km pipeline; Mozambique, S29 installations in NRL SSolar Power 1.70 MMT Gabon, Libya, S730 km capacity S5% equity stake SCapacity: 14 Bangladesh, pipelines in IOCL MW Nigeria, Yemen SOverseas SAdvanced and Myanmar S10% stake in SGas cracker SShale Oil / Gas Recovery 741 km pipeline project S20% stake in SDiscoveries: 24 techniques to (Sudan) S10% equity Niobrara Liquid discoveries maximize stake Shale asset, during last four production SNatural Gas in BCPL USA years S23% stake in 192km DNPL in North-east
Fully serviced E&P Company and diversifying into non-conventional energy
7 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”
8 Asset overview Domestic Assets
Non Area Blocks Operated Total Operated (SQKM) NELP 6 4 10 17,794 ASSAM +AP Pre-NELPJV - 2 2 121 AA-ONN-2010/2 40% PEL (Nom) 5 - 5 803 ASSAM +AP PML (Nom) 22 - 22 5,004 Total 33 6 39 23,722
Kharsang 40%
RJ-ONN-2004/2 100%
AAP-ON-94/1 41%
RAJASTHAN WB-ONN-2005/4 25% AA-ONN-2010/3 40% GK-OSN-2010/1 30% MN-OSN-2000/2 20%
MZ-ONN-2004/1 85% KG-ONN-2004/1 100%
KG-OSN-2009/4 30%
NELP Strong Presence in Prospective Pre-NELP CY-OSN-2009/2 50% East Coast PML / PEL—Nomination OIL as Operator
Significant Presence in Regions with Demonstrated Commercial Production and Known Accumulation of Hydrocarbons
9 International Asset Overview
Libya US 25% Area 95/96 6,629sq.km Colorado 20% 60 sq.km (Sonatrach) Julesburg Basin Ghadames Basin
Russia License 61 50% 4,991sq. km TAAS 10% 1,382sq. km JSC Vankor 8% 1,869sq.km Nigeria 17.5% 1,295sq.km OML 205 (Suntera)
Sudan 10% 741 km Pipeline Venezuela 203sq.km Carabobo 1 North 3.5% 180sq.km Carabobo 1 Central Bangladesh 45% 7,269sq.km SS-04 (OVL) 7,026sq.km SS-09
Gabon Myanmar 50% 3,761sq.km 10,421sq.km Shakti M-04 60% 21,380sq.km YEB Total No of Blocks: 15 Total Area: 77,972 sq.km Mozambique 4% Yemen 12.75% 9,653sq.km 1,853sq.km Rovuma Area-1 (Anadarko) Block 82 (Medco) Operator Non-Operator Area (Sq. km) OIL’s Participating Interest (%)
Strong International Footprint with Balanced Presence in Exploration Acreages & Producing Properties
10 Major Overseas Projects
Project Carabobo, Venezuela
S Significantly low subsurface risk Current Status S 56 wells under production S Two blocks in Orinoco Heavy Oil Belt S Current total production over 26000 S Block Area 383 Sq. Km BOPD
S ~ 30 billion barrels of Oil in place from Consortium Partners Project Carabobo PDVSA 71% Repsol 11% S Production started from Dec 2012 OVL 11% INDOIL 7% (OIL 50% & IOCL 50%)
Partner in major discovered heavy oil field with huge resource potential
11 Major Overseas Projects (Contd...)
Area 1 Rovuma, Mozambique
S OIL & OVL acquired 10% stake in Offshore Key Highlights Mozambique Area 1 in Jan. 2014 S More than 2/3rd of the volume of Initial S Acquisition Cost: USD 2,519 million, Development Phase will be committed (US$ 1,007 million by OIL) before FID S Area : 9653 SQ KM. S Location : Rovuma tertiary deltaic basin Consortium Partners extending from coastal part Anadarko 26.5% S Water depth over major gas fields are in Mitsui 20% the range of 800–1600 meters ENH 15% S 45-75 tcf recoverable resources BPRL 10% BREML (OIL 40% & OVL 60%) 10% S Resource size supports 50 MMTPA of LNG OVL 10% S Strategically located to supply LNG to PTTEP 8.5% buyers from Asia and Middle.
Discovered asset with high reserve base in a world class gas basin with significant future upside potential
12 Major Overseas Projects (Contd...)
Vankorneft, Russia
S OIL jointly with IOCL & BPRL acquired Key Highlights 23.9% stake in Vankorneft, Russia in Oct S Current production ~ 4,28,000 bopd 2016 S No. of Wells on Production: Oil ~ 450, S Acquisition Cost: US$ 2.02 Billion Gas ~ 22 (OIL’s share 33.5%) S On its peak production S Area: 1869 SQ KM (two licence blocks of 1632 SQ KM & 237 SQ KM) Consortium Partners S Location: Eastern Siberia, Russia Rosneft 50.1% (Onshore) OIL, IOCL, BPRL 23.9% S 2P reserves of 1908.2 Mn Bbl of oil & 3.12 (33.5%:33.5%:33%) TCF of gas (100% basis) OVL 26.0% S Effective OIL’s share 152.78 Mn Bbl of oil & 0.25 TCF of gas (@8.0065%)
Producing field in CIS region with high hydrocarbon reserves and world class partners
13 Major Overseas Projects (Contd...)
Taas Yuryakh, Russia
S OIL jointly with IOCL & BPRL acquired Key Highlights 29.9% stake in Taas Yuryakh, Russia in Oct 2016 S Current production ~ 22,000 bopd S Acquisition Cost: US$ 1.121 Billion S Existing number of wells: (OIL’s share 33.5%) Producing~43, Shut-in ~ 49, WI ~ 5 S Area: 1382 SQ KM (two licence blocks of S Production expected to reach 1,00,000 611 SQ KM & 771 SQ KM) bopd by 2020-21 S Location: Eastern Siberia, Russia Consortium Partners (Onshore) Rosneft 50.1% S 2P reserves of 1,002 Mn Bbl of oil & 2.41 OIL, IOCL, BPRL TCF of gas (100% basis) 29.9% (33.5%:33.5%:33%) S Effective OIL’s share 100.37 Mn Bbl of oil BP 20.0% & 0.24 TCF of gas (@10.0165%)
Developing field in CIS region with high hydrocarbon reserves and world class partners
14 Strategic strengths Strong In-House Capabilities
Infrastructure to Support E&P Activities Vertically Integrated E&P Operations
One 2D and two 10 Logging Units 3D Seismic crew
20 Work-over Drilling 20 Drilling Rigs Rigs Seismic API Wireline (2D and 3D) Logging
In-House Expertise
Production and Storage Facilities Field Development Transportation
70 Production Installations
Production 5,000 km O&G ~150k KL IOR / EOR Pipelines Crude Storage Field/Reservoir Management
In-house Expertise and Integration across Oil & Gas Infrastructure
15 Attractive Cost Structure
Finding & Development Cost (USD/ BOE) Crude Oil Production Cost (USD/ bbl)
6.3 5.9 18.4 17.8 16.6 5.3
8.7 9.6 10.0 4.2 FY 14 FY 15 FY 16 3.7 Raising Cost Levies
3.0 Natural Gas Production Cost (USD/ MMBTU)
0.4 0.3 0.3
1.3 1.4 1.2
FY 14 FY 15 FY 16 FY 14 FY 15 FY 16 Finding Cost F&D cost Raising Cost Levies OIL has Advantage of low cost structure due to largely in house infrastructure
16 Domestic Reserve Base (2P) as on 01.04.2016
25 Years current production of Crude Oil 42 Years current production of Natural Gas 33 Years current production of O+OEG
Total Balance Recoverable Reserves Proved and Developed Reserves – Split by Type
Natural Gas (MMTOE) 158 Crude Oil (MMT) 119
70 110 81 28 1P 2P 3P
Consistent Reserve Replacement Ratio Over One
1.64 1.37 1.29 1.35 1.38
FY12 FY13 FY14 FY15 FY16
17 Operating and Financial Highlights Crude Oil and Natural Gas Production
Crude Oil Production (MMT) Natural Gas Production (MMSCM)
2,838 2,722 3.50 3.44 2,626 3.25
1,474
1.60
FY14 FY15 FY16 H1 FY17 FY14 FY15 FY16 H1 FY17
OIL produces about 9% of India’s total Domestic Oil and Natural Gas production
18 Financial highlights
Revenue (Rs. crore) EBITDA (Rs. crore)
11,215 11,020 11,141 5,195 4,802 4,991
3,164 2,461 1,503 1,103
FY14 FY15 FY16 Q1 FY16 Q1 FY17 FY14 FY15 FY16 Q1 FY 16 Q1 FY 17
Net Profit (Rs. crore) EBITDA & PAT Margin (%)
2,981 46 44 45 2,510 2,330
27 21 743 23 494
FY 14 FY 15 FY 16 FY14 FY15 FY16 Q1 FY16 Q1 FY17 EBITDA Margin PAT Margin
19 Financial highlights
Earnings Per Share (Rs.) Book Value (Rs./ Share)
50 430 42 358 371 39 344
12 8 (in Rs.)
FY14 FY15 FY16 Q1 FY16 Q1 FY17 FY14 FY15 FY16 Q1 FY17
Dividend Percentage Dividend Payout (% of PAT)
215 48 200 43 41 160
(in Rs.)
FY14 FY15 FY16 FY14 FY15 FY16
20 Strong Liquidity with Low Leveraging
Net Worth (Rs. Crore) Strong Cash Balance (Rs. Crore)
11744 25841 9594 10085 22302 8917 20708 21498
FY14 FY15 FY16 Q1 FY17 FY14 FY15 FY16 Q1 FY17
Total Debt (Rs. Crore) Debt Equity Ratio 47.2% 9783 41.2% 38.8% 9199 9347 36.2% 8341
FY14 FY15 FY16 Q1 FY17 FY14 FY15 FY16 Q1 FY17
21 Contribution to Exchequer
Central Government State Governments
(Rs.crore) (Rs.crore) 4,154 1785 1822 1846 3,585 1,218 3,147 509 542 593 1,200 1,008 1,603
1,531 1,420 1,276 1,280 1,253
1,333 854 719
FY 14 FY 15 FY 16 FY 14 FY 15 FY 16
Corporate Tax Cess Dividend & Others Royalty VAT & Others
22 Government Policy and Outlook on Subsidy
Outlook on Subsidy Total Petroleum Subsidy 1,61,029 Petrol Prices De-regulated in June 2010 P 1,39,869 (Rs crore) P Diesel Prices De-regulated in October 2014 P Direct Benefit Transfer Scheme for LPG 72,314 implemented effective Jan 1, 2015. subsidies on Domestic LPG fully compensated by Govt. 11,496 P >10 mn users surrendered LPG subsidy under “Give it Up”, a voluntary initiative FY13 FY14 FY15 FY16 P No subsidy to tax payers with an annual income Sharing of Subsidy by Upstream Companies of more than Rs.10 lakh. (INRin Crores) P Monthly increase in price of LPG by Rs.2/ cyl. FY13 FY14 FY15 FY16 P Govt. absorbing subsidy on PDS Kerosene upto ONGC 49,421 56,384 36,300 1,096 Rs.12/ litre OIL 7,892 8,737 5,523 155 P Monthly increase in price of PDS Kerosene by GAIL 2,687 1,900 1,000 - 25-50/ paise Total 60,000 67,021 42,822 1,251 P Direct Benefit Transfer Scheme for PDS Kerosene under implementation.
Subsidy burden declines sharply with fall in crude oil prices and policy decisions
23 Realized Price for Crude Oil & Natural Gas
Crude Oil (USD/BBL) Natural Gas (US$/MMBTU)
106.4
4.8 4.7
84.3 4.2 4.0 3.9 3.6 3.6 3.5 3.2
47.1 47.1 46.4 45.3
28.7 29.1 28.8
FY14 FY15 FY16 FY14 FY15 FY16 Gross Realized Price Price Realized after Subsidy Gross Price Price Realized Net Realization after Levies Net Realization after Levies
24 Growth Strategy Growth Strategy
OIL has aspiration to be an international E&P player with operations at scale in at least two geographical clusters outside India, significantly higher production, reserves and cash flows while being known globally for its capabilities to extract value from mature assets.
15 MMTOE production translating to 6-7% growth p.a. with R/P I of 15, 2.5x production, 4x revenues and 5x net profits relative to 2015
II 50% of production outside NE and international presence at scale in 1-2 clusters (1.5-2 MMTOE each)
Among top 10 mature asset operator globally; known for III extracting value from mature assets Selective, profitable diversification in the energy value chain to IV monetize E&P assets and participate in India’s push for renewables Most preferred E&P company in India to attract and retain V exceptional talent, while continuing to be exceptionally well regarded in the community
25 Strategies to Achieve 2030 Aspirations
1 Reimagine Main Producing Area development to maximise potential
2 Step up exploration and development activities in select Indian basins
3 Build international presence at scale in one or two geographic clusters
4 Pursue selective, profitable diversification in the energy value chain
5 Achieve top 10 status in global mature asset exploitation
6 Restructure organisation and people processes to deliver the perspective plan
26 Technology Innovation/ Improvements
§ Use of advanced techniques have enabled company to maintain production rates in the Upper Assam basin despite majority of the fields being old.
§ Company deploys a wide array of IOR and EOR to achieve maximum recovery of oil reserves.
§ Introduced hydro-frac operations to produce tight sands.
§ Introduced radial drilling technology to improve productivity.
§ Introduction of ESPs to improve artificial lifting from wells.
§ Gravel pack completion for efficient production of unconsolidated sand reservoirs.
§ Plans to introduce extended reach completions to tap the reservoirs lying under logistically difficult areas.
27 Positive Policy Environment
§ Maximising domestic Oil & Gas production is a strategic priority for the Govt., with an aim to reduce import dependence by 10% by 2022. § “Hydrocarbon Vision 2030 for Northeast India” gives strategic importance to the development of Northeast India which is the main operating area for OIL. § Action areas envisaged under the NE Vision for upstream sector: § Increase in production from mature fields § Enhancing exploration activities § Offering premium on gas production § Re-allotment of relinquished blocks on nomination to NOCs § Concept of Zero phase of exploration and increase in exploration time to 8+4 years § Expansion of Refining capacity and Pipeline network § Declaration of Hydrocarbon Exploration Licencing Policy (HELP) in place of NELP § Monetisation of marginal fields - Bid round already kicked off § Unconventional Exploration Policy for PSUs § National Data Repository to facilitate Open Acreage Offer
28 Capex Plans
2016-17 : Rs.4,020 crore 2017-18 : Rs.4,290 crore
10% 9% 16% 10%
19% 23%
34% 36% 21% 22%
2014-15 391 753 706 921 1002 3773
2015-16 429 935 681 1051 527 3622
Survey Exploratory Drilling Development Drilling Capital Equipment Overseas Projects
29 Production Guidance for FY’17
2016-17
Crude oil 3.28 MMT
Natural gas 2981 mmscm
30 Conclusion
Steady and sustained Growth
Sound Financial Health
Strong operating track record
More than 5 decades of E&P expertise
Spreading wings: NE - Pan India - Global
Large prospective E&P acreage
Pioneer in Pipeline transportation
Entry into Offshore/ Deep Water Blocks
Entry into discovered and producing assets
Diversifying into new areas. Core Focus remains in E&P
31 • Thank You