Investor Presentation June 2017
Strictly Private and Confidential Indian Oil Corporation: The Future of India Energy
● Maharatna Company; GoI Control: 57.34% Strong Support from the ● Government nominated Directors on IOC Board Government of India ● Contribution to exchequer of INR 1,79,014 Cr in FY17
● 11 refineries with 80.7 MMTPA Capacity Largest Refiner in the Country ● 35% of Domestic Refining Capacity
● 12,700+ km pipelines for crude oil and products with a total capacity of 93.7 MMTPA Pan-India Pipeline Infrastructure ● 48% share in crude and product pipeline (by length)
Leading Market Share ● 45.1% petroleum market share in FY17 with over Across Portfolio 46,500 touch points
Integrated Operations Across the ● 2nd largest domestic player in Petrochemicals entire Energy Value Chain ● E&P: 8 domestic and 9 overseas blocks
● Overall 554 patents as on 31.03.2017 Strong Focus on Innovation Through R&D and Alternate Energy Sources ● New focus on Alternate and Renewable Energy (Wind, Solar, Biofuels, Nuclear)
● Consistent growth and profitability Driven by a Management Team That o FY11-FY17 Revenue CAGR: 6.59% has Delivered Results o Debt / Equity of 0.55x (as on Mar 31, 2017)
Note: Company Filings and Petroleum Planning and Analysis Cell (http://ppac.org.in/). 2 Our Journey at a Glance
From a humble beginning to an Oil Giant
FY17 31-Mar-17 500000 4,45,373 120000.00 99729 Turnover 100000.00 400000 (INR/Cr) Net Worth 80000.00 (INR/Cr) 300000 60000.00
200000 40000.00 78 100000 20000.00
0 0.00 1965 1975 1985 1995 2005 2015 1965 1975 1985 1995 2005 2015 Net Worth Source: Company Filings
Refining Capacity Pipeline Network Turnover
MMT Kms (‘000) US$ in Billion 11.6x 81 13 6.5x 68.7
7 36 5 24 4 14.5 12 2 7 0.1 0.7 2.7
1970 1980 1990 2000 2017 1970 1980 1990 2000 2017 1970 1980 1990 2000 2017
Contribution Fortune Moody’s : Baa3 Platts Energy to Exchequer: Global 500 Fitch: BBB- “Maharatna” Ranking: 14 US$ 28 Bn Ranking : status (2016) (FY17) 161 (2016)
Note: IOC is ranked 14th as per Platt Global Energy Company Rankings 2016. IOC is ranked 161 amongst Fortune Global 500 Companies in 2016. 3 Well Poised to Leverage Strong Industry Dynamics
Low per Capita Oil Consumption Represents an India is Among the World’s Fastest Growing Economies Underpenetrated Opportunity…
Consumption in million barrel per day GDP 2015 2016 2017 P 2018 P Growth 19.53 India 7.9% 6.8% 7.2% 7.7% 12.53 China 6.9% 6.7% 6.6% 6.2% 11.12
ASEAN-5 4.8% 4.9% 5.0% 5.2% 4.12 3.74 Brazil (3.8%) (3.6%) 0.2% 1.7%
Russia (2.8%) (0.2%) 1.4% 1.4% US EU China Japan India
Source: IMF World Economic Outlook, April 2017 (GDP at constant Prices) ASEAN-5: Indonesia, Malaysia, Philippines, Thailand & Vietnam Source: CIA World Fact book (2014 & 2015 Est.).-as per website on 30 May 2017
Oil Consumption Trends Have Been Rising Marginally… …With Strong Growth in Consumption Across Key Products
MMT FY18 – FY22 E CAGR 8.23% 194 185 166 6.30% 157 158 148
FY 12 FY 13 FY 14 FY 15 FY16 FY17E Diesel (HSD) Petrol (MS) Note: HSD: High Speed Diesel and MS: Motor Spirit Source: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas, Govt. of India. Source: Petroleum Planning and Analysis Cell 4 IOC - The Largest Refiner in India
Strategic Presence With Access to High Demand Markets Leader in Refining Market Share(1)
Strategically 35% placed with 26% 13% access to high 10% 9% 7% demand market of North India IOC Reliance HPCL BPCL Essar Oil ONGC
Digboi Panipat Note: Figures as of March 31, 2017. (1) Market share based on group Refining Capacity Source: PPAC website Bongaigaon Mathura Refinery Throughput (MMT) Capacity Utilization* (%) Barauni Guwahati
Koyali 105 104 65 Haldia 54 57 Paradip 99
FY 15 FY 16 FY 17 FY 15 FY 16 FY 17 *Excluding Paradip Refinery Source: Company Filing
Chennai Steady Distillate Yields* (%)
Narimanam Capacity(69.2 MMT) Subsidiary Cos. 80.6 (11.5 MMT) 78.8 79.3
Note: Figures as of March 31, 2017
Importing Crude from Across the Globe FY 15 FY 16 FY 17
*Excluding Paradip Refinery Source: Company Filing Changing Crude Mix for Enhanced Profitability Type of Crude Oil Used North Central Asia America Middle East 1.50% Producing Euro IV grade fuels 0.23% 66.3% Low Africa High South Sulphur Preparing for Euro VI 28.13% Sulphur East Asia 48% 3.84% 52%
FY 17 Total crude oil import : 63.79 MMT (including 7.74 MMT for CPCL) Note: All figures for the year ended March 31 of the respective years. 5 Figures for FYE 2017 Source: Company Filing Source: Company Filing Paradip Refinery – Modern Marvel
Further Downstream Projects in Odisha 700 KTA PP Plant: Petchem Initiation at Paradip
Anchor tenant of Paradip PCPIR
Turning Odisha into Energy Gateway of East India
15 MMTPA Capacity India’s Largest PSU Refinery
Rs. 34,555 crore Investment
6 Paradip Refinery Project – Salient Features
Paradip Refinery: Augmenting IOC’s Capacity
INDMAX Unit . Capacity : 15 MMPTA
. One of the most modern refineries: . 100% HS including 40% Heavy . Nelson Complexity Factor – 12.2
. Product Slate : . MS 25%, HSD 38%, ATF/SKO 13%, LPG 5%, Petcoke 8%
. Distillate Yield – 81% . Even with high percentage of heavy crudes
. Energy Index – 50 MBN . Among the best in the industry
7 Source: Company Filing Unparalleled Network of Cross Country Pipelines
Largest Pipeline Market Share - Downstream High Capacity Utilization % Others, 51% 94 99 94
Others, Others, 70 73 69 27% IOC, 44% IOC, 49% IOC, 73% 56% 118 125 119
FY 15 FY 16 FY 17 Crude Oil Pipelines Product Pipelines Total Pipelines Crude Product
Source: Company Filing Indicate Total Capacity Source: PPAC Website Note: Figures as of March 31, 2017 Utilization
Pipelines Throughput Steady Revenue Stream with healthy EBITDA
In US$ millions
MMT
925 945 846 764 83 76 80
31 28 29
48 51 51
FY 15 FY 16 FY 17 FY'14 FY'15 FY'16 FY'17 Crude Product EBITDA
Indicate Total Throughput
All annual figures for the year ended March 31 of the respective years. 8 Source: Company Filing USD-INR:64.8550 (as on Mar 31, 2017)
Extensive Network of Cross Country Pipelines
Length Capacity (KM) Crude Oil 5,217 48.60 Pipelines MMTPA Product Pipelines 7,491 45.09 MMTPA
Jalandhar Gas Pipelines 140 9.5 (1) Bhatinda Ambala MMSCMD Sangrur Total 12,848 -- Panipat Roorkee Najibabad Meerut Rewari Delhi Dadri Tinsukia Sanganer Mathura Baitalpur Numaligarh Ajmer Tundla Digboi Motihari Bongaigaon Jodhpur Chaksu Lucknow Bharatpur Muzaffarpur Siliguri Guwahati Kot Kanpur Patna Chittaurgarh Barauni Sidhpur Rajbandh/ Mundra Ahmedabad Durgapur Kolkata AFS Kandla Viramgam Mourigram Koyali Ratlam Vadinar Korba Ranchi Dahej Haldia Hazira Raipur Paradip Berhampur Hyderabad Vizag Rajahmundry Vijaywada Legend Bangalore Chennai Bangalore AFS Ennore Asanur Crude Oil Pipeline Chennai AFS Sankari CBR Product Pipeline
Trichy Ongoing Product Pipeline
As on March 31 2017 Madurai Gas Pipeline 9 Refinery 9 Marketing: Reach in Every Part of the Country
Pan India Presence with Multiple Consumer Touch Points Leader in Market Infrastructure
Others 326(1)
LPG Distributor SKO / LDO 49% 51% 9,570 56% Dealerships 3,904 Over 46,500 Customer touch-points
51% 44% 49% Retail Outlets Bulk Consumer 26,212 Pumps 6,520
Retail Outlets LPG Distributorships Aviation Fuel Stations
Indian Oil Others All figures for the year ended March 31, 2017 Source: Company Filing Source: Company Filing & PPAC Website Other Key Highlights Operating Highlights (Inland / Export Mix) Sales (MMT)
Rural Thrust and 80.7 83.5 7,051 Kisan Sevak Kendras (KSK) 76.5 Penetration 3.6 4.8 3.7
LPG Supply to over 99 million households
78.6 72.8 77.1 Petroleum Product 45.1% share in petroleum products Market Share
FY 15 FY 16 FY 17 Note: (1) Others includes Aviation Fuel Stations, Terminals, Depots and LPG Bottling Plants. Inland Export Source: Company Filing 10 Source: Company Filing Unparallel Sales
Domestic POL Sales (MMT) Overall IndianOil Sales 83.5 MMT 80.7 76.5 74.1 68.5* 72.6 LPG 9.2 10.1 8.4 Naphtha 9.5 10.1 MS 8.4 ATF 4.6 3.6 4.7 SKO HSD 34.5 35.8 35.4 FO/LSHS Bitumen Lubes 3.1 3.3 2.7 Others 2014-15 2015-16 2016-17
*As per old methodology Highest-ever Sales Maintaining Leadership with 45.1% Market Share Diversified Customer Base & Renowned Brands
Branded Products
Diversified Products & Brands Branded Services
Kisan Seva Kendra outlets for extending rural reach
Diversified Customer Base
• The turnover growth is insulated from the cyclical demand Retail Outlet at Boat house fluctuations due to diversified customer base
12 Moving Beyond the Traditional Value Chain
Petrochemicals Gas LAB Sourcing PX / PTA Marketing Polymers, Glycols LNG Terminals Butadiene, SBR CGD
Moving Beyond the Globalization Value E&P Exports Chain Domestic Consultancy Overseas Training Operatorship Downstream Marketing
^
RE&SD Wind, Solar Biofuels Nuclear Sustainability JV with NPCIL
13 One of the Leading Producer of Petrochemical Products
Capacity Sales Breakup (in INR/Cr)
Capacity Capex Project Total: 23080 (MT) (US$mn) Total: 19297 Total: 20273 1741 1894 Guajarat LAB 120,000 175 1416 1730 1960 2035 Styrene Butadiene 120 KTA 150 14685 Rubber Plant 12315 12210
Panipat Px / PTA 553,000 508 3236 2576 2835 1524 1030 1463 Panipat Naphtha 1,460,000 2337 FY 15 FY 16 FY 17 Cracker LAB Px/PTA Polymers MEG/DEG/TEG Others Source: Company Filing
EBITDA (in INR/Cr)
7,590
6,067
3,420 2,036
FY 14 FY 15 FY 16 FY17
Source: Company Filing 14 Backward Integration Through E&P
IOC: E&P Capabilities Status of Domestic and Overseas Blocks
Total 9 Blocks . Stake in 17 exploration blocks Total 8 Blocks
. 8 Domestic blocks – With ONGC / OIL / GAIL / GSPC – Including 2 Coal Bed Methane blocks with U. Development, 3 Production, 5 ONGC (20% participating interest) . 9 International blocks – Libya (1), Yemen (1) , Nigeria (1), Gabon (1), Appraisal, 3 U. Development, 1 Venezuela (1) , USA (1), Canada (1) and Russia (2)
Exploration, 1 Discovery, 3
Discovery, 1
Domestic Blocks Overseas Blocks
Discovery Exploration Appraisal Under Development Production
All figures as on March 31, 2017
Recent Developments on E&P A view of the drilling site at IOC Khambat 1 . Increasing Equity Oil and Gas Production.
. New Asset
• Taken stakes in Vankor and Taas Yuryakh (Roseneft’s Russian Assets). Both are producing Assets.
All figures as on March 31, 2017
Source: Company Filing 15 Russian Asset Acquisition
Vankor: Today’s Behemoth
Reserves 331 MMT Production 21 MMTPA Consortium Stake 23.9% IndianOil Stake 8%
Taas: Tomorrow’s Star
Reserves 196 MMT Production 1 MMTPA Peak Envisaged 5 MMTPA Consortium Stake 29.9% IndianOil Stake 10% Vankor Investment Approval for Taas US$ 598 million invested $1.23 billion US$ 408 million invested (till 31.03.2017) (till 31.03.2017) 16 Diversified Across Geographies and Energy Sources
Geographical Diversification Diversification Across Sources
● JV for City Gas Distribution with Gas presence in 9 Cities • Aviation, terminal & IndianOil retail business Mauritius ● 5 MMTPA LNG import, storage and re- • 24,000 MT Storage Ltd. (IOML) gassification terminal under (100% Stake) Terminal construction at Ennore (Near Chennai) • Market Share : 24% ● Ennore –Tuticorin Pipeline (1175 km)
Wind Power Lanka IOC • Storage, terminal & ● Wind – 167.60 installed capacity
Plc. retail business • 21 MW plant at Gujarat; (75.1% • 200 retail outlets • 48.3 MW plant at AP Stake) • Market Share 43.5% • 72.3 MW plant at Rajasthan
Solar ● 6000+ solar PV systems installed at IOC Middle Retail Outlets. Total installed capacity 24 East FZE • Marketing of Lubes MW (Mar’17). (100% Stake)
● Other installed Solar PV capacity is 20 MW
Note: Other overseas subsidiaries include IOC Sweden AB, IOC (USA) Inc.and IndOil Global B.V. Netherland (facilitating overseas upstream operations 17 Figures for the year ended March 31,2017
Source: Company Filing Strong Focus on Research and Development
Focus on Products & Technology Collaborations
● Hi-therm LPG based metal ● Technology developed to Indane maximize light distillates from cutting gas NANOCUT INDMAX refinery residue ● Improved efficiency and safety LPG standards Game-changing technology for ● 1st in India to introduce multi- ● Commercialized 1.2 MMTPA Conversion of CO2 to value grade railroad oil to Indian Diesel Hydro grass-root DHDT facility in Railroad Oils added products treating Bongaigaon Railways - significant fuel and oil savings
● Retrofitting of Bongaigaon Naphtha ● One of six companies to refinery for producing Euro-III/ Isomerization Marine Oils develop “OEM Approved Marine IV motor spirit Technology Equipment”
Conversion of Carbon dioxide to Fuel ● Commercialization of R&D ● Commercialization of R&D chemicals Efficient Hot Rolling developed energy efficient hot developed fuel efficient engine Oils rolling oil in association with Engine oil for gasoline & diesel car Oils RDCIS in steel plants
Active Patents Portfolio Investments in Research & Development
As on March 31, 2017 By Geography By Division Indalin: Technology for conversion of naphtha to light olefins, LPG & 51 aromatic rich gasoline; feasibility under study 244 228 9% Delayed Coking: Thermal cracking technology for conversion of long/short 34% 188 residue to distillates. Partnership with Engineers India Limited 44% 41% 275 Octamax: Technology for dimerization of cracked C4 to high octane 50% (RON) component for Euro IV/V gasoline 22% FCC Catalyst Additives: CO - Combustion promoter, Coke Reduction Additive, Residue Upgradation Additive for bottom Upgradation 122 DHDS / DHDT Catalysts: Demonstrated at CPCL for ULSD in 2009. India USA Others Lubes Refineries Others Partnership with Sud-Chemie India Limited (SCIL)
Total Patents: 554 Vegetable Oil co-processing in DHDT: Successful technology demonstrated in 2013 including demetallation of vegetable oil 18 Source: Company Filing INDMAX – A New Era
INDMAX: INDane MAXimization
IndianOil R&D’s “Make In India” Initiative
Indigenously developed technology to bridge India’s LPG Deficit
Over 2 times LPG yield over regular FCC
Flexibility to cater to Seasonal Demand: LPG/ MS/ HSD Mode
High Octane MS (97-98 RON) production
INDMAX unit being installed at Bongaigaon refinery as well 19 R&D Prowess • Technology Commercialisation
35 TMTPA INDAdeptG Plant Indigenous In-Line Pipeline Indigenously Developed at Guwahati Refinery Inspection Tool Delayed Coker at Barauni
• 2nd R&D Campus – Upscaling Thrust Areas
CO2 Refining Research Technology Pipeline Catalysts IndianOil R&D Research of Tomorrow
Alternate Energy Lubes Research Technology Nanotech New generation of Lead Acid Battery trials underway Investing In Future Growth
Major Ongoing Projects Planned Capital Expenditure Outlay (2017-18) (INR/Cr.)
Estimated Cost Project (Rs Crore) Others, 3500 Refining, Polypropylene unit at Paradip 3,150 4559
Coker at Haldia 3,076
BS-VI Projects 15,411
INDMAX unit at Bongaigaon 2,582 E&P, 2482
Paradip-Hyderabad Pipeline 2,321 Pipelines, 1890
Petchem, Major approved Capex Plans 1209 Estimated Cost Project (Rs Crore) Ennore – Tuticorin Natural Gas Pipeline 4,497 Marketing, 5988 Koyali – Ahmednagar – Solapur Pipeline 1,967
Phase – IV of Retail Automation 1,338 Capex planned for 2017-18, approx INR 19,628 Cr
Haldia Barauni Product Pipeline 1,038
Source: Company Filing 21 Experienced Management Team & GOI Ownership and Support
Management Team Contribution to Exchequer (in INR/Cr) Sanjiv Singh Handled all aspects of refining activities. Chairman Previously headed the refinery division. Also 1,79,014 35+ Year Experience worked with centre for High technology and with Nigeria Petroleum National Company. Chemical engineer from IIT Roorkee 1,32,064 A K Sharma Handled various assignments in finance functions. Director (Finance) Was at the forefront of treasury operations to raise 98326 32+ Year Experience funds for IOC. Credited for issuing the first ever foreign currency bonds of IndianOil in the international market. Chartered Accountant (CA) by profession. Also possesses law degree.
Verghese Cherian Possesses a rich and comprehensive experience Director (HR) in human resource discipline in various positions at 32+ Year Experience IndianOil. Also headed IIPM, an apex training centre of IndianOil Post graduate in Social Work (MSW). FY 15 FY 16 FY 17
Source: Company Filing Anish Agarwal Has held various important portfolios in Pipelines, Director (Pipelines) and has worked in various disciplines like 36+ Year Experience operations, maintenance, engineering services, Strong Support From the Government of India projects, etc. Electronics engineer from Punjab Engineering college and Executive MBA from MDI, Gurgaon. Government Has held several key portfolios including sales, B S Canth Approval for Director (Marketing) operations, human resources etc. Has made Capital Raising significant contribution as a member of Retail Two government Board Control: 32+ Year Experience nominated Members Advisory Committee. director on board nominated to PG in Personal Management & Industrial Relations of directors IOC Board and a Law graduate.
G K Satish Has experience in varied areas of business Director (Planning & including International Trade, Business Development, Natural Gas, Marketing Operations, Business Development) Performance: Functional Logistics and Human Resources. 30+ Year Experience Annual MoU Directors: A Graduate in Mechanical Engineering from the with Government Pricing: Appointment by NIT Surat, and a Post-Graduate in Management of India Select petroleum President of India from MDI, Gurgaon . products based on Government initiative Dr. SSV Ramakumar Has three decades of R&D experience Director (R&D) in downstream hydrocarbons sector, notably in 30+ Year Experience the areas of refinery process research streams 22 A doctorate in Chemistry from IIT-Roorkee
Our Differentiators: Strong Financials
Turnover (in INR/Cr) EBITDA (%)
Others 4,57,571 7% 4,50,756 4,45,373
Refining Petchem 37% 4,14,919 21% 4,06,828
Pipelines FY 13 FY 14 FY 15 FY 16 FY 17 17% Marketing 18% Contribution to FY17 EBITDA
Net Profit (in INR/Cr) and Dividends (%) EBITDA (in INR/Cr)
48% 30% 30% 30% 33% 35,990
19,106 23,371 19,023 11,242 17,284 14,291 7,019 5,005 5,273
FY 13 FY 14 FY 15 FY 16 FY17 FY 13 FY 14 FY 15 FY 16 FY 17
Exchange Rate 1USD= INR 64.8550 Dividend Payout Ratio (% of PAT) 23 Source: All figures Company Filing Our Differentiators: Strong Financials
Net Worth (in INR/Cr) Cash breakdown & Debt (in US$ billions)
99,729 88,134
0.1 65,992 67,970 61,124 0.1 3.7 2.9 0.0 $13.3 1.5 0.0 $12.5 0.1 1.2 1.6 2.1 1.8 1.9 1.4 $8.5 $8.5 $8.2 1.8
3.8 4.0 3.8 3.9 2.8
FY 13 FY 14 FY 15 FY 16 FY17 FY 13 FY 14 FY 15 FY 16 FY 17
Total Debt Market Value of Investments Special Oil Bonds Amount Recoverable from Govt. Cash Equivalents
Debt / Equity Reduction in Debt Level (INR/Cr)
1.32x 1.31x 86,263 80,894
0.81x 55,248 52,880 54,820
0.60x 0.55x
FY 13 FY 14 FY 15 FY 16 FY17 FY 13 FY 14 FY 15 FY 16 FY17
(1) Special Oil Bonds received from Government of India in lieu of compensation till the year FY 2009. Source: All figures Company Filing 24 Conclusion
India’s Largest Oil Company …Focused on Creating Shareholder Value
1 Largest Refiner in the Country
2 Pan-India Pipeline Infrastructure
3 Leading Market Share Across the Portfolio
4 Integrated Operations Across the entire Energy Value Chain
5 Strong Focus on Innovation Through R&D and Alternate Energy Sources
6 Driven by a Management Team That has Delivered Results
7 With Strong Support from the Government of India
25 Key Risk Factors
Fluctuations in commodity prices (e.g. crude oil)
Fluctuation in exchange rates (INR – US$)
Fluctuations in global petroleum product prices
26