Bharat Petroleum Corporation Limited
Investor Presentation
June 2020
1 Disclaimer 2
No information contained herein has been verified for truthfulness completeness, accuracy, reliability or otherwise whatsoever by anyone. While the Company will use reasonable efforts to provide reliable information through this presentation, no representation or warranty (express or implied) of any nature is made nor is any responsibility or liability of any kind accepted by the Company or its directors or employees, with respect to the truthfulness, completeness, accuracy or reliability or otherwise whatsoever of any information, projection, representation or warranty (expressed or implied) or omissions in this presentation. Neither the Company nor anyone else accepts any liability whatsoever for any loss, howsoever, arising from use or reliance on this presentation or its contents or otherwise arising in connection therewith.
This presentation may not be used, reproduced, copied, published, distributed, shared, transmitted or disseminated in any manner. This presentation is for information purposes only and does not constitute an offer, invitation, solicitation or advertisement in any jurisdiction with respect to the purchase or sale of any security of BPCL and no part or all of it shall form the basis of or be relied upon in connection with any contract, investment decision or commitment whatsoever.
The information in this presentation is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the Company. We do not have any obligation to, and do not intend to, update or otherwise revise any statements reflecting circumstances arising after the date of this presentation or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.
2 Table of Contents
1 2 3
Corporate Overview Business Overview Industry Overview Page 4 Page 9 Page 25
3 1. Corporate Overview
4 Introduction
India’s 2nd largest Oil Marketing Company 2nd (OMC) with standalone domestic sales volume of 275 Ranking on Fortune 500- 2019 global list over 43.10 MMT and Market share of 22% during FY20
3rd India’s 3rd largest in terms of Refining Capacity 44th Rank on Platt’s Top 250 Global Energy (15.33 % of India’s refining capacity) 44 Company Rankings 2019
1.2 BPCL’s Market Capitalization recently touched ₹ 6th India’s 6th largest company by turnover Lakh 1.2 Lakh Cr Cr
Recipient of Star PSU Award in The Govt. of India conferred BPCL with Balanced portfolio with Strategically located 2018 “MAHARATNA” status in Sep 2017 Refineries and Marketing Infrastructure
5 BPCL 5 Year Key Physical Indicators
REFINING CAPACITY MARKET SALES (MMT) Market Capitalization (MMT) (INR billion)
38.30 38.30 43.07 43.10 36.50 939.79 927.25 41.21 833.65 30.50 30.50 685.05 653.9
37.68 36.53
FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20
Entire throughput/capacity of Bina Refinery & NRL have been Market Capitalization figures as on period end considered
India’s Leading Oil and Gas Company with presence across the Hydrocarbon Value Chain
6 BPCL Evolution 7 GoI acquired Burmah Shell BPCL and GAIL BPCL entered the LNG Entered into Kochi Refinery CCR1 unit at Formation of Bharat Gas Refineries. Name changed formed a JV, IGL, for market by signing a upstream business capacity Mumbai Resources Limited for focus to BPCL in 1977 distribution of Natural gas sales purchase and formed Bharat enhanced Refinery on Gas business Gas in entire capital agreement with Petro Resources to 9.5 MMTPA commissioned region Petronet LNG Limited (BPRL) in March 2014 Bina capacity enhanced to 7.8 MMTPA
conferred with “MAHARATNA” status in Sep 2017 KR modernized and capacity 2009 enhanced to 15.5 MMTPA BPCL Evolution 2008 2006 2005 2003 Acquisition of upstream 2002 1976 1998 assets in Russia Integrated Refinery Expansion Project (IREP) at Kochi Started operations at its Bina Refrigerated LPG storage and refinery by launching its crude Commissioned Energy Efficient handling facility at distillation unit CDU IV with replacement of CDU I JNPT and Uran Restructured business into Mumbai Refinery Commissioning of & II at Mumbai Refinery First in the Indian Oil LPG plant corporate centre, Strategic capacity enhanced to Euro III / IV products launched 6 MMTPA Commissioned Kota Jobner Industry to roll out commissioned Business Units (SBU) and 12 MMTPA at Mumbai and Kochi Refinery Bina Refinery Pipeline and Terminal Shared Entities ERP Solution
7 Major Subsidiaries, JVs & Associates
Subsidiaries Joint Ventures & Associates
City Gas Aviation Upstream Refining Refining Pipelines Trading Activities Distribution Services
100.00% 61.65% 50.00% 50.00%* 22.50% 50.00% 50.00% Kochi Salem Bharat Stars Bharat Oman Indraprastha Gas Matrix Bharat Pte Pipeline Pvt. Services Pvt Refineries Limited Limited Limited Limited Limited
25.00% 25.00% 11.00% 37.00% Bharat Numaligarh PetroResources Ratnagiri Refinery & Central UP Gas Delhi Aviation Fuel Refinery Limited GSPL India Transco LNG Limited Petrochemicals Limited Facility (P) Limited Limited 12.50% 22.50% 11.00% 16.20% Kannur Maharashtra Petronet LNG Gas GSPL India Gasnet International Airport Natural Gas Limited Limited Ltd. 100.00% 49.94% 25.00% 25.00% Bharat Gas Mumbai Aviation Resources Limited Sabarmati Gas IHB Pvt. Ltd. Others Fuel Facility (P) Limited Limited
50.00% 74.00% 20.73% BPCL-KIAL Fuel Haridwar Natural Farm Facility Pvt. Gas Private Limited Ltd. FINO Paytech Ltd
50.00%
Goa Natural Gas Pvt. Ltd. 8 *From 31st March 2020, on account of conversion of share warrants issued by BORL into equity shares, BPCLs paid up share capital in BORL has increased from 50% to 63.38% 2. Business Overview
9 Asset Portfolio
Refining Upstream 9 Countries 25 Blocks 25+ Global Partners Total, ENI, ONGC, Rosneft, Mitsui, OIL, Japan Presence Russia, Brazil, Mozambique, UAE, Indonesia, Australia, 26 Exploration Discoveries
E&P East Timor, Israel, India Energy, ADNOC, Petrobras etc. Upstream
Refining 4 Refineries 38.30 MMT 937 km SBM Infrastructure Strategically located Refining Capacity Vadinar-Bina Crude oil pipeline at Vadinar and Kochi
Refining 100% BORL & NRL considered
Midstream & & Midstream Downstream
Marketing 79 Retail 52 LPG 58 Aviation 4 Lube 37 Geographical Infrastructure Depots Bottling Plants Service Stations blending plants Areas incl. JVs Storage
Pipeline 2241 Km Specific & Multi 17.84 MMTPA Design capacity Network of Pipeline Network Distribution Product Pipeline Network
Distribution ~16,200 Retail Outlets ~6,100 LPG Distributors Network Marketing
STRATEGIC BUSINESS UNITS 7 ENTITIES (Support Functions) 23 EMPLOYEES 11,246 10 *Numbers in the slide are for period ending 31st March 2020 Diversified Product Offering and Presence Across Value Chain Industrial/ RefineryAviation Retail LPG Aviation Lubricants Gas Commercial
Refining capacity of 25.70% market 25.90% market Currently 8,000+ 25.10% market 21.20% market 50+ major LNG 38.3 MMTPA share1 share1 customers share1 in ATF share1 customers 15% of the country’s ~16,200 retail outlets Currently over 58 Aviation service Currently 18,000+ refining capacity 79 depots 6100 distributors stations customers /installations 52 LPG bottling More than 400+ plants grades of products
Strategically Pan India presence Various Innovative Reliable, Present at all the Major OEM tie ups Emerging Markets located refineries across products offerings with innovative and major gateways such as Tata ventures in allied caring supplier of and airports for into Motors, Honda, business I&C products plane services Genuine Oil, TVS etc.
100% subsidiary Four refineries in Pioneer in branded Current Domestic Pioneer in IT Fuel Farm Product BGRL for focus on Mumbai, Kochi, retail outlets, customer base 8.27 integration and Operations through customization Gas business Numaligarh and branded fuels ex: Crores Supply Chain MAFFFL and Interest in 37 GAs Bina Speed Management DAFFL
1. Market share includes sale by PSU as well as private oil marketing companies. All figures as of 31st March 2020. For Lubricants it represents on PSUs share. 11 2. Source : Ministry of Petroleum and Natural Gas. 3. Numbers in the slide are for period ending 31st March 2020 Refining Coverage
Installed Capacity Refining Throughput
Refining Capacity 45.00
40.00 36.76* 38.29* Mumbai – 12 34.70* BORL 4.00 MMTPA 35.00 29.84* 31.25* 2.85 NRL 3.35 2.90 2.38 30.00 3.18 2.81 3.20 2.68 25.00 2.52 Kochi – 15.5 14.78 15.14 14.29 MMTPA 20.00 13.41 13.60 15.00
BORL – 7.8 10.00 16.77 MMTPA 14.25 16.23 5.00 10.71 11.79
Mumbai 0.00 Refinery Numaligarh – 3 FY16 FY17 FY18 FY19 FY20 MMTPA Kochi Mumbai Numaligarh Bina Kochi Refinery * Bina Refinery throughput is considered proportionately because it’s a 50:50 JV. From 31st March 2020, on account of conversion of share warrants issued by BORL into equity shares, BPCLs paid up share capital in BORL has increased from 50% to 63.38%
Refinery Utilization rates 937-km cross country Four Strategically located Refineries are BS VI & IMO Flexibility to process low & above name-plate pipeline to source crude to refineries across India Compliant high sulphur Crude capacities BORL
12 BORL
.Bharat Oman Refineries Limited (BORL) – BPCL Interest 50%* with 7.8 MMT Refining capacity at BINA
.State of art technologies - High Nelson Complexity Index 11.5
.Associated Facilities – SPM, Crude Oil Terminal, 937-km cross • Processed 19 types of crudes country crude oil pipeline from Vadinar to Bina (VBPL) • API Range: 28 to 40 • Hydrocracker • Delayed Coker unit for bottom .Bina Kota Pipeline for evacuation of products upgradation .Low cost capacity expansion from 6 MMTPA to 7.8 MMTPA
.GRM of $5.6/bbl during FY 20 and $9.8/bbl during FY19
Bina refinery to consolidate refining portfolio required to support downstream retailing market in Northern and Central India
*. From 31st March 2020, on account of conversion of share warrants issued by BORL into equity shares, BPCLs paid up share capital in BORL has increased from 50% to 63.38%
Expansion Plans .Capacity expansion from 3 to 9 MMTPA .Total Project Cost of Rs.22,594 crores .Integrated with an 8 MMTPA 1,398 km crude pipeline from Paradeep to Numaligarh .Numaligarh Refineries Limited .Integrated with a 6 MMTPA 650 km product pipeline from Numaligarh (NRL) – BPCL Interest 61.65% to Siliguri with 3 MMT Refining capacity in the north-eastern state of Other Projects Assam .Diesel Hydro-treater Project with capex of Rs.1031 crores completed .Largest producer of paraffin wax in Jan 2018 in the country .Bio-refinery through JV planned at a cost of Rs.1,259 crores at Numaligarh .GRM of $7.99/bbl during FY 20 .129.5 km India Bangladesh Product Pipeline at a cost of Rs.346 crores and $11.80/bbl during FY19 including Government Grant-in-Aid of Rs.285 crores
Numaligarh refinery to consolidate refining portfolio required to support downstream retailing market in North-eastern India
14 Marketing Operations and Efficiencies
SBU Market Sales (MMT) LPG Bottling Capacity (TMTPA)
5000 4212 4590 3957 36.53 37.68 41.21 43.07 43.10 4000 3687 45.00 3363 40.00 3000 35.00 2000
30.00 27.30 26.97 1000 26.60 25.00 0 25.38 25.25 FY16 FY17 FY18 FY19 FY20 20.00 0.30 15.00 0.32 0.24 0.29 6.95 0.32 6.51 7.05 10.00 5.14 Thru’put per Outlet BPC Vs. Industry (KL/month) 4.67 2.01 1.55 1.79 1.99 5.00 1.28 4.87 5.45 5.99 6.49 6.87 Apr-Mar 20 - 175 170 FY16 FY17 FY18 FY19 FY20 170 LPG Aviation Direct Lubes Retail 165 160 Retail Market Share MS & HSD* 154 155 152 .MS > 28.71% 150 147 145 .HSD > 28.95% 140 135 *Market share is PSU Market share on Mar 20 BPC IOC HPC Industry Leading Player with a Diversified product portfolio and a well-established Marketing and Distribution network
15 Ongoing Projects
Kochi Refinery – MS Block Project for BS VI grade gasoline and Maximization of Naptha to Retail Infrastructure: POL gasoline Terminal with Railway Siding at Pune, Gulbarga, & Coastal LPG import terminal at Haldia, terminal at Krishnapatnam West Bengal Bina Kanpur Product Pipeline & other pipelines
Kochi – Diversification into Niche Petrochemicals PDPP Project- 2G ethanol refinery at Bargarh Acrylic Acid, Oxoalcohol, Acrylates Odisha Upcoming Projects
Investments in Mozambique – FID sanctioned UPSTREAM BPCL has been awarded 11 GAs in 9th round and 2 GAs in 10th round of bidding INVESTMENTS IN GAS Expansion of marketing infrastructure across all business verticals including around 2500 new retail MARKETING INFRASTRUCTURE outlets in the next two years PETROCHEMICALS Petrochemical Project(Polyols) at Kochi to manufacture Propylene Glycol, Ethylene Glycol, Polyol PIPELINES Cross country LPG pipeline from Kandla to Gorakhpur through a JV RASAYANI Marketing Infrastructure & other facilities at Rasayani near Mumbai BPCLCAPEX Evolution Strategy
109.93 120.00 110.64 4.04 6.11
100.00 1.60 - 1.66 11.51 80.76
80.00 45.66 7.54 3.50 48.43 8.00
60.00 INR Billion INR 15.75 30.70 40.00 16.84 8.37 20.00 41.46 27.51 22.65
- FY19 FY20 FY21
Refineries Petrochemicals Marketing Investments in Exploration Investments in Gas Others
Significant Expansion in Upstream and Downstream business to drive future growth
18 Financial Performance
Net Worth (INR Billion) PROFIT AFTER TAX (INR Billion) CAPITAL EMPLOYED
367.38 341.31 332.14 80.39 79.76 450 426 900 296.68 71.32 400 367 773 800 341 350 332 700 297 648 300 580 600 250 240 500
200 446 400 INR BN INR 184 BN INR 150 178 300 100 200 21.85 50 100 - 0 FY17 FY18 FY19 FY20 Networth Adjusted Borrowing Capital Employed
FY17 FY18 FY19 FY 20 FY17 FY18 FY19 FY20
Financial Ratios FY 17 FY18 FY19 FY 20 Total Debt/EBITDA 1.72 1.58 1.95 5.53 Total Debt-Equity 0.78 0.68 0.79 1.44 Adjusted Debt-Equity* 0.60 0.54 0.65 1.28 *Adjusted for the bonds O/s during the period
19 Stable Earnings and Sound Financial Leverage driving Credit Strength BPCLBPRL’s Evolution Upstream Story over the years… Story over the years…….
2019 2018
2017
2016 Overseas 2013 Onshore Operatorship – Abu Dhabi 2012 Entry in Lower Zakum Declaration of Mozambique Commerciality FID 2011 Russian approved in Acquisition Operatorship Schedule B block 2010 Lead operator 2009 Joint operator Shale gas 2008 entry Australia Indonesia Brazil entry 2007 & Mozambique acquisition NELP VI 2006 (5 blocks) Formation of BPRL Formation of E&P 2003 setup in BPCL
20 Upstream - Global Spread 2 TYNGD Russia 2 Vankorneft
4 Cauvery Basin* 3 Rajasthan Basin India 3 Cambay Basin** 2 Assam-Arakan Production 3 Mumbai Basin
Appraisal / Indonesia 1 Nunukan Development Exploration Israel 1 Block 32
1 Lower Zakum UAE 1 Onshore 1
Mozambique 1 Area 1 * 1 block in in Cauvery Basin is in Production, the rest are in Exploration / Timor Leste 1 JPDA 06-103 Development ** 2 blocks in Cambay Basin in in 2 BM-SEAL-11 Australia 1 EP413 Development, the rest is in Exploration Brazil 1 BM-C-30 2 BM-POT-16
21 BPCL pursues its Upstream Business through its wholly owned Subsidiary Company – Bharat Petroresources Limited Global Upstream Footprint Partnership with established Oil and Gas operators expected to generate optimal returns for BPCL. Within India Brazil Australia and East Timor BPCL BPCL BPCL Exploration Block Operator Partners Exploration Block Operator Partners Exploration Block Operator Partners Stake Stake Stake1 GSPC, NELP—IV BM-SEAL-11 Petrobras 20.0% Videocon Videocon, CY/ONN/2002/2 ONGC 40.0% ONGC (2 blocks) Japan NELP—VI JPDA 06-103 Oilex 20.0% BM-C-30 17.85 Videocon, Energy, Pan BP CY/ONN/2004/2 ONGC 20.0% ONGC (1 block) % Total Pacific NELP—VII Petroleum BM-POT-16 Videocon, RJ/ONN/2005/1 HOEC, BPRL 33.33% IMC Petrobras 10.0% AWE Perth Pty (2 blocks) Petrogal, BP EP-413 Norwest 27.8% Limited NELP—IX GAIL, EIL, BIFL, Mozambique Russia CB/ONN/2010/11 25.0% BPRL MIEL BPCL BPCL Exploration Block Operator Partners Block Operator Partners AA/ONN/2010/3 OIL 20.0% ONGC Stake Stake2 BPRL, EIL, BIFL, PTTEP, Rosneft, CB-ONN-2010/8 25.0% Vankorneft 7.887 GAIL MIEL Mitsui and Vankorneft OIL, IOCL, Mozambique (2 Blocks) % Total 10.0% Co., ENH, ONGC MB-OSN-2010/2 OIL 20.0% HPCL Rovuma Basin OVL, BREML DSF 2016 TAAS- Yuryakh 9.867 Rosneft, BP, (OVL+OIL) TYNGD CY/ONDSF/KARAIKAL/2 (2 Blocks) % OIL, IOCL BPRL 100% - 016 United Arab Emirates RJ/ONDSF/BAKHRI BPRL 100% - BPCL TIBBA/2016 Block Operator Other Partners Israel Stake MB/OSDSF/B15/2016 BPRL 100% - CNPC, INPEX, ENI, BPCL RJ/ONDSF/SADEWALA/ Exploration Block Operator Partners BPRL 100% - Lower Zakum ADNOC 3% Total, Falcon Oil3, Stake 2016 IOCL ONGC Block 32 25% IOCL, OIL MB/OSDSF/B127E/2016 BPRL 100% - Urja (50:50 SPV of BPRL Videsh Onshore 1 50% Bharat & IOCL) CB-ONHP-2017/9 BPRL 60% - Indonesia CY-ONHP-2017/1 ONGC 40% - BPCL Exploration Block Operator Partners 1. BPCL’s effective stake held through 50:50 JV with Videocon. AA-ONHP-2017/12 OIL 10% - Stake 2. BPCL’s effective stake held through SPV with OIL & IOCL Nunukan PSC, Videocon 3. BPCL’s effective stake held through SPV with ONGC Videsh & IOCL Pertamina 12.5% 22 Tarakan Basin Industries Meet the Leadership Team
N Vijayagopal R Ramachandran D Rajkumar Arun Kumar Singh K Padmakar Director (Finance) Director (Refineries) Chairman & Managing Director Director (Marketing) Director (HR) • Vast experience of 32 • Over 34 years of industry • He has been acclaimed • Over 34 years of • Over 35 years of years in financial experience as one of the top 100 experience in Oil experience with BPCL management • Has previously held the “Most Influential CEOs” Marketing having worked across • He has held various post of MD, Bharat in the world, by the • Director on the board of the entire Human senior positions in BPCL Oman Refineries Limited CEOWORLD Magazine Bharat Gas Resources Ltd. Resource Management including its upstream • Has experience across July’19 • Previously held posts of landscape and pipeline subsidiary refinery operations, • He has over 33 years of Chairman, Indraprastha • He has also held various companies and handled product planning, experience out of which Gas Ltd. & President, BPRL positions of various areas of finance technical services, 15 years of experience as looking after Africa and responsibility covering Refinery/ project MD of BPCL’s JV & Australasia. encompassing HR Policy Corporate Accounts, conceptualization and Subsidiary companies • He has headed various and strategy and was Treasury Management, project financing • Has experience across Business Units and Entities responsible for Risk Management, integrated upstream and in BPCL viz. Retail, LPG, Organizational Learning Taxation and Budgeting, downstream oil sector Pipelines and Supply Chain & Talent Management Fund Management etc. Optimization etc
23 Awards Galore
Best Public Sector Organisation 20181
PRSI CII Leadership in HR Excellence Award.
Largest Corporate Brand Engagement Programme In Asia.
Best Project Management Company 20182 Excellent Corporate Governance 20183 Best Oil Marketing Company 2019
Leaders in Sustainability 4.0 award- Frost & Sullivan and TERI.
SKOCH award for market leadership and CSR. Thank you!
1. PRSI: Public Relations Society of India 2. Federation of Indian Petroleum Industry- *Best Project Management Company 2018* 3. Golden Peacock (Institute of Directors) awarded BPCL *Excellent Corporate Governance 2018*
24 3. Industry Overview IndiaBPCL Evolution– Attractive Industry Dynamics Significant potential for domestic O&G companies given low per-capita oil consumption and growing demand.
Oil: Consumption in thousands Per Capita Oil Consumption of barrels per day* bbl/day per 1,000 People
1449 83.5 Singapore 1419 FY19 28.3 13525 24.9 China 12840 81.1 1094 Australia FY18 26.2 1055 23.3 200 UK 207 76.0 2321 FY17 23.8 Germany 2443 21.5 3081 Brazil 3052 74.6 FY16 21.8 20456 US 19.0 19958 5156 India 69.3 4870 FY15 19.1 0 5000 10000 15000 20000 17.6
2018 2017 Diesel Petrol LPG
Source: BP Statistical Review of World Energy 2019 Source: PPAC
26 BPCLIndian EvolutionOil Industry
Positive Policy actions
• Petrol Prices De-regulated completely
• Gasoil (Retail) – Deregulation announced effective 19th October 2014
• Gasoil – Bulk sales completely deregulated since January 2013
• Restricted supply/Targeted subsidies for cooking fuel products
• LPG DBTL scheme - Domestic LPG fully enrolled
• SKO PDS DBTK scheme – launched on pilot basis in 4 districts and now implemented in the state of Jharkhand
• Govt. has consistently compensated OMCs including BPCL for under recoveries and ensured reasonable profitability
27 Strategic position in the Indian economy with way to deregulation of fuel sector in the country BPCL Evolution
Thank You
28