essar energy overseas ltd. partnering in development of hydrocarbon sector in africa
TRANSCRIPT
ESSAR ENERGY OVERSEAS LTD.
PARTNERING IN DEVELOPMENT OF HYDROCARBON
SECTOR IN AFRICA
Essar Group
The Essar Group is a leading Indian MNC (Multi National Companies) which, apart from
offices in India, is present in countries like USA, UK, U.A.E., China, Trinidad & Tobago,
Canada, Germany, Singapore, Nigeria, Costa Rica, Indonesia, Kenya, Madagascar,
Mozambique, Vietnam and Australia.
The parent company of the Essar Group is Essar Global Limited (EGL), which is a
diversified business corporation with a balanced portfolio of assets straddling the
manufacturing and services sectors: Steel, Energy, Power, Communication, Shipping
& Logistics, and Construction, with asset base of US$ 15 Billion and employs over
60,000 people across the world.
Among its recent global acquisitions are the US-based companies, Global Vantedge and
Minnesota Steel, acquisition of UCMS Group Ltd. (Australia) and CCN Group Ltd. (South
Africa) a leading BPO service, as well as the Ontario (Canada) based Algoma Steel apart
from acquisition of part stakes in Mombasa (Kenya) based KPRL.
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Businesses
The Essar Group
Shipping Ports & Logistics
Steel Energy Power Projects
Essar Steel Ltd4.6 MTPA integratedsteel plant
Essar Steel (Hazira)4.9 MTPA integrated steel plant (under implementation)
Essar Steel Orissa8 MTPA pellet plant(under implementation)
Essar Steel Algoma, Canada4.0 MTPA integrated steel plant
Essar Steel Minnesota, USA1.4 billion tonne iron ore reserves
PT Essar Indonesia0.4 MTPA cold rolling complex
Essar Oil 12.5 MTPA refinery complex at Vadinar
Over 1,300 retail outlets
Refinery expansion to 34 MTPA in two phases
Kenya Mumbasa Refinery: 3.7 MMTPA Exploration & Production Assets Balanced Portfolio of Exploration & Production Assets in India and overseas
Coal Bed Methane
Essar ShippingFleet of 26 vessels, DWT of 1.49 mn
Vadinar Oil TerminalTerminal facility of 32 MTPA – Liquid Cargo
Bulk TerminalDry bulk port facilities
Essar Oilfields A drilling company with 13 rigs
Essar LogisticsOwns and operates transshipment assets
Essar Power / Bhander Power1,015 MW combined cycle Vadinar Power125 MW co-generation; expanding to 1250 MW
Essar Power MP1,200 MW coal based(under implementation)
Essar Power Gujarat1,200 MW coal based(under implementation)
Essar Power Jharkhand1,200 MW coal based(under implementation)
Essar Construction - Engineering - Procurement - Fabrication - Construction
Fully geared to execute turnkey EPC jobs in India and overseas
Essar Offshore SubseaExpertise in marine construction
Heavy Engineering Services
Project Management Consultants
Asia’s largest equipment Bank
Communications
Vodafone EssarOver 65 million subscribers
Essar Telecom Infrastructure3,500 telecom towers operational; 20,000 planned by 2010
The MobileStoreOver 1,300 outlets operational; 2,500 planned by 2010
Aegis - BPO30,000 people in offices in the Philippines, Costa Rica, USA and India
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EnergyFrom rig to retail
EXPLORATION & PRODUCTIONOVERSEASVietnam: 1 offshore blockMadagascar: 2onshore blocksNigeria: 1 offshore blockAustralia: 2 offshore blocksIndonesia: 1 onshore block
INDIAAssam and Mehsana: 3 Onshore blocksMumbai Basin: 1 Offshore field (Ratna & R Series) and 1 Offshore blockCoal Bed Methane : 1 block
REFINING12.5 MTPA refinery, capacity being expanded to 16 MTPA. Second unit of 18 MTPA planned
Kenya Mumbasa Refinery: 3.7 MMTPA
MARKETINGRetail: Over 1,300 retail outlets operationalBulk Marketing
Essar Energy Group
Energy
Steel
Communications
Projects
Shipping, Ports &
Logistics
Power
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Essar’s Group Global Presence
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GERMANY
PHILIPPINESCOSTA RICA
SOUTH AFRICA
Flow of Presentation
Indian Downstream Sector - An Overview
Current Scenario - Hydrocarbons in East Africa
Growth Synergy
Essar Initiatives in Africa – KPRL Acquisition
Downstream - Refining & Marketing
Indian Petroleum Downstream Sector OverviewF
igs
in
Mil
lio
n M
T
Total Crude Processed: 156.98 MMT
Refinery wise Crude processing: Year 2008 –09
Refining capacity expected to increase to 249 MMTPA by the year 2012
Import & Export of Petroleum Products: 08 - 09
Fig in: 000, MT
Product Export Import
MS 5330 397
HSD 13679 2734
SKO 77 1449
ATF 3490 0
Naptha 7284 4988
FO 5932 2602
Bitumen 40 59
India – An Export hub for Petroleum Products
Outlook for 2010 - 2011 : MS & HSD
Figs in 000 MT’s
HSD MS
Demand Euro III 49500 9800
Euro IV 8400 3500
Total Demand 57900 13300
Supply Euro III 49100 14900
Euro IV 21200 10500Total Supply 70300 25400
Exportable Surplus 12400 12100
Exports by Essar Oil (Apr-Oct-09) 221 530
Substantial Exportable surplus from Indian Refineries
Refineries in Africa
48 Refineries have been built in Africa in last 50 years (31 in Sub-Saharan Africa)
21 Operating Refineries in Sub- Saharan Africa
11 Refineries in West & Central Africa, and 10 in Southern & Eastern Africa (of which 6 are in South Africa-including 2 synfuel plants)
Only one operating Refinery (KPRL- Mombasa, Kenya) in East Africa
Africa : Current Hydrocarbon Scenario
Downstream : Refining Sector
Most refineries are of small capacity with only 9 refineries having capacity over 5 MMTPA, simple refineries with only 9 refineries have cat-cracker, no coker
Several of these refineries are operating below capacity or intermittently due to technical and supply problems.12 Refineries have been closed permanently
Most refineries are under Govt. control and International Oil Majors are seen reducing their stakes in refining sector
Challenges in refining sector due to
Changes in product specifications
Market Liberalization
Product Imports from India & Middle East
Refining sector faces Challenge : Need for Investment for upgrade
Petroleum Products deficit in the entire Region
East Africa: Petroleum consumption Estimates: ‘07
CONSUMPTION Figs in '000 MTs
MS Jet (ATF) SKO HSD FO LPG Total
Kenya 511 1138 345 1370 680 74 4119
Tanzania 179 99 148 667 162 0 1255
Uganda 175 39 41 225 43 1 524
Rwanda 45 0 0 103 0 0 147
Burundi 45 0 0 51 0 0 96
Zambia 179 49 0 308 54 0 590
Malawi 90 0 0 154 0 0 244TOTAL
CONSUMPTION 1224 1326 535 2877 940 75 6976
PRODUCTION
Kenya 249 228 91 474 600 31 1673
Zambia 124 46 46 237 50 0 503
Total Prodn. 373 274 137 711 650 31 2176
BALANCE
Deficit 851 1052 398 2166 290 44 4800
Petroleum Products demand set to grow strongly
Growth in Petroleum Demand
Essar Group : Specialized Skills
Growth Synergy : Essar Group
Project Management, Refinery Operations & Maintenance
Technical Services & Consulting
Refinery Optimization & Scheduling
Supply & Logistics
Marketing & Retail Development
Construction
Procurement
Exploration & Production
Training
Essar Group : Creating Enduring Value
Energy Overseas Ltd.- New Initiatives in Africa
KPRL, Mombasa-Kenya
Essar Energy Overseas Ltd. acquired 50% equity from Shell, BP and Chevron in Kenya Petroleum Refineries Ltd., the remaining 50% stakes are with Government of Kenya.
KPRL operating at ~ 1.6 MMTPA against 3.7 MMTPA (70 kbpd) capacity.
A tolling refinery, processing fee inadequate to cover costs.
Very poor power supply resulting in around 60 disruptions last year and 50 disruptions in the current year so far, in refinery operations.
Contd…
Acquisition of 50% stakes in KPRL by Essar Energy Overseas Ltd.
Energy Overseas Ltd.- New Initiatives in Africa
KPRL, Mombasa-Kenya
As a first step after taking over the stakes, Essar Power is putting up captive power plant for KPRL; commissioning in next 6-8 months
Training of KPRL personnel at Vadinar refinery in batches
Commitment to upgrade the Refinery
Responses have been received from consultants to undertake Detailed Feasibility studies
Consultants being finalized for configuration studies
Estimated investment on the project estimated around US$400 Million
Proposal to improve the capacity utilisation at KPRL, improve feedstock & product yields for higher GRMs
Capability to produce AFRI-4 Standard fuels at KPRL
Reduce dependence on import of Products
Acquisition of 50% stakes in KPRL demonstrates long term vision of Essar Energy Overseas Ltd.
Energy Overseas Ltd.- New Initiatives in Africa
Essar Petroleum (East Africa) Limited
Incorporated a new company known as Essar Petroleum (East Africa) Ltd. in Kenya.
Riding on the expertise in Petroleum Business, Essar Petroleum (East Africa) will actively pursue marketing activities in East Africa to :
Efficiently and effectively meet the growing demand of the Petroleum products
Improve POL & LPG supply, storage & distribution system for reliability & economics and environmental benefits throughout East Africa
Undertake transfer of knowledge and develop technically qualified human resources
Support the Region for energy security
Contribute to sustainable development of the Region
Contd….
Essar Energy : Partnering in growth of Petroleum sector in East Africa
Energy Overseas Ltd.- New Initiatives in Africa
Essar Petroleum (East Africa) Limited
Utilise the existing infrastructure to handle imports
Become a low cost supplier for the East African Countries leveraging product availability from Essar Oil Ltd. refinery at Vadinar in Gujarat, India, currently operating at 14 MMTPA and being augmented to 34 MMTPA by 2011.
Undertake Crude Processing at KPRL
Undertake Petroleum Imports, Wholesale, Retail & Exports
Develop Petroleum & LPG infrastructure
Essar Energy : Partnering in growth of Petroleum sector in East Africa
Exploration & Production
Nigeria 100% interest in OPL 226 Exploration block
Madagascar100% Interest in 2 Exploration blocks
Assam100% Interest in 2 Exploration Blocks
West Bengal100% Interest in RG(East)- CBM- 2001/1 block in Durgapur. Certified by DGH for 2.15 Tcf of Reserves
Gujarat• 70% operatorship interest in Mehsana as a Proven field.
Maharashtra• 50% joint operatorship interest in Ratna & R- series with inplace Reserves of 500 MMBL certified by Scott Pickford .• 50% interest in MB-OSN-2005/3 in Mumbai Offshore Basin
Australia100% interest in 2 Shallow Water Permits NT/P77 and NT/P78
Vietnam100% interest in offshore block in 114Indonesia
49.5% interest in onshore South East
Tungkal Block
19Exploration & Production : Portfolio
Energy Energy- Upstream Initiatives in Africa
Essar Exploration & Production Activities in Africa
Nigeria - OPL 226, Offshore Exploration Block in prospective in Niger Delta
Madagascar – On land exploration blocks Melaky 3103 & Morombe 3110
Actively pursuing other opportunities in East Africa
Essar Energy : Partnering in growth of Hydrocarbon sector in Africa
Essar Telecom in Africa
Yu Mobile• Green field GSM services from Essar Telecom
in Kenya. • With Africa being the next stop for telecom
growth, Essar Telecom has started its foot print with the just launched services of Yu Mobile.
• With 700K subscribers and over 400 sites on air, the services are a fast expansion mode.
Obopay Inc.• Essar holds a strategic stake in this US based
mobile payments service provider. Plans to offer services in Kenya facilitating customers to make P2P, B2B, bill payments, and airtime top ups through the mobile phone.
Mobile services in Congo and Uganda• Essar planning the entry in Congo and Uganda
with the Dhabi group Promoters of Warid telecom – Congo and Uganda).
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