outlook in india insights into refinery driven demand - · pdf fileoutlook in india insights...

Outlook in India
Insights into Refinery driven Demand
Shri Sanjiv Singh
Director (Refineries),
Indian Oil Corporation Ltd.
32nd Asia Pacific Petroleum Conference
(APPEC 2016)
8th September, 2016 Raffles City Convention Centre - Singapore
8/9/2016 1 32nd Asia Pacific Petroleum
Conference (APPEC-2016),
Singapore

Framework
Indias Oil Demand Past Trends & Future Outlook
Indian Refining Past Trends & Future Outlook
Indias Crude Import
Indian Refining Margins Variables
Way Forward
Conference (APPEC-2016), Singapore

Trends in Oil Demand in India

Energy Mix World & India
Source: IEA World Energy Outlook, 2015
Total Primary energy demand :
2013- 775 MToE; 2040 -1909 MToE
CAGR =3.4%
Total Primary energy demand
2013 - 13,558 MToE; 2040 17,935 MToE
CAGR =1.04%
4
32nd Asia Pacific Petroleum
Conference (APPEC-2016), Singapore 8/9/2016

Oil Consumption vs GDP Growth
4.709
2.196
2.837
3.62
4.93
4.45
5.101
4.3
1.8
-1.7
4.3
3.1
2.5 2.42.6 2.5
1.2
0.5
1.0
2.0
3.9
1.21.0
1.5
-0.5
-2.0
3.03
1.07 1.17 1.11
0.77 0.8
-3
-2
-1
0
1
2
3
4
5
6
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
% Growth
% Growth
World
India
Growth in GDP
Growth in Oil Consumption
Growth in GDP
Growth in Oil Consumption
Source: BP Stats, World Bank, PPAC
4.4
5.8
3.8
8.5
7.5
9.49.6
9
3.9
8.5
10.3
6.6
5.6
6.6
7.27.6
3.1
0.4
3.73.5 3.6
1.4
6.7 6.8
3.63.2
2.3
5
6
0.9
4.5
10.9
0
2
4
6
8
10
12
2000
-01
2001
-02
2002
-03
2003
-04
2004
-05
2005
-06
2006
-07
2007
-08
2008
-09
2009
-10
2010
-11
2011
-12
2012
-13
2013
-14
2014
-15
2015
-16
8/9/2016 5 32nd Asia Pacific Petroleum Conference (APPEC-2016), Singapore

Global Scenario
Regardless of Promotions of Unconventional Sources of Energy, Oil continues to be major primary energy source (33%) in low price regime.
Market continues to remain oversupplied.
Global Oil demand remains stable with major demand from Asia Pacific Countries.
Global Refining Industry is having more favourable opportunities than the upstream industry in lower price regime.
More options for Crude Oil Supply and increased product demand as well as robust operations by Refiners are boosting Refining Margins
Global refinery utilisation rose by 1% to 82.1% in 2015 (fastest increase in last 5 years)

Key facts about Indias Energy Demand & Supply
4th Largest Energy Consumer. GDP growth rate 7-7.5%.
17% of Global Population. Per capita Energy Consumption 637 Kg Oil Equivalent.
4.2 Million barrels per day Oil Consumption 4% of Global Oil Consumption
31% of imports is Crude Oil 6.7% of GDP is Oil Imports.
About 0.3% of Global Proven Oil Reserves with 1% of Global Oil Production.
8/9/2016 7 32nd Asia Pacific Petroleum Conference
(APPEC-2016), Singapore

Refined petroleum products demand was buoyant, grew by 4.5% to 165 MMT in 2014-15 & further by 10.9% to 189 MMTPA in 2015-16.
LPG rebound of growth to 10.5% in 2014-15 Release of new connections Rural Penetration Successful implementation of PAHAL - DBTL LPG consumption grew at 8.6% during 2015-16
MS growth highest in last 5 years 2-wheelers sales increased by 8% Retail HSD deregulation narrowed MS-HSD spread; boosting MS sales During 2015-16 period MS consumption grew at 14.5%
HSD consumption turned around and grew at 1.5% in 2014-15 Deregulation of HSD prices in Oct14, and the consequent fall in the retail prices Pickup in industrial activity in the country During 2015-16, HSD consumption grew at 7.5%
Indian aviation sector is going through revival since 2013-14; Growth in 2015-16 : 8.7%
Petroleum Consumption
5.0 7.1
5.6 7.8 9.0
6.0
1.6
5.0 6.7
-4.8
0.9
4.4
8.8
-1.0
4.4 4.5
10.5 11.4
1.5 4.0
10.9 8.8
14.5
7.5 8.7
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
POL LPG MS HSD ATF
2011-12 2012-13 2013-14 2014-15 2015-16
Growth rate of major petroleum products consumption (in percentage)

05
10152025303540
27.2 30.1 30.3 32.2
35.3
15 15.7 17.1 19.1 21.8
Supply
Demand
0
20
40
60
80
10082.9
91.1 93.8 94.3 98.6
64.8 69.1 68.4 69.4 74.6
Supply
Demand
4.3 4.4 4.0
3.6 3.4
3.0 3.0 3.1 2.9 2.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2011-12 2012-13 2013-14 2014-15 2015-16
Demand
Supply
Diesel : Gasoline Ratio
Diesel Supply-Demand Trend
Gasoline Supply-Demand Trend Supply-Demand Trend of Diesel & Gasoline
In recent past, Gasoline demand growing
at a faster rate compared to supply
MM
T
MM
T

32.1 31.5 30.9 31.2 30.9 33.1 33.4 33.6 33.8 33.97 33.9 33.8 33.69 37.68
38.08 37.86 37.79 37.46
36.95
84.3 90.6
97.1 100.1 100.4 100.4 107.8
111.6 113.2 120.8
129 133.6 137.8 141.0
148.1 157.1 158.4
165.5
183.5
0
20
40
60
80
100
120
140
160
180
200
Wide gaps between product demand and
indigenous crude availability
Product Demand
Production from Indigenous Crude,Condensate & Gas
Widening gap between product demand and crude production
from indigenous sources; Heavy dependence on Imports
Bridging the gap - Oil Equity abroad and fresh finds under New
Exploration & Licensing Policy
MMT

India : Downstream Industry Overview
Since 2001-02, India has transformed from being a net importer of
petroleum products to being a net exporter.
Import/Export Products only
01020304050607080
'97-
98
'00-
01
'01-
02
'02-
03
'03-
04
'04-
05
'05-
06
'06-
07
'07-
08
'08-
09
'09-
10
'10-
11
'11-
12
'12-
13
'13-
14
'14-
15
'15-
16
Imports Exports
(in MMTPA)
60.5
MS : 16.8
HSD: 24.0
27 MMUS $
Indian Hydrocarbon sector has acquired the critical mass for major productivity leaps

Source: PPAC, MoPNG Energy Security: Oil
Attributes Brazil Russia India China US
Reserves 1.0% 6.1% 0.3% 1.1% 2.9%
Production 2.9% 12.7% 1.0% 5.0% 12.3%
Consumption 3.4% 3.5% 4.3% 12.4% 19.9%
Import Dependence 7% --- 81% 54% 47%
India placed most vulnerably among major countries
Value of net trade expected to cross $500 bn in 2040 from $140 bn in 2012
Import dependence expected to rise to 92% by 2040 Source: BP Stats, 2015; IEA
WEO 2015
64
10 27 47
Indias Import Dependence
12

Indian Refining
13 8/9/2016 32nd Asia Pacific Petroleum Conference
(APPEC-2016), Singapore

Growth in Refining Capacity
Refining Capacity (MMT)
Refining Sector has grown by 3.8 times since deregulation of the sector in 1998

Current Refining Industry Structure in India
20.0
60.0
15.1
23.8
30.5
80.7
Essar 9%
RIL 26%
ONGC 7%
HPC 10%
BPC 13% IOC
35% Indian Oil group owns & operates - 11 of 23 refineries in the country (incl CPCL)
Total: 230 MMT from 23 Ref(s)
No of
Ref(s)
11
4
3
2
2
1

Transition from Deficit to Surplus
11
21
47 55
61
22
56 62
India currently has a surplus production of 47 MMTPA, which is equivalent to 26% of its consumption.
Country has exported Petroleum Products worth $ 27 billion ( 1,76,773 crore) in 2015-16.
47
8/9/2016 16 32nd Asia Pacific Petroleum Conference (APPE

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