1. PETROLEUM PRODUCTS IMPORT & EXPORT IndianOption A Presentation By Muzahid Khan (muzahidkhan123@gmail) UNIVERSITY OF PETROLEUM & ENERGY STUDIES

3. The Indian Scenario

5. Jet Fuel

6. Kerosene

7. Distillate Fuel Oil

8. Residual Fuel Oil

10. Total Exports and Imports of Refined Petroleum Products WORLD TOTAL Imports: 21,083.59 Exports: 21,856.61 Source: EIA (2008)

12. World average refy capacity utilization moves around 75% (1980) to 87% (2008)

14. 100 MMT surplus (LPG:49 & Fuel Oil:51)

15. 347 MMT deficit (Naphtha:15, MS:72, Jet/kero:88, HSD:147 & Others:25)Source: EIA

17. The Indian Scenario

19. Crude/product Imports : ~ 28% of total imports

20. Product Exports : ~ 8% of total exports Source: PNGRB India - A Net Exporter of Products

21. Total Exports and Imports of Refined Petroleum Products in India Net Imports: 220.45 Net Exports: 450.70 Source: EIA (2008)

22. Refineries in India BHATINDA (9.0) PANIPAT (12.0+3.0) DIGBOI (0.65) BONGAIGAON (2.35) MATHURA (8.0) NUMALIGARH (3.0) GUWAHATI (1.0) BARAUNI (6.0) BINA (6.0) BARODA (13.7) JAMNAGAR (RIL 33.0 + 29.0) ESSAR 10.5+ 3.5) HALDIA (6.0+1.5) PARADEEP (15.0) MUMBAI (BPC 12.0) (HPC 5.5+ 2.4) VISAKH (7.5+0.8) TATIPAKA (0.08 + 0.08) MANGLORE (9.69 +5.31) Existing IOC CHENNAI (9.5+ 1.7) Subsidiaries of IOC KOCHI (7.5 + 2.0) Others NARIMANAM (1.0) New / Additions

23. India : Product Demand & Refining Capacity Gap between Refining Capacity & Product Demand 140 100 29 Surplus refining capacity is expected to increase further by 2030 India will continue to be product surplus Import/Export requirement for crude/products to be quite substantial Source: Draft XI Plan Demand Document

24. Govt. of India Policies Administered Pricing Mechanism (APM) dismantling effective 1.4.2002 Gas Pricing NELP Policy on Refining Auto Fuel Policy Policy on Marketing of Petroleum Products Gas Pipeline Policy Petroleum Product Pipeline Policy FDI Policy

26. The Indian Scenario

28. Cost Competitiveness Cash Operating costs Cost competitiveness driven by lower manufacturing wages Low capital and cash operating costs Access to large, technically skilled manufacturing base and workforce Source: A T Kearney

29. Refinery Configuration For Indian companies, the surplus capacity comes at a time when the international refining industry witnesses capacity crunch New capacity creation to address the current refining challenges Above measures contribute in improving the refining margins

31. Petroleum Chemicals and Petrochemicals Investment Regions (PCPIR) being set up

32. Major capacity additions done by IOC and RILAggregate Petrochemical Demand in ‘000T Demand for polymers alone has the potential to reach 12.5 MMT by the end of the 11th Five-Year Plan, growing at a CAGR of 18%. Growing rapidly at 1.5 - 2.5 times the GDP growth rate

33. World’s 6th largest refiner with 3% of world oil consumption Over 10,000 KM products pipeline network Excellent maritime infrastructure: POL facilities at 14 locations – 39 berths 2 barge jetties 8 SPMs Infrastructure

34. India as a refining hub competing with Singapore & Middle East Singapore (MMTPA) Refinery Capacity: 67 Refinery product surplus: 40 Product supplied to: Asia Pacific India Middle East (MMTPA) Refinery Capacity: 340 Refinery product surplus: 92 Product supplied to: Asia Pacific/Europe

35. Way Forward Leverage strategic advantage of coastal locations Consolidate with current/proposed location Proposed PCPIRs / SEZs Cost competitiveness to position the product in target markets Integration with petrochemicals, derivative and utility units, for maximizing value addition Environmental norms and product quality specs to meet the export markets Opportunity for India to emerge as a refining hub appears to be real and attractive

37. MOPNG

38. EIA