Oil Industry Overview

1. Oil Industry Overview
Misha Jain
4 years in HPCL Refinery as
Maintenance Engineer

2. Agenda
• Oil Value Chain
• Oil Value Chain Economics (US)
• Petrol Pricing in India
• Petrol Prices across the world
• Global Oil Scenario
• Top 10 Proven Oil Reserves
• World’s Largest Oil & Gas Companies
• Indian Oil Scenario
• Refinery Process Overview
• Nelson Complexity Index
• Refinery Products
• How a Refinery looks like??

3. Oil Value Chain
UPSTREAM
Exploration Production
DOWNSTREAM
Refining Petrochemicals Distribution

4. Oil Value Chain Economics (US)
• Over 75% of an integrated oil company's net
margins are in the upstream.
• Crude oil costs contribute nearly 60% to pump
prices.
• Severance and gasoline taxes cost consumers
nearly 26% of pump prices.
• Company net margins for refining and
marketing are 10% of pump price.

5. Petrol Pricing in India
% of Pump
Components of Pump Price Price
Actual Crude Oil E&P Cost 15.57 Rs/litre 23.28
E&P Margin 16.98 Rs/litre 25.39
Crude Price 32.55 Rs/litre 115 $/barrel 48.67
GRM 2.26 Rs/litre 8 $/barrel 3.39
Petrol Basic Price 34.81 Rs/litre 52.05
Excise Duty (Fixed) 14.35 Rs/litre 21.46
Edu Cess (3% of Excise) 0.43 Rs/litre 0.64
Dealer commission 1.05 Rs/litre 1.57
VAT (15% of Basic+Excise) 7.60 Rs/litre 11.36
Crude Oil Custom duty 1.10 Rs/litre 1.64
Petrol Custom 1.54 Rs/litre 2.30
Transportation Charge 6.00 Rs/litre 8.97
Pump Price 66.88 Rs/litre 100.00
Assumptions:
1 barrel = 158.99 litres
INR USD Rate 45.00
E&P Margin is 75% of Full Margins of integrated company

6. Crude Price
• Price drivers are:
– Demand Supply gap Demand
driven Speculation
– Speculation driven

7. GRM
• Gross Refining Margin = Selling Price of the
basket of products – Cost of Crude (per barrel)

8. Petrol Prices across the world

9. Global Oil Scenario
(in (in (in
(in MMT) Prodn Capacity as a % (in MMTPA) Plant
MMTPA) MMTPA) MMTPA)
% of Oil
Proven Oil Oil Refining of Domestic Crude
reserv Efficency Consumpti
Reserves Prodn capacity Production Throughput
es on
World 171000 3929 2.30 4414 89.01 3744 84.82 3928
OPEC 130000 1758 1.35
India 775 34 4.39 180 18.89 160 88.89 130
Source: Basic Statistics of Indian Petroleum & Natural Gas 2008-09

10. Top 10 Proven Oil Reserves
Source: Wikipedia

12. Indian Oil Scenario
Upstream Downstream
Oil Production Refining capacity
(in MMTPA) (in MMTPA)
World 3929 4414
India 33.5 180
ONGC (+MRPL) 25.363 9.69
OIL 3.46 0
Joint Ventures 4.674 0
RIL 0 62
ESSAR 0 10.5
IOCL (+CPCL, BRPL) 0 60.2
BPCL (+NRL, KRL) 0 22.5
HPCL 0 13
Source: Basic Statistics of Indian Petroleum & Natural Gas 2008-09

13. Refinery Process Overview

16. Gasoline/Petrol/MS
Diesel
Kerosene ATF
Boilers
Residual Fuel
Crude Oil
Tankers
Lubricants
Asphalt / Tar
Petroleum Coke Electrodes
Benzene, Toulene, X Plastic, Chem, Phar
ylene ma

17. Nelson Complexity Index
• A measure of the secondary conversion capacity
of a refinery relative to the primary distillation
capacity.