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OVERVIEW | OPPORTUNITIES
Petroleum
&
Natural Gas
OVERVIEW
SIZE
- Petroleum & Natural Gas constitutes over 15% of GDP and includes transportation, refining and marketing of petroleum products and gas
- Revenue of over US$130 billion in FY 07
- India has a crude oil refining capacity of about 135 MMT
- Natural gas demand is estimated of 159 MMSCMD (2007-08) with domestic supply of about 80 MMSCMD and import of about 18 MMSCMD resulting in huge unmet demand
- Production of petroleum products expected to grow at a CAGR of 9% p.a. over the next 5 years
STRUCTURE
- Public sector companies play a major role in oil refineries, oil and gas pipelines and gasoline retail outlets
- Indian Oil Corporation and its subsidiaries control over 40% of India’s refining capacity and own/franchise most gasoline retail outlets
- Gas Authority of India Ltd. (GAIL) owns and operates a large gas grid
- Reliance Industries and Essar Group are the major Indian Private sector participants
- Reliance Petroleum is setting a export-oriented 27 MMTPA grassroot refinery at Jamnagar - the single largest grassroot refinery in the world
- Shell has invested in refining and retail; British Gas has invested in city gas distribution
POLICY
- 100% FDI is allowed in petroleum refining, petroleum product and gas pipelines and marketing/retail through the automatic route
- Virtual administrative price control of government over most petroleum products
- Petroleum and Natural Gas Regulatory Board Bill has been enacted
- A Regulatory Board has been constituted
- Natural Gas Pipeline Policy has been constituted to delineate policy and promote competition
Major players and presence in value chain
Source: BP Statistical Review of World Energy – 2007, Capitaline
Fortune, Ministry of Petroleum and Natural Gas, Government of India.
Source: Directorate General
of Hydrocarbons, Ministry of Petroleum & Natural Gas, BP Statistical
Review of World Energy
OPPORTUNITY
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Over 75 MMT of additional refining capacity planned
to be added by 2012
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Large growth projected in fuel retail |
OUTLOOK
- High GDP growth rate, rapidly growing vehicle population and better road infrastructure will drive consumption of petroleum products
- Industry is expected to have CAGR of about 12%
- Over 92 MMT of additional refining capacity planned by 2012
- Over 100 MMSCMD of additional demand for Natural Gas in the next 4 years
- Recent gas finds and increased use of gas for power generation, petrochemicals, fertilisers and city gas distribution
POTENTIAL
- Several areas of unexploited potential, including:
- City gas distribution
- LNG (import) infrastructure – terminals, regasification, pipelines to industrial consumers
- Growing demand-supply mismatch provides opportunities for investment in the entire value chain for petroleum (refining, product pipelines, storage and retail) and Natural Gas
- Investment need of US$22 billion and US$15 billion estimated in refining and the marketing and gas transportation network respectively by 2012
For additional information:
Ministry of Petroleum & Natural Gas (http://petroleum.nic.in)
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