1 Oil Industry Future Challenges by Shri. B.K. Bakhshi.

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Transcript of 1 Oil Industry Future Challenges by Shri. B.K. Bakhshi.

  • Slide 1
  • 1 Oil Industry Future Challenges by Shri. B.K. Bakhshi
  • Slide 2
  • 2 Oil - Price Peaks & Effect on Indian Economy Sr No YearGDP Growth (+/-) InflationEvent 1.1973- 0.3 %20 %Yom Kippur War oct 73 2.1979- 5.2 %17 %Iranian Revolution 3.1990+ 1.3 %14 %1 st Gulf War 4.2008- From expected 9% to less than 8% 12 % +From Katrina Onwards
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  • 3 CRUDE OIL PRICES (Indian Basket) Peak July 08 - $142/BBL Sr No.YearPrice ($/BBL) 1.March 200323 2.200552 3.200663.35 4.200770.06 5.2008 (avg 1 st 6 months)110.52
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  • 4 VERTICAL INTEGRATION HELPS OIL MAJORS Integrated International Majors profits go down when crude price go down and profits go up when crude price are up. Examples: The slump in crude prices to less than $15 per bbl in 1998 led to mergers such as Exxon Mobil, Philips Conoco, etc. When crude prices rose from $33 per bbl in April 2004 to 70.25 per bbl in Aug 2005 2 weeks after Katrina Hurricane. Gasoline prices in USA peaked to $3.06 per USG. The combined net income of Exxon Mobil, BP, Royal Dutch, Shell & Conoco Philips totaled $ 32.8 Billion during the quarter ending Sept 2005 on a revenue of $ 378 Billion. * Source Black Gold by George Orwell, page 147
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  • 5 Governments liberalization drive hastened the pace of hydrocarbon market development in India. Journey so far 195019902007-08Comments 1Population (bn)0.360.841.132 nd most populous country 2GDP Growth Rate (%)3.9 @ 5.58 $ Around 9>8% for last four years 3 Crude Production (MMT) 0.2632.634Almost stagnant since 1990 4NG Prodn (MMSCMD)NA49.391Bulk production from Mumbai High field 5 Refining Capacity (MMT) 0.2551.851496 th largest refining capacity in world 6Crude import (MMT)3.05*20.7122 29% & 44% of total import & export in value 7Pipelines (kM)37^9,94531,061Worlds longest operating LPG pipeline 8 Product Consumption (MMT) 3.355129 >11% growth in MS/HSD & 14% in ATF last yr 9Product Export (MMT)02.639.3 20.2% growth in POL export over 2006-07 (32.7 MMT) 10Retail OutletsNA14,26434,696 # Catering to more than 80 mn motor vehicles * 1955 figure @ 1950-60 Avg # As on 1.4.07 $ 1990-200 Avg ^ Product pipeline
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  • 6 Upstream sector in India is a relatively unexplored market with reserves estimated in only 15 of the 26 sedimentary basins. 26 sedimentary basins: 3.14 mn sq kM (44% onland and 56% offshore) Prognosticated Hydrocarbon reserves: 28 BTOE (