Sector outlook and opportunities OIL India An overview Business - - PDF document

SLIDE 1

OIL INDIA LIMITED

Investor Presentation

May, 2010

Oil India Investor Presentation – FY2010

2

Oil India Investor Presentation – FY2010

Disclaimer

This presentation contains certain forward looking statements concerning OIL India’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India, ability to attract and retain highly skilled professionals, time and cost over runs on projects, our ability to manage our international operations, government policies and actions with respect to investments, fiscal deficits, regulations, etc., interest and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company.

SLIDE 2

Oil India Investor Presentation – H1 FY2009 Oil India Investor Presentation – FY2010

Sector outlook and opportunities OIL India – An overview Business structure, performance and strategy Financial performance

Oil India Investor Presentation – H1 FY2009 Oil India Investor Presentation – FY2010

Sector outlook and opportunities OIL India – An overview Business structure, performance and strategy Financial performance

SLIDE 3

5

Oil India Investor Presentation – FY2010

Global Oil and Gas trends

Source: Broker reports, Bloomberg, Wood Mackenzie, CERA

(Rebased to Brent) 25 35 45 55 65 75 85 Mar-09 Jun-09 Aug-09 Nov-09 Mar-10 Brent FTSE Eurofirst (Oil and Gas) FTSE AIM (Oil and Gas) +32% +115% +76% (US$/bbl) 20 40 60 80 100 120 140 160 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Broker high/ low range Historical Brent ICE Brent futures (Mar-10) Wood Mackenzie (Mar-10) CERA Global Fissures (Mar-10) CERA Asian Phoenix (Mar-10) CERA Break Point (Mar-10) Broker average (Mar-10)

Source: Datastream, FactSet market data as at March 2010

Most analyst reports point to a long term increase in the prices of crude oil as reflected in the Brent oil price futures and the recovery in the Oil-related indices Brent oil price futures/forwards and forecasts LTM oil price and equity market performance

6

Oil India Investor Presentation – FY2010

31.2 0.8 53.4 8.6 6.0 Coal Crude Oil Natural Gas Hydro Nuclear CAGR 4.36%

Note:

• 1. As of 31st December 2008 (BP Statistical Review of World Energy, 2009)

279 773 1,052 73% 30.6 10.8 41.4 26% Crude Oil (mmbbls) Natural gas (bcm)

Deficit Production Total Consumption

Note:

• 1. As of 31st December 2008 (BP Statistical Review of World Energy, 2009)

(mmtoe) Energy Sources - India

Domestic Industry environment

Steady growth in domestic energy consumption driven by India’s economic growth story1

261 295 344 379 433 100 200 300 400 500 1997 2000 2004 2006 2008

Significant supply deficit in the domestic market1

34.8 5.5 29.2 24.1 6.4 Coal Crude Oil Natural Gas Hydro Nuclear Energy Sources - Global

Energy sources (%) Crude oil and natural gas sources would tend to grow in significance as the Indian economy develops

SLIDE 4

7

Oil India Investor Presentation – FY2010

India: Energy scenario

Primary Energy Consumption (MTOE) Crude Oil Consumption (MTOE)

• 53% of primary energy consumed by 5 countries
• India is the 5th largest consumer of Primary Energy

− India CAGR (1998-2008): 4.8% vs. Global CAGR: 2.4%

• World oil consumption (2008): 3,928 MTOE
• India is the 4th largest consumer of Oil comprising 3.4% of total

− India CAGR (1998-2008): 3.9% vs. Global CAGR: 1.3%

Note: (1) Annualized crude oil production rate of 26.24 mmboe in Q2 FY2010 (2) Annualized crude oil delivery rate of 26.90 mmboe in Q2 FY2010 Note: (1) 1 BCM of Natural Gas = 6.2898 MMBOE

2,299 2,003 685 508 330 311 258 240 212 433 500 1,000 1,500 2,000 2,500 USA China Russia Japan India Canada Germany France South Korea UK

3.8% of total 3.4% of total

885 376 222 118 103 102 135 130 200 400 600 800 1,000 USA China Japan India Russia Germany

• S. Korea

Canada 8

Oil India Investor Presentation – FY2010

OIL at a glance

India’s premier Oil & Gas company engaged in the exploration, development, production and transportation of crude oil and natural gas in India

Professionally managed company with experienced management with a proven track record

Management

ICRA has assigned an A1+ (A one plus) rating to Rs. 5 billion short-term debt programme of OIL indicating highest safety

Credit rating

Revenue: USD 1,666 m (FY10) PAT : USD 550m (FY 10) Market cap : USD 6.54 bn

Size A corporate citizen committed towards corporate social responsibility, environment protection, implementation of safety measures & conservation of natural resources

Domestic acreage: 127,881 square kilometers; International acreage: 41,656 square kilometers

Acreage

SLIDE 5

Oil India Investor Presentation – H1 FY2009 Oil India Investor Presentation – FY2010

Sector outlook and opportunities OIL India – An overview Business structure, performance and strategy Financial performance

10

Oil India Investor Presentation – FY2010

Rich heritage of building a company

• Independent India’s first commercial oil discoveries were made

by Assam Oil Company – Nahorkatiya, Assam – 1953 – Moran, Assam – 1956

• Incorporated as Joint Sector Company on 18 February, 1959

– 2/3rd Owned by Assam Oil Company / Burmah Oil Company – 1/3rd Owned by Government of India

• Became a Public Sector Undertaking, GOI on 14 October, 1981
• Five decades of experience in Exploration & Production
• Second largest national oil and gas company in India
• Achieved overwhelming response in its maiden public issue on

30 September 2009

SLIDE 6

11

Oil India Investor Presentation – FY2010

• OIL’s shares listed in Mumbai Stock Exchange on 30.09.2009.
• Achieved the highest daily rate of crude oil production of 3.61 MTPA (> 26 mmbbls)
• Achieved the highest daily rate of natural gas production of 6.67 MMSCMD in North

East and potential of 0.93 MMSCMD in Rajasthan.

• Performance during 2010 :

3 25.70 MMBBL Crude Oil Production 25 144862 Mtrs Drilling 4.22 25.76 MMBBL Crude Oil Sales 6.44 2.415 BCM Natural Gas Production 7.2 1.86 BCM Natural Gas sales

% Increase over 2008-09 2009-10 Unit Parameter

Select highlights for FY2010

• Award of Block in Venezuela on 10th Feb’ 2010, Mixed Company Contract signed on 12th May’ 2010

12

Oil India Investor Presentation – FY2010

• Completed 660 Km long NRL – Siliguri Product Pipeline.
• LPG plant completed 26 years of continuous service with excellent track record of 99%

Plant Load Capacity. LPG production of 44,950 tonnes in 2009-10 was 103.1% of target

• Made two hydrocarbon discoveries (Umatara -1 & South Tinali) in Assam. Reserve

replacement was 1.65 times production.

• Provisionally won 9 blocks in NELP-VIII round - the highest so far by OIL - 2 as Operator,

1 as Joint Operator and PIs in 6.

• The first Operator to commence drilling in NELP – VI block in October, 2009.
• Commenced drilling in Libya as Operator in October, 2009.The second well is showing

promising prospects at shallow depths.

• Awarded as “Heavy Weight Mini Ratna PSU” by Dalal Street Journal
• Duliajan – Numaligarh Gas Pipeline (DNPL) Project likely to be completed by June, 2010.
• Measurement of Carbon footprint initiated.
• Revisiting Long Term Strategic Plan and PMS.

Select Highlights of 2009-10

SLIDE 7

13

Oil India Investor Presentation – FY2010

• NAVRATNA status awarded to OIL in April’ 2010.
• The Board of NAVRATNA companies enjoy enhanced autonomy and DOP in following areas:

– Capital expenditure without any monetary ceiling – Equity investment in joint ventures / subsidiaries in India or abroad, including purchase

• r other arrangements, technology and know-how

– To raise debt from the domestic capital markets and for borrowings from international market – Human resources development including to structure and implement schemes relating to personnel and human resource management, training, voluntary retirement schemes, etc – To effect Organizational Restructuring including establishment of profit centres, opening

• f offices in India and abroad, creating new activity centres, etc

– The Board of the these PSEs shall have the powers for mergers and acquisitions

NAVRATNA Status to OIL

14

Oil India Investor Presentation – FY2010

Shareholding pattern

78.4% 2.9% 2.1% 3.5% 12.3% 0.8% Promoters (GOI) Bodies Corporate Public & Others FII MF FI / Banks

0.54% HDFC Trustee Co Ltd-HDFC Top 200 Fund 2.23% Hindustan Petroleum Corporation 1.41% ICICI Prudential Life Insurance 0.88% HDFC Standard Life Insurance 2.23% Bharat Petroleum Corporation 0.34% Reliance Life Insurance Company Limited 0.34% PCA India Equity Open Limited 4.45% Indian Oil Corporation % Shareholding Key shareholders

• Listing :Listed on BSE/NSE on 30th Sept 2009
• Number of shares : 240.45 mn
• Dividend :FY10 Int dividend/share : Rs.18

F Dividend (Prop)/ share : Rs.16

• Share price (H/L) :Rs.1374 / Rs.1019
• Market Cap :Rs.30153 cr / USD 6.54 bn

SLIDE 8

15

Oil India Investor Presentation – FY2010

Performance of OIL’s Shares (W.r.t. Sector)

OIL SHARE PERFORMANCE VS OIL & GAS SECTOR (From 01.04.2010 to 21.05.2010)

1000.00 1050.00 1100.00 1150.00 1200.00 1250.00 1300.00 1 A p r il 5 A p r il 6 A p r il 7 A p r il 8 A p r il 9 A p r il 1 2 A p r il 1 3 A p r il 1 5 A p r il 1 6 A p r il 1 9 A p r il 2 A p r il 2 1 A p r il 2 2 A p r il 2 3 A p r il 2 6 A p r il 2 7 A p r il 2 8 A p r il 2 9 A p r il 3 A p r il 3 M a y 4 M a y 5 M a y 6 M a y 7 M a y 1 M a y 1 1 M a y 1 2 M a y 1 3 M a y 1 4

• M

a y

• 1

1 7

• M

a y

• 1

1 8

• M

a y

• 1

1 9

• M

a y

• 1

2

• M

a y

• 1

2 1

• M

a y

• 1

O IL S h a r e P r ic e ( R s .) 9000.00 9200.00 9400.00 9600.00 9800.00 10000.00 10200.00 10400.00 10600.00 OIL OIL INDEX

OIL SHARE PERFORMANCE VS ONGC (FROM 01.04.2010 TO 21.05.2010)

1000.00 1050.00 1100.00 1150.00 1200.00 1250.00 1300.00 1

• A

p r

• 1

5

• A

p r

• 1

6

• A

p r

• 1

7

• A

p r

• 1

8

• A

p r

• 1

9

• A

p r

• 1

1 2

• A

p r

• 1

1 3

• A

p r

• 1

1 5

• A

p r

• 1

1 6

• A

p r

• 1

1 9

• A

p r

• 1

2

• A

p r

• 1

2 1

• A

p r

• 1

2 2

• A

p r

• 1

2 3

• A

p r

• 1

2 6

• A

p r

• 1

2 7

• A

p r

• 1

2 8

• A

p r

• 1

2 9

• A

p r

• 1

3

• A

p r

• 1

3

• M

a y

• 1

4

• M

a y

• 1

5

• M

a y

• 1

6

• M

a y

• 1

7

• M

a y

• 1

1

• M

a y

• 1

1 1

• M

a y

• 1

1 2

• M

a y

• 1

1 3

• M

a y

• 1

1 4

• M

a y

• 1

1 7

• M

a y

• 1

1 8

• M

a y

• 1

1 9

• M

a y

• 1

2

• M

a y

• 1

2 1

• M

a y

• 1

O IL S h a r e P r ic e ( R s ) . 900 950 1000 1050 1100 1150 OIL ONGC

16

Oil India Investor Presentation – FY2010

Performance of OIL’s Shares (w.r.t. SENSEX / NIFTY)

OIL VS. NIFTY (FROM 01.04.2010 TO 21.05.2010)

1020.00 1060.00 1100.00 1140.00 1180.00 1220.00 1260.00 1300.00 1

• A

p r

• 1

5

• A

p r

• 1

6

• A

p r

• 1

7

• A

p r

• 1

8

• A

p r

• 1

9

• A

p r

• 1

1 2

• A

p r

• 1

1 3

• A

p r

• 1

1 5

• A

p r

• 1

1 6

• A

p r

• 1

1 9

• A

p r

• 1

2

• A

p r

• 1

2 1

• A

p r

• 1

2 2

• A

p r

• 1

2 3

• A

p r

• 1

2 6

• A

p r

• 1

2 7

• A

p r

• 1

2 8

• A

p r

• 1

2 9

• A

p r

• 1

3

• A

p r

• 1

3

• M

a y

• 1

4

• M

a y

• 1

5

• M

a y

• 1

6

• M

a y

• 1

7

• M

a y

• 1

1

• M

a y

• 1

1 1

• M

a y

• 1

1 2

• M

a y

• 1

1 3

• M

a y

• 1

1 4

• M

a y

• 1

1 7

• M

a y

• 1

1 8

• M

a y

• 1

1 9

• M

a y

• 1

2

• M

a y

• 1

2 1

• M

a y

• 1

O IL S h a r e P r ic e ( R s .) 4600.00 4700.00 4800.00 4900.00 5000.00 5100.00 5200.00 5300.00 5400.00 5500.00 OIL NIFTY

OIL VS. SENSEX (FROM 01.04.2010 TO 21.05.2010)

1020.00 1060.00 1100.00 1140.00 1180.00 1220.00 1260.00 1300.00 1

• A

p r

• 1

5

• A

p r

• 1

6

• A

p r

• 1

7

• A

p r

• 1

8

• A

p r

• 1

9

• A

p r

• 1

1 2

• A

p r

• 1

1 3

• A

p r

• 1

1 5

• A

p r

• 1

1 6

• A

p r

• 1

1 9

• A

p r

• 1

2

• A

p r

• 1

2 1

• A

p r

• 1

2 2

• A

p r

• 1

2 3

• A

p r

• 1

2 6

• A

p r

• 1

2 7

• A

p r

• 1

2 8

• A

p r

• 1

2 9

• A

p r

• 1

3

• A

p r

• 1

3

• M

a y

• 1

4

• M

a y

• 1

5

• M

a y

• 1

6

• M

a y

• 1

7

• M

a y

• 1

1

• M

a y

• 1

1 1

• M

a y

• 1

1 2

• M

a y

• 1

1 3

• M

a y

• 1

1 4

• M

a y

• 1

1 7

• M

a y

• 1

1 8

• M

a y

• 1

1 9

• M

a y

• 1

2

• M

a y

• 1

2 1

• M

a y

• 1

O IL S h a r e P r ic e ( R s .) 15600.00 15900.00 16200.00 16500.00 16800.00 17100.00 17400.00 17700.00 18000.00 18300.00 OIL SENSEX

SLIDE 9

Oil India Investor Presentation – H1 FY2009 Oil India Investor Presentation – FY2010

Sector outlook and opportunities OIL India – An overview Business structure, performance and strategy Financial performance

18

Oil India Investor Presentation – FY2010

Key lines of business

• Domestic: 23 exploration

blocks through NELP1

• International: Egypt, Gabon,

Iran, Libya, Nigeria, Timor Leste and Yemen2

• Discoveries: 11 Small to

Medium3 size discoveries from Fiscal 2007 to Fiscal 2010.

• Refining and marketing

petroleum products: 26% equity stake in NRL1

• Gas cracker project: 10%

equity stake in BCPL2

• Acquiring, transporting and

distributing natural gas - 23% equity stake in DNPL3

• City gas business - Signed

MOU with GAIL, HPCL, IOCL and BPCL

• 50 years of experience in Oil

& Gas production

• Crude oil: 40 installations

and est. 1,315 km of internal crude oil pipelines grid; FY10 production of 25.70 mmbbl

• Natural gas: 29 instllations

and est. 571 km of internal gas network pipelines grid; FY10 production of 2415 mmscm

• Advanced Recovery

Techniques - Artificial Lifting, Enhanced Oil Recovery and horizontal drilling

Exploration Downstream Production Transportation

• Crude Oil: 1,157 km crude
• il pipeline with an annual

capacity of over 44 mn barrels

• Multi-Product: 660 km

pipeline from NRL1 to Siliguri with an estimated capacity of 2.13 million kiloliters of refined petroleum products

• Overseas pipeline: 10%

equity stake in a 741 km pipeline in Sudan

• Natural Gas: 23% stake in

the 192 km DNPL3, which proposes to lay a 192 km pipeline project to transport natural gas from Duliajan to Numaligarh

Note: 1. NRL – Numaligarh Refinery Limited 2. BCPL – Brahmaputra Cracker and Polymer Limited 3. DNPL – Duliajan-Numaligarh Pipeline Limited Note: 1. 9 blocks have been provisionally awarded under NELP VIII. 2. Participating interests in exploration and development blocks. 3. Small to Medium size discoveries: Estimated proved plus probable reserves size of less than 30 million barrels of oil and oil equivalent gas 4. MMBOE – Million Barrels of Oil Equivalent

SLIDE 10

19

Oil India Investor Presentation – FY2010

Note: NO – Non-operator PI – Participatory Interests 1. Includes a 40% PI in the Kharsang fields of area 11 sq. km. 2. Includes 3,992 Sq Km of Joint Operatorship Strong presence in prospective East Coast RJ-ONN KG-DWN KG-OSN MN-DWN AA-ONN AA-ONN AA-ONN AA-ONN AA-ONN AAP-ON MZ-ONN KG-DWN AN-DWN

• AA-ONN

AA-ONN

• CY-DWN

WB-ONN RJ-ONN RJ-ONN 30% 90% 85% 16% 15% 10% 75% 25% 10% 75% 60% 60% 10% 20% 30% 20% KG-DWN 10% 20% 85% 20% 15% 20%

• KG-ONN

90% GK-OSJ-3 MN-OSN

Exploration Blocks : National Presence

Total Area – 169,537 Sq. Km Summary of Acreage (sq. km.)

1

OIL as Operator NELP I-VIII Nomination ML(s)/PEL(s) JVC Blocks

• Map Not to Scale

4,811 41,656 97,910 2,519 6,041 16,600 PEL Nomination PML Nomination JV/PSC (NO) NELP (Operator) NELP (NO) Overseas (PI)

• ASSAM +AP

AA-ONN

• 50%

CY-DWN 50%

• KG-DWN

15% KG-DWN 15% AA-ONN 50% AN-DWN 30% AN-DWN 40% AN-DWN 40% AN-DWN 30%

+

+ Joint Operator

1

2

20

Oil India Investor Presentation – FY2010

3,735 616 460 Assam Arunachal Pradesh Rajasthan 2,003 516 Assam Arunachal Pradesh

15 2 2 8 5 PML Areas 19 4,811 Pre-NELP – JV/PSC (Non Operator) 3 6,041

305 5,725 11 Assam & AP Kutch Offshore Kharsang

1 1 1 Operator Blocks (NELP) 12* 16,600

1,460 275 7,650 1,518 5,697 IV V VI VII VIII

1 1 1 6 Non-Operator Blocks (NELP) 18 97,910

4,970 37,066 110 1,060 22,829 16,140 15735 I II III IV VI VII VIII

1 1 2 4 1 3 All Onshore (* incl Joint Operator) 4 Onshore, 1 Offshore & 7 Deepwater Block category Blocks Area (Sq.km.)

• Petro. Mining License (PML)
• Petro. Exploration License (PEL)

JV/Production Sharing Contract (PSC)

Area (Sq.km.) Blocks

PEL Areas 13 2519

1

Map Not to Scale

Exploration Acreage

3* 6

SLIDE 11

21

Oil India Investor Presentation – FY2010

LIBYA LIBYA LIBYA LIBYA

Area 86 Area 102/4 Area 95/96

GABON GABON GABON GABON Shakti NIGERIA NIGERIA NIGERIA NIGERIA OPL 205 TIMOR LESTE TIMOR LESTE TIMOR LESTE TIMOR LESTE Block K YEMEN YEMEN YEMEN YEMEN Block 82 Block 83 EGYPT* EGYPT* EGYPT* EGYPT* Block 3 Block 4 IRAN IRAN IRAN IRAN Farsi Offshore 3,500 3,500 3,500 3,500 20 20 20 20 (OVL) (OVL) (OVL) (OVL) 8,287 8,287 8,287 8,287 2,600 2,600 2,600 2,600 25 25 25 25 (GSPC) (GSPC) (GSPC) (GSPC) 2,094 2,094 2,094 2,094 17.5 17.5 17.5 17.5 ( ( ( (Suntera Suntera Suntera Suntera) ) ) ) 3,761 3,761 3,761 3,761 45 45 45 45 1,857 1,857 1,857 1,857 364 364 364 364 15 15 15 15 (Medco) (Medco) (Medco) (Medco) 2,384 2,384 2,384 2,384 12.5 12.5 12.5 12.5 (Reliance) (Reliance) (Reliance) (Reliance) 7,087 7,087 7,087 7,087 2,710 2,710 2,710 2,710 6,629 6,629 6,629 6,629 50 50 50 50 50 50 50 50 25 25 25 25

( ( ( (Sonatrach Sonatrach Sonatrach Sonatrach) ) ) )

Area Area Area Area – – – – 41,656 sq.km. 41,656 sq.km. 41,656 sq.km. 41,656 sq.km. 19 Blocks 19 Blocks 19 Blocks 19 Blocks

* Government approval is awaited Operator Area (Sq. Km) OIL’s Participating Interest (%)

Total Total Total Total

OIL also holds a 10% equity stake in 741 km crude oil pipeline OIL also holds a 10% equity stake in 741 km crude oil pipeline OIL also holds a 10% equity stake in 741 km crude oil pipeline OIL also holds a 10% equity stake in 741 km crude oil pipeline in Sudan in Sudan in Sudan in Sudan VENEZUELA VENEZUELA VENEZUELA VENEZUELA

Corabobo 1 North Corabobo 1 Central

203 203 203 203 180 180 180 180 3.5 3.5 3.5 3.5

(Mixed (Mixed (Mixed (Mixed Company) Company) Company) Company)

Repsol Repsol Repsol Repsol 11% 11% 11% 11% Petronas Petronas Petronas Petronas 11% 11% 11% 11% OVL 11% OVL 11% OVL 11% OVL 11% IOC 3.5% IOC 3.5% IOC 3.5% IOC 3.5%

Overseas Exploration and Development Blocks

22

Oil India Investor Presentation – FY2010

Exploration and Development Growth Mapping (Acreage)

20000 40000 60000 80000 100000 120000 140000 160000 180000

Nomination Including Pre- NELP JVs (Till 1998) Very limited Scope for Growth

NELP

(1999 onwards)

+

Overseas

(2005 onwards) Competition Level Playing Field Operation Area – NE, RJ, UP, Uttarakhand Operation Area – Pan India + Overseas Acreage (Sq. Km)

Growth ~ 10 Times Growth

Current Acreage Domestic = 127,881 sq.km Overseas = 41,656 sq.km

SLIDE 12

23

Oil India Investor Presentation – FY2010

E&P Infrastructure in India

6 Logging trucks 1 Mud logging Unit 11 Drilling Rigs 14 W/over Rigs 3 (2D-2, 3D-1) Seismic Crew

State-of-art exploration facilities

24

Oil India Investor Presentation – FY2010

E&P Infrastructure in India

149535 KLs Crude Storage >5000 Km Oil & Gas Pipelines 70 Production Installations

Globally comparable Production & transportation facilities

Pipeline to Deliver Crude Oil to 4 Refineries NSPL Product Pipeline

• No. of Pump Station – 10
• No. of Terminal Station – 1

SLIDE 13

25

Oil India Investor Presentation – FY2010

Proved Proved & Probable Proved, Probable & Possible

Crude Oil and Natural Gas Reserves

283 296 285 540 588 575 1,000 1,039 999 300 600 900 1,200 1,500 1,800 2007 2008 2009 169 233 247 289 345 399 471 472 543 300 600 900 1,200 1,500 1,800 2007 2008 2009 452 529 532 829 933 974 1,471 1,511 1,542 300 600 900 1,200 1,500 1,800 2007 2008 2009

Has improved the overall reserves available consistently over the past 3 years through enhanced oil recovery methods and aggressive exploration Crude Oil Reserves (mmboe) Natural Gas Reserves (mmboe) Overall Reserves (mmboe)

26

Oil India Investor Presentation – FY2010

Crude Oil and Natural Gas Reserves

1P Reserves represent: 11 Years current production of Crude Oil 15 Years current production of Natural Gas 12 Years current production of O+OEG

SLIDE 14

27

Oil India Investor Presentation – FY2010

Crude Oil and Natural Gas Production

2265 2341 2269 2415 1000 1500 2000 2500 2006-07 2007-08 2008-09 2009-10

Crude Oil Production (mmbbl) Natural Gas Production (mmscm)

• Crude oil production during FY 10 increased by 3% over FY 09
• Natural gas production during FY 10 increased by 6.44% over FY 09

22.17 22.38 24.95 25.70 5 10 15 20 25 30 2006-07 2007-08 2008-09 2009-10 28

Oil India Investor Presentation – FY2010

Crude Oil and Natural Gas Sales

6.18 6.40 6.09 6.04 6.24 6.70 6.46 6.36 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 6.00 6.50 7.00 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10

Crude Oil Quarter on quarter sales (mmbbl) Natural Gas Quarter on quarter Sales (mmscm)

438.05 454.71 442.61 402.00 470.99 459.83 485.66 446.10 0.00 100.00 200.00 300.00 400.00 500.00 600.00 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10

SLIDE 15

29

Oil India Investor Presentation – FY2010

2.53 2.99 4.11 4.22 1 2 3 4 5 FY2007 FY2008 FY2009 FY2010 1.81 1.83 2.99 2.82 1 2 3 4 FY2007 FY2008 FY2009 FY2010

Low Finding and Development costs

F&D Costs (US$/bbl) Finding Costs (US$/bbl)

Note: (1) BOE: Barrels of Oil Equivalent

30

Oil India Investor Presentation – FY2010

4.80 7.10 6.81 7.24 2 4 6 8 FY2007 FY2008 FY2009 FY2010

Low Lifting & Production costs

Lifting Costs (US$/bbl) Production Cost NG (US$/MMBTU)

0.77 1.11 1.15 1.17 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 FY2007 FY2008 FY2009 FY2010

SLIDE 16

31

Oil India Investor Presentation – FY2010

Healthy reserve replacement ratio

176 159 204 204 169 165 50 100 150 200 250 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010

Crude Oil and Natural Gas (O+OEG)

Adequate reserve replenishment

32

Oil India Investor Presentation – FY2010

83.22 81.69 68.53 44.64 75.7 58.13 55.57 56.21 41.58 53.32 36.15 39.01 39.80 27.94 37.13 20 40 60 80 100 FY2008 FY2009 FY2010 Q4 FY2009 Q4 FY2010 Gross Realized Price Realized Price after Subsidy/Discount Net Realized Price

Realized Price

Realized Price ($/barrel)

Current subsidy burden only on auto fuels

SLIDE 17

33

Oil India Investor Presentation – FY2010

Impact of discount

Impact on PAT Impact on PBT Statutory Levies Discount

US $ Mn

Post Discount Less: Discount Pre - Discount

US $ / BBL

Particulars 6 9 2 12 55.65 1.84 57.49 Q1 39 55 14 72 56.93 10.45 67.39 Q2 53 81 20 100 58.78 15.11 73.89 Q3 FY 2009-10 FY 2008-09 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL 75.70 68.53 121.54 114.16 54.27 44.64 81.69 22.38 12.32 40.48 47.65 16.79 3.06 26.13 53.32 56.21 81.06 66.51 37.48 41.58 55.56 141 325 252 310 108 18 657 28 64 49 60 21 4 127 113 258 203 250 87 14 530 74 172 133 165 57 10 350

34

Oil India Investor Presentation – FY2010

Sharing of Subsidy by Upstream Companies

100% 100% 100% 100% 100% 100% 100% Total

7% 9% 5% 5% 7% 8% 19% GAIL 9% 11% 9% 9% 10% 7% 12% OIL 84% 80% 86% 86% 83% 85% 69% ONGC

TOTAL 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 113537 14430 32943 25709 20507 14001 5947 Total

8110 1326 1694 1401 1488 1064 1137 GAIL 10557 1549 3023 2307 1994 978 706 OIL 94869 11554 28226 22001 17025 11959 4104 ONGC

TOTAL 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05

RS./CRORES % SHARING

SLIDE 18

35

Oil India Investor Presentation – FY2010

Sharing of Subsidy by Upstream Companies

SHARING OF SUBSIDY BY OIL INDIA LTD. VIS-A-VIS OTHER UPSTREAM COMPANIES

706 978 1994 2307 3023 1549 11959 17025 22001 28226 11554 1137 1064 1488 1401 1694 1326 4104

5000 10000 15000 20000 25000 30000 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 R S . IN C R O R E S OIL ONGC GAIL

36

Oil India Investor Presentation – FY2010

Subsidy Mechanism

Recommendations of Expert Group (Kirit S. Parikh Committee)

• To continue with the present system for subsidy on Kerosene & LPG

(i.e. Apparently no burden to Upstream Companies)

• The prices of Petrol and Diesel should be market driven
• Increase of Rs. 6 per litre for Kerosene to reduce the subsidy burden
• Increase of Rs. 100 per cylinder for LPG

SLIDE 19

37

Oil India Investor Presentation – FY2010

Upside from 2011

• Price for Natural Gas increased to US$ 4.2/ MMBTU
• Consequentially additional gross revenue

generation of US$ 110 mn (annualised)

38

Oil India Investor Presentation – FY2010

Strategic Initiatives

Increase in Exploratory and Development Drilling Meterage. Increase in Work Overs. Enhanced Water Injection to Increase Production. Endeavour to Enhance LPG production through NGL Recycling. Endeavour to Reduce Gas Flaring / Pollution by Inducting LNG Technology. Completed Preliminary Activities in order to Develop CNG Network in Assam

SLIDE 20

39

Oil India Investor Presentation – FY2010

Business strategy

Geographic Diversification of Upstream Assets

Integrated business portfolio leading to stable long-term shareholder value addition

• Achieve balanced growth of portfolio

through acquisition of new assets

• Pursue selective bidding strategy in

future rounds of NELP in India

1

Increase Reserves and Production

• Conduct detailed 2D and 3D seismic

data Acquisition, Processing and Interpretation (API) in blocks

• Drill Exploratory wells and Development

wells in identified blocks

2

Monetisation of Gas reserves in the Upper Assam Basin

• Commercialize existing natural gas

reserves in the Upper Assam basin through upstream and downstream investment

• Improve utilisation of natural gas

through the implementation of advanced technology and techniques

3

Selectively diversify our domestic

• perations through Downstream Integration
• Pursue strategy of vertical integration
• Diversify sources of revenue through

investments in downstream sectors such as refining and processing

• Improve profitability by extending
• perations into higher margin segments
• f product value chain

4

Application of Advanced Recovery Techniques to improve the Recovery rate

• Capacity augmentation to increase

water injection in matured fields combined with in-fill drilling to drain the reservoirs more effectively

• Installation of modern Artificial Pumping

and Lifting equipment

• Implementation of Water Arrest

techniques

5

Oil India Investor Presentation – H1 FY2009 Oil India Investor Presentation – FY2010

Sector outlook and opportunities OIL India – An overview Business structure, performance and strategy Financial performance

SLIDE 21

41

Oil India Investor Presentation – FY2010

Revenue and profitability analysis (USD mn)

Revenue and profitability

1,239 1,401 1,677 1,666 317 367 460 550 200 400 600 800 1,000 1,200 1,400 1,600 1,800 FY2007 FY2008 FY2009 FY2010 Revenue PAT

42

Oil India Investor Presentation – FY2010

Networth and Book Value

Networth (USD mn) and Book Value Analysis (USD) 1,406 1,629 1,935 2,897 6.6 7.6 9 12 500 1,000 1,500 2,000 2,500 3,000 3,500 FY2007 FY2008 FY2009 FY2010 2 4 6 8 10 12 14 Networth (LHS) Book Value (RHS)

SLIDE 22

43

Oil India Investor Presentation – FY2010

Cash Flow (USD mn) EBITDA (USD mn) and EBITDA MARGIN (%) Consistent and Attractive Cash Flow EBITDA EBITDA MARGIN

Cash Flow and EBITDA Margin

275 344 391 450 50 100 150 200 250 300 350 400 450 500 FY2007 FY2008 FY2009 FY2010

586 734 923 49% 42% 44%

100 200 300 400 500 600 700 800 900 1000 FY2008 FY2009 FY2010 38% 40% 42% 44% 46% 48% 50% 44

Oil India Investor Presentation – FY2010

33.93 32.9 30.19 32.23 340 305 260 275 10 15 20 25 30 35 40 FY2007 FY2008 FY2009 FY2010 50 100 150 200 250 300 350 400 Dividend Payout (%) - LHS Dividends (%) - RHS

Dividends distribution Earnings per share and Debt-Equity ratio The dividend per share has shown a consistent uptrend Steady increase in EPS and minimal debt on the balance sheet

86 72 83 104 114 0.003x 0.006x 0.02x 0.06x 0.12x 20 40 60 80 100 120 FY2006 FY2007 FY2008 FY2009 FY2010 0.02 0.04 0.06 0.08 0.1 0.12 0.14 Earnings per share (INR) Debt/Equity

Dividends distribution and Earnings per share highlights

SLIDE 23

45

Oil India Investor Presentation – FY2010

Investment Plans

INR Million 1879 813 1066 US$ Million 84543 36579 47964 Grand Total INR Million 22833 270 22563 Acquisition & Diversification 5781 3878 1903 Overseas Projects 55929 32431 23498 Total INR Million 6116 3423 2693 Capital Equipments & Facilities 15415 9888 5527 Development Activities 34398 19120 15278 Exploration & appraisal activities Total 2011-12 2010-11

46

Oil India Investor Presentation – FY2010

SLIDE 24

47

Oil India Investor Presentation – FY2010

Venezuela - Project Carabobo

• Contains two Blocks – North and Central
• OIL’s PI – 3.5% [PdVSA-60%, REPSOL, PETRONAS, OVL – 11% each, IOC-3.5%]
• Contract Period – 25 Years, Possible Extension – 15 Years
• Estd Oil In Place – 27.3 billion barrels
• Recoverable Reserve (in 25 Years) - 3 billion barrels
• Expected Daily Production – 400,000 bbl
• Expected Annual Production – 146 Mn bbl
• Estd. Investment for OIL - $ 424 Mn [Debt: Equity – 1.5:1]
• Estd Capex - $ 6.37/ bbl for 25 Years
• Estd Opex - $ 6.47/ bbl for 25 Years

Back