1. March 2005 Oil and Gas Industry Dynamic and Growing

2. March 2005 Oil and Gas  India - An Overview  Market and Growth Potential  Players  Opportunities  Contact in India

3. India - An Introduction  Population  States/UTs  Geographical Area  Languages recognised  Business language  Per Capita Income**  GDP** Over 1 bn 35 3.3 mn sq kms 22 English US$ 534 US$ 650 bn **(at factor cost & at current prices) 1USD=43.54 INR (as on July 4, 2005) Source:CSO Statistics

4. March 2005 India - Fast pace Growth  Largest democracy  4th largest economy by PPP index  6th largest energy consumer  ForEx reserves skyrocket from US$ 42 bn (2001) to US$ 133 bn (February, 2005)  GDP growth to continue between 6-8%  3rd largest economy by 2050: Goldman Sachs  Leading in IT & BPO  Oil & Gas and Biotechnology sunrise industries

5. March 2005 India - Leading the world  Hero Honda - largest manufacturer of motorcycles  Moser Baer - 3rd largest optical media manufacturer in world  Pharmaceutical Industry - 4th largest in world  Walmart, GAP, Hilfiger sources more than USD 1bn worth apparel from India  100 Fortune 500 have set R&D facilities in India including GE, Delphi, Eli Lilly, HP, Heinz and Daimler Chrysler

6. March 2005 Oil and Gas  India - An Overview  Market and Growth Potential  Players  Opportunities  Contact in India

7. March 2005 Oil and Gas Market SizeUS$ 90bn (16.5% of GDP) Contribution to over 30% treasury Employment650,000 Energy requirement35% served by sector

8. March 2005  Domestic crude oil production 33.38 mn tonnes  Over 100 operating PSCs  CBM - 16 blocks awarded  Overseas E&P acreage in 9 countries  Recent foray in deepwater drilling Upstream

9. March 2005 Midstream  Product pipelines  Gas pipelines  City gas supply networks exist in 3 cities - to expand to 72 cities  First LNG terminal (5 MMTPA) commissioned  First LNG ship commissioned

10. March 2005 Downstream  10th largest refining capacity (2.28 mn bopd) -- 18 refineries  Largest grassroots refinery (540,000 bopd) and 7th largest refinery  Longest LPG pipeline of 1270 kms  Existing outlets – Petro retail (19,800) – LPG distributors (8,100) – SKO dealers (6,500)  Construction of 3 refineries under progress

11. March 2005 Energy Consumption

12. March 2005 Oil and Gas  India - An Overview  Market and Growth Potential  Players  Opportunities  Contact in India

13. March 2005 Domestic Players ONGC Videsh Ltd Indian Oil Corporation Ltd (IOCL) Bharat Petroleum Corporation Ltd (BPCL) Hindustan Petroleum Corporation Ltd (HPCL) Reliance Industries Ltd (RIL) GAIL India Ltd Essar Oil Ltd

14. March 2005 Foreign Investments Shell LNG & Lubes (US$ 1 bn) BG Upstream & city gas distribution (US$ 1 bn) Cairn Energy Upstream (US$ 500 mn) Niko, Tullow Oil Upstream Total Underground LPG storage tanks Total, Bp, Lubes ExxonMobil, ChevronTexaco            

15. March 2005 Foreign Interests  BP  Kuwait Petroleum Corporation  Saudi Aramco  Abu Dhabi National Oil Co  Petronas Foreign companies participating in acquisition opportunities (Over US$ 0.5 bn to US$ 1.5 bn)

16. March 2005 Oil and Gas  India - An Overview  Market and Growth Potential  Players  Opportunities  Contact in India

17. March 2005 Investment Potential Next 5 years US$ 18-20 bn  Upstream sectorUS$ 13.05 bn  Downstream sectorUS$ 8.03 bn Next 25 years US$ 110 bn

18. March 2005 Business opportunities Upstream  NELP rounds  EOR projects (Estimated investments US$ 3 bn)  Oil Field services (Committed investments US$ 2.5 bn)  Deep Water drilling  Farm in Opportunities  Coal Bed Methane  Underground coal gasification  Gas hydrate

19. March 2005 Business Opportunities Midstream and downstream  Refineries (Upgradation)  Planned product pipelines - 12,272km (US$ 5 bn)  New retail outlets planned (US$ 7 bn)  New Terminals, depots & LPG infrastructure

20. March 2005 Business Opportunities Midstream and downstream  Building strategic oil reserves  Planned gas distribution pipeline – 14,915 kms (USD 7 bn)  City gas projects - 22 cities

21. March 2005 Business Opportunities JV & Cooperation Indian Downstream companies are scouting for investment opportunities  Africa  CIS  Bangladesh  Srilanka  Nepal  SE Asia

22. March 2005 Policy Advantage  100% FDI permitted under automatic approval route in following sectors: - petroleum product marketing - petroleum product pipelines - oil exploration in small & medium sized fields  100% FDI permitted for natural gas / LNG pipelines subject to approval from FIPB  LNG exempt from CVD / excise duty.

23. March 2005 Key Features A financial Special Purpose Vehicle (SPV) to be established to finance infrastructure projects. Service tax on pipeline transmission at 10.2% Crude oil customs duty reduced to 5%. Peak duty reduction on petroleum products to 10%. Customs duty on coking coal cut from 15% to 5%. Union Budget 2005-06

24. March 2005 Evolving Regulatory Regime  New Exploration Licensing Policy (NELP) -Entire value chain has been privatised -E&P acreage offered under competitive bidding (since 1999) -Decontrol of Oil sector since April 2002  Draft petroleum & natural gas policy released  Draft gas pipeline policy released  Common Carrier Pipeline Policy allows 2 or more companies to use single pipeline  Indian Hydrocarbon Vision 2025

25. March 2005 Oil and Gas  India - An Overview  Market and Growth Potential  Players  Opportunities  Contact in India

26. March 2005 Contact in India Confederation of Indian Industry (CII) 249-F, Sector 18, Udyog Vihar Phase IV Gurgaon 122015 Tel 0091 124 5014060-67 Fax 0091 124 5014080/5013874 E mail v.raghuraman@ciionline.org