BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of India

The latest India Oil & Gas Report from BMI forecasts that the country will account for 10.8% of Asia/Pacific regional oil demand by 2010, while providing 10.2% of supply. Asia/Pacific regional oil demand rose to 24.27mn b/d last year and should average 24.77mn b/d in 2006, before reaching 27.79mn b/d by 2010. Asia/Pacific gas consumption in 2005 was 385bcm, with demand of 602bcm targeted for 2010. Production last year of 314bcm should reach 490bcm by the end of the decade. India’s share of consumption in 2005 was 9.6%, as was its share of production. By 2010, its share of demand is forecast to be 9.3%, with the country accounting for 8.6% of supply.

Assuming an uneventful Q4, we are now predicting an OPEC basket price for 2006 averaging US$61.10/bbl – an increase of US$1.10 from our June forecast. This also represents a 19% rise from the FY05 average. Our forecasts for the US, Brent and Urals are US$66.40, US$65.40 and US$61.60/bbl respectively. For 2007, we continue to assume an OPEC basket price of US$50/bbl, which implies US$55.40 for the US, US$53.40 for Brent and US$49.50 for Urals. Prices are then forecast to fall by around US$5/bbl in 2008-2010, with the OPEC price averaging US$45/bbl over the period.

Indian real GDP growth is now forecast by BMI at 8.4% for 2006, up from 7.5% in 2005. We are assuming 8.3% growth in 2007, 7.3% in 2008, followed by 7.2% in 2009 and 2010. State oil firm ONGC is charged with maximising domestic oil production, which last year averaged 784,000b/d. Thanks to its efforts and those of UK-based Cairn Energy, we see production at around 790,000b/d by 2010. Oil consumption is forecast to increase by 3-5% per annum to 2010, implying demand of 3.01mn b/d by the end of the forecast period. The import requirement would therefore be approximately 2.22mn b/d by the end of the decade. Gas consumption is set to rise from 36.6bcm to 53.3bcm, with domestic supply up from 30.4bcm last year to 42bcm by 2010.

In the BMI Business Environment Ranking matrix, India receives an unchanged composite score of 37, which ranks the country equal second out of 14 states included in the Asia/Pacific region, alongside Malaysia. The overall business environment can be considered very attractive in a regional context, thanks largely to a low level of perceived political risk, advanced oil industry deregulation, reasonable licensing terms and a competitive landscape involving several domestic companies and some IOCs. There is a relatively poor outlook for domestic upstream oil output growth, but significant under-exploited gas reserves. Domestic oil demand is rising fast and there is considerable IOC interest in the downstream fuels segment, although Indian privatisation policy has thrown some doubt over future oil industry FDI.

Contents

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Chapter 1 - Executive Brief

Chapter 2 - SWOT Analysis

India Economic SWOT

India Political SWOT

India Business Environment SWOT

Chapter 3 - Regional Market Overview

Asia Pacific Region

Table 1: Asia/Pacific Oil Consumption (000b/d)

Table Asia/Pacific Oil Production (000b/d)

Table: Asia/Pacific Oil Refining Capacity (000b/d)

Table: Asia/Pacific Gas Production (bcm)

India

Chapter 4 - Business Environment Rankings

India

Asia Pacific Region

Chapter 5 - India Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Red Tape

Foreign Direct Investment

Tax Regime

Chapter 6 - Oil Market Outlook

Table Crude Price Forecasts 2006

Revised Forecasts

Table Oil Price Forecasts

Chapter 7 - Regional Supply and Demand

Asia Pacific

Table: Oil Production (000b/d) – Asia Pacific

Table: Oil Consumption (000b/d) – Asia Pacific

Chapter 8 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

LNG

Refining and Oil Products Trade

Revenues/Import Costs

Table: India Oil & Gas – Historic Data & Forecasts

Other Energy

Table: India Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 9 - Economic Outlook

Table: GDP And Population

Chapter 10 - Country Snapshot: India Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 11 - Regional Case Study

Asian Shell

Chapter 12 - Competitive Landscape

Executive Summary

Table: Key Players – India Oil & Gas Sector

Overview/State Role

ONGC – Summary

Reliance – Summary

Table: Key Upstream Players

Oil India – Summary

IOC – Summary

BP – Summary

GAIL – Summary

Table: Key Downstream Players

Cairn – Summary

HPCL – Summary

BPCL – Summary

BG – Summary

Shell – Summary

Petronet LNG - Summary

GSPC – Summary

Chapter 13 - Company Monitor

Oil and Natural Gas Corporation (ONGC)

Company Analysis

SWOT Analysis

Indian Oil Corporation (IOC)

Company Analysis

SWOT Analysis

Hindustan Petroleum Company Ltd (HPCL)

Company Analysis

SWOT Analysis

Bharat Petroleum Corporation Ltd (BPCL)

Company Analysis

SWOT Analysis

Reliance Industries

Company Analysis

SWOT Analysis

Gas Authority of India Ltd (GAIL)

Company Analysis

SWOT Analysis

Cairn Energy

Company Analysis

SWOT Analysis

Chapter 14 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Energy Industry

Cross checks

Sources

Chapter 15 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Network of Asian Oil & Gas Sources

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BMI's Asian Oil & Gas Reports are based on an extensive network of multilateral organisations, government departments, oil & gas industry associations, chambers of commerce and company reports. Information sources include: