REPORT ON LISTED OIL AND GAS COMPANIES IN INDIA

University Degree Business and Administrative studies

INDEX

GLOBAL OIL AND GAS OVERVIEW

The price of crude oil in the international market have risen to unprecedented high level due to sustained high demand, geo-political uncertainties, production decline in aging fields, supply concern, speculative trading and weakening of US dollar. The demand remained encouraging eventhough the crude oil price was above US$ 100/bbl. The oil industry has withstood slower economic growth and rise in crude price. The global demand for oil grew from 84.90 million bpd to 86 million bpd. In spite of the demand the global refining capacity grew marginally from 85.1 bpd to 85.3 bpd in 2007.

On an average Gas fulfil 24% of the worlds energy needs. The global demand for LNG will grow to around 330 mtpa by 2015, basically outstripping the supply. Russia has largest gas reserve, but they are unable to use it due to lack of capital.

The spot/short term availability in 2008 is very tight due to sudden increase in demand from Japan. Because of the shutdown of their nuclear plant due to earthquake they are buying additional tankers. In last 10 years, the world’s LNG trade has risen, on an average, by 7.4%.

INDIAN OIL AND GAS OVERVIEW

Demand in India for oil and gas exceeds the production in country. India has GDP exceeding US$ 1 trillion. Compound annual growth rate more than 8.5% in last four year and the GDP growth is anticipated at least 8% over the next decade. India is one of the fastest growing continental economies bettered only by china.

Petroleum and natural gas constitutes more than 60% of GDP of the country, including transportation, refining and marketing of petroleum products and gas.

The consumption of petroleum products increased by 6% yoy in fy07. The average growth in consumption of petroleum grew by 3.4% in last 5 years. India is 6th largest consumer and 9th largest importer in the world. The demand for petroleum products have grown about 10% in 2007-08. Oil and gas forms 45% of the total energy consumption in India. The crude oil imports have been increasing by 7% per annum over last 5 years. India is relatively unexplored with potential resources in excess of 205 billion barrels.

To reduce the impact of high crude price, the Government of India has been continuing to regulate the retail prices of petrol, diesel, kerosene and domestic LPG. This is resulting in substantial under-recoveries on sale of the above product Oil Marketing Companies. The appreciation of Rupee to US Dollar and a small rise in price of petroleum product have helped to a limited extent in reducing the under-recoveries. The remaining under-recoveries is bridged by issuing oil bonds, asking upstream companies to bear some burden of subsidies and even asking the oil marketing companies to bear some burden of subsidies.

Natural gas forms 8% of total energy consumption in India. India’s current annual demand for gas is 1.12 million barrels of oil equivalent per day (bopepd) against production of 0.55 million boepd. Out of the total gas consumed 36% is used by Power industry and 29% by fertilizer industry. The demand of natural gas in India is expected to grow from 196 mmscmd in 2008-09 to about 279 mmscmd in 2011-12.

The natural is being used more in power and other sector because it does not produce any harmful and toxic gas and also it is cheaper than oil.

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