Indian Oil Corp. Ltd. · NSE:IOC
Indian Oil — Debt Investor Presentation (August 2014)
49 slides from Indian Oil's debt investor presentation, Aug 7, 2014
Slide 1: Bankers' Meet 7th August 2014
Bankers’ Meet 7th August 2014
Slide 2: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 3: Indian Oil Corporation Limited – A prelude
Indian Oil Corporation Limited – A prelude India’s largest crude oil refiner - 31% market share with 65.70 MMTPA capacity India’s largest downstream pipeline network - 47% market share with length of over 11,000 km India’s largest oil marketing company - 42% market share with over 41,500 touch point
Slide 4: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Flagship national oil company and downstream petroleum major “Maharatna” status – another jewel in the crown Contribution to Exchequer US$ 14.38 billion for FY 2013-14 Major supplier to core sector Supplier of fuel to Government organization
Slide 5: Saga of Growth
Saga of Growth … From a humble beginning to an OIL GIANT US$ Billion 12 80 Turnover 76.36 Networth 11.01 70 10 60 8 50 6 40 30 4 Turnover 0.01 20 2 Networth 0.01 10 0 0 1965 2014 Turnover Net Worth US$-INR: 59.92 (as on 31st March 2014) 4
Slide 6: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 7: Indian Economy
Indian Economy World’s third largest economy in Purchasing Power Parity (PPP) Global growth has slowed down and India is no exception. However……… Still One of the Fastest Growing Economies of the World 9.5 % GDP Growth (YoY) China 6.5 6.3 6.4 India 5.4 ASEAN-5 4.7 4.4 Russia Brazil 3.5 MENA 0.5
Slide 8: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 9: Oil Industry in India – An Overview
Oil Industry in India – An Overview Indian Oil Corporation Ltd. 1 UPSTREAM (Exploration & Oil & Natural Gas Corporation Ltd. (ONGC) 2 Production) Oil India Ltd. Reliance, Cairn Energy, HOEC, Premier Oil etc Indian Oil Corporation Ltd. DOWNSTREAM Hindustan Petroleum Corporation Ltd. (HPCL)3 (Refining
Slide 10: Growing Oil Demand
Growing Oil Demand 160 157 158 Consumption (MMT) 148 145 138 141 134 130 115 100 FY09 FY10 FY11 FY12 FY13 FY14 Consumption of petroleum products grew at CAGR of 3.44% in last five years Source: Petroleum Planning & Analysis Cell, Ministry of Petroleum & Natural Gas, Govt. of India 9
Slide 11: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 12: A Government Company
A Government Company One of the Government of India’s “Maharatnas” i.e. valuable jewel 6.61% 6.05% Being a Government Company, IOCL is governed by provisions of Section 5.00% 619 of Company’s Act (India) – 13.77% Statutory Auditors are appointed by the Comptroller and Auditor General 68.57% of I
Slide 13: Government Of India's Ownership & Support
Government Of India’s Ownership & Support Capital Raising: Government Approval Board Control: Performance: Members Annual MoU Nominated to with Govt. for IOC Board performance Functional Directors: Equity Appointment Control: by President 87.34%* Pricing: of India Select petroleum products based on
Slide 14: Operating Structure
Operating Structure Downstream & Petrochemical Operations Refining Pipeline Fuel Research & Petrochemicals Transportation Marketing Development …. also diversified into E&P, Gas, Wind, Solar, Nuclear Power and Bio-fuels 13
Slide 15: IOCL's Dominance in Downstream Oil Sector
IOCL’s Dominance in Downstream Oil Sector Refining Share Products Pipelines Share Industry Capacity – Essar Downstream Industry Capacity – 215.07 MMT* 9% IOCL 80.59 MMT 31% HPCL 28% RIL IOCL 28% 46% BPCL BPCL ONGC 26% HPCL 14% 7% 11% Petroleum Products Market Share** Industry Size – Others 12% 158 M
Slide 16: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 17: Refining – Portfolio
Refining – Portfolio • Access to high demand Controls 10 refineries spread across market of North / West India • Largest capacity in this the country (65.70 MMT – 31% of Bathinda region Industry) Digboi Panipat Refining Industry Capacity 215.07 MMTPA Mathura Bongaigaon Numaligarh IOCL’s share of T
Slide 18: IOC Refineries – Nelson Complexity Index
IOC Refineries – Nelson Complexity Index Refinery Index Digboi 11.0 Panipat 10.5 Haldia 10.4 Gujarat 10.0 Mathura 8.4 Bongaigaon 8.2 Barauni 7.8 Guwahati 6.7 Total 9.6 Paradip 12.2 CPCL 8.2 17 Figures as of 31st March 2014
Slide 19: Sourcing of Imported Crude Oil
Sourcing of Imported Crude Oil North America 0.3% Central Asia 2.2% Middle East 65.2% Africa 25.9% South East Asia Latin America 4.2% 2.2% Total crude oil import : 51.40 MMT (including 8.85 MMT for Chennai Petroleum Corporation Ltd.) Figures for FYE 2014 18
Slide 20: Refinery Projects – Crossing Milestones
Refinery Projects – Crossing Milestones Strengthening Downstream Integration • Cost: US$167 million; Commissioned: January, 2014 Fluidized Catalytic • Unit capacity enhanced to 1.5 MMTPA from 1.3 MMTPA Cracking unit Revamp • Improved profitability at Mathura • Maximized production of value-added Pro
Slide 21: Refinery Projects – The Way Forward
Refinery Projects – The Way Forward Paradip Refinery from Aspiration to Reality • Cost US$ 5 billion • Complexity Factor 12.2 • Crude mix: 100% HS; 40% Heavy • Distillate yield 81% • On the verge of completion Value addition through process optimization • Estimate cost: US$ 513 million • Capacity in
Slide 22: Wide Network of Cross Country Pipelines
Wide Network of Cross Country Pipelines Largest liquid pipeline network Jalandhar Length Capacity Market Share Bhatinda Ambala (KM) (MMTPA) Downstream Roorkee (MMTPA) Sangrur Najibabad Panipat Meerut Rewari Delhi Tinsukia Crude Oil 4,448 40.40 73% Sanganer Mathura Pipelines Ajmer Tundla Bongaigaon
Slide 23: Marketing – Reach in Every Part of India
Marketing – Reach in Every Part of India Bulk Consumer Pumps 6,359 Retail Outlets Over 41,600 touch points (51.5% of 23,993 industry) Cross country retail network comprising of 23,993 (45.9%) outlets LPG Bottling Plants 90 Continued Rural thrust : 6,002 Kisan Seva Kendras Over 41,600 LPG sup
Slide 24: Renowned Brands & Diversified Customer Base
Renowned Brands & Diversified Customer Base Renowned Brands Kisan Seva Kendra outlets for extending rural reach Diversified Customer Base • The turnover growth is insulated from the cyclical demand Retail Outlet at Boat house fluctuations due to diversified customer base 23
Slide 25: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 26: Moving Beyond the Traditional Value Chain
Moving Beyond the Traditional Value Chain Petrochemicals Gas LAB Sourcing PX / PTA Marketing Polymers, Glycols LNG Terminals Butadiene, SBR CGD Moving Beyond the Globalization E&P Value Chain Exports Domestic Consultancy Overseas Training Operatorship Downstream Marketing ^ RE&SD Wind, Solar
Slide 27: Petrochemical Capacity Growth
Petrochemical Capacity Growth Total Capacity: 120 KTA Total Capacity: 2661 KTA Others, 155 LAB, 120 LAB, 120 SBR, 120 Butadien, 138 Polymers, 1250 Glycols, 325 PTA, 553 FY 2003-04 FY 2013-14 Capex (US$ million) LAB, Gujarat 199 PX/PTA Panipat 761 Naphtha Cracker, Panipat 2340 SBR 29 Butadiene Extrac
Slide 28: Forward Integration
Forward Integration Turnover (US$ million) EBITDA (US$ million) Volume (TMT) 2078 2116 312 327 3,434 340 MEG/DEG 2,939 254 Polymers 842 986 PTA LAB Others* 552 408 119 106 253 289 FYE 13 FYE 14 FYE 13 FYE 14 FYE 13 FYE 14 Market share & position in domestic market LAB: 31.2% (2nd position); PT
Slide 29: Backward Integration
Backward Integration E&P Capabilities Status of Blocks Stake in 23 exploration blocks 13 Domestic blocks 3 – With ONGC / OIL / GAIL / GSPC / Petrogas / HPCL / HOEC / AWEL (20- 3 100% participating interest) 5 – Including 2 Coal Bed Methane 3 (CBM) blocks with ONGC (20% participating interest) 3
Slide 30: Acquisition of LNG Assets in British Columbia, Canada
Acquisition of LNG Assets in British Columbia, Canada Upstream Segment: Lands (mineral and surface) - approximate area 1.16 million acres Downstream Segment LNG liquefaction development of initial 2 trains x 6 MMTPA at Lelu Island, Prince Rupert Minimum operational life of 40 years Provisi
Slide 31: Diversified Across Geographies and Energy Sources
Diversified Across Geographies and Energy Sources Geographical Diversification Diversification Across Sources Gas ● Gas • Aviation, terminal & • 42.6% revenue growth, US$ 1,490 million Indian Oil • JVs for City Gas Distribution Mauritius retail business Ltd. • 24,000 MT Storage • 5 MMTPA LNG import,
Slide 32: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 33: Strong Results - Annual
Strong Results - Annual Turnover (US$ billion) Net Profit (US$ billion) CAGR 5.66% 76.36 1.17 68.40 69.24 0.84 0.66 FYE 12 FYE 13 FYE 14 FYE 12 FYE 13 FYE 14 EBITDA (US$ billion) Net Worth (US$ billion) 3.66 3.17 11.01 2.88 10.20 9.66 FYE 12 FYE 13 FYE 14 FYE 12 FYE 13 FYE 14 Turnover grew at 5.66%
Slide 34: Debt vis-à-vis Investments & Cash Receivable from Govt.
Debt vis-à-vis Investments & Cash Receivable from Govt. (US$ billion) Debt Investments* Cash recoverable from Govt # Net under realisation ## 13.9** 13.5 12.6 11.0** 10.4 9.4 9.3 9.6 1.2 4.0 3.5 3.1 1.0 7.4 5.9 6.4 6.2 FYE 12 FYE 13 FYE 14 Apr-Jun 14(P) # FYE 12 : Compensation of USD 3.5 billion rec
Slide 35: Strong Financials with Conservative Capital Structure
Strong Financials with Conservative Capital Structure DEBT / EQUITY 1.30 1.32 1.26* FYE 12 FYE 13 FYE 14 CORE DEBT** / EQUITY 0.94 0.94 0.98 FYE 12 FYE 13 FYE 14 *Debt excluding finance lease (Debt /Equity including finance lease : 1.31) 34 **Core Debt = Debt less Cash Receivable from Govt.
Slide 36: Borrowing Breakup
Borrowing Breakup March 2014 Borrowing : USD 13.9 billion % 65 66 Short Term # Rupee 35 34 Long Term ## USD USD 9.0 bn USD 4.9 bn USD 5.0 bn USD 8.9 bn March 2014 March 2014 79 Secured 21 Unsecured USD 2.9 bn USD 11.0 bn March 2014 # Short-Term borrowing refers to loans maturing within 1 year. ## Lo
Slide 37: EBITDA Breakup
EBITDA Breakup FYE 2014 EBITDA : USD 3174 million US$ million 2018 827 340 -11 Petroleum (Refining & Marketing) Petroleum Transportation (Pipelines) Petrochemicals Others* 63.6% 26.1% 10.7% (0.4%) * Others: Gas: USD 25 million; Wind & Solar : USD 6 million; Explosives & Cryogenics : USD 3 million; E
Slide 38: Solid Infrastructure Base
Solid Infrastructure Base US$ billion 24.32 21.78 18.84 FYE 12 FYE 13 FYE 14 Gross Fixed Assets including CWIP US$-INR: 59.92 (as on 31st March 2014) 37
Slide 39: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance – Under Realization Ongoing Projects Key Credit Considerations
Slide 40: Under Realization & its Compensation: A Conceptual Framework
Under Realization & its Compensation : A Conceptual Framework Indian Refining & Marketing sector stands deregulated w.e.f. 2002 Products of far reaching impact on Indian growth story & masses HSD: India is a dieselized economy : HSD accounts for 43% of petroleum products consumption LPG (Dom
Slide 41: Rationalization of under realization: Recent steps
Rationalization of under realization: Recent steps HSD Steps taken on 18th January 2013: Dual pricing introduced Market Determined Prices for Bulk Customers (e.g. Railway, Defense, State Transport etc) Subsidized Prices for Retail Consumers (vehicle owners) OMCs authorised to increase the
Slide 42: Sharing Pattern of Under realization
Sharing Pattern of Under realization US$ billion FYE 12 FYE 13 FYE 14 Gross Under-realization 12.6 14.3 12.2 5.0 5.3 5.8 Upstream Discount (40%) (37%) (48%) Govt. Support Cash Compensation 7.6 8.9 6.2 (60%) (62%) (51%) 0.0 0.1 0.2 Net Under-realization (0%) (1%) (1%) Finalization of under recovery s
Slide 43: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 44: Major Ongoing Projects & Outlay
Major Ongoing Projects & Outlay Major Planned Projects Plan Capex Outlay: 2013-14 Project Estimated Cost Anticipated (US$ mn) Completion 15 MMTPA Paradip Refinery 4969 December 2014 Project onwards Paradip – Raipur – Ranchi 299 August 2015 Pipeline Project Debottlenecking of Salaya- 264 August 2015
Slide 45: Investing In Future Growth
Investing In Future Growth XI Plan Capex: 2007-08 to 2011-12 XII Plan Capex : 2012-13 to 2016-17(1) Others, Petchem, Others, 5% 1% 4% Petchem, 27% E&P, 28% E&P, 3% Mkting, 1% Ref, 60% Ref, 47% Pipelines, 8% Mkting, 3% Pipelines, 12% US$ 8,120 million US$ 9,379 million (1) Capex for future periods su
Slide 46: IOCL – An Important Pillar in the Indian Economy
IOCL – An Important Pillar in the Indian Economy Indian Economy Oil Industry in India IOCL – An Overview IOCL’s Core Operations Strategic Initiatives Financial Performance Ongoing Projects Key Credit Considerations
Slide 47: Key Credit Considerations
Key Credit Considerations India’s Largest Commercial Enterprise Market Leader Across Various Industry Segments Strong Brand Equity and Product Diversity Integrated Operations and Diversity of Assets and Revenues International Outreach With strong support from the Government of India 46
Slide 48: Q&A
IndianOil Q&A
Slide 49: Thank You
IndianOil Thank You
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