India electricity market印度电力市场分析.docx

India electricity market印度电力市场分析.docx

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Indiaelectricitymarket印度电力市场分析

India

LastUpdated:

August2010

Background

Indiaboastsagrowingeconomy,andisincreasinglyasignificantconsumerofoilandnaturalgas.

Withhigheconomicgrowthratesandover15percentoftheworld’spopulation,Indiaisasignificantconsumerofenergyresources.In2009,Indiawasthefourthlargestoilconsumerintheworld,aftertheUnitedStates,China,andJapan.Despitetheglobalfinancialcrisis,India’senergydemandcontinuestorise.Intermsofend-use,energydemandinthetransportsectorisexpectedtobeparticularlyhigh,asvehicleownership,particularlyoffour-wheelvehicles,isforecasttoincreaserapidlyintheyearsahead.

Indialackssufficientdomesticenergyresourcesandimportsmuchofitsgrowingenergyrequirements.Inadditiontopursuingdomesticoilandgasexplorationandproductionprojects,Indiaisalsosteppingupitsnaturalgasimports,particularlythroughimportsofliquefiednaturalgas.

AccordingtotheInternationalEnergyAgency（IEA）,coal/peataccountfornearly40percentofIndia’stotalenergyconsumption,followedbynearly27percentforcombustiblerenewablesandwaste.Oilaccountsfornearly24percentoftotalenergyconsumption,naturalgassixpercent,hydroelectricpoweralmost2percent,nuclearnearly1percent,andotherrenewableslessthan0.5percent.Althoughnuclearpowercomprisesaverysmallpercentageoftotalenergyconsumptionatthistime,itisexpectedtoincreaseinlightofinternationalcivilnuclearenergycooperationdeals.AccordingtotheIndiangovernment,nearly30percentofIndia’stotalenergyneedsaremetthroughimports.

IEAdatafor2008indicatethatelectrificationratesforIndiawerenearly65percentforthecountryasawhole.Inurbanareas,93percenthadaccesstoelectricitycomparedtoruralareaswhereelectrificationrateswereapproximately50percent.Roughly400millionpeopledonothaveaccesstoelectricityinIndia.

Oil

TheIndiangovernmentcontinuestoholdlicensingroundsinanefforttopromoteexplorationactivitiesandboostdomesticoilproduction.

AccordingtoOil&GasJournal（OGJ）,Indiahadapproximately5.6billionbarrelsofprovenoilreservesasofJanuary2010,thesecond-largestamountintheAsia-PacificregionafterChina.India’scrudeoilreservestendtobelightandsweet,withspecificgravityvaryingfrom38°APIintheoffshoreMumbaiHighfieldto32°APIatotheronshorebasins.

Indiaproducedroughly880thousandbarrelsperday（bbl/d）oftotaloilin2009fromover3,600operatingoilwells.Approximately680thousandbbl/dwascrudeoil,theremainderwasotherliquidsandrefinerygain.In2009,Indiaconsumednearly3millionbbl/d,makingitthefourthlargestconsumerofoilintheworld.EIAexpectsapproximately100thousandbbl/dannualconsumptiongrowththrough2011.

ThecombinationofrisingoilconsumptionandrelativelyflatproductionhasleftIndiaincreasinglydependentonimportstomeetitspetroleumdemand.In2009,Indiawasthesixthlargestnetimporterofoilintheworld,importingnearly2.1millionbbl/d,orabout70percent,ofitsoilneeds.TheEIAexpectsIndiatobecomethefourthlargestnetimporterofoilintheworldby2025,behindtheUnitedStates,China,andJapan.

Nearly70percentofIndia’scrudeoilimportscomefromtheMiddleEast,primarilyfromSaudiArabia,followedbyIran.TheIndiangovernmentexpectsthisgeographicaldependencetoriseinlightoflimitedprospectsfordomesticproduction.

SectorOrganization

Thoughthegovernmenthastakenstepsinrecentyearstoderegulatethehydrocarbonsindustryandencouragegreaterforeigninvolvement,India’soilsectorisdominatedbystate-ownedenterprises.India’sstate-ownedOilandNaturalGasCorporation（ONGC）isthelargestoilcompanyanddominatesIndia’supstreamsector.State-ownedOilIndiaLimited（OIL）isthenextlargestoilproducer.Othermajorstate-runplayersincludetheIndianOilCorporation（IOC）andtheGasAuthorityofIndianLimited（GAIL）.Inaddition,theprivateIndianfirm,RelianceIndustriesLimited,isbecomingasignificantoperatorintheoilsectorandisthelargestprivateoilandgascompanyinthecountry.CairnIndia,abranchofUK-basedCairnEnergy,andBGExplorationarealsoimportantprivatesectoroperatorsintheindustry.

Asanetimporterofoil,theIndiangovernmenthaspoliciesaimedatincreasingdomesticexplorationandproduction（E&P）activities.Aspartofanefforttoattractoilmajorswithdeepwaterdrillingexperienceandothertechnicalexpertise,theMinistryofPetroleumandNaturalGascreatedtheNewExplorationLicensePolicy（NELP）in2000,whichforthefirsttimepermitsforeigncompaniestohold100percentequityownershipinoilandnaturalgasprojects.Despitethis,internationaloilandgascompaniescurrentlyoperateasmallnumberoffields.

India’sdownstreamsectorisalsodominatedbystate-ownedentities.TheIndianOilCorporation（IOC）isthelargeststate-ownedcompanyinthedownstreamsector,operating10ofIndia’s18refineriesandcontrollingaboutthree-quartersofthedomesticoilpipelinetransportationnetwork.RelianceIndustriesopenedIndia’sfirstprivately-ownedrefineryin1999,andhasgainedaconsiderablemarketshareinIndia’soilsector.

ExplorationandProduction

MostofIndia’scrudeoilreservesarelocatedoffshore,inthewestofthecountry,andonshoreinthenortheast.Substantialreserves,however,arelocatedoffshoreintheBayofBengalandinRajasthanstate.India’slargestoilfieldistheoffshoreMumbaiHighfield,locatednorth-westofMumbaiandoperatedbyONGC.AnotherofIndia’slargeoilfieldsistheKrishna-Godavaribasin,locatedintheBayofBengal.BlockD6intheKrishna-Godavaribasin,operatedbyRelianceIndustries,beganoilproductioninSeptember2008.

TheprimarymechanismthroughwhichtheIndiangovernmenthaspromotednewE&PprojectshasbeentheNELPframework.Thelatestroundofauctions,NELPVIII,waslaunchedinApril2009andattractednearly$1.1billionininvestment.IndiacurrentlyplanstolaunchtheNELPIXbiddingroundinthethirdquarterof2010.

OverseasE&P

Inrecentyears,IndiannationaloilcompanieshaveincreasinglylookedtoacquireequitystakesinE&Pprojectsoverseas.ThemostactivecompanyabroadisONGCVideshLtd.（OVL）,theoverseasinvestmentarmofONGC.OVLconductsoilandnaturalgasoperationsin13countries,includingVietnam,Myanmar,Russia（SakhalinIsland）,Iran,Iraq,Sudan,Brazil,andColumbia.OneofOVL’smosthighprofileinvestmentsisitsshareintheGreaterNilePetroleumOperatingCompany（GNPOC）,whichhasengagedinE&PworkinSudansince1997.OVLacquireda25percentequitystakeinthecompanyin2003,withthebalanceheldbytheChinaNationalPetroleumCompany（CNPC,40percent）,Petronas（30percent）,andtheSudanNationalOilCompany（Sudapet,5percent）.TheGNPOCacreageinSudanholdsprovedcrudeoilreservesofmorethanonebillionbarrelswithcurrentproductionlevelsatroughly300,000bbl/dfrom10fields.Inadditiontotheupstreamactivities,theGNPOCcompaniesoperatea935-milecrudeoilpipelinethatpumpsoiltoPortSudanforexport.

OVLalsoholdsa20percentstakeintheExxonMobil-ledconsortiumthatoperatestheSakhalin-IprojectinRussia.Accordingtocompanyestimates,theoilfieldsassociatedwithSakhalin-Iholdrecoverablecrudeoilreservesof2.3billionbarrels.

InadditiontoONGC,otherIndiancompaniesarealsoactivelyinvolvedinE&Pprojectsabroad.OIL,forexample,isworkingonprojectsinLibya,Gabon,Nigeria,andSudan.

Downstream/Refining

AccordingtoOGJ,Indiahad2.8millionbbl/dofcrudeoilrefiningcapacityat18facilitiesasofJanuary1,2010.Indiahasthefifthlargestrefinerycapacityintheworld.In2009,privately-ownedRelianceIndustriesaddedanotherrefinerytoitsJamnagarcomplextoraisetheentirecomplex’srefiningcapacityfrom660,000bbl/dto1.24millionbbl/d.TheJamnagarcomplexisthelargestoilrefinerycomplexintheworld.

OtherkeyupcomingrefineryprojectsincludeEssarOil’sVadinarrefineryexpansionof110,000bbl/din2011,120,000bbl/dgreenfieldrefineryinBinain2011byajointventurebetweenBharatPetroleumCorporationLimitedandOmanOilCompanyLimited,a180,000bbl/dgrassrootsrefineryinBhatindain2014byHindustanPetroleumCorporationLimited,andIOC’sgrassrootsParadeeprefineryof300,000bbl/din2015.Indiaisslatedtoadd840thousandbbl/dofrefiningcapacitythrough2015basedoncurrentlyproposedprojects.

Duetoexpectationsofhigherdemandforpetroleumproductsintheregion,furtherinvestmentintheIndianrefiningsectorislikely.Aspartofthecountry’s11thFiveYearPlanfrom2007to2012,thegovernmentwouldliketopromoteIndiaasacompetitiverefiningdestination,andindustryexpertsexpectthecountrytobeanexporterofrefinedproductstoAsiainthenearfuture.

RefinedFuelSubsidies

TheMarketDeterminedPriceMechanismisnotionallybenchmarkedtointernationaloilprices,buttheIndiangovernmentheavilysubsidizesdomesticpricesofoilproductssuchasdiesel,gasoline,kerosene,andLPG.Atthesametime,taxesoncrudeandpetroleumproductsimposedbydifferentlayersofIndiangovernmentoftenexceedthesubsidies.Accordingtoindustryanalysts,thoughoriginallyanattempttoprotecteconomicallydisadvantagedIndianconsumers,fuelsubsidiesdistortIndia’sdomesticmarketbyforcingIndia’sstateownedoilcompaniestoaccept“under-recoveries”（i.e.losses）andencouragingIndia’sprivatecompaniestoorienttheirproductsalesinternationally.Withdieselpricessignificantlylower