Transcript www.indiaenergyforum.org

Potential For Co-operation Between Neighboring Countries
Upstream / Refining & Marketing /Gas
Ashok Dhar
President (Industrial Marketing)
11th Petro India,
New Delhi, 11th Dec’12
Forward looking statements
This presentation contains forward-looking statements which may be
identified by their use of words like “plans,” “expects,” “will,” “anticipates,”
“believes,” “intends ” “projects ” “estimates” or other words of similar
meaning. All statements that address expectations or projections about the
future, including, but not limited to, statements about the strategy for growth,
product development, market position, expenditures & financial results, are
forward looking statements.
Forward-looking statements are based on certain assumptions &
expectations of future events. The companies referred to in this presentation
cannot guarantee that these assumptions and expectations are accurate or
will be realized. The actual results, performance or achievements, could thus
differ materially from those projected in any such forward-looking statements
These companies assume no responsibility to publicly amend, modify or
revise any forward looking statements, on the basis of any subsequent
developments, information or events, or otherwise.
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Contents

South Asia – Regional Constituents

Regional Indicators.

Dependency on Fossil Fuels (Global & South
Asia).

Energy Trade Patterns and Potential areas of
Co-operation.

Trade Inhibiting factors.

Way forward.
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South Asia: Regional Constituents
South Asia – A region of huge potential, both in human capital and natural resources,
where people are dreaming for a better tomorrow.
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South Asia – Regional Indicators
South Asia:
Indicators
Particulars
Demographic
Afghanistan Bangladesh
Area ('000 sqkm)
652 41
Population (in
30 40
mm) (Jul’12 est.)
GDP (PPP in $ bn)
29.74 111
(2011 est.)
GDP real growth
5.8 49
rate (%) (2011 est)
GDP per capita
1,000 217
(in$) (2011 est.)
Coast line (in kms) Landlocked
India
Maldives
144 95
38 137
3,287
7
161
1
165
1,205
2
4.31 170
4421
5
2.8 180
6.8
35
5.8 50
3,700 165
8,600 119
8
283.5 46
6.5 39
1,900 195
580
natural gas,
coal,
petroleum,
lead, copper,
chromites,
natural gas,
talc, barites,
Natural Resources
arable land,
zinc, sulfur,
timber, coal
iron ore, salt,
precious and
semi
precious
stones
Country comparison with the world
Bhutan
&
5.3
58
5,800 143
Landlocked
7,000
coal, iron ore,
manganese,
mica, bauxite,
timber,
rare earth
hydropower, elements,
gypsum,
titanium ore, fish
calcium
chromites,
carbonate
natural gas,
diamonds,
petroleum,
limestone,
0.298 210
0
644
176
Economic
Myanmar
Nepal
Pakistan
Sri Lanka
677 40
147 94
796 36
66 122
55
30
190
21
24
82.68 78
41
6
57
38.08 102
488.4 28
116.3 66
55
3.9 103
3.0 123
8.30 16
1,300 204
1,200 207
2,800 175
5,700 146
1,046
1,340
5.5
1,930
petroleum,
tin, timber,
zinc,
antimony,
lead, copper,
coal,
tungsten,
marble,
limestone,
precious
stones,
natural gas,
hydropower
Landlocked
quartz, water, extensive
timber,
natural gas
hydropower, reserves,
small
limited
deposits of petroleum,
lignite,
poor quality
copper,
coal, iron ore,
cobalt, iron copper, salt,
ore
limestone
limestone,
graphite,
mineral
sands, gems,
phosphates,
clay,
hydropower
Source: www.cia.com, World fact book
South Asia, home to 1.6 billion people, facing challenges of hunger & poverty, rich in
resources, not well distributed, has still turned into a region of developing economy
inspite of all odds.
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South Asia: Trade with India
Afganistan Bangladesh
Bhutan
Maldives
Myanmar
Nepal
Pakistan
Sri Lanka
Total
Region
Exports
Value (Rs Crores)
2429
18387
1104
598
2645
13130
7448
20951
66692
% Share
0.17
1.25
0.08
0.04
0.18
0.9
0.51
1.43
4.56
Value (Rs Crores)
622
2793
974
92
6352
2639
1918
3436
18826
% Share
0.03
0.12
0.04
0
0.27
0.11
0.08
0.15
0.80
Value (Rs Crores)
3051
21179
2079
690
8997
15770
9366
24387
% Share
0.08
0.56
0.05
0.02
0.24
0.41
0.25
0.64
2.24
83
40
91
120
53
42
52
35
-
1807
15594
130
506
(3708)
10491
5531
17516
47867
Imports
Total Trade
Rank
Trade Balance
India Total Export – Rs.1465959 Crores
India Total Import – Rs.2345463 Crores
Source: www.commerce.nic; Figures for 2011-12
India has very low trading volumes with its South Asian Neighbors.
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85518
Dependency on Fossil Fuels - Global & South Asia
Global Dependency on Fossil Fuels:
82%
88%
Source: BP Outlook 2012
Globally, the share of fossil fuels will only decrease by 6% in the next two decades. The
fuel mix changes slowly, due to long gestation periods and asset lifetimes.
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South Asia - Dependency on Fossil Fuels
Oil
Country
Gas
Proven
Net Export Proven
Production Consumption
Reserves
/ (Import) Reserves
000 bbls / day
billion bbls
Coal
Production Consumption
trillion cu.ft
Net Export Proven
/ (Import) Reserves
billion cu.ft
Production Consumption
billion tons
Net Export /
(Import)
Million tons
Afganistan
0
0
5
(5)
2
5
5
0
0.4
0.04
0.04
0
Bangladesh
0.03
5.7
110
(104.3)
7
710
710
0
3.3
1.2
2.2
(1.0)
0
0
1
(1)
0
0
0
0
0.0
0.1
0.1
0.02
5.7
936.8
3426.0
(2489.3)
38
1682
2261
(579)
118.1
686.5
795.9
(109.3)
Maldives
0
0
7
(7)
0
0
0
0
0
0
0
0
Myanmar
0.05
20.8
45.0
(24.2)
10
421
118
303
0.3
1.6
1.2
0.4
0
0
19
(19)
0
0
0
0
0.0
0.02
0.4
(0.4)
Pakistan
0.3
62.1
371
(308.9)
30
1383
1383
0
3.5
4.1
12.8
(8.7)
Sri Lanka
0
0
98
(98)
0
0
0
0
0
0
0.2
(0.2)
6.1
1025
4082
(3056.3)
87
4201
4477
(276)
125.6
693.7
812.8
(119.1)
Bhutan
India
Nepal
Region
Source: www.eia.com, Oil and Gas estimates for 2011, Coal estimates for 2010
Demand of South Asian countries is outstripping the resource availability necessitating
imports.
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Dependency on Fossil fuels is here to stay:
Liquid demand by sector
Liquid demand by product group
Transportation demand by energy type
Algae Farm
Source: BP Outlook 2012
Liquid demand growth is driven by transportation. One has to
sustainable mobility that displaces liquid transportation fuels
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evolve a model of
South Asia - Dependency on Fossil Fuels:
Source: integrated Energy potential of South Asia; Vision 2020
Source: BP Energy 2030
With rising demand for energy, all South Asian countries will continue to remain big
importers of fossil fuels.
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South Asia – Energy Trade Patterns and
Potential areas of Co-operation
South Asia – Energy Trading Potential
Country
Oil & Petroleum Products
Gas
Coal
Import
Export
Import
Export
Import
Export
Afghanistan
Yes
No
Yes
No
No
No
Bangladesh
Yes
No
Yes
No
Yes
No
Bhutan
Yes
No
Yes
No
Yes
Yes
India
Yes
Yes
Yes
No
Yes
No
Maldives
Yes
No
Yes
No
No
No
Myanmar
Yes
No
No
Yes
No
Yes
Nepal
Yes
No
Yes
No
Yes
No
Pakistan
Yes
No
No
No
Yes
No
Sri Lanka
Yes
No
Yes
No
No
No
Source: integrated Energy potential of South Asia; Vision 2020
Inward looking energy import substitution policies aimed at national self sufficiency have
resulted in low energy sharing.
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South Asia : Surplus Energy Availability
HYDRO POWER
TRANSIT
LINKAGE
GAS
GAS
HYDRO POWER & GAS
REFINED PRODUCT
South Asian region, through cross border infrastructure linkages can look forward to
reducing import dependency on the outside world.
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South Asia: Energy Trade Prospects
IMPORTING COUNTRY
EXPORTING COUNTRY
Afghanistan
Afghanistan
Bangladesh
Bhutan
India
Maldives
Myanmar
Nepal
Pakistan
Sri Lanka
x
x
x
Transit for
Energy trade
with East Asia
x
x
x
Transit for
Energy trade
with East Asia
x
x
x
x
x
Bangladesh
x
Bhutan
x
India
Marginal
Significant
hydropower &
x
hydropower &
gas export via
gas export
India
Marginal
Significant
hydropower
x
hydropower
export via India
export
Supply Refined
Supply Refined Supply Refined
products via
products
products
Pakistan
Maldives
x
x
Myanmar
x
Nepal
x
Pakistan
Supply of
electricity and
gas
x
x
Sri Lanka
x
x
x
Marginal
hydropower
export via India
Marginal peak
hydropower
support
x
x
x
x
x
x
x
x
x
Marginal
hydropower &
gas export via
India
Unlikely;
Similarity of
resources
Supply Refined Supply Refined Supply Refined Supply Refined Supply Refined
products
products
products
products
products
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
Supply of gas
x
x
x
x
x
Marginal peak
hydropower
support
x
x
x
x
x
Significant
hydropower &
gas export
Marginal peak
hydropower
support
Co-operation of energy across the region will have multiple impact on social &
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economic conditions of the country.
India’s – Refined Product Surplus Availability
Refined Product
Country
Production
Consumption
Refining Installed Capacity
Net Export /
(Import)
2011
000 bbls/day
2015
2020
000 bbls/day
Afganistan
0
4.2
(4.2)
0
0
0
Bangladesh
24.8
89.6
(64.8)
31
31
31
Bhutan
0
1.7
(1.7)
0
0
0
India
4125.0
3292.0
833.0
3967
4746
4906
Maldives
0
6.9
(6.9)
0
0
0
Myanmar
16.7
40.6
(23.9)
57
57
57
Nepal
0
18.4
(18.4)
0
0
0
Pakistan
205.9
426.7
(220.8)
294
436
686
Sri Lanka
38.6
108.9
(70.3)
50
50
50
Region
4411
3989
422
4400
5320
5730
Source: www.eia.com; cia world Factbook; Facts Global Fall 2011 Edition
India Surplus = 833 Kbbls/day
Others Deficit = 411 Kbbls/day
India’s superior refining capabilities and surplus product availability can cater to demand
of whole South Asian region.
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India and Pakistan – A Case Study

Pakistan’s Refined Product Demand (Zonewise):
Zones
Province
Diesel
Demand
(%)
Demand Deficit
Zone 1
Punjab/ NWPF
63%
4425
2266
Zone II Balochistan / Sindh 37%
2599
1331
Total
100%
7024
3597
Demand Concentration (in KT)
Gasoline
Jet/Kero
FO
Demand Deficit Demand Deficit Demand Deficit
1532
702
683
120
5792
4285
900
413
401
70
3401
2516
2431
1115
1085
190
9193
6801
Source: Fact Global Fall 2011


Zone I (Punjab/NWPF) is geographically and logistically near to India and shares close proximity to the
Bhatinda Refinery/Panipat Refinery and Jalandhar pipeline tap-off point.
Zone 2 (Balochistan/Sindh) can be logistically fed by Indian Refineries from Gulf of Kutch via karachi and
will replace product imports from Middle East.
Destination To
Zones
Zone I
Zone II
Province
NWFP
NWFP
Punjab
Punjab
Balochistan
Sindh
Sindh
Sindh
Road distances From (in Kms)
Main City Location
Islamabad
Peshawar
Lahore
Multan
Quetta
Sukkur
Hyderabad
Karachi
North
North
North
Central
Central
South
South
South
Karachi
Jalandhar
Bhatinda
Panipat
1460
1364
1282
936
692
476
164
0
503
639
133
488
1113
955
1262
1415
561
697
205
495
1084
962
1233
1385
792
927
415
706
1332
1173
1150
1613
Closest
Supply
Point
Jalandhar
Jalandhar
Jalandhar
Jalandhar
Karachi
Karachi
Karachi
Karachi
Source: one way distances from www.googleearth.com
Indian refineries are better positioned to bridge product deficits of Pakistan, if there are
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no disincentives (prices, payment security and level playing field) for doing trade.
Trade Inhibiting Factors
South Asia – Present Trade Inhibiting Factors
 Political/Security Considerations
Prolonged political tension between India and Pakistan.
 National Policy & Political Mindset
Reluctance to make efficient policy decisions due to the threat of possible supply
disruptions due to political uncertainty.
 Infrastructure Constraints.
Lack of cross-border infrastructure to address mismatch between resource distribution and
demand growth distribution.
 Regulations and Sector ownership
Pervasive state ownership of the energy companies and regulation of the retail prices with
no effective independent regulatory body for resolution of disputes.
Mindset of policy makers should be more positive towards improving mutual
relationships and reducing trust deficits.
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Way forward
AFGHANISTAN
NEPAL
BHUTAN
PAKISTAN
MYANMAR
INDIA
SRI LANKA
MALDIVES
At present, South Asia is following independent inclusive policies for self
sufficiency.
We can have friendship pipelines, ferries and trains convert South
Asia into a seamless region for a common market and an economic
union on the lines of the European Union.
Energy Trade Flow Boosters
 Friendship Product Pipelines:
Refined Products
– Jalandhar (India) – Lahore (Pakistan) – Kabul
(Afghanistan)
– Haldia (India) – Dhaka (Bangladesh)
 Friendship Product Ferries:
– Jamnagar (India) – Karachi (Pakistan)
– Vizag / Paradeep / Haldia (India) – Chittagong
(Bangladesh)
– Vizag / Paradeep / Haldia (India) – Yangon
(Myanmar)
 Friendship
Product
Freight corridor:
Transnational
– Lahore (Pakistan) - Delhi (India) – Kolkata
(India) - Dhaka (Bangladesh) – Agartala (India)
[2453 km]
– Thimpu (Bhutan) - Haldia (India) [760 km]
– Thimpu (Bhutan) – Chittagong (Bangladesh)
[880km]
– Kathmandu (Nepal) - Phulbari (India) –
Chittagong (Bangladesh) [1442 km]
– Kathmandu (Nepal) - Haldia (India) [1323 km]
A quantum leap in connectivity will have Schumann Plan like transformational impact
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An united South Asian Region……..
………can then harness well endowed tradeable energy
resources of Iran, Turkmenistan, Tajikistan, Kyrgyzstan, Uzbekistan and
Kazakhstan……
May this be the Delhi declaration of this conference for economic
upliftment of people in the region.
Thank You