A Glorious Heritage (1860 – 1871)§ Around 1860’s, the world witnessed vast industrial development that ultimately lead to an increase in

petroleum refineries. This was also the time that our historical journey began as Burma Oil Company.

Breaking Ground (1886 – 1889)

§ The search for oil and gas in India began in 1886, when Mr. Goodenough of McKillop Stewart Company successfully drilled a well near Jaypore, Upper Assam, striking oil.

§ However, it wasn’t until 1889 when the Assam Railway and Trading Company (ARTC) struck oil at Digboi that a chain reaction sparked off, marking the beginning of oil production in India.

§ Although incorporated in Scotland in 1886, the Burma Oil Company became an important player in the South Asian market that grew out of an enterprise named Rangoon Oil Company (formed in 1871) to refine crude oil produced from primitive hand dug wells in Upper Burma independently.

HISTORY

The Birth of a Titan (1928)

§ While discoveries were being made and industries expanded, John D. Rockefeller and his business associates acquired control over numerous refineries and pipelines.

§ In 1928, Asiatic Petroleum (India) joined hands with the Burmah Oil Company, an active producer, refiner and distributor of petroleum products, particularly in Indian

A Pioneering Approach § Burmah Shell began its operations with the import and marketing of Kerosene and soon proved

itself to be a pioneer in more ways than one. The company imported oil products in bulk and transported them in 4-gallon and 1-gallon tins all over India.

§ The company also took up the challenge of reaching out to people in remote villages to ensure every home was supplied with kerosene.

The Retail Revolution (1930)

Post war, Burmah Shell established efficient and up-to-date fuel service and filling stations to give its customers the highest possible standard of service facilities.

On 15th October 1932, when civil aviation arrived in India, Burmah Shell had the honour of fuelling J.R.D. Tata's historic solo flight in a single-engine De Havillian Puss Moth from Karachi to Bombay via Ahmedabad. Thirty years later, i.e. in 1962, Burmah Shell again had the privilege of fuelling Mr Tata's re-enactment of the original flight.

From the ground to the sky (1932 - 1962)

A New Beginning in a New Nation

Showcasing its pioneering spirit, the company introduced LPG as a cooking fuel to Indian homes in the mid-1950s. As always, it went beyond selling petroleum, educating customers and offering better services and products.

BPCL

F&S BharatGas MAK Lubricants Aviation Refineries Gas I&C BPRL Internation

al Trade

BPCL BUSINESS HUB

ABOUT FUELS & SERVICES§ Bharat Petroleum, offers world-class Fuel Stations (Petrol

Pump) across the country, selling Petrol, Diesel, Automotive LPG and CNG. Our products and services are designed to meet the needs of our diverse customers, which has led us to create specialized Fuel Station formats, such as Pure for Sure, Pure for Sure Platinum, Ghar, Highway Star and many more.

§ We have a wide network of 13,439 world class Fuel Stations, which continues to grow, across the country, which you can count on. With 8,403 fully automated Fuel Stations and offer wide range of products and services – from Petrol & Diesel fuel to Speed and Speed 97 (which are premium petrol with better driving experience and higher octane numbers) to convenience stores, like In & Out, Restaurants and ATMs.

ABOUT BHARATGAS § Bharatgas comes from the house of Bharat Petroleum, a

Fortune 500 company and a major player in refining and marketing of petroleum products in India. Bharatgas fuels over 42 million homes and has brought many innovative products and customer centric offerings to the customers.

§ ‘Beyond LPG’ is a value-added service launched in recognition of the need to provide housewives some relief from their daily chores of shopping for low involvement products. Under this initiative, Bharat Petroleum enters into corporate tie-ups with reputed brands to make FMCG products, home appliances and kitchenware easily available at attractive prices through its distributor network.

Present in over 42 m i l l i o n h o m e s s p a n n i n g b o t h urban and rura l areas

A n e t w o r k o f o v e r 4,494 distributors that includes 1500 exclusive rural distributors

F a c i l i t i e s t o b o o k cylinder 24 X7 through SMS, IVRS, Mobile App and Internet

F M C G a n d h o m e appliances made available at attract ive pr ices at Bharatgas distributors

Bharat Metal Cutting Gas that provides a cost effective fuel for cutting and brazing

5 0 m o d e r n f i l l i n g p l a n t s t o b o t t l e Bharatgas cylinders

Here are some interesting fast facts about Bharatgas

ABOUT MAK LUBRICANTS

§ Bharat Petroleum understands the importance of the right lubricants in extending the life of vehicles, and allowing customers to derive the maximum value out of them. The company offers a complete range of quality products across categories such as Automotive Engine Oils, Gear Oils, Transmission Oils, Specialty Oils and Greases.

§ In 1998, BPCL re-launched three lubricant brands – MAK Lubricants for Diesel Engine oils, Automol for Petrol Engine oils and Glide for two/three wheelers. The company then combined them together into an umbrella brand called “MAK Lubricants”.

ABOUT AVIATION

§ The Aviation fuel services business of Bharat Petroleum is an integrated unit looking after the Receipt, Storage, Marketing and Delivery of Jet fuel and Aero Lubricants to airline customers and aircraft operators.

§ BPCL fuel the leading airlines of the world, who operate flights to India and are proud of our association with most international airlines including all the major domestic players. We have the pleasure of being associated with Defence Services to supply Aviation fuel to Indian Air Force, ARC and the Coast Guard. We also operate “Bulk Petroleum Installation” for supply of aviation fuel to the Indian Air Force stations at Sirsa, Suratgarh and Gwalior.

§ Pipelines are among the safest, most cost-effective and efficient ways to transport petroleum products inland. To evacuate refined products safely and reliably, the company has connected all our refineries with a network of pipelines.

§ BPCL took its baby steps in the field of Cross Country Pipelines by setting out to lay a hydrocarbon artery connecting the supply-heart of Mumbai with Manmad, a major hinterland terminal. Since commissioning of BPCL first petroleum product pipeline i.e. Mumbai-Manmad P ipel ine in the year 1998 , BPCL has successfu l ly commissioned many more product pipelines, thereby widening its pipelines network to 2229 km over the last two decades.

ABOUT BPCL PIPELINES

ABOUT INDUSTRIAL & COMMERCIAL

§ To cater to the Industries needs for fuels and other petrochemicals, BPCL Industrial and Commercial Fuel Services Business Unit, commonly known as I&C SBU was formed.

§ Currently I&C SBU offers commercial fuel services, catering to around 8000 industrial customers across the country including several industries from the Public & Private sectors, both core and non-core segments and various Governmental establishments such as Defence, Railways, State Transport Undertakings and State Electricity Boards etc.

ABOUT BHARAT PETRORESOURCES LIMITED

§ Bharat Petroleum entered the upstream sector in 2003 with the aim of providing partial supply security of crude and hedging of price risks and to become a vertically integrated oil company.

§ With the addit ional aim of strengthening the company’s bottom line,a wholly owned subsidiary company of Bharat Petroleum, by the name Bharat PetroResources Limited (BPRL) was incorporated in October 2006.

§ BPRL was set up with the objective of carrying out Exploration and Production activities considering the need for a focussed approach for Exploration and Product ion act iv i t ies and implementat ion of investment plans of Bharat Petroleum at a quicker pace.

MUMBAI REFINERY (BPCL - MR)

§ Mumbai refinery was commissioned in 1955 with a crude oil processing capacity of 2.2 MMTPA. The refining capacity has been augmented to the present level of 12 MMT through progressive revamps, the addition of various process units and the incorporation of advanced refining technologies.

§ The Bharat Petroleum Mumbai Refinery (BPCL - MR) is one of the most versatile refineries in India and excels in all aspects like quality, technology, energy, human relations, safety, environmental friendliness and operating cost.

§ With successful de-bottlenecking and implementation of various major projects, Mumbai Refinery has a capacity to process 12 MMT of crude oil per annum. Mumbai Refinery has processed 76 different types of crude in five decades of its operations, making it one of the most flexible refineries in the country.

§ Mumbai refinery processes various types of crudes which include Bombay High, East African, Petronas, Kuwait, Arab mix, Arab medium, Basrah, Arab extra light, Murban, Umm Shaif etc. The main products are LPG, Naphtha, MS, Benzene, Toluene, Hexane, SBP, MTO, Kerosene, Jet Fuel, Diesel, Light Diesel Oil, Lubes, Fuel Oil, LSHS and Bitumen.

§ Mumbai Refinery has successfully commissioned Naphtha Isomerization (ISOM) unit to produce total BS-IV MS. New Diesel Hydrotreating Unit (DHT) is also commissioned to meet the government mandate of producing 100% BS-IV HSD and Gasoline Treatment Unit is being installed to meet sulfur specs on gasoline (BS-IV-MS).

PERFORMANCE of MUMBAI REFINERY

§ During the year under review, Mumbai Refinery (MR) has achieved throughput of 13.60 MMT of crude and other feedstocks as compared to 13.41 MMT achieved in 2015-16. Refinery has achieved the highest ever throughput processing in Financial Year 2016-17.

§ This represents a capacity utilization of 113.3% as compared to 111.7% in the previous year. MR has also achieved 86.2% of distillate yield, which again is the highest ever achieved.

§ MR achieved its highest ever production of 2347 TMT of Motor Spirit an increase of 10.6% over the previous year, also highest production of 94 TMT Propylene and 920 MT Aviation Turbine Fuel (ATF) was achieved during the year 2016-17. Further, MR was successfully able to meet 100% BS-IV grades auto fuel requirement from March, 2017 in line with Government of India’s auto fuel policy.

§ Gross Refining Margin (GRM) of MR for the year was US$ 5.36 per barrel as compared to US$ 6.37 per barrel realized in 2015-16. The gross margin amounted to ` 3671 crores as compared to ` 4198 crores in 2015-16.

KOCHI REFINERY (BPCL - KR)

§ The BPCL Kochi Refinery, embarked on its journey in 1966 with a capacity of 50,000 barrels per day. Formerly known as Cochin Refineries Limited, the refinery was originally established as a joint venture in collaboration with Phillips Petroleum Corporation, USA. It was later renamed as Kochi Refineries Limited.

§ Kochi Refinery is located at Ambalamugal, near Kochi in Kerala, and is one of the two Refineries of BPCL, presently having a crude oil refining capacity of 15.5 Million Metric Tonnes per Annum (MMTPA).

§ The products of this fuel based refinery include Liquefied Petroleum Gas, Naphtha, Motor Spirit, Kerosene, Aviation Turbine Fuel, High Speed Diesel, Fuel Oils and Asphalt. Specialty products for the domestic markets include Benzene, Toluene, Propylene, Special Boiling Point Spirit, Mineral Turpentine Oil, Sulphur and Hydrogen.

§ Kochi Refinery has also initiated the Propylene Derivative Petrochemical Project which would help KR to produce value added petrochemical products.

PERFORMANCE of KOCHI REFINERY

§ During the year under review, Kochi Refinery (KR) has achieved throughput of 11.79 MMT of crude and other feedstocks as compared to 10.71 MMT achieved in 2015-16.

§ KR’s Gross Refining Margin (GRM) for the year was US$ 5.16 per barrel as compared to US$ 6.87 per barrel realized in 2015-16. The gross margin amounted to ` 3061 crores as compared to ` 3610 crores in 2015-16. The lower GRM for the year 2016-17 can be attributed to lower product cracks.

§ During the year, refinery achieved highest ever production 594.2 TMT of LPG, 6.4% higher than previous year, 170.5 TMT of Motor Spirit 5% higher than previous year, 532.1 TMT of High Speed Diesel, 3.7% higher than previous year and 558.6 TMT of Aviation Turbine Fuel, 16.3% higher than previous year.

§ Further, KR could switch over to the production of full quantity of auto fuels to BS-IV grade effective March, 2017 in line with Government of India’s auto fuel policy.

NUMALIGARH REFINERY LIMITED (NRL)

§ NRL was incorporated in 1993 with an authorized Share capital of ` 1,000 Crores. It is a Category I Mini Ratna company and has a 3 MMTPA refinery at Numaligarh in Assam. Besides the refinery, NRL has two marketing terminals, one at Numaligarh & other at Siliguri for evacuation of product.

§ During 2016-17, NRL Crude throughput was 2.68 MMT as compared to 2.52 MMT in the previous year.

§ NRL Revenue from Operations was ` 13,946.92 Crores for the financial year ending 31st March 2017 as compared to ` 11,925.44 Crores in the previous year. The company’s 40 Bharat Petroleum Corporation Limited consolidated profit after tax for the year stood at ` 2,049.83 Crores as against profit of ` 1,182.27 Crores in the previous year.

Conceptualized to meet the country’s energy needs especially that of Northern and Central India, BORL, with significant co-operation from the Government of Madhya Pradesh, set up a six million tonnes per annum (6.0 MMTPA) petroleum refinery at Bina, M. P. in the serene surroundings of Bundelkhand.

BHARAT OMAN REFINERIES LIMITED

25.3924.1223.3623.3523.21

BPCL PERFORMANCE in VOLUME

37.68

36.53

34.45

34.00

33.30

•SHRI. D. RAJKUMAR

•Chairman & Managing Director

•SHRI. S RAMESH

•Director (Marketing)

•SHRI. R. RAMACHANDRAN

•Director (Refineries)

•DR. K. ELLANGOVAN

•Government Director

•SHRI. RAJIV BANSAL

•Government Director

BOARD

of D

IREC

TORS

Govt. of India

37.68

FII

Bank/Insu.

Others

§ India is expected to be one of the largest contributors to non-OECD petroleum consumption growth globally. Oil imports rose sharply year-on-year by 27.89 per cent to US$ 9.29 billion in October 2017. India’s oil consumption grew 8.3 per cent year-on-year to 212.7 million tonnes in 2016, as against the global growth of 1.5 per cent, thereby making it the third-largest oil consuming nation in the world.

§ India is the fourth-largest Liquefied Natural Gas (LNG) importer after Japan, South Korea and China, and accounts for 5.8 per cent of the total global trade. Domestic LNG demand is expected to grow at a CAGR of 16.89 per cent to 306.54 MMSCMD by 2021 from 64 MMSCMD in 2015.

§ The country's gas production is expected to touch 90 Billion Cubic Metres (BCM) in 2040 from 21.3 BCM in 2017-2018 (Apr-Nov). Gas pipeline infrastructure in the country stood at 16,470 km in September 2017.

MARKET SIZE

INDUSTRY OUTLOOK

INDIAN PETROLEUM SECTOR

§ India is expected to overtake China as the largest consumer of petroleum products over the next 20 years. While oil dynamics are expected to continue to remain uncertain and volatile, the oil industry is on the recovery path, while getting accustomed to the new lows. The decline in prices has been extremely beneficial to India, making energy more affordable and easily accessible.

§ What remains a challenge though is that India is still dependent on imports for 80% of its crude requirements, thus making it more vulnerable to the international oil scenario.

Planned indigenous crude oil production for 2016-17 was 37.1 Million Metric Tonnes (MMT) against which the actual indigenous crude oil production that was recorded was 36 MMT (36.9 MMT during 2015-16). The decline of 2% in indigenous crude oil production as compared to the previous year is primarily due to reduced production from mature and ageing fields, underperformance and operational issues in some fields.

Crude Oil and Natural Gas Production

Source : Annual Report of Ministry of Petroleum & Nature Gas

§ India is growing as a refinery hub and currently has the 2nd largest refining capacity in Asia. The country’s refining capacity stands at 234.5 MMT as on 1st April 2017, up from 230.1 MMT in the previous year. PSU companies continue to hold a share of 65% in India’s refining capacity.

§ The refining capacity is expected to increase further after completion of 6 MMTPA Integrated Refinery Expansion project at Kochi which is under advanced stage of commissioning. Targeted Crude Throughput (Crude Oil Processed) for the year 2016-17 is 240.418 MMT as against 232.865 MMT in 2015-16, showing an increase of about 3.24%.

Refinery Capacity & Refinery Crude Throughput

REFINING CAPACITY & REFINERY CRUDE THROUGHPUT

Source : Annual Report of Ministry of Petroleum & Nature Gas

IMPORT of CRUDE OIL§ Import of Crude Oil during April-November, 2016 was 143.813 MMT valued at Rs. 2,96,431 Crore which marked an increase of 9.31% in

quantity terms and 4.84% decrease in value terms over the same period of last year. Import of crude oil during 2015-16 was 202.850 MMT valued at Rs. 4,16,579 Crore.

§ After steadily increasing with effect from 2011-12, the prices of crude oil and petroleum products have shown a continuous declining trend post July 2014. The price of Indian basket crude oil which was around $110/bbl in June 2014 has continuously decreased thereafter and touched a bottom of US$ 24.03/bbl on 20th January, 2016.

Import of Crude Oil and average Crude Oil Prices (Indian basket)

Source : Annual Report of Ministry of Petroleum & Nature Gas

IMPORT & EXPORT of PETROLEUM PRODUCTS

Source : Annual Report of Ministry of Petroleum & Nature Gas

IN 2017 PETROLEUM PRODUCTS CONSUMPTION WAS DOWN§ Consumption of petroleum products grew by 5.2% to 194.2 MMT during

2016-17 as compared to the 11.6% growth recorded in the previous year. The main reason for a decline in growth was due to the substantial decline in the demand for diesel which constitutes 40% of the total consumption basket. Diesel grew by only about 2% during 2016-17 as compared to the 7.5% growth recorded in the previous year largely due to reduction in the growth in commercial vehicles (CV).

§ During 2016-17 CVs registered a growth of about 4% as against the growth of 11.5% on the previous year. This, together with increased fuel efficiency have caused a sharp reduction in the growth of diesel during 2016-17.

§ There have been several initiatives taken by the Government of India in the interest of the consumer and society during the previous year. Effective 1st April 2017, the entire country has been upgraded to BS-IV auto-fuels in an attempt to reduce carbon emissions. Oil Marketing Companies have ensured that all refining, storage and distribution locations have been converted to BS-IV standards for 100% implementation. The Government has decided that India will leapfrog directly from BS-IV to BS-VI fuel standards across the country with effect from April 1, 2020.

Downstream Oil Companies in India

§ Indian Oil Corporation Limited (IOCL), commonly known as Indian Oil is an Indian state owned oil and gas company with registered office at Mumbai and primarily headquartered in New Delhi. It is the largest commercial enterprise in the country, with a net profit of INR 19,106 crore (USD 2,848 million) for the financial year 2016–17.

§ Indian Oil accounts for nearly half of India's petroleum products market share, 35% national refining capacity (together with its subsidiary Chennai Petroleum Corporation Ltd., or CPCL), and 71% downstream sector pipelines through capacity. The Indian Oil Group owns and operates 11 of India's 23 refineries with a combined refining capacity of 80.7 MMTPA (million metric tonnes per annum). Indian Oil's cross-country pipeline network, for transportation of crude oil to refineries and finished products to high-demand centers, spans over 13,000 km The company has a throughput capacity of 80.49 MMTPA for crude oil and petroleum products and 9.5 MMSCMD for gas.

§ Hindustan Petroleum Corporation Limited (HPCL) is an Indian state-owned oil and natural gas company with its headquarters at Mumbai, Maharashtra.

§ HPCL operates two major refineries producing a wide variety of petroleum fuels and specialties, one in Mumbai (West Coast) of 9.5 million metric tonnes per annum (MMTPA) capacity and the other in Visakhapatnam, (East Coast) with a capacity of 15.5 MMTPA. HPCL holds an equity stake of 16.95% in Mangalore Refinery and Petrochemicals Limited (MRPL), a state-of-the-art refinery at Mangalore with a capacity of 9 MMTPA. Another refinery of 9 MMTPA (set up in Bathinda, Punjab by HMEL, a joint venture with Mittal Energy.

Companies Group Refineries Group Refining Capacity (MMTPA)

Product Pipeline (Km)

Distillate Yield (%)

Capacity Utilization (%)

IOC 23 81 13000 78 to 80 105

BPCL 4 36.5 2229 86 to 88 113

HPCL 2 24.5 3370 74 to 77 112

COMPARISONS of THREE DOWNSTREAM COMPANIES

FINANCIAL PERFORMANCE of IOCL & HPCL

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