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September 12, 2016London

India: Economic and Energy Overview

Discovered Small Field Bidding Round – 2016

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Emerging markets have been growing strongly in recent years

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While world economy as a whole is forecast to grow by 2.7% in 2016… India stands out even within Asia.

Policy reforms and growth in investment to drive and sustain India’s growth

Source: IMF forecasts (%)

2.6

1.7

1.0

2.2

-3.5

-1.0

7.5

6.3

2.6

1.7

0.3

2.2

0.0

1.0

7.5

6.0

-6 -4 -2 0 2 4 6 8 10

2017 2016

U.S.

Euro -zoneJapan

UK

Russia

China

India

Brazil

International Monetary Fund (IMF) has predicted that India would retain the

status of the fastest growing large economy in

the foreseeable future

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$18.90

$21.10

$38.50

$56.60

$63

$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00

Pakistan

Vietnam

Indonesia

China

India

India replaced China as the top destination for FDI in 2015

Top FDI Destination in Asia-Pacific in 2015 (USD Billion)

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Notes: #: advance estimates;

#FY16: 7.6FY15:7.2FY13: 5.6

FY16: 4.9FY15:5.9FY13: 10.2

FY16: 2.6FY15:2.8FY13: 1.1

2014: $7252011: $632

FY16: $360 bn

FY15:$341.6 bn

FY13: $292 bn

FY15: $310.3 bn

FY14:$314.4 bn

GDP growth (%) Consumer price index inflation (%)

Index of industrial production growth (%)

Household final consumption

expenditure per capita

Forex reserves Exports

India’s economic fundamentals is strong across key indicators – Government’s inflation focus helping drive long term sustainable growth

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Reforms across the board driving growth and transformation of the economy

Enhancing manufacturing through investments, innovation, and infrastructure

To enhance business conduciveness, through investor-friendly measures

Creation 100 Smart Cities and rejuvenation of 500 cities (through AMRUT)

A system to rank states based on the 98-point action plan launched to enhance business conditions

400 million youth to be skilled by 2022.

100% FDI allowed under the automatic approval route for railway infrastructure

A digital empowered economy and knowledge economy

Digitisation of user payments, digital wallets, computerisation of ration shops and payment banks

FDI norms in 15 sectors liberalised;distinction between FDI and FPI eliminated

Make in India to Ease of Doing Business driving investor sentiments

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China23%

US17%

India5%Russian

Federation5%

Japan4%

Others46%

Source : BP Statistical Review 2016

Primary Energy Consumption

-

100

200

300

400

500

600

700

800 India’s share in world energy – 5.3%

India and China have accounted for much of the growth in the past decade

Indian energy growth in 2015 outstripped China’s by a large margin

Close to 80% of India’s oil is imported. India is striving to reduce this import dependence

Source : BP Statistical Review 2016

India’s primary energy consumption has increased at a CAGR of 5% since 2010

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7

22

20

4

35

24

PSU

Private Players

Foreign Players

Non-operatorsOperators

PSC regime has seen participation from significant number of private and foreign players

Source : Directorate General of Hydrocarbon (DGH)

• “As on Q2FY16, the upstream sector attracted a total of US$ 40 bn investments under PSC regime”

• ~21% of the total production of oil and gas was contributed by private and JV players

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Government’s Visions for Energy Sector will drive and sustain domestic growth of O&G Sector

PSC: Production Sharing Contract

Hydrocarbon Exploration and Licensing Policy (HELP)

Open Acreage Licensing Policy (OALP)

Marketing and pricing freedom for gas production*

Extension of 28 PSC for small, medium & discovered

fields

Quadrupling PNG connections to 1 crore households by 2019

Reduce oil imports dependence by 10% by 2022

Make In India - Enhancingdomestic production

*from High Pressure High Temperature, Deepwater and Ultra Deepwater areas

Maximum GovernanceMinimum Government

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Government’s has initiated programs across the entire sector to improve its attractiveness

~11000 Kms of pipelines to be built by 2020Source: PPAC

More than100 City Gas Distribution systems to start operations by 2020Source: PPAC

Current LNG Regasification capacity is 21.24 MMTPA across 4 terminalsRe-gasification capacity to expect grow multifold

Source: PPAC

The domestic petrochemical industry is in the process of investing over~US$25 billion to meet the surging demand

Source: CPMA India

23.5 MMTPA refining capacity expansion planned in the coming yearsSource: MoPNG Annual Report, 2016

Plans to auction more than 1500 sq. kms. In Discovered Small Fields Bid Round 2016

Source: DGH

Thank you