11 th Petro India, New Delhi, 11 th Dec’12

1. 11th Petro India, New Delhi, 11th Dec’12 Potential For Co-operation Between Neighboring Countries Upstream / Refining & Marketing /Gas Ashok Dhar President (Industrial Marketing)

2. 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.

3. 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.

4. 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.

5. South Asia – Regional Indicators

6. South Asia: Demographic & Economic Indicators 41 36 95 122 137 7 210 40 94 40 6 8 57 165 2 176 24 41 111 28 46 66 170 5 180 78 102 49 123 39 16 58 35 50 55 103 217 175 195 146 143 165 119 204 207 Source: www.cia.com, World fact book Country comparison with the world 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.

7. South Asia: Trade with India 66692 18826 85518 2.24 Source: www.commerce.nic; Figures for 2011-12 India Total Export – Rs.1465959 Crores India Total Import – Rs.2345463 Crores India has very low trading volumes with its South Asian Neighbors.

8. Dependency on Fossil Fuels - Global & South Asia

9. 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.

10. South Asia - Dependency on Fossil Fuels 4082 693.7 812.8 4201 4477 1025 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.

11. Dependency on Fossil fuels is here to stay: Liquid demand by product group Transportation demand by energy type Liquid demand by sector Algae Farm Source: BP Outlook 2012 Liquid demand growth is driven by transportation. One has to evolve a model of sustainable mobility that displaces liquid transportation fuels

12. 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.

13. South Asia – Energy Trade Patterns and Potential areas of Co-operation

14. South Asia – Energy Trading Potential 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.

15. 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.

16. South Asia: Energy Trade Prospects IMPORTING COUNTRY EXPORTING COUNTRY Co-operation of energy across the region will have multiple impact on social & economic conditions of the country.

17. India’s – Refined Product Surplus Availability 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.

18. India and Pakistan – A Case Study • Pakistan’s Refined Product Demand (Zonewise): • 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. Source: Fact Global Fall 2011 Source: one way distances from www.googleearth.com Indian refineries are better positioned to bridge product deficits of Pakistan, if there are no disincentives (prices, payment security and level playing field) for doing trade.

19. Trade Inhibiting Factors

20. 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.

21. Way forward

22. 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.

23. Energy Trade Flow Boosters • Friendship Product Pipelines: • 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 Transnational Freight corridor: • 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] Refined Products A quantum leap in connectivity will have Schumann Plan like transformational impact

24. 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.

25. Thank You