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Indiaa new growth engine of petrochemicals?

Threat or Opportunity for Asian producers?

APIC ANNUAL MEETING, Singapore

19-20 May 2015

Clive Gibson

Vice President, Nexant

cgibson@nexant.com

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Nexant Overview

A Global Advisor to the Energy & Chemicals Industry with ProvenTrack Record

2

Headquarters Main Offices

Representative Offices

San FranciscoWashington, DC

White Plains

LondonFrankfurt

Sao Paulo

Bahrain

TokyoSeoul

Shanghai

Singapore

Kuala LumpurBangkok

Our People

Over 150 consultantsworldwide in Energy &

Chemicals Advisory

Expertise covering strategic,

commercial, operational and

technical aspects with deep

energy and chemicals sector

knowledge

Nexants consultants are

typically Chemical Engineers,Economists and MBA graduates

who have significant prior

experience working at energy

& chemical producers

Proven Track Record

Advising clients in the energy &

chemicals industry for 50 years Completed over 2,000 client

assignmentsincluding market

assessments, technology

evaluations, valuations /

appraisals and due diligence

Global Footprint

Strong international presence provides valuable insights through our consultants local

market knowledge and our vast network of sector specialists

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Macro Economic Fundamentals

5

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Industry Growth Drivers

6

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Increasing consumer wealth is driving vehicle fleet growth in India resulting inhigher fuels demand

India Vehicles, Population and GDP Regional Vehicle Ownership vs GDP

Vehicle ownership percapita in India is oneof the fastest growingin Asia

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Indian transportation fuels demand

Global Polymer Consumption Trends

0

1

2

3

4

56

7

8

9

10

0 10 20 30 40 50 60 70 80 90 100

M

arketGrowth-percentC

AGR

2015-

2020

Current Annual Consumption, Kg/Capita

India

China

Japan

Western Europe

United States

8

Bubble size indicates total current demand

Polymers include: LD, LL, HD, PP, PVC, PS, EPS, ABS, SBR, BR

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Indian polymer growth trends remain well above the global average

Global Polymer Consumption Trends

0

1

2

3

4

5

6

7

8

9

10

0 10 20 30 40 50 60 70 80 90 100

M

arketGrowth-percentC

AGR

2015-

2020

Current Annual Consumption, Kg/Capita

India

China

Japan

Western Europe

United States

9

Bubble size indicates total current demand

Polymers include: LD, LL, HD, PP, PVC, PS, EPS, ABS, SBR, BR

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Industry Landscape

10

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Indian refining capacity is 4.2 million barrels per day (210 million tons per year),concentrated in West India.

Essar Vadinar, 400kbd

IOC Panipat, 300kbd

IOC Barauni,

120kbd

IOC

Bongaigon,

47kbd

BPCL Numaligarh,60kbd

IOC Haldia, 150kbd

IOC Mathura, 160kbd

BORL Bina, 120kbd

IOC Paradip, 300kbd

HPCL Vizakh, 166kbd

HMEL Bathinda, 180kbd

BPCL Mumbai, 240kbd

HPCL Mumbai, 130kbd

MRPL Mangalore, 300kbd

BPCL Kochi, 192kbd

CPCL, Madras 210kbd

Reliance DTA

Jamnagar, 660kbd

IOC Koyali 260kbd

Reliance SEZ

Jamnagar, 580kbd

Existing Refinery

New Refinery

Essar

Vadinar,

400kbd

Most recent grass roots capacity additionsinclude IOCL Paradip (2015/6), HMEL

Bathinda and BORL Bina (2012)

Over 50 percent of refining capacity in W India

Landlocked refineries must match local

demand

Refinery upgrading focused on FCC andcoking

Refinery-Petrochemicals integration focused

on propylene and aromatics

Ownership is domestically focused and mainly

state owned.

Refinery Locations

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Threat or Opportunity?

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Uncertain timesbut sources of competitive advantageremain clear and robust in refining and chemicals sectors

PARAMETER KEY OBJECTIVES

Size

Location

Configuration

Integration

Capture economies of scale

Access to low cost feedstocks/

deficit markets

Cost advantage/ product

differentiation

Synergies with adjacent facilities

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0

500

1000

1500

2000

2500

3000

0 50 100 150 200

EthyleneC

ashCost

(CurrentUS

dollars

pertonethylene)

Ethylene Cumulative Capacity (million tons)

Oil Price(US$ per bbl)

140

100

70

50

Lighter feedstocks

Liquids cracking

Petrochemicals feedstock cost advantages remain atlower oil prices but are substantially reduced

Global ethylene production cost curves versus crude oil price

14

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Revisiting sustainable value drivers in turbulent times

2020 VISIONFeedstocks

Integration

Technology

Sourcing a competitive cost advantage

Creating value via optimising molecules

Innovation to capture cost advantages

Lower oil prices may bring longer term benefits for industry

leaders

Stronger global GDP growth and product demand growth

Weaker capacity growth in the near term

Lowercapital costs.in the longer term

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Nexant Asia Limited

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555 Phahonyothin Road

Kwaeng Chatuchak,Khet Chatuchak

Bangkok 10900,

Thailand

Telephone: + 66 2 793 4600

Facsimile: + 66 2 937 0144

www.thinking.nexant.com

This presentation was prepared by Nexant Limited (Nexant). Except where specifically statedotherwise in the presentation, the information contained herein was prepared on the basis of

information that is publicly available and has not been independently verified or otherwise examined todetermine its accuracy, completeness or financial feasibility. Neither NEXANT, nor any person acting on

behalf of NEXANT assumes any liabilities with respect to the use of or for damages resulting from theuse of any information contained in this presentation. NEXANT does not represent or warrant that anyassumed conditions will come to pass.

This presentation is integral and must be read in its entirety.

The presentation is given on the understanding that the recipient will maintain the contents confidentialexcept for internal use. The presentation should not be reproduced, distributed or used without firstobtaining prior written consent by NEXANT. This presentation may not be relied upon by others.

This notice must accompany every copy of this presentation.

Nexant, Inc.

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New York

Houston

Washington

London

FrankfurtBahrain

Singapore

Bangkok

Shanghai

Kuala Lumpur

M: +66 89 890 6450

T. +66 2793 4600

E. cgibson@nexant.com

Energy & Chemicals Advisory

Clive GibsonVice President