Oil India Limited (OIL) Earnings Call Transcript & Summary

Ladies and gentlemen, distinguished guests and our valued investors and analysts fraternity. A very good afternoon, and a warm welcome to this highly anticipated Annual Investors and Analyst Meet of 2023 of Oil India Limited. I would like to extend my heartfelt gratitude to each one of you for joining us today. We understand that your time is valuable, and we greatly appreciate your presence here. It's indeed an immense pleasure for us today as we gather here to discuss our company's performance, progress, achievements and future endeavors. Your presence here reflects your commitment to our shared vision and the trust you have placed in our company. At the outset, I'm happy to announce that today, we have with us the members of the Board of Directors of the company, led by our Chairman and Managing Director, Dr. Ranjit Rath; our Resident Chief Executive; and other senior executives of the company. This gathering marks a significant milestone in our journey, and we will be excited to share with you the latest updates on our company's performance, growth and strategic initiatives. I would like to convey our thanks to [indiscernible] Antique Stock Broking for coordinating this event. Dear friends, being investors and analysts, you have been an integral part of our success story. Your unwavering support, financial backing and guidance have helped us not only to sustain and grow but also to create values for our stakeholders. It's needless to mention that together we have overcome challenges, embraced opportunities and consistently strived for excellence. In the past 2 to 3 years, our team has demonstrated resilience and agility in overcoming the unprecedented challenges, including the global pandemic. Despite the hurdles, we could achieve significant milestones, sustain our operations and solidify our position. During today's interactions, we'll provide you with a comprehensive update on our operating and financial performance, key business initiatives, our strategic partnership across the energy value chain, the initiatives being taken by the company towards our commitment to environmental sustainability and our corporate social responsibility initiatives. We firmly believe that businesses have a responsibility not only to generate profit, but also contribute positively to the society and the environment. This investor meet serves as an invaluable platform for us to engage in meaningful dialogue, exchange ideas and address any concerns or queries you may have. We value your insights, feedback and perspectives as they contribute to our continuous improvement and long-term success. Once again, I express my deepest gratitude for your presence and continued support. With this, now I request Professor Ravi Sundar Muthukrishnan from Antique Stock Broking for his welcome address to the audience. Thank you. Thank you very much.

Good afternoon, ladies and gentlemen. I want to keep this welcome address very, very short. I think you need all the time with the management here. My name is Ravi Sundar Muthukrishnan. I'm the mentor at Antique Stock Broking. I, on behalf of myself, my colleague, Varatharajan Sivasankaran, Mr. Kishan Mundhra and team Antique, welcome you all to this investor meet with the top management of Oil India. The team, as you know, is represented by the CMD, Dr. Ranjit Rath; Director, Finance, Mr. Harish Madhav; Director, Operations, Mr. Pankaj Kumar Goswami; Director, Exploration and Development, Dr. Manas Sharma; and Director, HR, Mr. Ashok Das. So without taking too much of your time, I would request the management to share their brief comments followed by Q&A. Thank you very much, sir, and welcome you all to this meet today.

Thank you, Professor Muthukrishnan, for your address. I now request our Chairman and Managing Director, Dr. Ranjit Rath, to kindly give his inaugural address to the audience.

Good afternoon. In fact, we are very, very thankful to each one of you, and we understand the evinced interest of everyone present here. And considering that you have keen interest in the business portfolio of Oil India Limited, we offer our heartfelt gratitude to each one of you and every investor, they have reposed faith on Oil India Limited. So as part of the proceedings, we would have a brief address. And thereafter, we'll have a presentation, which will outline the growth story of Oil India Limited, and then we will take up the Q&A session. So as part of the opening remarks, I would welcome all the analysts and investors to this meet and thank all of you for being here for a discussion with the management of the company. While most of you are fully aware about our company, our areas of operation, the policy environment concerning the upstream oil sector in the country, adding to what you already know would help us in communicating the message about the company's recent achievements and growth story. As you all know, it was formed in 1959 as a joint venture company between Burma Oil Company and the Government of India. And Oil India Limited became a public sector undertaking in 1981 with the Government of India taking over complete ownership of the company. The company has been performing its mandate as a national oil company over the last 6 decades. With an IPO in 2009, OFS in 2013 and few subsequent share transfers to CPSEs through ETF, the present shareholding of Government of India in Oil India Limited stands at 56.66%. Today, we are the second largest and also the oldest national upstream oil and gas company in India. Having briefly covered the history and heritage of the company, now let me have the narrative, how did we travel since mid-'90s. As you all know, since mid-'90s, our operations are primarily concentrated in Northeast India and in blocks allocated to us under nomination regime. Under the category 1 basin, the Assam shelf basin where Oil India operates, is considered to be one of the prolific hydrocarbon bearing formation, and we are operating out of the Assam shelf. And we since then have not only harnessed our expertise in the E&P sector in Assam or upper part of Assam, we have also now extended our portfolio across the country. As you all know, we have operating blocks in Rajasthan. Then we had the new exploration licensing policy and considering our participation in new licensing -- new exploration licensing policy blocks. We have 6 blocks and 4 as operator. 2016, 2017 witnessed a very pathbreaking reform, which enabled the Government of India through its process to choose the exploration acreages under Open Acreage Licensing Policy. Under OALP, so far, we have acquired 29 blocks as operator. And presently, in totality, we are operating in 68 upstream acreages, including 27 nomination blocks and 3 discovered small fields spread in different geographies across the country. The presentation would actually cover the entire spread. We also have, under the overseas OIL equity initiative, 10 such projects in 7 countries. As part of 29 blocks, today, we have a total acreage of about 53,000 square kilometers, for which we have already completed the seismic data acquisition. And as we all know, as part of the upstream activity, after the seismic data acquisition is done, we undertake processing, interpretation to identify prospective locations, for which next stage of exploratory drilling happens. Our present crude oil production comes mostly from our fields in Northeast India and majority of natural gas production also comes from this area. About 10% of our natural gas production is contributed by producing areas in Rajasthan as well. In spite of the fact that most of our fields are old and matured, and let me share with you all that the Naharkatia field, which was post independence first oil discovery happened in 1953, and the Moran field, which was discovered in 1956, are still producing. And that is where Oil India Limited takes credit in operating those mature fields. In fact, we have been able to contain the decline of the pressure and improve our crude oil and natural gas production through successful improved oil recovery or enhanced oil recovery techniques. The year just concluded 31st March 2023 witnessed about 5.48% of crude oil production in terms of percentage growth to 3.18 million metric ton. And the company has also achieved highest-ever natural gas production of 3.18 BCM in the year 2022, '23, increase of 4.43% over last year. During the last year, the company has also added one more discovery to its kitty, which is known as Sesabil area in Assam shelf basin, which is producing currently 83 cubic meters per day of oil. Besides crude oil and natural gas production, we also operate, as you all know, 1,157 kilometer of crude oil pipeline, which is primarily supplying crude oil of ONGC and Oil India fields to all the Northeast refineries. And we also supply product of Numaligarh through a 600-kilometer pipeline to the Siliguri marketing terminal, from which it goes to the Mainland or India. And as we speak, the product pipeline is under capacity expansion to be able to evacuate the enhanced product portfolio that is foreseen possibly because of the Numaligarh refinery expansion project. The current year 2022, '23 witnessed the highest ever PAT for Oil India Limited. On a stand-alone basis, the number stands at INR 6,810 crores, which is 75% higher than the last year's PAT. The turnover also witnessed a significant growth and -- which stands at INR 23,272 crores, which is also the highest ever. The turnover during last year was INR 14,530 crores. As we all know, the company has 3 main operating segments: crude oil, natural gas and pipeline transportation of crude oil and petroleum products. All these segments have shown excellent results during the recently concluded annual results declared for financial year 2022, '23. The Numaligarh refinery, our material subsidiary, has also achieved the highest-ever crude throughput beyond the nameplate capacity, and that works out to be 3.091 million metric ton for the year ended 31st March 2023 since its inception. And the gross refinery margin reported as $19.86 per barrel for the year '22, '23. At the group level, OIL also reported highest ever turnover of INR 41,038 crores for the year '22, '23, and that's an increase of about 37%. At a group level, the PAT was also highest ever of INR 9,854 crores. The company has declared a final dividend of INR 5.50 per share. And with this, the total dividend is INR 20 per share or 200% of face value of our shares. We are currently, as we speak, preparing the strategic roadmap for 2040 in coordination with an internationally acclaimed strategy consultant. The plan is being worked out through an active engagement across the stakeholders and the main stakeholder of Oil India Limited, the employees of Oil India Limited. And the focus, a, to enhance the production; enhance our footprint in other areas of operation; pursuing the exploration efforts, both through organic and inorganic growth; and also to have diversification initiatives through forward integration and create an alternative energy portfolio. Our company, as we -- you would have noticed, is being led by a very experienced management team you can repose faith on. We are best of the both worlds with independent and an autonomous management and the benefit of Government of India linkages, which adds to our capabilities of engaging with overseas counterparts, which helps us being a national oil company through a G2G linkage in oil and gas sector. With this, I would request my colleague to take forward today's presentation. And then after that, I would like to invite all of you to participate in a very constructive Q&A session. Thank you very much.

Dear friends from the investors and analysts fraternity, Chairman sir, Board members of OIL on the dais, professor sir from Antique, senior colleagues from Oil India Limited, ladies and gentlemen, a very good afternoon to you all. And at the very outset, I would like to convey our special thanks to the investors and analyst friends for sparing their time today afternoon and really, really encouraging the oil team. We are very thankful for that and thankful for your active participation and presence. In today's presentation, we are trying to give a company overview; the OIL's strategic strengths and overview on OIL's assets; the company's operating and financial performance; performance of OIL's material subsidiary, Numaligarh Refinery; our growth plans and we'd also like to highlight the ESG initiatives taken by OIL. Starting with our journey so far for last 64 years, we are a very old company. We are -- we feel proud of that. OIL was found in 1959. And in 1981, Oil India Limited got nationalized. We got, for our consistent performance and growth, the coveted Navratna status in 2010. In continuing with its growth, strive and the opportunities available, OIL started to look for increasing its footsteps into the overseas field. And also under its diversification initiatives, we put our -- we entered into the renewable energy space. In 2012, we commissioned the first renewable energy plant in wind energy plant and solar energy plant in Rajasthan. We got international first credit rating from Moody's and Fitch Ratings in 2014. The company published its initial public offer, the IPO, in 2009, which was a resounding success. As a major acquisition for the overseas front, Oil India acquired, in 2014, its 4% stake in Rovuma block in Mozambique. Then in 2016, we acquired, with an investment of around $1 billion in 2 prolific assets in Russia, Vankorneft and Taas. Both the assets are dividend-paying assets. OIL, under its diversification strategy, has entered into the CGD business in 2018, participating with HPCL and forming HPOIL which was engaged in 2 business areas. And currently, Oil India is having partnership associated through the different JVs and working in 7 business areas -- geographical areas for CGD. A major integration move was initiated in 2021 and OIL acquired major stake in Numaligarh Refinery. With this acquisition, OIL is holding 69.63% in Numaligarh Refinery, being its material subsidiary. And with this acquisition, the company has become a truly integrated energy company. Our continuous strive in the alternate energy space also was with a focused approach. The company was first in the country to capitalize a pilot green hydrogen plant. A brief introduction of the management team of OIL. Our management team is led by Dr. Ranjit Rath, Chairman and Managing Director. Sir took over the charge in August 2022, an alumni of IIT Mumbai and IIT Kharagpur, sir is having a prolific geoscientist with wide experience in strategic formulation, business development, upstream asset management, application of geoscience and exploration geology. The other members in OIL's functional directors team includes Shri Harish Madhav, Director, Finance; Shri Pankaj Goswami, Director, Operations; Dr. Manas Kumar Sharma, Director, Exploration and Development; Shri Ashok Das, Director, Human Resources. All of them are having wide experience of more than 30 years plus in oil and gas sector in their respective fields. OIL Board also have a Nominee Government Director, Shri Vinod Seshan, Director in MoP&NG. Shri Seshan is an IAS of 2008 batch. With his rich experience in different fields in various government departments, he contributes immensely in the functioning of OIL's Board. The Board also have 3 independent directors: Shrimati Pooja Suri, Shri Raju Revanakar and Shri Samik Bhattacharya. All of them are from diversified fields with wide experience and contributing in the OIL Board's functioning. As you all are aware, the financial year '22, '23 has been a resounding year for OIL group. We achieved highest ever PAT of INR 6,810 crores, a growth of 75% over the previous financial year. We achieved highest ever turnover of INR 23,000 crores, an increase by around 60%. Our EPS increased from INR 35.85 per share to INR 62.80 per share in the fiscal year. On the performance side, there is growth in crude oil production as well as natural gas production with more than 5.4% growth in crude oil production. Our production for 2022, '23 was 3.18 MMT. And we achieved highest ever natural gas production of 3.18 BCM, a growth of more than 4% over the previous year. With this performance on the production side, the pipeline throughput achieved during the year was also highest. Our material subsidy, Numaligarh Refinery, they achieved the highest capacity utilization of more than 100%. In fact, their capacity utilization was 103% last year, which is, in any standard, excellent. The dividend per share -- OIL has declared a dividend per share of INR 20 per share. On the strategic strength side, Oil India is a diversified energy conglomerate with significant presence across the energy value chain. We have, on the upstream side, 68 E&P blocks with around 68,000 square kilometer of acreage. To handle its acreage and crude oil and natural gas production, the organization is having sufficient infrastructure. In the international scene, we have presence in 7 countries and in 10 blocks with a reserve -- significant reserve -- 2P reserve of oil 231 million barrels and gas 126 million barrel oil equivalent. We have received continuous dividends from our overseas investments. Cumulatively, it works out to around $800 million from the Russian assets. On the transportation side, we have our own infrastructure of over 1,000 kilometer crude pipeline, spreading from Assam up to Barauni, with facilities for both forward pumping as well as reverse pumping and with a capacity of around 6 million metric ton. We also have pipeline facilities to evacuate products from Numaligarh Refinery, around 660 kilometers of product pipeline with a capacity of 1.72 million metric ton. This pipeline capacity is currently under expansion to meet the additional requirement that will be coming from capitalization of the expansion project of Numaligarh Refinery. So the capacity expansion is up to 5.5 MMTPA for this product pipeline. OIL also has presence in natural gas transportation, having 49% stake in Duliajan Numaligarh pipeline, which helps in evacuation of OIL's gas to Numaligarh Refinery, and also is having 40% stake at the group level in Indradhanush Gas Grid Limited, which is formed for connecting the Northeastern states to the country's gas hub. In the downstream side, as we have already highlighted, we have our refineries, Numaligarh Refinery, which is 69.63% stake, and OIL also have 5% stake in Indian oil. On the petrochemical side, with the diversification initiatives by the company, we have got 20% stake in BCPL in Assam, Brahmaputra Cracker and Polymer Limited. And we have got 48.79% stake in Assam Petrochemicals Limited. In the CGD front, currently, OIL is having presence in 7 geographical areas with 50% stake in HPOIL; with 26% stake in PBGPL; and with 49% stake in Assam -- AGCL-OIL JVC. HPOIL is operating in 2 GAs, PBGPL in another 2 GAs and AGCL-OIL JVC will be taking care of 3 geographical areas, which OIL got -- OIL owned -- the consortium owned under the 11th CGD bid. In the renewable space, we have a total capacity of 188-megawatt with 174 megawatt wind energy in Rajasthan, Gujarat and Madhya Pradesh, and another 14 megawatt in Rajasthan. As we have already mentioned, OIL is the first in the country to commission a pilot plant for green energy production -- green hydrogen production at its pipeline facility in Jorhat, Assam. OIL has sufficient infrastructure to cater to the need of the E&P operations of the organization. We have got our own in-house as well as chartered hire facilities to cater to the need of seismic surveys, drilling, wireline logging, field development, field reservoir, IOR/EOR as well as transportation requirements. This slide will show you our presence across the energy value chain in the industry. We have got 69.63% stake in Numaligarh Refinery. This refinery is having 3 million metric ton capacity at present and we can -- and is undergoing expansion up to 9 million metric ton. Also, a pipeline is being constructed, 1,640 kilometer pipeline, which will cater to the additional crude requirements of the refinery. The total project cost being INR 28,000 crores. Numaligarh Refinery is also undergoing another project for production of ethanol -- 2G ethanol via ABRPL with a project cost of INR 4,000 crores, basically for production of ethanol from bamboo. Another 360 KTPA polypropylene plant is envisaged with a project cost of around INR 7,000 crores. The refinery has recently commissioned a pipeline from India to Bangladesh. It is called India-Bangladesh Friendship Pipeline. And this pipeline will definitely help Numaligarh in captivating its product and marketing -- will help for product and marketing of the refinery. In the petrochemical space, OIL has -- as a group, has 20% stake in BCPL. BCPL is operating since 2016, having its petrochemical complex at Lepetkata. And also 48.79% stake in Assam Petrochemicals Limited, that's in upper Assam district in Namrup, Assam. Assam Petrochemicals Limited has recently commissioned, in April 2023, 500 TPD methanol plant. And the project is under stabilization at this moment. In the gas transportation and CGD front, we have 40% stake, along with NRL, in IGGL, Indradhanush Gas Grid Limited. Indradhanush Gas Grid Limited is being given the responsibility of constructing pipeline connectivity with all the Northeast state capitals, which will -- under the government's Hydrocarbon Vision for Northeast 2030, will connect Northeast capitals to the gas hub of the country. The other partners in Indradhanush Gas Grid are ONGC, GAIL and IOCL. We also have a 49% stake in Duliajan Numaligarh Pipeline Limited. Other two CGD initiatives from OIL side with 26% stake in PBGPL, which is having a CGD network in 2 geographical areas in Assam, and HPOIL with 50% holding by OIL and 50% by HPOIL -- by HPCL, which is operating in Maharashtra and Haryana. OIL has a strong credit rating with highest domestic rating of long-term AAA Stable and short-term A1+ by both CRISIL and CareEdge. And we also have international rating from Moody's and Fitch, both investment-grade ratings and which is at par with the sovereign rating of the country. OIL's 56.66% holding is by Government of India and rest by institutional investors and public. An overview on the domestic assets, the acreage of the company. As our Chairman sir was telling, we have got 63,000 square kilometer of areas with 63 blocks which are operating and also another 5 nonoperating blocks with around 5,000 square kilometers. This is spread across the country with, of course, most concentration on the northeastern side of the country, where we have got a prolific presence. I would like to highlight here that the blocks that we have received under OALP, out of that, 72% of the blocks are in category 1 basin, which represents that commercial operations are already in place in these basins. Our presence in overseas assets. We have got presence in 7 countries, 10 projects. And out of that, with a total acreage of 44,300 square kilometer. A few highlights of the major 3 assets. In Russia, we have got -- in 2016, we had acquired Tyngd, Taas-Yuryakh, and Vankorneft with an investment of $393 million for Taas and $598 million for Vankorneft. The cumulative dividend that the company has received from Taas as on date is $389 million, so it's almost 100% of the original investment. And for Vankorneft, we have received a cumulative dividend of $424 million, which stands out to around 70% of the total investment. OIL also have 4% stake in Area 1 Rovuma, Mozambique, which was equaled in 2014 with an investment of -- the cumulative investment is $1,450 million as on date. The project is currently under force majeure since April 2021 for law and order situation in the country. However, with the developing stories, it is expected that the project will resume by mid-July 2023. A glimpse of operational and financial performance of the company. OIL has been a driver of exploration in India. This slide, you can see that we have a cumulative 2D LKM, line kilometer, of around 500 in the year 2013, '14. And from that, by 2023, we have increased to 20,526, an increase of almost 40x. For 3D, similarly, 745 was the number for 2013, '14, and which has increased to 7,240 in financial year '22, '23, an increase of almost 10x. Similarly, on the drilling front, combined development and exploratory wells, our numbers in 2013, '14 was 35, and this has increased to 417 in financial year '22, '23, an increase of almost 12x. So with this aggressive exploration and drilling initiatives, the company has been able to achieve a resource base of almost 500 million barrels of crude oil and 870 million barrel oil equivalent of natural gas in the 2P reserve category. OIL has been able to maintain its reserve replacement ratio always more than 1. For '22, '23, the reserve replacement ratio is 1.01. On the acreage side, we'd like to highlight that in the last 5 years, our acreage has increased by almost 7x. In financial year '17, '18, our acreage was 9,300 square kilometer, which has increased to almost 63,000 square kilometer by the end of financial year '22, '23. The company is also on the lookout for assessment of ultra deep and shallow water currently being carried out. On the reserve base of the company, as we have mentioned, we have got a domestic 2P reserve of 500 million barrel oil equivalent and 870 million barrel of gas. With combined domestic and overseas, the oil reserve is 732 million barrel oil equivalent and 1,004 million barrel oil equivalent of natural gas. On the 2P reserve type, our percentage of reserve represents natural gas 63% and crude oil 37%. A glimpse of the financial performance of the company for the last 3 years. I would like to highlight here that OIL's crude oil production in financial year 2021 was 2.96, which has increased to 3.18 in financial year '22, '23, a growth of almost 7%. And on the gas front, in 2021, it was 2.64 BCM, which has increased to 3.18 BCM, an increase of around 20%. Similarly, there has been consistent performance by Numaligarh Refinery also with current year's throughput being at 3.09 MMT. With this increased production, both on the crude oil and on the natural gas side, the company has been able to receive highest ever pipeline throughput of 8.19 MMT in previous financial year. At a consolidated level, our total income is INR 41,758 crores and profit after tax is INR 9,854 crores. Net worth of the company is almost INR 40,000 crores at the group level with an EPS of INR 80 per share. On the price realization front, last financial year has been really good with the gross realization increasing up to $95.47 per barrel. But due to the levy of special additional excise duty, the net realization remained almost at the same level with the previous financial year. However, on the natural gas front, you can see that for financial year '21, '22, our average realization was 2.35, which has increased to 7.34 in financial year '22, 23. The government has come up with a new natural gas policy in April last year. And under that policy, there has been fixed slab for natural gas price with the minimum price at $4 per MMBtu and the maximum at a slab of $6.5 per MMBtu, which is linked to 10% of the Indian basket price and with a provision for increase in future. So this definitely stabilizes the gas pricing scenario and is an encouragement to the E&P sector. On the financial performance side, our revenue has increased in the financial year '22, '23 up to almost INR 25,000 crores. Profit after tax, INR 6,810 crores. EBITDA, there has been increased from INR 7,266 crores to INR 11,000 crores. And EBITDA margin also has marginally increased to 45%. And with this, the earnings per share has increased from INR 35.85 per share to INR 62.80 per share. With this improved performance, both on the financial side as well as on the operating side, the company has paid increased dividend to the extent of around INR 600 crores with the current year dividend declaration being INR 2,169 crores, a INR 20 per share dividend, against INR 1,545 crores last year. The net worth of the company has increased to INR 31,600 crores, and book value has also significantly increased to INR 316.9 per share. On the debt front, Oil India is having a healthy leverage. For -- at a stand-alone basis, our debt is INR 11,000 crores as on 31st March 2023. And at the group level, our debt is around INR 80,000 crores. There is additional debt at Numaligarh Refinery to the tune of around INR 3,000 crores plus we have got a $500 million debt at Numaligarh -- at Singapore level. So that works out to around INR 18,000 crores at the consolidated level. There has been increase -- improvement in the debt equity percentage. The 31st March debt-equity ratio works out to around 35%. We have been able to liquidate our loan -- the entire domestic loan that we have taken for NRL acquisition. Outstanding last year was INR 1,500 crores, and that was completely repaid in '22, '23. So as on date, the debt standing in the books is for acquisition of Mozambique project. A glimpse of the contribution to exchequer by Oil India Limited. Total contribution for financial year '22, '23 in -- under central exchequer is INR 7,856 crores and under state exchequer is INR 4,478 crores. Combined with OIL and NRL, the total contribution to exchequer works out to around INR 17,350 crores with OIL and NRL being the major contributor to the state exchequer of Assam. Both OIL and NRL contributes around INR 5,000 crores to the state exchequer. Few performance highlights of our material subsidiary, Numaligarh Refinery. Numaligarh Refinery currently is having a capacity of 3 million metric ton. OIL's stake is 69.63%. The refinery is undergoing major expansion from 3 million metric ton to 9 million metric ton. And with a pipeline, which is coming up 1,600 kilometer pipeline from Paradeep to Numaligarh Refinery, basically to cater to the additional crude requirement once the expansion is commissioned. Also, the refinery is taking a project for ethanol production, the biorefinery for 2G ethanol production. And another polypropylene unit with 360 KTPA is envisaged. The refinery, as we have already mentioned, has commissioned an India-Bangladesh product pipeline in March 2023. For the financial year '22, '23, the refinery's crude throughput is 3.091 million metric ton, which is 103% of its capacity. Its distillate yield works out to 87.9%. Income from operations, INR 29,785 crores. EBITDA, INR 5,319 crores. PAT, INR 3,703 crores. And a very healthy gross refinery margin of $19.86 per barrel. Oil India's growth plan. We would like to categorize the growth plan under upstream, midstream, downstream and in the alternate energy space. Under the upstream segment, the company has Mission 4+, which the company -- with which the company envisages to increase its crude oil production to 4 MMTPA and natural gas production to 5 BCM per annum. The company is already in -- aggressively into the OALP regime for drilling. To increase its global presence, Oil India is in pursuit for overseas international assets. The company is having strong trust on enhancement of its gas portfolio, considering Government of India's strategy in this regard. And also an enhanced portfolio increase from a single asset to a multi-asset Pan-India presence. In the midstream segment, OIL already have its stake in IGGL, which is increasing -- which is basically implementing the project for pipeline networking under the CGD business. OIL is also envisaging increased pipeline connectivity for the product pipeline for Numaligarh Refinery. And under this project, from 1.72 MMT current capacity, the product expansion -- pipeline expansion plan is for up to 5.2 MMT. Also through its participation in DNPL for gas transportation, there has been expansion plan in that regard for the gas transportation as well. Under the downstream segment, with its presence in Numaligarh Refinery. there is already an aggressive push for the NRL refinery expansion. There is concerted effort towards development of the CGD network in Assam, Haryana and Maharashtra. Also, the company is envisaging its presence in the petrochemical industries, as we have explained in our earlier slides. In the alternative space, we are into diversification towards the green hydrogen initiative. OIL has already commissioned its first pilot plant and it's under review and formulation studies are going on so that use of the green hydrogen in business are being explored. The company is also looking into opportunities in CBG and additional bio ethanol plant, focus on all renewable energy resources including geothermal, coal gasification and also participation in EV revolution for Indian mobility. Regarding the Mission 4+, which is the primary growth plan for the company under the upstream segment, the company has elaborate plan and is also in the lookout for collaboration with international oil companies. It's looking for production enhancement contracts and technology sharing models with international companies. There is well -- the well drilling plan is 77 number of wells to be drilled in '23, '24 and 76 numbers of wells to be drilled in '24, '25. Oil India is also acquiring technologies for extended reach and deep drilling for Eocene plays. Under the 4 -- Mission 4+, the company has identified 5 fields and aggressive drilling plans are being formulated in all these 5 fields. The company is, -- as you are aware, is mainly operating in Assam area and it's a maturing asset. So with its adoption of advanced technologies and IOR and EOR initiatives, OIL has been able to maintain a sustained production and not only sustaining its production, but also increasing the production from the asset. OIL has been a pioneer in different IOR, EOR initiatives, and I would like to highlight a few of the initiatives, like low salinity water injection, polymer flooding, hydrofracture initiatives, cyclical steam stimulation for heavy oil field in Rajasthan. With all these initiatives, the company is looking for achieving, by the end of financial year '23, '24, a crude oil production of 3.4 million metric ton and gas production of 3,330 MMSCM. To support this growth plan, we have got a large CapEx outlay. The actual CapEx incurred for financial year '22, '23 is INR 5,500 crores and the BE for -- budgeted estimate for '23, '24 works out to INR 4,900 crores. At the consolidated level, both OIL and NRL combined, our CapEx for '22, '23 is INR 12,400 crores and for '23, '24 is INR 14,000 crores. Oil is well positioned for its planned investments and to achieve its goal for growth. It has got a strong cash and margin fundamentals with a very strong EBITDA and strong operating cash flows. The consolidated cash flows for the company for financial year '21-'22 was INR 9,310 crores and for '22-'23 is INR 11,000 crores-plus. Its refinery, Numaligarh Refinery is having a consistently healthy refinery margin, and Oil also enjoys the benefit of a very competitive cost structure. On the borrowing side, we have entirely repaid the INR 6,300 crores loan that we have taken for NRL acquisition. The current funding is only for Mozambique project, and all other CapEx and investments the company has made from its internal accruals. At a consolidated level, the debt/equity ratio for '22-'23 is 44%. The company has a significantly high interest coverage ratio with EBITDA to interest for financial year '22-'23 at the consolidated level is 18x, which gives a strong liquidity and propensity for additional debt raising for the company. A few highlights on the ESG initiatives of the company. Both Oil and NRL is walking towards with a government's -- in line with the government's target with a net 0 target of -- by 2040. The initiatives taken by Oil on the environmental risks and mitigating measures includes towards carbon transition, physical climate risk, water management, pollution and waste management as well as maintenance of natural capital. Oil being a socially responsible corporate citizen is also taking all the measures required for improving its customer relation, human capital, demographic and social trends, health and safety as well as responsible production. Oil is known for its CSR initiatives. It has been taking initiatives in all the fields of CSR, like promotion of art, culture and heritage, women empowerment, environment, augmentation of rural infrastructure, educations, sports, skill development, health care. To summarize, I'd like to say that Oil India Limited is the second largest public sector E&P company, with a very strong credit metrics, having its presence of over 6 decades in -- with E&P expertise, having a steady and sustained output growth with strong financials and with the aggressive exploration and drilling activities and which are focused on the category 1 basins that has been allotted to the company under the OALP regime and also for acquisition of discovered and additional producing assets in overseas fronts, along with diversification initiatives across the energy value chain. I'd like to share contact person details for the investors' context. For institutional investors/analysts, Shri. S. Maharana, CGM (F&A). And for retail investors, Shri. A.K. Sahoo, Company Secretary. Their e-mails are also presented. Thank you.

Dear friends, with the completion of the presentation, our house is now open for question-and-answer. But we have a request to the participants, please kindly mention your name as well as your -- the name of your organization before raising your queries. Thank you very much.

Yes. My query was, actually, a biggest problem for India is that we are oil-dependent in the global market and those prices keep varying like anything depending on global factors. So my question is, as far as India's oil dependency is concerned, what steps are being taken by Oil India and ONGC? And if you can share the CapEx plan for the next few years, and how much is going towards downstream and upstream? Because being a diversified in all kinds of areas like, there are numerous gas pipelines and city gas distribution is a good initiative. But finally, our focus should be on oil exploration and making India less dependent on the world as far as oil or crude is concerned. [ Sharath Chandra ], investment adviser.

All right. So a very valid point. Yes, India, from an consumption point of view is heavily dependent on crude, oil import, which stands at about 85% and the demand is ever increasing. So there are two-pronged strategy which is adopted. One is to enhance the exploration efforts and also from a consumption point of view, how do you displace through the blending mechanism? So broadly, one is like we are evaluating the possibility of 2G ethanol being blended in petrol. Methanol is being planned to be blended in diesel, so that the mobility component of the consumption is addressed. Similarly, to generate -- to use EV to have solar or renewable energy. Now that's the consumption part. From a supply side, there are 2, 3 things which is happening. One is to ensure overseas equity. Second is to create strategic petroleum reserves so that you meet your interim requirements. And third and which is very important and Oil India is actually pursuing sincerely all its effort is the exploration front. So both production from the existing fields so that the domestic production would increase. That's through improved oil recovery and enhanced oil recovery. That's one piece. And further upstream is the exploration. Now if you would see the presentation, the current portfolio from an exploration acreage is hovering around 60,000 square kilometers. And the hydrocarbon value chain, as all of you would appreciate, it starts with the upstream segment where we do seismic acquisition, processing and interpretation. So as we speak, the open acreage licensing policy reform has been actually a boon where we have chosen the areas which are prospective. And you would all have also taken note that majority of our OLP blocks, about 76%, falls under the category 1 basin, which is the most prolific and where commercial discovery has happened. So having taken note of that, we have 60,000 square kilometer of OLP area acreage under exploration. Seismic API, both 2D and 3D is mostly done. We have also identified prospective locations. And as we speak, we have a couple of blocks in upper Assam, North Bank of Brahmaputra under exploration. We have a couple of blocks, 5 of them, 15,000 square kilometer in Mahanadi Basin. We have about 13,000 to 14,000 square kilometer in the Bikaner-Nagaur Basin in the western flank of the country. All, -- as we speak, we have also identified prospective locations and in Mahanadi Basin and in the upper reaches of Assam OLP drilling campaign has already initiated. This besides Oil India has also taken a leap of faith in having offshore acreages. So we have 2 blocks, Andaman-Nicobar Basin East and Andaman-Nicobar basin West, where we are also having done seismic. We have identified prospective locations. And we have -- we are actually in the process of going to the market to seek drilling service providers. This is Category 2 basin. Simultaneously, we have also picked up one Category 3 basin in Kerala-Konkan, which is also another offshore asset for which the seismic is done, and we have identified one prospective location, and we are going to do the drilling exploration there. So that's the kind of portfolio where concerted thrust is on exploration because our objective is to maintain the reserve replacement ratio always above 1. So we are intending to enhance our production and also adding new resources or new reserves to be very specific to the pool so that the RRR ratio is always 1. I think that's suffice. Thank you.

This is Probal from ICICI Securities.

Can we just pass on the mic to this gentleman? He has been the person who has raised hand. That's okay? All right. Okay. Please continue. As long as he is fine, we are okay.

A couple of questions. With respect to the 4 million tonne oil and the 5 BCM gas target, I apologize if I have missed this, but what kind of a timeline have we put internally to achieve this, number one?

Yes, go ahead. Go ahead.

Yes. The second question was with respect to the NRL expansion, if you can refresh us, please, with the time lines, now with the additional petrochemical expansion or the petrochemical plant, along with the biofuel plants. All of these combined, what kind of timelines are we looking at in terms of commissioning? And the third question was with respect to the pilot hydrogen plant. I don't know if it is possible, but can you just share some economics in terms of our initial results with respect to the cost per kg that we are actually able to achieve what sort of economics are we seeing with our pilot project and the test results that we have done? Those are my 3 questions.

Okay. So first of all, very good questions. In terms of timelines, we are looking at under Mission 4. We all understand that this production of Mission 4, 4 million tonne of crude oil and 5 BCM of natural gas would primarily come from the main producing areas of Oil India Limited. And we have picked up a couple of EOR activities in terms of hydrofracture, in terms of low salinity water injection, in terms of CO2 injection also. And we are looking at actually '24-'25 as a target. I would actually also highlight that while we intend to meet the 4 million tonne, the EOR is also being aggressively supported or supplemented by workover efforts to counter the current decline. And effort is also on to have more discoveries in the main producing area. That's regarding the Mission 4+. As far as Numaligarh Refinery is concerned, there are 3 components to it. One is the cross-country pipeline from Paradip to Numaligarh, 1,640 kilometers. The target completion days is December 2024. And the Numaligarh Refinery expansion plan from 3 million to 9 million tonne is also coinciding it with December 2024. The 2G ethanol plant, which is under construction right now, our every effort is there to complete it by December 2023, because significant component of physical progress has already happened. As far as the pilot hydrogen is concerned, I will be very glad to share with you that it has been an R&D effort, which is based on 500 kilowatts of solar photovoltaic source where electricity is generated, we have got a 10 kg per shift, 30 kg per day possibility and R&D effort with about INR 5 crore. Now it will not be prudent to calculate per kg cost out of it because it is not an industrial scale. But just to share with you, the current national green hydrogen mission has actually opened up the [ Vista ] And we have already taken the first-mover advantage, and you all would know that honorable Prime Minister flagged off the start-up initiative of Oil India Limited, where we run a hydrogen fuel cell bus in Bangalore this year during early February under, I mean, India Energy Week. Now having said that, with the possibilities of national hydrogen mission, green hydrogen mission, now there is a concept of Hydrogen Valley is under discussion under the Department of Science and Technology. And as part of that Hydrogen Valley, a research organization would took -- will take the lead supported by the industry partners. So I'm very glad to say that we have evidenced our expression of interest to DST that the Northeast Hydrogen Valley will be led by IIT Guwahati, where Oil India Limited and NRL are actually supporting the initiative as part of the industry partner. This besides 18 megawatt of hydrogen generation by NRL is also under construction or we have just placed the LOA, that would primarily look at the consumption requirement of Numaligarh Refinery. In addition to that, we are also having several discussions for the purpose of Oil's participation in other possible hydrogen valleys, which is primarily coastal driven. Thank you. Yes, please.

Sir, [ Ramesh Bodhwani ] from [indiscernible] First and foremost, it is a great delight that you are an alumni of IIT Mumbai.

Thank you.

The atmosphere and the vibrancy at IIT Mumbai is simply unbelievable.

Thank you. Thank you very much.

Producing -- I mean, giving us only entrepreneurs or heads of big corporates as you are placed. So that was the 1 part. My colleague has asked a lot of questions, which were in my mind. But in the presentation, there was a reference that our debt today is around $500 million, which we have invested in Mozambique. And Mozambique in one slide showed us 50 to 75 TCF of gas reserves. Now I would like to have your insightful observations on that because energy security is on the prime agenda?

I'm so glad you asked that question. First of all, thank you very much for that appreciation. It's all about the cause of energy security of the country. See, Mozambique has been a very strategic decision and Mozambique investment is actually an India Inc. investment, where we have Oil India, BPRL and OVL, together, we have invested. Unfortunately, what has happened, there was a change in the operatorship from Anadarko and then finally, it is with Total. The best part is the force majeure which was in place, it is all likely that we are going to have very soon the force majeure getting lifted. That's number one. Number two, we have already got the respective approvals in place and till now, we were honoring the cash calls of the operator to start the construction process. And as we speak, we had discussions with the operator, both -- I mean, together as India Inc. And there are discussions are on in terms of resuming the operations of the both offshore field development and then the LNG trains. So in all probability, the way we have reassessed the situation, a, though there will be an escalation of investment, and I must share this, the project is going to get on stream by '26 -- sorry, '27. The best part of Mozambique, which also under discussion is the Eastern Coast of refinery -- sorry, Africa is in the closest possible proximity to the Western Coast of India, which has got maximum LNG terminals to receive natural gas. So serious discussion is also being undertaken at a G2G level and at a sectoral level, to lift the natural gas, the LNG, gasified and re-gasified, here on the Western Coast. So in all probability, we are going to resume the work, and we will have now by virtue of the discussion that we had, we'll now have more active engagement of the stakeholders as India Inc. in the project. That would also be a learning curve for us because at this point of time, that will be one of the largest offshore field development in terms of gas field development. So we will be able to create a capability development for replicating such learnings in the Indian waters. So we are all positive about the Mozambique investment.

Yes. My name is Vipul Shah. So sir, my first question is what is the cumulative expense we have done till date on NRL from 3 million to 9 million tonnes? And all the -- it is on the NRL's -- all the debt is on the NRL's balance sheet or it is on the Oil India's balance sheet? And what is the coupon rate for the debt which we have incurred?

Okay. I would request DF Shri. Harish Madhavji to take this question.

About the first question of the total investment made so far. As on 31 March 2023, total investment is about INR 8,000 crore to INR 8,500 crore. That is the cash investment, which has happened. And the commitments are about INR 15,000 crore, INR 16,000 crore contract commitments have been completed. The second question was whether the debt is on Oil India's book or it is entirely on NRL's book? The debt will be entirely on NRL's book. There is no corporate guarantee even given by the Oil India Limited. This is completely stand-alone NRL books. And as far as the interest rates are concerned, I think these are all commercial transactions, which even possibly be being the owner of the company, we don't have very, very detailed information about those rates, and we will not like to share those rates.

So what will be the peak debt for NRL?

Peak debt for NRL will be about INR 18,900 crore total.

18,000?

Yes.

And marketing rights for expansion, 3 million to 9 million tonnes will be with BPCL only?

Okay. Let me take that question. This is -- Numaligarh Refinery gives us an advantageous position, which is very well aligned to the Look East policy. So as you would have noticed, the India-Bangladesh Friendship Pipeline is on. There is an active discussion is going on with the Bangladesh government in terms of our supply of diesel and any additional product. That's about Bangladesh. We are also looking at further growth in the consumption in Northeast. And as we speak, the pipeline, the product pipeline is getting expanded, capacity expansion for reaching out through the Siliguri marketing terminal and further possibility of going to Barauni. And it is not exclusively to BPCL. The all the 3 oil marketing companies will have, and as we speak, discussions are underway, to have marketing rights for NRL product because I would actually agree with you from 3 to 9, we have already started working for it. So once the refinery is in place, by then, we have a structure where all the 3 oil marketing companies will have access to the products and NRL will also contribute under the [ Lucas ] policy.

And sir, lastly, will there be any equity contribution towards Mozambique in the next few years?

See, it's like this. Since the project was under force majeure, the operator is in negotiation with all the large contractors, EPC contractors. And in case there is a component or a cost escalation, the process of approval will be there. And with the current approvals we have, we have enough to honor the cash calls till 2024. So the project will kick start once the force majeure is lifted and which is very likely, very soon rather. And once we arrive at a revised cost estimate, a firm number at that, we will possibly need to enhance our composition or our equity contribution. But we will have more clarity on that as we speak, maybe Q3 or Q4.

Can you quantify, sir?

No, not right now. Not now. We don't have that number because the operator is working on it right now.

Yes. This is Sabri Hazarika from Emkay Global. So I have got 3 questions. The first one is relating to the GST on royalty on crude oil and natural gas. I think ONGC has taken a write-off in their books. You also have got around INR 2,500 crore or INR 3,000 crore of contingent liabilities regarding this. So post this ONGC's write-off, what is your assessment and you being from the mining sector, how do you think the other mining companies are placed in this entire issue? That's the first question. The second question is on NRL. So I think the rights issues are happening for NRL. So your stake has already gone up to, I think, 75%. So is there any risk of like -- not risk, I mean, is there any chance of your stake actually going up with Assam government not like participating in the rights issue? Or do you think you'll maintain 69.6%? And also how the valuation is being done for this rights issue pricing? That is the second question. And the third question is on net 0. So is it a firm target or it is a tentative target? And whether it includes Scope 1 plus Scope 2 both or it's just general? Yes.

Okay. Let me take the first -- last question first. It is for Scope 1 and Scope 2, and it is a firm target, 2040. And it is actually at a group level where both Oil India and NRL team is working together under the ESG mandate. As far as the NRL stake is concerned, no such discussion right now there for any dilution of any other stakeholders, equity or enhancing Oil's equity. And as far as the GST on royalty, see, it's a subject which is under judicial review, and we have submitted our petition on that. And I would request Director Finance to further give his views on it.

See, both Oil India and ONGC the matter is similar, and we were following a similar policies as far as the accounting or treatment of this liability in the books of accounts is concerned. And for us, we don't find any trigger as of now or any change in the matter before the court we have a stay on the payment of these demands beyond a particular time -- point of time. So I think for last 1, 1.5 years, even the cash deposits are not happening. So matter is under litigation. This is a new development which ONGC has taken. What call they have taken, we don't know. We can't comment on that. But as far as my company is concerned, there is the litigation going on. I think we are in full favor of continuing with that. But this is a new development now. We'll have to take further basically interaction with our legal counsels who are dealing with this case in the Guwahati High Court and the Rajasthan High Court. And if something is required, we will take appropriate action. But at this point, I don't think any change in the policy or treatment of disability by Oil India is warranted or we are going to comment.

Right. So just a follow-up. So the Guwahati High Court basically put a stay on this entire thing. I think the last order came out in November 2021. Since then, has there been any hearing or has there been any updates from the high court side? I know Supreme Court bench is also looking into that, but...

There's no hearing on the merits in the case so far.

Okay. And are you expecting something soon or it could be taken up by Supreme Court only?

No. The matter is standing in the Guwahati High Court, so it will be taken up by the High Court only.

My name is S. Suneesh. I'm from Nirmal Bang Equities. So in Numaligarh Refinery, is it possible to share what is the extent of the reduction of special additional excise duty in your gross refining margins? Because the delta we have seen in FY '23 for Numaligarh seems to be much less than for the other refiners. So if you can shed some light on that would be great.

See, I don't think it will be possible for us to give you that number, how much is the impact of the special additional excess duty on the refining margins. The reason is this additional excise duty or the windfall tax, it has been factored into the refinery transfer prices. And that particular thing refinery transfer price is realized on the products it goes into the GRM calculation. So going beyond those calculations, beyond the refinery transfer prices, it's not possible right now.

Sure. So now if you go back to the discussion about Mozambique gas, I know there could be some escalations, so you may not have the final project cost. So what is the current cost estimate for that entire project for the upstream as well as the LNG? And -- so -- and in terms of the heads of agreement, sales agreements, is there any formed agreement for placing the LNG and placing the cash from the gas development project? Can you give us some details on the contracts?

Okay. The -- see, it's like this. The people who are going to place this order, that discussion is just initiating because Total, as an operator identifies or acknowledges that it is India Inc., which is an investor in that particular project. And considering the fact that Total itself is having a terminal in the Western Coast and -- we have Petronet LNG, we have GAIL, Dabhol. So the discussions are actually now just frutifying or about to kind of get to that particular stage, where Oil India is not involved. So therefore, this is at the operator level because all those discussions will happen actually at the operator level, not Oil India's involvement. So as and when that matures probably we will -- will all of us will come to know about it.

Okay. My final question is, if you're looking at the CapEx you're undertaking in NRL, the polypropylene project and 2G ethanol project, what is your sense in terms of the viability of this project? Because refining, at the end of the day, there is no hang off the fuel demand coming down globally because of the electric vehicles. And the project cost is fairly high, if you look at the cost. And secondly, similarly, the 2G ethanol project, the cost seems to be very substantial. And the polypropylene project is another INR 7,000 crores, which pretty much everybody and his mother is putting up, a polypropylene project, if you see the history. So what is the kind of IRR you're working with for these projects? And when do you expect the positive cash flows from these 3 projects? If you can give us some sense on the timeline.

Okay. So there are 2 parts to it. One is the necessity of meeting the 20% ethanol blending in MS, that happens through the 2G ethanol route. And as we know that there is also a concern of food versus fit. Now this 2G ethanol of NRL, which is under implementation right now is from bamboo. Hydrolysis of bamboo. So this was -- for the first time, this was attempted. And in fact, to share with you, we are now looking at another -- putting up another unit. So a prefeasibility study, as we speak, is being assigned to take up another unit also. That's the kind of bamboo that is available in Northeast. And from an India story, the oil and gas is used to stay. We are going to have a transition, but this transition is over a period of time. And since the demand is increasing multiple, 2.5x the quantum might reduce, the percentage of oil and gas in the energy mix might reduce, but the quantity terms, it is bound to increase. So in fact, as we speak, the demand for diesel and petrol is going to increase multiple times. So considering that the 2G ethanol will have a major role to play. And we are only looking at -- currently, we have done 10% and we are supposed to do 20%. Now the moment we have this on steaming of ethanol plant, we will definitely have market for it. One step further is we are also looking at ethanol blending in diesel. So that's also another area where Oil India is working through the subsidiary of -- through its JV of Assam Petrochemical. Now that's part of the ethanol story. The petrochemical, as we speak, now stand-alone refineries would make more sense if we have the petrochemical derivative because the growth trajectory of petrochemical is 35%. And in northeastern part of the country, as you would know, we have only 1 petrochemical unit that is Brahmaputra Cracker and Polymer which is primarily having naphtha feedstock and gas feedstock, which we are supplying both naphtha is being fed by NRL. Now having a PFCC unit as part of the refinery expansion project, we see a lot of opportunity for petrochemicals. And that petrochemical would actually find itself as a market, not only in Northeast, but again, that look is policy. So we are also looking at Bangladesh as a market. So the eastern part of the country is actually requiring more petrochemical and therefore, we see value in it. And we are very soon going to kind of announce that also.

Any sense on the timeline in terms of when you will see positive cash flows from these 3 projects?

See, once we announce that because this is kind of on a drawing board right now, we will have a decision that's for sure. And once we start the project, we will have a timeline. And the best part of this petrochemical investment is that lot of things would have common utilities from the refinery expansion program. So we want to actually take up this investment decision on a very soon basis. And that will not coincide with the refinery expansion, it will go beyond, but a lot of common utilities will give us benefit both in terms of cash flow and early completion.

This is Kirtan Mehta from BOB Capital Markets. A couple of questions from my side. One, on the natural gas side, we have set a target from increasing from 3.3 BCM to 5 BCM. And we mentioned that many of this will come through IOR/EOR activities. Would it also be possible to specify the fields where we expect these increases to come through? And on the similar side, where do we see this additional consumption developing in Northeast area? That's the first question. The second question is about the exploration wells that we are targeting 75 to 80 wells over the next 2 years, would you be able to highlight top 5 wells where we expect the higher probability of addition of resources, would you be able to highlight them? And one more question, if at all, from my side is in terms of the cost economics for 2G ethanol, you gave us some perspective, would it be possible to share the feasibility stage cost economics with us in terms of the cost per unit of 2G ethanol?

It is like we have the potential to produce. And as we speak, we know that the Indradhanush Gas Grid Limited, which is part of the hydrocarbon infrastructure vison of 2030 for Northeast is actually, as we speak, is being implemented and it is being implemented on schedule. So that is a Phase I that will happen by December '23. Then there are Phase 2, Phase 3 and Phase 4 already lined up. And the intent of sharing IGGL, where we have, at a group level 40% stake, has got very significant bearing, and we are looking forward to that commissioning of the pipeline. On the gas, both supply side and consumption side. That's number one. Number two, we all know that we have our significant presence in terms of about 7 geographical areas. So all these pipelines are actually going to cater to the geographical areas for the purpose of CGD, both in terms of CNG and PNG. That's the second piece of demand. The third is, the moment we are going for the Numaligarh Refinery expansion -- currently, we are supplying about 1 million standard cubic meter per day, that would go to about 2.5 million cubic meter per day, plus the fertilizer plant of BVFCL, that Namrup 4 is also on the cards. Plus, in case there is a thought process of BCPL going for expansion. So these are those consumption patterns that we are looking forward to. Now in addition to that, there is a pipeline crossing, which is being implemented as we speak by GAIL, which will actually connect to IGGL and both national gas grid will be connected to the Northeast gas grid. So then gas availability in terms of supply and demand will not be a constraint. So that's the gas story, which is evolving, as we speak. As far as the exploration effort is concerned, there is a mix of exploration. There is a mix of drilling wells that is being attempted. One is the exploratory well as part of our commitment for the OALP and NELP and as part of our effort to discover more hydrocarbon at deeper depth in the main producing area within our mining lease. So as we speak, we have planned even to have wells as deep as 6,000 meter-plus. Plus, we are also looking at extended reach drilling below the Brahmaputra River and also utilizing a single land plinth area and have multiple radial wells. Plus, we are also looking at the already discovered fields where we have identified multiple pay zones, and we would do development wells. So the 70 well plus 70 well that you are looking at as part of our rolling plan for next 2 years is primarily including these deeper wells and shallow wells. In addition to this, this also includes additional waves to be drilled in Rajasthan basin, where we are implementing very, very successfully and one of its kind, the cyclic steam stimulation, where we are actually injecting steam to a depth of 1,000 meter and making the heavy thick viscous oil to flow to the surface. So this is the exploration part. As far as the 2G ethanol is concerned. Currently, the effort is to complete that project, go for the commissioning because this will be a first of its kind on the bamboo based. So having -- he has rightly picked up, having established the cost numbers will derive. But this is a mandate, as a national oil company, we would offer as part of a 20% blending, but I can give you an assurance that the ROI of the project is still protected.

One follow-up. On the exploration, would you be able to share the exploration budget for drilling for next 2 years? Survey and drilling separately basically.

Survey and drilling separately, that would be about, say, 30% to 40% of it?

Yes. Survey and exploratory drilling, if you call, that is the exploration, it is about 40% of the total plan -- total CapEx.

Yes, please.

It's Varatharajan from Antique. So on this net 0 targets, what I observed is that for the next 2 years, there's no major CapEx. But the following 5 years, like broadly, what kind of proportion of your CapEx will be dedicated to renewables or any of these net 0 related projects? And what could potentially be the hurdle rate you would consider? Would it be similar to your exploration or core business hurdle rate or is it going to be any different?

See, the effort for net 0 is actually a mixed bag. And you have rightly picked up this current year, I will not say that there is no CapEx. There is a certain component of CapEx. I'll just tell you a couple of initiatives. We are, as part of net 0 initiative, we are also looking at our sustainable business model, where the formation water, which is being derived as part of our production is being pumped back as part of our efforts for recycle. That's one, 2 of the projects are on schedule and we have completed those projects on time also. This apart, we are also looking at those stranded natural gas which is, a, either being flared under constraint; b, we are unable to produce. The intent is to capture them through modular skids and ship it under -- or truck it to the CGD network that we have. That's the second part for which we have already gone to the market. We have got a couple of initiatives. Third, we have also changed or in the -- one piece we have already implemented, a 3x10-megawatt gas-based engine, that is already implemented and similar such initiatives are also being planned. Next, the thought process is also there. How do we harness the geothermal energy, a, how do we harness the carbon sequestration possibility? Because as an oil and gas company in the space of upstream, we understand the subsurface formations more than anyone else. So we are actually, as we speak, we have already gone to the market to understand the possibility of carbon capture. And we have a collaborative framework with BCPL, Brahmaputra Cracker and Polymer, where we are getting 99% pure CO2. So that is getting captured from lipid [indiscernible] and it is being brought to one of our field, a, to attempt EOR. In a similar manner, we are also evaluating a couple of our abundant wells, about 1,000 to 1,200 meters because the moment it goes beyond 1,200 meters the cost economics fails. So we have picked up a couple of abundant wells and started looking at it the possibility of sequestration of CO2. So all these studies would actually find its dates and the numbers in a year and/or 2 years. And then you are right, we will have a CapEx for all of them. And by then, we expect that there will be policies for this and all the thermal power plants will also come on board, and we will have collaborations.

If there is no further question, we want to close the question-and-answer session right now. Now I request [indiscernible] to please come forward and give the vote of thanks.

Good afternoon, everyone. As we have now come to concluding session of the event, on behalf of Oil India Limited, I would like to extend our heartfelt gratitude to CMD sir, members of the Board of Directors of Oil India Limited and senior officials of Oil India Limited for being present on this occasion and providing their insights and thoughts about the company's achievements. I would also like to extend to all the analysts, investors and experts for being present in this event for raising their valuable points, suggestions and in helping us making the event a grand success. We also solidate similar support and cooperation from the investors and analyst fortuity in the days and years to come. I must also take on record our sincere appreciation to [ Mathews ], Antique Stockbroking for coordinating this event for Oil India Limited. I also extend my thanks to the organizing team for organizing the event so beautifully. The high-tea is ready, sir. And now I request everyone to please join us for the high-tea. Thank you.