oil and gas industry in bahrain
DESCRIPTION
global country study reportTRANSCRIPT
A
GLOBAL COUNTRY STUDY REPORT
ON
‘OIL AND GAS INDUSTRY OF BAHRAIN’
WITH RESPECT TO
BUSINESS OPPORTUNITIES FOR GUJARAT AND PUNJAB
SUBMITTED TO
INSTITUTE CODE: 729
L. J. INSTITUTE OF ENGINEERING & TECHNOLOGY
UNDER THE GUIDANCE OF
PROF. DR. ABHINAVA SINGH
ASSOCIATE PROFESSOR
IN PARTIAL FULFILMENT OF THE REQUIREMENT OF THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION (MBA)
OFFERED BY
GUJARAT TECHNOLOGICAL UNIVERSITY
AHMEDABAD
STUDENTS OF
MBA SEMESTER – III
GROUP NO. 1
NOVEMBER 2015
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STUDENT’S DECLARATION
We, following students, hereby declare that the Global Country Study Report titled " OIL
AND GAS INDUSTRY OF BAHRAIN " Bahrain & Gujarat is a result of our own work and
our indebtedness to other work publications, references, if any, have been duly
acknowledged. If we are found guilty of copying any other report or published information
and showing as our original work, or extending plagiarism limit, I understand that, we shall
be liable and punishable by GTU, which may include ‘Fail’ in examination, ‘Repeat study &
re-submission of the report’ or any other punishment that GTU may decide.
Enrollment No. Name Signature
147280592001 Aman Raghani
147280592002 Umesh Bagadiya
147280592003 Denisha Baria
147280592004 Ritesh Bhadoria
147280592005 Hiral Bhagde
137280592053 Tofik Chuhan
Place: Ahmedabad Date :
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INSTITUTE CERTIFICATE
3
PREFACE
To become a manager in future passing the theoretical subjects is not enough. The subjects
are the bases for our carrier from which we can strengthen our knowledge to apply it in real
world. The GCSR project provides the platform of opportunity to know the current market
situation, various factors affecting the industrial and economic performance and the behavior
of environment. It gives the opportunity where we can apply the theory knowledge in real
world and so that we can be a successful manager in future. This changed the market
structure, character and focus of marketing strategies. MBA is a course where unlike many
other courses practical studies area companied together with theoretical studies, case analysis
and preparation of various reports, giving presentations on various topics are a vital part of
the practical studies in this course.
The preparation of the GCSR is one such part of the practical studies here. For this purpose
we have selected crude-oil industry related bahrain trade and prepare a report through study
research.
As the student of management it is learning experience to analyze a trade. It is the most
essential for us to expose our skill as a future responsible management post. So, we are
deciding to go for detail study of country “Bahrain”.
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ACKNOWLEDGEMENT
We are especially thankful to Gujarat technological university and our director Dr. P. K.
Mehta and Dr. Siddharth Singh Bist for providing us an opportunity to prepare a Global
Country Study Report of our area of interest; we express our sincere thanks to them.
It gives us the immense pleasure to present this case. Completing a task is a never a one-man
effort. It is often the result of valuable contribution of a number of individuals in a direct or
indirect manner that helps on shaping and achieving an objective.
We wise to express our since gratitude to innumerable number of people who have been
associated with us throughout this project. We feel blessed to have the opportunity of
expressing our hearty gratitude to the following personalities, without the help of whom our
project could not have been hatched.
We express our sincere thanks to Prof. Dr. Abhinava Singh, who guided our group
throughout the project and give us valuable suggestion and encouragement to complete
project report successfully. We express our since gratitude to his that he gave his valuable
time to support us.
We have no world to express our gratitude for the ungrudging and unfailing cooperation of
our group member. Finally we want to thank all the friend, colleagues for third constant
cooperation, encouragement, help and support throughout the study without which this work
would not have been possible.
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CONTENTS
CONTENT PAGE NO
1. SUMMARY 7
2. INTRODUCTION TO BAHRAIN 16
2.1 OVERVIEW OF BAHRAIN 16
2.2 LATEST DEVELOPMENT IN BAHRAIN 18
3. OVERVIEW OF INDUSTRIES 21
3.1 LIST OF MAJOR INDUSTRIES OF BAHRAIN 22
3.2 CONTRIBUTION OF INDUSTRIES IN NATIONAL GDP 22
4. ABOUT SELECTED INDUSTRY 24
4.1 OVERVIEW OF BPCL 24
4.2 OVERVIEW OF CRUDE-OIL SECTOR IN BAHRAIN 25
4.3 SEGMENTATION OF BAHRAIN 27
4.4 SEGMENTATION OF INDIA 28
4.5 IMPORT-EXPORT NORMS 29
4.6 BILATERAL TRADE OPPORTUNITIES WITH INDIA & BAHRAIN 31
5. STEEPLED Analysis 49
5.1 STEEPLED Analysis of oil and gas industry in Bahrain 49
5.2 STEEPLED Analysis of oil and gas industry in India 51
6. SWOT Analysis 54
7. ABOUT SELECTED STATE OF INDIA 57
7.1 OVERVIEW OF GUJARAT 58
7.2 OVERVIEW OF PUNJAB 60
8. CONCLUSION 61
9. BIBLIOGRAPHY 62
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SUMMARY:The expansion of the kingdom’s non-oil industrial sector has been a strategic main concern
for Bahrain since the 1970s and Manama at rest sees it as a main concern sector for both
public and private investment in order to create jobs and diversify the kingdom’s industrial
base. In the center point of 2013, about $6.5bn-worth of industrial projects were planned or
under way in the kingdom, accounting for about 9 per cent of all projects planned or under
way, and including some of the biggest projects in the country.
The supporting protests that began in Manama in near the beginning 2011 have weighed
heavily on almost all aspects of the Bahraini economy, including the kingdom’s projects
market. With far more limited hydrocarbon reserves than its neighbors, the turmoil created by
the protest, and by the government’s hard line answer, has placed the kingdom’s economy
under considerable injure. Manama faces an impossible challenge to maintain fiscal
discipline in the face of an urgent need to expend in order to inject momentum into economic
growth, and to meet the demands of its people. In end result, Bahrain has come to depend on
financial support from its richer GCC associates to balance its budget.
The country has been promise 10bn doller in aid from the UAE, Saudi Arabia and Kuwait,
which is due to be handed over regularly over the course of a decade. Much of the money is
destined for transportation projects and there are secret language that it is starting to have an
impact.
While the protests did knock the kingdom’s economic act, the economy has performed better
than expected. Growth in 2012 is predictable at around 3.9 per cent, although that is partly
reflective of the slow previous year. It would have been higher were it not for the go down in
oil production due to maintenance at the country’s main oil field, Abu Safa. The Economic
Development Board (EDB) budgeted growth of about 6.2 per cent in 2013, driven by a strong
rebound in the oil sector due to the return of the Abu Safa field and the non-oil sector benefits
from government incentive expences.
Despite the better-than-expected economic performance, Manama face a huge task if it is to
address its broader economic challenges. deep deficits and shaky confidence are a bigger
threat to the nation. The Washington based IMF estimate that the breakeven oil price for
Bahrain in 2013 is $111 a barrel. It is forecasting an average oil price of $104 a barrel for the
year. In the budget for 2013, Manama is forecasting a discrepancy of BD662m (doller
1.76bn), rising to BD753m ($2bn) in 2014.
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Manama estimates that it will spend about $15bn on its upstream oil and gas sector over the
next 20 years, while downstream; the main hope rests on a planned $6bn expansion of the
Sitra refinery going ahead. Until Bahrain makes a significant oil and gas discovery, it is set to
remain a unimportant player in the GCC energy projects market, in receipt of only scant
attention from international contractors.
The BAPCO was recognized in 1929 in Canada by standard oil company of California for oil
exploration activities in Bahrain. It take over Bahrain's resources of gulf oil. In 1930 it
obtained the only oil concession in Bahrain. On 31 May 1932, the company discovered the
awali oil field. In 1936 the Standard Oil Company of California signed an concord with
Texaco, which acquired a half of BAPCO's shares.
In 1975 more than 60% BAPCO's shares was acquire by the Government of Bahrain. In
1980, all BAPCO's shares were taken over by the Government of Bahrain. In 1999 the
current Bahrain Petroleum Company was created when the Bahrain National Oil Company,
established in 1976, amalgamated with BAPCO.
Bapco’s vision is to direct and operate an included oil and gas business, supplying crude oil,
petroleum products and gas to the international and local markets, to create value for our
shareholders, customers and human resources.
Bahrain can also export the machinery, tools and techniques that they are using in the highly
productive plants to increase capacity of Indian Petrochemicals‟ foliage as Bahrain is best in
the plants and methods.
GDP is estimated to have grown-up 3.4 percent in 2012. “However, the revival was, to an
extent, restricted by a extended dip in oil production due to industrial disruption in the Abu
Sa’afa offshore oilfield during most part of the year. development is probable to reach 5.6
percent in 2013, largely driven by the anticipated improvement in oil production from Abu
Sa’afa field as well as planned further increases in the Bahrain Field,” the EDB said.
Imports in Bahrain increased to 5722 BHD Ml in 2013 from 5535 BHD Ml in 2012. import in
Bahrain averaged 2340.48 BHD Ml from 1975 until 2013, accomplishment an all-time high
of 6120 BHD Ml in 2008 and a confirmation low of 496 BHD Ml in 1975. Imports in
Bahrain are report by the Ministry of economics, Kingdom of Bahrain.
India is the sixth most energy shopper in the World. Gujarat ranks 1st in the making of crude
oil (aground.10%) and natural gas (aground.3%) in India. The State has the highest number
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of oil and gas field (aground and offshore) in India (31.3%) 36.6% of India’s install refining
capacity is in the State of Gujarat, which is the peak in India Reliance Petroleum Limited at
Jamnagar (Gujarat) is the principal working class refinery in Asia Pacific.
Gujarat is the only state in India with a state-wide gas grid and multi gas supplier. The State
has the possible to become a nationwide heart for gas due to its nearness to the Middle East
gas source and good-looking northern bazaar.
Gujarat State Petroleum Corporation (GSPC) is India’s only State Government-owned
corporation in the oil and gas looking at and manufacture business
GSPC is known for India’s major gas finding in Basin on the coastline of Andhra Pradesh.
Gujarat is the only State having 2 Terminals (Dahej and Hazira).
GSPC is an oil and gas study company of Gujarat Govt. GSPC takes over gas blocks in KG
Basin in August 2002. According to government’s own estimates, the gas field allotted to
GSPC were worth $20 billion. Modi government entered into manufacture sharing
agreements with Geo Global and Jubilant Enpro Pvt. Ltd.
IOCL or Indian Oil is an Indian publicly owned oil and gas corporation with its H.Q. in New
Delhi, India. It is the world's 88th main corporation, according to the Fortune Global 500 list,
and the major community corporation in India when rank by revenue.
Indian Oil and its subsidiary report for a 49% share in the petroleum goods market, 31%
share in refining capacity and 67% downstream division pipelines capacity in India. The
Indian Oil Group of companies own and operate 10 of India's 22 refineries with a joint
refining ability of 65.7 million metric tones per year.
Indian Oil Corporation is the No. 1 Oil Company in hindustan by sales turnover and is also
the 21st largest petroleum company in the world. It was the only Indian company to be listed
in the fortune 500 in 2003 and was also ranked second among 15 national oil companies in
the Asia pacific region. It was ranked 325 in the prestigious Forbes Global 500 listing among
the largest public companies. 43.5% national refining capacity and 74% petroleum products
pipeline capacity.
The main products of Indian Oil are petrol, diesel, LPG, auto LPG, aviation turbine fuel,
lubricants and petrochemicals.
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The Bahrain society and culture is dominated by the values of Islam and it is a culturally rich
country. Islam is the dominant religion of the Bahrain people and about 95% of them are
Sunni Muslims.
Bahrain has only recently applied environmental regulations after the country’s rapid
industrialization., In addition to the MEPA, the General Environmental Regulation is the
government-approved association aimed to prohibit and action that may be detrimental to the
environment. Furthermore, the GER ensures that preventative measures, including
conducting assessments of company projects to evaluate possible damage to the environment.
India is a developing society which is in the phase of post industrialization and the society is
now starts to encourage the industries from the other countries, thinking on the societal
welfare of both the countries by developing business in another country.
If we give a glance to economy of India then avoiding present scenario, Indian economy is
much more stable economy than USA, China etc. as the habits of people over here do not
have aggressive decisions in their blood. So in the present time.
Bapco, which is participating as a major energy sponsor and key exhibitor for Gulf Industry
Fair through The National Oil and Gas Authority (Noga). It is fast securing world leadership
in international markets through its commissioning of the low Sulphur diesel plant (LSDP) at
the cutting-edge of refinery technology.
Premier integrated Oil Company in India. Indian Oil Corporation is the No. 1 oil company in
It was the only Indian company to be listed in the fortune 500 in 2003 and has also been
ranked second among 15 national oil companies in the Asia Pacific region. It was ranked 325
in the prestigious Forbes.
Declining crude oil sales, Although the revenue from the crude oil sales accounts for a
meager share of total revenue, revenues from this division dropped sharply by 68.7% in fiscal
2003 as against the previous fiscal. The crude oil operations contributed about INR 49.44
billion in fiscal 2003 as against INR148.68 billion in fiscal 2002. Operating profit fell by a
large 88% to reach INR19.4 million in 2004. If not for the good performance of petroleum
products the company’s profitability would have been severely affected by the drastic decline
in crude oil sales.
Punjab is a state in the northwest of the Republic of India, form part of the larger Punjab
region. The state is bordered by the Indian states Himachal Pradesh to the east, Haryana to
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the south and southeast, Rajasthan to the southwest, and the Pakistani province of Punjab to
the west. To the north it is bounded by the Indian state of Jammu and Kashmir. After the
partition of India in 1947, the Punjab province of British India was divided between India and
Pakistan. The Indian Punjab was divided in 1966 with the formation of the new states of
Haryana and Himachal Pradesh alongside the current state of Punjab. Punjab is the only state
in India with a majority Sikh population.
Punjab offers product clusters across the state in various industries, including Textile & In
Punjab there is a good strength of natural resource. And low cost and efficient man power.
There is good climate condition and political environment benefit of goods incentives plan
from government and also having an infrastructure facility. In Punjab having some weakness
like traditional way of manufacturing and lower technological advancement as compare to
other country.
Lot of scope of product diversification to produce furnishing, cloth materials, and value added items. There is also scope of participation in exhibition and trade fairs.
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Introduction to Bahrain:
Bahrain, officially the Kingdom of Bahrain is a small island country situated near the western shores of the Persian Gulf in Southwest Asia.
Saudi Arabia lies to the west and is connected to Bahrain by the King Fahd Causeway while Iran lies 200 km (124 mi) to the north across the Persian Gulf. The peninsula of Qatar is to the southeast across the Gulf of Bahrain. The population in 2011 stood at 1,234,571, including 666,172 non-nationals.
Bahrain is the site of the ancient land of the Dilmun civilisation. Bahrain was one of the earliest areas to convert to Islam in 628 AD. Following a period of Arab rule, Bahrain was occupied by the Portuguese in 1521, who in turn were expelled in 1602 by Shah Abbas I of the Safavid dynasty under the Persian Empire. In 1783, the Bani Utbah clan captured Bahrain from Nasr Al-Madhkur and has since been ruled by the Al Khalifa royal family, with Ahmed al Fateh as Bahrain's first hakim.
In the late 1800s, following successive treaties with the British, Bahrain became a protectorate of the United Kingdom. In 1971, Bahrain declared independence. Formerly astate, Bahrain was declared a Kingdom in 2002.
Since early 2011, the country has experienced sustained protests and unrestinspired by the regional Arab Spring, particularly by the majority Shia population.
Bahrain was home to the Dilmun civilization, an important Bronze Age trade centre linking Mesopotamia and the Indus Valley. Bahrain was later ruled by the Assyrians.
From the 6th to 3rd century BC, Bahrain was added to the Persian Empire by the Achaemenian dynasty. By about 250 BC, Parthia brought the Persian Gulf under its control and extended its influence as far as Oman.
During the classical era, Bahrain was referred to by the ancient Greeks as Tylos, the centre of pearl trading, when the Greek admiral Nearchus serving under Alexander the Great came to discover Bahrain.
Nearchus is believed to have been the first of Alexander's commanders to visit the island, and he found a verdant land that was part of a wide trading network; he recorded: “That in the island of Tylos, situated in the Persian Gulf, are large plantations of cotton tree, from which are manufactured clothes called sindones, a very different degrees of value, some being costly, others less expensive. The use of these is not confined to India, but extends to Arabia.”
Alexander had planned to settle in Bahrain with Greek colonists, and although it is not clear that this happened on the scale he envisaged, Bahrain was very much part of the Hellenised world: the language of the upper classes was Greek (although Aramaic was in everyday use), while Zeus was worshipped in the form of the Arabian sun-god Shams. Bahrain even became the site of Greek athletic contests.
Herodotus also believed that the homeland of the Phoenicians was Bahrain. This theory was accepted by the 19th-century German classicist Arnold Heeren who said that: "In the Greek
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geographers, for instance, we read of two islands, named Tyrus or Tylos, and Arad, Bahrain, which boasted that they were the mother country of the Phoenicians, and exhibited relics of Phoenician temples."
The name Tylos is thought to be a Hellenisation of the Semitic, Tilmun. The term Tylos was commonly used for the islands until Ptolemy’s Geographia when the inhabitants are referred to as 'Thilouanoi'.
Some place names in Bahrain go back to the Tylos era, for instance, the residential suburb of Arad in Muharraq, is believed to originate from "Arados", the ancient Greek name for Muharraq.
Bahrain is a generally flat and arid archipelago in the Persian Gulf, east of Saudi Arabia. It consists of a low desert plain rising gently to a low central escarpment with the highest point the 134 m (440 ft) Mountain of Smoke (Jabal ad Dukhan).
Bahrain had a total area of 665 km2(257 sq mi) but due to land reclamation, the area increased to 765 km2 (295 sq mi), which is slightly larger than Hamburg or the Isle of Man.
Often described as an archipelago of 33 islands, extensive land reclamation projects have changed this; by August 2008 the number of islands and island groups had increased to 84. Bahrain does not share a land boundary with another country but does have a 161 km (100 mi) coastline.
The country's natural resources include large quantities of oil and natural gas as well as fish in the offshore waters. Arable land constitutes only 2.82% of the total area.
The agricultural and domestic sectors' over-utilisation of the Dammam Aquifer, the principal aquifer in Bahrain, has led to its salinisation by adjacent brackish and saline water bodies. A hydrochemical study identified the locations of the sources of aquifer salinisation and delineated their areas of influence.
The investigation indicates that the aquifer water quality is significantly modified as groundwater flows from the northwestern parts of Bahrain, Four alternatives for the management of groundwater quality that are available to the water authorities in Bahrain are discussed and their priority areas are proposed, based on the type and extent of each salinisation source, in addition to groundwater use in that area.
Climate:
The Zagros Mountains across the Persian Gulf in Iran cause low level winds to be directed toward Bahrain. Dust storms from Iraq and Saudi Arabia transported by northwesterly winds, cause reduced visibility in the months of June and July.
People and Customs:
A long tradition of association with other races, stable Government, and a strong sense of national identity has resulted in Bahrain being a pleasant place to live. Bahrain is one of the few countries in the region where nationals are in the majority.
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A Strategic Location:
The opening of the King Fahad causeway between Saudi Arabia and Bahrain in November 1986 ended the island's 6000 years of isolation and opened up a multitude of benefits for both countries.. Due to its centralized location within the Gulf region and its excellent port and airport services, Bahrain has become both an attractive local tourist resort and also an important business centre.
In addition, Bahrain's increasing popularity as a stopover point for major international flights has resulted in the reinforcement of its strong international outlook, making it a hub of communications not only within the Gulf states but worldwide.
Population: 516,444 (medium projection of population- 1991)
Capital: Manama (1991) Population Census: 144,343
Climate:
Hot and humid in summer and mild in winter. The climate is pleasant from about December to March with temperatures ranging from 10 degrees C to 20 degrees C. Humidity is high in July, August and September with temperatures averaging 36 degrees C.
Language:Arabic is the official language. English is widely spoken and used in business.
Religion:Islam is the state religion and more than 85 percent of the population are Muslims. There are also Christians, Jews, Bahai, Hindu and Parsee minorities.
Weights & Measures:
The Metric System
Gross Domestic Product (GDP):
BD 1,637 million (1992)
Gross National Product (GNP):
BD 1,381 million (1992)
Per Capital Income: BD 2,659 (1992)
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Electricity:220 Volts, 50 Cycles, AC throughout Bahrain except Awali which has 110 Volts, 6O Cycles.
Time: GMT + 3
Currency:The unit of currency is the Bahraini Dinar (BD) which is divided into 1000 fils: Notes: 500 fils, 1, 5,10, 20 dinars. Coins: 1, 5, 10, 25, 50, 100 fils.There are no restrictions on import or export of currency.
Entry and Visas:
Visitors to Bahrain require entry visas, except those holding passports from the United Kingdom and the GCC states. 72 hour transit visas are available on arrival at Bahrain Airport on production of a confirmed return or onward air ticket.This visa can be extended if a Bahraini sponsor applies to the Immigration Department stating the reason for the extension and payment of a BD 4 fee.
Aseven-day visitors' visa may be obtained by businessmen, and established merchants known for their trading activity, conference and exhibition delegates, dependants and servants accompanying GCC families at a cost of BD 5.
Tourist groups may also avail themselves of the visitors' visa provided previous arrangements have been made with the Directorate of Tourism and Archaeology at the Ministry of Information office or with any private agency such as hotels, travel agents and tourist organisers in Bahrain. Travellers are required to pay BD 3 Departure Tax at the airport.
Health Regulations:Yellow fever vaccination certificates are required by those coming from infected areas.
Customs Regulations:
200 cigarettes, half a pound of tobacco and one bottle of spirits are allowed duty free.Pornographic and obscene literature and pictures, arms and ammunitions, cultured or undrilled pearls are all prohibited.
Business Hours:
Friday is the weekly day of rest, when nearly all business is closed, and most shops. Many businesses close early on Thursday. The 36 hour week with Thursday and Friday as weekend applies to all branches of the Civil Services and schools.
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Government Offices:
7:00 to 14:15 Saturday to Tuesday
7:00 to 14:00 Wednesday
Commercial Organisations:
07:00 -12:00 and 14:30 -17:30 Saturday to Thursday
Shopping Hours:08:00 -12:30 and 15:30 -18:30 Saturday to Thursday. Some shops are
open in the souk on Fridays for a few hours.
Banking Hours:
07:30 -12:00 Saturday to Wednesday
15:30 -17:30 Saturday to Wednesday (for some banks)
07:30- 11:00Thursday
Communications:Bahrain's telecommunications services are among the most advanced in the world, with direct dialling to most countries.
Key Features:
A wealth of historical, cultural and traditional attractions Year-round fine weather Water sports, pearl diving expeditions, scuba diving and dhow trips First class accommodation, nightlife and restaurants Friendly, welcoming Bahrainis and a peaceful, crime-free
environment amusement and wildlife parks and many other social amenities for families
Tourism Development Opportunities:
The development of facilities and attractions for tourists has become a major in Bahrain offering scope to local, regional and international companies including:
The Hospitality sector
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Catering Sports facilities Historical and cultural locations transport Entertainment Conference and exhibition centre's Souvenir manufacture
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List of major industries of Bahrain:
Bahrain National Gas Company Gulf Petro Chemical Industries National Oil & Gas Authority Bahrain Petroleum Company
Contribution of industries in national GDP Overview:
Bahrain has made great efforts to diversify its economy; its highly developed communication and transport facilities make Bahrain home to numerous multinational firms with business in the Gulf. Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state. Bahrain's economy, however, continues to depend heavily on oil. In 2012, petroleum production and refining accounted for 77% of Bahrain's export receipts, 87% of government revenues, and 19% of GDP. Other major economic activities are production of aluminum - Bahrain's second biggest export after oil - finance, and construction. In 2011 Bahrain experienced economic setbacks as a result of domestic unrest, however, the economy recovered in 2012-13, partly as a result of improved tourism.
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INTRODUCTION OF BHARAT PETROLEUM CORPORATION LIMITED:
Bharat Petroleum Corporation Limited (BPCL) is an Indian state-
controlled oil and gas company headquartered in Mumbai, Maharashtra. BPCL has been
ranked 225th in the Fortune Global 500 rankings of the world's biggest corporations for the
year 2012.
Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas
company headquartered in Mumbai, Maharashtra. BPCL has been ranked 243th in the
Fortune Global 500 rankings of the world's biggest corporations for the year 2014.
In 1889 during vast industrial development, an important player in the South Asian market
was the Burmah Oil Company. Though incorporated in Scotland in 1886.
This alliance led to the formation of Burmah-Shell Oil Storage and Distributing Company of
India Limited. Burmah Shell began its operations with import and marketing of Kerosene.
On 24 January 1976, the Burmah Shell was taken over by the Government of India to form
Bharat Refineries Limited. On 1 August 1977, it was renamed Bharat Petroleum Corporation
Limited.
In 2003, following a petition by the Centre for Public Interest Litigation, the Supreme Court
restrained the Central government from privatizing Hindustan Petroleum and Bharat
Petroleum without the approval of Parliament. As a result, the government would need a
majority in both houses to push through any privatization.
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PRODUCT (Crude Oil):
The first oil deposits in India were discovered in 1889 near the town of [Digboi] in the state
of Assam. The first well was completed in 1890 and the Assam Oil Company was established
in 1899 to oversee production. At its peak during the Second World War the Digboi oil fields
were producing 7,000 barrels per day.
At the turn of the century however as the best and most profitable uses for oil were still being
debated, India was seen not as a producer but as a market, most notably for fuel oil for
cooking. As the potential applications for oil shifted from domestic to industrial and military
usage Despite this however British colonial rule laid down much of the country’s
infrastructure, most notably the railways.
Independence, 1947-1991
After India won independence in 1947, the new government naturally wanted to move away
from the colonial experience which was regarded as exploitative. In terms of economic policy
this meant a far bigger role for the state.
The foreign companies continued to play a key role in the oil industry. Oil India Limited was
still a joint venture involving the Indian government and the British owned Burmah Oil
Company (presently, BP) whilst the Indo-Stanvac Petroleum project in West Bengal was
between the Indian government and the American company SOCONY-Vacuum (presently,
ExxonMobil). The powers to plan, organize, and implement programmes for the
development of oil resources and the sale of petroleum products and also to perform plans
sent down from central government.
In order to find the expertise necessary to reach these goals foreign experts from West
Germany, Romania, the US, and the Soviet Union were brought in.[5] The Soviet experts
were the most influential and they drew up detailed plans for further oil exploration which
were to form part of the second five-year plan. India thus adopted the Soviet model of
economic development and the state continues to implement five-year plans as part of its
drive towards modernity.
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Liberalization, 1991-present
The process of economic liberalization in India began in 1991 when India defaulted on her
loans and asked for a $1.8 billion bailout from the IMF. [7] This was a trickle-down effect of
the culmination of the cold war era; marked by the 1991 collapse of the Soviet Union, India’s
main trading partner. The bailout was done on the condition that the government initiate
further reforms, thus paving the way for India’s emergence as a free market economy.
For the ONGC this meant being reorganized into a public limited company (it is now called
for Oil and Natural Gas Corporation) and around 2% of government held stocks were sold
off.[5] Despite this however the government still plays a pivotal role and ONGC is still
responsible for 77% of oil and 81% of gas production while the Indian Oil Corporation (IOC)
owns most of the refineries putting it within the top 20 oil companies in the world.[8] The
government also maintains subsidized prices.[8] As a net importer of oil however India faces
the problem of meeting the energy demands for its rapidly expanding population and
economy and to this the ONGC has pursued drilling rights in Iran and Kazakhstan and has
acquired shares in exploration ventures in Indonesia, Libya, Nigeria, and Sudan.[8]
India’s choice of energy partners however, most notably Iran led to concerns radiating from
the US.[8] A key issue today is the proposed gas pipeline that will run from Turkmenistan to
India through politically unstable Afghanistan and also through Pakistan.[8] However despite
India’s strong economic links with Iran, India voted with the US when Iran’s nuclear
program was discussed by the International Atomic Energy Agency although there are still
very real differences between the two countries when it comes to dealing with Iran.
Segmentation of Bahrain:
Bahrain oil and gas sector is constantly undergoing active transformation from the past few
years. The country is expected to witness significant growth and attract new investments in
the medium to long term future. Amidst the series of recent developments, the report from the
author proves a strong guide for strategy formulation of all the players interested in Bahrain
oil and gas.
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Bahrain oil and gas industry report provides complete information on the industry trends,
infrastructure, investments, competition and developments to 2025. The report provides key
trends driving the Bahrain oil and gas industry. It also details forecasts of supply and demand
of oil, gas, gasoline, LPG, diesel, fuel oil along with Primary energy consumption, GDP,
population. Further, asset wise capacity outlook of refining (CDU), coking, FCC, HCC,
Storage, liquefaction, degasification are provided to 2020.
The report provides information on all operational and planned oil and gas assets in Bahrain.
Further, investment and new business opportunities in the country’s oil and gas sector are
identified. The research work examines the existing infrastructure (oil and gas assets),
market conditions, investment climate and competitive landscape of upstream, midstream and
downstream sectors.
SWOT Analysis and benchmarking tools are used to analyze and compare the real prospects
and challenges of investing or expanding in the industry. Further, the report details all the
investment opportunities sector wise, highlighting the industry growth potential and project
feasibility. Detailed information on new fields, blocks, pipelines, refineries, storage assets
and LNG terminals along with the investments required, current status of the projects and
commencement feasibility are provided. The report also analyzes three key companies in
Bahrain oil and gas industry. Business operations, SWOT Analysis and financial performance
of the companies are provided. All latest developments in the industry along with their
possible impact on the industry are included in the report.
Segmentation of India:
India has set ambitious goals for its domestic power sector, knowing that a reliable energy
supply will be a key driver of economic growth.
The bulk of India’s energy will continue to come from oil and gas, so development of the
country’s hydrocarbon resources is a key element of the government’s energy agenda. With a
solid commitment from the authorities to jumpstart domestic oil and gas exploration, improve
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midstream distribution networks and gain efficiencies in energy production, a company will
need to have a superior breadth of experience, knowledge of the local market, and access to
the most advanced technologies to take advantage of the myriad of opportunities arising in
the Indian oil and gas sector.
GE is a world leader in advanced technology equipment and services for a wide array of
activities related to the oil and gas sector. Therefore, GE Oil & Gas is already deeply
involved in all three segments of India’s oil and gas sector. However, given each of these
segments’ potential for growth, the company continues to search for opportunities where its
cutting edge technological solutions can unlock value.
Upstream
India’s upstream segment is perhaps most exemplary of the overall sector’s enormous
potential. Although the country has proven reserves of 206 billion barrels of oil, only 67
billion barrels are online. In addition, less than 25% of India’s sedimentary basins are
explored, with subsea areas particularly underexplored. In fact, only one of the country’s 83
deep-water blocks has been developed. The enormous backlog in a wide variety of upstream
activities plays to GE’s strengths. The company is not only able to provide a large number of
advanced drilling solutions, but also has a myriad of offshore and subsea technologies that
can be deployed in India’s deep water blocks, including:
- Subsea trees
- Controls, manifolds, umbilical’s,
- Specialty connectors and pipes
- Subsea Well Head Equipment
- Flexible risers
In addition, it has a variety of solutions designed specifically to improve well performance,
like water injection, and gas-specific solutions like gas reinjection and gas lift. GE provides
its upstream services through a number of well-respected brands, including VG, Hydril,
Wood group, and Well stream.
Midstream
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In the midstream segment India suffers from a comparatively low density of pipelines. While
countries like the United States, United Kingdom, and China sport pipeline densities of 50
kilometers per 1000 square miles, India’s pipeline density is only 3 kilometers per 1000
square miles. Clearly India’s developing economy will require an increase in both pipeline
length and capacity, and GE Oil & Gas has already demonstrated expertise in pipeline
compression, integrity solutions, sensor-based measurement, inspection, asset condition
monitoring, and data management experience in the Indian context.
Additionally, the company’s gas turbine product line is among the most extensive in the
industry, and provides clients in the midstream segment support for a wide variety of
applications. Also, given India’s growing gas reserves, the company’s strong track record
with gas storage and natural gas liquefaction (LNG) could prove to be a boon for India’s long
distance gas transportation plans.
Downstream
India’s increasing consumption of fertilizer, petroleum, and petrochemicals means the
domestic downstream segment is set to expand as well. Already, growing demand for
fertilizer is encouraging companies to reopen mothballed plants, with GE providing the
necessary support to modernize fertilizer production. Analysts also predict refining capacity
will increase 5 percent over the next decade. Essar Oil’s recent expansion of its refinery in
Gujarat and Reliance Industries cracker project in the same state are not only exemplary of
downstream segment expansion, but also relied heavily on know-how from GE Oil & Gas.
Perhaps most importantly, with India’s energy consumption continuing to grow at a steady
clip, GE’s ability to provide highly efficient power generation will be much sought after over
the next ten years.
Import/Export Norms
Government Initiatives:
Two landmark initiatives for energy efficiency – Design Guidelines for Energy Efficient
Multi-Storey Residential Buildings and Star Ratings for Diesel Genets and for Hospital
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Buildings – were launched by Mr. Dharmendra Pradhan, Minister of State with Independent
Charge for Petroleum and Natural Gas, Government of India.
Some of the major initiatives taken by the Government of India to promote oil and gas sector
are:
India and Norway have discussed bilateral relationship between the two countries in the field
of oil and natural gas and decided to extend cooperation in hydrocarbon exploration.
To strengthen the country`s energy security, oil diplomacy initiatives have been intensified
through meaningful engagements with hydrocarbon rich countries.
PAHAL - Direct Benefit Transfer for LPG consumer (DBTL) scheme launched in 54 districts
on November 11, 2014 and expanded to rest of the country on January 1, 2015 will cover
15.3 crore active LPG consumers of the country.
24 x 7 LPG service via web launched to provide LPG consumers an integrated solution to
carry out all services at one place, through My LPG.in, from the comfort of their home.
Special dispensation for North East Region: For incentivizing exploration and production in
North East Region, 40 per cent subsidy on gas price has been extended to private companies
operating in the region, along with ONGC and OIL.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Mr.
Narendra Modi, has approved a mechanism for procurement of Ethanol by Public Sector Oil
Marketing Companies (OMCs) to carry out the Ethanol Blended Petrol (EBP) Program.
India seeks Saudi Arabia's support for petroleum imports:
Business Standard
India has sought Saudi Arabia’s support for long-term oil imports. Petroleum Minister
Dharmendra Pradhan, currently visiting that nation, took up India’s additional requirement of
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crude oil and liquefied petroleum gas (LPG) and investment opportunities with assistant
minister for petroleum and mineral resources Prince Abdul Aziz Bin Salman Bin Abdulaziz.
Pradhan also met minister for petroleum and mineral resources Ali bin Ibrahim Al-Naimi and
invited the world's largest oil exporter to invest in strategic crude oil storages and
downstream facilities in India. “The Saudi side assured affirmative consideration of India’s
growing demand for crude and LPG, while also agreeing to look into the issues underlined by
India concerning trade and investment in hydrocarbon sector between the two countries,” said
an official statement. Both sides discussed issues concerning public sector oil companies in
India and Saudi Aramco. The Indian delegation invited Saudi companies, including Aramco,
to participate and invest in crude oil storage facilities and downstream industries in India.
India sources over 20 per cent of its crude imports from Saudi Arabia. It is the largest
supplier of LPG to India.
Import and Export Licensing Procedures in India
Indian import and export system is governed by the Foreign Trade (Development &
Regulation) Act of 1992 and India’s Export Import (EXIM) Policy. Imports and exports of all
goods are free, except for the items regulated by the EXIM policy or any other law currently
27
in force. Registration with regional licensing authority is a prerequisite for the import and
export of goods. The customs will not allow for clearance of goods unless the importer has
obtained an Import Export Code from the regional authority.
Import Policy
The Indian Trade Classification -Harmonized System classifies goods into three categories:
• Restricted
• Canalized
• Prohibited
Goods not specified in the above mentioned categories can be freely imported without any
restriction, if the importer has obtained a valid IEC. There is no need to obtain any import
license or permission to import such goods. Most of the goods can be freely imported in
India.
Prohibited Goods
These are the goods listed in ITC (HS) which are strictly prohibited on all import channels in
India. These include wild animals, tallow fat and oils of animal origin, animal rennet, and
unprocessed ivory.
Restricted Goods
Restricted goods can be imported only after obtaining an import license from the relevant
regional licensing authority. The goods covered by the license shall be disposed of in the
manner specified by the license authority, which should be clearly indicated in the license
itself. The list of restricted goods is provided in ITC (HS). An import license is valid for 24
months for capital goods, and 18 months for all other goods.
Canalized Goods
Canalized goods are items which may only be imported using specific procedures or methods
of transport. The list of canalized goods can be found in the ITC (HS). Goods in this category
can be imported only through canalizing agencies. The main canalized items are currently
petroleum products, bulk agricultural products, such as grains and vegetable oils, and some
pharmaceutical products.
Export Policy
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Just like imports, goods can be exported freely if they are not mentioned in the classification
of ITC. Below follows the classification of goods for export:
• Restricted
• Prohibited
• State Trading Enterprise
Restricted Goods
Before exporting any restricted goods, the exporter must first obtain a license explicitly
permitting the exporter to do so. The restricted goods must be exported through a set of
procedures/conditions, which are detailed in the license.
State Trading Enterprise (STE)
Certain items can be exported only through designated STEs. The export of such items is
subject to the conditions specified in the EXIM policy.
Prohibited Goods
These are the items which cannot be exported at all. The vast majority of these include wild
animals, and animal articles that may carry a risk of infection.
Types of Duties
There are many types of duties that are levied in India on imports and exports. A list of these
duties follows below-
Basic Duty
Basic duty is the typical tax rate that is applied to goods. The rates of custom duties are
specified in the First and Second Schedules of the Customs Tariff Act of 1975.
The First Schedule contains rates of import duty, and the second schedule contains rates of
export duties. Most of the items in India are exempt from custom duty, which is generally
levied on imports.
The first schedule contains two rates: Standard rate and preferential rate. The preferential rate
is lower than the standard rate. When goods are imported from a place specified by the
central government (CG) for lower rates, the preferential rate is applicable. In any other case,
the standard rate will be applicable. If the CG has signed a trade agreement with the country
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of origin, then the CG may opt to charge a lower basic duty than indicated in the first
schedule.
Additional Customs Duty (Countervailing Duty)
In addition to the basic duty on imported goods, a countervailing duty is also applicable to
imported goods. The rate of duty is equal to the rate of excise applied to goods manufactured
in India. If the article is not manufactured in India, then goods of a similar nature are used to
determine the correct duty amount. If there are different rates of duty on similar goods, then
the highest rates of the known products will be applied to the article in question.
Additional Duty (VAT)
The CG may levy an additional duty equivalent to sales tax or VAT charged on sale/purchase
in India. The rate cannot exceed 4 percent. However, the additional duty shall be refunded
when the imported goods are sold if the following conditions are satisfied:
• The importer pays all the custom duties;
• The sale invoice shall bear the indication that the credit of such duty shall not be
allowed; and
• Importer shall pay VAT/sales tax on the sale of these goods.
Anti-Dumping Duty
The CG may impose an anti-dumping duty if an article is imported to India at less than its
normal price, and will notify the importer if they decide to do so. The amount of duty cannot
exceed the margin of dumping. The margin of dumping means the difference between the
export price and the normal price.
The notification issued by CG in this regard shall be valid for five years. The period can be
further extended. However, the total period cannot exceed 10 years from the date of first
imposition.
Countervailing Duty on Subsidized Articles
A countervailing duty is a tariff applied to imported goods to neutralize the effect of a
subsidy from the country of origin. If any country grants subsidies on any article to be
imported to India, whether directly from the same country or otherwise, then the CG may
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impose a countervailing duty equal to or less than the subsidy itself. However, the duty will
not be imposed if the article is subsidized for the following reasons:
• Research activities conducted by person engaged in manufacturing or export
• Assistance to disadvantaged regions in destination country
• Assistance in adaptation of existing facilities to new environment requirements.
The notification issued by CG in this regard shall be valid for five years and possibly subject
to further extension. However, the total period cannot exceed 10 years from the initial date of
imposition.
Safeguard Duty
A safeguard duty is a tariff designed to provide protection to domestic goods, favoring them
over imported items. If the government determines that increased imports of certain items are
having a significantly detrimental effect on domestic competitors, it may opt to levy this duty
on those imports to discourage their proliferation. However, the duty does not apply to
articles imported from developing countries. The CG may exempt imports of any article from
this duty. The notification issued by CG in this regard is valid for four years, subject to
further extension. However, the total period cannot exceed 10 years from the date of first
imposition.
Protective Duties
In addition to safeguard duties, the CG also bolsters domestic industries using protective
duties. Should the Tariff Commission issue a recommendation for a protective duty, the CG
may impose on any goods imported to India a protective duty to provide protection to
domestic industry.
BILATERAL TRADE OPPORTUNITIES WITH INDIA & BAHRAIN
India-Bahrain Relations :
India and Bahrain enjoy excellent bilateral relations characterized by cordial political, economic and cultural contacts. Our bilateral Trade and commercial exchanges go back to about 5,000 years ago tracing their origins to the period of Dilmun Civilization in Bahrain to the era of Indus valley civilization in India. Ancient Bahraini traders are believed to have carried out flourishing trade of Bahraini pearls with Indian spices from India. Presence of around 350,000 Indian nationals who comprise a third of the total population of 1.2 million in Bahrain is an important anchor of our bilateral relations with Bahrain.
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Bilateral Agreements/Memorandums of Understanding:
The two countries have the following bilateral agreements/MOUs:
Air Service Agreement (April 2000)
MOU on Cooperation between Ministries of Foreign Affairs (January 2004)
Agreement on Juridical and judicial Co-operation in Civil and Commercial Matters (January 2004)
Extradition Treaty (January 2004)
Agreement on Mutual Legal Assistance in Criminal Matters (January 2004)
Agreement on the Promotion and Protection of Bilateral Investment (January 2004)
Agreement for Media Co-operation between Prasar Bharati and Bahrain Radio & TV Corporation (March 2007)
MOU on Labour and manpower Development (June 2009)
Agreement regarding Exchange of Information with respect to Taxes (May 2012)
MOU on Cooperation in the field of Information and communication Technology (May 2012)
MOU on the establishment of a Joint High Commission (February 2014)
Mode of entry to Foreign Market:
The decision of how to enter a foreign market can have a significant impact on the results.
Expansion into foreign markets can be achieved via the following four mechanisms:
• Exporting
• Licensing
• Joint Venture
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• Direct Investment
Exporting
Exporting is the marketing and direct sale of domestically-produced goods in another
country. Exporting is a traditional and well-established method of reaching foreign markets.
Since exporting does not require that the goods be produced in the target country, no
investment in foreign production facilities is required. Most of the costs associated with
exporting take the form of marketing expenses.
Exporting commonly requires coordination among four players:
• Exporter
• Importer
• Transport provider
• Government
Licensing
Licensing essentially permits a company in the target country to use the property of the
licensor. Such property usually is intangible, such as trademarks, patents, and production
techniques. The licensee pays a fee in exchange for the rights to use the intangible property
and possibly for technical assistance.
Joint Venture
There are five common objectives in a joint venture: market entry, risk/reward sharing,
technology sharing and joint product development, and conforming to government
regulations. Other benefits include political connections and distribution channel access that
may depend on relationships.
Such alliances often are favorable when:
• The partners' strategic goals converge while their competitive goals diverge;
• The partners' size, market power, and resources are small compared to the industry
leaders; and
• Partners' are able to learn from one another while limiting access to their own
proprietary skills.
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The key issues to consider in a joint venture are ownership, control, length of agreement,
pricing, technology transfer, local firm capabilities and resources, and government intentions.
Potential problems include:
• conflict over asymmetric new investments
• mistrust over proprietary knowledge
• performance ambiguity - how to split the pie
• lack of parent firm support
• cultural clashes
• if, how, and when to terminate the relationship
Joint ventures have conflicting pressures to cooperate and compete:
• Strategic imperative: the partners want to maximize the advantage gained for the joint
venture, but they also want to maximize their own competitive position.
• The joint venture attempts to develop shared resources, but each firm wants to
develop and protect its own proprietary resources.
• The joint venture is controlled through negotiations and coordination processes, while
each firm would like to have hierarchical control.
Foreign Direct Investment:
Foreign direct investment (FDI) is the direct ownership of facilities in the target country. It
involves the transfer of resources including capital, technology, and personnel. Direct foreign
investment may be made through the acquisition of an existing entity or the establishment of
a new enterprise.
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Direct ownership provides a high degree of control in the operations and the ability to better
know the consumers and competitive environment. However, it requires a high level of
resources and a high degree of commitment.
Mandatory Documents Required For Export And Import:
India took a leap forward in improving 'Ease of Doing Business' today by reducing the
mandatory documents required for import and export of goods to three documents each. The
Directorate General of Foreign Trade (DGFT) issued a Notification to this effect today.
35
The Department of Commerce had set up an Inter-Ministerial Committee under the
Chairmanship of DGFT in July 2014 to study and recommend ways to reduce the number of
mandatory documents required for export and import. The Committee held detailed
discussions with all stakeholders and the concerned Departments/ Ministries/Agencies and
also visited JNPT to study the ground situation and find ways to minimize the number of
documents and reduce transaction costs and time for exports and imports. The Committee
submitted its "Trading across Borders" report to Prime Minister's Office in December 2014.
Based on the recommendations of the report, the RBI has agreed to do away with the 'Foreign
Exchange Control Form (SDF)' by incorporating the declaration in the 'Shipping Bill' (for
exports) and dispensing with the 'Foreign Exchange Control Form (Form A-1)' (for imports).
Customs have also agreed to merge the 'Commercial Invoice' with the 'Packing List' and have
issued a Circular for accepting 'Commercial Invoice cum Packing List' that incorporates the
required details of both the documents. The exporters and importers, however, have the
option of filing separate 'Commercial Invoice' and 'Packing List' also, if they so desire.
Shipping Ministry has also agreed to do away with the requirement of 'Terminal Handling
Receipt' and make the process online.
(a) Mandatory documents required for export of goods from India:
1. Bill of Lading/Airway Bill.
2. Commercial Invoice cum Packing List*.
3. Shipping Bill/Bill of Export.
[Note: *(i) As per CBEC Circular No. 01/15-Customs dated 12/01/2015.
(ii) Separate Commercial Invoice and Packing List would also be accepted.]
It may be recalled that India ranked 126 in 'Trading across Borders" component of "Ease of
Doing Business", out of 189 countries ranked by the World Bank, in its 2015 Report. The
ranking methodology adopted by the World Bank for 'Trading across Border' takes into
account the number of mandatory documents required for export and import and the time and
cost of exporting/importing a container out of/into the country. World Bank's 2015 Report
listed 7 and 10 mandatory documents respectively for export and import from/to India.
(b) Mandatory documents required for import of goods into India:
1. Bill of Lading/Airway Bill
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2. Commercial Invoice cum Packing List*
3. Bill of Entry
[Note: *(i) As per CBEC Circular No. 01/15-Customs dated 12/01/2015.
(ii) Separate Commercial Invoice and Packing List would also be accepted.]
As such, after issue of DGFT's Notification only three documents each would be mandatory
for export and import as two documents (Packing List and Commercial Invoice) required by
Customs have been merged into one document, whereas one document required by RBI
(Foreign Exchange Control Forms - SDF for exports and A-1 for imports) and one document
required by Ministry of Shipping (Terminal Handling Receipt) earlier, have now been
dispensed with. 'Cargo Release Order' is not a mandatory document required by any
regulatory agency, but is a commercial document issued by the Shipping line to the
concerned importer. As regards, 'Technical Standard Certificate'/ 'Certified Engineer's
Report', 'Product manual' and 'Inspection report', these documents are required in specific
cases/products/tariff lines only and are not mandatory for all products.
The reduction in the number of mandatory documents would also lead to corresponding
reduction in Transaction cost and time. It is expected that this step would not only facilitate
the 'Ease of Doing Business' in respect of 'Trading across Borders' but also improve India's
ranking on this parameter.
Subject: Specifying documents required for Export and Import
S.O. (E) in exercise of the power conferred by Section 5 of the Foreign Trade (Development
and
Regulation) Act, 1992 read with Para 2.1 of the Foreign Trade Policy, 2009-2014, the Central
Government hereby inserts a new Para 2.53 of Foreign Trade Policy, 2009-14:
2. Para2.53: The following mandatory documents are prescribed for exports and imports of
goods
From/into India:
(a) Mandatory documents required for export of goods from India:
1. Bill of Lading/Airway Bill
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2. Commercial Invoice cum Packing List*
3. Shipping Bill/Bill of Export
(b) Mandatory documents required for import of goods into India:
1. Bill of Lading/Airway Bill
2. Commercial Invoice cum Packing List*
3. Bill of Entry
[Note: *(i) As per CBEC Circular No. 01/15-Customs dated 12/01/2015.
(ii) Separate Commercial Invoice and Packing List would also be accepted.]
(c) For export or import of specific goods or category of goods, which are subject to any
restrictions/policy conditions or require NOC or product specific compliances under any
statute, the regulatory authority concerned may notify additional documents for purposes of
export or import.
(d) In specific cases of export or import, the regulatory authority concerned may
electronically or in writing seek additional documents or information, as deemed necessary to
ensure legal compliance.
(e). This Notification shall come into effect from 1st April, 2015.
3. Effect of this Notification: Only three documents each {as in para 2. (a) & (b) above}
would be mandatory for exports and imports.
SHIPPING:
SEA SHIPMENT:
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All shipment of materials shall be made by first class direct vessels, through the chartering
wing, Ministry of Surface Transport as per procedure detailed hereunder. The Foreign
Supplier shall arrange with Vessels Owners or Forwarding Agents for proper storage of the
entire Cargo intended for the project in a specific manner so as to facilitate and to avoid any
over carriage at the port of discharge. All shipment shall be under deck unless carriage on
deck is unavoidable.
The bills of lading should be made out in favour of `Bharat Petroleum Corporation Ltd.Or
order'. All columns in the body of the Bill of Lading namely marks and nos., material
description, weight particulars etc., should be uniform and accurate and such statements
should be uniform in all the shipping documents. The freight particulars should mention Page
6 of 24 the basis of freight tonnage, heavy lift charges, if any, surcharge, discount etc. clearly
and separately. The net total freight payable shall be shown at the bottom.
SHIPPING DOCUMENTS:
All documents viz. Bill of Lading, invoices, packing list, freight memos, and country of
origin certificates, test certificate, drawings and catalogues should be in English language.
In addition of the bill of lading which should be obtained in three stamped original plus as
many copies as required, invoices, packing list, freight memos, (if the freight particulars are
not shown in the bills of lading), country of origin certificate, test / composition certificate,
shall be made out against each shipment in as many number of copies as shown below.
The bill of lading, invoice and packing list specifically shall show uniformly the mark and
numbers, contents case wise, country of origin, consignees name, port of destination and all
other particulars as indicated under clause 2. The invoice shall show the unit rates and net
total F.O.B. prices. Items packed separately should also be invoiced and the value shown
accordingly. Packing list must show apart from other particulars actual contents in each case,
net and gross weights and dimensions, and the total number of packages. All documents
should be duly -signed by the Vendor's authorized representatives.
In the case of FOB orders, shipping arrangements shall be made by the Chartering Wing of
the Ministry of Surface Transport, New Delhi through their respective forwarding agents. The
names and addresses of forwarding agents shall be as per Special Purchase Conditions.
Supplier shall furnish to the respective agents the full details of consignments such as outside
dimension, weights (both gross and net) No of packages, technical description and drawings,
name of supplier, ports of loading, etc. 6 weeks notice shall be given by the supplier to enable
39
the concerned agency to arrange shipping space. The bill of lading shall indicate the
following: Shipper: Government of India
Consignee: Bharat Petroleum Corporation Ltd.
In case of supplies from USA, Export Licenses, if any required from the American
Authorities shall be obtained by the U.S. Suppliers. If need be assistance for obtaining such
export licenses would be available from India Supply Mission at Washington.
AIR SHIPMENT:
In case of Air shipment, the materials shall be shipped through freight consolidator
(approved by us). The airway bill shall be made out in favour of BHARAT PETROLEUM
CORPORATION LTD.
TRANSMISSION OF SHIPPING DOCUMENTS:
Foreign Supplier shall obtain the shipping documents in seven complete sets including three
original stamped copies of the Bill of Lading as quickly as possible after the shipment is
made, and airmail as shown below so that they are received at least three weeks before the
Vessels arrival. Foreign Supplier shall be fully responsible or any delay and / or demurrage in
clearance of the consignment at the port due to delay in transmittal of the shipping
documents.
If in terms of letter or otherwise, the complete original set of documents are required to be
sent to BPCL through Bank the distribution indicated below will confine to copies of
documents only minus originals.
Documents BPCL (Mumbai)
Bill of Lading 4 (including 1 original)
Invoice 4
Packing List 4
Freight Memo 4
Country of Origin Certificate 4
Third party inspection certificate 4
Drawing 4
Catalogue 4
Invoice of Third Party 4
40
For inspection charges whenever applicable
Import and Export Licensing Procedures in Bahrain
Bahrain: Import
41
General import regulations and requirements
The term Persian Gulf should not be used on any shipping documents; the term Arabian Gulf must be used.
Bahrain observes the Arab boycott of Israel, whereby no vessel or aircraft used for shipments to Bahrain may call on any port in Israel.
Consular legislation is required for certain documents, see below.
The Bahrain Directorate of Customs must certify all product descriptions on customs documents to be specific and clear before goods are cleared for entry. Identifying imports by supplying the applicable tariff item numbers in customs documents and Letters of credit will facilitate their customs clearance.
Samples, low value and non-commercial importations
Samples not for sale are exempt from customs duty.
Samples having a commercial value may enter temporarily by payment of a deposit equal to the applicable duty.
In general, advertising matter is free of duty.
Drug samples may be consigned to an approved pharmaceutical importer only.
There is no allowance for low (de Minimis) value duty free entry.
Import customs tariff
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates are all member-countries of the Gulf cooperation council (GCC), a Customs union that has established a common external tariff rate of 5% for most goods imported from member countries.
Certain items, e.g., basic foodstuffs and medical items, are exempt from the Common External Customs Tariff (CXT) and enter the member-countries free of duty. Currently, each member-country has created an individual "exempt/duty-free" list.
Note: Kuwait prohibits the importation of pork, pork products, alcoholic beverages, products containing alcoholic beverages, gambling machines, and pornographic materials.
Customs valuation basis
Customs value is generally based on transaction value, which is the price actually paid or payable (the Commercial invoice price). This value is subject to certain adjustments including freight, insurance, packing, commissions, royalties, and license fees. If value cannot be determined using this method, another method of valuation must be used. For more information see Customs valuation of imported goods. In most cases the customs value is equivalent to CIF value.
There are no additional customs surcharges or value-added taxes in Bahrain.
General import license/permit requirements
An import license is required for imports of arms, ammunitions and alcoholic beverages, fertilizers, pesticides, fireworks, natural pearls, handcuffs, satellite dishes and accessories.
42
Prohibited or highly restricted imports
Prohibited imports include: food products containing cyclamates; irradiated food products; pornography; wild animals; radio-controlled model airplanes; children's toys that methyl chloride; articles determined to be dangerous by the Ministry of Health.
Any imports which pose a threat to public policy and security are also prohibited.
This country prohibits imports of hazardous waste as per the Basel convention. For additional information see: Basel convention (select country for details).
Note: All imports from Israel are prohibited.
Official customs/import information
Rules of origin are important in implementing such trade policy instruments as anti-dumping and countervailing duties, origin marking, and safeguard measures. Follow rules issued by WTO.
Check Member and Observer countries of World Trade Organization, Centre William Rappard, Rue de Lausanne, 154, CH-1211 Geneva 21, Switzerland; phone: +41 22 739 5111; fax: +41 22 731 4206; email: [email protected]
Foreign exchange controls and letters of credit
Foreign exchange is controlled by the Bahrain Monetary Agency. There are no restrictions on capital movements, foreign exchange, foreign trade or foreign investment.
The central bank is the Central bank of Bahrain, King Faisal Highway, Diplomatic Area, Block 317, Rd. 1702, Bldg. 96, POB 27, and Manama.
The unit of currency is the BHD = Bahraini Dinar (subdivided into 1,000 fils).
Commercial invoice
A commercial invoice is required for every commercial shipment. At least three (3) original, signed copies should be included in the shipping documents sent to the consignee or his agent.
The commercial invoice should conform to the information required for Consular legalization. It should be including the following information:
• Manufacturer's full name and address
• First six digits of the Harmonized Tariff System (HTS) classification number / Schedule B number
• Complete marks and numbers
• Net weight and gross weight (all in metric system units)
• Port of lading
• Transportation mode, and name of ocean vessel
• Country of origin
The invoice must be on the letterhead stationery of the seller. Either English or Arabic is acceptable. It should also contain the following statement:
"I, (name, title, company name), hereby swear that the prices stated in this invoice are the current export market prices and that the origin of the goods described herein is
43
_____________, and I assume full responsibility for any inaccuracies or errors therein."
When the seller arranges the shipping insurance, a copy of the insurance certificate, or insurance policy must be included among the shipping documents. If the insurance coverage is provided by the buyer, the invoice must state that the insurance is placed in Bahrain.
Note: If the shipped goods contain any foreign components, include their country of origin and their percentage of the cargo.
For more information on preparing and distributing commercial invoices, see comments on: Commercial Invoice and Shipping Document Distribution Based on Specific Functional Needs.
Airfreight shipments, in most cases, require the shipping documents to accompany the cargo/air waybill (AWB).
Non-commercial shipments require a pro-forma invoice.
Packing list
A packing list is required. At least two (2) copies should be included, describing in detail the contents of each case or container. Include net weight, gross weight, and the CIF value.
In general, even when it is not required regulation, it is recommended that a packing list be used with all shipments containing more than one shipping unit of packaged cargo. Most countries require a packing list be provided together with the commercial invoice. The required information must be consistent with all information shown on the commercial invoice.
At least three (3) copies of the packing list should be included as part of the shipping documents sent to the consignee or the agent thereof. The exact contents of each package should be clearly identified. This should include each item's gross weight and net weight and each package's marks and numbers.
Transport document
A properly prepared transport document is required for transportation purposes and as a source document for Customs clearance purposes.
For ocean cargo, an ocean bill of lading is typically used. It may take several forms (a traditional negotiable bill of lading, a straight bill of lading, and express bill of lading, or an electronic bill of lading (EBL).
An ocean bill of lading issued to order may be negotiated by endorsement to a buyer/consignee, however the designated port of discharge cannot be amended.
In general, ocean freight charges must be Freight Prepaid.
Note: For detailed information on completing a bill of lading see interactive bill of lading exhibit. (Scroll down to see the form, and click on any field for details on the information that goes in that box.)
For air cargo, an air waybill (AWB) replaces the bill of lading used for ocean freight. Nine (9) copies on a standard IATA AWB form are required.
Alert: The term Arabian Gulf is required on all shipping documents; the term Persian Gulf is NOT be used.
Certificate of Origin (general)
44
A Certificate of Origin (CO, C/O) (Original) certified by the relevant Chambers of Commerce of the country of origin is required. The number of copies is determined by the needs of the importer.
After confirming that number, the C/O should be prepared using the general form available from a commercial printer.
The C/O must include the name of the vessel and state that the port of discharge or final destination is Bahrain.
The C/O must list the contents of each shipping unit, the manufacturer of each item within and the products' country of origin.
If any of the shipped goods are not wholly the product of their origin country, the following statement should be included:
"The undersigned, ______, does hereby declare on behalf of the above-named supplier/manufacturer that certain parts or components of the goods described in the attached certificate of origin are the products of such country or countries, other than the country named therein as specifically indicated herein."
The statement should be followed by a list of countries and the percentages of each country's foreign components.
The C/O should include a notarized statement by the shipper that the information stated is true and correct.
Each C/O copy should be attached to a copy of the commercial invoice.
Official cargo insurance requirements
When the seller/exporter arranges for the shipping insurance, a copy of the insurance certificate or insurance policy must be included among the shipping documents sent to the consignee. If the insurance coverage is provided by the buyer/importer, the commercial invoice must state that the insurance is placed in Bahrain.
A shipper who wishes to protect his beneficial interest in the cargo in the event of loss or damage prior to delivery to the ultimate consignee should cover the cargo with either an FOB/FAS clause or contingency insurance clause coverage.
Other general import document requirements
A "steamship certificate", issued by the steamship line, may be required stating that the vessel carrying the ocean freight is not an Israeli vessel and no scheduled Israeli port calls.
All import shipments of food and drink to Bahrain must be covered by a "cyclamate certificate" issued and signed by the manufacturer or the exporter that the products do not contain cyclamates.
Wood packing materials
The International Standards for Phytosanitary Measures No. 15 (ISPM-15) has not yet been adopted by this country.
See information issued by the International Plant Protection Convention (IPPC), Plant Protection Service, U.N. Food and Agriculture Organization of the United Nations (FAO), Viale delle Terme di Caracalla, I-00100 Rome, Italy; fax: +39 6 570 56347; email: [email protected]
45
Contact: Agricultural Quarantine Unit, Plant Health Directorate, Ministry of Municipal Affairs and Agriculture, POB 251, Manama; phone: +973 1779 6688; fax: +973 1769 3386; email: [email protected]
General Information:
For a listing of countries that have adopted ISPM-15 requirements see: ISPM15.com.
For IPPC contact information by country see: International Plant Protection Convention (IPPC), and select "Countries".
Shipment packaging and marking requirements
In general, follow standard shipping practices.
• Export packing must be strong enough to withstand weather conditions, pilferage, and rough handling during the cargo's through transportation.
• Each package should be uniquely numbered if there is more than one shipping unit in the consignment
• Each package should be marked with: contents & quantity, name & address of consignee, country of origin, port of loading, port of discharge, net weight, gross weight, cubic measurement and marks & numbers.
• Dangerous goods require the use of U.N. Performance Oriented Packaging (UN POP).
Product packaging/labeling requirements
Labels must be in Arabic or in Arabic/English. Arabic stickers are accepted.
Common GCC labeling standards should be observed. Check: GCC Standardization Organization, Al Gadeer and Olaya Street, POB 85245, SA-11691 Riyadh; phone: +966 11 274 6655; fax: +966 11 210 5391; email: [email protected]
Goods should be clearly marked with country of origin.
There are specific packaging and labeling requirements that apply to food products, pharmaceuticals and cigarettes.
Food labels must include:
• Product and brand names
• Production and expiration dates
• Country of origin, name
• Name of manufacturer
• Net weight in metric units
• List of ingredients in descending order of magnitude
All fats and oils (including gelatins) used as ingredients must be specifically identified on the label.
Pork products, or products containing pork or pork lard, should be clearly identified as such on the label. Products found to contain traces of pork that are not so labeled will be confiscated and possibly banned from future import for a specified period of time.
Additional product packaging and/or labeling requirements may apply to particular types of products. Refer to the product-based information herein for the product you are considering to import or export. An exporter should also verify with its prospective importer in the destination country as to requirements for a specific product to be shipped.
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Standards
Product standards are regulated by the Bahrain Standards & Metrology Directorate (BSMD), Ministry of Industry and Commerce, Bldg. 240, Road 1704, Block 317, POB 5479, BH-Bahrain; phone: +973 17 574871; fax: +973 17 530730; email: [email protected]
Also see ISO Standards Membership.
GCC Standards (click button for English on top bar, right side): The Gulf Cooperation Council member countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates have recently established standards (GCC Standards) for the importation of certain products. These standards have been instituted in collaboration with the Saudi Arabian Standards Authority (SASO), Imam Saud Bin Abdul Aziz Bin Mohammed Rd. (West End), POB 3437, SA-11471 Riyadh; phone: +966 1 452 0000; fax: +966 1 452 0086; email: [email protected].
ATA carnets
Bahrain has ratified the Istanbul Convention on temporary admission of goods in May 2012. The ATA Carnet System is expected to be implemented shortly.
An ATA Carnet is obtained in the country from which the goods are to be first exported (see list of participating countries). Initiating and governing authority for ATA Carnets is the International Chamber of Commerce (ICC), 38, Cours Albert 1er, F-75008 Paris, France; phone: +33 149 532828; fax: +33 149 532859
Note: An ATA Carnet is typically accepted for Commercial Samples, Exhibitions and Fairs, and/or Professional Equipment. An ATA Carnet does not cover perishable or consumable items, nor goods for processing or repair. Some countries are more restrictive in the scope of allowances for temporary imports covered by ATA Carnet. It is recommended that prior verification be made with the issuing agency.
Important: Exercise independent care before relying on information contained herein. Although we strive to ensure all information is correct and current, GIST net assumes no liability for detrimental reliance on this information. Trade requirements may change with little or no prior notification, de-facto requirements in certain countries vary from official regulations, and particular shipments and/or importers may have special destination customs arrangements. We encourage you to check with the importer or its customs agent in the destination country for specific importation requirements for specific products and circumstances. We ask your help with feedback ([email protected]) concerning information which may be outdated or incomplete.
STEEPLED ANALYSIS
47
STEEPLED Analysis of oil and gas industry in Bahrain:
Social
Bahrain is having kind of conservative society and if we see the societal business over there
is mainly with other gulf countries and agreements with the same.
Technological
Bahrain for oil and gas industry they have advanced technology for finding the oil and gas
resources and to pull up from the landscape
Economical
Bahrain is quite developed country and economy of Bahrain is merely depends upon oil and
gas industry as all other gulf country. So for our as well as Bahrain’s economic growth it’s
better to make trade agreements regarding oil and gas sector which will be beneficial for both
the countries.
Environmental
Bahrain is somewhat conservative country in general sense about the country’s environment.
Specially for women that their 30 to 40% productive group is not contributing anything to the
nation’s income and are dependents.
Political
Bahrain is having Monarchy system and that is why political factors are merely dependable
on the king of the country, if king does corruption, then whole country may having the habit
of corruption and if the king is lesser interested in putting restrictions regarding policy
formulation, then country can grow more bitterly
Legal
Bahrain is more positive in legal aspect as people over there with illegal acts having
punishment like death too. So it is a good aspect of Bahrain. In the case of oil and gas
industry too, Bahrain is following the legality for running their economy on the basis of the
same industry.
Ethical
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Bahrain, then it is also having a kind of ethics based on the community ethics and the country
ethics- business ethics are the formulated part of the same. Business ethics are what
somewhat refers to fair practices in making trade. So at Bahrain, for making stronger trade
relationship with the country.
Demographical
Demographic factors, such Bahrain's young population, and trends in international migration
will also play an important role. The fact that foreign workers account for over 70% of
Bahrain's labor force makes the country relatively vulnerable to changes in international
flows of expatriates.
STEEPLED Analysis of oil and gas industry in India:
49
Social
India is a developing society which is in the phase of post industrialization and the society is
now starts to encourage the industries from the other countries.
Technological
India is also having BARC to make research and having updated technology in the field of
production technology, safety technology and also in information technology.
Economical
Indian economy is much more stable economy than USA, China etc. as the habits of people
over here do not have aggressive decisions in their blood. So in the present time, falling the
value of rupee and inflation and all other economic DE growth is for short-term.
Environment
There are some places where such business with high risk of damages like oil and gas
companies can’t be situated anywhere as some of the parts of India are having high risk of
violence.
Political
In India strong political leader and strong political party can change the policy at any point of
time as some of the political groups and parties having stronger impact of their decision on
the society for example Shiv sena.
Legal
In India some illegal things like smuggling, selling prohibited products secretly and piracy
and many more legal issues that actually not allowed to act but still people make the illegal
things happen.
Ethical
India is having the ethics on the basis of the culture, traditions, belief in god and thoughts of
the parents if we talk in general sense. For oil and gas industry, there would be no such issue
happens but the rise in fuel prices at all over the India and in Gujarat too makes morals and
ethics of making business down.
Demographical
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India is having highest youth population that is from productive group who can be the
workforce for the business established in India by Bahrain. Educated youth can make the oil
and gas industry survive more better and people over India needs more fuel as most of the
youth is in the productive activities.
Comparative analysis of STEEPLED in tubular form
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BAHRAIN INDIA
SOCIAL Bahrain is having kind of
conservative society and if
we see the societal business
over there is mainly with
other gulf countries and
agreements with the same.
India is a developing society
which is in the phase of post
industrialization and the
society is now starts to
encourage the industries from
the other countries.
TECHNOLOGICAL Bahrain for oil and gas industry
they have advanced technology
for finding the oil and gas
resources and to pull up from
the landscape
India is also having BARC to
make research and having
updated technology in the field
of production technology, safety
technology and also in
information technology.
ECONOMIC Bahrain is quite developed
country and economy of
Bahrain is merely depends upon
oil and gas industry as all other
gulf country.
Indian economy is much more
stable economy than USA,
China etc. as the habits of
people over here do not have
aggressive decisions in their
blood.
ENVIRONMENT Bahrain is somewhat
conservative country in general
sense about the country’s
environment. Specially for
women that their 30 to 40%
productive group is not
contributing anything to the
nation’s income and are
dependents.
There are some places where
such business with high risk of
damages like oil and gas
companies can’t be situated
anywhere as some of the parts
of India are having high risk of
violence.
POLITICAL Bahrain is having Monarchy
system and that is why political
factors are merely dependable
on the king of the country
In India strong political leader
and strong political party can
change the policy at any point
of time as some of the political
groups and parties having
stronger impact of their decision
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on the society.
LEGAL Bahrain is more positive in
legal aspect as people over there
with illegal acts having
punishment like death too.
In India some illegal things like
smuggling, selling prohibited
products secretly and piracy and
many more legal issues that
actually not allowed to act but
still people make the illegal
things happen.
ETHICAL Bahrain, then it is also having a
kind of ethics based on the
community ethics and the
country ethics- business ethics
are the formulated part of the
same.
India is having the ethics on the
basis of the culture, traditions,
belief in god and thoughts of the
parents if we talk in general
sense.
DEMOGRAPHIC Demographic factors, such
Bahrain's young population, and
trends in international migration
will also play an important role.
India is having highest youth
population that is from
productive group who can be
the workforce for the business
established in India by Bahrain.
SWOT ANALYSIS OF BPCL
53
BPCL specializes in refining, processing, and distributing petroleum products, and
exploration and production of hydrocarbons. It offers petrol, diesel, kerosene, aviation fuel,
liquefied petroleum gas (LPG), compressed natural gas (CNG), and lubricants. Research and
development (R&D) is an integral part of BPCL’s strategy for achieving sustainable growth
and profitability. However, increasing competition can create hindrances for the company in
securing sites for its new fuel stations, which could hurt the company's expansion plans.
STRENGTHS:
Robust research and development capabilities
Research and development (R&D) is an integral part of BPCL’s strategy for achieving
sustainable growth and profitability. To enhance R&D capabilities, BPCL is continuously
strengthening its infrastructure and manpower resources. The new products developed during
the year include OE specific high performance passenger car engine oil, semi-synthetic 4T
engine oil, high performance hydraulic oil, STOU (Super Tractor Oil Universal) for farm
tractors, environment friendly cutting oils, defense specific hydraulic oil, and alternate
formulations for existing products. Moreover, as part of its new initiatives, BPCL continued
its research collaborations with a number of leading research institutes. These include
collaborations with Indian Institute of Science of Bangalore, Osmania University of
Hyderabad, Tamil Nadu Agricultural University of Coimbatore, IIT Roorkee, IIT Madras,
Institute of Plasma Research of Gandhinagar, and CSMCRI of Bhavnagar.
Non-conventional energy initiatives
BPCL has placed strong emphasis on the development of non-conventional sources of
energy. A Number of initiatives have been undertaken in tapping non-conventional energy
sources like bio-diesel, wind energy, solar energy, and fuel cells in order to develop alternate
sources of energy. BPCL has promoted Bharat Renewable Energy (BREL), a joint venture
company with the objective of entering the bio-diesel value chain in the state of Uttar
Pradesh. “Project Triple One” has also been launched with the aim of producing one million
tons of bio-diesel from the plantation of Jatropha and Karanj, to replace diesel over the next
10 years.
Strong production capabilities
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BPCL has strong production capabilities. The aggregate refinery throughput at BPCL’s
refineries at Mumbai and Kochi and that of its subsidiary company NRL in FY2013 was
23.21 MMT. During FY2013, the Mumbai refinery processed 13.10 MMT of crude oil.
Despite turnaround activities, the refinery achieved a capacity utilization of 109% in FY2013.
The refinery achieved its highest ever production of several products including LPG, methyl
tertiary butyl ether, aviation turbine fuel (ATF), and lube base oils. The refinery also
commenced the production of Euro IV quality motor spirit (MS) and high speed diesel
(HSD). The Kochi refinery recorded a throughput of 10.1 MMT in FY2013. The Kochi
refinery recorded its highest ever production of ATF, Bitumen, LPG, MS meeting Euro III
standards, and propylene.2012, the Kochi refinery recorded its highest ever production of
ATF, Bitumen, LPG, MS meeting Euro III standards, and propylene. Strong production
capabilities enable BPCL to continuously enhance its efficiency, to evaluate opportunities to
reduce costs, and to improve processes. In addition, it helps the company to increase the
reliability of order fulfillment and satisfaction of customer needs.
WEAKNESS:
Concentration of operations
BPCL primarily operates in India and generates major revenues from the country. Although
the company has presence in six countries across five continents, the company heavily
depends on the Indian market for its operating profits. As a result, this becomes a competitive
disadvantage, as its competitors carry a wider scale of operations. The prime concentration of
company’s operations in India not only increases its exposure to local factors but also
deprives BPCL of higher revenues from high growth markets in countries outside India.
Dependency on international market for supply of crude oil
BPCL’s dependence on imports for meeting the crude oil requirements of its refineries has
been increasing. BPCL’s imports of crude oil rose from 16.27 MMT in FY2012 to 17.00
MMT in FY2013. The international crude oil markets remain extremely challenging since the
crude oil prices are volatile. On the other hand, supply of crude oil from domestic sources has
been declining, Also, geo-political developments like the sanctions imposed on Iran, a major
crude oil supplier, has made the task of imports more challenging.
All these factors contribute in creating a demand supply gap for the company. This also
hampers the face value of the company as well as hits the revenues adversely.
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OPPORTUNITIES:
Strategic plan for the integrated refinery expansion project (IREP)
In recent years, BPCL has strategically planned for a major expansion program at its Kochi
refinery. BPCL, through IREP, plans to increase the crude oil refining capacity from 9.5
MMTPA to 15.5 MMTPA, focusing on low-cost expansions as a part of the company’s
INR200,000 million ($4,172 million) investment disbursement over the next three years. In
accordance with this target, in April 2011, the Board of Directors at BPCL approved the
expansion of the Kochi refinery by six MMTPA. Further, in June 2011, BPCL planned to
expand its refineries in Kochi from 190,000 barrels per day to 300,000 barrels per day and
also planned to build a fluid catalytic cracking unit at the same plant. These expansions are
expected to be operational by FY2015. In recent years, BPCL has strategically planned for a
major expansion program at its Kochi refinery. BPCL, through IREP, plans to increase the
crude oil refining capacity from 9.5 MMTPA to 15.5 MMTPA, focusing on low-cost
expansions as a part of the company’s INR200,000 million ($4,172 million) investment
disbursement over the next three years. In accordance with this target, in April 2011.
Expansion of the petrochemical business:
BPCL is planning to diversify into the petrochemicals business and also to build a niche
petrochemical project at a cost of INR50–60 billion ($1.1–1.3 billion). For instance, in
December 2011, BPCL planned to sign an agreement to form a joint venture with UK's LP
Chemicals for setting up a petrochemical plant at its Kochi refinery in Kerala. Further, in July
2012, BPCL signed a MOU with LG Chemicals to set up a petrochemical plant next to its
Kochi refinery complex. The company would be installing a petrochemical fluid catalytic
cracker (PFCC) which would produce 500 thousand metric tons per annum (TMTPA) of
propylene. This project is scheduled for completion in the next four years dovetailed with the
refinery expansion project, with an expenditure of INR40–60 million ($0.83–$1.25 million).
Later, in September 2012, the company further planned to offer 51% stake in the
petrochemical project to its Korean joint venture partner LG Chemicals.
Growing demand for oil and gas:
56
After the global economic meltdown, the years 2011–13 continued the pace of recovery,
especially in countries like India and China. The annual growth rate of the Indian economy is
projected to have increased to 7.4% in 2014-15 as compared with 6.9% in the fiscal year
2013-14.. India’s GDP is expected to grow at a healthy rate in the coming years. As energy
demand grows, oil and gas companies will have a major role to play in meeting the rising
demand. Moreover, according to BP’s Energy Outlook 2030, energy consumption in India
has grown by 190% over the past 20 years and is likely to grow by 115% over the next 20
years, a rate of over 4% per annum.
THREATS:
Intense competition
The competition in the downstream segment in India has increased due to the entry of private
sector companies. Other state-owned oil companies in India have shed their co-existence
policy in recent years and have gained noticeable market share in the oil industry. BPCL
faces intense competition from other national and local companies such as Hindustan
Petroleum, Indian Oil, Chennai Petroleum, Hindustan Oil Exploration, and Mangalore
Refinery and Petrochemicals.
In addition, deregulation of the downstream segment has led to the entry of private sector
companies such as Reliance Industries into this market segment. Increasing competition in
the downstream segment could force the company to offer additional subsidy and result in
pricing pressures. This in turn would increase costs and cause further decline in margins.
Further, increasing competition can create hindrances for the company in securing sites for its
new stations, which could hurt the company's expansion plans.
Under-recovery of the prices of petroleum products:
Although the Indian-state owned oil marketing companies (OMC) like BPCL are in theory
free to raise the prices of their petroleum products, but in practice they are rarely allowed to
do so by the Indian government, their majority shareholder.
Currently, OMC are suffering a loss of INR9.84 ($0.20) for every liter of diesel sold in the
domestic market and a loss INR31.30 ($0.65) for every liter of kerosene sold, while the loss
on selling domestic LPG is INR478.50 ($9.98) per cylinder. Although BPCL had absorbed
such losses in the past whereby profits from its refining business had compensated the losses
57
suffered by its marketing operations allowing the company to record overall profits, but
declining refining margins are no longer enough to offset the marketing losses.
Overview of Gujarat:
58
Gujarat ranks 1st in the production of crude oil (onshore-55.10%) and natural gas (onshore-
32.3%) in India. The State has the highest number of oil and gas fields (onshore and offshore)
in India (31.3%) 36.6% of India’s installed refining capacity is in the State of Gujarat, which
is the highest in India Reliance Petroleum Limited at Jamnagar (Gujarat) is the largest
grassroots refinery in the Asia Pacific.
Gujarat is the only state in India with a state-wide gas grid and multigas suppliers. The State
has the potential to become a national hub for gas due to its proximity to the Middle East gas
sources and attractive northern market.
Gujarat State Petroleum Corporation (GSPC) is India’s only State Government-owned
company in the oil and gas exploration and production business
GSPC is known for India’s largest gas discovery in KG Basin on the coastline of Andhra
Pradesh. Gujarat is the only State having 2 LNG Terminals (Dahej and Hazira).
Gujarat State petroleum Corporation (GSPC) is an oil and gas exploration company of
Gujarat Government. GSPC acquired gas blocks in KG Basin in August 2002. According to
government’s own estimates, the gas fields allotted to GSPC were worth $20 billion. Modi
government entered into production sharing agreements with Geo Global and Jubilant Enpro
Pvt. Ltd. Modi gave away 10% of participating interest to each of these two companies
completely free of cost.
Indian Oil Corporation Limited, or Indian Oil, is an Indian state-owned oil and gas
corporation with its headquarters in New Delhi, India. It is the world's 88th largest
corporation, according to the Fortune Global 500 list, and the largest public corporation in
India when ranked by revenue.
Indian Oil and its subsidiaries account for a 49% share in the petroleum products market,
31% share in refining capacity and 67% downstream division pipelines capacity in India. The
Indian Oil Group of companies owns and operates 10 of India's 22 refineries with a combined
refining capacity of 65.7 million metric tonnes per year. In FY 2012 IOCL sold 75.66 million
tonnes of petroleum products and reported a EBT of 37.54 billion, and the Government of
India earned an excise duty of 232.53 billion and tax of 10.68 billion
Indian Oil Corporation is the No. 1 Oil Company in India by sales turnover and is also the
21st largest petroleum company in the world. It was the only Indian company to be listed in
the fortune 500 in 2003 and was also ranked second among 15 national oil companies in the
59
Asia pacific region. It was ranked 325 in the prestigious Forbes Global 500 listing among the
largest public companies. Indian Oil and its subsidiaries account for 47% petroleum products
market share among public sector oil companies, 43.5% national refining capacity and 74%
petroleum products pipeline capacity.
The main products of Indian Oil are petrol, diesel, LPG, auto LPG, aviation turbine fuel,
lubricants and petrochemicals: naphtha, bitumen, kerosene etc. Indian Oil operates the largest
and the widest network of fuel stations in the country, numbering about 20,575 (16,350
regular ROs & 4,225 Kisan Seva Kendra). It has also started Auto LPG Dispensing Stations
(ALDS). It supplies Indane cooking gas to over 66.8 million households through a network of
5,934 Indane distributors.
Overview of Punjab:
60
Punjab is a state in the northwest of the Republic of India, form part of the larger Punjab
region. The state is bordered by the Indian states of Himachal Pradesh to the east, Haryana to
the south and southeast, Rajasthan to the southwest, and the Pakistani province of Punjab to
the west. To the north it is bounded by the Indian state of Jammu and Kashmir. The state
capital is located in Chandigarh, a Union Territory and also the capital of the neighboring
state of Haryana.
After the partition of India in 1947, the Punjab province of British India was divided between
India and Pakistan. The Indian Punjab was divided in 1966 with the formation of the new
states of Haryana and Himachal Pradesh alongside the current state of Punjab. Punjab is the
only state in India with a majority Sikh population.
Punjab offers product clusters across the state in various industries, including Textile &
Apparel, Rubber and Paper, Machinery and Parts, Chemicals, Auto and Auto Parts, Leather,
Sports Goods, Steel Rolling and Re-rolling, IT and Electronics and Pharmaceuticals.
In Punjab there is a good strength of natural resource. And low cost and efficient man power.
There is good climate condition and political environment benefit of goods incentives plan
from government and also having an infrastructure facility.
Lot of scope of product diversification to produce furnishing, cloth materials, and value added items. There is also scope of participation in exhibition and trade fairs.
CONCLUSION
61
India and Bahrain have had economic and trade relations for over several centuries; these
relations received fresh impetus from the oil boom of the early seventies. Relative prosperity
and higher standard of living in Bahrain boosted global imports of goods and services,
including from India. Bahrain Government's policy of industrial diversification also played
an important role in enhancing economic cooperation between India and Bahrain. More than
anything else, new job opportunities attracted a large number of Indian expatriates to
Bahrain. Bahrain serves as the gateway to the GCC market because of its location.
We are importing oil from Bahrain and relation of India and Bahrain is going so good in
trading activities .India and Bahrain trading activities Bahrain is giving some exemption of
India and also helping in shipping and exempt for living in Bahrain.
In Bahrain there are probably more than 2 00 00 people live in Bahrain so easy to live and
make business with Bahrain.
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BIBLIOGRAPHY
http://www.pages.drexel.edu/~st96e895/PROJECT/Tou.html http://globaledge.msu.edu/countries/bahrain https://en.wikipedia.org/wiki/Bahrain http://crawfurd.dk/jcjfilm/bahrain.htm http://www.infoplease.com/encyclopedia/world/bahrain.html http://www.britannica.com/place/Bahrain
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