Essar Oil Limited Analyst Presentation April 16 , 2010 Essar Oil-E&P Higgghlights 1 Received Competent Persons Reports (CPR) for 4 most promising blocks ; Ratna, Raniganj, Rajmahal and Nigeria 2 Emerging as a significant player in CBM in India with low risk, significant demand and better fiscal regime 3 Raniganj & Rajmahal – 2C & prospective CBM resources: 993 BCF & 4.7 TCF respectively 4 Execution of off take Agreement with Matix Fertilizers and Chemicals for supply of 2 .8 mmscmd for 20 years 5 Nigeria PSC executed in March, 2010; plans are under way to farm out 37% in favour of local partner; 6 Nigeria has shown great potential with 2C and best estimate prospective resource of ~ 126 mmboe 7 Trail production of gas from raniganj to commence by Q2 CY2010 & Commercial Production to start by Q4 CY 2010. Total Reserve portfolio increased to ~1400 mmboe ; 2C & prospective resource – 1162 mmboe & unrisked 8 resource – 238 mmboe 1 Essar Oil Refininggp and Expansion Proj jggect Highlights 1 Achieved throughput of 3.60 MMTPA for the quarter and 13. 50 MMTPA for the year 2 76 % of the crude processed was Heavy or Ultra Heavy, helping strengthen refining margins 3 Commenced supply of BS IV grade HSD and BS III grade MS to OMCs 4 Natural Gas ( 1 mmscmd) usage and Mangla Crude (20 – 30 kbpd) processing to commence in this quarter. 5 Refinery Expansion Phase I on track, scheduled for mechanical completion by March, 2011 - Overall progress of 53% 6 Achieved 729 days of Lost Time Incident Free operation, equivalent to 13.19 million safe man-hours 7 Won British Safety Council International Award for 2009 – 5th award for EOL for Health Safety and Environment 8 Awarded second position, CII-SHE Award 2009, in the manufacturing (Large) category in the Western Region 2 Essar Oil Marketingggg Highlights 1 1338 retail outlets operational all over India, with addition of around 50 retail outlets in the last quarter 2 Focus on Gujarat and Western India due to sales tax and logistics advantages 3 Captured 7.53 % market share in MS and HSD retail in Gujarat; currently in the process of adding Auto LPG facilities in the ROs 4 73% of sales (by value) in the domestic market in the quarter; 75% in the year 5 Captured 13% share of bitumen market in India; commissioned the packed bitumen sales in this quarter 6 Increased the number of supply locations in India to 25, lowering the cost of placing products in far-away markets 7 Retail Sales for the quarter Rs. 676 crore the year ( FY 2010 - Rs 2875 crore & Qty - 0.8 MT) 3 Essar Oil – Financial Higgghlights 1 Essar Oil clocked Turnover of Rs. 42402 crore for the year 2009-10; EBIDTA Rs 1935 crores; GRM 4.38 $/ bbl 2 Net Profit for year 2009-2010 is Rs. 29 crore, as against loss of Rs 514 crore for 2008-09 3 For quarter ending March-2010: Turnover of Rs. 11941 crore; EBIDTA Rs 680 crores; GRM 5.12 $/ bbl 4 Net Profit for Quarter ending March-2010 is Rs 179 crore as against a loss of Rs 226 crore in Quarter ending Dec-09 Equity Infusion of Rs 2000 Crores committed by promoters & tie up of Debt of Rs 4600 crore for Phase I Refinery Expansion 5 Project, completed 6 Essar Energy plc, holding company of Essar’s refinery, E&P and power businesses, to list at London Stock Exchange 7 Part of proceeds will be utilized for refinery expansion, E&P activities and corporate purpose 4 CEO’s Message • Refining margins have bottomed out in this quarter and are expected to be higher in coming quarters boosted by demand from emerging economies. • Per capita oil consumption in India set to rise with growth in Indian economy, increase in per capita income, growth in vehicles and Govt. focus on infrastructure spending. • India will remain the anchor market for Essar’s expanded capacity and the company will continue toaugment itsretiltail netktwork torealize the opportititunities availa ble in Indian Market • Going forward, E&P business is expected to emerge as a major value creator for the company 5 Stronggg India GDP growth outlook …is expected to drive among the fastest GDP growth rates in India has low GDP per capita… the world GDP growth rate 1.6% 1.4% 4.8% 3.1% 10.0% 7.1% (2000 – 2009) 46,400 9.6% 32,700 7.5% 2009 (US$) al) growthrate capita 09 – 2014) rr ee –– (20 15,200 3.6% 3.5% GDP (r GDP pe GDP 10,200 2.4% 2.3% 6,500 (PPP terms) terms) (PPP 3,100 USA EU Russia Brazil China India China India Brazil Russia UK US Source: CIA World Factbook, International Monetary Fund Source: International Monetary Fund, World Economic Outlook Database, October 2009 Increased government spending levels… …supporting private sector growth Total 68 80 97 120 149 160 % infrastructure spending by private sector 140 CAGR: 22% 24.4% 120 51 30.1% 100 41 (US$154bn) – prices) 2007 80 32 16. 0% 19.8% 47 (US$43bn) 25 60 21 39 33 40 29 26 25.8% 51 20 32 40 21 26 US$bn (at 2006 US$bn 0 2007 – 08 2008 – 09 2009 – 10 2010 – 11 2011 – 12 IdiIndian Gov tXPlt. X Plan IdiIndian Gov tXIPlt. XI Plan (FY03 – FY07) (FY08 – FY12) Energy Transportation Others Note: Energy includes electricity and gas Source: Projections of Investment in Infrastructure during the Eleventh Plan available on http://www.infrastructure.gov.in/ Transportation includes roads, ports, railways & airports Others includes telecom, irrigation, water & storage 6 Increasinggg oil and gas consum ption Low per capita oil consumption Low per capita gas consumption 1.9% 0.8% 0.7% 9.8% 18.9% 6.9% 105.7 23.1 75.3 ) –) 2008 as consumption feet/person) - 2008 mption (annual (annual mption gg nn uu 11. 0 cc 35.1 7.3 4.4 2.2 capita Per (annual cubi (annual barrels/perso 0.9 4.5 2.1 1.2 Per capitaPer oil cons USA EU Russia Brazil China India Russia USA EU Brazil China India Source: KBC Note: Figures in ovals represent gas consumption CAGR (2003 – 2008). Source: BP Statistical Review of World Energy June 2009, CIA World Factbook Source: BP Statistical Review of World Energy June 2009, CIA World Factbook Strong potential uplift from vehicle ownership… …as India catches up with developed countries 900 2005 20.0 140 2030 800 120 Cars per ' German 16.0 700 UK 100 600 Japan Kuwait 12.0 80 500 0 S Korea er '000 drivers ita (US$'ita 000) 00 drivers pp pp 400 Brazil 8.0 60 China 300 Russia 40 Cars 4.0 200 Thailand 20 Pakistan GDP per ca 100 India 0.0 0 0 2000 2010 2020 2030 1,000 10,000 100,000 GDP per capita Car ownership GDP US$2004 (PPP) Source: KBC Source: KBC 7 Industry Trends 16% $12 13.90%* 14% 10.00 MS Growth HSD Growth $10 12% 11.30% Light-Heavy Price Diffrential 8.45 11.10% $8 (Arab Light -Arab Heavy) 10% 6.80 7.40% 8.80% 8% 8.70%* $6 8.50% 4.95 6.90% 6.70% 6% 4.30% $4 4.35 4.80% 2.65 4% 4.50% $2 1.70 2% 2.20 1.20% 1.40% 1.55 1.20 1.50 0% $0 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Apr - Feb. *As per IPR 09-10 Gasoil FO Jet Gasoline 11.2 $12 10.1 8.0 929.2 7.0 7.3 9.0 7.8 6.2 7.6 8.8 7.2 8.8 10.2 7.6 6.9 6.9 6.9 8.7 10.5 $7 5.9 8.2 8.2 6.0 7.7 7.0 7.5 6.2 6.5 6.3 5.6 6.3 6.2 3.5 $2 2.2 2.9 -1.9 -2.3 -2.9 -2.1 $(3) -4.0 -4.5 -3.3 -7.6 -4.9 -545.4 -4.9 -5.4 $(8) Jul-09 Jan-10 Jun-09 Oct-09 Feb-10 Apr-09 Sep-09 Dec-09 Aug-09 Nov-09 Mar-10 May-09 8 Essar Oil Limited A world-class, low cost Indian integrated energy company Exploration & Production Refining Marketing Low cost refining complex centred around High impact E&P platform Pan India Presence through Retail Network Vadinar supersite Capitalise on India’s rapidly growing energy demand 9 Exploration & Production 10 A higgp,h impact, Indian-led E&P platform Mehsana(a) Rajmahal(b) Vietnam(e) 70% interest (ESU) 100% interest in CBM block 100% interest in block 114 2P reserves: 2mmbbl (()oil) Best estimate ppprospective Unrisked/undiscovered in-place Potentially significant CBM play resources: 4.7tcf CBM gas resources: 1.0tcf gas (167mmboe) (787mmboe) CPR by ARI (2010) Nigeria(c)(e) 100% interest in offshore block OPL 226 – in discussion with local partner to farm down to 63% 2C and best estimate prospective resources (based on 63% interest): 126mmboe (f) (48% oil) CPR by NSAI (2010) Other Assets Assam (()e) (100% interest): Unrisked/undiscovered in-place Ratna /R Series(d) resources: 10mmboe (oil) (e) 50% interest Mumbai Offshore (50% interest): 2C resources: 81mmboe (92% oil, Unrisked/undiscovered in-place resources: 186bcf (31mmboe) 8% gas) Raniganj(c) Commercial production: Q4 Indonesia (e) (49.5% interest): CY2013(()d) 100% interest Unrisked/undiscovered in-place Expected gross peak production: 2C and best estimate prospective resources: 30mmbl (oil) 35kbbl/d resources: 993bcf CBM gas Madagascar(e) CPR by RPS Energy (2010) (165mmboe) Trial production: Q2 CY2010 Australia(e) Note: Reserves and resources data is working interest, adjusted to reflect Essar Oil’s interest Expected gross peak production: (a) Signed PSC for Oil; CBM rights subject to government approval and modification in government policy 3.5mmscm/d (g) 2P reserves/ 2C and prospective resources (b) Provisional winner, formal award awaited CPR by NSAI (2010) Unrisked/undiscovered in-place resources ()(c) Signe d PSC (d) PSC expected to be signed by June 2010, which is subject to a government approval process (e) Subject to necessary approval for transfer to Essar Oil (f) c.22mmboe (2C) of gas classified as development not viable (g) Relates to 2C and best estimate prospective resources Source: Company information 11 Details of E&P blocks with reserves and resource estimates Best estimate prospective 2C resources(a) resources(a) Unrisked in-place resources(a) Oil Gas Total Oil Gas Total Oil Gas Total Capex(i) Peak Assets Comments Ownership mmbbl Bcf mmboe mmbbl Bcf mmboe mmbbl Bcf mmboe (US$mm) Opex Prodn.