Refining Life, Redefining Growth

FY 2006-07
Project Progress Update

25th April, 2007

RIL’s Existing Refinery At Jamnagar, Gujarat

Contents

Global Refining Environment

Project Progress Update

Summary

2
 Crude prices recovered marginally

US$/ bbl 1999-2003 2004 2005 2006 Q1 2007

WTI 26.6 41.5 56.6 66.0 58.0 Jan’ 07 fall driven by:
Dubai 23.4 33.7 49.5 61.5 55.4
• Lower demand

Quarterly Marker Crude Oil Prices • Warm weather

75 • High OPEC supplies
70
65 Recovery influenced by:
Prices in $/bbl

60 • Renewed geopolitical
55 tension; Actions of Iran
WTI Brent Dubai
50
45 • Lower product
40 inventories in US
35
30
• OPEC cuts
Q4 2004

Q1 2005

Q2 2005

Q3 2005

Q4 2005

Q1 2006

Q2 2006

Q3 2006

Q4 2006

Jan-07

Feb-07

Mar-07
• Colder weather & high
implied demand

Downside risk limited, given stronger growth outlook

3
Margin Scenario – Historic and Current

US$/ bbl 1999-2003 2004 2005 2006 Q1 2007

Singapore 2.4 6.4 6.8 5.8 6.8

Europe 1.8 4.6 6.4 5.1 4.1

USGC 1.2 3.5 8.0 8.4 8.4

„ Step jump in cracking margins since 2004 caused by;

¾ Run-away growth in demand, especially in transportation fuels

¾ Little capacity additions and tighter product specification

¾ Sluggish Fuel Oil demand growth due to shift to cleaner Natural Gas

„ Lower margins in 2006 attributable to higher stock levels, benign storm season and
slow growth in demand on the back of high oil prices

Conversion capacity crunch supportive of complex refiner margins

4
Singapore Margins : Simple vs. Complex

US$/ bbl 1999-2003 2004 2005 2006 Q1 2007

Light-Heavy Differential 1.2 3.2 5.1 5.4 5.5

Sing Margins – Dubai

2.4 6.4 6.8 5.8 6.8
cracking
Sing Margins – Dubai
0.7 2.0 1.7 (0.1) 1.2
Topping

Demand growth in MMBD 1.0 3.1 1.2 0.8 0.6

„ Light - Heavy differential - Widest levels seen in recent years

„ Complex margins delta to simple margins (US$ 5.7/ bbl for 2006 and US$ 5.6/ bbl for
Q1 07), very strong in recent times

Complex refiners’ retain their competitive advantage

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 The year ahead…

„ Robust demand growth expectation of 1.5 MMBD.

„ Non OPEC production growth projected at less than 1 MMBD

„ CDU capacity additions at 1 MMBD - Lower than expected demand and supportive for margins.

„ US Gasoline lifts up the complex; margins may soften from current levels unless there is some
serious disruptions. Another rally may happen during hurricane season.

„ Following market indicators are supportive of strong complex margins:

¾ Continuous reduction in US product inventories

¾ Refinery capacity additions lagging demand growth

¾ Tighter product specifications

¾ Continued weakness in fuel oil alongwith strong gasoil margins

¾ Residual fuel oil economical as supplementary feedstock

¾ Strong hurricane season

2007: Shaping up as another strong year for complex refiners

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 Global refining sector: Medium term outlook

Š Demand side

¾ Medium term world GDP growth pegged higher-than-historical but lower than 2006

¾ Demand growth during 2007-2009 at 5 MMBD vs. Annual growth of 1 MMBD during ‘93-'03

¾ While heating oil demand may fluctuate with winter expectations, diesel demand is largely a
function of road / rail freight and, as such, a function of the economy.

¾ Medium term demand side impact of bio fuels: very limited

¾ Trade flows expected to be impacted by product quality considerations

Š Supply side

¾ Project delays and construction bottlenecks push major capacity additions beyond 2011

¾ Conversion capacity additions over the next 2 – 3 years much above historical; However,
still expected to lag demand growth

¾ Western refiners adjusting throughput to support product margins

7
 Incremental capacity and refinery utilisation

Refinery Utilisation rates in %

Incremental Capacity in MMBD

Source: Merrill Lynch

Due to delay in new projects commissioning, refinery utilisation expected to peak in

2009 indicating stretched refining capacity
Even by 2010, utilisation levels expected to be much higher long term historical

Refining bottleneck unlikely to disappear before 2011

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 Medium term margin outlook equally encouraging

Crude price outlook: 2007-2011 Actuals

$/bbl ESAI PEL POTEN Average 1999-03 2006
Dubai 46.2 56.9 55.5 52.9 23.4 61.5
Dated Brent 49.2 62.0 52.6 54.6 25.0 65.1
WTI 50.7 64.0 56.5 57.1 26.6 66.0
CRACKS
Gasoil 7.8 12.3 10.9 10.3 4.4 15.3
Kerosene 9.9 16.5 13.4 13.3 5.7 19.1
Naphtha 2.3 2.3 1.0 1.9 1.9 0.3
Gasoline 8.8 9.3 10.6 9.6 5.4 11.7
Fuel Oil -6.9 -7.4 -12.5 -8.9 -1.4 -12.7

Product margins stronger than historical and weaker than current

Conversion capacity additions expected to make fuel oil less weak from current levels

ESAI’s forecasts generally tend to be very conservative

Period of strong margins expected to extend till 2011

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Trade Flows

Product specifications will govern trade flows

Refiner with flexibility to swing across different qualities at

production stage may exploit better opportunities

Trade routes to be longer requiring logistic optimisations

¾ Flexibility in product export logistics

¾ Higher parcel sizes

¾ Break bulk operations

Process/ logistical flexibility: an imperative

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Summary – Refinery Business Environment

Global economic growth projections supportive of demand growth

Geopolitical concerns and limited Non OPEC growth to support oil prices

Continuing slow growth in capacities due to delays / cancellation of new

projects to extend margin strength till 2011

Competitiveness of complex refiner expected to stay

Extended period of strong complex margins

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Summary – Product Trade Flows

Product trade flows likely to be governed by:

¾ Imbalances in individual grades

¾ Flexibility to switch between grades

¾ Longer hauls

RPL prepared to meet the market needs by virtue of

¾ Ability to maximise ultra low sulfur products

¾ Process/ logistical flexibility to switch between grades

¾ Ability to load suezmax product parcels

RPL well positioned to respond to market needs

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RPL flexibility : A significant competitive advantage

Capability to produce ultra clean fuels

Process / logistical flexibility to switch between grades

Capability to handle up to suezmax product vessels

RPL – fully geared to respond to market requirements and reap benefits

of emerging opportunities in the global refining environment

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Contents

Global Refining Environment

Project Progress Update

Summary

14
Summary of Project Progress

Š Cumulative project progress of 50% as at year end

Š Basic engineering done; Detailed engineering work nearly completed

Š Procurement contracting for all key equipments completed

Š Equipment deliveries and their installations have commenced

Š Construction activities gained significant momentum during the quarter

• Concurrent progress across all units; Skylines have change dramatically

• Pipe racks and foundation works moving rapidly

• Concreting activities nearing its peak; focus shifting towards piping work

• Equipment erection activities begun and have gained significant momentum

• Sufficient site infrastructure developed to sustain construction on fast track

Impressive project progress; On track for completion by Dec’ 08

15
 Engineering progress update

Š Nearly 80% of detailed engineering work completed

Š Entire project scope of concrete drawings delivered to site already

Š Over 70% of structural steel drawings completed; Focus now shifting on release of

piping isometrics and electrical as well as instrumentation engineering drawings

Š 3D site modeling effort progressing rapidly – to provide benefits superior

engineering quality, reduced construction interferences and rework at site

Š Over 7500 engineers working on the project across locations globally

Rapid engineering progress, supporting fast track construction

16
 Procurement progress update
Š Procurement and contracting activities nearly completed

Š Over 95% of tagged items ordered

Š Over 300 equipments, including several critical and long lead items, delivered at site

Š Equipment installations have commenced already

Š Substantial part of project bulks delivered at site

• More than 85% of rebars, pipes, fittings, flanges and tankage plates

• Over 80% of structural steel requirements delivered at site

• Electrical Bulks first lot received

Š Emphasis shifting towards vendor monitoring and follow-up

• Expediting and inspection of all critical and long lead equipments

• Compliance with quality and delivery commitments

Deliveries and installation of long lead equipments taken off

17
 Construction progress update

Š Over 1,000,000 cubic meters of concreting work completed

Š Nearly 80% of concreting work for the project is complete now

Š Focus shifted towards underground laying, piping erection and equipment front generation

Š New construction record created during the fourth quarter

• Over 185,000 cubic meters of concrete poured in a single month

• Surpassed earlier record of 168,555 cu.m created by RPL in Dec’06 and 154,000 cu.m created

during the implementation of RIL refinery

Š Nearly 40,000 tonnes of structural steel fabrication and about 34,000 tonnes of tankage

fabrication work completed, meeting nearly 80% of peak requirements

Š Site infrastructure in place to receive peak construction workforce during 1H FY 2007-08

Project concreting work nearing completion; Resource mobilised to

sustain rapid pace of construction
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Snapshot of project progress

An aerial view of project site at Jamnagar

19
 Snapshot of project progress

FCC unit with OSBL pipe rack loaded with pipes

20
 Snapshot of project progress

FCC unit pipe rack construction making rapid progress

21
Snapshot of project progress

Crude pipe rack in progress

22
 Snapshot of project progress

Alkylation plant overview

23
 Snapshot of project progress

Pressure swing absorption unit and reformer in HMU under installation

24
Snapshot of project progress
Dec’06 Mar’07

Rapid progress in sulphur stack construction during the quarter

25
Snapshot of project progress

Coke drum structure nearing completion

26
Coker pipe rack in progress
27
Coker – Nitrogen vessel under installation
28
 Snapshot of project progress

CFP heater and reactor structure

29
 Snapshot of project progress

Coker EW Piperack
30
Snapshot of project progress

Tanks in progress at the Refinery Tank Farm

31
 Snapshot of project progress

Central Control Building

32
 Snapshot of project progress

Changing Skylines – JERP Aerial View

33
Contents

Global Refining Environment

Project Progress Update

Summary

34
 Project implementation summary
Expected
Months from
Milestone Completion Current Status
Zero Date
Date
Start of the Project/Zero Date 01-Dec-05 Started
Technology Selection/Project Scope Jan-06 1 Completed
Completion of Basic Engineering May-06 6 Completed
Order placement for critical
May-06 6 Completed
equipment
Completion of Detailed Engineering Sep-07 22 Ongoing
Completion of Civil work Nov-07 24 Progressing
Started
Completion of Equipment Erection Jan-08 26
Mechanical Completion Aug-08 33
Ready for Start Up (RFSU) All areas Sep-08 34
Commencement of operations Dec-08 36

Refinery progressing full steam to commence production in 2008

35
Thank You