-
Essar Oil Limited
Analyst Presentation
Results for quarter ended 30th June, 2011June, 2011
-
� Performance Snapshot
� Industry Overview & Market Outlook
� Operations
Agenda of Presentation
� Operations
� Projects
� Financials
Industry Overview & Market Outlook
Agenda of Presentation
1
-
Performance Snapshot
2
-
Quarterly Highlights
� Strong operating performance of refinery with capacity
above 135%, throughput of 3.62 mmt.
� Revenue increased by 37% & EBIDTA increased by 124%
to corresponding previous quarter, demonstrating
financial performance.
� Profit after tax increased to Rs 469 crore as compared
Rs 70 crore for corresponding previous quarter.
� Current Price GRM for the quarter ended June, 2011 increased
US$ 7.38 as against US$ 5.79/bbl for correspondingUS$ 7.38 as against US$ 5.79/bbl for corresponding
quarter.
� Refinery Expansion Project progressing well; Phase – I Expansion
92% complete
� Mechanical completion of number of units achieved
quarter, balance units excluding DCU expected to be mechanical
complete during Q3 CY 2011.
� 35 days shut – down planned from Sept 18, 2011 for
new units .
� Revamp of CDU, FCCU & SRU to be completed during shut
� Optimization Project on track : 56% complete
capacity utilization
% compared
demonstrating excellent
compared to loss of
increased to
corresponding previouscorresponding previous
Expansion :
during this
mechanical
for tie – in of
shut down.
3
-
Industry Overview & Market OutlookIndustry Overview & Market Outlook
4
-
Global Oil Demand
84.75
86.06 86.31
83.00
84.00
85.00
86.00
87.00
88.00
89.00
90.00World Oil Demand (mbpd)
• 2010 annual oil demand growth was 2.84 mbpd
• 2011 oil demand growth is estimated to be 1.30 mbpd, with bulk of growth coming from Asia (0.95 mbd),ME(0.19mbd) and Latam (0.21mbd)
Source : IEA
80.00
81.00
82.00
2006 2007 2008
85.17
88.01
89.29Oil Demand (mbpd)
5
2010 annual oil demand growth was 2.84 mbpd- one of the highest in history
2011 oil demand growth is estimated to be 1.30 mbpd, with bulk of growth coming from Asia
(0.95 mbd),ME(0.19mbd) and Latam (0.21mbd)
2009 2010 2011Estimated
-
11.34 12.39 13.04
18.40
(4.81)
11.76 12.86 14.26
20.33
7.40 6.71
8.69 10.48
$0
$5
$10
$15
$20
$25
Gasoil FO
Cracks Outlook
(6.69)(4.81)
(8.23) (8.69) (8.52)
-$15
-$10
-$5
Apr-Jun, 10 Jul-Sept, 10 Oct-Dec, 10 Jan - Mar,11 April
� Singapore Cracking margins remained strong on account of strong Non
growth & geo political events.
Source : Historical Platt’s & Forward Curve as of 5th July, 2011 from Morgan Stanlay
19.43 18.48 18.18
18.33 18.58
20.36 19.44 20.01 20.35
20.31
11.66 11.81
8.57.08 7.56
Jet GasolineUSD /bbl
(8.52)(6.75)
(8.31) (9.04) (9.56)
April - Jun,11 Jul-Sep,11 Oct-Dec,11 Jan-Mar,12 April-Jun,12
6
Singapore Cracking margins remained strong on account of strong Non-OECD demand
July, 2011 from Morgan Stanlay
-
Market Dynamics
Widening the Gap between Crude Price ($/bbl)
103
110101
96
97
104
115
123
114 114
93
100
109
116
108 108
95
100
105
110
115
120
125
WTI Brent Dubai
9090
85
90
January-11 February-11 March-11 April-11 May-11 June-11
� Crude Oil marker difference widened
during the quarter due to supply outage
Libya & due to Geo- political issues in
Middle east and North Africa
� Higher difference between Brent & Dubai
to benefit complex refiners, having ability
to process heavy & sour crude.
Difference between Light &Heavy Crude ($/bbl)
2.65 2.78 3.15 4.20
5.08
7.91
10.25 9.99
11.89
13.67
4
6
8
10
12
14
16
Arab Light - Arab Heavy Arab Light - Norooz
7
� Difference between light & heavy crude
has increased from $ 2.65/bbl to $5.08
� Difference between Light & Ultra heavy
crude further widened, expected to
benefit complex refineries.
-
2
April - Jun,10 Jul-Sep,10 Oct - Dec,10 Jan- Mar,11 April-Jun,11
-
Operations
8
-
Vadinar Refinery
9
-
3.68
14.76
3.65 3.62
2
4
6
8
10
12
14
16
Operating Performance – Refinery
Crude Throughput
Mill
ion
Ton
nes
-
2
Q1 FY11 FY11 Q4FY11 Q1 FY12
� Processed 3.62million tonnes of crude during the quarter.
� Processed more than 15 types of crudes in the crudes like Forozan Blend, Ras Gharib etc
� Processed around 10.80% of Mangala crude between
� Avg. API (Density) – 33 , Avg. Sulphur % – 1.70
Refinery
Crude Mix
19% 20% 19%
47% 44% 45% 53%
34% 35% 36% 34%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Light Heavy Ultra Heavy
crude during the quarter.
types of crudes in the quarter including ultra heavy & tough
crude between April –June,2011
1.70 and Avg. TAN – 0.26
10
19% 20% 19% 13%0%
10%
Q1 FY11 FY 11 Q4 FY11 Q1 FY12
-
Operating Performance - Refinery
Product Mix
46% 46%
28% 28%
40%
60%
80%
100%
Light Middle
� Optimised production of middle & light distillates
� Heavy Distillates include positive margin Bitumen converted from low margin fuel
26% 27%
0%
20%
40%
Q1 FY11 FY11
Refinery
Product Mix
46% 44%
29% 29%
Middle Heavy
Optimised production of middle & light distillates – High margin segment
Heavy Distillates include positive margin Bitumen converted from low margin fuel oil
11
25% 27%
Q4 FY11 Q1 FY12
-
Operating Performance - Refinery
Sales Mix
60% 57%
8%6%
5%5%
30%
40%
50%
60%
70%
80%
90%
100%Bulk PSUs
� Continue to focus on domestic market due to better price realization of petro products
� Export products include Fuel Oil & Gasoline
� Lower retail sales due to continuing high oil prices in international market & non revision of
retail prices by OMCs.
27% 32%
0%
10%
20%
30%
Q1 FY11 FY11
Refinery
Sales Mix
59% 61%
5% 7%2%
1%
Exports Retail
Continue to focus on domestic market due to better price realization of petro products
Lower retail sales due to continuing high oil prices in international market & non revision of
33% 32%
Q4 FY11 Q1 FY12
12
-
Retail
� Number of Retail Outlets Operationalconstruction has reached to 1639.
� Prices for HSD and MS, were maintained higheracross India, throughout the quarter, on the backproduct prices
� Duty cuts & revision in prices of MS & HSD announcedGovt recently, made petrol price in line withinternational product prices.
� Network expansion will be pursued in a controlleduntil such time that a sustainable pricing scenarioHigh MS potential outlets in city locationstargeted for expansion
� Focus on tapping the opportunity of ALPG &through tie-ups with Aegis, Sabarmati Gas,Gas. Total of four CNG/ ALPG stationcommissioned.
� Non Fuel Revenue : Formed new allianceTourism Development Corporation, RajasthanDevelopment Corporation, Heritage FoodsPhosphorus Group
& under
higher than PSUsback of high
announced bywith prevailing
Ahmedabad
Surat
controlled mannerscenario prevails.
locations are being
CNG pumpsGAIL, Adanihave been
with KeralaRajasthan Tourism
and United
13
-
Projects
14
-
Expansion to 18 MMTPA (Project Cost : Rs 8310 crore)
Complexity to improve to 11.8 from 6.1
� Overall progress : 92.37%
� Engineering : 99.90%
� Procurement :96%
� Construction : 87%
� All critical / major equipments erected at site
Refining Expansion - Phase I
�
� Mechanical completion of number of units
achieved during this quarter, balance units
excluding DCU expected to be mechanical
complete during Q3 CY 2011.
� 35 days shut – down planned from Sept 18, 2011
for tie – in of new units.
� Revamp of CDU, FCCU & SRU to be completed
during shut down.
� Start up activity of new units to commence
during Q3/Q4 CY2011
crore)
Phase I
Delayed Coker Unit
units
units
mechanical
2011
completed
commence
Isomerization Unit
15
-
Expansion to 20 MMTPA
� Overall progress : 56%
� Optimization project to provide excellent economics due to
maximum utilization of low priced Ultra Heavy Crude.
� Optimization Project to complete in minimum time & cost
provide an opportunity to optimize the utilization of available
infrastructure & support facilities
� Capacity expansion to 20 MMTPA is on schedule & expected
complete by Sept; 2012
Refining Optimization Project
complete by Sept; 2012
New Units/ Facilities under optimization.
� Conversion of VBU into Crude Dist. Unit
� Additional Mangala Crude Tankages & Pipeline & blending
Facilities
� Additional two Coke Drums & Associated Facilities
� Revamping of FCCU
Funding & Timeline
� Estimated cost of above facilities : Rs. 1,700 Crore, being
funded through mix of Debt & Equity
Optimization project to provide excellent economics due to
cost &
available
expected to
Optimization Project
Delayed Coker Unit
Additional Mangala Crude Tankages & Pipeline & blending
Vacuum Gas Oil Hydrotreater Unit
16
-
Units Mechanically completed
ISOM Unit (Isomerization Unit)
Natural Gas StationNatural Gas Station
Units Mechanically completed
Cooling Tower
Desalination Plant
17
-
Units Mechanically completed
Raw Water Treatment PlantAir Generation Unit
Units Mechanically completed
Raw Water Treatment Plant D M Plant
18
-
Supporting Infrastructure: Commissioned Power Plant 380MW (Gas based)
� Existing Power Plant : 77 MW & steam @ 230 TPH & Commercial
completed; synchronized with Grid, ready to supply power to Refinery Expansion Project
Power Plants (Owned by Essar Power)
Supporting Infrastructure: Commissioned
TPH & Commercial operation of Vadinar Phase – I Expansion of 380 MW
completed; synchronized with Grid, ready to supply power to Refinery Expansion Project.
19
-
Supporting Infrastructure Facilities Supporting Infrastructure Facilities
Ports & Terminals (Owned by EPL)
Current facilities
� 5 road & 1 rail gantry : 7 mmtpa
� 1 berth at Jetty for product evacuation :
7 mmtpa
� 1 SPM with crude intake capacity : 27
mmtpa
� Tankages, Pipelines & other facilities
New Additional facilities
� 5.5 mmtpa tankages facilities :
completed
� 1 Berth : 7 mmtpa completed
� 1 Road Gantry : completed
20
-
Upgradation of existing unit
� Overall Progress : 95.68% (93.87% - Mar.’2011
� 120 out of 126 equipments received
� Erection of all equipments completed
� Revamp will be completed during the Shutdown
Upgradation of existing unit – CDU/VDU
2011)
Shutdown – Q3 CY2011
21
-
VGO HT (Vacuum Gas Oil Hydrotreater Unit)
March - 11
� Overall Progress : 93.86% (88.08% - March, 2011)
� VGO-HT Both Reactors erected; Weighing Approx 1400
� 165 out of 177 equipments received.
� Major equipments erected : Kerosene & Diesel Stripper,
pressure Off Gas Scrubber, Recycle gas scrubber, Product
drum
� Mechanical completion by Q3CY2011
VGO HT (Vacuum Gas Oil Hydrotreater Unit)
June - 11
1400 MT; 58.4 Meter long; Diameter 5.5 mtrs.
Stripper, MP Medium pressure Off Gas Stripper, LP Low
Product fractionators, Recycle gas compressor, Feed surge
22
22
-
DCU (Delayed Coker Unit)
March- 11
� Overall Progress : 86.05% (78.21% - Mar.’2011)
� All Six Coker drums including structural modules erected, piping in progress
� Major equipments erected : 6 Coke drums,
Heavy cycle gas oil stripper, Blow down tower,
� 255 out of 264 equipments received
� Mechanical completion by Q4 CY2011
June - 11
Mar.’2011)
All Six Coker drums including structural modules erected, piping in progress
drums, Debutanizer, Absorber, Stripper, Light cycle &
tower, Fuel gas scrubber, Wet Gas compressor etc
23
-
DHDT Unit (Diesel Hydrotreater Unit)
Mar- 11
� Overall Progress : 92.58% (85.15% - Mar.’2011)
� 110 equipments out of 122 equipments received
� Major equipments erected : Recycle gas compressor,
fractionators, Feed surge drum, Recycle gas
� Mechanical completion by Q3CY2011
DHDT Unit (Diesel Hydrotreater Unit)
June- 11
Mar.’2011)
received. Reactor erected
compressor, Recycle gas scrubber, Stripper, Product
compressor
24
-
HMU Unit (Hydrogen Manufacturing Unit
March - 11
� Overall Progress : 91.34% (80.13% - Mar ’2011)
� 73 equipments out of 74 equipments received
� Major equipments erected : All 5stripper, Process gas boiler, Pre reformer,drum, Fuel gas knock out drum, HPSeparator, Continuous & Intermittentcompressor
� Mechanical Completion by Q3CY2011
HMU Unit (Hydrogen Manufacturing Unit)
June - 11
Mar ’2011)
73 equipments out of 74 equipments received
5 reactors erected, Process condensatereformer, Common LPG Surge drum, Flare knock out
condensate flash drum, Start-up NitrogenBlow down drum , Start-up nitrogen
25
-
Refinery Expansion Project
Mechanical Completion of Units/ Facilities under Expansion ProjectMechanical Completion of Units/ Facilities under Expansion Project
26
-
Exploration & ProductionExploration & Production
27
-
Project Progress at Raniganj
� Present Production : 33000 scmd; has been
low level, pending statutory approval.
� Significant progress achieved in drilling surface
vertical wells
� Pipeline Construction from Raniganj to Durgapur
completed (48 KM)
� Gas Gathering Station completed. Final pigging
GGS to Durgapur industries completed (30kms),
producing wells are interconnected with GGS.
� Gas Sale Price approval received from MOPNG
Run Sales.
� FDP approved for drilling of 500 wells
� Commercial sales to commence shortly, post statutory
approvals.
� Tied up with local customers at Durgapur Industrial
Estate.
� Cost incurred upto June, 2011 : Rs 489 cr.
Project Progress at Raniganj
been kept at
surface holes &
Durgapur
pigging from
kms), all
MOPNG for Test
statutory
Industrial
28
-
Financials
29
-
12,048
16,478
10,000
12,000
14,000
16,000
18,000
Refining and Marketing Financials
Revenue
Rs
-C
rore
Throughput (mmt)
3.623.68
37%
-
2,000
4,000
6,000
8,000
Q1 FY 2011 Q1 FY 2012
Rs
1 Current Price GRM includes sales tax of US$ 2.29/bbl in Q1 FY2011
� Revenue increase in FY 2011 is primarily due to increase in product prices
� Increase in EBIDTA due to higher GRM
407
913
500
600
700
800
900
1,000
Refining and Marketing Financials
EBITDA
CP GRM1
US$/bbl5.79 7.38
+124%
Rs
-C
rore
Unaudited & Provisional
Rs - crore
407
-
100
200
300
400
500
Q1 FY 2011 Q1 FY 2012
30
Rs
Q1 FY2011 and US$ 3.18/ bbl in Q1 FY 2012
due to increase in product prices
-
Financial Highlights
� Net worth excludes FCCBs of US$ 262 Million ( Rs 1172 crore) issued to EEPLC
� Debt Includes Project Debt & FCCBs of Rs. 5874 cr. (
Rs in Crore
Unaudited & Provisional
31
Net worth excludes FCCBs of US$ 262 Million ( Rs 1172 crore) issued to EEPLC
Debt Includes Project Debt & FCCBs of Rs. 5874 cr. ( corresponding previous quarter Rs. 2841 cr.)
-
Financial Results
Particulars Q1 FY11
Throughput-Million Tones
INCOME
Income from Operation 12,048
Less: Excise Duty & Taxes 1,517
Net Income from Operation 10,531
Other Income
Total Income 10,570
EXPENDITURE
Cost of Goods Sold 9,789
Other Expenditure
Forex Loss/(Gain)
Total Expenditure 10,163
EBITDA
Interest & Finance Charges
Operational Profit 108
Depreciation
PBT (73)
Tax
PAT (70)
C P GRM $/bbl $
C P GRM $/bbl (With STI) $
( Rs in Crore) Unaudited & Provisional
Q1 FY11 FY 11 Q4 FY 11 Q1 FY12
3.68 14.76 3.65 3.62
12,048 53,119 14,846 16,478
1,517 6,131 1,531 1,532
10,531 46,988 13,315 14,946
39 260 67 126
10,570 47,248 13,382 15,071
32
9,789 43,197 12,116 13,692
365 1,365 374 404
9 (94) (20) 62
10,163 44,469 12,470 14,158
407 2,779 912 913
299 1,220 309 284
108 1,559 603 629
181 731 181 181
(73) 828 422 448
(3) 174 101 (21)
(70) 654 321 469
3.50$ 4.53$ 5.29$ 4.20$
5.79$ 6.91$ 8.15$ 7.38$
-
Summary
� Strong Financial & Operating Performance
� Refinery Expansion nearing to completion
� Demand environment for petro products remains positive
� Raniganj commercialisation to provide boost to E&P strategy
� Capturing further growth opportunities
ISOM : Unit Mechanical Completion
33
Strong Financial & Operating Performance
Refinery Expansion nearing to completion
Demand environment for petro products remains positive
Raniganj commercialisation to provide boost to E&P strategy
Capturing further growth opportunities
33
33
-
Indian Growth Story to continue…….
India has low GDP per capita ...
7.7%1.2% 4.0% 10.3% 8.8%2.8%
46,085
34,919
15,67111,118
7,1403,202
USA UK Russia Brazil China IndiaGD
P p
er c
apita
(P
PP
term
s) –
2010
(U
S$)
GD
P G
row
th R
ate
USA UK Russia Brazil China India
Source: KBC, International Monetary Fund, World Economic Outlook Database, Oct. 2010
Increased government spending levels …
21 26 3240 51
2629
3339
47
2125
32
41
51
0
20
40
60
80
100
120
140
160
2007 – 08 2008 – 09 2009 – 10 2010 – 11 2011 – 12
US
$bn
(at 2
006
–20
07 p
rices
)
Energy Transportation Others
68 80 97 120 149C
ar p
er ‘0
00 d
river
Indian Growth Story to continue…….
... is expected to drive among the fastest
GDP growth rates in the world
9.75%
8.25%
4.33% 4.09%
2.56% 2.46%
China India Brazil Russia USA UK
GD
P G
row
th R
ate
(201
0-15
)
China India Brazil Russia USA UK
Source: International Monetary Fund, World Economic Outlook Database, July 2010
34
Strong potential uplift from vehicle ownership
GDP, US$ 2004 (PPP)
Car
per
‘000
driv
er
-
Major Units and Licensors
UNIT / FACILITYCAPACITY(MMTPA)
CDU / VDU10.5 (CDU)7.2 (VDU)
VISBREAKER (VBU) 1.9
NAPHTHA HYDROTREATER (NHT) 1.6
CONTINUOUS CATALYTIC REFORMER UNIT (CCR)
0.9(CCR)
FLUID CATALYTIC CRACKING UNIT / UNSATURATED GAS SEPARATION SECTION (FCCU)
2.9
DIESEL HYDRODESULFURISATION UNIT (DHDS) 3.7
VGO HYDROTREATER (VGO HT)
DIESEL HYDROTREATER (DHDT)
DELAYED COKER UNIT (DCU)
ISOMERISATION (ISOM)
CAPACITY(MMTPA)
CAPACITYPost OPTIMISATION
LICENCER / TECHNOLOGY
DETAILEDENGG
10.5 (CDU)7.2 (VDU)
18 (CDU) 10.9 (VDU)
1.9 2.0 (CDU)
1.6 1.8
0.9 1.1
2.9 3.9
3.7 5.3
- 6.5
- 4.0
- 7.5
- 0.7
3535
-
Cru
de m
ix
14MT(current)
18MT(expected post phase 1 expansion)
Heavy25%
Light11%Light
28%
Heavy52%
Ultra-heavy20%
Fuel loss
Expansion to provide crude as well as product flexibility
14 MMTPA 18 MMTPA
• Processing an increasingly high proportion of high sulphur and low API crudes
• Focus on delivery of higher margin products (middle/light distillates)
Note: Ultra-heavy crude defined as having API33Dar and Mangala crude with high tan and wax content classified as heavy crudeProduct yield – fuel and loss include natural gas, but excludes 1 mmtpa of Coal
Source: Company information
Pro
duct
yie
ld
14MT(current)
18MT(expected post phase 1 expansion)
VGO10%
Heavy end15%
Fuel loss5%Light
Distillates22%
Middle Distillates
47%
Heavy end25%
Fuel loss6%
18MT(expected post phase 1 expansion)
20MT(expected post optimisation)
Ultra-Heavy87%
Light13%
Ultra-Heavy64%
Expansion to provide crude as well as product flexibility
18 MMTPA 20 MMTPA
Processing an increasingly high proportion of high sulphur and low API crudes
Focus on delivery of higher margin products (middle/light distillates)
33, light crude with API>33
18MT(expected post phase 1 expansion)
20MT(expected post optimisation)
Light Distillates
21%
Middle Distillates
49%
Fuel loss5% Light
Distillates24%
Middle Distillates
47%
VGO9%
Heavy end14%
Fuel loss6%
36
-
LPG/Naptha
Gasoline
� Conversion of entire negative margin fuel oil into high value added products and pet coke
� Building higher flexibility between light and middle distillates
� Flexibility to produce petrochemical feed stock
� Euro IV & V grade at 55% in Gasoline pool and 50%% in Diesel pool
Yield to shift to higher grade products optimal for export markets
0.810.53
3.06
5.34
0.70
2.47
1.09
14 MMTPA
Jet/Kero
Diesel
VGO
Fuel Oil
Coke
Others
Fuel & Loss / Residue
Note:Others include bitumen, sulphur Product yield – fuel and loss include natural gas, but excludes 1 mmtpa of Coal
Source: Company information
0.282.49
2.631.41
2.29
Conversion of entire negative margin fuel oil into high value added products and pet coke
Building higher flexibility between light and middle distillates
Euro IV & V grade at 55% in Gasoline pool and 50%% in Diesel pool
Yield to shift to higher grade products
0.97 1.280.21
0.761.83
2.150.60
1.841.75
7.72
9.13
1.17
18 MMTPA 20 MMTPA
37
-
Essar Oil – Refining
1
2
3
Capacity (MMTPA)
1418 20
38
Increasing capacity and complexity
5
4
7
6
Total cum.
Capex( US$2.8bn US$4.65bn US$4.95bn US$9.75bn
Total Incre-
-mental Capex – US$1.85bn US$0.38bn US$4.8bn
Complexity 6.1 11.8 11.8 12.8
API (density) 32.4 24.8 24.8 24.0
avg.:
Sulphur % 1.5% 3% 3% 3%
avg.:
Product Euro III/IV Euro IV/V Euro IV/V Euro V/US
grade: Specs/CARB
Today Phase I Optimization Phase II
Current Q3/Q4 CY2011 Q3 CY 2012
Key highlights
Low cost, safe and efficient operations – refinery operating
cost US$1-2 per barrel lower than global peers
Strategically located on the west coast of India
Increasing complexity from 6.1 to 11.8 following Phase – I
enhancing crude and product flexibility
Vadinar currently one of India’s largest refineries: will be
amongst the top 5 globally at 780k bbl/d post Phase -II
Crude slate geared towards heavy crudes (89% of crude mix
comprises of heavy and ultra-heavy crude) post phase - I
Expansion at competitive capex cost; cost/complexity/bbl of
$1018 and $983 post Phase I & Phase II respectively
enhancing crude and product flexibility
Timing for Phase - II to be determined based on a review of
market conditions and attainment of financial closure
38
-
Cost-effective expansion and increased Complexity
Moving up on the Complexity Front
RefineriesCapacity
(mmtpa)
Compl
exity
Cost
(US$
mn)
Cost
(USD/bbl)
Cost
(USD/compl
exity/ bbl) Year
EOL, Existing 14 6.1 2800 10370 1490 2008
EOL post Phase I 18 11.8 4650 12012 1018 2011
EOL post
Optimization 20 11.8 4950 12126 1022 2012
Central India
PSU Refinery 6 9 2533 20819 2313 2011
North India PSU
Refinery 9 9 4000 21918 2435 2011
East India PSU
12.811.8
0
2
4
6
8
10
12
14
16
… becoming one of the most complex refineries worldwide
Source: Company Data & market reports
East India PSU
Refinery 15 9 6617 21755 2417 2013
Private Refinery 29 14 7333 12470 891 2008
1490
1018 1022
23132435 2417
891
Cost (USD/complex bbl)
effective expansion and increased Complexity
Along with expansion at low cost …
EOL - 14 EOL - 18 EOL - 20 C. India PSU
N. India PSU
E. India PSU
Private SEZ
6.1
Source: Company & market reports
… becoming one of the most complex refineries worldwide
39
-
Competitive gross refining margin
11.60
15.00
10.00
12.00
14.00
16.00
Indian Complex Refinery
US$ 7.34/bbl
6.11
7.66
-
2.00
4.00
6.00
8.00
2007 2008
Competitive gross refining margin
12.20
8.40
Singapore Complex Margin
Average premium: US$ 5.11/bbl
40
6.60
8.40
5.79
3.49
5.20
2009 2010 2011
-
Exploration and Production
931
49
40176
1500
2000
2500
Oil Gas
Reserves & resources (mmboe) (a)1
2
High impact E&P platform
3
1012
971 2132
63
963
1957
87
49
0
500
1000
2P & 2C
Contingent
Resources
Best Estimate
Prospective
Resources
Unrisked /
Inplace
Resouces
Total
Resources
(a) Subject to necessary approvals. Please refer to next slide for further details
Source: Company information, ARI, RPS Energy, NSAI
5
150
4
6
7
Exploration and Production
Key highlights
Diverse portfolio of offshore and onshore oil & gas blocks
Developing as a leading CBM player - lower risk and with
significant demand and exciting growth profile
Attractive economics for onshore CBM resources versus offshore gas in India - favourable fiscal terms and lower opex and capex
Raniganj –2C and best estimate prospective resources: 993bcf
CSG; commercial production expected shortly; gross peak
production: 3.5mmscm/d
Sohagpur, Talcher & IB valley CBM blocks- 4.4 tcf inplace
resources as per DGH estimates
International and other domestic – Unrisked/in-place resources
of over 238 mmboe
Rajmahal – Best estimate prospective resources: 4.7tcf (CBM)
41
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Leading CBM Gas Player in India
Details of CBM Block Place Ownership Acreage
2P/ 2C
resources
Bcf
Raniganj (CBM) West Bengal 100% 500 Sq km
Rajmahal (CBM) Jharkhand 100% 1128 sq. km
Sohagpur-CBM-2008/IVM.P. &
Chhattisgarh100% 339 sq. km
Talcher -CBM-2008/IV Orissa 100% 557 sq. km
IB Valley -CBM-2008/IV Orissa 100% 209 sq. kmIB Valley -CBM-2008/IV Orissa 100% 209 sq. km
Total 2733 sq km
� Leading CBM player in the country with 2733 sq km of acreage & more than 10 TCF of reserve &
resources in place under five blocks.
� Presence in major key market deficient in natural gas supplies.
� Experience Team of 150 engineers, geoscientists & technical staff with avg. experience of more than
8 years in the field of execution & operation of CBM projects
� Deployment of innovative industry standard technologies for drilling & production from CBM Wells
� Essar owns a versatile fleet of oil well rigs, core hole rigs, air drilling rigs & other critical equipment
Leading CBM Gas Player in India
2P/ 2C
resources
Best estimate
prospective
resources
Unrisked in-
place
resource
TotalRemarks
Bcf Bcf Bcf Bcf
201 792 - 993 CPR by NSAI (2010)
- 4,723 - 4,723 CPR by ARI (2010)
600 600 As per DGH
2,600 2,600 As per DGH
- -1,200
1,200 As per DGH- -1,200
1,200 As per DGH
201 5,515 4,400 10,116
Leading CBM player in the country with 2733 sq km of acreage & more than 10 TCF of reserve &
Presence in major key market deficient in natural gas supplies.
Experience Team of 150 engineers, geoscientists & technical staff with avg. experience of more than
8 years in the field of execution & operation of CBM projects
Deployment of innovative industry standard technologies for drilling & production from CBM Wells
Essar owns a versatile fleet of oil well rigs, core hole rigs, air drilling rigs & other critical equipment
42
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Details of Major E&P blocks with reserves and resource estimates
Assets Ownership
2P/ 2C resourcesBest estimate prospective
resources
Oil Gas Total Oil Gas
mmbbl Bcf mmboe mmbbl Bcf
Raniganj (CBM) 100%-
201 33 - 792
Rajmahal (CBM) 100%- -
- - 4,723
Mehsana (b) 70% (b) 2 - 2 - -Mehsana (b) 70% (b) 2 - 2 - -
Ratna/ R-Series (a) 50% (a) 74 40 81 -
Nigeria (C) 63% (c) 11 136 33 49 264
Total 87 377 149 49 5779
(a) For Ratna / R-Series, balance 50% is held by ONGC (40%) and Premier Oil (10%)
(b) For Mehsana (ESU oil field), balance 30% ownership is held by ONGC
(c) 37% has been farmed out in favour of local Nigerian partner, Agamore Energy
Details of Major E&P blocks with reserves and resource
Best estimate prospective
resourcesOpex
Peak Comments
Prodn.
Gas Total (US$ mn)
Bcf mmboe
792 132$0.43/
mmbtu 3.5 mmscmd
Test production commenced.
Moving to commercial development
4,723 787Large acreage. Situated in rich coal
belt
- - - Potentially significant CBM play- - - Potentially significant CBM play
-$5.3/bbl 35k bbl/d
Discovered fields. Development to
commence post signing of PSC
264 93Located in proven Nigerian
petroliferous basin
5779 1012
Series, balance 50% is held by ONGC (40%) and Premier Oil (10%)
(b) For Mehsana (ESU oil field), balance 30% ownership is held by ONGC
37% has been farmed out in favour of local Nigerian partner, Agamore Energy43
-
RG(EAST)-CBM-2001/1 (RANIGANJ) PRODUCTION PROFILE
0.000
0.500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
09
10
11
12
12
13
14
15
16
17
17
18
19
20
21
22
22
23
24
25
1-J
ul-
09
1-M
ay
-10
1-M
ar-
11
1-J
an
-12
1-N
ov
-12
1-S
ep
-13
1-J
ul-
14
1-M
ay
-15
1-M
ar-
16
1-J
an
-17
1-N
ov
-17
1-S
ep
-18
1-J
ul-
19
1-M
ay
-20
1-M
ar-
21
1-J
an
-22
1-N
ov
-22
1-S
ep
-23
1-J
ul-
24
1-M
ay
-25
Production is capped at 3.5 mmscmd
Production of 0.38 mmscmd – by Q3 2011-12
Production of 0.63 mmscmd – by Q4 2011-12
Production of 1.00 mmscmd – by Q2 2012-13
Production of 2.00 mmscmd – by Q4 2012-13
Production of 3.00 mmscmd – by Q2 2013-14
Production of 3.50 mmscmd – by Q4 2013-14
Plateau Gas production of 3.5 mmscmd for 12 years with total Field Recovery
2001/1 (RANIGANJ) PRODUCTION PROFILE
26
27
27
28
29
30
31
32
32
33
34
35
36
37
37
38
39
40
41
42
MMSCMD
1-M
ar-
26
1-J
an
-27
1-N
ov
-27
1-S
ep
-28
1-J
ul-
29
1-M
ay
-30
1-M
ar-
31
1-J
an
-32
1-N
ov
-32
1-S
ep
-33
1-J
ul-
34
1-M
ay
-35
1-M
ar-
36
1-J
an
-37
1-N
ov
-37
1-S
ep
-38
1-J
ul-
39
1-M
ay
-40
1-M
ar-
41
1-J
an
-42
Drilling and Completion **
Phase I wells (143) – Nov 2011
Phase II wells (222) – Nov 2012
Phase III Wells (135) – Nov 2022
(Start of Drilling of Phase III wells – March 2019)
Plateau Gas production of 3.5 mmscmd for 12 years with total Field Recovery - 0.993 TCF
44
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Raniganj – low risk development to serve customers in Eastern India’s gas deficit industrial belt
Field overview
Current status
Key milestones
Government take
Opex guidance
Capex guidance &
low risk development to serve customers in Eastern India’s gas deficit industrial belt
Resources
� Onshore block, located in Damodar Valley coal field in the Raniganj region of West Bengal
� 993bcf (165mmboe) of 2C and best estimate prospective resources (CBM gas), CPR by NSAI
Interest /operator
� 100% interest & operatorship with EOL
Current status� producing 35000 scmd of gas� Development plan approved
Key milestones � 500 wells to be drilled over the life of the asset� Commercial production expected shortly
� Royalty at the rate of 10% of well-head priceGovernment take
and pricing
� Royalty at the rate of 10% of well-head price� Production level payments (PLP) linked to a percentage
of revenue & payable to the Government of India, shortly
Capex to full development
� Capex to full development: c.US$439mn� To be funded 70/30 debt/equity� Capex figure reflects estimated expenditure for both
2C and prospective resources
Opex guidance � US$0.43/mmbtu
Capex guidance & phasing
� CY 2011 : c.US$161mn
Other � Cost/well: US$0.63mn
Evacuation � Pipeline construction completed (48 KM)
Customers� Matix Fertilizers & other industrial customers at
Durgapur have been tied up.
4545
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Work Progress- Oil and GasISOM Unit
46
46
-
Work Progress- Oil and GasRaw Water Treatment PlantRaw Water Treatment Plant
47
47
-
Work Progress- Oil and GasD M Plant
48
48
-
Work Progress- Oil and GasAir Generation Unit
49
49
-
Work Progress- Oil and GasCooling Tower Facility
50
50
-
Desalination Plant
51
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Natural Gas Station
52