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Essar Oil LimitedEssar Oil Limited

20 MMTPA Refinery Complex a

Analyst Presentation

November, 2012

at Vadinar

Index

P f Hi hli ht Performance Highlights

Industry Overview

Refinery & Marketing Opera

Exploration & Production

Financials

tions

1

Performance Highlights

2

Quarterly Performance Highlig

1 Refinery throughput registered impressive growth of 6Achieved annualised throughput of 20 mmtpa in first q

y g g

g p p q

2 Crude mix (80% + heavy & ultra heavy) & Product slatincreased complexity.

3 Revenue increased by 67% to Rs 23023 crore compareDomestic market remains anchor market with 70% pro

4 Current Price Gross Refinery Margin improved by morFY12 full benefit of expansion projects expected to bFY12, full benefit of expansion projects, expected to b

5 EBIDTA soared by more than 27 times to Rs 1169 croindicating the benefit of complexity started reflecting

6 Profit after tax stands at Rs 105 crore compared to los

7 Vadinar coal based power plant, captive for refinery opof minimum US$ 1/bbl to the Refinery from Nov 12

8

Sales Tax matter fully settled & Hon’ble Supreme Cou

No interest is payable on Sales Tax liability till 16th Ja

of minimum US$ 1/bbl to the Refinery from Nov,12.

8 The Company to pay Sales tax liability in next 2 years

Interest @ 10% p.a. payable on installments.

* EBIDTA & Profit after tax for quarter ended September, 2011 are net of sales tax incentiv

hts

66%, increased to 5.07 mmt compared to 3.03 mmt in Q2 FY13.quarter post completion of expansion /optimization projects.q p p p / p p j

te (80%+ light & middle dist.) improved substantially in line with

ed to Rs 13805 crore in Q2 FY12, led by higher throughput.oducts sold in domestic market during the quarter.

e than 55% to US$ 7.86/bbl compared to US$ 5.07/bbl for Q2 e reflected from Q4 CY12e reflected from Q4 CY12

ore compared to Rs 43 crore* for the quarter ended Sept, 2011, operating performance of refinery.

ss of Rs 419 crore* for Q2 FY12.

perations, fully synchronized & expected to derive the benefit

urt awarded its Judgment;

an, 12 ‐ Rs 1802 crore.

s in eight quarterly installment beginning from Jan,13.

3ve impact

Industry Overview

4

Crude Market Dynamics

Benchmark Crude Prices continue to show volatility on accoun

of global economic outlook, geo‐politics in Middle East &

y

g , g p

Africa regions & European crisis.

Difference between Dubai & Brent benchmark maintained in

id d i f lsame range , provides good opportunity for complex

refineries to source ultra heavy crudes from West.

Diff. between Dubai & WTI continue to remain wide &

expected to shrink post reversal of cushing pipeline

US$ / bbl16

AL ‐AH diff AL ‐ Norooz BL ‐Maya

6 85 6 9 6 8 7 2

8.69

10.74

13.74 12.20

9.50 8.50

11.0

13.0 12.0

8

10

12

14

2.8 2 5 2 43.55 3.3 2.95

2 4 2 4 2.8

5.30 5.50 5.56 6.85 6.76 7.01 6.9 6.8 7.2

2

4

6

8

2.8 2.5 2.4 2.4 2.4 2.8

0Jan/12 Feb/12 Mar/12 Apr/12 May/12 Jun/12 Jul/12 Aug/12 Sep/12

US$ / bblnt

120

127

120125

130 WTI Brent Dubai

101102

107103

111

120 120

110

103

113 113

110

116122

117

107 109

111

105

110

115

120

95

82

88

94 9595

94

99

85

90

95

100

Difference between AL & AH has declined further from

avg US$ 3 26/bbl during Q1 FY 2013 to avg US$ 2 53/bbl

80 Jan/12 Feb/12 Mar/12 Apr/12 May/12 Jun/12 Jul/12 Aug/12 Sep/12

avg. US$ 3.26/bbl during Q1 FY 2013 to avg. US$ 2.53/bbl

during Q2 FY13.

Differential between Arab Light & Norooz and Maya &

Bonny Light improved compared to Q1FY13 beneficial forBonny Light improved compared to Q1FY13, beneficial for

complex refineries.

Light & Heavy differentials seems to be bottom out and

expected to revive with fuel oil turning negative due top g g

closure of teapot refineries in china due to environmental

concerns.5

Product Cracks

$25Gasoil FO

19.43 17.60 17.81

16.36 15.39

20.36 18.75 18.23

15.64 15.96

20.21

14.64 $15

$20

11.66

7.60

11.79 10.55

12.

$5

$10

8.52

5.56

2.84 3.17 3.704.82

$

-$5

$0

-$10April ‐ Jun,11 Jul‐Sep,11 Oct‐Dec, 11 Jan ‐Mar, 12 Apr‐June,12 July‐Se

Gasoil & Gasoline margins observed upswing on accounplanned outages & delay in start up of refineriecountries.

Gasoil & Jet cracks expected to remain strong on acshut down & closures of refineries.shut down & closures of refineries.

Fuel Oil crack is expected to decline going forward (to convert entire bottom into value added products,

Source : Historical Platt’s (Singapore cracks) & Forward Curve from Morgan Stanley as of 15th Oct, 1

Jet Gasoline US$/bbl

19.27 18.87 19.03 18.63 18.52 18.19 18.29

20.77 20.43 20.15 19.90 20.09 20.39

42 11.929.93

8.556.95

5.99

6.19

9.03 8.52 7.74 7.05 6.46 5.98

pt, 12 Nov, 12 Dec, 12 Jan‐Mar, 13 Apr‐June,13 July‐Sept, 13 Oct‐Dec, 13

ount of low global inventories, closure of few refineries,es after maintenance, strong demand from non‐OECD

ccount of demand from OECD countries and unplanned

(Nov,12 :Negative US10/bbl), enable complex refineries, thus improve GRM.

2 6

Indian Refining Capacity

HPCL BPCL IOC EOL RIL Others

g p y

mmtpa99 5

90

100

30% Refining Capacity ‐over 35 years old

others99.5

60

70

80 over 35 years oldRIL

63.9

40

50

60

EOL

others

IOC

others

53.2

20

30IOC

BPCL

RIL

0

10

Refineries 30 yrs and Refineries 10-30yrs old Refineries less than 10

BPCLBPCL

BPCL

IOCHPCL HPCL

HPCL

Refineries 30 yrs and above

Refineries 10 30yrs old Refineries less than 10 yrs old

More than 30% of refineryMore than 30% of refinery

capacities are more than 35

years old.

No new refinery capacity

addition expected in next 3‐5addition expected in next 3 5

years except Paradeep &

Nagarujana Refineries.

Essar Oil’s new refinery are

well placed to cater theothers

23

Refineries under

well placed to cater the

growing demand from

domestic market.

IOC

HPCL

Refineries under construction

7

Key Global Economies ‐ shifting ty g

EOL is well placed to capitalise on grok t ( t f l ~8%) f lmarket (auto fuels ~8%) for clea

Nitrogen (Nox) emission norm under EURO VI ~ 60 mg/km compared to 180 mg/km for Euro V. Combined

towards cleaner fuels

13 Major cities13 Major cities shifted to EURO IV Norms from 2010

and 7 cities added in 2012

Entire nation is expected to move to EURO IV & MetrosEURO IV & Metros to EURO V in next

few years

owing domestic f l

8

aner fuels.

emission norms ( Hydrocarbon & Nox i) ~ 170 mg/KM under Euro VI compared to 230 mg/km for Euro V

Refinery & Marketing Operattion

9

Safe, Reliable & Sustainable ope, p

LTI free Man ‐days

1643

LTI free Man 13 68LTI free Man‐hours

13.68

Major fire free days

1228

Vadinar Refinery received “ Refinery of the Year” Aw

Essar Refinery Integrated Management System(ERIMS

As of 30th Sept, 2012

14001:2004 & OHSAS 18001:2007 .

Awarded first position in Safety, Health & Environmen

(large) industries by CII.

Gold category award for implementation of the 5‘S’, b

British Safety Council ‐International Safety Award with

Safety excellence award from Federation of Indian Ch

National Award for Excellence in Water ManagementNational Award for Excellence in Water Management

Note : The 5S program is a Japanese management tool focusing on efficiency in the work sp

erations

ward from Petroleum Federation of India.

S) conforms to the requirement of ISO 9001:2008, ISO

nt (SHE) Awards for year 2010 in manufacturing sector

by the Quality Circle Forum of India

h Distinction for its Health & Safety performance .

ambers of Commerce & Industry (FICCI)

from Confederation of Indian Industry (CII)from Confederation of Indian Industry (CII)

pace that targets ‘sorting’, ‘straightening’, ‘systematic cleaning’, ‘standardizing’ & ‘sustaining’10

Quantum Growth in Throughpu

5.074 485 0

6.0 Million tonnes

3.03

4.48

3.0

4.0

5.0

0.0

1.0

2.0

Q2FY12 Q2FY13 Q1FY13

Units Capacity CapacityUnits Capacity (KTPD)

Capacity Utilisation (%)

DCU 17.01 91

VGOHT 17.12 85

DHDT 11 68

CDU‐2 6 122

t

1.71 1.70 1.661.8

2.0 Million tonnes

1.0

1.3

1.5

0.3

0.5

0.8

J l/12 A /12 S /12

31 days 31 days 30 days

66% growth in throughput compared to Q2 FY13

Jul/12 Aug/12 Sep/12

66% growth in throughput compared to Q2 FY13

New Units are fully stabilised & consistently

operating at higher capacities

Secondary Units have further scope for optimization.

11

Four fold increase in Ultra Heavy

100%

Ultra Heavy Heavy Light

17% 41%

25% 19% 11%

60%

80%

64%48%

60%

20%

40%

15%0%


Ultra heavy crude increased from 15% to 64% in Ultra heavy crude – increased from 15% to 64% in overall crude basket.

Supply security of ultra heavy crudes – term contracts for 70% of ultra heavy crude with Latincontracts for 70% of ultra heavy crude with Latin American, Middle East & Domestic suppliers.

Crude API improved to 27.44 compared to 33 for Q1FY12, signify the impact of increased complexity,FY12, signify the impact of increased complexity, further improvement in Crude API to 25/26 subject to widening of light & heavy/ ultra heavy diff.

y Crude

100%

Ultra Heavy Heavy Light

33%11% 7%

16% 19%23%

60%

80%

51%

70% 70%

20%

40%

0%Jul/12 Aug/12 Sep/12

Crude optimization continues & stabilising the

operations with 70% of ultra heavy crude.

Processed more than 25 types of crude during

1

yp g

the quarter including Forozan Blend, Ras Garib,

Nowrooz and Mangala.

12

Other Parameters like Sulphur % ‐ 1.75 , Avg.

TAN ‐ 0.53 also improved.

Production of light & middle mg

100%

Heavy Middle Light

43%

29% 23% 24%

60%

80%

28%18% 17%

43% 59% 59%

20%

40%

Continue to optimize production of middle & light

0%Q2FY12 Q2FY13 Q1FY13

p p g

distillates post completion of expansion projects

High quality product slate provide flexibility to

t b th d ti d l b l k tcater both domestic and global markets.

Heavy distillates includes Fuel Oil & Petcock ‐

expected to continue with its production based on

market dynamics.

axmised

100%

Heavy Middle Light

62% 56% 57%

21% 24% 22%

60%

80%

17% 20% 21%

62% 56% 57%

20%

40%

0%Jul/12 Aug/12 Sep/12

Converted low margin heavy distillates to

better margin light distillates.

Gasoil improved from 36% in Q2FY12 to

42% in Q2FY13

Fuel Oil declined from 25% in Q2FY12 to

8% in Q2FY13

Light & middle distillates increased to 81%

13

g

inspite of four fold increase in ultra heavy

crude.

Focus on domestic market c

100%Export PSU Bulk Retail

5%6%

3%

1%

1%

60%

80%

64%73%

4%3%

40%

60%

42%30%

20%

51%

0%

20%


Focus on domestic market to get better price realizat

E t d d i i lt d hi h t i S


Extended raining seasons resulted higher exports in S

Export products include Gasoline, VGO, Fuel Oil and P

High complexity to provide an opportunity to export h

continue...

1%80%

Export PSU Bulk Retail

5%8%

1%

2% 1%

1%

60%

63% 66% 63%

20%

40%

30%25%

35%

0%

20%

July August September

ion of petro products.

t 12ept,12

Petcoke.

high quality products for better realization.

14

Significant Gross Refining Marging g g

US$/bbl

7.868.0

9.0 C P GRM

4.94.5 4.2

5.14.7

4 0

5.0

6.0

7.0

1.6

1.0

2.0

3.0

4.0

All units of refinery fully integrated & stabilized in m

-FY09 FY10 FY11 FY12 Q2FY12 Q2FY13 Q1FY13

All units of refinery fully integrated & stabilized in m

Sept,12.

Full benefit of higher complexity post Expansion Proje

Coal based power plant synchronized & full reflected

With fuel oil turning negative by more than US$ 10/b

3.5/bbl, this is expected to further benefitted comple

n uplift

$10.83 $12.00

C P GRM

p

US$/bbl

$5 07

$7.46

$6 00

$8.00

$10.00

$5.07

$2.00

$4.00

$6.00

$-Jul/12 Aug/12 Sep/12

id August 12 and started operating at its full capacity inid August, 12 and started operating at its full capacity in

ects will start getting reflected from Q4 CY12.

from mid Nov, 12.

bbl in Nov,12, light & heavy differentials improved to US$

x refineries.

15

Coal based Power Plant to save

12%

Pre coal Power plant Post coal power plant

10%

12%

8%8%

1.6 Million Tonnes of Coal (6.5%)

1 2 mmscmd

6%

6 3%

1.2 mmscmd of Natural

1.2 mmscmd Natural Gas (1.7 %)

Liquid Fuel and gas 4.00%

4%

6.3% -liquid fuel Gas (1.5%)

2%

0%

liquid fuel

With start of Coal based power plant, liquid

fuel will decline to 4.0% from 6.3%.

Overall Fuel & Loss (post expansion projects &

pre‐coal based power plant) ~ 8% while it

would be 8.4% (post expansion projects & post

coal based power plant) on SRFT (standardcoal based power plant) on SRFT (standard

refinery fuel tons) basis.

Refinery will use Coal for Power plant and

Natural Gas for refinery internal processes.

It will save liquid fuel (Fuel Oil & Naphtha),

which will be further converted into value

added products.

This will save minimum US$1/bbl for theThis will save minimum US$1/bbl for the

Refinery.16

Fully geared to leverage the GRMFully geared to leverage the GRM

Particulars Pre

CapacityCapacity

Complexity

Ultra Heavy Crude (%)

API (Density) AvgAPI (Density) Avg

Product Yield (Light & Middle distillate)

Coal based Power Plant Liquid f

BenchmarkIEA – Singapore margin IEA

Full benefit of exf fexpected to be refle

M from complex refineryM from complex refinery

e Expansion Post Expansion

14 2014 20

6.1 11.8

20% 70%

33 2733 27

68% 80%

fuel & Natural Gas Unit‐I synchronised & dunit II in mid Nov 12.

A + US$ 3/bbl IEA + US$ 7/bbl

xpansion projects p p jected from Q4CY12

Retail Business : Emerging Oppo

Deregulation of Gasoline by Govt enabled us to ram

Retail Business : Emerging Oppo

up of retail sales volumes significantly at its 1400 reta

outlets.

Gasoline prices are now at par with PSUs across India

Govt. steadily moving towards fully deregulation of

auto fuels, which will create great value for our retai

business.business.

Other Non Fuel Revenue activities including ALPG an

CNG t t il t ti ti t b iCNG pumps at our retail station, continue to bring

additional revenue streams for franchisees.

ortunity

p

ortunity

ail

3

16

26

43

601

11

a.3

40

1927

115

4103

103

3

215

26

l 3

4

195

159

35

26

d

74

70

2

3770

2

18

Marketing & DistributionMarketing & Distributionn Facilitiesn Facilities

19

Exploration & Production

20

E&P Asset Portfolio

Mehsana

• 70% interest (ESU)• 2P reserves: 2mmbbl

(oil)• Potentially significant

CBM play

Ratna /R SeriesRatna /R Series

• 50% interest• 2C resources:

81mmboe (92% oil, 8% gas)

• CPR by RPS Energy (2010)

Rajmahal

• 100% interest in CBM blockCBM block

• Best estimate prospective resources: 4.7tcf CBM gas (787mmboe)

• CPR by ARI (2010)• CPR by ARI (2010)

Other Assets

• Assam (100% interest):

Raniganj

Unrisked/undiscovered in‐

place resources: 10mmboe

• 3 CBM Blocks (100% interest):

Unrisked /undiscovered in• 100% interest• 2C and best estimate

prospective resources: 855bcf CBM gas (142mmboe)

Unrisked /undiscovered in‐

place resources: 4400 bcf

• CPR by NSAI (2012)

21

Project Progress at Raniganj

Continued production of ~30,000 scmd from 20‐22 we

including supply of Gas to end customers through pipeli

and cascades.

More than 100 wells drilled, Hydro fracturing completed f

74 wells and 47 wells are interconnected to GGS‐1 & GGS‐2

form a closed loop to enable quick ramp‐up of gas productio

Environmental Clearance to drill additional 232 direction

well received.well received.

ARI started providing on‐site expert consultancy for drilli

of development wells.

Grant of Petroleum Mining Lease received from Govt of We Grant of Petroleum Mining Lease received from Govt of We

Bengal in June 2012.

Approval of sale & price of CBM is under consideration wi

Govt of IndiaGovt of India.

48 km pipeline catering to Durgapur Industrial Area, 43 km o

infield pipeline to connect wells with GGSs completed &

operational & approx 14.5 km of Matrix pipeline is being laid

ells

neGas Flare Gas sale distribution

for

to

on.

nal

ng

estest

ith

of

d.

22

Progress at Raniganj

Implemented a fully automated logistics solution;

Track rigs and vehicles as they move across siteg y

Track the movement and inventory of materials

Optimise vehicle movements and mitigates

against route problems on narrow roads

A standardized 2 rig program implemented to

facilitate forward planning and smooth executionp g

FIELD OVERVIEW

WELL CROSS SECTIONRESERVOIR MGT.

HISTORY TRACKING TRAVELLED PATH REPORT

LIVE TRACKING CARGO DEPLOYMENT STATUS

G&G HF P d ti D illi

CATIVE

KPIs

G&G HF Production Drilling Depth Days to complete Water level Azimuth

Formation No of jobs Annulus Press Horizontal Drift

Seam thickness No. of cuts Daily water Top of seam

Seam from Casing weight Daily gas Bottom of seam

INDIC Seam from Casing weight Daily gas Bottom of seam

Seam to Casing Grade Gas consumption

Job Span Shoe Depth

Integration of key process streams & functional groups into a Cockpit to enable real time monitoring of key performance indicators such as rig performance, well performance, reservoir performance & logistics at site

23

Infrastructure for CBM at Ranigag

GGS‐1 Katgoria GGS‐2 Ak

GGS‐3 MGGS‐1 Katgoria

GGS 1 – Complete and opGas Gathering Stations

GGS 1 – Complete and opGGS 2 – being commissioGGS 3 – Under constructi

anjj

khandara Hydrofrac Unit

Molandighi Separators

perationalperational. nedon 24

Other CBM Blocks

Petroleum Exploration License (PEL)

Being followed up with respective state Govt. autho

Rajmahal ‐ Draft EIA report and request for conduct

Sohagpur ‐ Draft EIA report was submitted on 9th Oc

Talchir & IB Valley ‐ Draft EIA report under preparat

Other Activities

Remote Sensing studies for Geological Assessment o

Project Office opened in Pakur for Rajmahal

Process initiated for opening up of project office in

EIA – Environment Impact Assessment

orities for Environment Clearance

ting Public Hearing submitted

ctober 2012

tion

of all the blocks underway

Sohagpur block (Shahdol)

25

Financials

26

Reflection of Complexity in Fina

Revenue (Rs ‐ Crore)

Quantum growth in Sales post Expansion

Reflection of Complexity in Fina

27000

36000

45000

Revenue (Rs Crore)

49%

30283

45131

13805

230239000

18000

2700067%

0

H1 FY12 H1 FY13 Q2 FY 12 Q2 FY13

7 86GRM (US$/bbl)

Impressive growth in GRM; uplift to continue...

4.6

6.41

5.07

7.86

5 00

6.00

7.00

8.00 GRM (US$/bbl)

4.6

2.00

3.00

4.00

5.00

0.00

1.00

H1 FY12 H1 FY13 Q2 FY 12 Q2 FY13

ancial Numbers

EBIDTA (Rs – Crore)

Multifold jump in EBIDTA

ancial Numbers

800

1000

1200( )

46%

27 times

581

853

43

1169

200

400

600

430

H1 FY12 H1 FY13 Q2 FY 12 Q2 FY13

Improvement in Profitability to continue….

105

‐200

0

200

Profit after Tax (Rs ‐ Crore)

# #

‐316

‐1413‐419

‐1000

‐800

‐600

‐400

Sharp decline in crude prices and depreciation of Rupee against US$ resulted Inventory & forex Losses

‐1400

‐1200

H1 FY12 H1 FY13 Q2 FY 12 Q2 FY13

Inventory & forex Losses

# H1 FY12 and Q2 FY12 profitability numbers are net of sales tax incentive impact in respective period

27

Refinery Margin started indicating y g g

Indian Complex Refinery IEA

11.60

15.00 12.20

10.00

12.00

14.00

6.60

3 563.62

1 60

4.00

6.00

8.00

2.57

3.56 2.69

1.60

-2.00

0.00

2.00

FY 2007 FY 2008 FY 2009 FY 2010

Increased complexity to provide incremental margin

Source: EOL; Industry

FY 2007 FY 2008 FY 2009 FY 2010

With expected throughput for FY13 & FY 14 ~ 140 m

to deliver excellent refinery margin & profitability.

Cash flow generated from business operations will b

complexity advantagep y g

US$/bblSingapore Margin Vadinar Refinery

8.40 8.70 7 60

9.57.60

4.53

4.23 4.69

7.86

0.37 1.40

(0.43)

2.49

FY 2011 FY 2012 Q1 FY13 Q2FY13

ns in line with the peers with similar complexity

FY 2011 FY 2012 Q1 FY13 Q2FY13

mmbbls & 150 mmbbls respectively, vadinar refinery is set

be utilized to deleverage the B/S.

28

Financial PerformanceFinancial Performance

Financial numbers are restated to provide the effect of Sales Tax Incentive

Rs in Crore

29

e reversal in respective years as per Hon’ble supreme court judgment.

Balance Sheet ‐ HighlightsBalance Sheet Highlights

Rs in Crore

30

Key Financial Developments

CDR Exit Sale

•CDR Exit Proposal of

Company approved by CDR

Core Group August, 2012

•CDR Exit Proposal of

Company approved by CDR

Core Group August, 2012

•Sales Tax mat

with final jud

Supreme Cou

•Sales Tax mat

with final jud

Supreme Cou

•CDR Exit to provide

operational flexibility for

decision making.

•CDR Exit to provide

operational flexibility for

decision making.

balance sales

8 quarterly in

year from Jan

balance sales

8 quarterly in

year from Jan

•It offer an opportunity to

reduce cost of debt through

restructure of debt Mix &

•It offer an opportunity to

reduce cost of debt through

restructure of debt Mix &

•The Compan

pay the sales

out of intern

•The Compan

pay the sales

out of intern

participation of foreign

banks.

•CDR expected to be

participation of foreign

banks.

•CDR expected to be

/profitability

from busines

and credit lin

/profitability

from busines

and credit lin

completed in next 2‐3

months.completed in next 2‐3

months.

available wit

required.

available wit

required.

s

es Tax ECB Funding

tter concluded

dgement from

urt to pay the

tter concluded

dgement from

urt to pay the

•RBI recently approved Essar

Oil’s proposal to raise $ 1.5

billion through external

•RBI recently approved Essar

Oil’s proposal to raise $ 1.5

billion through externals tax liability in

nstalment in 2

n, 2013.

s tax liability in

nstalment in 2

n, 2013.


commercial borrowings (ECB)

to refinance its rupee

denominated debts with


commercial borrowings (ECB)

to refinance its rupee

denominated debts withy is planning to

s tax liability

al accruals

y is planning to

s tax liability

al accruals


existing lenders.

•Refinance of Rupee debt with

ECB id l


existing lenders.

•Refinance of Rupee debt with

ECB id lgenerated

ss operations

ne of Rs50bn

generated

ss operations

ne of Rs50bn

ECBs to provide an annual

interest saving of Rs 4.5 – 5.0

bn, mainly due to reduction of

ECBs to provide an annual

interest saving of Rs 4.5 – 5.0

bn, mainly due to reduction of

h bank, if h bank, if interest rate by 4%. interest rate by 4%.

31

Thannks

32

Financial PerformanceFinancial Performance

Financial numbers are restated to provide the effect of Sales Tax Incentiv

Rs in Crore

33

ve reversal in respective years as per Hon’ble supreme court judgment.

Strategic location & global presenceg g p

Proximity to the Middle Easthe largest crude oil source

the world resulting in lowecrude freight costs

Crude intakeStrong, captive infrastructure like port / jetty, power plants of Essar affiliated companies inEssar affiliated companies in close proximity

Crude intake

So

Latin America

e to drive the synergyy gy

Presence in a major

st, in r

maritime route from the Middle East to the Far East

trategically located to cater the demand of growing domestic market & supply to

global markets

34

Vadinar Refinery set to deliver signiy g

14

16Indian Refineries

11.8

Large scale high complexity refineries

Legends :Indian Private SectorNOC 18

10

12

mpl

exity

NOC 2NOC 3NOC 4NOC 5

2

4

6Com

Vadinar Refinery at 20 mmtpa becomes second largest sin

O f l fi i l b l k

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000Capacity (bpd)

One of most complex refinery in global market.

Capability to process ~ 85% heavy & ultra heavy crude wit

Strategic Location to carter petro products demand of dom

Build with one of the lowest Capital Cost ~ US$12746 per

Continuous focus on process innovation and optimisation

Benefitted from fully integrated infrastructure developed

Expanded Refinery with higher complexity started indicati

ficant value

23 00026,500 30,000

New Refinery Capex (US$ Cost/bbl)

23,000 19,800

18,000 20,400

10,700 12,746

10,000

15,000

20,000

25,000

‐

5,000

World Average

China Saudi Arabia

India Indian PSU Refineries

Indian Private Sector

Essar Oil Limited

Sector

gle location refinery in India.

th avg API ~ 24/25 & produce Euro IV/V grades of products

mesitc and international markets

barrel

i.e. conversion of VBU into CDU & Coal based Power Plant.

around refinery site i.e. power plant, port/jetty, tankages etc

ng improvement in GRMs, full benefit expected in Q4 CY 12.

35

CBM Blocks

Acreage

Leading CBM gas playe

CBM Blocks Place CertifiedAcreage (km2)

Raniganj West Bengal NSAI, Jan12 500

Rajmahal Jharkhand CPR ARI 1128Rajmahal Jharkhand CPR, ARI 1128

Sohagpur M.P. & Chhattisgarh DGH 339

Talcher Orissa DGH 557

IB Valley Orissa DGH 209

Total 2733

Leading CBM player in the country with 2733

reserve & resources in place under 5 blocks.

5 CBM blocks ~ 10 tcf gas, 100% ownership

Raniganj to start production of CBM Gas shoRaniganj to start production of CBM Gas sho

2P/2C Prospective In place Unrisked

er in India

2P/2C resources (bcf)

Prospective Resources (bcf)

In place Unrisked Resource (bcf)

558 297

4 7234,723

600

2,600

1,200

558 5,020 4,400

3 sq km of acreage & more than 10 TCF of

rtly.rtly.

36

Indian Oil & Gas Sector

22.3 Per capita oil consumption (annual barrels/person)‐2012

Low per capita oil consumption

9.7

5.53.7

2.61.1

USA EU R i B il Chi I diUSA EU Russia Brazil China India

Historical Growth of Auto Fuels in India

Gasoline Growth Gasoil Growth (Diesel)

13.9%

11.5%10.3%12.0%

14.0%

16.0%

9.0%

4 2%

8.5% 8.9%

6.7%6.0%

8.0%

10.0%

4.2%4.0%

2008‐09 2009‐10 2010‐11 April‐Sept 2012

Low per capita gas consumption (bcf)

83.6Per capita gas consumption (annual cubic feet/person)‐2012

62.7

38.6

3.6 2.8 1.6

Russia USA EU Brazil China IndiaRussia USA EU Brazil China India

Low per capita Oil & Gas consumption in India; provides

a huge potential to grow at faster pace in order to catch

up with developed economies.

Petro products demand in India continue to be strong

led by growth in GDP, rising disposable income, Govt.

f d l t f i f t tfocus on development of infrastructure.

Gas demand is growing at 20%+ rate, however, this is

also restricted due to constrain from supply side.

Govt Policy to restrict Gasoil Price has created abnormalGovt Policy to restrict Gasoil Price has created abnormal

demand growth in Gasoil, which has even replaced Fuel

Oil & CNG also apart from Gasoline. 37

Why refining margins would rem

Global capacity utilisation under pressure

to high average life of refineries and planned/

y g g

g g p /

Low Inventory level: Five‐year‐low invento

coming quarter g q

Strong diesel demand in India & China &

in India, China and Middle East will benefit As,

refinery margin.

Contraction in refinery capacity due to uny p y

Refinery capacity has contracted due to pla

M k i d h 1 8 b d f Market witnessed more than 1.8 mbpd of re

closure of another 1mbpd for FY13; resulting

FY13 and with expected demand growth at 0

margins in the near to medium term

main high ?

e : Refinery Utilisation unlikely to rise further due

/ unplanned shutdown.

g

/ p

ry level to provide support to diesel cracks in the

Middle East : Continuous strong diesel demand

sian diesel refiners and will result into healthy y

nplanned shutdown : p

nned/unplanned refinery shutdown.

fi i l i FY12 & d lik lefinery capacity closure in FY12 & expected likely

g net refinery capacity addition to be negative in

0.8 / 1.0 mbpd. This would support refinery

38

essar oil limited › upload › pdf › eol_q2_fy2012_13.pdf · 2012-11-09 · supply security of...

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