essar oil limited · 2011. 7. 11. · excluding dcu expected to be mechanical...

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


Cooling Tower

Desalination Plant

17


Raw Water Treatment PlantAir Generation Unit


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)


VGO10%

Heavy end15%

Fuel loss5%Light

Distillates22%

Middle Distillates

47%

Heavy end25%

Fuel loss6%


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


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

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

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






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

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

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

Natural Gas Station

52

essar oil limited · 2011. 7. 11. · excluding dcu expected to be mechanical...

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