Challenges for an Exporting Refinery Reliance Industries Limited P Raghavendran President (Refinery Business) New Delhi 3 rd October 2008

India:from a Net Importer to Exporter Figs in KTPA With the commissioning of Reliance’s first Refinery in 1999, India turned from a major importer to a significant exporter of HSD, MS & ATF

Gulf of Kutch: Emergence as a Refinery Hub Gulf of Kutch emerges as the largest source of HSD, MS & ATF for inter regional global trade with the commissioning of Reliance’s Second Refinery Figs for MS. HSD, Kero/ATF in MMTPA

Global Traded Volumes Figs in MMTPA The two refineries at Jamnagar become the single largest source of MS, HSD and ATF for global markets

Shrinking of the Globe Hydroskimming Vs Cracking~ 35 USD/MT Hydroskimming Vs Coking~ 75 USD/MT Distance to Markets (Nautical Miles) Product freight at different Parcel Sizes (USD/MT) 40 KT80 KT120 KT250 KT Note : TC rates at 3 yr Charter Inter regional movement from a coking or cracking refinery, moved in a larger vessel will be able to compete with local HSK refineries Gasoline Gas oil ATF

Travails of an Exporting Refinery Reliance believes it can compete with the Best in the World despite the above handicaps.

Disadvantage vis-à-vis PSUs in the Indian home market  NIL access to Domestic Market (TPP vs. Export Realisation and double taxation on MS and HSD)  No Upstream assistance or Oil Bonds to meet cash losses on domestic sales  Denial of access to cross country pipeline or Airport Hydrants even against payment of charges Due to huge losses, Reliance forced to withdraw completely from the domestic market for MS & HSD

Assistance sought from GoI  Removal of Residual Export Restrictions  Facilitate exchange of streams amongst Refineries for value addition with taxes only for removal into Domestic tariff area  Eliminate double taxation for Domestic removals GoI Support crucial for developing India as a successful Export Hub.

Back Up Slides

Source: ESAI report for RIL April 2007 MMTPA Global Gasoline Trade flows Euro IV + Euro V RIL gasoline targeted at North America will compete with European gasoline. RIL gasoline targeted at Middle East will compete with the Med gasoline. RIL gasoline targeted at Oceania will compete with Singapore and the Far East gasoline surpluses. Back

Source: ESAI report for RIL April 2007 MMTPA Global Gasoil Trade flows Jamnagar would be competing with the surpluses from Middle East and the FSU for the deficits of 10 ppm diesel in the Med and the ARA. There are serious doubts with regard to the timing of the required additional hydrotreating facilities in these regions in order to meet the EU specification requirements providing an opportunity for Jamnagar to meet these deficits for a fair period of time. Back

Source: ESAI report for RIL April 2007 MMTPA Global ATF Trade flows ATF from Jamnagar will compete with sources in the Middle East for deficits in Europe and the US while Africa and rest of Asia are roughly in balance. Back