Reliance Industries Limited

Reliance Industries Limited Challenges, Opportunities, Strategies & New Paradigms

Forward Looking Statements This presentation contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The companies referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise.

Emerging Global Trends Reliance Response • Emerging Asia – Key Driver of World Demand • Energy Producing and Delivery Systems are stretched globally • “Easy Oil” over • Heightened competition • Sustainable Development Gaining emphasis • Technology may hold answers for potential solutions • Reliance • Goal Congruence • E&P in India and Overseas • East West Pipeline • Refining in Jamnagar • Petroleum Retailing • Energy Convergence • Carbon Footprint • Bio Diesel • Coal • Energy Challenges • Emerging Imperatives Outline Energy Imperatives for India

Emerging Global Trends Reliance Response Outline Energy Imperatives for India • Emerging Asia – Key Driver of World Demand • Energy Producing and Delivery Systems are stretched globally • “Easy Oil” over • Heightened competition • Sustainable Development Gaining emphasis • Technology may hold answers for potential solutions • Reliance • Goal Congruence • E&P in India and Overseas • East West Pipeline • Refining in Jamnagar • Petroleum Retailing • Energy Convergence • Carbon Footprint • Bio Diesel • Coal • Energy Challenges • Emerging Imperatives

Key driver of world’s energy demand growth – Emerging Asia • World Economy expected to treble from US$ 47 Tn in 2002 to 113 Tn by 2025. • Emerging Asia accounts for 48% of the increase • The world’s population is set to increase from 6.3 Billion to about 7.9 Billion • Emerging Asia accounts for 50% of the increase • World’s energy needs set to increase from 10, 300 to 16,125 MTOE • Emerging Asia accounts for 46% of the increase • Oil and Gas to account for 64% of the increase in consumption India is one of the key players of Emerging Asia

Energy producing and delivery systems are stretched • Little surplus capacity in major oil producing nations • Geopolitics, accidents and weather related incidents resulting in supply disruptions • Global Refining Capacity is stretched • Futures markets indicate higher prices • Resultant high oil and Gas prices impact the entire energy space Supply Side measures are a key to solve the energy related issues

“Easy Oil” over • Rising f&d costs; last ten year average $7.44/boe as against $11.37/boe in 2005 • Exploration outlays on decline, E&P spending directed towards existing producing wells rather than exploration thru drilling new wells • Reduction in discoveries in the last few years, the average size of new discoveries around the world has declined three-fold to about 22 mmboe Low hanging fruits already plucked, new reserves are in difficult logistics, unconventional plays, adverse fiscal regimes, politically unstable geographies

Heightened competition • National Oil Companies (NOC) are aggressively increasing their share of reserves worldwide, resulting in less share for IOCs • Additionally, competition from smaller oil companies leading to higher acquisition costs NOCs striving for national supply-security, easily outbid IOCs acquiring solely on “hurdle rates”

Sustainable development gaining emphasis • Global warming will have serious consequences of rising sea levels, species extinction, epidemic disease, drought and severe weather events. • In 50 years, greenhouse emissions must be reduced by 60 percent. • In 5 to 15 years carbon exposure management could create or destroy shareholder value. • Carbon regulation, will raise costs across the globe • Carbon Trading has become a reality A lower carbon footprint should be woven in into every greenfield project

Need for new energy pathways • R/P ratio for oil and gas is declining, currently close to 40 years for oil and 65 years for gas • Iran and Russia contributed to increased reserves, which are difficult to access Technological innovations key to commercially tap “hard oil”/ “unconventional oil” and other abundant energy sources

Advanced technological solutions • Integrated bitumen processing for syn-crude generation • SAGD (Steam Assisted Gravity Drainage) for tar sands • Latest technology in deepwater drilling and drilling tools • Technology to reduce exploration risks • Gas hydrate production • Biomass, Coal to Liquid, Integrated Gasification Combined Cycle etc. New technologies expanding the existing frontiers

Emerging Global Trends Reliance Response • Emerging Asia – Key Driver of World Demand • Energy Producing and Delivery Systems are stretched globally • “Easy Oil” over • Heightened competition • Sustainable Development Gaining emphasis • Technology may hold answers for potential solutions Outline Energy Imperatives for India • Reliance • Goal Congruence • E&P in India and Overseas • East West Pipeline • Refining in Jamnagar • Petroleum Retailing • Energy Convergence • Carbon Footprint • Bio Diesel • Coal • Energy Challenges • Emerging Imperatives

Energy Challenges • India – the fifth largest energy consumer • Energy demand estimated to grow by 40% in 5 years • Widening Demand-Supply Gap • Energy volatility affects economy considerably • Funding of US$ 225 Bn by 2012; Government ?? Any takers ? It is not just energy….It is “affordable energy”

Energy Challenges • Industries faced an average of 17 power shutdowns a month (2005) • Investment in transmission & distribution upto 2012 is US$ 40 Bn • Nuclear Power is long term and needs support • Electricity generation must go up by 90 GW in 7 years. Equal to wiring up the entire United Kingdom. • The new power infrastructure estimated at US$ 170 Bn

Energy Resources Gap* Deficit Supply *Source: McKinsey

Coal • Supply – Demand gap expected to be 100 million tonnes in 2012 • Govt monopoly in coal production – short of targets • Commitment to power plants down to 89% from 96% two years ago • Needs US$ 10-15 Bn for upgradation / new mines • Opex is 50% higher – needs newer technologies • 15% drop in commitment shaves off 1% in growth rate • Major investments for infrastructure – US$ 45 - 50 Bn • Market related coal price

400 16000 368 Supply Production 13807 350 14000 Demand Demand 300 12000 11053 250 10000 8158 195 million tonnes MMSCFD 200 8000 5332 150 6000 4979 4979 110 4273 96 100 4000 60 2472 45 50 2000 33 32 0 0 2001-02 2002-03 2011-12 2024-25 2001-02 2007-08 2011-12 2024-25 Oil & Gas • Demand supply gap for Oil may rise from current ~70% to well over 80% levels, in next 20 years • Demand supply gap for Gas may climb up from ~50% to over 60% Natural Gas Projections Oil Projections Source: ORF Energy Monitor, 23-29 Nov, 05 and Reliance Source: ORF Energy Monitor, 23-29 Nov, 05 Demand and Supply Side measures to create Interim Petroleum Security

Emerging Imperatives for India • Strengthen Energy Security • Accelerate domestic E&P • Policy Measures for supply/ demand management • Strengthen Delivery Infrastructure • Investments required in Refining / Power /Pipelines • Thrust on Renewable /Alternate Fuels • Coal /Nuclear Power / Bio Fuels / Gas hydrates • Use of new technologies

Reliance – Business Segments 1970s 1980s 1990s 2000s Petroleum Upstream Gas Pipelines Petroleum Downstream Retail Infrastructure Polyester Textiles Plastics Vertical integration, participation in sectors with strong growth potential and international competitiveness

CAGR FY 2005 FY 2006 5 years 10 years Revenues 19,976 28% 32% 16,725 Net Profit 2,033 18% 29% 1,731 Consistently Accelerating Growth ( US $ million) India’s first and only private sector company to feature in the Fortune Global 500 list

Reliance benchmarks itself with global best practices in all aspects of its operations Reliance Philosophy • Invest in businesses for future • World scale • Best technology • Best people • Integration • Superior Project Execution • What is good for India is good for Reliance

Reliance Vision India Energy Imperatives Reliance Initiatives • Expanding Upstream in India & Abroad • ~ Extensive E&P in India • ~ International Acquisitions • Expanding Delivery Infrastructure • ~ Refining / Pipelines / Retail • Energy Convergence • Renewable /Alternate Fuels • Managing Carbon exposure • Strengthen Energy Security • ~ Accelerate domestic E&P • ~ Policy Measures for overseas Investment • Strengthen Delivery Infrastructure • ~Investments required in Refining / Power /Pipelines • Thrust on Renewable /Alternate Fuels • ~ Coal /Nuclear Power / Bio Fuels • Sustainable development

Emerging Global Trends Reliance Response • Emerging Asia – Key Driver of World Demand • Energy Producing and Delivery Systems are stretched globally • “Easy Oil” over • Heightened competition • Sustainable Development Gaining emphasis • Technology may hold answers for potential solutions Outline Energy Imperatives for India • Reliance • Goal Congruence • E&P in India and Overseas • East West Pipeline • Refining in Jamnagar • Petroleum Retailing • Energy Convergence • Carbon Footprint • Bio Diesel • Coal • Nuclear • Energy Challenges • Emerging Imperatives

Extensive Exploration Acreage in India • Producing Assets – 30% Interest in 90,000 BOEPD Panna-Mukta & Tapti fields • Exploration Blocks - 34 blocks in India • Exploration Area - about 350,000 sq.km, Predominantly in deepwater • Coal Bed Methane - 5 blocks (4,000 sq.km.) • Reliance holds about 10% of country’s sedimentary basin and has the largest private sector exploration acreage A diversified and balanced portfolio

East Timor Sunrise JPDA Area Bayu - Undan International Acquisitions – Current positions TIMOR LESTE YEMEN 2,464 square km COLOMBIA 2,380 square km OMAN 21,140 square km 15,718 square km

International Acquisitions – Vision One of Top 10 Global Companies (pvt + govt.) One of Top 10 Global Pvt. Oil Companies 2020 2015 Top Pvt. Oil Company of Asia Production (bopd) : Prod Growth (CAGR) : Overseas Reserves : ~500,000 ~15% ~3 bn bbl 2006 Near Term Aspirations Production : Overseas Reserves : ~250,000 bopd ~1,500 mm bbl

Gas Chain strategy - India • Largest Gas Discovery in the World in 2002 -Initial estimates of the gas in place is upward of 14 tcf • Gas Discovery established India as a world class destination • Expected to be on production in 2008 which would double India’s Gas Production • Proposed East West Pipeline to evacuate Gas from KG basin is amongst the longest cross country pipelines in India • Proposed Pipeline will link key demand and supply centres • Extensive City Distribution networks planned for domestic, industrial and commercial sectors Gas Find ushering in a supply coordinated demand growth story in India

Proposed Refinery at Jamangar • A 580,000 barrels per day stand alone refinery • A 0.9 million tonnes per annum Polypropylene plant • ‘Intelligent’ repeat design to optimize project cost and construction schedule • Project expected to be commissioned in 2008

RIL Group, India 1,240,000 Jamnagar: Refining Hub of the World BPD Source: Oil and Gas Journal RIL – RPL combine to be the largest refinery complex in the world

A World Class Asset • One of the highest complexity index of more than 14 • Process more than 60 crude varieties, with API ranging from 16-51 • Diversified crude sourcing strategy Growing light - heavy crude differentials offer promise for complex refineries

Superior Performance • Benchmarked in the top quartile, in all performance parameters by Solomon Associates, in 2003 • Adjudged the “Most Energy Efficient Refinery” by Shell Global Solutions in 2004 • First in Asia to be awarded the “International Refiner of the Year” in 2005, by the Hart’s World Refining and Fuels Conference Globally acclaimed performance

A Reliance City Outlet Reliance – Retail Marketing Network • Nationwide network of over 2000 outlets covering highways, cities and rural areas under implementation • Supply chain covering road, rail and ocean transport designed to minimize cost of placement • Entire network connected through “Broadband” enabling operational efficiency and delivery of superior customer value State-of-the-art, pan India retail network with strong value propositions

Energy Convergence Solutions • Fuel Cells and Hydrogen technology can transform energy space • Current usage restricted due to prohibitive costs • Large scale commercialization of fuel cells leveraging • Extensive city gas distribution network • Access to natural gas • Partnerships with technology leaders One stop solution for energy needs of electricity , cooling , heating and automotive fuels

Embrace ecology and environment • Arid Land with poor water resources, poor biomass and biodiversity and a Fragile mangrove based coastal ecosystem • Planted 2.2 million trees representing 200 species over 2,000 acres for horticulture and agro forestry • Represents Asia’s largest Mango plantation – 2.5 million mangoes or about 450 MT • Mega Project implementation with virtually no ecological disturbance Jamnagar experience to be leveraged for future projects

Bio-diesel Initiatives • Grow energy in agriculture • Integrate with CBM wherever possible • Focus on Jatropha and source better yielding varieties from within and outside the country • Undertake large-scale production of high yield seeds • Achieve a capacity of 100,000 tonnes of biodiesel production by 2011 Convergence of agriculture and energy

Reliance Industries Limited