Essar Enegry Prospectus

PROSPECTUS
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This document comprises a prospectus relating to Essar Energy plc (together with its subsidiaries, the
‘‘Company’’) prepared in accordance with the Prospectus Rules of the UK Listing Authority made under
section 73A of the Financial Services and Markets Act 2000 (the ‘‘FSMA’’). The Prospectus has been filed
with the Financial Services Authority and will be made available to the public in accordance with the
Prospectus Rules.
Application has been made to the UK Listing Authority for all of the Shares, issued and to be issued, to be
admitted to the premium listing segment of the Official List of the Financial Services Authority and to the
London Stock Exchange for all of the Shares to be admitted to trading on the London Stock Exchange’s
main market for listed securities (‘‘Admission’’). Conditional dealings in the Shares are expected to
commence on the London Stock Exchange on 4 May 2010. It is expected that Admission will become
effective, and that unconditional dealings in the Shares will commence, on 7 May 2010. Dealings on the
London Stock Exchange before Admission will only be settled if Admission takes place. All dealings before
the commencement of unconditional dealings will be of no effect if Admission does not take place and such
dealings will be at the sole risk of the parties concerned. No application is currently intended to be made for
the Shares to be admitted to listing or dealt with on any other exchange.
The directors of Essar Energy plc, whose names appear on page 154 of this document (the ‘‘Directors’’),
and Essar Energy plc accept responsibility for the information contained in this document. To the best of
the knowledge of the Directors and Essar Energy plc (who have taken all reasonable care to ensure that
such is the case), the information contained in this document is in accordance with the facts and contains
no omission likely to affect the import of such information.
See ‘‘Risk Factors’’ in Part 1 for a discussion of certain risks and other factors that should be considered
prior to any investment in the Shares.
ESSAR ENERGY plc

(Incorporated under the Companies Act 2006 (the ‘‘Companies Act’’) and registered in England and Wales
with registered number 7108619)
Offer of 302,789,825 Shares of 5 pence each

at an Offer Price of 420 pence per Share
and admission to the premium listing segment of the Official List
and to trading on the London Stock Exchange
Sponsor and Financial Adviser
J.P. Morgan Cazenove
Joint Global Coordinators and Joint Bookrunners
J.P. Morgan Cazenove Deutsche Bank

Co-Managers
BNP PARIBAS Nomura Standard Chartered
ORDINARY SHARE CAPITAL IMMEDIATELY FOLLOWING ADMISSION
Issued and fully paid

Nominal
Number Value
1,303,030,302(1) 65,151,515
(1) Assuming no exercise of the Over-allotment Option described below.
Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

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In connection with the Offer, J.P. Morgan Cazenove, as Stabilising Manager, or any of its agents, may (but
will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other
transactions with a view to supporting the market price of the Shares at a higher level than that which
might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such
transactions and such transactions may be effected on any securities market, over-the-counter market,
stock exchange or otherwise and may be undertaken at any time during the period commencing on the
date of the commencement of conditional dealings of the Shares on the London Stock Exchange and
ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising
Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising
transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without
prior notice. In no event will measures be taken to stabilise the market price of the Shares above the Offer
Price. Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends
to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation
to the Offer.
In connection with the Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up
to a maximum of 10% of the total number of Shares comprised in the Offer. For the purposes of allowing
the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales
of Shares effected by it during the stabilising period, Essar Energy plc has granted to it the Over-allotment
Option, pursuant to which the Stabilising Manager may subscribe or procure subscribers for additional
Shares up to a maximum of 10% of the total number of Shares comprised in the Offer (the
‘‘Over-allotment Shares’’) at the Offer Price. The Over-allotment Option is exercisable only once in whole
or in part, upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the
commencement of conditional dealings of the Shares on the London Stock Exchange. Any Over-allotment
Shares made available pursuant to the Over-allotment Option will rank pari passu in all respects with the
Shares, including for all dividends and other distributions declared, made or paid on the Shares, will be
subscribed for on the same terms and conditions as the Shares being issued in the Offer and will form a
single class for all purposes with the other Shares.
Each of J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas and Nomura, which are authorised and
regulated in the United Kingdom by the Financial Services Authority and Standard Chartered, which is
regulated by the Securities and Futures Commission of Hong Kong, is acting exclusively for the Company
and no one else in connection with the Offer. J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas,
Nomura and Standard Chartered will not regard any other person (whether or not a recipient of this
document) as a client in relation to the Offer and will not be responsible to anyone other than the
Company for providing the protections afforded to their respective clients or for the giving of advice in
relation to the Offer or any transaction, matter or arrangement referred to in this document. Apart from
the responsibilities and liabilities, if any, which may be imposed on J.P. Morgan Cazenove, Deutsche Bank,
BNP Paribas, Nomura and Standard Chartered by FSMA or the regulatory regime established thereunder,
each of J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas, Nomura and Standard Chartered accepts no
responsibility whatsoever for the contents of this document, including its accuracy, completeness or
verification or for any other statement made or purported to be made by it, or on its behalf, in connection
with the Company, the Shares or the Offer. J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas, Nomura
and Standard Chartered accordingly disclaim all and any liability whether arising in tort, contract or
otherwise (save as referred to above) which they might otherwise have in respect of this document or any
such statement.
None of the US Securities and Exchange Commission, any other US federal or state securities commission
or any US regulatory authority has approved or disapproved of the Shares nor have such authorities
reviewed or passed upon the accuracy or adequacy of this document. Any representation to the contrary is
a criminal offence.
Notice to Overseas Shareholders

The Shares have not been, and will not be, registered under the US Securities Act. The Shares offered by
this document may not be offered or sold in the United States, except to qualified institutional buyers
(‘‘QIBs’’), as defined in, and in reliance on, the exemption from the registration requirements of the US
Securities Act of 1933 as amended (the ‘‘US Securities Act’’) provided in Rule 144A under the
US Securities Act (‘‘Rule 144A’’) or another exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act. Prospective investors are hereby notified that the
sellers of the Shares may be relying on the exemption from the provisions of Section 5 of the US Securities
Act provided by Rule 144A or another exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act.

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The Shares are subject to selling and transfer restrictions in certain jurisdictions. No actions have been
taken to allow a public offering of the Shares under the applicable securities laws of any jurisdiction.
Prospective subscribers or purchasers should read the restrictions described under the paragraph entitled
‘‘Selling restrictions’’ in Part 13 ‘‘The Offer’’. Each subscriber for or purchaser of the Shares will be
deemed to have made the relevant representation described therein.
This document does not constitute an offer of, or the solicitation of an offer to subscribe for or buy, any of
the Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such
jurisdiction.
The distribution of this document and the offer of the Shares in certain jurisdictions may be restricted by
law. No action has been or will be taken by the Company, J.P. Morgan Cazenove, Deutsche Bank,
BNP Paribas, Nomura or Standard Chartered to permit a public offering of the Shares or to permit the
possession or distribution of this document (or any other offering or publicity material relating to the
Shares) in the UK or any other jurisdiction where action for that purpose may be required. Accordingly,
neither this document nor any advertisement or any other offering material may be distributed or
published in any jurisdiction except under circumstances that will result in compliance with any applicable
laws and regulations. Persons into whose possession this document comes should inform themselves about
and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation
of the securities laws of any such jurisdictions.
NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED
STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS
EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW
HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF
NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA421-B IS TRUE, COMPLETE
AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION
OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE
SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY
UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL
TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO
BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
Dated 30 April 2010.

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CONTENTS
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PART 1 RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART 2 PRESENTATION OF FINANCIAL AND OTHER INFORMATION . . . . . . . . . . . 37
PART 3 DIRECTORS, SECRETARY, REGISTERED AND HEAD OFFICE AND
ADVISERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
PART 4 EXPECTED TIMETABLE OF PRINCIPAL EVENTS AND OFFER STATISTICS . 48
PART 5 INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
PART 6 THE BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Oil and Gas—E&P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Oil and Gas—Refining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
PART 7 REGULATORY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
PART 8 DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE . . 154
PART 9 OPERATING AND FINANCIAL REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
PART 10 CAPITALISATION AND INDEBTEDNESS STATEMENT . . . . . . . . . . . . . . . . . . 206
PART 11 FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
PART 12 UNAUDITED PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . 271
PART 13 THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
PART 14 TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
PART 15 RELATIONSHIP WITH THE ESSAR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . 292
PART 16 ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302
PART 17 DEFINITIONS AND GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368
PART 18 EXPERT REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381
RPS Ratna & R-Series Fields Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382
ARI RM(E)-CBM-2008/IV Block Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498
NSAI OPL 226 Block Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536
NSAI RG (East)-CBM-2001/1 Block Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 585

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SUMMARY
This summary must be read as an introduction to this document only. Any decision to invest in Shares should
be based on consideration of this document as a whole. Following the implementation of the relevant provisions
of the Prospectus Directive (Directive 2003/71/EC) in each Member State of the European Economic Area
(‘‘EEA’’), no civil liability will attach to those persons responsible for this summary in any such Member State,
including any translations of this summary, unless it is misleading, inaccurate or inconsistent when read together
with the other parts of this document. Where a claim relating to the information contained in this document is
brought before a court in a Member State of the EEA, the plaintiff may, under the national legislation of the
Member State where the claim is brought, be required to bear the costs of translating this document before legal
proceedings are initiated.
The Company is an India-focused energy company with existing operations and projects under
construction and development in both the power industry and in the oil and gas industry. The Company is
India’s second largest private power producer with a 12-year operating track record. The power business
owns three operating power plants in India and one in Canada, and is planning an almost tenfold
expansion of its capacity by 2014. The Company also owns a portfolio of oil, gas and coal seam gas
(‘‘CSG’’) blocks and is developing as a leading player in the rapidly emerging domestic gas market in India.
The Company’s low-cost Vadinar refinery is currently one of India’s largest oil refineries and post
expansion is expected to become one of the largest and most complex refineries in the world.
The power business of the Company, which was a first mover among the private-sector players in the
Indian power industry, currently has a total installed generation capacity of 1,220 MW (of which 85 MW is
in Canada). The Company’s operating power plants are co-located with Essar Affiliated Companies, with
75% of the off-take contracted to these affiliates.
The Company’s expansion projects in its power business (the ‘‘Power Plant Projects’’) are divided into two
phases (the ‘‘Phase I Power Projects’’ and the ‘‘Phase II Power Projects’’) and are designed to bring total
installed capacity to 11,470 MW. Its six Phase I Power Projects have an expected total installed capacity of
4,880 MW and are expected to become commercially operational between 2010 and 2012. In addition, the
Company will seek to further expand its power operations through its six Phase II Power Projects which are
expected to increase its installed total capacity by a further 5,370 MW and are due to become commercially
operational during 2013 and 2014.
For all power plant projects, the Company is focused on securing long term fuel supply and minimising
price volatility. To achieve this the Company adopts a strategy of backward integration by sourcing coal
from captive mines that are either owned by or allocated to the Company. The Company currently owns or
has rights to coal reserves of 343 mmt; these reserves include coal blocks in India and coal mines recently
acquired by the Company in Indonesia and Mozambique. The existing coal block allocations in India are
subject to the term periods of such allocations being further extended, however, to bridge any gaps the
Company has applied to the Government of India for temporary coal supplies in the interim. Through a
combination of coal block allocations, acquisitions of coal mines and long-term fuel supply arrangements
with the relevant power off-taker, the Company presently has fuel security for 8,620 MW of its existing and
planned power generation capacity. Further, if the Company consolidates its stake in the Neptune power
plant projects, it expects to gain access to the accompanying coal block allocation of 112 mmt and achieve
fuel security for an additional 1,050 MW of power generation capacity. As a result of the above, the
Company expects to have fuel security for 9,670 MW of its existing and planned power generation capacity.
Essar Energy is also investing in select high-voltage transmission lines for its power projects. Both the
backward integration and the construction of company-owned transmission lines provide the Company
with further control over the timing and successful development of each power project.
The Company’s oil and gas business is engaged in the exploration and production of oil and natural gas,
crude oil refining and refined petroleum products sales and marketing. Based on company estimates and
certifications from independent petroleum and gas consultants, the Company’s net working interest in its
oil and natural gas exploration and production assets includes 2P reserves of 2 mmboe, 2C contingent
resources of 148 mmboe, best estimate prospective resources of 1,012 mmboe and an unrisked in-place
resource base of 238 mmboe.
The Company’s Vadinar refinery has a total current production throughput capacity of 14 mmtpa
(approximately 300,000 barrels per stream day). The Vadinar refinery enjoys strong structural cost benefits
as a result of its location, scale, asset quality and workforce. The Vadinar refinery currently has refining
operating costs of US$1.3 per barrel. This is approximately US$1 lower per barrel than the average

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Summary
operating costs within the industry (Source: KBC Process Technology Limited (‘‘KBC’’)). Vadinar’s
location provides efficient access to indigenous crudes and Middle East-based crudes as well as to high-
growth refined product export markets. The scale and complexity of the Vadinar refinery provide the
Company with significant crude processing flexibility, with 72% of the refinery’s current throughput
comprising medium, heavy and ultra-heavy crude oils.
The Company is currently expanding the refining capacity and the complexity of its Vadinar refinery. The
Company has started construction on the first phase of this expansion (the ‘‘Phase I Refinery Project’’)
which is expected to extend the refinery’s total throughput capacity to 18 mmtpa (approximately 375,000
barrels per stream day) and increase the complexity of the Vadinar refinery from an average Nelson
Complexity Index of 6.1 to 11.8. The Phase I Refinery Project is expected to be completed by March 2011.
The Company is also considering undertaking a second expansion phase (the ‘‘Phase II Refinery Project’’)
which will add a new refinery stream with a projected additional capacity of 18 mmtpa (approximately
375,000 barrels per stream day). The timing for the implementation and completion of the Phase II
Refinery Project will be decided following a review of market conditions and the securing of financing
commitments for the project. Upon completion of the Phase II Refinery Project, the Company expects the
Vadinar refinery as a whole to have an average Nelson Complexity Index of 12.8 and a total refining
throughput capacity of 36 mmtpa (approximately 750,000 barrels per stream day) and to be able to
produce up to Euro V grades of petrol and high-speed diesel (‘‘HSD’’).
The vast majority of the Company’s refined petroleum products are sold domestically to the large Indian
national oil companies, with some products sold internationally and exported through the Vadinar port
terminals owned by Vadinar Oil Terminal Limited (‘‘VOTL’’) an Essar Affiliated Company. The Company
also maintains a franchisee-owned and -operated network of approximately 1,300 retail fuel stations in
India, which supplements the Company’s domestic distribution platform. In addition, the Company owns a
50% interest in the Kenya Petroleum Refinery Limited (‘‘KPRL’’), which is anticipated to lead to
additional international refined petroleum product distribution in the future.
The equity component required by the Company for the completion of its Power Plant Projects, the
expansion of its oil and gas exploration and production operations and the Phase I Refinery Project will be
funded from the net proceeds of the Offer and cash from operations. The Company has secured debt
financing commitments for 73% (97% if non-binding sanction letters are included) of the total expected
debt financing requirements for the Phase I Power Projects and 100% of debt for the Phase I Refinery
Project is committed. The debt required for the Phase II Power Projects (approximately US$3.66 billion)
and the Phase II Refinery Project (approximately US$2.88 billion) is not yet committed.
Strengths
The Company benefits from the following key strengths:
• positioned to take advantage of strong Indian macroeconomic and energy growth;
• strong operational performance and efficiency;
• new growth projects poised to significantly bolster the Company’s competitive positioning and market
leadership;
• proven execution track record of successfully delivering and operating large-scale projects;
• breadth and depth of experience in the Board and management team; and
• strong relationship with one of India’s leading corporates.
Strategy
The Company’s strategy is to create a world class, low-cost integrated energy company by capitalising on
India’s rapidly growing demand for energy. This will be achieved by:
• optimising performance of all existing assets;
• delivering growth through a variety of power and oil and gas projects;
• leveraging skills and Indian asset base to identify growth opportunities; and
• being a good corporate citizen.

Summary
Summary of financial information

Summary income statement
Nine months ended

Year ended on 31 March 31 December
2007 2008 2009 2008(1) 2009
(US$ in million)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202.7 372.3 8,453.1 7,083.9 5,654.6
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 74.9 681.7 425.9 322.4
Profit/(loss) after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25.6) (84.9) (167.0) (254.1) 119.7
EBITDA(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.4 (43.0) 123.7 (106.9) 433.1
(1) Unaudited.
(2) EBITDA is a non-IFRS financial measure as explained in Part 2 ‘‘Presentation of Financial and Other Information’’.
Summary balance sheet
As at 31 March As at 31 December
2007 2008 2009 2009
(US$ in million)
Property, plant and equipment . . . . . . . . . . . . . . . . . . . 3,877.7 5,067.1 4,441.3 5,453.9
Summary cash flow statement
Nine months
ended
Year ended 31 March 31 December
2007 2008 2009 2008(1) 2009
(US$ in million)
Net cash generated from/(used in) operating activities . . . (47.7) (126.5) 350.1 229.6 164.2
Net cash used in investing activities . . . . . . . . . . . . . . . . (1,289.3) (589.6) (498.2) (413.4) (556.9)
Net cash provided by financing activities . . . . . . . . . . . . . 1,367.1 772.2 97.9 89.7 392.6
(1) Unaudited.
Current trading and prospects

The plant availability and plant load factor for both the Essar Power-Hazira (515 MW) and Bhander
Power-Hazira (500 MW) power plants for the quarter ended 31 March 2010 were broadly in line with the
average for the nine-month period ended 31 December 2009. However, revenue was marginally lower in
the quarter ended 31 March 2010 compared to the average for the nine-month period ended 31 December
2009. Following the adoption of an availability-based tariff in Gujarat from 5 April 2010, both Essar Power-
Hazira and Bhander Power-Hazira are taking advantage of the opportunity of supplying power based on
prevalent frequency, which has resulted in improved plant load factors and revenues in April.
The gross refining margin for the Vadinar refinery has improved for the quarter ended 31 March 2010
compared with the quarter ended 31 December 2009 in line with the general improvement in refinery
margins. Refining throughput was marginally higher in the current quarter ended 31 March 2010 compared
to the quarter ended 31 December 2009. During the quarter ended 31 March 2010, the Vadinar refinery
began producing higher quality products, including BS III/IV grades of diesel and BS III grades of
gasoline. The gross refining margin and refining throughput improvement seen in the quarter ended
31 March 2010 has continued into April 2010.
Reasons for the Offer and use of proceeds

The Company’s net proceeds from the Offer are estimated to be £1,208 million (approximately
US$1.8 billion), after deduction of underwriting commissions and estimated fees and expenses in
connection with the Offer.

Summary
The Company currently intends to use the net proceeds from the Offer to execute its stated strategy,
focusing on the equity funding component of its existing growth projects. The major growth projects to be
funded by the net proceeds from the Offer, as well as by cash from operations, include:
• completion of the Power Plant Projects and acquisition of captive mines to expand the Company’s
total installed capacity to 11,470 MW, which is currently estimated to require approximately
US$1.94 billion of equity financing, comprising of US$0.45 billion for the Phase I Power Projects,
US$1.22 billion for the Phase II Power Projects and US$0.27 billion for the acquisition and
development of captive coal mines;
• exploration and development of the Company’s oil and natural gas blocks, which are currently
estimated to require approximately US$0.25 billion of equity financing for the period 2010-2014; and
• completion of the Phase I Refinery Project to expand the Vadinar refinery’s refining capacity to
18 mmtpa, which is currently estimated to require approximately US$0.26 billion of equity financing.
In addition, a further US$0.50 billion from the net proceeds from the Offer will be used for general
corporate purposes including working capital requirements for the oil and gas business.
The above amounts are the current best estimate of capital expenditure and funding plans and, given the
long-term nature of some of these projects, may be subject to change. The difference between the total
uses indicated above and the net proceeds from the Offer is expected to be funded by cash from
operations.
Dividend policy
The Board intends to adopt a dividend policy that will take into account the profitability of the businesses,
underlying growth in the Company’s earnings, ongoing capital requirements, industry practice and cash
flows.
Dividends will be declared by the Company in US dollars. Unless a Shareholder elects to receive dividends
in US dollars, they will be paid in pounds with the US dollar dividend being converted into pounds at
exchange rates prevailing at the time of payment. The Company may only pay dividends if distributable
reserves are available for this purpose. As a holding company, the Company’s ability to pay dividends will
principally depend upon dividends or other distributions received from its subsidiaries and its ability to
obtain consent from its lenders, where relevant.
The Offer
The Offer will comprise an issue by the Company of 302,789,825 New Shares. In addition, a further new
30,303,029 Over-allotment Shares are being made available by the Company pursuant to the
Over-allotment Option to cover short positions arising from over-allotments made (if any) in connection
with the Offer and sales made during the stabilisation period.
Pursuant to the Offer, the Company expects to raise gross primary proceeds of £1,273 million, out of which
it will pay underwriting commissions and other estimated fees and expenses in connection with the Offer of
approximately £64 million.
The Offer is fully underwritten by the Underwriters and is subject to satisfaction of the conditions set out
in the Underwriting Agreement, including Admission occurring and becoming effective by no later than
8:00 a.m. (London time) on 7 May 2010 or such later time and/or date as the Company and the Joint
Global Coordinators may agree.
The New Shares being issued by the Company pursuant to the Offer will, on Admission, rank pari passu in
all respects with the existing Shares in issue and will rank in full for all dividends and other distributions
thereafter declared, made or paid on the share capital of the Company. The New Shares will, immediately
following Admission, be freely transferable.
It is expected that Admission will take place and unconditional dealings in the New Shares will commence
on the London Stock Exchange at 8.00 a.m. (London time) on 7 May 2010. Prior to Admission, it is
expected that dealings in the Shares will commence on a conditional basis on the London Stock Exchange
at 8.00 a.m. (London time) on 4 May 2010.

Summary
Relationship with Essar Global Limited

Upon Admission, it is expected that Essar Global Limited (‘‘Essar Global’’) will own 76.74% of the
Company’s issued Shares assuming the Over-allotment Option is not exercised and 75.00% of the
Company’s issued Shares assuming the Over-allotment Option is exercised. The Company has entered into
a relationship agreement with Essar Global that will come into force on Admission to ensure that the
Company will be able, at all times, to carry on its business independently of Essar Global and its Associates
(as defined in the Relationship Agreement) and that transactions and relationships with Essar Global and
its Associates (as defined in the Relationship Agreement) are at arm’s length and on normal commercial
terms except for certain de minimis transactions.
Essar Global and members of the Essar Group are party to (and following Admission will continue to be
party to) a significant number of arrangements with the Company. The Company will be reliant on the
Essar Group for a number of ongoing, and in some cases, long-term, arrangements including customer and
supply contracts, transport and logistics services, contracts for the supply of services in relation to the
Expansion Projects and the provision of general corporate and administrative services.
Lock-ups
Pursuant to the Underwriting Agreement, the Company, the Directors and Essar Global have each agreed
to certain lock-up arrangements. Further details are set out in Part 13 ‘‘The Offer’’.
Directors’ details
The Directors and Senior Management are:
Directors
Ravi Ruia . . . . . . . . . . . . . . . . . . . . Chairman
Prashant Ruia . . . . . . . . . . . . . . . . . Vice-Chairman
Naresh Nayyar . . . . . . . . . . . . . . . . . CEO
Sattar Hajee Abdoula . . . . . . . . . . . . NED
Philip Aiken . . . . . . . . . . . . . . . . . . NED
Subhash C. Lallah . . . . . . . . . . . . . . NED
Simon Murray . . . . . . . . . . . . . . . . . NED
Senior Management
Gerry Bacon . . . . . . . . . . . . . . . . . . CFO
Mark Lidiard . . . . . . . . . . . . . . . . . Head of Investor Relations and Communications
Power
K V B Reddy . . . . . . . . . . . . . . . . . Executive Director, Essar Power—Group
S Shrivastava . . . . . . . . . . . . . . . . . . Head Development and Regulatory, Essar Power-Hazira
V. Suresh . . . . . . . . . . . . . . . . . . . . CFO, Essar Power-Hazira
B.C.P. Singh . . . . . . . . . . . . . . . . . . CEO, Essar Power Gujarat-Salaya and Vadinar Power-Jamnagar
R.K. Narayan . . . . . . . . . . . . . . . . . Head of Transmission
R.P. Gupta . . . . . . . . . . . . . . . . . . . CEO, Essar Power MP-Mahan
A.K. Singh . . . . . . . . . . . . . . . . . . . CEO, Essar Power Jharkhand-Tori
T.S. Bhatt . . . . . . . . . . . . . . . . . . . . MD, Bhander Power-Hazira

Summary
Oil and Gas
C. Manoharan . . . . . . . . . . . . . . . . . Head, Refining
Shishir Agrawal . . . . . . . . . . . . . . . . Head, Exploration and Production
S. Thangapandian . . . . . . . . . . . . . . . Head, Marketing
P. Sampath . . . . . . . . . . . . . . . . . . . CFO, Oil and Gas
Iftikhar Nasir . . . . . . . . . . . . . . . . . Executive Director, Strategy and Business Development
Krishnamurthy Govindarajan . . . . . . . . Head, Refinery Expansion
Narendra Vachharajani . . . . . . . . . . . Head, Operations and IST

Summary
Risk Factors
Prior to investing in the Shares, prospective investors should consider the risks associated therewith. Such
risks include, but are not limited to, the following:
Risks Relating to the Group

• timely completion of major projects within budget and ability to manage associated risks;
• substantial debt requirements and risks arising out of the structure and terms of the Company’s
financing arrangements;
• ability to retain tax incentives in the future, existing litigation and new provisions introduced by the
2010 Finance Bill;
• Essar Global being a controlling shareholder and having conflicting interests with other shareholders;
• dependence on the Essar Group;
• dangerous business activities and the Indian refinery operations being located where natural disasters
have occurred;
• significant health, safety, environmental and other regulations;
• fluctuations in exchange rates;
• ability to implement advanced technology timely and cost-effectively;
• uncertainties involved with expanding into new countries;
• dependence on timely access to raw materials, supplies and equipment and reliable transport and
transmission infrastructure;
• doing business in countries with risks relating to security, enforcement of obligations, fraud, bribery
and corruption;
• ability to attract and retain key management and other personnel;
• labour disruptions;
• right to operate on land granted by or acquired from the central or state governments;
• Essar Energy plc’s tax residence status and proposed changes to certain UK tax rules; and
• Essar Energy plc is dependent on distributions from its subsidiaries.
Risks relating to the Company’s Power Business

• incurring irrevocable costs if the power plants are not operated efficiently or the Company breaches
its PPA obligations and risks with expanding into merchant sales;
• reliance on a few major customers and exposure to the steel business;
• power project bidding, selection, implementation and regulatory risks;
• coal mining risks and unexpected disruptions;
• changes to ‘‘captive power’’ status materially increasing costs; and
• liberalisation of the Indian power sector increasing competition.
Risks relating to the Company’s Oil and Gas Business

• fluctuation of crude oil and refined petroleum product prices and refining margins;
• inability to enter into term contracts for crude oil purchases;
• dependence on more favourable pricing of its refined petroleum product sales to Indian national oil
companies;

Summary
• ability to find, develop and commercially exploit resources and reserves;

• ability to enter into and enforce PSCs and relationship with its partners;
• recent changes in the Indian regulatory framework which create uncertainties; and
• Essar Oil Limited’s (‘‘Essar Oil’’) listing on the Bombay Stock Exchange and the National Stock
Exchange.
Risks associated with India

• changes in government policy having a negative impact;
• loss of business confidence due to terrorist attacks and other acts of violence;
• uncertainties related to India’s property title registration system;
• slowdown in economic growth in India;
• effects of inflation;
• effects of declines in foreign exchange reserves on the Indian economy; and
• impact of downgrading India’s sovereign debt rating.
Risks relating to the Offer

• effects of an inactive market on the price of Shares;
• share price and volume fluctuations;
• effect of significant sales on trading price of Shares;
• shares pledged to banks being sold; and
• inability to exercise pre-emptive rights by US and other non-UK holders of Shares.

MERRILL CORPORATION JDICKSO//30-APR-10 12:40 DISK116:[10ZAU1.10ZAU70801]BE70801A.;53
PART 1
RISK FACTORS
Any investment in the Shares would be subject to a number of risks. Prior to investing in the Shares, prospective
investors should carefully consider the risks associated with any investment in the Shares, the Company’s
business and the industry in which it operates, together with all other information contained in this document
including, in particular, the risk factors described below. The following factors do not purport to be a complete
list or explanation of all the risk factors involved in investing in the Shares, and additional risks and
uncertainties relating to the Company that are not currently known to the Company, or that it currently deems
immaterial, may also have an adverse effect on the Company’s business, financial condition and/or results of
operations. If this occurs the price of the Shares may decline and investors could lose all or part of their
investment. Investors should consider carefully whether an investment in the Shares is suitable for them in light
of the information in this document and their personal circumstances.
RISKS RELATING TO THE COMPANY

1. The Company plans to expand significantly, involving substantial capital expenditures and execution risks that
it may not be able to manage. The expansion projects may not be completed on time, according to specifications
or within budget.
The Company’s growth strategy in its power business contemplates the Phase I Power Projects, which
involve an expansion of the power business’s installed power generation capacity by 4,880 MW through the
construction of six additional power plants that are expected to be completed between 2011 and 2012, and
the Phase II Power Projects, which involve development projects for the construction of an additional
power plant and the expansion of five operational and planned power plants and are currently expected to
be completed in 2013 and 2014, while the Company’s growth strategy in its oil and gas business
contemplates a substantial expansion of its oil and gas exploration and production operations as well as
increasing the Vadinar refinery’s production capacity through the Phase I Refinery Project and the Phase II
Refinery Project (together, the ‘‘Refinery Expansion Projects’’).
The Company’s implementation of the Power Plant Projects and the Refinery Expansion Projects
(together, the ‘‘Expansion Projects’’), as well as the exploration and development of its oil, gas and coal
blocks, involves risks associated with major projects, such as changes in scope of work causing cost
overruns, delays in implementation, technical and economical viability risks and intervening changes in
market conditions. While the Company has entered into turnkey contracts for the supply and installation
of equipment and for civil works in relation to the Phase I Power Projects, most of the Phase II Power
Projects and the Phase I Refinery Project, there is a risk that the Company will have to fund project delays
or cost overruns arising from changes in the scope of the projects. In addition, the scheduled completion
dates for the Expansion Projects are estimates and subject to delays as a result of, for example,
construction cost increases, shortages of or defects in equipment and materials, customs clearance delays,
shortages of the necessary technical personnel, inability to obtain Indian visas for non-Indian equipment
installers and technicians, adverse weather conditions, third-party performance failures, bankruptcies of
suppliers or contractors, environmental issues, legal disputes, changes in government or regulatory policies
and delays in obtaining requisite approvals, permits, licences or certifications from the relevant authorities.
The Company has outsourced the project management, engineering, construction and supply of equipment
for a number of the Power Plant Projects and the Refinery Expansion Projects to Essar Affiliated
Companies, which have, in turn, outsourced certain elements of these projects to other contractors. Essar
Energy has limited, if any, control over the day-to-day activities of the Essar Affiliated Companies and
their subcontractors in the performance of their services in accordance with the terms of their contracts.
These risks could have a material adverse effect on the Company’s ability to complete its Expansion
Projects to the original specifications in a timely manner, or at all.
As a result of a substantial increase in industrial development in India in recent years, the demand for
contractors offering specialist design and engineering and project management skills and services has
increased, resulting in increasing costs for the services of these contractors. The execution risks the
Company faces as a consequence include the non-completion of construction and/or the installation of
critical equipment on time, within budget or to the specifications set forth in the applicable agreements
with such contractors. While the Company generally seeks to agree a fixed price for construction work
necessary for its Expansion Projects, such contracts contain price variation clauses triggered by certain
events (including a change in applicable laws) that under such circumstances may entitle contractors to
renegotiate fixed prices. If the Company is unable to engage skilled and experienced contractors at

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Part 1 Risk Factors
reasonable rates or at all, the Expansion Projects may be delayed or abandoned or the costs of completing
these projects may increase substantially.
The Company has experienced delays in completing projects on schedule in the past. In the power
business, the Company experienced delays in completing the Essar Power-Hazira, the Vadinar Power-
Jamnagar and the Bhander Power-Hazira power plants. Additionally, the construction of the Vadinar
refinery was disrupted by a tropical cyclone in June 1998, leading to substantial delays and cost overruns in
completing the construction of the refinery and the adjoining oil terminal owned by an Essar Affiliated
Company. The Company has also deferred its Phase II Refinery Project beyond its original completion
date due to the general downturn in the global economy, including the tightening of credit available in the
Indian and international financial markets and recent adverse movements in oil prices.
In addition, the Company is in the process of acquiring certain land needed to complete its Phase I Power
Projects. There can be no assurance that the Company will succeed in completing additional land
acquisitions in a timely manner and on terms that are commercially acceptable, or at all.
Failures to complete a project according to its original specifications or on schedule may give rise to
additional potential losses, including cost overruns, the forfeiture of security deposits, performance
guarantees being invoked, lower or no returns on capital, erosion of capital, reduced revenues and the loss
of certain benefits available under various government programmes. To the extent the Company is unable
to service its debt as a result of the aforementioned factors this would result in defaults under the
Company’s financing arrangements, pursuant to which the maturity of the Company’s indebtedness could
be accelerated. If such indebtedness is accelerated and the Company does not have sufficient cash on hand
to repay the indebtedness, the Company could be required to refinance such indebtedness, which may be
at a higher capital cost, or scale back or delay its expansion projects. If any of the above risks materialise,
the Company’s business, results of operations and financial condition could be materially and adversely
affected. In addition, if there are delays in the construction of the Power Plant Projects and related
transmission facilities, the Company could be required to pay liquidated damages and penalties to its
power off-take customers. Any failure by the project companies implementing the Power Plant Projects to
make timely debt service payments could also result in a loss on the Company’s investment in such project
companies if lenders exercise their rights in respect of the security provided under financing arrangements
due to a project company’s default, which could in turn adversely impact the Company’s ability to
pre-qualify for financing for future projects. In the short-term the Company’s only expansion project which
is expected to be completed and also has debt facilities that could be impacted by the risks set out in this
paragraph is the Vadinar Power Expansion Phase I Project. This project is expected to become
commercially operational in Q3 2010. If these risks were to materialise in the short-term the Company
would use existing cash balances to fund debt service payments.
In addition, the Company has not yet applied for or received certain permits, approvals and licences that
will be required for the Expansion Projects and the exploration and development of its oil, gas and coal
blocks, and certain of the in-principle approvals that it has obtained are subject to conversion to final
approvals. There can be no assurance that the Company will receive such approvals on a timely basis, or at
all. Any approvals may also be subject to the fulfilment of certain conditions, including undertakings made
by the Company in its applications for the approvals, and subject to revocation, renewal or modification,
including the requirement of operational changes to the Expansion Projects that could increase costs
significantly and/or cause delays in the completion of these projects. Non-compliance with these conditions
may lead to these approvals not becoming operational or being revoked or suspended as well as adversely
impacting the likelihood of further approvals being granted. Certain of the Company’s approvals are also
granted subject to final decisions by courts, and adverse decisions may affect their validity. The occurrence
of any of the above risks may delay or result in the non-completion of the Expansion Projects as well as the
incurrence of substantially higher irrecoverable costs, which could have a material adverse effect on the
Company’s business, results of operations and financial condition.
The Company’s growth strategy is expected to place significant demands on its management, financial and
other resources and will require the Company to develop its operational, financial and internal controls on
a continuous basis. In particular, continued expansion and international diversification will increase the
challenges involved in financial and technical management, training and retaining sufficiently skilled
technical and management personnel and developing and improving internal administrative infrastructure.
The Company’s growth is dependent on its ability to meet these challenges successfully, and any inability to
10

Part 1 Risk Factors
do so could have a material adverse effect on the Company’s business, results of operations and financial
condition.
2. The Company has substantial debt requirements. The structure and terms of the Company’s financing
arrangements could give rise to additional risks.
The Company operates in a capital intensive industry and has significant debt financing requirements. To
finance the Power Plant Projects, the oil and gas exploration and production projects and the Phase I
Refinery Project, the Company expects that in addition to equity funding and cash from operations, it
needs debt funding of US$7,164 million for the Power Plant Projects, US$505 million for the oil and gas
exploration and production projects and US$985 million for the Phase I Refinery Project, a certain portion
of which has already been obtained. For more information about the phasing of the Company’s capital
expenditures and planned funding required, see ‘‘Factors Affecting Results of Operations and Financial
Condition—Funding Costs for the Expansion Projects’’ in Part 9 ‘‘Operating and Financial Review’’. As of
31 March 2010, the Company had US$3.7 billion of borrowings outstanding, including borrowings under
long term and short term debt facilities including working capital facilities.
The Company has secured debt financing commitments for 73% (97% if non-binding sanction letters are
included) of the total expected debt financing for the Phase I Power Projects and entered into project
financing arrangements for the total expected debt financing required for the Phase I Refinery Project,
including long term agreements, facility agreements and a foreign currency facility agreement. The
Company currently has not secured any debt financing commitments for the Phase II Power Projects or the
Phase II Refinery Projects. The Company currently only has minimal capital commitments in 2010 and
2011 under the PSCs for its exploration and production licences for oil and gas blocks. The majority of the
Company’s future capital expenditure for the Phase II Power Projects, the Phase II Refinery Project (if
consummated) and the exploration and production projects is expected to be incurred in 2012 and beyond.
The Company’s debt financing requirements are subject to a number of variables and the actual amount of
capital required to complete these projects may differ from the Company’s current estimates. The
Company has included a number of contingencies in relation to potential cost and schedule overruns in its
plans for the Phase I Power Projects and the Phase I Refinery Project, and the majority of the Phase II
Power Projects. Further EPC contracts for the Power Plant Projects are fixed price with standard escalation
provisions based on the agreed scope for each project. For any projects the Company might choose to
undertake in the longer term and one of the Phase II Power Projects for which EPC contracts are expected
to be finalised within the next six months, the Company may not be able to enter into similar fixed price
contracts. In such an instance, should the Company experience a significant increase in capital
requirements or delays with respect to the implementation of its planned capital projects, the Company
may need to obtain additional debt financing, which may be at a higher capital cost, or scale back or delay
such capital projects. As noted in risk factor 1 above, the Company has experienced higher financing costs
as a result of delays in completing capital projects in the past.
Whilst the Company has already drawn down a majority of the debt required for the Phase I Refinery
Project as well as the Phase I Power Projects, there can be no assurance that the Company will meet the
conditions precedent required for any further draw downs on the relevant project financing arrangements.
These conditions precedent include confirmation that as of the date of any draw down, all representations
and warranties contained in the documentation governing the financing arrangements are true and correct,
no material adverse change has occurred in the Company’s business, operations or financial condition and
there has been no event of default. In the event that the Company is not able to meet any such condition
precedents for the remaining debt draw downs, it expects that it will fund any short falls using existing cash
balances until it can satisfy such conditions precedent.
The Company currently has not secured any debt financing commitments for the Phase II Power Projects,
the Phase II Refinery Project or the oil and gas exploration and production projects and there can be no
assurance that additional debt financing will be forthcoming to fund these projects, or that such debt
financing will be available at reasonable capital costs. Any development costs incurred in relation to the
Phase II Power Projects and the oil and gas exploration and production projects before debt financing is
secured for these projects will be funded from existing cash balances. Moreover, should the Company
pursue the acquisition of the Shell Refineries, it may need to obtain additional financing.
11

Part 1 Risk Factors
The Company’s substantial current and expected indebtedness and the terms of such indebtedness could
place restrictions on the Company, including the following:
• requiring the Company to dedicate a substantial portion of its cash flow from operations to service its
indebtedness, thereby reducing the availability of cash flow for working capital, capital expenditures,
expansion projects and other general corporate activities;
• limiting the ability of Group companies to pay dividends or loan money to each other and restricting
the Company from making dividend payments to its shareholders in certain circumstances; and
• placing the Company at a competitive disadvantage compared to its less-leveraged competitors, who
may have greater flexibility in planning for, or reacting to, economic and industry changes.
In addition, the structure of, and specific provisions of, the Company’s financing arrangements give rise to
certain significant additional risks. The Company’s existing and future project financing arrangements are
and will be secured by pledges and charges over substantially all of the assets to which the financing
arrangements relate, including the shares of significant subsidiaries of the Company including the
Company’s shares in Essar Oil. In the event of a default, lenders may exercise their rights under the
pledges and become owners of the shares to the extent pledged. In addition, the Company is subject to
restrictive covenants in respect of its financing arrangements that require the Company in certain
circumstances to obtain the prior consent of its lenders before taking certain actions, including entering
into material contracts, declaring dividends, incurring additional indebtedness, altering the Company’s
capital structure, making investments and capital expenditures, making disposals, making material changes
to the documents relating to the Expansion Projects and the constitutional documents of the Company
companies, as well as changes in the management of the Company’s subsidiaries. In addition, certain of the
Company’s financing arrangements require it to maintain various financial ratios. If certain events of
default occur, certain lenders have the right to accelerate the relevant credit facility, exercise share and
asset pledges and/or convert all or any portion of certain outstanding loan amounts into shares of the
Company’s subsidiaries. In addition, defaults may automatically trigger cross defaults under the financing
arrangements of Essar Oil, Essar Power, their subsidiaries and certain Essar Affiliated Companies.
It is a condition of Essar Oil’s Master Restructuring Agreement (‘‘MRA’’) (as described in Part 9
‘‘Operating and Financial Review—Corporate Debt Restructuring’’) that Essar Oil obtains the benefits of
the sales tax deferral. While the Corporate Debt Restructuring (‘‘CDR’’) lenders have provided extensions
since 2005, with the current extension valid until June 2011, in the event Essar Oil is unable to receive
further extensions from the CDR lenders or the ongoing sales tax incentive litigation described in
paragraph 14.8 of Part 16 ‘‘Additional Information’’ is not resolved in Essar Oil’s favour, this may be
considered to be an event of default under the MRA. The CDR lenders will then have an option to
demand payment of all outstanding amounts or convert such outstanding amounts into shares of Essar Oil.
This may also trigger cross default provisions in certain other financing documents. The MRA also
contains a mechanism whereby the lenders can call for an increase in interest rates payable on certain
facilities if they determine that the cash flows or profitability of Essar Oil allow such payments. Further,
the lenders’ committee may accelerate the repayment schedule if it is of the view that the cash flows of
Essar Oil would allow such acceleration. If any of these risks materialise and the Company is unable to
renegotiate its existing facilities, it could be required to scale back or delay some of its expansion projects,
and the Company’s business, results of operations and financial conditions could be materially and
adversely affected.
Certain of the Company’s subsidiaries have historically not complied with certain covenants in their debt
facilities, in respect of which they have now received waivers or have otherwise repaid such facilities.
3. The Company enjoys significant tax incentives, which may not be available in the future, and is involved in
litigation in relation to certain tax incentives. In addition, certain provisions of the Finance Bill, 2010
announced in February 2010 may have a material adverse effect on the Company’s results of operations.
The Company currently enjoys, in the form of tax holidays, exemptions and subsidies, the benefit of various
tax incentives provided by the Indian federal and state governments designed to encourage investment in
the power and oil and gas sectors. These incentives have a material impact on the Company’s investment
returns on its existing and planned power plants and the Vadinar refinery. The Company’s results of
operations and financial condition could be materially adversely affected if these benefits were amended or
12

Part 1 Risk Factors
withdrawn or were to become unavailable or if the Company’s claim for these benefits were disputed or
disallowed by the tax authorities.
Further, any change in tax laws, including the proposed migration from the Income Tax Act, 1961 to a
direct tax code, or in the interpretation of the tax laws, may result in discontinuation or withdrawal of these
tax benefits. Tax regulations have historically been subject to varying interpretations and applications by tax
authorities, courts and tribunals. The Government of India has also recently proposed comprehensive
indirect tax reforms including a shift to a unified goods and services tax system. The Company cannot
currently ascertain the impact that such changes may have on the Company, and any change in tax laws or
the interpretation and application of such laws could have a material adverse effect on the Company’s
business, financial condition and results of operations.
The Finance Bill, 2010 introduced on 26 February 2010 proposes to increase the minimum rate of income
tax payable on book profits by companies (whose tax payable under the Indian Income Tax Act is less than
15% of book profits, popularly referred to as ‘‘minimum alternate tax’’) from 15% to 18%. This proposal,
if implemented, is expected to increase the Company’s Indian income tax liability going forward. Further,
this bill also proposes the introduction of a ‘‘clean energy cess’’ to be levied on coal, lignite, and peat
(including certain derivations thereof) produced in India. This proposal, if implemented, is expected to
increase the cost of coal for the Company’s domestic coal-fuelled Power Plant Projects. If this proposal
receives regulatory approval, this would have an adverse effect on the Company’s profitability and results
of operations.
In addition, the Company is currently engaged in litigation with the government of the state of Gujarat
regarding whether the Company is eligible to retain, under the Gujarat state’s Capital Investment
Incentive to Premier/Prestigious Unit Scheme, 1995-2000, the proceeds of the sales tax collected for a
period of approximately 13 years on sales of refined petroleum products from the Vadinar refinery in an
amount of up to approximately Rs. 91 billion (US$1.95 billion). The retained sales taxes are repayable, on
an interest-free basis, to the state government beginning in 2021/22 or on exhaustion of the full eligible
amount, whichever is earlier, in six equal annual instalments. The Company collected sales taxes in the
amount of Rs. 15.16 billion (US$330.3 million) and Rs. 10.6 billion (US$221.3 million) under this scheme
and included these amounts in revenue, net of the present value of Rs. 3.01 billion (US$65.7 million) and
Rs. 2.28 billion (US$47.6 million), respectively, during the periods from 1 May 2008 to 31 March 2009 and
from 1 April 2009 to 31 December 2009, respectively. The government of the state of Gujarat has asserted
that Essar Oil is not eligible to participate in the sales tax incentive scheme because the Vadinar refinery
did not commence commercial production by 15 August 2003. If the ruling in this litigation is adverse to
Essar Oil, Essar Oil may have to promptly pay the tax retained under the tax incentive programme to the
state of Gujarat and would not be able to benefit from the scheme going forward, which would have a
material adverse impact on the Company’s results of operations and financial condition. As described in
risk factor 2 above, this may also result in the occurrence of an event of default under the MRA. See
‘‘Litigation—Dispute in relation to sales tax incentives’’ in Part 16 ‘‘Additional Information’’.
While, pursuant to a factoring arrangement, the Company has assigned its sales tax liability under the sales
incentive scheme of Rs. 25.76 billion (US$551.6 million) to Essar House Limited (‘‘Essar House’’), an
Essar Affiliated Company, and paid the present value agreed pursuant to the factoring arrangement of
US$112.3 million to Essar House as of 31 December 2009, the Company remains ultimately liable for the
payment of the sales tax liability to the state of Gujarat in the event that Essar House does not make
payments on the due dates. For additional information on various tax incentives available to the Company,
see ‘‘Factors Affecting the Company’s Results of Operation and Financial Condition—Sales Tax
Incentives’’ in Part 9 ‘‘Operating and Financial Review’’.
4. Essar Global will continue to exert significant influence over the Company following the Offer and its interests
may conflict with those of other shareholders.
Essar Global will own 76.74% of the issued Shares of the Company following the completion of the Offer
(75.00% if the Over-Allotment Option is exercised in full). As a result, Essar Global could exercise
significant influence over certain of the Company’s corporate decisions, including the election or removal
of Directors, the declaration of dividends, whether to accept the terms of a takeover offer and the
determination of other matters to be decided by the Company’s shareholders. By exercising its powers of
control, Essar Global could take certain actions regarding changes in the control of the Company or in its
13

Part 1 Risk Factors
capital structure or regarding business combinations involving the Company, or encourage or discourage a
potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company.
The Company has entered into a relationship agreement with Essar Global to ensure that the Company
will be able to carry on its business independently of Essar Global and its Associates (as defined in the
relationship agreement) and to ensure that transactions and relationships with Essar Global and its
Associates (as defined in the relationship agreement) are at arm’s length and on normal commercial terms
except for certain small transactions. See section 13.2 ‘‘Relationship Agreement’’ in Part 16 ‘‘Additional
Information’’ for further details.
5. The Company’s operations are dependent on the Essar Affiliated Companies.

The Company benefits from the operational experience, industry contacts, brand and reputation of Essar
Affiliated Companies and the Company’s reputation is closely tied to that of the Essar Affiliated
Companies. The Company’s ability to implement its business strategies and to manage its operations
efficiently depends on the continuing profitability and support of Essar Affiliated Companies. If any of the
Essar Affiliated Companies were to suffer material damage to their reputation, business, relationships or
financial condition, this may have a material adverse effect on the Company’s results of operations and
financial condition.
Some of the Company’s power plants are, and are expected to continue to be, dependent on Essar
Affiliated Companies for a significant amount of the plants’ fuel supplies and for the off-take of a
significant amount of their generated power.
In addition, because Essar Affiliated Companies are the sole or major off-take customers for a number of
the Company’s existing and planned power plants, the viability of these plants is dependent on the
continued viability of the relevant Essar Affiliated Company.
The Company has outsourced the project management, engineering, construction and procurement of
equipment for a number of the Power Plant Projects and the Refinery Expansion Projects to Essar
Affiliated Companies. In addition, the Company’s bulk steel requirements for its Power Plant Projects and
Refinery Expansion Projects are being sourced from an Essar Affiliated Company.
The Company does not have direct control over the timing or quality of services, equipment or supplies
provided by Essar Affiliated Companies. There can be no assurance that Essar Affiliated Companies will
not experience conflicts of interests and prioritise their own interests over those of the Company in
providing the services and products to the Company. There can also be no assurance that future
agreements that the Company enters into with Essar Affiliated Companies will be on as favourable terms
to the Company as the existing agreements. In addition, as noted above, in the event that the Company has
a conflict of interest with the Essar Global or its subsidiaries that are not part of the Company (‘‘Essar
Group’’), it may not be possible for the Company to resolve the conflict on the most favourable terms to
the Company.
The reputation and value associated with the Company’s brand names could also be negatively affected by
events outside of the Company’s control, including environmental disasters or the behaviour of Essar
Affiliated Companies and third parties, such as retail fuel station franchisees.
In addition, a substantial portion of the land required for the Company’s currently operational power
plants and the Phase I Power Projects is leased by Essar Affiliated Companies to the Company. The
Company has not independently verified the titles to the land leased by Essar Affiliated Companies, and
any defects in these titles would have a significant adverse impact upon the relevant power plant and
consequently on the Company. For the Essar Power Orissa—Paradip project, the Company expects to
lease the land for this project from Essar Steel Orissa. However, since the land is currently in the process
of being acquired by Essar Steel Orissa, the Company has not yet secured a formal contractual lease
arrangement. There can be no assurance that the land required for this power plant will be available from
Essar Steel Orissa. Further, for the Essar Power Gujarat–Salaya project, the fuel, which is imported coal, is
proposed to be imported through a captive jetty being constructed by Essar Bulk Terminal, an Essar
Affiliated Company, which in turn will require substantial government approvals, land and funding, all of
which are beyond the Company’s control. Delays in constructing this captive jetty may delay the
commissioning of the commercial operations of the Essar Power Gujarat–Salaya Phase I Power Project and
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Part 1 Risk Factors
the related Salaya II Phase II Power Project and may cause the Company to incur higher transportation
costs for transporting coal to fuel this power plant.
For information about the Company’s relationship agreement and other related party transactions, and the
Company’s relationship generally with the Essar Affiliated Companies, see ‘‘Relationship with the Essar
Group’’ in Part 16 ‘‘Additional Information’’.
6. Activities in the power generation and oil and gas sectors can be dangerous. The Company’s Indian refinery
operations are located in an area where natural disasters have occurred.
The Company’s operations are subject to the significant hazards and risks inherent in the oil and gas and
power generation sectors. These hazards and risks include:
• explosions and fires;
• blowouts and other operational disruptions in relation to the Company’s upstream exploration and
production operations;
• severe weather, cyclones, earthquakes and other natural disasters;
• ruptures and spills from crude and product carriers or storage tanks;
• equipment break-downs and other mechanical failures;
• improper installation or operation of equipment;
• disruption of deliveries of crude oil, fuel, equipment and other supplies;
• disruption of electricity, water and other utility services;
• acts of political unrest, war or terrorism;
• labour disputes; and
• community opposition activities.
If any of these risks were to occur, this could result in the partial or total shut-down of the operations at the
affected facility or a cessation of the construction activity at the Expansion Projects, other damage to the
Company’s properties, environmental pollution, personal injury or wrongful death claims and damage to
the properties of others.
Given that India has experienced severe weather disruptions, cyclones, earthquakes and other natural
disasters in the past, the Company’s operations are significantly dependent upon the Company’s ability to
protect its existing and planned facilities against damage from natural disasters. While the Vadinar refinery
has been designed to withstand certain earthquake risks, the refinery is located in an area that has
experienced severe earthquakes and cyclones, including a cyclone in June 1998 that substantially disrupted
and delayed the construction of the refinery and the associated Vadinar terminal, which is owned by an
Essar Affiliated Company, by causing extensive damage to the seawater intake facilities and other
equipment and assets.
The Company believes that it maintains insurance with respect to its operations in accordance with
industry practice and applicable law, including third-party liability insurance up to specified limits, and that
its insurance programme is adequate to cover the consequences of the insurable hazards and risks to which
the Company’s operations are subject. However, the Company may be exposed under certain
circumstances to uninsurable hazards and risks. There is also no guarantee that the Company will be able
to maintain adequate insurance in the future at rates the Company considers reasonable. The occurrence
of any event that is not fully covered by insurance could have a material adverse effect on the Company’s
business, results of operations and financial condition.
7. The Company is subject to significant health, safety, environmental and other regulations.
All of the Company’s operations are extensively regulated. National, state and local authorities in the
countries in which the Company has operations regulate the industries in which the Company operates
with respect to matters such as labour, employee health and safety, permitting and licensing requirements,
planning and development, supply of water, environmental compliance (including, for example,
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Part 1 Risk Factors
compliance with waste and wastewater treatment and disposal, air emissions, discharges and forest and soil
conservation requirements), rehabilitation requirements, resettlement of persons affected by projects,
restrictions on the storage, handling and transportation of crude oil, petroleum products and other
hazardous substances, plant and wildlife protection, reclamation and restoration of properties after
operations are complete, the effects that power generation, mining and upstream exploration and
development operations and refining have on water quality and availability and surface subsidence from
underground exploration and production activities. Numerous governmental permits, approvals and
licences are required for the Company’s operations. The Company has not yet obtained several of the
required permits, approvals and licences for the Expansion Projects and the exploration and development
of oil, gas and coal blocks. In addition, the Company may not be in compliance with all terms and
conditions of permits, approvals and licenses obtained by it. Certain material contracts, including
production sharing contracts (‘‘PSCs’’), require agreement with government entities and any delays in
entering such contracts could have an adverse effect on the Company’s operations. Failure to obtain the
necessary authorisations or violations of the conditions of any authorisations or other legal or regulatory
requirements could result in substantial fines, sanctions, permit revocations, injunctions and other
penalties. The Company is required to prepare and present to national, state or local authorities data
pertaining to the effect or impact that any proposed power generation, mining or exploration and
production and refinery activities may have upon the environment. The costs, liabilities and requirements
associated with complying with environmental laws and regulations or to comply with changes in these laws
and regulations or the manner in which they are applied are expected to be substantial and
time-consuming and may delay the commencement or continuation of power generation, mining or
exploration and production and refinery activities. Failure to comply with environmental laws and
regulations or to obtain or renew the necessary permits, approvals and licenses may result in the loss of
these authorisations.
Specifically, Essar Oil received a notice dated 17 August 2009 from the Gujarat Pollution Control Board
(‘‘GPCB’’) under Section 33-A of the Water (Prevention and Control of Pollution Act), 1974 claiming that
the production at the Vadinar refinery in May 2009 was higher than the approved production in the
authorisation dated 22 January 2008 and that complaints had been received from people in surrounding
areas regarding damage to health and crops. GPCB has proposed issuing directions to curtail production in
accordance with the conditions of the authorisation as well as directions to authorities to stop the supply of
electricity and water to the refinery. In response to this notice, Essar Oil clarified in a letter to GPCB dated
5 September 2009 that it had applied to GPCB on 14 June 2009 to operate the refinery at 14 mmtpa and
that so far as the complaints of the villagers were concerned, Essar Oil had been meeting the norms
prescribed by GPCB for emissions, effluent and hazardous waste. GPCB has not responded to this letter or
initiated any further action. In the event that GPCB initiates any such action, this may have an adverse
impact on the operations of the Vadinar refinery. On 2 March 2010, however, Essar Oil received
from GPCB an authorisation and consent, valid until 16 September 2010, to operate the refinery at
14 mmtpa, and on this basis believes that no further action by GPCB as to this matter is likely. In the event
that Essar Oil is not able to extend this authorisation and consent (or obtain consent from the GPCB for
the Phase I Refinery Project expansion to 18 mmtpa), it may be required to limit its operating throughput
which would have a material adverse effect on its business, results of operations and financial condition.
Environmental legislation or regulations may be adopted in the future that may materially adversely affect
the Company’s operations and its cost structure. Authorities generally have or reserve the right to impose
additional or modified conditions for existing approvals on account of a number of factors, including
factors beyond the Company’s control. New legislation or regulations, or different or more stringent
interpretation or enforcement of existing laws and regulations or additional or modified conditions to
existing approvals, may also require the Company or its customers to change operations significantly or
incur increased costs, which could have an adverse effect on the results of operations or financial condition
of the Company. In particular, India is expected to tighten its CO2 emission regulations in the future, which
will impose substantial compliance costs on the Company for upgrading facilities, and potentially require
further investment by the Company in green technology.
The Company expects to generate a considerable amount of ash from its coal-fuelled Power Plant Projects.
There are limited options for utilising ash in India and, as a result, the demand for ash is currently low.
Certain of the Company’s approvals have specific conditions in relation to disposal and sale to third parties
of ash, which the Company is required to comply with, typically in a time-sensitive manner. While the
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Part 1 Risk Factors
Company is continuing to explore methods to utilise or dispose of ash, the Company’s ash utilisation
activities may be insufficient to dispose of the ash it expects to generate, including in the manner stipulated
in the relevant approvals, which may lead to imposition of fines or penalties as well as suspension or
revocation of the license and other regulatory actions.
In addition, a violation of health and safety laws relating to the Company’s operations or a failure to
comply with the instructions of the relevant health and safety authorities could lead to, among other things,
a temporary shutdown of all or a proportion of the Company’s facilities or operations or the loss of the
Company’s permits, approvals and licences and the imposition of costly compliance procedures. If health
and safety authorities require the Company to shut down all or a portion of its facilities or operations to
implement costly compliance measures, whether pursuant to existing or new environmental, health and
safety laws and regulations, this could have a material adverse effect on the Company’s results of
operations or financial condition.
8. The Company is exposed to fluctuations in exchange rates.

The prices of the natural gas and imported coal needed to run the Company’s power operations and crude
oil, feedstocks needed for the Company’s production of refined petroleum products are generally
denominated in or tied to the US dollar, while most of the Company’s other operating expenses and
revenues are denominated in rupees. Therefore, the Company’s profitability will be affected by exchange
rate fluctuations to the Company’s aggregate US dollar-denominated expenses and revenues to the extent
such expenses and revenues do not match its rupee-denominated expenses and revenues. In the oil and gas
business, the Company currently hedges a portion of its foreign currency exposure. Additionally, even
though the Company’s results are stated in US dollars, dividends to shareholders will be paid in pounds
sterling.
Changes in the exchange rate of the rupee against other currencies in which the Company does business, in
particular, the US dollar, will affect the Company’s results of operations. For example, depreciation of the
rupee against the US dollar will significantly increase the rupee cost of the Company’s US dollar-
denominated payment obligations which would be offset only to the extent of any US dollar-denominated
or correlated receivables. The exchange rate between the rupee and other major currencies has fluctuated
significantly in recent years. A substantial number of contracts for critical plant and equipment and the
transportation thereof into India for the Company’s Power Plant Projects are denominated in US dollars,
and the Company’s power operations in India are not expected to have any revenues in US dollars.
Payments in most of these contracts is in stages or on pre-determined dates in the future, and the Company
has not currently entered into any contractual arrangements to hedge the risks associated with the Indian
rupee depreciating against the US dollar in relation to such contracts, which, in the event of unfavourable
currency movements, may significantly increase outflows and consequently the capital cost of the relevant
power projects. Additionally, The Company faces exchange rate risks in particular in relation to its
revenues from sales of refined petroleum products to the Indian national oil companies, which are received
in rupees at rates of exchange against the US dollar that are reset at fortnightly or monthly intervals
depending upon the product. Similarly, when there are rapid fluctuations in exchange rates, there may be a
mismatch between the Company’s rupee-denominated revenues and the rupee-equivalent cost of its US
dollar-denominated expenditures.
The Company’s functional and presentational currency is the US dollar. Therefore, it also faces translation
risks to the extent that the assets, liabilities, revenues and expenses of its subsidiaries are denominated in
currencies other than the US dollar. In preparing the Company’s financial information, the values of those
assets, liabilities, revenues and expenses are translated into US dollars at the applicable exchange rates.
Consequently, increases and decreases in the value of the US dollar against other currencies, in particular
the rupee, will affect the value of these items in the Company’s financial statements, even if their value has
not changed in their original currency. Changes in the exchange rate of the Indian rupee against the US
dollar have had a significant effect on the Company’s results of operations. The Indian rupee depreciated
against the US dollar by approximately 28% in the year ended 31 March 2009 and appreciated by
approximately 8% in the nine months ended 31 December 2009. Primarily as a result of these changes, the
Company experienced a loss of US$459.0 million and a gain of US$146.1 million, respectively, from
currency exchange effects in these periods.
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Part 1 Risk Factors
9. The Company may not be able to implement more advanced technologies into its facilities in a timely and
cost-effective manner.
To remain competitive and better optimise production from its power generation and refinery facilities and
to comply with increasingly stringent environmental regulations, the Company’s success will depend on its
ability to respond to technological advances and emerging industry standards and practices on a
cost-effective and timely basis. In the current industry environment, power projects and oil and gas
increasingly seek to implement newly developed, sophisticated and complex machinery built by third
parties that has not been extensively field tested and is therefore susceptible to malfunction. In addition,
because acquisition of technology is costly, if the technology is not utilised in a productive and efficient
manner, the Company may not realise the expected benefits of these technologies and its operations and
profitability may be adversely affected.
Changes in technology may also make newer power generation or refinery facilities or equipment more
competitive than the Company’s facilities and require the Company to make additional capital expenditure
to upgrade its facilities. For example, the Company’s operational power plants in India do not currently
employ the latest industry-specific technology available as the Company believes the cost of purchasing and
implementing this technology currently outweighs the financial benefit of employing such technology.
However, the Company intends to employ the latest industry specific technology in certain of the Phase II
Power Projects that involve large-scale power-generation units or where superior environmental
performance is required. In addition, alternative technologies exist for power generation, including fuel
cells, micro turbines, windmills and photovoltaic (solar) cells, and may become increasingly attractive and
efficient alternatives to the power generation technologies used by the Company. If the Company is unable
to adapt in a timely manner to changing technology, this could have a material adverse effect on the
Company’s business, results of operations and financial condition.
10. The Company’s recent and planned expansion into new countries involves uncertainties and additional risks.
The Company has made acquisitions of, and investments in, power plants, coal mines and oil and gas
exploration and production assets and refinery assets both inside and outside of India in recent years,
including in Canada, Indonesia, Kenya, Madagascar, Nigeria and Vietnam, and intends to continue to
increase its refining production and petroleum product sales and marketing capacity by establishing a
greater presence in its existing and additional non-Indian markets, including through select acquisition
opportunities. In addition, the Company intends to seek new exploration and production opportunities
through the acquisition of additional hydrocarbon assets. The Company’s ability to make acquisitions will
depend on a number of factors, including the Company’s ability to identify acquisition candidates,
consummate acquisitions on favourable terms, successfully integrate acquired businesses into the
Company, obtain financing for these acquisitions and many other factors beyond the Company’s control.
Such acquisitions and investments, both within India and in other countries, subject the Company to risks,
including:
• the impact of unforeseen risks, such as contingent or assumed liabilities, and in particular
environmental liabilities, relating to the acquired businesses that may only become apparent after the
acquisition is finalised;
• the assumption of substantial new debt and exposure to future funding obligations;
• difficulties in integrating the financial, technological and management standards, processes and
controls of acquired businesses with those of the Company’s existing operations;
• unexpected losses of key employees, customers and suppliers of the acquired operations; and
• challenges in managing the increased scope and geographic diversity of the Company’s operations.
If the Company is unable to successfully meet the challenges associated with one or more of its
acquisitions, this could have a material adverse effect on the Company’s business, financial condition and
results of operations.
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Part 1 Risk Factors
The Company’s growing international operations also expose it to additional risks in each of the
jurisdictions in which the Company operates, including:
• devaluations and fluctuations in currency exchange rates;
• imposition or increase of withholding and other taxes on remittances by foreign subsidiaries;
• imposition of export or import controls, including trade restrictions or embargoes against certain
states, preventing the Company from buying crude oil and other feedstock from, or selling products
to, these states;
• limitations on investments and other restrictions imposed by foreign governments, including,
potentially nationalisation, expropriation or cancellation of contract rights;
• failure to comply with a wide variety of foreign laws;
• unexpected changes in regulatory environments and government policies;
• the invalidity of governmental approvals and contracts which require renewals, extensions or waivers
from governments or counterparties, as the case may be, and which may not be forthcoming on terms
acceptable to the Company after an acquisition is consummated, or at all; and
• political conflicts and unrest.
11. The Company depends on timely access to raw materials, supplies and equipment and on a reliable
transportation and transmission infrastructure.
The Company is dependent upon a reliable transportation and transmission infrastructure, including
power transmission lines, port terminals, roadways, canals, railways and pipelines for the transmission of
power generated and for transport of the substantial amounts of raw materials, fuel, water and other
supplies and equipment needed to carry out the Company’s existing and future business operations and its
Expansion Projects. India’s physical infrastructure is less developed and less reliable than that of many
developed nations. In addition, some of the transmission and transportation infrastructure needed for the
completion of the Company’s Expansion Projects has not been constructed. The construction of public and
private transmission and transportation infrastructure projects entails obtaining approvals and rights of
way. The Company or the third party owners of a number of these infrastructure projects have not
obtained all necessary rights of way and approvals. There can be no assurance that these approvals and
rights of way will be forthcoming or, if they are forthcoming, how quickly they will be forthcoming. In
addition, in India the government and government-owned utilities undertake the development and
construction of public transmission and transportation projects. The Company may not succeed in
convincing the relevant government and government-owned utilities to develop and construct additional
public transmission and transportation infrastructure in a manner that suits the Company’s needs. There
also can be no assurance that additional private and public transmission and transportation infrastructure
will be constructed in a timely manner, operated on a cost effective basis and maintained at adequate
levels, which may delay or prevent the completion of, or the commissioning of, the Expansion Projects as
well as the exploration and development of the Company’s oil, gas and coal blocks. If supply or delivery
disruptions were to occur or the Company were not to have access to the additional transmission and
transportation infrastructure it needs for its operations, or if the costs associated with the same are higher
than anticipated, Essar Energy may be unable to operate its power plants and refinery, deliver power and
refined petroleum products to customers, or complete the Expansion Projects on a timely basis, or at all.
The Company’s access to the transmission and transportation infrastructure needed to run its existing and
future operations could be interrupted as a result of, among other things, political events that affect
supplier relations or supply infrastructure; insufficient transportation infrastructure and other problems in
transporting sufficient quantities of these supplies to the Company’s facilities, including pipeline ruptures,
disruptions of port terminal facilities, railways and roads; fires; adverse weather conditions; sabotage;
government restrictions; economic sanctions against the governments of countries where suppliers are
located or where supplies are to be received; industrial action; regional hostilities; adverse weather
conditions; and other hazards and force majeure events.
The Company’s power plants require supplies of significant quantities of water for cooling. Regions in
India have from time to time suffered from serious water shortages and insufficient rainfall, including in
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Part 1 Risk Factors
2009. In the event of water shortages, the affected power plants may be required to reduce their water
consumption, which would reduce their power generation capacity. In addition, if the Company does not
obtain and maintain the necessary governmental approvals and licences to draw water, the Company may
have to locate alternative sources of water. Alternative sources of water may not be available on terms
acceptable to the Company.
If one of the suppliers to the power plants or the refinery were to fail to fulfil its delivery commitment on
time, the Company may need to find alternative sources of supplies on a timely basis, which may be more
costly. Each of the Company’s four operational power plants relies, and most of the Company’s power
plants under construction and development are each expected to rely, on a single primary supplier for all
or substantially all of each plant’s coal and other fuel supplies.
The Company is also dependent on a limited number of suppliers for the supply of certain critical power
plant and refinery equipment for the Power Plant Projects and the Refinery Expansion Projects. Orders for
this equipment generally require long lead times. If the suppliers of any critical items of equipment are
unable to provide the equipment for any reason, this may jeopardise the completion of the project to which
the equipment relates.
Certain risks relating to unforeseen site and geological conditions may also render the equipment provided
unsuitable for operations, causing substantial delays and monetary loss. Further, while contracts with
equipment suppliers provide for the payment of liquidated damages for delays and performance at less
than guaranteed levels, such liquidated damages provisions are capped at a certain percentage of the
contract price. Moreover, the overall liability is, subject to certain exceptions, also capped at a certain
percentage of contract price. There can be no assurance that losses and damages incurred by the Company
on account of the delay or default of any contractor would be recoverable.
In addition, the Company requires the continued and timely support of its contractors to supply necessary
services and parts for the Expansion Projects at an affordable cost. If the Company is unable to procure the
required services or parts from these manufacturers, or if the cost of these services or parts exceeds the
budgeted cost, this could lead to disruptions in operations and substantially higher recurring costs, which
would adversely affect the Company.
12. The Company does business in countries with inherent risks relating to security, enforcement of obligations,
fraud, bribery and corruption.
The Company’s businesses operate in India, Canada, Australia, Indonesia, Kenya, Madagascar,
Mozambique, Nigeria and Vietnam and the Company also has significant crude supply arrangements with
the National Iranian Oil Company (‘‘NIOC’’). Doing business in international markets brings with it
inherent risks associated with security of staff or property, enforcement of obligations, fraud, bribery and
corruption. In certain jurisdictions, fraud, bribery and corruption are more common than in others. The
Company currently does business in a number of countries that feature prominently on Transparency
International’s Corruption Perceptions Index. In addition, the natural oil and gas and mining industries
have historically been shown to be vulnerable to corrupt or unethical practices. While the Company
maintains anti-corruption training programmes, codes of conduct and other safeguards designed to prevent
the occurrence of fraud, bribery and corruption, it may not be possible for the Company to detect or
prevent every instance of fraud, bribery and corruption in every jurisdiction in which its employees, agents,
subcontractors or joint venture partners are located. The Company may therefore be subject to civil and
criminal penalties and to reputational damage. Instances of fraud, bribery and corruption, and violations of
laws and regulations in the jurisdictions in which the Company operates, could have a material adverse
effect on its results of operations and financial condition.
13. The Company’s long-term success depends on attracting and retaining key management and other personnel.
The Company’s future success depends substantially on the continued service and performance of the
members of the Company’s senior management and the senior management of the Essar Affiliated
Companies. The Company is dependent on its management team and other key personnel for the running
of its daily operations as well as for the planning and execution of the Company’s expansion strategy.
There is competition for experienced senior management and other key personnel with technical and
industry expertise in the exploration and production, mining, refining and power sectors. If the Company
20

Part 1 Risk Factors
loses the services of any of these or other key individuals and is unable to find suitable replacements in a
timely manner, the Company’s ability to realise its strategic objectives could be impaired.
14. The Company may be subject to labour disruptions.

Whilst the Company’s workforce is not unionised and the Company generally enjoys good labour relations
with its employees, The Company’s operations may be affected by strikes, lock-outs or labour disruptions
involving the employees of third parties, including employees of contractors retained to construct the
Expansion Projects and the employees of operators of transportation infrastructure needed to run the
Company’s operations.
15. Land granted by or acquired from the central government and state governments in India is typically subject to
certain conditions which the Company will need to comply with.
Infrastructure projects in India typically depend on land grants from the central or state government. A
substantial amount of the land for the Power Projects has been acquired from the government. Further the
land for the Phase I Refinery Project has also been acquired from the government. Land granted by or
acquired from the government is typically subject to certain conditions, including prohibitions on using the
land for any purpose other than that for which it has been allotted or transferring the land or a portion of it
without first obtaining a waiver or approval as well as requirements to surrender possession of outlying
portions of the land upon receipt of notice from the government, to obtain prior approval from the
government before entering into any mortgages or leases, to recruit local employees as per the industrial
employment policy decided by the government and to complete construction on the land within the time
period specified in the award and pursuant to the plan approved by the government. Non-compliance with
such conditions may result in a loss of the Company’s rights over the relevant property or in the imposition
of monetary penalties. For example, Essar Oil had to surrender land comprising 481.75 hectares acquired
for the Vadinar refinery to the government of the state of Gujarat due to the breach of a condition in
respect to the laying of a single-buoy mooring within the limits set by the Gujarat Maritime Port Board.
Any of these events could prejudice the success of the Company’s existing and future operations on the
affected property and may require the Company to write off substantial expenditures, particularly in
respect of a project under construction or development.
16. The Company’s financial condition may be adversely affected by changes in Essar Energy plc’s tax residence or
proposed changes to the UK’s controlled foreign companies taxation rules.
Tax residence
The UK HM Revenue & Customs (‘‘HMRC’’) has indicated that, based on the proposed location and
structure of management as described to it by the Directors, and on the assumption that the structure of
management as described to it is put into operation, it seems likely that Essar Energy plc is a dual resident
of the United Kingdom and Mauritius and it appears that Essar Energy plc’s place of effective
management under the residence tie-breaker in the Mauritius/UK Double Taxation Convention will not be
in the United Kingdom.
The Mauritian tax authorities have indicated that, on the assumption that Essar Energy plc will have its
head office located in Mauritius, its board meetings will be held in Mauritius and all its key business
decisions will be taken in Mauritius, the place of its effective management will be in Mauritius and
therefore it will be resident for tax purposes in Mauritius under the Mauritius-UK Double Taxation
Convention. Essar Energy plc has also received a certificate from the Mauritius Revenue Authority, dated
31 March 2010 confirming that, having undertaken to have its central management and control in
Mauritius, Essar Energy plc is considered as resident in Mauritius by virtue of Section 73(b)(ii) of the
Income Tax Act 1995, and paragraph 3 of Article 4 of the Double Taxation Treaty signed between
Mauritius and the United Kingdom, and is subject to income tax on its profits.
On the assumption that the affairs of Essar Energy plc are conducted as the Directors intend and in the
light of the confirmations described above, the Directors have been advised that Essar Energy plc will be
regarded as a resident of Mauritius for the purposes of Mauritian taxation law and the Mauritian tax
authority’s application of the Mauritius/UK Double Taxation Convention.
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Part 1 Risk Factors
Accordingly, on the basis described above, it seems likely that Essar Energy plc will be treated as being
resident for tax purposes solely in Mauritius.
It is possible that, including as a result of change of law or the practice of any relevant tax authority or the
renegotiation of the Mauritius/UK Double Taxation Convention, or as a result of any change in the
management or conduct of Essar Energy plc’s affairs, Essar Energy plc could become, or be regarded as
having been, resident in the United Kingdom and therefore become subject to the UK tax regime. This
could materially adversely affect the financial results of Essar Energy plc’s group.
Controlled foreign companies taxation rules

Even assuming that Essar Energy plc is solely tax resident in Mauritius, on the basis that it is incorporated
in England and Wales, Essar Energy plc is technically subject to the UK controlled foreign company rules
(the ‘‘CFC Rules’’), which can operate to apportion the profits of overseas subsidiaries to the UK parent
company which will be subject to UK corporation tax on those amounts (subject to certain deductions).
However, Essar Energy plc has obtained confirmation from HMRC in the United Kingdom that, provided
that (a) all arrangements made between the relevant subsidiaries and Essar Energy plc (and any UK
resident subsidiaries or UK permanent establishments of non-resident subsidiaries) correspond to those
that would have been made between parties acting at arm’s length and (b) there is no material change in
the facts and circumstances of Essar Energy plc’s group as summarised in the application letter of
26 February 2010 and in previous discussions with HMRC, the motive test exemption applies so that Essar
Energy plc will not be subject to the operation of the CFC Rules (with the exception that Essar Energy plc
will still have to comply with certain administrative procedures set out under these rules). The
confirmation only applies to those companies that form part of Essar Energy plc’s group as described to
HMRC in the application for confirmation that the motive test exemption applies dated 26 February 2010,
which Essar Energy plc has been advised includes all companies currently forming part of Essar
Energy plc’s group and if new companies are added to Essar Energy plc’s group, Essar Energy plc will need
to apply for the clearance to be extended to cover those companies. There is no guarantee that such an
application will be successful and any such failure could adversely affect the financial results of Essar
Energy plc’s group.
This confirmation from HMRC is stated to last for a period of 24 months starting on the earlier of the date
on which the Offer becomes unconditional, or 30 June 2010. The confirmation is also subject to any
relevant change of law, including any removal or amendment of the motive test exemption as part of the
anticipated reform of the CFC Rules. HM Treasury and HMRC published a discussion document in
January 2010 entitled ‘‘Proposals for controlled foreign companies (CFC) reform’’ (the ‘‘Discussion
Document’’). The Discussion Document sets out proposals for reform of the current CFC Rules. If there
were to be such a change of law, it is likely to be enacted in Finance Bill 2011. Although the Directors
consider that HMRC’s objectives in reforming the UK tax system should not lead to Essar Energy plc
being disadvantaged, the final position cannot be known until the new legislation is published and enacted.
If the proposed changes to the UK’s CFC Rules result in the profits of certain non-UK resident companies
in Essar Energy plc’s group being subject to UK corporation tax, this may result in a substantial increase in
the tax costs or effective tax rates of Essar Energy plc’s group which in turn could have a material adverse
effect on the after-tax results of operations and financial condition of Essar Energy plc’s group.
HMRC has also confirmed that it will renew its confirmation that the motive test exemption applies,
extending the period for which it applies, in the event that there is a delay in the anticipated introduction
of the anticipated changes to the UK CFC Rules beyond their expected enactment in Finance Bill 2011 for
so long as changes to the rules are reasonably anticipated and for such period following enactment as is
reasonable to enable Essar Energy plc’s group to restructure (if necessary) to take account of the new
rules, subject to the following conditions. This confirmation from HMRC only applies to those companies
that form part of Essar Energy plc’s group as described to HMRC in the application for confirmation that
the motive test exemption applies dated 26 February 2010, which Essar Energy plc has been advised
includes all companies currently forming part of Essar Energy plc’s group, is subject to any relevant change
of law, including any removal or amendment of the motive test exemption as part of the anticipated reform
of the CFC Rules, and is subject to there being no material change in the facts and circumstances of Essar
Energy plc’s group as summarised in the application letter of 26 February 2010 and in previous discussions
with HMRC.
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Part 1 Risk Factors
17. Essar Energy plc will primarily depend upon its subsidiaries for its cash flows and income.
Essar Energy plc is a holding company with no direct operations and relies on distributions from its
subsidiaries and its available cash on hand to fund its cash requirements, including the payment of
dividends and operating expenses and other expenses. There is no legal obligation on either Essar Oil or
Essar Power or any of its subsidiaries to declare dividends.
Further, each of such subsidiaries has, or may, enter into financing transactions or other transactions which
impose restrictions on the cash generated by these subsidiaries, thereby restricting the dividends which may
be declared and payable to Essar Energy plc by such subsidiaries, which in turn will adversely affect the
funds available to pay dividends declared by Essar Energy plc.
RISKS RELATING TO THE COMPANY’S POWER BUSINESS

18. If the Company does not operate its power plants efficiently or otherwise breaches its Power Purchase
Agreement (‘‘PPA’’) contractual obligations, the Company may face increased irrecoverable costs. The
Company’s expansion into merchant sales is subject to certain risks.
The Company’s power business’s profitability is largely a function of its ability to operate its power plants
at the capacity contracted to be available under their PPAs and its ability to manage its costs during the
terms of its PPAs.
The Company’s long-term PPAs often contain restrictions on the Company’s ability to, among other things,
increase prices at short notice and undertake expansion initiatives with other customers. The Company’s
PPAs have terms of 10 to 30 years and set the relevant power plant’s revenue structure over the term of the
PPA. Under some of the Company’s PPAs, the Company may be limited in its ability to pass on to the
buyers the cost of inflation, or other unforeseen price increases and other unforeseen increases in certain
non-fuel costs, such as capital and other expenditure required for the operation of the Company’s power
plants. Moreover, if there is an industry-wide increase in power tariffs, the Company may not be able to
renegotiate the terms of its PPAs to take advantage of the increased tariffs, possibly putting the Company
at a disadvantage to its competitors with PPAs with shorter durations and more flexible terms. Therefore,
the prices at which the Company supplies power under some of its PPAs could have little or no relationship
with prevailing market rates for power and the Company’s costs incurred in generating power, leaving the
Company’s power business’s margins at risk of being reduced.
The power business’s profitability is largely dependent on how effectively it is able to manage its costs
during the terms of its PPAs and its ability to operate its plants at optimal levels. The operation of a power
plant involves many operational risks that could lead to a reduction in the plant’s generation capacity or a
total shutdown of the plant. PPAs generally require the Company to guarantee certain minimum
performance standards, including plant availability and generation capacity. The tariffs the Company
charges are also typically calculated and agreed assuming a certain heat rate and other technical norms. If
the Company’s facilities do not meet the required performance standards, its customers may be entitled to
reduce their capacity payments. In addition, customers are not required to reimburse it for any increased
costs arising as a result of the Company’s failure to operate and maintain its power plants in accordance
with the required performance standards or within the agreed norms. In addition, there can be no
assurance that the Company’s future PPAs will not contain more restrictive provisions regarding the
Company’s ability to recover its fixed and variable costs in operating its power plants than those contained
in some of the Company’s existing PPAs.
A majority of the Phase I Power Projects are coal-fuelled, and the Company does not have any prior
experience in operating coal-fuelled power plants, as none of its operational power plants are coal-fuelled.
In addition, 2,520 MW of the Company’s planned additional installed capacity relates to Power Plant
Projects involving imported coal. Imported-coal based projects face additional risks and uncertainties,
including India’s limited coal-handling capacity at its ports, currency variations, freight cost fluctuations
and political uncertainties in the countries where the coal is mined.
Many of the Company’s PPAs for its Power Plant Projects require or will require that the power plants be
commissioned by a specific date and require the plants to guarantee certain minimum performance
standards, such as plant availability and generation capacity. In the event the Company is unable to meet
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Part 1 Risk Factors
the required commissioning dates or meet performance guarantees, the Company may be liable to provide
performance guarantees, pay liquidated damages or the relevant PPA may be terminated.
In the future there can also be no assurance that the Company will be successful in recovering its fixed and
variable costs under its existing PPAs.
The Company may be required to sell any power not covered by long-term PPAs on short notice. These
short-term sales create additional variability in the power business’s revenues and expose the business to
risks of market fluctuations in power demand and prices. In particular, the Company may not find buyers
at short notice for the relevant quantity. In addition, the prices received for such power may have little or
no relationship to the cost to the Company of supplying this power.
Under its contracts with the government of the states of Madhya Pradesh and Jharkhand for the Essar
Power MP-Mahan and the Essar Power Jharkhand-Tori Phase I Power Projects, the Company is required
to provide 7.5% and 12%, respectively, of the power generated at a variable cost that is below cost of
production to the relevant state governments. These supply terms could adversely affect the overall
profitability of the relevant power plant.
In addition, while the Company historically has not engaged in any merchant sales of power, the Company
intends to sell approximately 26% of its total combined installed capacity following the completion of the
Power Plant Projects pursuant to merchant sales. Merchant sales are sales pursuant to short-term or spot
sales at market rates sales in the open wholesale market to licensed power traders. Merchant sales will
create additional variability in the power business’s revenues, and it is not possible to ensure that the
Company will be able to enter into merchant sales for all of the planned additional available installed
capacity that is not covered by long-term power off-take agreements. In addition, the price per unit
received for merchant sales will fluctuate due to a number of factors including seasonal, daily and hourly
changes in demand for electricity, instances of extreme peak energy demand, price and availability of fuel
supply, electric transmission availability and transmission reliability within and between regions and the
number of generating units undergoing maintenance.
The amount of electric energy that the Company will be able to generate and sell as merchant sales will be
dependent on the availability and efficiency of the Company’s power plants. If the Company’s power plants
are not able to generate electricity efficiently, the Company’s operating expenses increase and the
Company may earn lower margins on merchant sales or may not be able to sell its electric capacity not
covered by long-term PPAs at all.
Merchant sales will not provide the Company with the same level of protection for coverage of the fixed
and variable costs involved in generating power that the Company currently receives under PPAs and other
long-term off-take agreements.
In addition, the Company could experience seasonality in the level of its revenues from its merchant sales,
especially during the monsoon season months of July to September, when electricity demand generally
decreases in India.
19. The Company’s power business relies on a few major customers and currently has a heavy exposure to the steel
industry.
The Company’s power business relies on a few major customers. Of the power business’s 1,220 MW total
combined installed capacity of its operational power plants, 55% is dedicated to the Essar Steel Group,
which has an option to purchase an additional 10%, 25% to Gujarat Urja Vikas Nigam Limited
(‘‘GUVNL’’), the state of Gujarat public utility, and the balance to Essar Affiliated Companies. Once the
expected 10,250 MW combined additional installed capacity from the Power Plant Projects becomes
available, the Company currently expects that 11% of the Company’s total installed MW capacity will be
dedicated to the Essar Steel Group, which has an option to purchase an additional 1%, 7% for use by the
Vadinar refinery, 21% to GUVNL and 34% to other state electricity boards. As a result, less than 4% of
the Company’s existing revenue is derived under its PPAs with Essar Steel Group, Essar Oil, GUVNL and
the other State Electricity Boards (‘‘SEBs’’). This dependency is expected to decline going forward,
nevertheless, any deterioration of the Company’s relationship with these customers or termination of the
PPAs with them, on account of a default by the Company in complying with the terms of these PPAs or
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Part 1 Risk Factors
otherwise, could have a material adverse effect on the Company’s results of operations and financial
condition.
As a result of the power business’s strong dependency on its relationship with the Essar Steel Group, the
power business is dependent on the financial health of the Essar Steel Group. The steel industry has
experienced high volatility in its revenues and profitability in recent years. There can be no assurance as to
how the Essar Steel Group or the steel industry in general will perform in the future.
The Company may also face difficulties in enforcing the payment provisions under PPAs with government
entities including GUVNL. GUVNL has in the past refused to pay on several occasions for certain services
billed to it by the Company under its PPA with GUVNL for the Essar Power—Hazira power plant, and the
Company has recently filed a petition with respect to certain payments it believes are due to it under this
PPA. The Company is also involved in a dispute with GUVNL concerning an alleged diversion of power by
the Company in violation of the PPA and a refund of fuel generation credit to GUVNL. See ‘‘Litigation—
Power Business—Dispute with GUVNL’’ in Part 16 ‘‘Additional Information’’. If these claims are
ultimately resolved in favour of GUVNL, this could have an adverse effect on the Company’s results of
operations and cash flow. Further, SEBs have incurred substantial losses in the past and are subject to
Government of India decisions concerning the grant of free or reduced-rate power to farmers and other
consumers, which could adversely affect these SEBs’ financial health and their ability to make payments to
electricity producers, including the Company.
20. Power projects entail bidding, selection, implementation and regulatory risks.
The Company implements some of its power projects pursuant to tendering processes sponsored by power
off-take customers, in particular state-owned utility companies. The Company may continue to submit bids
for power projects from time to time. There could be delays in the bid selection process. In addition, the
Company’s bids may not be selected or, if selected, may not be finalised within the expected time frame or
on expected terms or at all owing to a variety of reasons beyond the Company’s control, including an
exercise of discretion by the government or off-take customers and the ability of competitors with greater
resources to make more competitive bids.
In selecting power producers for major projects, off-take customers limit the tender to contractors they
have pre-qualified based on criteria such as experience, technological capacity and performance, safety
record and financial strength, although the price competitiveness of the bid is the most important selection
criterion. Pre-qualification is key to the Company winning these projects. To bid for larger projects, the
Company may need to enter into memoranda of understanding and joint venture agreements with partner
companies to meet capital adequacy, technical and other requirements that may be required to qualify for
a bid, but there is no assurance that the Company will be successful in doing so.
In addition, the Company modified the capacities of its Essar Power MP—Mahan and Essar Power
Jharkhand-Tori Power Plant Projects subsequent to its receipt of various government approvals and its
entrance into a memorandum of understanding with the government of the state of Jharkhand in relation
to these projects. The Company also recently amended the business purpose behind the Essar Power
Jharkhand-Tori project, which was originally envisioned as a 2,000 MW captive project for Essar Steel but
is now intended to be a 1,800 MW non-captive project. The capacities of, as well as the business rationales
underlying, the Company’s Phase II Power Projects may also be subject to further amendment by the
Company. As such, the projected capacities and business rationales set forth herein for the Phase II Power
Projects may differ substantially from the final installed capacity of, and the business rationale underlying,
the project when completed.
Power projects also involve substantial regulatory risk and the Company has not yet taken certain
regulatory steps in relation to some of its Power Plant Projects. In particular, the Company has yet to apply
to or notify certain governmental entities of the revisions it has made to the capacities of and business
purposes underlying its Essar Power MP-Mahan and Essar Power Jharkhand-Tori Power Plant Projects.
Amendments may also be required to the Company’s existing approvals, which may no longer be valid. For
example, the Company has not yet applied to revise the environmental and pollution control clearances
that it had already received for its Essar Power Jharkhand—Tori project or notified the relevant
environmental and land acquisition authorities within the governments of Madhya Pradesh and Jharkhand
of these changes. Further, costs as appraised by lenders for certain Power Plant Projects may differ from
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Part 1 Risk Factors
those submitted to government authorities for the purpose of obtaining the initial approvals. For example,
the cost estimate the Company submitted to the government of the state of Jharkhand for the Essar Power
Jharkhand-Tori project was Rs. 48.60 billion (US$1,041.13 million) for a 2,000 MW project, while the cost
as appraised by a lending institution was Rs. 57 billion (US$1,221.1 million), which is the cost estimate
contained in this document. The relevant authorities may raise questions on account of the Company’s
delay in making the applications or notifications, and may also postpone granting the requisite revised
approvals or further approvals as may be required in this regard, which in turn could delay the
implementation of the respective project(s), including the commencement of activities with respect to the
Company’s captive coal mines. Further, delays in submitting such revised cost estimates may also adversely
affect the Company’s recovery of costs in respect of power proposed to be sold to the respective state
governments or their power utilities. In addition, delays in applying for the amendment of licences or in
notification may result in the imposition of fines or penalties as well as the institution of legal proceedings.
In addition, the Company entered into a memorandum of understanding with the government of the state
of Jharkhand with respect to the Essar Power Jharkhand—Tori project which expired in March 2008 and
has not yet been renewed. In the event that this memorandum of understanding is not renewed, the
government of the state of Jharkhand may not be required to provide the assistance in the setting up of the
power plant contemplated in the memorandum of understanding, which may in turn lead to delays in the
granting of approvals by the relevant governmental entity of the state of Jharkhand and the Government of
India as well as other approvals contingent upon a lack of objection from, or a response from, the relevant
government entity.
21. Coal mining involves numerous risks and is subject to compliance with the terms of the coal allocation letters
and unexpected disruptions.
The Company has recently obtained allocations that grant licences to operate coal mines located in the
states of Madhya Pradesh and Jharkhand for the supply of coal to the Company’s power plants. The
Company plans to mine coal using expertise hired from other coal mining operators and will subcontract
certain coal-mining activities. However, the Company has no prior experience in coal-mining activities.
These activities involve numerous risks, including events and operating conditions that could disrupt the
mining, loading and transportation of coal at or from the Company’s mines resulting in delays to the
delivery of coal to the Company’s power generating facilities. There can be no assurance that the
Company’s coal-mining operations will be successful, or that the coal mined, if any, would be sufficient to
operate the relevant Power Plant Projects for the life of such mines as estimated by the Company.
In addition, under the Government of India’s allocation letters for the coal mines in Madhya Pradesh,
Jharkhand and Neptune’s coal block, certain terms and conditions are required to be adhered to, including
in relation to the submission of a mining plan, the date by which coal production must commence and the
provision of geological reports. The required date for commencement of coal production for the Mahan
coal block in Madhya Pradesh has already expired, though the Company has made an application for an
extension. The required date for the commencement of coal production from the Chakla and Ashok
Karkata coal blocks in Jharkhand will also expire prior to the scheduled date of commencement of coal
production. The Company has applied for extensions of these periods. Non-compliance with the terms of
allocation may lead to cancellation of one or more of these coal allocations.
Further, due to delays in the Company’s receipt of certain mining-related approvals, coal from the Mahan
and Chakla coal blocks may not be available in time for the scheduled commissioning dates of the Essar
Power MP—Mahan and Essar Power Jharkhand—Tori Power Plant Projects. In addition, the Ashok
Karkata coal block is not expected to achieve commercial production for at least 42 months from March
2010. Applications have accordingly been made to the Government of India for temporary coal linkages to
meet coal demand for the Essar Power MP—Mahan project and the Essar Power Jharkhand—Tori project
until such time as the blocks become operational, though there can be no assurance that these applications
will not be delayed.
Neptune Limited has received a show cause notice from the Ministry of Coal of the Government of India
in relation to its coal blocks, alleging non-compliance of certain milestones provided in the relevant
allocation letter. A reply to this notice has been filed. If the terms of the allocation are not complied with,
the allocation of the coal blocks for the Neptune projects may be revoked. If the revocation order to the
allocation becomes effective, the Company and Neptune Limited would explore various options depending
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Part 1 Risk Factors
on the stage in the Neptune projects when such order were to become effective. That is, if the order were
to become effective at an early stage (before investment by the Company of significant capital in the
projects), the Company may consider, among other options, not acquiring the remaining stake in Neptune
Limited, or exiting the projects altogether which would result in a loss of its initial investment. If, on the
other hand, the order were to become effective at a later stage (after investment of significant capital, the
majority of which is expected to be invested from 2012 onwards), the Company and Neptune would need
to take remedial measures, such as applying to the Government for coal linkages or making other alternate
arrangements for domestic or imported coal, any of which could lead to substantially higher fuel costs for
Neptune Limited. Assuming Neptune Limited is able to secure other sources for the supply of coal, this is
not expected to have a material impact on the timing of the projects, or on the required capital
expenditure, although it would have an impact on earnings from the projects. Based on the Company’s
experience and publicly available information, the Directors believe that the probability of revocation is
low, and that even if the coal allocation was revoked, the overall impact on the Company would be
minimal.
22. Changes to the ‘‘captive power’’ status of the Company’s operational power plants and Power Plant Projects
could materially increase the Company’s costs.
Two of the Company’s four operational power plants benefit from captive power status and at least one of
the Power Plant Projects is expected to benefit from this status. Under the Electricity Act, 2003 (the
‘‘Electricity Act’’), captive power projects benefit from reduced regulation and are not subject to the cross-
subsidy surcharge tariff regulations and other restrictions imposed by India’s Central Electricity Regulatory
Commission (‘‘CERC’’) and State Electricity Regulatory Commissions (‘‘SERCs’’). Captive power plants
can also avail themselves of certain tax and duty benefits. Pursuant to the current regulations, the buyer
and seller are free to negotiate and agree the relevant tariff without regulatory input or approval.
However, such projects first need to meet certain structural requirements to be afforded captive power
status. For instance, to enable certain of the Company’s power projects to qualify for captive power plant
status, Essar Affiliated Companies that are the power plant’s off take customers are required to own a 26%
equity interest in the respective plants.
The captive status of some of the power plants owned by the Company’s competitors are currently under
regulatory scrutiny. There can be no assurance that any of the Company’s operational or future captive
power plants will obtain or retain their captive status, which could result in additional tariff regulations that
could have a material adverse affect on the Company’s results of operations and financial condition. In
addition, any amendments made by the regulators to the conditions required to obtain or retain captive
power status could result in increased compliance costs, or a loss of the plant’s captive power status
altogether.
23. Liberalisation of the Indian power sector has significantly increased competition.
The Electricity Act, has resulted in substantial changes in the power sector in India, including the
de-regulation of the power generation sector, competition in supply, open access to distribution and
transmission systems and the reorganisation and privatisation of certain of the SEBs. However, while
allowing the Company greater flexibility to sell power, the provisions of the Electricity Act, have increased
the scope for competition in the Company’s supply and distribution businesses, and may continue to do so,
which could adversely affect its revenues, results of operations and prospects. The continued impact of the
provisions of the Electricity Act, and the National Electricity Policy and national tariff policy could have a
material adverse affect on the Company’s results of operations and financial condition.
RISKS RELATING TO THE COMPANY’S OIL AND GAS BUSINESS

24. Crude oil prices, refined petroleum product prices and refining margins have fluctuated significantly in the
past and could significantly impact the Company.
The performance of the Company’s oil and gas business is driven in large part by the price differential, or
margin, between realised refined product prices and the prices for crude oil and other feedstocks used to
produce the refined products. This price differential, plus the benefits of sales tax incentives and as
adjusted for commodity hedging gains and losses, constitutes the Company’s gross refining margin
(‘‘GRM’’). This means the Company will not generate operating profit or positive cash flow from its
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Part 1 Risk Factors
refining operations unless the Company is able to buy crude oil and sell refined petroleum products at
margins sufficient to cover the fixed and variable costs of the Company’s refinery operations.
The Company may not be able to sustain its gross refining margins at its historic margin levels. The
Vadinar refinery generated average gross refining margins of US$7.97 per barrel for the period from 1 May
2008 to 31 March 2009 and US$4.46 per barrel for the period from 1 April 2009 to 31 December 2009 and
average gross refining margins (excluding sales tax incentives) of US$5.02 and US$2.12 per barrel
respectively, compared to the International Energy Agency benchmark of US$2.14 and US$(2.33) per
barrel, respectively. Historically, refining margins have fluctuated substantially both within individual
refining groups and across the refining industry. Refining margins are influenced principally by supply and
demand for crude oil and refined petroleum products, which in turn determine their market prices. Other
factors that may have an impact on prices and refining margins, in no particular order, include:
• aggregate refining capacity in the global refining industry to convert crude oil into refined petroleum
products, including those the Company refines;
• changes in global and regional economic conditions including exchange rate fluctuations;
• changes in global and regional demand for refined petroleum products;
• market conditions in countries in which the Company refines or sells its refined petroleum products
and the level of operations of other refineries in the world;
• changes in the cost or availability of transportation for crude oil, feedstocks and refined petroleum
products;
• availability of price arbitrage for refined petroleum products between different geographical markets;
• political developments and instability in petroleum producing regions such as the Middle East, Russia,
Africa and South America;
• the inability of the Organization of Petroleum Exporting Countries (‘‘OPEC’’) and other petroleum
producing nations to set and maintain oil price and production controls;
• seasonal demand fluctuations;
• expected and actual weather conditions;
• to the extent unhedged, changes in prices from the time crude feedstocks are purchased and refined
petroleum products are sold;
• the extent of government regulation, in particular as it relates to fuel specifications, energy taxes or
environmental policy or restrict exports or fixes prices of petroleum products;
• the ability of suppliers, transporters and purchasers to perform on a timely basis, or at all, under their
agreements (including risks associated with physical delivery);
• the development, availability, price and acceptance of alternative fuels;
• terrorism or the threat of terrorism that may affect supply, transportation or demand for crude oil and
refined petroleum products; and
• Potential influence on the oil prices due to the large volume of derivative transactions on petroleum
exchanges and OTC markets.
In addition, the Vadinar refinery’s gross refining margins benefit substantially from certain sales tax
incentives provided by the state of Gujarat in relation to sales of refined petroleum products in that the
state. Therefore, the Company’s gross refining margins may not be comparable to the refining margins of
other refiners that do not benefit from such incentives. See ‘‘—Risks Related to the Company—The
Company enjoys significant tax incentives, which may not be available in the future, and is involved in
announced in February 2010 may have a material adverse effect on the Company’s results of operations’’.
The time lag between a change in the price of crude oil and the price of the Company’s products may also
affect its gross refining margins and could have a significant impact on its refining business, financial
condition and results of operations. Although the Company attempts to minimise the impact of time lag
through its hedging activities, there can be no assurance that the Company’s hedging activities will be
successful or will achieve their desired objective. For information about the Company’s historical gains and
losses on commodity derivative instruments, see Part 9 ‘‘Operating and Financial Review—Factors
Affecting Results of Operations and Financial Condition—Hedging Activities’’.
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Part 1 Risk Factors
The Company’s gross refining margins and operating results are influenced by changes in refined
petroleum products prices and changes in crude oil prices. While the Vadinar refinery generally processes
crude oil within 20 to 30 days from the date of its purchase, any changes in the price of crude oil will still
affect the cost of inventory, resulting in inventory gains or losses. For example, the steep decline in crude
oil prices in the second half of 2008, particularly in the fourth quarter had a negative impact on the Vadinar
refinery’s gross refining margin, with the margin decreasing from US$8.90 per barrel in the quarter ending
in September 2008 to US$2.68 per barrel in the quarter ending in December 2008. This decrease was
largely due to the accounting of inventory losses resulting from the decline in crude oil prices during the
fourth quarter of 2008, coupled with lower refined petroleum product margins.
Long-term trends in crude oil prices also affect the results of operations of the oil and gas business’s
exploration and production operations. While higher crude oil prices generally benefit these operations,
lower crude oil prices reduce the economic recoverability of discovered reserves and the prices realised
from production.
25. If the Company is unable to enter into term contracts for crude oil purchases, the Company may be unable to
optimise its gross refining margins.
The Company’s refinery operations require crude and other feedstocks to produce refined petroleum
products. In the period from 1 April 2009 to 31 December 2009, the Company purchased approximately
53% of its crude oil by volume pursuant to term contracts and 47% pursuant to spot market purchases
from national oil companies, oil majors and crude oil traders. The Company believes that term purchase
contracts for crude oil provide better reliability of supply of the crude oils than spot market purchases.
Nearly all of the Vadinar refinery’s term-contract oil procurement is presently undertaken through 12 to
15-month term contracts with the national oil companies Abu Dhabi National Oil Company, NIOC and
Saudi Arabian Oil Company. While the Company has negotiated renewals of its term contracts with these
national oil companies prior to their expiry in the past, there can be no assurance that the Company will be
able to negotiate renewals of these contracts in the future, or enter into new term contracts with these
suppliers or other suppliers on commercially reasonable terms, or at all. Reductions in term-contract
purchases of crude oil will make the Company more reliant on spot market purchases. There can be no
assurance that the Company will be able to purchase the types and quantities of crude oils that it needs to
maximise its refining margins in the spot market.
All of the Company’s term purchases of crude oil are from the Middle East, making the Company subject
to the political, geographic and economic risks attendant to doing business with suppliers located in this
region, such as labour strikes, regional hostilities and unilateral announcements by any of the countries
within this region that some or all oil exports for a specified period of time will be halted.
The Company may also be subject to governmental restrictions on the Company’s purchases of crude oil
sourced from countries subject to economic sanctions, which may result in the unavailability of the desired
crude oil. The Company currently purchases a significant amount of crude oil under a term purchase
contract with the NIOC (which provided approximately 36.8% of the Company’s crude oil requirements in
the nine months ended 31 December 2009), which is a government-owned entity of Iran, a country subject
to sanctions by the US Office of Foreign Assets Control (‘‘OFAC’’). In the future, the Company may
continue to purchase crude oil from NIOC and other companies owned by the governments of Iran and
other OFAC-sanctioned countries. While the Company believes that none of its business is prohibited by
sanctions administered by OFAC because neither the Company nor any of its subsidiary undertakings is a
US person as defined in the OFAC regulations, there can be no assurance that the Company will not be
subject to sanctions in the future under OFAC because of changes to the OFAC regulations. In addition,
Iran is currently subject to United Nations-imposed economic sanctions which may be heightened in the
future as the result of a proposal by the United States, with the support of the United Kingdom, France
and Germany, to impose a fourth round of Security Council sanctions against Iran. The Company may
experience some limitation on its ability to finance its operations and transactions to the extent those
operations facilitate transactions or those transactions are with countries subject to sanctions by OFAC,
including Iran.
If the Company is unable to obtain adequate crude oil volumes of the crude oils that the Company requires
at favourable prices, the Company’s gross refining margins could be materially adversely affected.
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Part 1 Risk Factors
26. Any loss of the benefits from the pricing mechanism of its refined petroleum product sales to Indian national oil
companies compared to export pricing could have a material adverse effect.
To provide the Company with security of off-take for its refined petroleum products in light of the
government subsidies to, and the market position of, the Indian national oil companies, the Company has
entered into long-term refined petroleum product off-take agreements with the national oil companies
Bharat Petroleum Corporation Limited (‘‘BPCL’’) of 48 months in duration from 1 April 2008, Hindustan
Petroleum Corporation Limited (‘‘HPCL’’) of 48 months in duration from 1 January 2008 and Indian Oil
Corporation Limited (‘‘IOCL’’) of 24 months in duration from 1 April 2009. Under the terms of these
agreements, the Company is not guaranteed any binding minimum off-take quantity from the Indian
national oil companies. However, due to the pricing terms for sales to the Indian national oil companies,
the Company is able to generate higher margins on sales to these customers than on export sales. Sales to
the national oil companies accounted for 61.1% of the oil and gas business’s revenue in the nine months
ended 31 December 2009.
The national oil companies are also competitors of the Company. BPCL, HPCL and IOCL owned or
controlled approximately 92% of the total number of retail fuel stations in India as of 31 March 2009. The
national oil companies have announced plans to expand their refining capacity, which may make them less
reliant on Indian private-sector refiners, including the Company, for supplies of refined petroleum
products.
In addition, any policy changes by the Indian government in relation to the pricing terms offered by the
national oil companies could result in a significant reduction of the Company’s business from the national
oil companies.
The loss of one or several of the national oil companies as customers, a significant reduction in purchase
volume by any of them or changes in the prices offered by them could have a material adverse effect on the
Company’s results of operations and financial condition.
27. The success of the Company’s exploration and production operations depends on its ability to acquire land,
find, develop and commercially exploit resources and reserves. The hydrocarbon resources and reserves data in
this document are estimates only.
The success of the Company’s exploration and production operations depends on its ability to
commercially exploit existing resources and reserves and to find and develop new commercially exploitable
resources and reserves, including its ability to enter into new PSCs and acquire land on which to locate its
wells and other equipment. Developing hydrocarbon resources and reserves into commercial production is
a highly speculative activity involving a high degree of risk, including encountering unusual or unexpected
geological formations or pressures, seismic shifts, unexpected reservoir behaviour, unexpected or different
fluids or fluid properties, premature decline of reservoirs, uncontrollable flow of oil, natural gas or well
fluids, equipment failures, extended interruptions due to, among other things, adverse weather conditions,
environmental hazards, industrial accidents, lack of availability of exploration and production equipment,
explosions, pollution, oil seepage, industrial action and shortages of manpower. As a result of these risks,
only a few of the properties that are explored are ultimately developed into commercially producing
properties. There is no assurance that economically viable and commercial quantities of hydrocarbons will
be recovered from the Company’s existing or future exploration and production blocks and fields. In
addition, no assurance can be given that even when commercial reserves are discovered, the Company will
be able to exploit the reserves as it currently plans to.
In addition, while the Company has started commercial production at one of its onshore oil and gas
production blocks, the Company has not yet developed an offshore oil and gas field. Although the
Company is partnering with experienced operators, offshore exploration is subject to a wide range of
hazards, including capsizing, collision, bad weather and additional environmental pollution hazards. There
can be no assurance that the Company will be successful in developing and operating any of its offshore oil
and gas fields.
Without reserve or resource additions through further exploration and development activities or
acquisitions, the Company’s reserves and resources will decline. In June 2007, the Company commenced
crude oil production from the ESU field of the CB-ON/3 block at Mehsana in the Cambay Basin (the
‘‘Mehsana Block’’). The Company’s exploration and development activities in Raniganj, West Bengal are
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Part 1 Risk Factors
expected to yield a flow of CSG by the second quarter of 2010, and commercial production is expected to
begin by the fourth quarter of 2010. Subject to the execution of the PSC (which is subject to a government
approval process) and other agreements for the Ratna & R-Series fields (the ‘‘Ratna Fields’’), the
Company intends to submit a revised development plan and commence development activities in the
Ratna Fields upon signing of the PSC. If these development activities commence as expected, the
Company expects the Ratna Fields to begin commercial production of oil in the fourth quarter of 2013.
However, the Company’s other exploration activities are yet to yield hydrocarbon reserves. If these
activities are unsuccessful and the Company does not acquire properties containing proven reserves or
resources, its total estimated reserves and resources will decline.
The hydrocarbon resources estimates are based upon a number of assumptions. In addition, this document
contains resources estimates in relation to early stage mineral assets which are not material to the
Company including 114 block (the ‘‘Vietnam Block’’), AA-ONN-2004/3 and AA-ONN-2004/5 (the ‘‘Assam
Blocks’’), MB-OSN-2005/3 (the ‘‘Mumbai Offshore Block’’) and the South East Tungkal block (the
‘‘Indonesia Block’’) that have not been independently reviewed or certified by an independent technical
expert and for which estimates have been provided by the Company. There is additional uncertainty in
relation to such uncertified estimates, and potential investors should not place undue reliance upon
uncertified data. The Company cannot assure investors that the resources estimates as presented in this
document will be recovered in the quantities, qualities or yields expressed in this document. Adverse
changes in economic conditions may render it uneconomical to develop certain hydrocarbon resources.
Moreover, actual production, revenues and expenditures with respect to resources will vary from estimates,
and the variances may be material.
There are numerous uncertainties inherent in estimating quantities and qualities of hydrocarbon resources,
the timing of development expenditures and the projection of future rates of production. The resources
estimates are based on a number of assumptions. Many of the assumptions used in the resources estimates
set forth in this document are beyond the Company’s control and may prove to be incorrect over time. In
particular, the reliability of resources and other estimates is dependent upon:
• the quantity and quality of technical and economic data;
• historical production from an area compared with production from other comparable producing
areas;
• interpretation of geological and geophysical data;
• the quality of the results of test drilling;
• extensive engineering judgments;
• assumptions regarding the availability of oil and gas transportation facilities at the time commercial
production commences;
• the assumptions applied in relation to future crude oil, gas and coal prices and the crude oil, gas and
coal prices actually applicable to the Company’s production;
• the production performance of reservoirs and mines;
• the assumptions applied in relation to the future performance of exploration and production facilities;
• assumptions concerning capital expenditures for exploring, developing and producing reserves;
• the ability of the Company to acquire land (which may be subject to various government regulations)
for exploration and development operations in its blocks and fields, particularly for its CSG
operations;
• whether the prevailing tax rules and other government regulations and contractual conditions will
remain the same as on the dates estimates are made; and
• consistency in the policies of the governments in the countries where the resources and reserves are
located.
The inclusion of resources, reserves and production estimates in this document should not be regarded as a
representation that these amounts can or will be exploited or achieved economically, and nothing herein
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Part 1 Risk Factors
should be interpreted as assurances of the economic lives of the Company’s reserves or the profitability of
the Company’s future exploration and production activities.
28. The success of the Company’s exploration and production operations depends on its PSCs and similar
arrangements as well as on its relationship with its joint venture partners and its ability to honour supply
agreements. The Company may become liable under the security arrangements if it does not complete the
minimum work commitments in its PSCs.
In addition to its PSCs and other similar arrangements with the Indian Government, the Company has
entered into such arrangements with the governments or government-controlled entities of Australia,
Indonesia, Madagascar, Nigeria and Vietnam (collectively, the ‘‘PSC Government Counterparties’’). The
Company’s PSCs are subject to the rules and regulations or the influence of governmental agencies in the
jurisdictions of the PSC government counterparties that may adversely affect the Company’s ability to
perform or its rights under PSCs. These rules and regulations may affect the Company’s rights by
potentially limiting or precluding the Company from exploring and developing the full acreage provided
for and may also affect the opportunities and obligations under the Company’s PSCs. PSC Government
Counterparties could seek, among other things, to increase the Company’s expenditures or exploration and
development programmes beyond the minimum contractual requirements under the PSCs. In addition, the
Company must comply with certain procedural requirements under its PSCs in order to obtain the
reimbursement of costs incurred under the PSCs. The Company may not be able to recover, or the PSC
Government Counterparties may not approve, reimbursement of all costs incurred under PSCs. The
Company may also be hindered or prevented from enforcing its rights under certain PSCs due to the
doctrine of sovereign immunity.
The Company has not entered into PSC or similar arrangements for some of the Company’s exploration
and production blocks. Though the Ratna Fields in India have been awarded to a consortium comprised of
Essar Oil, Oil and Natural Gas Corporation Limited (‘‘ONGC’’) and Premier Oil Pacific Limited
(‘‘Premier Oil’’), the PSC for Ratna Fields has not yet been executed and is subject to a government approval
process. The Company is also seeking permission from the Government of India to exploit the CSG
potential of the Mehsana Block. While the Company has signed a PSC with the Government of India for
the exploitation of oil and gas in that block, it will be required to enter into a separate contract to be able
to exploit the CSG potential of the block. Moreover, current regulations in India do not permit a licensee
to extract CSG and oil and gas from the same field. There can be no assurance that the PSC for the
Ratna Fields will be executed or if executed, without any change to the material terms, or that the
Company will be permitted to exploit CSG from the Mehsana Block.
Under certain of its PSCs, the Company companies as the operators under the PSCs are obligated to carry
out certain minimum work programmes for the relevant exploration area or block within a certain period
of time. To secure these obligations, the Company has provided its counterparties under the PSCs with
performance bank guarantee equivalents or other security arrangements for the amounts as required
under the respective PSCs or similar agreements for the relevant minimum work programme
commitments. In the event the Company fails to achieve its minimum work programme commitments
stipulated within the requisite time period and it is unable to seek an extension, the relevant counterparty
may collect on the performance bank guarantees towards the incomplete minimum work programme.
In addition, in the course of certain investments in joint ventures where the Company is not the operator
of the relevant exploration and production asset, the Company will be largely dependent on the operating
partner, including for the overall success of the joint venture. the Company also may disagree with actions
proposed to be taken by the operating partner and may be exposed to liability for actions taken by the
operating joint venture partner.
The Company has also entered into a supply contract on a take or pay basis with Matix Fertilisers and
Chemicals Ltd. (‘‘Matix’’) for the sale of CSG from its Raniganj Block beginning in April 2012. Since
Matix is developing a greenfield fertiliser project, there is a possibility that Matix’s plant may face
commissioning delays, which in turn could lead to a delay in the off-take of gas from the Raniganj Block
during such period. In addition, because the Company is required under the contract with Matix to supply
a minimum of 90% of the contracted-for quantity annually, in the event that the Company is unable to
fully comply with its supply obligations following the commissioning of Matix’s plant, the Company would
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Part 1 Risk Factors
be required to compensate Matix for the difference between the contract price and the price of an
alternative fuel.
29. Recent changes in the regulatory framework in India create additional regulatory uncertainties for the
Company’s activities.
Among other recent developments, the Petroleum and Natural Gas Regulatory Board Act, 2006 (the
‘‘PNGRB Act’’), which became effective in October 2007, provides for the creation of a Petroleum and
Natural Gas Regulatory Board (‘‘PNG Board’’) vested with a number of powers and functions, including
the protection of Indian consumers’ interests by the fostering of fair trade and competition among those
engaged in, or intending to become engaged in, the refining, processing, storage, transportation,
distribution marketing, import and export of crude oil, refined petroleum products and natural gas,
including the laying of pipelines for their transportation; ensuring adequate availability in the Indian
market of crude oil, refined petroleum products and natural gas; monitoring prices and taking corrective
measures to prevent restrictive trade practices in relation to crude oil, refined petroleum products and
natural gas; securing equitable distribution of crude oil and petroleum products; imposing fees and other
charges; and regulating the technical standards and specifications, including safety standards in activities
relating to petroleum products and natural gas. The Company’s activities of refining, storage and
transportation of crude oil and natural gas fall under the jurisdiction of the PNG Board. There can be no
assurance that the rules, regulations and policies of the PNG Board will not include the imposition of
pricing terms for the refining, storage and transportation of crude oil, refined petroleum products or
natural gas that conflict with the Company’s contracts governing the refining, storage and transportation of
these products.
30. Essar Oil is listed on the Bombay Stock Exchange and the National Stock Exchange and is subject to
additional legal and regulatory requirements.
Essar Oil, the Company’s subsidiary which is the company primarily holding its oil and gas business, is
listed on the Bombay Stock Exchange and the National Stock Exchange (together, the ‘‘Indian Stock
Exchanges’’). While the Company holds an indirect economic interest of 86.39% of Essar Oil, and an Essar
Affiliated Company holds a further 3.26%, other public shareholders hold the remaining 10.59% of Essar
Oil Limited. In addition, Essar Oil Limited’s shareholders have passed a resolution, valid until 26 June
2010, permitting Essar Oil to issue equity shares, global depository shares, American depository receipts,
foreign currency convertible bonds or any securities convertible into equity shares in an amount of up to
US$2,000 million.
As a result of being listed on the Indian Stock Exchanges, and given the minority public shareholding,
Essar Oil may be subject to additional legal and regulatory requirements and Essar Oil may require the
prior approval of a particular or specified majority of shareholders and/or regulatory bodies, which may or
may not be forthcoming, prior to taking certain courses of action.
Further, the listing agreement between the Indian Stock Exchanges and Essar Oil may limit the Company’s
ability to increase its equity interest in Essar Oil beyond 90%, since Essar Oil is required to maintain a
minimum public shareholding of 10% of its equity share capital.
Essar Energy plc will consider various options to provide funds to Essar Oil including as debt or equity
however, these options may be subject to provisions of Indian law; for example, Essar Energy may be
unable to provide funds through debt until it has a minimum equity share holding in Essar Oil. In addition,
funds infused as debt into Essar Oil by Essar Energy plc will, inter alia, be subject to certain end use
restrictions.
While Essar Oil has no intention of delisting its shares from the Indian Stock Exchanges, in the event that
Essar Oil proposes to delist its shares from the Indian Stock Exchanges, the process would be subject to
certain conditions being met and an exit opportunity being provided to all the public shareholders of Essar
Oil in accordance with the conditions specified under the Securities and Exchange Board of India
(Delisting of Equity Shares) Regulations, 2009, as amended, including approval of the public shareholders
by special resolution.
Even after a successful delisting, a number of public shareholders may continue to be shareholders of
Essar Oil and the Company may not be able to effect a squeeze out of the remaining shareholders under
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Part 1 Risk Factors
Indian law. Thus, the Company may not able to control 100% of Essar Oil in the event that it desires to
increase its shareholding in Essar Oil beyond 90%.
RISKS RELATING TO INDIA
31. The Company operates in heavily regulated industries, where changes in government policy could have a
negative impact.
The power and oil and gas industries in India are heavily regulated. Since 1991, the Government of India
has pursued policies of economic liberalisation, including significantly relaxing restrictions on private
sector involvement in the power, oil and gas and certain other industries. Nevertheless, the role of the
Indian central and state governments in the Indian economy as producers, consumers and regulators has
remained significant. The Government of India under Prime Minister Singh’s leadership since 2004 has
announced policies and taken initiatives that have supported the continued economic liberalisation policies
that have been pursued by previous governments. There can be no assurance that these liberalisation
policies will continue in the future. Government corruption scandals and protests against privatisations,
which have occurred in the past, could slow down the pace of liberalisation and deregulation. The rate of
economic liberalisation could change, and specific laws and policies affecting oil and gas and power
companies, foreign investments, currency exchange rates and other matters affecting investment and doing
business in India could change as well. A significant change in India’s economic liberalisation and
deregulation policies could disrupt business and economic conditions in India generally.
32. Terrorist attacks and other acts of violence could adversely affect financial markets, result in a loss of business
confidence and adversely affect the Company.
Terrorist attacks, such as the recent shooting and bomb attacks in Mumbai in November 2008, the bomb
blasts that occurred in Mumbai on 25 August 2003 and 11 July 2006, the October 2004 bomb blasts that
occurred in North-east India, the World Trade Center attack in New York on 11 September 2001 and the
bomb blasts in London on 7 July 2005, as well as other acts of violence or war, including those involving
India and the United States or other countries, may adversely affect Indian and worldwide financial
markets. India’s neighbour Pakistan is currently experiencing increasingly intense terrorist activities and
fighting. Due to the proximity of Pakistan to the Gulf of Kutch, through which crude oil imported for the
Vadinar refinery is transported, any further deterioration in the situation in Pakistan could adversely
impact the Company’s ability to import oil necessary for the refinery’s operations by sea. The Company
also faces internal security risks with respect to its exploration and production assets and activities in
Assam in north eastern India due to the ethnic unrest in that region, as well as with respect to coal supplies
from its mines located in central India due to the on-going Naxalite unrest in that region. Acts of violence
may result in a loss of business confidence and have other consequences that could adversely affect the
Company’s business, results of operations and financial condition. Travel restrictions as a result of such
attacks may have an adverse impact on the Company’s ability to operate effectively. Increased volatility in
the financial markets can have an adverse impact on the economies of India and other countries.
33. There are certain limitations in India’s property title registration system and other associated risks in relation
to real property.
In contrast to other countries, India does not have a central title registry for real property. Title registries
are maintained at the state and district level and since computerisation of such records began only recently,
may not be available online for inspection. In addition, because it is common practice in some parts of
India (especially in villages) for transfers of title upon deaths of family members and in certain other
circumstances to be made only by mutation in local revenue records, changes in the ownership of land may
not be registered with the relevant land registry in a timely manner or at all. Title registries and local
revenue records may not be updated or complete. As such, legal defects and irregularities may exist in the
titles to the properties on which the Company’s existing facilities and future facilities are located. The
Company’s rights in respect of these properties may be compromised by improperly executed, unregistered
or insufficiently stamped conveyance instruments, unregistered encumbrances in favour of third parties,
rights of adverse possessors, ownership claims of family members of prior owners, or other defects that the
Company may not be aware of. These defects may arise after land is acquired by the Company, and are not
necessarily revealed by a title due diligence, on account of various factors including but not limited to
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Part 1 Risk Factors
incomplete land records, transactions without registered documents, the decentralised nature of
maintenance of land registries and local revenue records, property-related litigation in India and family
disputes in the sellers’ family. Any defects or irregularities of title may result in litigation and/or the loss of
development rights over the affected property. With respect to projects on leasehold land, revocation/
expiry of the lease and any defect or irregularity in the lessor’s title may result in loss of the Company’s
rights over affected property. For land that is in the process of being acquired, such as the land for the
Essar Power Jharkhand-Tori Power Plant Project, title verification is pending and there can be no
assurance that such land will have clear title.
34. A slowdown in economic growth in India could have an adverse effect on the Company’s business.
The Company’s performance and the growth of the Indian power and oil and gas industries are dependent
on the health and growth of the overall Indian economy. The Indian economy has shown sustained growth
over recent years with gross domestic product (‘‘GDP’’) adjusted for inflation growing at 5.4% in 2009,
7.3% in 2008 and 9.4% in 2007 according to the International Monetary Fund’s World Economic Outlook
Database, October 2009. However, growth in industrial production in India has been variable. Any
slowdown in the Indian economy could have a material adverse effect on the Company’s business.
35. If inflation worsens, the Company’s results of operations and financial condition may be adversely affected.
India has experienced high levels of inflation since 1980. The average annual inflation rate in India from
2005 to 2009 was 7% according to the International Monetary Fund’s World Economic Outlook Database,
October 2009. In the event that inflation remains high, or worsens, certain of the Company’s costs, such as
salaries, travel costs and related allowances, which are typically linked to general price levels, may increase,
and the Company may not be able to recoup these increases through higher refined petroleum product
prices or power tariffs. In addition, the Government of India, to the extent the Government regulates
prices and tariffs in the oil and gas and power industries, may not adjust such prices and tariffs for the
effect of inflation. As a result, high rates of inflation in India could increase the Company’s costs and
decrease its operating margins.
36. A decline in India’s foreign exchange reserves may affect liquidity and interest rates in the Indian economy,
which could have an adverse impact on the Company.
India’s foreign exchange reserves declined, on a balance of payment basis (excluding valuation effects), by
US$20,080 million during the fiscal year 2009, as compared to an increase of US$92,164 million during the
fiscal year 2008. According to the weekly statistical supplement of the RBI Bulletin, India’s foreign
exchange reserves totalled US$284.3 billion as at 8 January 2010. A sharp decline in these reserves could
result in reduced liquidity and higher interest rates in the Indian economy. Reduced liquidity or an
increase in interest rates in the economy following a decline in foreign exchange reserves could have a
material adverse effect on the Company’s results of operations and financial condition.
37. Any downgrade of India’s sovereign debt rating by an international rating agency could have a negative impact
on the Company’s results of operations and financial condition.
Any downgrade of India’s credit ratings for domestic and international debt by international rating
agencies may have a material adverse effect on the Company’s ability to raise additional financing, and the
interest rates and other commercial terms at which such additional financing is available.
RISKS RELATING TO THE OFFER
38. An active market for the Shares may not develop, which may cause the price of the Shares to fall.
Prior to the Admission, there had been no public market for the Shares. The Offer Price has been agreed
between the Underwriters and the Company and may not be indicative of the market price for the Shares
following Admission. Although the Company has applied for the Shares to be admitted to trading on the
London Stock Exchange and it is expected that this application will be approved, there can be no assurance
that an active trading market for the Shares will develop or, if developed, that it will be maintained
following the closing of the Offer. If an active trading market is not developed or maintained, the liquidity
and market price of the Shares could be adversely affected
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Part 1 Risk Factors
39. The Shares may experience price and volume fluctuations.

Following Admission, the market price of the Shares could be subject to significant fluctuations due to a
change in sentiment in the market regarding the Shares (or securities similar to them) or in response to
various facts and events, including any regulatory changes affecting the Company’s operations, variations
in the Company’s operating results and business developments of the Company or its competitors. Stock
markets worldwide have experienced significant price and volume fluctuations in the past two years that
have affected the market prices for securities. Furthermore, the Company’s operating results and prospects
from time to time may be below the expectations of market analysts and investors. Any of these events
could result in a decline in the market price of the Shares.
40. Significant sales of Shares may affect the trading price of the Shares.
Although Essar Global has agreed not to dispose of any of its holding of Shares for a period of 12 months
from the date of this document, Essar Global may subsequently sell all or part of its holding of Shares. Any
sales of substantial amounts of Shares in the public market, or the perception that such sales might occur,
could materially and adversely affect the market price of the Shares.
41. Shares pledged to banks could be sold if Essar Global defaults under its financing arrangements.
Essar Global has pledged all of the Shares it holds in the Company as security for Essar Global’s
indebtedness under certain financing arrangements. In the event of a default by Essar Global, its lenders
may exercise their rights under the relevant financing arrangements and take ownership of the pledged
shares, which could result in a change of control of the Company.
42. US and other non-UK holders of Shares may be unable to exercise their pre-emptive rights.
In the case of an increase of the share capital of Essar Energy plc for cash, existing Shareholders are generally
entitled to pre-emption rights pursuant to the Companies Act, unless such rights are waived by a special
resolution of the Shareholders at a general meeting or in certain circumstances stated in the Articles. To the
extent that pre-emptive rights are granted, US and other non-UK holders of the Shares may not be able to
exercise pre-emptive rights for their Shares unless Essar Energy plc decides to comply with applicable local laws
and regulations and, in the case of US holders, unless a registration statement under the Securities Act is
effective with respect to those rights or an exemption from the registration requirement thereunder is available.
Essar Energy plc intends to evaluate at the time of any rights offering the costs and potential liabilities
associated with any such compliance or registration statement. At such time, Essar Energy plc also intends to
evaluate the benefits to it of enabling the exercise by US and other non-UK holders of the Shares of the
pre-emptive rights for their Shares and any other factors Essar Energy plc considers appropriate at the time.
On the basis of this evaluation, Essar Energy plc will then make a decision as to how to proceed and whether to
file such a registration statement or otherwise or any other steps necessary to extend the rights offering into the
other jurisdictions (including complying with local law requirements in other jurisdictions). No assurance can
be given that any steps will be taken in any jurisdiction or that any registration statement will be filed to enable
the exercise of such holders’ pre-emptive rights.
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MERRILL CORPORATION JDICKSO//30-APR-10 12:40 DISK116:[10ZAU1.10ZAU70801]BH70801A.;72
PART 2
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
General
Investors should only rely on the information in this document. No person has been authorised to give any
information or to make any representations other than those contained in this document in connection with
the Offer and, if given or made, such information or representations must not be relied upon as having been
authorised by or on behalf of the Company, the Directors or any of J.P. Morgan Cazenove, Deutsche Bank,
BNP Paribas, Nomura or Standard Chartered. No representation or warranty, express or implied, is made
by any of J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas, Nomura or Standard Chartered or any
selling agent as to the accuracy or completeness of such information, and nothing contained in this
document is, or shall be relied upon as, a promise or representation by any of J.P. Morgan Cazenove,
Deutsche Bank, BNP Paribas, Nomura or Standard Chartered or any selling agent as to the past, present or
future. Without prejudice to any obligation of the Company to publish a supplementary prospectus
pursuant to FSMA and paragraph 3.4.1 of the Prospectus Rules, neither the delivery of this document nor
any subscription or sale of Shares pursuant to the Offer shall, under any circumstances, create any
implication that there has been no change in the business or affairs of the Company since the date of this
document or that the information contained herein is correct as of any time subsequent to its date.
The Company will update the information provided in this document by means of a supplement hereto if a
significant new factor that may affect the evaluation by prospective investors of the Offer occurs prior to
Admission or if this document contains any material mistake or inaccuracy. The prospectus and any
supplement thereto will be subject to approval by the FSA and will be made public in accordance with the
Prospectus Rules. If a supplement to the Prospectus is published prior to Admission, investors shall have
the right to withdraw their subscriptions made prior to the publication of the supplement. Such withdrawal
must be done within the time limits set out in the supplement (if any) (which shall not be shorter than two
days after publication of the supplement).
The contents of this document are not to be construed as legal, business or tax advice. Each prospective
investor should consult his or her own lawyer, financial adviser or tax adviser for legal, financial or tax
advice in relation to any subscription, purchase or proposed subscription or purchase of Shares. In making
an investment decision, each investor must rely on their own examination, analysis and enquiry of the
Company and the terms of the Offer, including the merits and risks involved.
This document is not intended to provide the basis of any credit or other evaluation and should not be
considered as a recommendation by any of the Company, the Directors or any of J.P. Morgan Cazenove,
Deutsche Bank, BNP Paribas, Nomura or Standard Chartered or any of their representatives that any
recipient of this document should subscribe for or purchase the Shares. Prior to making any decision as to
whether to subscribe for or purchase the Shares, prospective investors should read this document.
Investors should ensure that they read the whole of this document and not just rely on key information or
information summarised within it. In making an investment decision, prospective investors must rely upon
their own examination of the Company and the terms of this document, including the risks involved.
Investors who subscribe for or purchase Shares in the Offer will be deemed to have acknowledged that:
(i) they have not relied on J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas, Nomura or Standard
Chartered or any person affiliated with any of them in connection with any investigation of the accuracy of
any information contained in this document or their investment decision; and (ii) they have relied on the
information contained in this document, and no person has been authorised to give any information or to
make any representation concerning the Company or the Shares (other than as contained in this
document) and, if given or made, any such other information or representation should not be relied upon
as having been authorised by or on behalf of the Company, the Directors, J.P. Morgan Cazenove, Deutsche
Bank, BNP Paribas, Nomura or Standard Chartered.
None of the Company, the Directors or J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas, Nomura or
Standard Chartered or any of their representatives is making any representation to any offeree, subscriber
or purchaser of the Shares regarding the legality of an investment by such offeree, subscriber or purchaser.
In connection with the Offer, the Underwriters and any of their respective affiliates, acting as investors for
their own accounts, may subscribe for and/or acquire Shares and in that capacity may retain, purchase, sell,
offer to sell or otherwise deal for their own accounts in such Shares and other securities of the Company or
related investments in connection with the Offer or otherwise. Accordingly, references in this document to
37

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Part 2 Presentation of Financial and Other Information
the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as
including any issue or offer to, or subscription, acquisition, dealing or placing by, the Underwriters and any
of their affiliates acting as investors for their own accounts. Neither of the Underwriters intends to disclose
the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory
obligations to do so.
Presentation of financial information

Presentation of financial information and non-financial operating data
Historical financial information
The historical financial information in Part 11 ‘‘Financial Information’’ has been prepared in accordance
with the requirements of the Prospectus Directive regulation and the UK Listing Rules and in accordance
with International Financial Reporting Standards as adopted by the European Commission for use in the
European Union (‘‘IFRS’’) except for the purposes of presenting the historical financial information on a
combined basis and certain deviations from IFRS resulting from the application of certain accounting
conventions commonly used for the preparation of historical financial information for inclusion in
investment circulars as described in the Annexure to SIR 2000 (Investment Reporting Standards applicable
to public reporting engagements on historical financial information) issued by the UK Auditing Practices
Board have been applied. The basis of preparation is further explained in Part 11 ‘‘Financial Information’’.
Throughout the periods presented in the historical financial information, the Company consisted of
commonly controlled entities within the Essar Group that historically comprised the power and oil and gas
businesses of the Essar Group. These entities have been reorganised into a separate corporate group with
the Company as the holding company, pursuant to the Pre-IPO Reorganisation. Prior to this time, the
Company entities did not constitute a legal group and hence, consolidated historical financial information
is not available and combined financial information has been prepared.
The Company has been part of the larger Essar Group throughout the periods presented in the historical
financial information and has benefited from the Essar Group structure and central operations. Therefore,
the historical financial information may not be indicative of the Company’s future performance and does
not necessarily reflect what the Company’s financial position and results of operations would have been
had the Company operated as a separate, stand-alone entity during the periods presented. Factors that
may not be reflected include, but are not limited to, the following:
• administrative costs have been affected by the arrangements that existed in the Essar Group;
• current tax charges recorded in the combined income statement have been determined in accordance
with the taxation arrangements within the Essar Group;
• interest income and expenses recorded in the combined income statement have been determined in
accordance with the historic financing arrangements within the Essar Group; and
• no information is presented for proposed directors of the Company who were not employed by the
Essar Group, or for individuals who served as directors of companies within the Essar Group but who
are not to be directors of the Company following the Offer.
The historical financial information presented in this document consists of audited combined financial
information for the years ended 31 March 2007, 2008 and 2009 and the nine months ended 31 December
2009 and unaudited financial information for the nine months ended 31 December 2008. The combined
historical financial information contained in Part 11 ‘‘Financial Information’’ has been prepared on a basis
that combines the results and assets and liabilities of the companies comprising the Company. Internal
transactions within the Company have eliminated on combination.
The financial information included in Part 11 ‘‘Financial Information’’ is covered by the respective
Accountant’s Reports included in Sections A and B which were prepared in accordance with International
Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board.
The historical financial information included in Part 11 ‘‘Financial Information’’ was audited in accordance
with the Standards for Investment Reporting issued by the Auditing Practices Board in the United
Kingdom. Neither this information nor the other financial information used in this document was prepared
38

in accordance with accounting principles generally accepted in the United States (‘‘US GAAP’’), audited in
accordance with auditing standards generally accepted in the United States of America (‘‘US GAAS’’), or
auditing standards of the US Public Company Accounting Oversight Board (‘‘PCAOB’’). No opinion or
any other assurance with regard to any financial information was expressed under US GAAP, US GAAS or
PCAOB Standards, and the financial information included in Part 11 ‘‘Financial Information’’ and other
financial information is not intended to comply with SEC reporting requirements. Compliance with such
requirements would require the modification, reformulation or exclusion of certain financial measures and
would not allow for the deviations from IFRS described above. In addition, changes would be required in
the presentation of certain other information. In particular, no reconciliation to US GAAP is provided.
Potential investors should consult their own professional advisers to gain an understanding of the financial
information in Part 11 ‘‘Financial Information’’ and the implications of differences between the auditing
standards noted herein.
All unaudited financial information in this document has been extracted without material adjustment from
the Group’s accounting records.
Pro forma financial information

This document includes an unaudited pro forma net assets statement as at 31 December 2009 for the
Company illustrating the effect of Admission had it occurred on 31 December 2009. Because of its nature,
the pro forma financial information addresses a hypothetical situation and, therefore, does not represent
the the Company’s actual financial position. The Prospectus Rules regarding the preparation and
presentation of pro forma financial information vary in certain respects from Article 11 of Regulation S-X
promulgated under the US Securities Act and, accordingly, the unaudited pro forma financial information
included herein should not be relied upon as if it had been prepared in accordance with such requirements.
Shareholders and potential investors should refer to the basis of preparation of the unaudited pro forma
financial information set forth at Section B2 of Part 11 ‘‘Financial Information’’ of this document.
Non-financial operating data

The non-financial operating data included in this document has been extracted without material
adjustment from the management records of the Company and are unaudited.
Non-IFRS Financial Measures

In this document, certain financial measures are presented that are not recognised by IFRS, including
EBITDA and gross refining margin or GRM.
EBITDA
The Company defines EBITDA as (loss)/profit after tax adjusted for depreciation, non operational
income/expenses, net finance costs and taxes.
EBITDA is not defined by or presented in accordance with IFRS, it is not a measure of performance, and
should not be considered as an alternative to:
• operating income or net income (as determined in accordance with IFRS), or as a measure of
operating performance;
• cash flows from operating, investing or financing activities (as determined in accordance with IFRS),
or as a measure of our ability to meet cash needs; or
• any other measures of performance under IFRS.
EBITDA has limitations as an analytical tool, and an investor should not consider these measures in
isolation from, or as a substitute for, analysis of the Company’s results of operations. Some of the
limitations of EBITDA are that:
• it does not reflect the Company’s cash expenditures or future requirements for capital expenditure or
contractual commitments;
• it does not reflect changes in, or cash requirements for, the Company’s working capital needs;
39

• it does not reflect the significant interest expense, or the cash requirements necessary to service
interest or principal payments in respect of any borrowings;
• although depreciation and amortisation are non-cash charges, the assets being depreciated and
amortised will often have to be replaced in the future, and EBITDA does not reflect any cash
requirements for such replacements;
• other companies in the Company’s industry may calculate these measures differently from how the
Company does, limiting their usefulness as a comparative measure; and
• they do not reflect gains and losses in commodities and foreign exchange, part of which impact
earnings.
EBITDA may not be indicative of the the Company’s historical operating results, nor is it meant to be a
projection or forecast of future results.
The Directors believe that EBITDA is a measure commonly reported and widely used by investors in
comparing performance without regard to depreciation, which can vary significantly depending upon
accounting methods, interest expense or taxation, or non-operating factors. EBITDA has been disclosed in
this document because it is used by management in determining the Group’s core performance and the
Directors believe that it permits a more complete and comprehensive analysis of the Company’s operating
performance.
The following table reconciles (loss)/profit after tax to EBITDA for the periods indicated:
Nine months ended
2007 2008 2009 2008(1) 2009
(US$ in million)
(Loss)/profit after tax . . . . . . . . . . . . . . . . . . . . . . . . (25.6) (84.9) (167.0) (254.1) 119.7
Depreciation and amortisation . . . . . . . . . . . . . . . . . . 13.2 30.5 108.7 84.6 89.9
Net finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.7 44.9 259.7 191.6 215.7
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.9) (33.5) (77.7) (129.0) 27.6
Other non operational income . . . . . . . . . . . . . . . . . . — — — — (19.8)
EBITDA(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.4 (43.0) 123.7 (106.9) 433.1
Power business . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.8 101.0 133.3 97.6 120.8
Oil & gas business . . . . . . . . . . . . . . . . . . . . . . . . . (9.4) (144.0) (9.6) (204.5) 312.3
Power business EBITDA margin(2) . . . . . . . . . . . . . 43.8% 43.4% 51.2% 50.7% 61.3%
Oil & gas business EBITDA margin(2) . . . . . . . . . . . (9.8)% (103.0)% (0.1)% (3.0)% 5.7%
(1) Unaudited
(2) EBITDA margin is calculated by dividing EBITDA by sales of goods, expressed as a percentage.
Gross refining margin or GRM

The total sales value of the refined petroleum products produced by a refinery less the cost of crude oil is
referred to as the gross refining margin or GRM. GRM is not a measure defined by IFRS and has not been
audited.
The Vadinar refinery’s total gross refining margin is defined as:
• the sales value, net of discounts, of refined petroleum products sold;
• less the cost of crude oil consumed;
• plus benefits of sales tax incentives; and
• as adjusted for commodity hedging gains and losses.
Other companies in the Company’s industry may calculate these measures differently from how the
Company does, limiting its usefulness as a comparative measure.
Gross Refining Margin has been disclosed in this document as it is used by management in determining
results from refining operations and the directors believe it is a measure commonly used in the industry.
40

The following table reconciles revenue from the refining segment to GRM for the periods indicated.
Nine months ended

Year end 31 December
31 March
2009(1) 2008(1) 2009
US$ (in millions)
Revenue—Refined petroleum products . . . . . . . . . . . . . . . . . . . . . . . 7,689.8 6,582.4 4,965.3

Cost of crude oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,331.2) (6,400.7) (4,771.9)
Sales tax incentives(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256.3 214.3 168.4
Commodity hedging gains/losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78.9 46.5 (40.0)
GRM (including sales tax incentives) . . . . . . . . . . . . . . . . . . . . . . . . . 693.8 442.5 321.8
GRM (excluding sales tax incentives) . . . . . . . . . . . . . . . . . . . . . . . . 437.5 228.2 153.4
Number of barrels (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 63 72
GRM per barrel (including sales tax incentives) . . . . . . . . . . . . . . . . . 7.97 7.03 4.46
GRM per barrel (excluding sales tax incentives) . . . . . . . . . . . . . . . . . $ 5.02 $ 3.62 $ 2.12
(1) Includes results of the Vadinar refinery following commencement of commercial production on 1 May 2008.
(2) Represents the gross sales tax incentives received less the costs of social contributions required to be made by the Company as a
condition of receiving the benefit.
Pro forma financial information

In this document, any reference to ‘‘pro forma’’ financial information is to information which has been
extracted without material adjustment from the unaudited pro forma financial information contained in
Part 12 ‘‘Unaudited Pro Forma Financial Information’’. The unaudited pro forma balance sheet contained
in Part 12 ‘‘Unaudited Pro Forma Financial Information’’ is based on the combined balance sheet of the
Company as at 31 December 2009 extracted without material adjustment from Part 11 ‘‘Financial
Information’’. The unaudited pro forma balance sheet includes certain adjustments in respect of the
proposed Offer. However, the unaudited pro forma balance sheet is not necessarily indicative of what the
financial position of the Company would have been had the Offer occurred on 31 December 2009.
The unaudited pro forma financial information is for illustrative purposes only. Because of its nature, the
pro forma financial information addresses a hypothetical situation and, therefore, does not represent the
Company’s actual financial position. Future results of operations may differ materially from those
presented in the pro forma information due to various factors.
Currency presentation
Unless otherwise indicated, all references in this document to:
• ‘‘Canadian dollars’’ or ‘‘C$’’ are to the official currency of Canada;
• ‘‘euro’’ or ‘‘A’’ are to the currency introduced at the start of the third stage of European economic and
monetary union pursuant to the Treaty establishing the European Community, as amended;
• ‘‘pounds sterling’’ or ‘‘£’’ are to the official currency of the United Kingdom;
• ‘‘rupees’’ and ‘‘Rs’’ are to Indian rupees, the official currency of the Republic of India; and
• ‘‘US dollars’’ or ‘‘US$’’ are to the lawful currency of the United States.
The Company prepares its financial statements in US dollars. Certain Essar Energy plc group companies,
including Essar Oil, prepare their financial statements in other currencies, including rupees. Solely for
convenience, the Company has presented certain amounts denominated in Indian rupees in this document
using a constant currency translation at the rate of Rs. 46.68 : US$1.00, the exchange rate prevailing as of
31 December 2009.
The basis of translation of foreign currency for the purpose of inclusion of the financial information set out
in Part 11 ‘‘Financial Information’’ is described in that Part. Information derived from this financial
information set out elsewhere in this document has been translated on the same basis.
41

Year conventions
For Indian tax purposes, the year-end is 31 March. References in this document to, for example, 2008/09
are to the tax year ended 31 March 2009.
Rounding
Certain data in this document, including financial, statistical, and operating information has been rounded.
As a result of the rounding, the totals of data presented in this document may vary slightly from the actual
arithmetic totals of such data. Percentages in tables have been rounded and accordingly may not add up to
100%.
Presentation of reserves and resources information

This document contains information concerning the Group’s hydrocarbon reserves and resources extracted
from:
• in relation to the oil and gas reserves and resources in the Ratna Fields near Mumbai, India, the
report dated 30 April 2010 prepared by RPS Energy (‘‘RPS’’), an independent consultancy
specialising in petroleum and gas reservoir evaluation (the ‘‘RPS Ratna & R-Series Fields Report’’).
This report is set out in Part 18 ‘‘Expert Reports’’;
• in relation to the CSG reserves and resources of the RM(E)-CBM-2008/IV block in Jharkhand, India
(the ‘‘Rajmahal Block’’), the report dated 30 April 2010 prepared by Advance Resources
International, Inc. (‘‘ARI’’), an independent consultancy specialising in petroleum and gas reservoir
evaluation (the ‘‘ARI RM(E)-CBM-2008/IV Block Report’’). This report is set out in Part 18 ‘‘Expert
Reports’’;
• in relation to the oil and gas reserves and resources in the OPL 226 block off the coast of Nigeria (the
‘‘Nigeria Block’’), the report dated 30 April 2010 prepared by Netherland, Sewell & Associates, Inc.
(‘‘NSAI’’), an independent consultancy specialising in petroleum and gas reservoir evaluation (the
‘‘NSAI OPL 226 Block Report’’). This report is set out in Part 18 ‘‘Expert Reports’’;
• in relation to the CSG reserves and resources of the RG (East)-CBM-2001/1 block in West Bengal,
India (the ‘‘Raniganj Block’’), the report dated 30 April 2010 prepared by NSAI (the ‘‘NSAI RG
(East)-CBM-2001/1 Block Report’’). This report is set out in Part 18 ‘‘Expert Reports’’;
(collectively, the ‘‘Oil and Gas Expert Reports’’); and
• in addition, in relation to the report for the assessment of coal seam gas resources in the CB-ON/3
Block, Cambay Basin, Gujarat, India, dated 30 April 2010, prepared by RPS (the ‘‘Mehsana Report’’).
The Oil and Gas Expert Reports and the Mehsana Report present information concerning reserves and
resources in accordance with the definitions and guidelines set forth by the 2007 Petroleum Resources
Management System (the ‘‘PRMS’’), which is approved by the Society of Petroleum Engineers as the
standard for classification and reporting. The PRMS standards differ in certain material respects from
standards of the US Securities and Exchange Commission (the ‘‘SEC’’). The SEC permits oil and gas
companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated
by actual production or conclusive formation tests to be economically and legally producible under existing
economic and operating conditions. This document contains data, such as reserves and prospective and
contingent resources presented in accordance with PRMS standards, which the SEC’s guidelines would
prohibit the Company from including in filings with the SEC.
It should be noted that prospective resources relate to undiscovered and/or undeveloped accumulations
and accordingly by their nature are highly speculative. A possibility exists that the prospects will not result
in the successful discovery of economic resources in which case there would be no commercial
development. Contingent resources relate to undeveloped accumulations and may include non-viable
resources.
The information on reserves and resources in this document, in the Oil and Gas Expert Reports and in the
Mehsana Report is based on economic and other assumptions that may prove to be incorrect. Prospective
investors should not place undue reliance on the forward-looking statements in the Oil and Gas Expert
42

Reports or the Mehsana Report or on the ability of the Oil and Gas Expert Reports or the Mehsana
Report to predict actual reserves or resources. The basis of preparation for the Oil and Gas Reports and
the Mehsana Report is set out in more detail in each of these reports.
Where reserves and resources are shown in barrels of oil equivalents or mmboe (million barrels of oil
equivalents) natural gas reserves have been converted at the rate of 6 bcf equivalent to 1 mmboe.
Market, economic and industry data

Certain statements in this document relating to the Indian power market and the Company’s existing and
planned power plants have been extracted without material adjustment from a report prepared by KPMG
India Private Limited (‘‘KPMG’’). Similarly, certain statements in this document relating to the Indian and
international petroleum refining industry and the Vadinar refinery have been extracted without material
adjustment from a report prepared by KBC. The Company confirms that this information and any other
information extracted from third-party sources has been accurately reproduced and, so far as the Company
is aware and is able to ascertain from information published by these third parties, no facts have been
omitted which would render reproduced information inaccurate or misleading. Such information has not
been audited or independently verified.
Nelson Complexity Index

The Company has calculated the average Nelson Complexity Index rating of the current Vadinar refinery
to be 6.1, which is expected to increase to 11.8 following completion of the Phase I Refinery Project and to
12.8 following completion of the Phase II Refinery Project based on the pre-1997 Nelson methodology and
including some additional process units (sour water strippers and sulphur recovery units). The Company
also applies a ‘‘Hydrocracker’’ factor to the high pressure VGO Hydrotreater and includes it in its
calculations. In contrast, a report prepared by KBC calculates the average Nelson Complexity Index rating
of the current Vadinar refinery to be 4.8, which it expects to increase to 8.4 following completion of the
Phase I Refinery Project and to 10.0 following completion of the Phase II Refinery Project using the
post-1998 methodology and having not taking into account the aforementioned additional process units.
Except where otherwise indicated, the Nelson Complexity figures contained in this document have been
calculated in accordance with the Company’s methodology.
Definitions and glossary

Certain terms used in this document, including all capitalised terms and certain technical and other items,
are defined and explained in Part 17 ‘‘Definitions and Glossary’’.
Information regarding forward-looking statements

This document includes forward-looking statements. These forward-looking statements involve known and
unknown risks and uncertainties, many of which are beyond the Company’s control and all of which are
based on the Directors’ current beliefs and expectations about future events. Forward-looking statements
are sometimes indentified by the use of forward-looking terminology such as ‘‘believe’’, ‘‘expects’’, ‘‘may’’,
‘‘will’’, ‘‘could’’, ‘‘should’’, ‘‘shall’’, ‘‘risk’’, ‘‘intends’’, ‘‘estimates’’, ‘‘aims’’, ‘‘plans’’, ‘‘predicts’’, ‘‘continues’’,
‘‘assumes’’, ‘‘positioned’’ or ‘‘anticipates’’ or the negative thereof, other variations thereon or comparable
terminology. These forward-looking statements include all matters that are not historical facts. They
appear in a number of places throughout this document and include statements regarding the intentions,
beliefs and current expectations of the Directors or the Company concerning, among other things, the
results of operations, financial condition, liquidity, prospects, growth, strategies, and dividend policy of the
Company and the industry in which it operates. In particular, the statements under the headings
‘‘Summary’’, ‘‘Risk Factors’’, ‘‘The Business’’ and ‘‘Operating and Financial Review’’ regarding the
Company’s strategy and other future events or prospects are forward-looking statements.
These forward-looking statements and other statements contained in this document regarding matters that
are not historical facts involve predictions. No assurance can be given that such future results will be
achieved: actual events or results may differ materially as a result of risks and uncertainties facing the
Company. Such risks and uncertainties could cause actual results to vary materially from the future results
43

indicated, expressed, or implied in such forward-looking statements. Please refer to Part 1 ‘‘Risk Factors’’
for further confirmation in this regard.
The forward-looking statements contained in this document speak only as of the date of this document.
The Company, the Directors, J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas, Nomura and Standard
Chartered expressly disclaim any obligation or undertaking to update these forward-looking statements
contained in the document to reflect any change in their expectations or any change in events, conditions,
or circumstances on which such statements are based unless required to do so by applicable law, the
Prospectus Rules, the Listing Rules, or the Disclosure and Transparency Rules of the FSA. Investors
should note that the contents of these paragraphs relating to forward looking statements are not intended
to qualify the statements made as to sufficiency of working capital in this document.
Over-allotment and stabilisation

transactions with a view to supporting the market price of the Shares at a higher level than that which
might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such
transactions and such transactions may be effected on any securities market, over-the-counter market,
stock exchange or otherwise and may be undertaken at any time during the period commencing on the
date of the commencement of conditional dealings of the Shares on the London Stock Exchange and
ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising
Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising
transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without
prior notice. In no event will measures be taken to stabilise the market price of the Shares above the Offer
Price. Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends
to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation
to the Offer.
Enforceability of Judgments in the United States

All of the Directors and executive officers of the Company are residents of countries other than the United
States. The Company is a public limited company incorporated under the laws of England and Wales.
Furthermore, all or a substantial portion of the Directors’ assets and all of the assets of the Company are
located outside the United States. As a result, it may not be possible for investors in the United States to:
• effect service of process within the United States upon any of the Directors and executive officers of
the Company; or
• enforce in the US courts or outside the United States judgments obtained against any of the Directors
and executive officers of the Company in the US courts in any action, including actions under the civil
liability provisions of US securities laws; or
• enforce in the US courts judgments obtained against any of the Directors and executive officers of the
Company in courts in jurisdictions outside the United States in any action, including actions under the
civil liability provisions of US securities laws.
Investors may also have difficulties obtaining, in original actions brought in courts in jurisdictions outside
the United States, judgments predicated upon the civil liability provisions of US securities laws.
The Directors have been advised by Freshfields Bruckhaus Deringer, the Company’s legal advisers as to
English law, that there is doubt as to the ability of a plaintiff to obtain a judgment predicated upon the US
securities laws against these persons in the United Kingdom in original actions or in actions for the
enforcement of judgments of US courts predicated upon the federal securities laws of the United States.
Available information
For so long as any of the Shares are in issue and are ‘‘restricted securities’’ within the meaning of
Rule 144(a)(3) under the US Securities Act, the Company will, during any period in which it is not subject
to Section 13 or 15(d) under the US Securities Exchange Act of 1934 as amended, (the ‘‘US Exchange
Act’’), nor exempt from reporting under the US Exchange Act pursuant to Rule 12g3-2(b) thereunder,
44

make available to any holder or beneficial owner of a Share, or to any prospective purchaser of a Share
designated by such holder or beneficial owner, the information specified in, and meeting the requirements
of, Rule 144A(d)(4) under the US Securities Act.
Information not contained in this document

No person has been authorised to give any information or make any representation other than those
contained in this document and, if given or made, such information or representation must not be relied
upon as having been so authorised. Neither the delivery of this document nor any subscription or sale
made hereunder shall, under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date of this document or that the information in this document is
correct as of any time subsequent to the date hereof.
No incorporation of website information

The contents of the Company’s website do not form part of this document.
45

MERRILL CORPORATION JDICKSO//30-APR-10 12:39 DISK116:[10ZAU1.10ZAU70801]BJ70801A.;44
PART 3
DIRECTORS, SECRETARY, REGISTERED AND HEAD OFFICE AND ADVISERS
Directors Ravi Ruia, Chairman

Prashant Ruia, Vice-Chairman
Naresh Nayyar, CEO
Sattar Hajee Abdoula, NED
Philip Aiken, NED
Subhash C. Lallah, NED
Simon Murray, NED
Company Secretary Executive Services Limited
Registered office of the 3rd Floor
Company Lansdowne House
57 Berkeley Square
London W1J 6ER
United Kingdom
Head office of the Company DCDM Building
10 Frere Felix de Valois Street
Port Louis
Mauritius
Sponsor, Joint Global J.P. Morgan Securities Ltd.
Coordinator and Joint 125 London Wall
Bookrunner London EC2Y 5AJ
United Kingdom
Joint Global Coordinator and Deutsche Bank AG, London Branch
Joint Bookrunner Winchester House
1 Great Winchester Street
London EC2N 2DB
United Kingdom
Co-Managers BNP PARIBAS
16, Boulevard des Italiens
75009 Paris
France
Nomura International plc
Nomura House
1 St. Martins-le-Grand
London EC1A 4NP
Standard Chartered Securities (Hong Kong) Limited
15/F Two International Finance Centre
8 Finance Street, Central
Hong Kong
Financial Advisor to the J.P. Morgan Securities Ltd.
Company 125 London Wall
London EC2Y 5AJ
United Kingdom
46

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MERRILL CORPORATION JDICKSO//30-APR-10 12:39 DISK116:[10ZAU1.10ZAU70801]BJ70801A.;44
Part 3 Directors, Secretary, Registered and Head Office and Advisers
English and US legal Freshfields Bruckhaus Deringer LLP

advisers to the Company 65 Fleet Street
London EC4Y 1HS
United Kingdom
Indian legal adviser to the Amarchand & Mangaldas & Suresh A. Shroff & Co.
Company Peninsula Chambers
Peninsula Corporate Park
Ganpatrao Kadam Marg
Lower Parel
Mumbai 400 013
India
English and US legal Linklaters LLP
advisers to the One Silk Street
Sponsor, Joint Global London EC2Y 8HQ
Coordinators and Joint United Kingdom
Bookrunners
Reporting Accountants Deloitte LLP
and Auditors 2 New Street Square
London EC4A 3BZ
United Kingdom
Registrars Computershare Investor Services PLC
The Pavillions
Bridgwater Road
Bristol BS13 8AE
United Kingdom
Technical Consultants Advanced Resources International, Inc.
4501 Fairfax Drive, Suite 910
Arlington, VA 22203
United States
Netherland, Sewell & Associates, Inc.
4500 Thanksgiving Tower
1601 Elm Street
Dallas, Texas 75201-4754
United States
RPS Energy
309 Reading Road
Henley-on-Thames
Oxfordshire RG9 1EL
United Kingdom
47

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PART 4
EXPECTED TIMETABLE OF PRINCIPAL EVENTS AND OFFER STATISTICS
Expected timetable of principal events
Event Time and Date
Latest time and date for receipt of indications of interest under the Offer . . 5.00pm on 30 April 2010
Announcement of Offer Price and allocation . . . . . . . . . . . . . . . . . . . . . . . 30 April 2010
Commencement of conditional dealings on the London Stock Exchange . . . 8.00am on 4 May 2010
Admission and commencement of unconditional dealings on the London
Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.00am on 7 May 2010
CREST accounts credited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 May 2010
It should be noted that, if Admission does not occur, all conditional dealings will be of no effect and any such
dealings will be at the sole risk of the parties concerned.
All times are London times. Each of the times and dates in the above timetable is subject to change
without further notice.
Offer statistics
Offer Price (per Share) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420 pence

Number of Shares in the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302,789,825
Percentage of the enlarged issued Share capital in the Offer . . . . . . . . . . . . . . . . . . . . 23.24%
Number of Shares subject to the Over-allotment Option . . . . . . . . . . . . . . . . . . . . . . . 30,303,029
Number of Shares in issue following the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,303,030,302
(1)(2)
Estimated net proceeds of the Offer receivable by the Company .............. £1,208 million
Market capitalisation of the Company at the Offer Price . . . . . . . . . . . . . . . . . . . . . . £5,473 million
(1) Assuming no exercise of the Over-allotment Option.
(2) After expenses of £64 million.
48

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PART 5
INDUSTRY OVERVIEW
OVERVIEW
Expected Growth in the Indian Economy
According to the Central Intelligence Agency World Factbook, India, the second most populous country in
the world with a population of over 1.16 billion people, had a GDP on a purchasing power parity (‘‘PPP’’)
basis of approximately US$3,561 billion in 2009.
According to the International Monetary Fund, India’s GDP grew at a CAGR of 8.2% during the
five-years ended 31 March 2008. According to IMF estimates, India’s GDP will continue to maintain a 6%
to 8% growth rate, surpassing 10% by 2014. This makes India one of the fastest growing large economies in
the world. While the growth rate has decreased in the past year, this decrease is mainly due to the global
economic contraction and deterioration in the global financial markets. The Planning Commission of
India’s 11th Plan (tax year 2007/08 to 2011/12) aims at a sustainable GDP growth rate of 9.0% from
2007/08 to 2011/12.
Indian Power Demand

The following chart shows India’s historical and projected power deficit:
Project electricity supply deficit

(% of demand)
Base Case
Optimistic Demand Scenario
11% 11%
10-11%
8-9%
4-5%
1-2%
2009 2012 2014

8APR201020525882
Source: EPS, A.T. Kearney analysis.
49

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Part 5 Industry Overview
Indian Domestic Energy Demand

Rapid economic growth in India is driving the growth in energy consumption and the demand for energy.
The following table sets out Indian domestic energy consumption, and the contributions of the major
primary energy sources to total domestic energy consumption, for years indicated:
Total Domestic Energy sources as a percentage of total domestic

Energy energy consumption
Consumption
Year ended December 31 (MTOE) Coal Crude oil Natural gas Hydro-electric Nuclear
1999 . . . . . . . . . . . . . . . . . . . . . . . . 280.1 48.5% 35.8% 8.1% 6.6% 1.0%

2000 . . . . . . . . . . . . . . . . . . . . . . . . 295.1 48.9% 36.0% 8.0% 5.9% 1.2%
2001 . . . . . . . . . . . . . . . . . . . . . . . . 296.5 49.0% 36.1% 8.0% 5.5% 1.4%
2002 . . . . . . . . . . . . . . . . . . . . . . . . 307.8 49.3% 36.1% 8.1% 5.0% 1.4%
2003 . . . . . . . . . . . . . . . . . . . . . . . . 316.2 49.6% 35.8% 8.4% 5.0% 1.3%
2004 . . . . . . . . . . . . . . . . . . . . . . . . 343.9 50.1% 34.9% 8.3% 5.5% 1.1%
2005 . . . . . . . . . . . . . . . . . . . . . . . . 362.2 50.9% 33.0% 8.9% 6.1% 1.1%
2006 . . . . . . . . . . . . . . . . . . . . . . . . 378.8 51.6% 31.8% 8.9% 6.7% 1.1%
2007 . . . . . . . . . . . . . . . . . . . . . . . . 409.2 52.0% 31.4% 8.8% 6.8% 1.0%
2008 . . . . . . . . . . . . . . . . . . . . . . . . 433.3 53.4% 31.2% 8.6% 6.0% 0.8%
Source: BP Statistical Review of World Energy, June 2009.
In 2008, India accounted for 3.4% of the world’s consumption of crude oil and 1.4% of the world’s
consumption of natural gas according to the BP Statistical Review of World Energy, June 2009.
Per capita energy consumption World per capita GDP and car ownership levels
(2005-2030)
Oil (bbl/y)1 %Growth (2010E -2015E) (for oil) Power (kwhpa)2
+x%
%Growth (2007A -2015E) (for power)
20 +2% 10,000
+3%
15.67 7,679
8,000
15
6,000
10
+2% +69%
+54% 4,000
4.84 2,380 2,010
5 +12%
+7% 2,000
2.35 +17%
0.87 446
0 0
OECD World China India
Average 8APR201021305214 30MAR201015142860
(1) Source: EIA 2009 Source: KBC
(2) Source: World Energy Outlook 2009
During the five-year period ended 31 March 2009, the CAGR of refined petroleum product demand in
India was 4.4% according to MoPNG Statistics 2008-09, as compared to the GDP CAGR of 8.2% for the
same period, as reported by the International Monetary Fund. The lower growth in demand compared to
GDP growth is largely attributed to disproportionately high growth in the less-power-intensive service
sector relative to more-power-intensive sectors such as heavy industry and agriculture. Nonetheless, the
Government of India expects demand for oil in India to reach 226 mmt in 2014-15 and 368 mmt in 2024-25
as these more energy-intensive industries expand. (Source: Integrated Energy Policy, Planning
Commission, Government of India, August 2006.)
On a per capita basis, energy consumption in India is relatively low in comparison to much of the world. In
2008 India’s per capita energy consumption was 347 kilograms of oil equivalent, as compared to a world
average of approximately 1,637 kilograms of oil equivalent. (Source: Petroleum Planning Analysis Cell
(‘‘PPAC’’) Ready Reckoner.)
Presently India is heavily dependent on imports to meet its crude oil requirements. As a result of marginal
declines in domestic oil production, coupled with an increase in domestic demand in recent years, crude
imports account for around 79% of total oil consumption (Source: KPMG-Oil and Gas Sector Overview in
50

India 2009). The domestic production of crude oil in India during 2008/09 were approximately 34 mmt
while crude oil imports were approximately 128 mmt. (Source: PPAC, Government of India.)
THE INDIAN POWER SECTOR
Overview
Prior to India’s independence, power generation and supply was mainly in the hands of the private sector
and largely restricted to urban areas. After independence, the Government of India felt the need to
broaden the power supply base in order to stimulate growth throughout the country. The Electricity
(Supply) Act, 1948 was the first step towards the modern power infrastructure in India. This act mandated
the creation of State SEBs. More recently, the Electricity Regulatory Commission Act, 1998, provided for
the creation of the CERC and the SERC. These commissions were given the power to determine energy
tariffs. However, the Electricity Act, 2003 resulted in the repeal of the previous regulatory framework,
including the Electricity (Supply) Act, 1948.
The Electricity Act, 2003 (the ‘‘Electricity Act’’) was the watershed act in the power sector reforms process.
It consolidated all previous policies, thereby streamlining the power sector. The Electricity Act seeks to
facilitate competition and contains provisions for changes in the regulation of generation, transmission and
distribution.
With the passage of the Electricity Act generation became fully delicensed. For thermal generation, as per
Section 7 of the Electricity Act —‘‘Any generating company may establish, operate and maintain a
generating station without obtaining a license under this Electricity Act if it complies with the technical
standards relating to connectivity with the grid’’.
Salient features of the Electricity Act for generation are:
• No license required for generation
• Competitive bidding for all procurement of power by long-term distribution licensees
• Captive generation and sale of power to third parties was set out
• Facilitating direct access to large retail consumers through open access in transmission and
distribution
After 2003, the National Tariff Policy in 2006 (‘‘NTP’’) replaced cost plus tariff for private projects with
tariff based on competitive bidding. Competitive bidding was adopted as the only mechanism for long term
power procurement by distribution licensees in a phased manner.
Organisation and Regulation of the Indian Power Sector

Overview
In India, control over the development of the power sector is shared between the central and the state
governments. The Electricity Act sets forth the central statutory framework for the regulation of electricity
in India. In addition a number of states, including Andhra Pradesh, Haryana, Karnataka, Orissa, Rajasthan
and Uttar Pradesh, supplement the federal framework with their own state-level legislation.
The Ministry of Power is the highest authority governing the power industry in India. The CEA is the
Government of India’s statutory body with responsibility for formulating the National Electricity Plan,
every five years in accordance with the National Electricity Policy. The CEA is the main technical advisor
of the Government of India and the regulatory commissions. The CEA is responsible for setting technical
standards and safety requirements for construction, operation and maintenance of electrical plants and
electrical lines and for providing technoeconomic clearances for hydroelectric projects.
The CERC, which was constituted under the Electricity Regulatory Commission Act, 1998, is an
independent statutory body with quasi-judicial powers. The main functions of the CERC are to regulate
the tariffs of power-generating companies, grant licenses for inter-state transmission and trading and
advise the Government of India in formulation of national electricity policy and tariff policy. 26 states have
constituted SERCs and 21 states have issued tariff orders to rationalise the tariffs.
51

The main responsibilities of each SERC are to determine the tariff for generation, supply, transmission
and wheeling of electricity, whole sale, bulk or retail sale within the State; to issue licenses for intra-State
transmission, distribution and trading; and to promote co-generation and generation of electricity from
renewable sources of energy. (Source: Ministry of Power.)
National Electricity Policy

In compliance with the Electricity Act the Government of India promulgated the National Electricity
Policy in February 2005. The National Electricity Policy aims at achieving the following objectives:
• access to electricity available for all households by 2010;
• demand to be fully met by 2012, with energy and peaking shortages to be overcome and adequate
spinning reserves to be available;
• supply of reliable power of specified standards in an efficient manner and at reasonable rates;
• per capita availability of electricity to be increased to over 1000 kWh by 2012;
• minimum lifeline consumption of one unit per household per day by year 2012;
• promotion of the commercial viability of electricity sector; and
• protection of consumer interests.
National Electricity Plan

Assessment of demand is an important pre-requisite for planning the expansion of generation capacity.
The Electricity Act requires the CEA to frame a National Electricity Plan every five years and revise this
plan from time to time in accordance with the National Electricity Policy. CEA released a National
Electricity Plan in April 2007.
The National Electricity Plan would be for a short-term framework of five years while giving a 15-year
perspective and would include:
• short-term and long-term demand forecast for different regions;
• suggested areas/locations for capacity additions in generation and transmission keeping in view the
economics of generation and transmission, losses in the system, load centre requirements, grid
stability, security of supply, quality of power including voltage profile and environmental
considerations, including rehabilitation and resettlement;
• integration of generating facilities with the transmission system and development of a national grid;
• promotion of different technologies available for efficient generation, transmission and distribution;
and
• fuel choices based on economy, energy security and environmental considerations.
Duration of India’s Plan Periods
Plan Period Years
VIth Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1980-81 to 1984-85

VIIth Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1985-86 to 1989-90
VIIIth Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1992-93 to 1996-97
IXth Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1997-98 to 2001-02
Xth Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2002-03 to 2006-07
XIth Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007-08 to 2011-12
Source: Planning Commission
Note: In the period between the VIth and VIIIth Plans, there were annual plans. No 5 Year Plan was presented on account of the
political situation.
52

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Planning Commission estimate of investment in the XIth Plan Period (INR billion)
Power
SEZ
Roads
Railways
Urban Infra
Irrigation
Ports
Pipeline
Airports
0 2000 4000 60006APR201023045473

8000
Emerging regulatory framework and implications for IIPs

Issue Overview Implications for IPPs
The New Coal Distribution Policy for the XII plan will introduce a point based system for coal linkage Plants with unit sizes smaller than 660 MW
allocation. Priority for coal linkage allocation will be assigned according to a points system, out of a (which are not viable for super-critical
Fuel – potential maximum of 100 points. Projects using supercritical technology will get 20 points. Of the technology) and plants with limited progress on
Coal Linkage remaining 80 points, as much as 50 will be based on the status of land acquisition, 20 for projects land acquisition may find it relatively more
located at pit heads and the balance for generation plants using sea water instead of fresh water. difficult to get coal linkage allocation.
8APR201008054833
The New Coal Distribution Policy for the XIIth Plan will give supercritical projects — plants with unit sizes Plants with unit sizes smaller than 660 MW
of 660 MW and above — a 20 point advantage in the allocation process for coal linkage. The preference (which are not viable for super-critical
Technology is aimed at helping the country launch a supercritical power programme along the lines of similar efforts technology) may find it relatively more difficult
in the US, Japan, Germany, South Korea and Russia. to get coal linkage allocation.
8APR201008054971
The Union Budget for the year 2010-11 proposes to introduce a competitive bidding process for If this implemented it may potentially ease fuel
Fuel – allocating coal blocks for captive mining to ensure greater transparency and increased participation from availability issues and enhance fuel security for
Captive coal both public and private sectors in production from these blocks. The Government proposes to take steps coal-fired power plants.
blocks to set up a ‘Coal Regulatory Authority’ to facilitate resolution of issues like pricing of coal and
benchmarking of standards of performance.
8APR201008055105
The National Tariff Policy mandates that all future requirements of power of distribution companies will be If implemented, this may expand the market for
Competitive met through competitive bidding. Currently, plants owned by Centre and State Government entities are private sector developers.
Bidding exempt from competitive bidding. However all plants by Central Government and State Government with
post 2011 commercial operation date post 2011 will also be subject to the competitive bidding guidelines.
8APR201008055235
• To facilitate integration of electricity markets, enhance open access and encourage competition, This method of pricing may have implications
CERC has introduced a draft regulation (which is yet to be implemented) on transmission pricing on the location choices for a power plant. If this
which proposes a new mechanism on sharing of inter-state transmission charges and losses. CERC regulation is implemented, generators are likely
has propose replacing the ‘Regional Postage Stamp’ method with the ‘Point of Connection (PoC)’ to prefer to set up power plants in those
system. regions where the charge for the generator
Transmission
• Under this system, a generator node would be required to pay a single charge based on its location node is lower.
Pricing in the Grid to gain access to a demand customer located anywhere in the country. Similarly, a
27APR201020411410 demand node would be required to pay a single charge to get access to any generator in the Grid.
In the same node, the charges for the consumer and the generator would be different.
• If this pricing method is adopted it is expected to result in more efficient pricing of transmission
charges and have an impact on decisions on location of power plants.
Source: KPMG
53

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STRUCTURE OF THE INDIAN POWER INDUSTRY
Overview
The following diagram provides an overview of the structure of the Indian power industry:
Generation Transmission Distribution Consumption
SEBs & EDs Discoms

SEBs SEBs / STUs licencees
agriculture
domestic
(32Wh) commercial
industrial and
CPSUs Powergrids Energy available and sold other end-users
IPPs & Private Private utilities Transformation,

Licensees
transmission and
distribution losses,
including uncounted energy
Captive open Captive consumer
Power Trading Companies

30MAR201014095025
Key to the diagram:
CPSUs: Central public-sector undertakings

Discoms: Distribution companies
EDs: Electricity departments
IPPs: Independent power producers
SEBs: State electricity boards
STUs: State transmission units
Generation
Overview
Generation generally refers to the bulk production of electric power for industrial, commercial, residential
and rural use. Currently, under Indian law, any generating company can establish, operate and maintain a
generating station if it complies with the technical standards relating to connectivity with a grid. Approvals
from the Central Government and state governments and the techno-economic clearance from the CEA
are no longer required except for hydroelectric projects. Generating companies are now permitted to sell
electricity to any licensees and, where permitted by the respective state regulatory commissions, to
consumers.
Installed Generation Capacity by Sector and Fuel

India’s grid-based power generation capacity more than doubled in the past two decades, increasing from
around 63 GW in 1990 to 149 GW in 2009. (Source: Ministry of Power.) Additional planned grid expansion
projects already add up to a total of 290 GW.
54

The following graph sets forth a summary of India’s energy generation capacity in March 2009 in terms of
fuel source and ownership:
Capacity break-up by sector: Total 148 GW Capacity break-up by fuel: Total 148 GW
as of March 2009 as of March 2009
Private Others
15% 13%
Centre
33%
Coal
52%
Hydro
25%
State
52%
Gas
10%
Public Sector
30MAR201016082426
Source: CEA Source: CEA

Installed Capacity as of December 2009 has increased to Installed Capacity as of December 2009 has increased to
156 GW 156 GW
Demand-Supply Overview
The Indian power sector has historically been characterised by supply shortages, a situation that has been
worsening over the past three decades, particularly since the enactment of the Electricity Act. In 2008/09,
India’s power demand exceeded supply by 86 TWh, or 12.48% (Source: A.T. Kearney). The following table
sets forth the historical power supply and demand trend in India from 1980 through 2009:
Historical Supply and Demand Trend in TWh

Demand CAGR
Supply CAGR
Power
BUs Pre-liberalization Early liberalization
reform
Demand
800 775
700 8.0% CAGR

(1)
Supply
600 689
489
500 6.1%CAGR
6.8% CAGR
400 462
300 8.1%CAGR
221
200
7.0%CAGR
204
101
100 7.9%CAGR
95
1979/80 1989/90 2002/03 2008/09

Electricity Act 5APR201019314295
Source: CEA
(1)
Only grid-based capacity in terms of GW (1 GW=1,000 MW). Source: Minnistry of Power.
55

Installed Capacity Requirement

India’s installed capacity requirement is estimated to increase from 180 GW in 2008-09 to 290 GW in
2015-16:
India’s installed capacity requirement (GW)
GW
79
110
32
290 Peak
Requirement
211
180
148
Base
Requirement
Installed Capacity - Shortfall - 2008-09 Installed Capacity Additional capacity Total Capacity Total Capacity
2008-09 Requirement
2008-09
required by 2016-17 Requirement by
2015-16 30MAR201016082866
Requirement by
2015-16
Source: Demand Projections by 17th EPS, CEA—Power Sector at a Glance December 2008,
Installed capacity requirement projection based on Infraline, KPMG Analysis
Installed Capacity 2008-09—CEA
Installed capacity as of 31.12.2009—CEA
Installed Capacity requirement is the capacity required to serve demand. The capacity required to serve a
certain demand is greater than the actual demand to account for plant availability and reserve
requirements. Historically, peak demand met as a percentage of installed capacity is 66% (average over the
last years)—which implies that only 66% of installed capacity was available to meet the peak demand.
(This is mainly due to plant availability and reserve requirements). Going forward, with more new capacity
being added, this ratio has been assumed to gradually improve to 70%. Therefore the installed capacity
required to meet the demand of 203 GW is 290 GW (Source: KPMG).
Planned Capacity Additions

The following table shows India’s historical and planned power generation capacity in GW:
Capacity addition by 2015-16 (GW)

500
450
188 Announced
400
Capacity
350
300
250 Capacity with visible signs of

105
449 progress
200
Capacity added between
150 8 2008-09 and Q3 2009-10
100
148 Installed capacity
50 148
as of 2008-09
0
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total* Break-up
(2015-16)
Installed Base Expected Announced 30MAR201016082569
Source: Installed capacity: CEA. Installed capacity as on 31.12.2009 has increased to 156 GW
Supply Addition. KPMG Analysis, Company Information, Press Notes, Infraline
Note: * Includes installed, expected and announced capacity
Announced capacity refers to planned capacity announced by central, state and private sector entities.
Total capacity additions announced up to the 2016 fiscal year is approximately 293 GW, but historically
actual capacity additions has lagged announced. Hence progress on key milestones (securing financing,
56

fuel supply agreement, land acquisition, water availability, clearances and equipment orders) is an
important indicator of likelihood of capacity addition.
Approximately 105 GW of capacity is showing signs of progress on some or all of the following milestones
as per publicly available information: a) secured committed financing b) land acquired / acquisition under
progress c) fuel supply agreement signed d) water availability ensured, other clearances and NOCs
obtained and e) order for equipment placed. If this 105 GW of capacity comes on-line it will take the total
installed base to 261 GW by 2015-16. The additional 188GW of announced capacity—for which there is no
publicly available information on progress—has been equally distributed in the chart above across the
seven years from 2009-10 to 2015-16 (around 27GW per year) as there is limited publicly available
information on their expected / scheduled commercial operation date (Source: KPMG).
Private-Sector Participation
The private sector is expected to play a much larger role in the provision of power in coming years than in
the past. Of the 113 GW with visible signs of progress from April 2009, 58 GW is expected to be added by
the private sector. 8 GW of the 113 GW has been commissioned by 31 December 2009 of which 3.5 GW
was added by the private sector. Based on these figures, the private sector will account for over 50% of the
installed MW capacity additions over the next five years. 20 GW of the announced private sector capacity
addition has shown progress on all key milestones outlined in the previous paragraph.
Break-up of capacity with visible progress, by sector (GW)

120
100
58
80 Private
Sector
60 113
40
55
Public
20 Sector
0
Total Expected Capacity by 2015-16 Sector30MAR201016273448
Source: Infraline, Company websites, press reports
Note: 113 GW includes 8 GW added in Q1, Q2 and Q3 of 2009-10
Source: KPMG
Fuel Resources
India is expected to rely on a variety of energy sources in meeting the growing demand for power, with
coal-fuelled thermal generation continuing to dominate.
Thermal Power
Thermal plants can be fuelled with coal, lignite, natural gas or liquid fuel. Based on the total installed
power generation capacity in India as of 28 February, 2010, coal-fuelled thermal plants accounted for
52.4% of the total available thermal capacity (Source: CEA)
India’s geological resources of coal stood at 267 billion tonnes as of 1 April 2009, with approximately 87%
of these consisting of non-coking grade primarily used for power generation. The geographical distribution
57

of these coal reserves was across the states of Jharkhand, Madhya Pradesh, Chhattisgarh, West Bengal,
Orissa and Andhra Pradesh. (Source: Government of India, Ministry of Coal.)
The use of imported coal with high calorific value and low ash content may be the preferred fuel choice for
coastal thermal power plants in the Indian states of Tamil Nadu, Gujarat, Maharashtra, Karnataka and
Andhra Pradesh, depending on how competitively imported coal prices compare to domestic coal prices.
India’s geological reserves of lignite, or brown coal, are approximately 38.3 billion tonnes, according to the
Working Group Report of the 11th Planning Commission. These reserves are found primarily in the states
of Tamil Nadu, Rajasthan and Gujarat. Since lignite’s low energy density makes it inefficient to transport
over long distances, it is typically used for power generation at pithead generating stations, or stations
located near these reserves.
Natural gas is increasingly used in combined-cycle gas turbine power stations due to the high efficiencies
resulting from the use of these advanced gas turbines.
Hydroelectric Power
Hydroelectric power generation is based on the sustainable development of river basins. The hydroelectric
potential of a river basin forms an integral part of the electric power supply industry.
As per CEA, India has hydroelectric power potential of about 148 GW. However, only 25% of this
potential (36 GW in total) has been developed and only about 10–15 GW of this is under construction.
Overall, about 70% of the exploitable power potential is yet to be developed.
Wind Power
India’s wind power development programme was initiated in 1983/84. India now ranks fourth in the world
after Germany, the United States and Spain in wind power generation. According to the Ministry of Non-
Conventional Energy Sources, the supply of wind power that can be exploited technically and economically
in India is about 13,000 MW, while India’s total wind power generation potential is around 45,000 MW.
According to the Ministry of New and Renewable Energy’s press release dated 13 July 2009, India’s
current wind power installed capacity is 10,242 MW, with the majority of this capacity being achieved
through private investment. The unit capacity of wind power generators presently range from 225 kW to
2 MW.
Power Generation by Customer Segment

Captive Power Generation
Captive power refers to power generated by a project set up for industrial users. According to the Monthly
Review of the Power Sector, June 2009 (CEA), captive power capacity at 19,509.5 MW accounted for
11.5% of the total installed capacity in India. Dependence on captive power has been increasing due to the
continuing shortage of power and India’s economic growth. The Electricity Act provided additional
incentives to captive power generation companies to grow by exempting them from licensing requirements.
This has resulted in an increase in captive power capacity. Reliability of power supply and economies of
scale are other factors driving industrial users to develop captive generation plants.
Merchant Power Generation

Merchant power plants (‘‘MPPs’’) generate electricity for sale in the open wholesale market. MPPs may
not have long-term PPAs and are generally built and owned by private developers at their own cost. The
rise of MPPs has been one of the results of the restructuring of the electricity industry.
MPPs can generally be categorised into different classes based on the amount of time that the facility is
operating and the variable costs to produce electricity. A facility’s variable cost to produce electricity, in
turn, determines the order in which it is used to meet fluctuations in electricity demand. Base-load facilities
are those that typically have low variable costs and provide power at all times. Base-load facilities are used
to satisfy the base level of demand for power, or ‘‘load,’’ that is not dependent upon time of day or
weather. Typically, base-load units are selected for areas characterised by relatively high load factors or
stable energy use. Peaking facilities have the highest variable cost to generate electricity and typically are
58

used only during periods of high demand for power. Typically, peaking units are selected for areas of
relatively low-load factors or high volatility in load demand. Intermediate facilities have cost and usage
characteristics in-between those of base-load and peaking facilities.
The availability goals of all units are driven by ‘‘in-market’’ availability, defined as availability during
periods when power prices are significantly above the variable cost of producing power at the facility.
In order to facilitate the development of the electricity market, the Indian Ministry of Power has issued
guidelines for the development of MPPs as well as regarding which coal linkage/captive coal block
allotments would be available for MPPs. Under these guidelines, MPPs up to a capacity of about 1000 MW
would be provided coal linkage and captive coal blocks. These may also be provided to MPPs with
capacities in the range of 500 MW to 1000 MW.
The Working Group Report of the 11th Planning Commission estimates that approximately 10,000 MW to
12,000 MW of capacity will be developed through this MPP initiative. The National Electricity Plan
anticipates that capacity additions from this initiative will further contribute to India’s economic
development and to more reliable sources of power and greater spinning reserves and most importantly,
would promote increased competition in the electricity market.
Mega Power Projects

Mega power projects are large-scale capacity expansion projects incentivised by the state through a variety
of means. One of the following conditions must be fulfilled by a proposed power project to be granted
mega power project status:
• a thermal power plant with a capacity of 1000 MW or more; or
• a thermal power plant with a capacity of 700 MW or more located in the states of Jammu and
Kashmir, Sikkim, Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura;
or
• a hydro power plant with a capacity of 500 MW or more; or
• a hydro power plant with a capacity of 350 MW or more, located in the states of Jammu and Kashmir,
Sikkim, Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura; or
• a brownfield (expansion)—in the brownfield phase of an existing mega project, the size of the
expansion unit should not be less than that provided in the earlier phase of the project which has been
granted a mega power project certificate.
Fiscal concessions and benefits available to mega power project’s include:
• No customs duty: The import of capital equipment is free of any customs duties for these projects.
• Deemed export benefits: Deemed export benefits are available to domestic bidders for projects in either
the public or private sector upon meeting certain requirements.
• Pre-conditions for availing the benefits: Imported Goods required for setting up of any mega power
project, qualify for the above fiscal benefits after the project is certified provided that:
• the power purchasing states have granted to the Indian regulatory commissions full powers to fix
tariffs; and
• the power purchasing state undertakes, in principle, to privatise distribution in all cities in that
state that have a population of more than one million within a period to be fixed by the Indian
Ministry of Power.
• Income tax benefits: An income-tax holiday is also available under Section 80-IA of the Income Tax Act
1961.
Ultra-Mega Power Projects

UMPPs, which were introduced in 2006, are large-sized projects, typically involving a capacity of 4000 MW
each and requiring an estimated investment of about Rs. 160,000 million (US$3,427.6 million). These
projects are intended to meet the demand for power of a number of states, as well as the distribution
59

companies located in those states. (Source: KPMG) These projects are being developed on a ‘‘Build, Own,
and Operate’’ basis. As the promotion of competition is one of the key objectives of the Electricity Act and
as a result of the legal provisions regarding procurement of electricity by distribution companies, the
identification of project developers for these projects is conducted on the basis of tariff-based competitive
bidding. Guidelines for the determination of the tariff for procurement of power by distribution licensees
were promulgated in January 2005 under the Electricity Act. The Power Finance Corporation Limited
(‘‘Power Finance Corporation’’), a PSU under the Indian Ministry of Power, has been identified as the nodal
agency for this initiative.
Trading
Historically, the main suppliers and consumers of bulk power in India have been the various government-
controlled power generation and distribution companies, which typically contracted power on a long-term
basis by way of PPAs with regulated tariffs. However, to encourage the entry of mega power plants and
private sector investment in the power sector, the Electricity Act recognised power trading as an activity
distinct from generation, transmission and distribution and has facilitated the development of a trading
market for electricity in India by providing for open access to transmission networks for normative charges.
The Electricity Act classifies trading in electricity as a licensed activity. Trading has been defined as the
purchase of electricity for resale. Resale may involve the wholesale supply of electricity (i.e. purchasing
power from power producers and selling to the distribution licensees) or retail supply (i.e. purchasing
power from power producers or distribution licensees for sale to end consumers).
The Indian Energy Exchange (‘‘IEX’’) is India’s first national automated and online electricity trading
platform. IEX is a demutualised exchange that facilitates efficient price discovery and price risk
management in the power trading market. IEX seeks to accelerate the modernisation of electricity trading
in India by enabling trading through an online platform. It offers a broader choice to generators and
distribution licensees for the sale and purchase of power by facilitating trade in smaller quantities. IEX
also enables participants to precisely adjust their portfolios as a function of consumption or generation.
(Source: www.iexindia.com.) On 9 June 2008, IEX received CERC approval to commence operations.
Power Exchange India Limited (‘‘PXIL’’) is a fully electronic, nation-wide exchange for trading of
electricity. It has been promoted by two of India’s leading Exchanges, the National Stock Exchange and the
National Commodities & Derivatives Exchange Ltd. PXIL aims to provide transparent and fair price
discovery mechanisms which can signal massive potential investments into the Indian Power Sector. PXIL
received regulatory approval from CERC on 30 September 2008 to begin operations and successfully
began its operations on 22 October 2008. (Source: http://www.powerexindia.com/index.html.)
With the aid of the reforms, the volume of power traded, as well as its traded price, has grown rapidly over
the last few years. The following graphic shows the increasing volume of power traded for the periods
indicated:
Volume of Electricity Traded by the Trading Licensees in GWh

25,000
20,965
20,000
15,023
14,188
15,000
11,846
11,029
10,000
5,000
0
2003-04 2004-05 2005-06 2006-07 30MAR201016083308
2007-08
Source: http:www.corcind.gov.in.
60

MERRILL CORPORATION JDICKSO//30-APR-10 12:41 DISK116:[10ZAU1.10ZAU70801]BP70801A.;55
Historically, prices in the short term merchant market appear to be linked to the demand-supply situation
and the corresponding deficit or surplus. In order to arrive at price ranges for short term power, it is
necessary to understand the supply-demand conditions which shall prevail in India over the forecast period
(2011-14). The approach included:
• Supply addition estimates for the period 2010-11 to 2013-14, with various scenarios for supply addition
• Estimation of installed capacity requirement to meet demand from 2010-11 to 2013-14
• Estimation of short-term power price ranges for the period 2010-11 to 2013-14.
Deficit (%) vs Short-term price (INR / unit)

20% 9
18% 8
Average trader price (Rs / Unit)

16% 7
14%
6
12%
Deficit (%)
5
10%
4
8%
3
6%
2
4%
2% 1
0% 0
Apr-07
Jun-07
Aug-07
Oct-07
Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Deficit (%) Average trader price (Rs / Unit) 22APR201007372813

Source: KPMG
Tariffs
Tariffs for independent power products are governed by PPAs between power generation companies and
utilities. Tariffs for state-sector generators are regulated by the SERCs. The Electricity Act empowers the
CERC to set tariffs for generating companies owned or controlled by the Government of India as well as
for other entities with interstate generation and transmission operations.
The NTP, enacted by the Government of India in January 2006 and amended in March 2008, has facilitated
reforms of the power sector by providing guidelines for multi-year tariffs, the rate of return for generation
and transmission projects, tariff modalities for utilities, subsidies to consumers and cross-subsidy
calculations. However, these guidelines are not applicable if the tariff is fixed through a transparent
bidding process.
Transmission
Transmission infrastructure
The transmission network in the country is divided into five regional grids—Northern, Western, Southern,
Eastern and North-Eastern The key objective of the national grid development is to enable transfer of
power from power surplus regions to those regions with a power deficit. With the Electricity Act 2003
mandating open access to allow for trading of power, the demand for transfer of power has increased.
PGCIL is responsible for the construction and operations and maintenance of the interstate transmission
system and the operation of regional power grids. PGCIL is working towards a national Indian grid, and its
activities and short-term objectives are revised every 5 years as part of the National Electricity Plan.
Phase I of the national grid was completed in 2002 (IXth Plan) which created an inter-regional capacity of
5,050 MW. Phase II of the national grid was completed in 2007 (Xth Plan). At the inter-state level, PGCIL
and DVC have made a combined investment of an estimated Rs. 186 billion (US$3,984.6) during the Xth
Plan period. At the intrastate level, another Rs. 250 billion (US$5,355.6) was invested by State
61

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: BP70801A.;55
Transmission Utilities during the same period. The transmission network in India has grown from 52,034
ckt km at the end of the VIth Plan period to 198,410 ckt km at the end of the Xth Plan period.
350000 ~4X
293,3
300000
250000
198,4
200000 152,2
117,3
150000
81,08
100000 52,03
50000
0
VI Plan VII Plan VIII Plan IX Plan X Plan XI Plan -
target
765 kV HVDC 400 kV 220 kV 30MAR201016083159
The XIth plan
The XIth Plan envisages an addition of 23,600 MW and further 21,000 MW is estimated as being added by
2014-15. During the XIth Plan period, the total fund requirement for development of transmission
infrastructure is estimated to be in the region of Rs. 1,400 billion (US$30 billion). Of the total expenditure
requirement, an estimated Rs. 750 billion (US$16.1 billion) is required for creation of inter-state
transmission capacity. Rs. 195 billion (US$4.2 billion) of this Rs. 750 billion requirement is expected to be
contributed by the private sector.
60000
50000
40000
30000
20000
10000
0
X Plan XI Plan 2014-15
ER-SR ER-NR ER-WR ER-NER WR-SR 30MAR201016083451

NER / ER-NR / WR
62

Key issues in the Indian Power Sector

Issue Overview
Due to the inability of CIL to meet the coal requirements for the planned power projects, India will
Fual
require — 140 MT of imported coal by 2012 to meet its coal requirements. The power sector, being the
Availability largest consumer of coal will be affected significantly by fuel non-availability.
8APR201008111475
There are two issue with equipment:

Equipment • Shortage of domestic equipment with domestic players unable to meet targets
• Technical and regulatory uncertainty around imported equipment
8APR201008111618
Land Acquisition poses an increasingly significant challenge in the Indian Power sector. Power plants
and utilities may face constraints and delays regarding the availability of land and obtaining the
Land requisite environmental and other clearances for projects.
In case a captive coal block is involved, apart from clearances, there are issues around damage to
forest cover, security issues etc.
8APR201008111753
A number of clearances are required before the developer can start construction work on the project
Clearances and/or the mine. These get further hampered due to R&R issues.
8APR201008111896
Shortage in manpower will impact timely execution on projects, especially given that a large number of
new entrants in power generation are players with unrelated existing businesses (e.g. Athena is financial
Man Power
services firm planning to enter the generation sector).
Shortage The working group report on infrastructure also estimates shortages in manpower requirement in power
8APR201008112027 generation to the tune of 10,000 personnel across levels.
Source: KPMG.
EXPLORATION AND PRODUCTION
Domestic Oil and Natural Gas Production

While domestic production of crude oil and natural gas has grown in India over the past decade, this
growth has not kept pace with growth in domestic consumption. In 2009, more than 79% of India’s crude
oil requirements were met though imports. The following table sets forth the total volume of crude oil
processed by domestic refineries, or throughput, the total domestic production of crude oil, and the
resulting deficit required to be met through imports of crude oil during the ten-year period ended
31 March 2009:
Total refinery Total domestic

crude oil production of crude oil
Year ended 31 March throughput (with condensate) Crude oil deficit
(million barrels) (million barrels) (%) (million barrels) (%)
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 644.7 239.6 37% 405.1 63%
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . 775.8 243.2 31% 532.6 69%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . 804.6 240.2 30% 564.3 70%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . 844.2 247.8 29% 596.4 71%
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . 913.5 250.3 27% 663.2 73%
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . 955.5 254.9 27% 700.6 73%
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . 975.8 241.4 25% 734.3 75%
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1099.5 254.9 23% 844.6 77%
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1170.8 255.9 22% 914.9 78%
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1205.8 251.3 21% 954.5 79%
Source: MoPNG, converted using a conversion factor of 1 mmt = 7.5 mmbbls.
With the widening gap between demand for and production of crude oil in recent years, India is
increasingly becoming a significant net importer of crude oil.
63

The following table sets forth the total domestic production of natural gas during the 13-year period ended
31 March 2008, all of which was consumed domestically.
Total domestic
production of
Year ended 31 March natural gas
(billion cubic
meters)
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.6
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.3
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.4
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.4
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.5
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.5
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.7
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.4
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.0
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.8
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.2
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.7
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.3
Source: MoPNG-Basic Statistics of Indian Petroleum and Natural Gas
With the commissioning of the Dahej Petronet LNG regasification terminal, LNG imports into India
commenced in early 2004. (Source: Petronet LNG)
Exploration and Development Activities

Beginning in 1997, the Government of India revised its procedures for awarding exploration licenses,
through the introduction of the New Exploration Licensing Policy (‘‘NELP’’). This program has led to
significantly higher private-sector involvement in domestic hydrocarbon exploration in recent years and has
increased the exploration opportunities in India. Recently the Government of India announced the Eighth
Round of NELP in April 2009, with 70 exploration blocks offered covering an area of 163,535 km2.
The Petroleum and Natural Gas Rules, 1959 (‘‘P&NG Rules’’) provide the framework for the granting of
petroleum exploration licenses (‘‘PELs’’) and petroleum mining licenses (‘‘PMLs’’) in India. The P&NG
Rules prohibit the prospecting or exploitation of any oil or gas unless a licence or lease has been granted
thereunder. A PML entitles the lessee to an exclusive right to extract oil and gas from the relevant contract
area. PELs and PMLs are granted by the MoPNG for offshore areas and by the relevant state
governments, with the prior approval of the Government of India, for onshore areas. PELs or PMLs are
required to contain the terms and conditions specified in the P&NG Rules. However, PELs and PMLs may
also contain the terms and conditions agreed to between the licensee or the lessee and the Government of
India. The term of a PEL is for a period of four years which is renewable twice for a period of one year at
each instance. The term of a PML is generally 20 years, and the area covered by it is normally 250 square
kilometres. Further, upon grant of the PML, the lessee has to be paid the higher of either the prescribed
rental or the royalty with respect to the relevant lease. While the rental is stipulated to be payable based on
the area of land leased, the royalty is the amount that is generally payable as a percentage of the value at
the well-head of the natural gas obtained by the lessee. The Government of India has the right to order a
royalty to be paid in terms of natural gas obtained instead of money. Under the Oilfields (Regulation and
Development) Act, 1948, the levy of a royalty of up to 20% of the sale price of the mineral oil (which
includes natural gas) is permitted. Further, in the event of a national emergency in relation to petroleum,
the Government of India has the right of pre-emption in relation to the natural gas extracted from the
leased area at the fair market price prevailing at the time of the pre-emption.
Further, the licensee or lessee is under an obligation to provide to the Government of India or its
designated agency all data obtained or that will be obtained as a result of petroleum operations under the
licence or lease. Such data shall be the property of the Government of India, provided that the licensee or
lessee shall have the right to make use of such data, free of cost, for the purposes of petroleum operations
under the licence or lease. Additionally, under the P&NG Rules, the Government of India may, in the
64

interest of conserving mineral oils, restrict the amount of petroleum or natural gas that is produced by a
lessee in a particular field.
After a decade of private-sector participation, ONGC and Oil India Limited (‘‘OIL’’) account for 86% and
75% of total domestic oil and gas production, respectively. (Source: MoPNG, Government of India.)
While total domestic production in India has been relatively flat in the past few years, a number of recent
discoveries have been made in various exploration blocks in India. The potential for future discoveries
could be high in light of the Indian Directorate General of Hydrocarbons’ assessment that significant
portions of the Indian sedimentary basins are either ‘‘unexplored’’ or ‘‘poorly explored’’.
Given the substantial gap between supply and demand in the energy sector in India and the limited amount
of crude oil and natural gas reserves globally, the Government of India has increasingly focused its
attention on alternate hydrocarbon extraction technologies such as underground coal gasification and gas
hydrates. CSG is natural gas derived from coal that is extracted by depressurisation. The Government of
India had awarded 26 CSG blocks as of March 2009 and is expected to continue to encourage domestic
and foreign companies to pursue CSG opportunities in India in the future. Under the CBM IV Licensing
Round, 26 bids were received for eight of the ten blocks on offer. Out of these eight blocks, seven blocks
received multiple bids. A total of 19 companies, comprising three foreign companies and 16 domestic
companies, participated in this round. (Source: KPMG Oil and Gas Sector Overview in India 2009.)
Crude Oil and Natural Gas Transportation

Prior to 1987, gas prices were fixed by ONGC and OIL. The price has been fixed by the Government of
India since 1987. The price of Administered Price Mechanism (‘‘APM’’) gas of ONGC and OIL was last
revised in 2005.
The Gas Allocation Policy was enacted in 2008 by the Ministry of Petroleum and Natural Gas, Government
of India, to ensure that natural gas is utilised in the most optimal manner. Under the Gas Allocation
Policy, priority among allocation is provided to (1) existing fertilizer and urea plants (2) LPG-based plants
as LPG is a clean fuel (3) existing gas-based power plants (4) other gas-based plants (5) replacement of
liquid fuel by natural gas. The policy further elaborates that once the gas demand from existing units has
been satisfied, LPG gas should be utilised in the following order of priority for greenfield expansion:
fertiliser plants, petrochemical plants, city gas distribution, refineries and power plants.
Crude oil produced onshore in India is transported to refineries primarily through trunk pipelines, with a
small percentage transported by tanker. IOCL owns approximately 79% of the approximately 5,559
kilometres of crude oil pipeline in India, with the balance owned by OIL. (Source: Ministry of Petroleum
and Natural Gas, Government of India.)
India’s existing domestic natural gas transmission infrastructure can support daily production and
transportation of approximately 100 million m3 of natural gas. Natural gas is transported to end users
through producer-owned pipelines or through a transporter. (Source: Methane to Markets Partnership,
India Sector Overview.) The Gas Authority of India Limited controls the distribution for more than 79%
of the gas transmission in India through its ownership of approximately 7,001 kilometres of pipelines.
(Source: The MoPNG, Government of India.)
REFINING IN INDIA
Overview
Unless indicated otherwise, the market and competitive data in this section has been extracted without
material adjustment from a report prepared by KBC.
The Government of India created the Petroleum and Natural Gas Regulatory Board (‘‘PNGRB’’) effective
1 October 2007, to provide a regulatory mechanism in the petroleum sector. The PNGRB regulates the
refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum
products and natural gas. The PNGRB is mandated to carry out a number of policy objectives, including
the protection of consumers’ interests, the authorisation of common carriers and the establishment of rates
for pipelines, ensuring the adequate availability of petroleum products, the monitoring of prices and
65

distribution of petroleum products and the establishment of technical standards for the production and
distribution of petroleum products.
According to PPAC, the Indian crude oil refining sector consists of ten companies operating a total of 20
refineries, with a combined annual installed throughput capacity, as of 31 March 2009, of approximately
178 mmtpa (following the commissioning of Reliance Petroleum Limited’s new refinery with an annual
installed capacity of 29.0 mmt on 15 March 2009). With the exception of the Reliance refineries and the
Company’s Vadinar refinery, all of India’s domestic refiners are public-sector enterprises.
The three Indian government-owned national oil companies, IOCL, BPCL and HPCL, continue to
dominate the refined petroleum product retail sector in India, accounting for approximately 92% of total
retail petrol stations as of 1 April 2009. (Source: PPAC and MoPNG.) Domestic private-sector companies
account for the majority of the remainder of the sector.
Auto Fuel Policy and the Quality of Fuel Policy

MoPNG framed the Auto Fuel Policy in 2003 with the twin objectives of addressing growing environmental
concerns and providing assurance that the oil and automobile industries would enact detailed plans and
undertake government mandates to produce higher quality fuels. These objectives were to be achieved
through the improvement in quality of liquid auto fuels throughout the country in line with vehicular
emission standards, the increased use of alternative fuels for vehicles, the use of CNG and LPG in cities
affected by high levels of vehicular pollution to enable vehicle owners to meet higher emission standards in
those cities, and the improvement of technology used to produce ethanol and bio-fuels.
MoPNG has developed a roadmap for the implementation of the Auto Fuel Policy by mandating vehicular
emission standards and corresponding fuel specifications. The ministry has not defined specific vehicle
technologies to be used or types of fuel and has also made allowances for the use of alternative fuels with
the appropriate conversion kits.
The following table sets forth the mandated Indian fuel standards (as well as their European equivalents)
and their targeted implementation dates:
Standard Reference Date Region
India 2000 . . . . . . . . . . . . . . . . . . . . . . . Euro 1 2000 Nationwide

Bharat Stage II . . . . . . . . . . . . . . . . . . . . Euro 2 2001 NCR*, Mumbai, Kolkata, Chennai
April 2003 NCR*, 10 Cities †
April 2005 Nationwide
Bharat Stage III . . . . . . . . . . . . . . . . . . . Euro 3 April 2005 NCR*, 10 Cities †
April 2010 Nationwide
Bharat Stage IV . . . . . . . . . . . . . . . . . . . Euro 4 April 2010 NCR*, 10 Cities †
* National Capital Region (Delhi)
† Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, Pune, Surat, Kanpur and Agra
Source: Emission Controls Manufacturers Association
Refined products
Oil refining is primarily a margin-based business in which a refiner’s goal is to optimize the refining
processes and yields of all products in relation to feedstocks used. In a simple refinery, a greater
percentage of the end products are less valuable heavy products such as fuel oil, long residue and bitumen.
Complex refineries generally produce a lower percentage of these heavy products and produce a higher
percentage of light products such as LPG, naphtha and gasoline and middle distillates such as kerosene
and diesel.
66

The major refined petroleum products produced by refineries are:

• LPG: Liquefied petroleum gases, consisting primarily of propane and butane, are produced for use as
a premium fuel and as an intermediate material in the manufacturing of petrochemicals. LPG is also
now permitted as auto fuel.
• Naphtha: Principally used as a feedstock by the petrochemicals industry for producing basic building
blocks such as ethylene, propylene, butadiene, benzene, toluene and xylenes, which in turn are used
for the production of plastics, synthetic fibres, synthetic rubbers and other products. Naphtha is also
commonly used as fuel for fertilizer units and power plants.
• Motor spirits (Gasoline/Petrol): Various gasoline blendstocks are blended to achieve specifications for
regular and premium grades in both summer and winter gasoline formulations, wherever applicable.
Additives are often used to enhance performance and provide protection against oxidation and
corrosion. Gasoline/petrol is most commonly used as fuel for automobiles.
• Middle distillates: Middle distillates are kerosene, aviation fuel, diesel fuel and heating oil.
• Fuel oils: Many marine vessels, power plants, commercial buildings and industrial facilities use fuel oils,
or combinations of fuel oils and distillate fuels. Fuel oils are also used as fuel for fertilizer plants and
industrial units.
• Bitumen: Residual product of crude oil vacuum distillation, which is used primarily for asphalt coating
of roads and roofing materials.
• Niche petroleum products: Various refined petroleum products produced in relatively small quantities
such as petroleum coke, base oils, Methyl Tertiary Butyl Ether, Ethyl Tertiary Butyl Ether, Tertiary
Amyl Methyl Ether, Alkylate, Iso Octane and other refined petroleum products. These products are
commonly used as blending components for transportation fuels or for lubricants. Petroleum coke is a
solid residual by-product of the delayed coking process. Over 75% of petroleum coke produced is fuel
grade and has about 15-25% higher heating value than coal.
The total value of the refined products less the cost of crude oil and other feedstock is commonly referred
to as the gross refining margin. The GRMs of complex refineries are generally higher than those of simple
refineries because complex refineries are able to generate a higher yield of light and middle distillates from
lower cost, heavier and sourer crude oils. In addition, complex refineries have secondary processing
facilities available to convert lower valued, heavy products into the higher value, light products.
The following table sets forth domestic consumption data for the major categories of refined petroleum
products, as a percentage of total Indian domestic consumption of refined petroleum products, for the
years indicated.
Year ended 31 March
Refined petroleum product category 2001 2002 2003 2004 2005 2006 2007 2008 2009
Liquefied petroleum gas . . . . . . . . . . . . . . . . 7% 8% 8% 9% 9% 9% 9% 9% 9%

Naphtha/natural gas liquids . . . . . . . . . . . . . . 12% 12% 11% 11% 13% 11% 11% 10% 10%
Motor spirits (gasoline/petrol) . . . . . . . . . . . . 7% 7% 7% 7% 7% 8% 8% 8% 8%
Kerosene . . . . . . . . . . . . . . . . . . . . . . . . . . . 11% 10% 10% 9% 8% 8% 8% 7% 7%
High-speed diesel (HSD) . . . . . . . . . . . . . . . 38% 36% 35% 34% 36% 35% 36% 37% 39%
Fuel oil/low-sulphur heavy stock . . . . . . . . . . 13% 13% 12% 12% 12% 11% 10% 10% 9%
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13% 14% 16% 17% 15% 17% 18% 18% 17%
Source: PPAC.
Others include ATF (Aviation Turbine Fuel), LDO (Light Diesel Oil), Bitumen, Petcoke and Lubes.
As the table shows, automotive fuels, including diesel (in particular HSD) and motor spirits, account for a
significant portion of refined petroleum products sold domestically; approximately 47% of the total sales of
refined petroleum in India for the year ended 31 March 2009.
67

Indian Domestic Pricing Methodology and Regulation

The Indian retail sales and marketing sector, has been significantly affected by price controls, subsidies,
mandated distribution arrangements, and other government regulation. Prices for crude oil, natural gas
and various refined and processed products have historically been subject to complex price and subsidy
arrangements. Although domestic crude oil prices were largely deregulated as of April 2002, retail fuel
stations owned or controlled by the Government of India (‘‘PSU Retail Outlets’’), which comprise
approximately 92% of the retail fuel stations in India, currently price their petroleum products below cost.
As a result, private-sector oil companies, although they are free to set their own prices, have to either
similarly sell their petroleum products below cost for a loss, or charge higher, non-competitive prices.
The pricing of products for sale on the Indian domestic market is linked to international prices through a
formula. The trade parity price for MS and HSD is determined by taking 80% of the import parity price
(‘‘IPP’’) and 20% of the export parity price (‘‘EPP’’). Prices for products other than MS and HSD are
equal to 100% of the IPP. The pricing cycle varies for different products. For MS, HSD, FO, aviation
turbine fuel (‘‘ATF’’) and bitumen, prices are determined on a fortnightly basis beginning on the 1st and
16th of every month. For SKO and LPG pricing occurs on a monthly basis beginning the first of every
month. Sulphur is generally priced twice in a month upon receipt of sulphur reports, but this can vary
depending on market conditions.
Domestic sales in India can include commercial sales and retail sales. Domestic commercial sales consist of
the bulk sale of refined petroleum products to domestic industrial customers as well as to the government-
controlled oil marketing companies whose marketing requirements are greater than their own refinery
supplies. Motor spirit and HSD products sold to the government-controlled oil marketing companies are
priced at 80% of the prevailing IPP plus 20% of the prevailing EPP. ATF and SKO products sold are priced
at 100% of the prevailing IPP. Domestic retail sales consist of the sale of refined petroleum products to
retail consumers through domestic retail fuel stations.
The pricing basis for the regulated market provides a margin advantage to Essar Energy and other Indian
refiners compared to competitors in countries with non-regulated markets. The graph below shows the
notional Indian based margin compared to a Singapore based margin for Dubai crude with a standard
cracking refinery yield (FCC/Visbreaker based configuration). The Indian margin is about $2/bbl above
Singapore in the early years.
Forecast Cracking Margins (Dubai Crude)
30MAR201015202649
Source: KBC
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Demand for refined products

Following the recent turmoil on global commodities markets, expectations for growth in global oil demand
have been tempered by an exceptional period of demand destruction (2008-9) that has seen world oil
demand drop back from its 2007 peak—a level of global oil demand that is not expected again until 2011 at
the earliest. Global demand recovery in the aftermath of the recession is expected to be led by the
Asia-Pacific region and the Middle East, with China and India leading the way as their economies continue
to grow strongly over the coming decade. Demand in the major markets in Europe and the United States is
expected to begin a slow decline, driven by slow economic recovery, rising fleet fuel economy and a general
push to lower GHG emissions. Increasing mandates for biofuel blending over the next decade will limit the
recovery of conventional oil demand, as much of the marginal growth in refined product demand will be
met by bioethanol and biodiesel.
Developments in Global Oil Demand, 2000-2030
30MAR201015203637
Source: KBC
In absolute terms, global oil demand is expected to rise by 12 million bbl/d over the next decade from
85.8 million bbl/d in 2010 to 97.8 million bbl/d by 2020. The rising demand prospects in Asia, led by China
and India, see the locus of refined products markets shifting further east. While in the west, transport fuel
demand is expected to be flat and fuel oil demand is expected to fall, Asian markets are expected to lead
the global recovery, with 60% of oil demand growth over the next decade coming from Asia and much of
the rest of it coming from the Middle East and the developing south. The trend intensifies over the decade
from 2020 to 2030. Global demand growth will slow to only 6.4 million bbl/d, but more than 72% of this
growth will be realised in the Asia-Pacific region. By contrast, both North American and European
demand is expected to remain static for the next 15 years, after which it enters into a period of slow
decline.
Recent strength in Indian product demand has given strong signals for robust growth in the near-term,
although it is anticipated that the development of India’s gas resources may eventually have a partial
substitution impact on certain refined products, such as naphtha (fertilizer feed stock), furnace oil and low
sulphur heavy stock as fuels burnt for heat generation in the manufacturing industry.
It is clear that India is set to be amongst the top growth regions of the world. Moreover, it is necessary to
account for other factors that will serve to depress long term demand growth:
• rising international oil prices;
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• the potential for eventual local prices to rise in future as subsidies are reduced or eliminated; and
• longer term pressures to curb energy/oil use in response to environmental concerns.
Indian refined product demand, -’000 bbl/d

2000 2005 2008 2009 2010 2011 2012 2015 2020 2025 2030
LPG . . . . . . . . . . . . . . 231 337 406 416 432 450 468 526 625 690 725
Naphtha . . . . . . . . . . . 282 296 336 352 352 366 380 426 498 547 573
Gasoline . . . . . . . . . . . 155 202 260 299 332 363 394 478 677 937 1333
Kerosene . . . . . . . . . . 288 270 303 301 316 329 344 395 477 488 507
Gas/Diesel . . . . . . . . . 860 823 1050 1112 1184 1246 1314 1553 1846 2101 2376
Fuel Oil . . . . . . . . . . . 296 340 390 404 402 401 400 398 328 225 183
Others . . . . . . . . . . . . 214 316 362 379 395 412 429 487 576 650 712
Total . . . . . . . . . . . . . 2326 2585 3107 3264 3414 3568 3729 4262 5025 5639 6410
Source: KBC
The year ahead will see India progressing its next level of fuel quality improvements, though there are
some concerns whether domestic PSU refiners will be capable of meeting their share of the full volumetric
requirement which could force India to import some clean product in the near term. Under the country’s
Auto Fuel Policy, major cities will move from BS-III to BS-IV standard (similar to the Euro IV) while the
rest of the country will move from BS-II standards to BS-III by October 2010.
Supply of refined products

After three years which some called the ‘‘golden age’’ of refining, global refiners have been hit hard by the
current global recession. The collapse in global products demand has met a wave of new capacity additions
led by the massive new Reliance Petroleum SEZ refinery at Jamnagar, which brought 580,000 bbl/d of
new capacity to the global market. The combination of declining demand and the arrival of nearly
2 million bbl/d of complex new refinery capacity led to a substantial oversupply of refining capacity which
has, in turn, led to low utilisation rates and the collapse of refining margins over the course of the past
12 months.
The chart below shows how the slump in demand (on the green line), and the corresponding slump in net
refined product demand (on the black line) took a downward turn after a record year in 2007. It is
noteworthy that the additions of substantial volumes of biofuels and gas liquids in the recent past and
near future cause the gap between total oil demand and net refinery output to widen from around
7 million bbl/d in 2005 to around 11 million bbl/d in 2015. In effect, the addition of biofuels to the global
fuel mix is bearish for refiners. The outlook assumes that both the US and India will back away from their
aggressive 20% biofuels mandates in 2022 and 2017 respectively, while Europe will probably achieve its less
aggressive target of 10% by 2020.
Global refining utilisation (in blue) went from a peak of just under 90% in 2007 to present-day levels in the
low-80% range. Firm capacity additions, shown on the red line, keep pace with demand recovery,
indicating that net refining utilisation is forecast to remain in the low-80% range until about 2015 on the
basis of firm refining projects.
More speculative (but still plausible) refining capacity additions are shown on the dotted red line. Some of
these projects will likely proceed, including some new capacity addition for Kuwait, Saudi Arabia, Brazil
and China. As these projects are not yet proceeding, there is potential for them to slip further back. These
projects are taken from a much longer list of potential refinery projects, the vast majority of which are
unlikely ever to be built.
70

Refinery Output, World Oil Demand and Refinery Capacity, 1995-2015
30MAR201015205727
Source: KBC
The above picture seems bearish for refiners over the medium term. However, the situation will likely be
improved by the continued trend of refinery closures in markets where demand has collapsed. This is
actually a positive for Asia-Pacific refiners, as their capacity is much closer to the future market demand.
The forecast only includes announced closures in Europe, the US and Japan.
Net refinery capacity additions shown above are largely scheduled to come to market in the Middle East
and Asia-Pacific regions, as can be seen in the chart below.
Net Changes in World Crude Distillation Capacity

End Year Basis, Likely and Forecast Possible
30MAR201015204877
Source: KBC
What is also evident from this chart is the low capital investment climate that preceded the current market
conditions. When considered in conjunction with the utilisation chart above, it can be seen that for the
early part of the past decade refinery capacity investments did not keep pace with demand growth.
71

Product balance in India

Prior to 2000, domestic demand in India for most refined petroleum products exceeded domestic supply,
with the net deficit being met through imports. However, following large increases in refining capacity
resulting from the construction of new refineries and upgrades at existing refineries in India, domestic
refining capacity now exceeds domestic demand for refined petroleum products, other than LPG.
Construction of additional refineries, and capacity upgrades at existing refineries in India, are set to
continue in the next few years. This planned increase in capacity as compared to the expected growth in
domestic demand suggests that India’s refined product exports will increase. However, as some of the
planned new refineries have been set up as export-oriented units and/or are within special economic zones,
these refineries may have an obligation to export some or all of their production, thereby reducing the
potential available supply for the domestic market. Despite a decline in refined petroleum product exports
to 36.9 mmt in 2008/09 compared to 40.8 mmt in 2007/08, there were still imports of over 18.3 mmt in
2008/09, indicating that a shortage in supply in the domestic market still exists.
Year ended 31 March

Product 2002 2003 2004 2005 2006 2007 2008 2009
(mmt)
Liquefied petroleum gas . . . . . . . Production 7.0 7.3 7.7 7.8 7.7 8.5 8.9 9.2
Imports 0.7 1.1 1.7 2.3 2.8 2.3 2.8 2.3
Exports — — — 0.1 0.1 0.1 0.1 0.1
Consumption 7.7 8.4 9.3 10.2 10.5 10.8 12.2 12.3
Naphtha/natural gas liquids . . . . . Production 10.8 11.3 12.6 15.8 16.0 18.2 18.0 16.5
Imports 3.3 2.8 2.4 2.2 2.3 5.3 6.0 5.0
Exports 2.5 2.1 2.2 2.9 5.1 8.4 9.3 7.3
Consumption 11.8 12.0 11.9 14.0 12.2 13.9 13.3 13.9
Motor spirits (Gasoline/Petrol) . . Production 9.7 10.4 11.2 11.1 10.5 12.5 14.2 16.0
Imports — — — 0.2 0.5 0.4 0.3 0.4
Exports 2.4 2.3 3.0 2.9 2.4 3.6 4.3 5.3
Consumption 7.0 7.6 7.9 8.3 8.6 9.3 10.3 11.2
Kerosene . . . . . . . . . . . . . . . . . . Production 9.9 10.2 10.1 9.2 9.0 8.6 8.0 8.5
Imports 0.4 0.7 0.8 0.2 1.0 1.4 2.5 1.4
Exports — — — 0.2 0.1 0.2 0.1 0.1
Consumption 10.4 10.4 10.2 9.4 9.5 9.5 9.4 9.3
High-speed diesel . . . . . . . . . . . . Production 39.9 40.3 43.1 46.1 47.7 53.7 58.5 63.0
Imports — 0.1 0.1 0.8 0.8 1.0 3.0 2.7
Exports 2.9 3.2 6.2 7.3 8.5 11.4 14.3 13.8
Consumption 36.5 36.6 37.1 39.7 40.2 42.9 47.7 57.1
Fuel oil/low-sulphur heavy stock . Production 12.2 12.3 13.7 14.8 14.1 15.5 16.0 17.8
Imports 2.0 2.2 1.7 1.6 2.0 3.0 3.7 2.6
Exports 0.5 1.1 1.3 1.8 1.8 3.8 4.7 5.9
Consumption 13.0 12.7 12.9 13.5 12.8 12.6 12.7 12.6
Source: PPAC.
Combined, India will add approximately 950,000 bbl/d of new firm refining capacity through 2012. Even
when set against relatively robust growth in demand for refined products, this firm capacity addition still
leaves India as a net exporter of more than 1 million bbl/d of products.
As noted above, part of this is by design. The new Reliance Petroleum refinery in the Special Economic
Zone (SEZ) at Jamnagar is designed to be export-oriented, and is currently said to be exporting more than
80% of its total output. Thus around 500,000 bbl/d of India’s surplus is anticipated to be structural, which
suggests that the market without Reliance is much tighter than would otherwise be expected. It is early to
determine the full final impact of this refinery on India’s product balance, but indications are that the
refinery will export nearly all of the transport fuels it produces, while apparently selling the LPG into India,
at least in the near term, to meet domestic demand.
72

Additions to Indian Nameplate Refining Capacity, 2010-12
Capacity
Refiner, Location Project Type kbpd Month Year
BPCL, Bina, Madhya Pradesh . . . . . . . . . . . . . . New Refinery 120 April 2010

Chennai Refineries, Manali (Chennai) . . . . . . . . Expansion 20 Feb 2010
Essar, Vadinar . . . . . . . . . . . . . . . . . . . . . . . . . Expansion 10.5>18 mmtpa 80 April 2011
HPCL, Mumbai . . . . . . . . . . . . . . . . . . . . . . . . Expansion 48 2010
HPCL, Vizag (Andhra Pradesh) . . . . . . . . . . . . . Expansion 17 2010
IOC, Haldia . . . . . . . . . . . . . . . . . . . . . . . . . . . Expansion 30 2010
IOC, Panipat (Haryana) . . . . . . . . . . . . . . . . . . Expansion 60 July 2010
Hindustan Petroleum/Mittal, Bhatinda (Guru
Gobind S . . . . . . . . . . . . . . . . . . . . . . . . ... New Refinery 180 1Q 2011
Mangalore Refining & Petrochemicals,
Mangalore . . . . . . . . . . . . . . . . . . . . . . . ... Expansion 12->15 mmtpa 60 Oct 2011
Chennai Refineries, Manali (Chennai) . . . . . ... Expansion 40 1Q 2012
IOC, Paradip (Orissa) . . . . . . . . . . . . . . . . . ... New Refinery 300 Dec 2012
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 955
Source: KBC/Company.
Base Indian Refined Products Balance, 2000-2030, Surplus/(Deficit), ’000 b/d
2000 2005 2008 2009 2010 2011 2012 2015 2020 2025 2030
LPG . . . . . . . . . . . . . . . . . . (28) (93) (82) (43) (42) (30) (20) (52) (151) (216) (251)
Naphtha . . . . . . . . . . . . . . . (7) 32 45 127 187 222 244 244 172 123 96
Motor Gasoline . . . . . . . . . . 28 37 114 129 250 253 305 270 98 (95) (374)
Jet/Kerosene . . . . . . . . . . . . (41) (20) 42 65 78 88 96 70 (12) (23) (42)
Gas/Diesel Oil . . . . . . . . . . . 33 125 206 265 367 429 472 313 20 (235) (511)
Fuel Oil . . . . . . . . . . . . . . . . (22) 21 64 70 49 16 (18) 71 141 243 286
Others . . . . . . . . . . . . . . . . . 11 34 (93) 1 64 77 89 49 (39) (114) (176)
Total . . . . . . . . . . . . . . . . . . (26) 136 296 613 953 1056 1168 966 230 (317) (971)
Source: KBC
It is helpful to look for potential export markets for the potential Indian surplus. India’s neighbours have a
poor history of investing in refining capacity to meet their domestic needs. Overall import requirements
from Bangladesh and Sri Lanka can meaningfully soak up a significant volume of India’s potential surplus.
Plans exist for capacity additions in these markets, but their history of execution is poor and timelines tend
to be extended.
Emergence of India as a Global Refining Hub—Jamnagar and Vadinar

In the first half of calendar year 2009, the total annual refinery capacity in the Indian provinces of
Jamnagar and Vadinar increased by 29 mmt, raising India’s total annual domestic refining capacity to
178 mmt. Jamnagar and Vadinar are expected to emerge as a major global refining hub due to the
following competitive advantages:
• Cost competitiveness: Compared to more developed countries, India enjoys significant cost advantages
from cheaper power and labour costs, giving Indian refineries lower capital and cash operating costs.
Capital costs in India are approximately 20% lower than the world average, and substantially lower
than countries such as Saudi Arabia. (Source: KBC)
• Strategic location: Jamnagar and Vadinar are located near the Middle East and are positioned on the
major maritime route from the Middle East to the Far East. Significantly for India, the bulk of the oil
exported from the Middle East to East Asia is routed through the Arabian Sea and Indian Ocean.
73

As a result, the all-weather ports at Jamnagar and Vadinar in the Gulf of Kutch provide an important
transit, landfall for Middle East crude oil.
• Infrastructure: The ports, tankers, pipeline and other supply and distribution infrastructure facilities at
Jamnagar and Vadinar have been constructed and developed exclusively for the refineries there.
These infrastructure facilities are located to enable the delivery of products from the refineries to
domestic demand centres in India as well as for export to Western markets.
• High-quality, flexible product mix: The refineries at Jamnagar and Vadinar are able to produce large
quantities of high specification fuels meeting Euro IV and Euro V product quality standards as well as
a product slate with enough flexibility to produce both light and middle distillates for global markets.
• Policies and regulations: India’s government policies have been strengthened in a number of ways to
create a conducive environment for refining operations. In addition, the price regulation of refined
petroleum products is being progressively removed. Further, income from the refining of petroleum
products is exempted from Indian federal income taxation during the first seven years after a refinery
is fully commissioned.
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PART 6
THE BUSINESS
OVERVIEW
The Company is an India-focused energy group with existing operations and projects under construction
and development in both the electricity generation and transmission industry and in the oil and gas
industry. The Company is India’s second largest private power producer with a 12-year operating track
record. The Company also owns a portfolio of oil and gas blocks and is developing as a leading player in
the rapidly emerging domestic CSG market in India. The Company’s low-cost Vadinar refinery is currently
one of India’s largest oil refineries and post expansion will become one of the largest and most complex
refineries in the world.
The Company owns three operational power plants in India and one operational power plant in Canada
with a total installed capacity of 1,220 MW. The Company has a further six power plant projects under
construction in India as part of its Phase I expansion, which will increase its total installed capacity to 6,100
MW by 2012; and additional power plants in the development stage, which will increase the Company’s
total installed megawatt capacity to 11,470 MW by 2014. The Company has a vertically integrated power
generation portfolio with a substantial portion of the fuel and off-take secured for the Phase I Power
Projects.
The Company’s oil and gas business is engaged in the exploration and production of oil and natural gas,
crude oil refining and refined petroleum products sales and marketing. The Company’s net working
interest in its oil and natural gas exploration and production assets includes 2P reserves of 2 mmboe, 2C
contingent resources of 148 mmboe, best estimate prospective resources of 1012 mmboe and an unrisked
in-place resource base of 238 mmboe based on company estimates and independent certifications from
NSAI, ARI and RPS. The Company’s Vadinar refinery has a total current throughput capacity of
14 mmtpa (300,000 barrels per stream day) and the Phase I Refinery Project is slated to extend the
refinery’s total throughput capacity to 18 mmtpa (375,000 barrels per stream day) by March 2011.
The Company generated revenues of US$8,453.1 million and a loss after tax of US$167.0 million in the
year ended 31 March 2009 and revenues of US$5,654.6 million and a profit after tax of US$119.7 million in
the nine months ended 31 December 2009. The Company’s EBITDA for the year ended 31 March 2009
was US$123.7 million and was US$433.1 million for the nine months ended 31 December 2009.
Power
The Company was an early mover in India’s private power industry, with a 12-year operating track record.
The Company’s power business currently has three operational power plants in India and one in Ontario,
Canada, with a total installed capacity of 1,220 MW. The Indian plants are primarily gas fuelled and are
located in the state of Gujarat, India, with a total installed capacity of 1,135 MW: Essar Power–Hazira with
an installed capacity of 515 MW, Bhander Power–Hazira with an installed capacity of 500 MW and Vadinar
Power–Jamnagar with an installed capacity of 120 MW. Essar Power–Hazira and Bhander Power–Hazira
sell their power to Essar Steel companies, other Essar Affiliated Companies, and GUVNL, the state of
Gujarat’s public power utility, under long term PPAs (with a mix of assured and optional off-take). Vadinar
Power–Jamnagar produces power and steam for the Vadinar refinery. The Ontario power plant, which has
an installed capacity of 85 MW, is fuelled by residue from the iron and coke making operations of Algoma
Steel, an Essar Affiliated Company, and sells its power and steam to Algoma Steel, with the Ontario Power
Authority underwriting the minimum purchase price pursuant to a long-term PPA.
The Company also has a number of power plant projects under construction and development in India to
increase the Company’s total installed capacity to 11,470 MW by 2014. The six Phase I Power Projects have
an expected total installed capacity of 4,880 MW. These projects, of which four will be wholly coal fuelled
plants and two will be multi fuel plants, are expected to become commercially operational between 2010
and 2012. In addition, the Company’s six Phase II Power Projects are expected to increase the Company’s
installed total capacity by a further 5,370 MW, of which 89% will be coal fuelled and 11% captive fuelled.
The Company expects the Phase II Power Projects to become commercially operational during 2013 and
2014. The Company intends to sell the power generated from its Power Plant Projects that is not used by
Essar Oil through a combination of long-term PPAs to industrial customers, including Essar Affiliated
Companies, and Indian state-owned utilities and pursuant to merchant sales on a short-term or spot basis
in the wholesale market.
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Part 6 The Business
For all power plant projects, the Company is focused on securing long term fuel supply and minimising
price volatility. To achieve this the Company adopts a strategy of backward integration by sourcing coal
from captive mines that are either owned by or allocated to the Company. The Company currently owns or
has rights to coal reserves of 343 mmt; these reserves include coal blocks in India and coal mines recently
acquired by the Company in Indonesia and Mozambique. The existing coal block allocations in India are
subject to the term periods of such allocations being further extended, however, to bridge any gaps the
Company has applied to the Government of India for temporary coal supplies in the interim. Through a
combination of coal block allocations, acquisitions of coal mines and long-term fuel supply arrangements
with the relevant power off-taker, the Company presently has fuel security for 7,300 MW of its existing and
planned power generation capacity. Further, if the Company consolidates its stake in the Neptune power
plant projects, it expects to gain access to the accompanying coal block allocation of 112 mmt and achieve
fuel security for an additional 1,050 MW of power generation capacity. Further, the Company has secured
fuel supply for the Essar Power Gujarat—Salaya 2 project of 1,320 MW through a fuel supply agreement
with Essar Shipping & Logistics Limited. As a result of the above, the Company expects to have fuel
security for 9,670 MW of its existing and planned power generation capacity.
Essar Power Transmission Company Limited (‘‘Essar Power Transco’’) focuses on the Company’s
transmission business and is currently constructing transmission lines to evacuate power from the Essar
Power MP-Mahan Power Plant Projects.
Essar Trading proposes to trade the surplus power capacity following the commissioning of the Company’s
Power Plant Projects and to source power from external power suppliers. Essar Trading is able to purchase
and sell power both on its own and on behalf of its clients.
The Company also intends to manufacture and market wind turbines of 1.5 MW capacity. Production is
expected to commence in the third quarter of 2010.
The Company’s power business generated revenues of US$260.5 million and a pre-tax profit of
US$52.7 million in the year ended 31 March 2009 and US$196.9 million and US$54.7 million, respectively,
in the nine months ended 31 December 2009.
Oil and Gas

The Company currently has a diverse portfolio of 14 blocks and fields (including the Rajmahal Block, for
which the Company has been declared provisional winner) for the exploration and production of oil and
gas in India, Australia, Indonesia, Madagascar, Nigeria and Vietnam. The Company’s development and
production assets include:
• the Raniganj Block, in which the Company has a 100% interest, has estimated 2C contingent
resources of 201 bcf (34 mmboe) and best estimate prospective resources of 792 bcf (132 mmboe)
according to NSAI and is expected to commence commercial production by the end of 2010;
• the Ratna Fields near Mumbai, in which the Company has a 50% interest, have estimated 2C (92%
oil, 8% gas) contingent resources of 162 mmboe (of which 81 mmboe represents the Company’s net
working interest) according to RPS. The Company expects to sign the PSC for the Ratna Fields by
June 2010. See ‘‘The success of the Company’s exploration and production operations depends on its
PSCs and similar arrangements as well as on its relationship with its joint venture partners and its
ability to honour supply agreements. The Company may become liable under the security
arrangements if it does not complete the minimum work commitments in its PSCs’’ in Part 1 ‘‘Risk
Factors’’. Once the PSC and other agreements have been executed, the Company intends to submit a
revised development plan and commence development activities in the Ratna Fields. If the PSC and
other agreements, which are subject to the government approval process, are executed, and
development activities commence as expected, the Company expects the Ratna Fields to begin
commercial production of oil in the fourth quarter of 2013; and
• the Mehsana Block, in which the Company has a 100% interest (with the exception of the ESU field,
in which the Company holds a 70% interest), has estimated 2P oil reserves of 2 mmboe according to
the Company’s internal estimate of net working interest. In addition to the oil reserves, the Company
estimates that the Mehsana Block contains thick deposits of coal/lignite with the potential for CSG
exploitation. ARI has prepared and submitted a comprehensive report dated 30 April 2010 on the
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Part 6 The Business
CSG resources in this block. In this report, ARI estimates the 2C Contingent Resources of 747.4 BCF
of CSG at the Mehsana Block. Although current Indian regulations prohibit the simultaneous
exploration of CSG and oil and gas in the same field, the Government of India is currently considering
amending these regulations and the Company has accordingly submitted a proposal for a separate
contract for the exploration and production of CSG in and around the Mehsana Block.
The Company’s exploration assets include:
• the Nigeria Block, for which the Company has signed a PSC with a 100% participating interest and is
currently in discussions with a local Nigerian partner to transfer a 37% ‘‘carried interest’’ in this block,
subject to requisite approvals from the Nigerian government. The block has estimated 2C contingent
resources of 53 mmboe and best estimate prospective resources of 147 mmboe according to NSAI (of
which the Company’s net working interest would be 126 mmboe in the event that a local Nigerian
partner acquires a 37% interest, as is being discussed);
• the Rajmahal Block, for which the Company has emerged as provisional winner in the recently-
concluded CBM IV round of bidding by the Government of India, has estimated best estimate
prospective resources of 4.7 tcf (787 mmboe) according to ARI; and
• other exploration blocks, including blocks in the Mumbai offshore area, Assam, Australia, Indonesia,
Madagascar and Vietnam.
The Vadinar refinery is India’s second-largest private-sector refinery and is located approximately 20 km
from the port of Vadinar in the western part of India. Vadinar is India’s closest port to the Middle East and
its coastal regions—the world’s largest single source of crude oil and the main source of imported crude oil
for India—and is also well located to indigenous sources of crude oil. This port also provides access to the
growing markets of China, Southeast Asia and East Africa as well as to the established markets of Europe
and North America.
The Vadinar refinery commenced commercial operations on 1 May 2008 and is a catalytic cracking refinery
with an average Nelson Complexity Index rating of 6.1. The refinery is currently producing at a throughput
capacity of 14 mmtpa (300,000 barrels per stream day), which is above the refinery’s design capacity of
10.5 mmtpa (230,000 barrels per stream day), as a result of debottlenecking projects undertaken by the
Company. The refinery is configured to process a crude slate geared towards heavy crudes and to produce
up to Euro IV grades of diesel, but is currently producing up to Euro III grades of petrol and HSD.
According to data provided by the Company, the Vadinar refinery currently has refining operating costs of
US$1.3 per barrel. This is approximately US$1 per barrel lower than the average operating costs within the
industry (Source: KBC). See ‘‘—Oil and Gas—Vadinar Refinery—Overview’’. In addition to these refining
operating costs, Essar Energy has incurred product handling charges and other corporate and marketing
expenses of US$0.96 per barrel.
The Company is currently expanding and upgrading the Vadinar refinery. The Phase I Refinery Project is
expected to increase the refinery’s average Nelson Complexity Index to 11.8 and its annual throughput
capacity to 18 mmtpa (375,000 barrels per stream day) by the project’s expected completion in March 2011.
The Phase II Refinery Project involves the addition of a new refinery stream with a projected additional
annual capacity of 18 mmtpa (375,000 barrels per stream day). The Company intends to finalise the timing
for implementation and completion of the Phase II Refinery Project following a review of market (i.e.,
supply and demand) conditions and the securing of financing commitments for the project. Upon the
completion of this project, the Company expects the Vadinar refinery to have an average Nelson
Complexity Index of 12.8 and a total annual refining throughput capacity of 36 mmtpa (750,000 barrels per
stream day) and to be able to produce Euro V grades of petrol and HSD. The Vadinar refinery is expected
to be the fifth-largest single-location refinery in the world upon completion of the Phase II Refinery
Project (Source: KBC).
The Company markets refined petroleum products both in the domestic Indian market, including direct
bulk sales and retail sales through the Company’s franchisee-owned and -operated network of almost 1,300
retail fuel stations, and in the international export market. In the nine months ended 31 December 2009,
the Company sold 76.4% of its refined petroleum products in the Indian domestic market and the
remainder in the export market. Domestic bulk prices in India are generally equivalent to or higher than
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Part 6 The Business
those in the international spot market, enabling the Company to generate higher profit margins with lower
transportation costs on domestic sales in India.
The Company also holds a 50% interest in KPRL, the owner and operator of the Mombasa refinery in
Kenya, which has a name plate capacity of 4 mmtpa and is currently operating at 1.6 mmtpa. This refinery
is the only oil refinery in East Africa and primarily serves Kenya and the neighbouring countries of
Uganda, Burundi and Rwanda. The refinery is at an advantageous location to process potential future
crude oil production from the Lake Albert basin in Uganda and the Democratic Republic of Congo, in the
event the crude can be successfully delivered to Mombasa.
The Company’s oil and gas business generated revenues of US$8,192.6 million and a pre-tax loss of
US$297.4 million in the year ended 31 March 2009 and US$5,457.7 million and pre-tax profit of
US$92.6 million, respectively, in the nine months ended 31 December 2009.
The Company operates its oil and gas business through Essar Oil, which is listed on the Indian Stock
Exchanges and currently has a public float of 10.59%.
Power and Refinery Expansion Projects

The following table summarises the expected capacity and commissioning date for each of the Company’s
Phases I and II Power Projects and Phases I and II Refinery Projects discussed above. See ‘‘Factors
Affecting Results of Operations and Financial Condition—Funding Costs for the Expansion Projects’’ in
Part 9 ‘‘Operating and Financial Review’’.
Expected
commissioning
Project Gross capacity dates
(MW)
Phase I Power Projects . . . . . . . . Vadinar Power-Expansion Phase I 380 2010
Essar Power MP-Mahan 1,200 2011
Essar Power Gujarat–Salaya 1,200 2011
Vadinar Power-Expansion Phase II 510 2011
Transmission — 2011
Essar Power Hazira-Hazira 270 2012
Essar Power Orissa-Paradip 120 2012
Essar Power Jharkhand-Tori 1,200 2012
Phase II Power Projects(1) . . . . . . Essar Power Jharkhand-Tori Expansion 600 2013
Essar Power MP-Mahan Expansion 600 2013
Salaya II 1,320 2013
Salaya III 600 2013
Neptune I 1,050 2013
Neptune II(2) 1,200 2014
(mmtpa)
Phase I Refinery Project . . . . . . . Vadinar Refinery 18 2011
Phase II Refinery Project . . . . . . Vadinar Refinery 18 2013(3)
(1) The Phase II Power Projects are subject to securing committed financing.
(2) Subject to securing fuel supply.
(3) The Phase II Refinery Project is subject to review of market conditions and securing committed financing.
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Part 6 The Business
Coal mine assets

The following table summarises the coal mines owned by or allocated to the Company.
Mine Location Reserves

(mmt)
Mahan(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 73
Chakla . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 71
Ashok Karkata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 100
Aries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indonesia 64
Cambulatsitsi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mozambique 35
Neptune(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 112(3)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455
(1) Coal allocation subject to renewal.
(2) Subject to the Company increasing its stake in Neptune to 100% from its present 39% economic interest and Neptune
complying with the terms of the allocation.
(3) Reserve number shown represents 100% of the coal allocated to Neptune.
(Source: Company)
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Part 6 The Business
HISTORY AND BACKGROUND

The Essar Group
The Company has been part of the Essar Group, which was established over 40 years ago, as it developed
its power, oil and gas businesses.
Power
1991 The Indian power generation sector is opened to private-sector participation.

1991 Essar Power is incorporated.
1997 The Essar Power-Hazira power plant is commissioned to supply Essar Steel and the Gujarat
state power grid.
1998 A cyclone damages the then under-construction Vadinar Power-Jamnagar power plant.
2005 Essar Trading is awarded a trading licence to trade up to 500 million units of electricity per year
in India.
2006 The Mahan coal block is allocated jointly to Hindalco Industries Limited (‘‘Hindalco’’) and
Essar Power.
Mahan Coal, a joint venture between Hindalco and Essar Power, is established.
The 155 MW Phase I generation unit of the Bhander Power-Hazira power plant is
commissioned.
2007 Essar Power Gujarat executes a PPA with GUVNL for supply of 1,000 MW of power from the
Essar Power Gujarat-Salaya power plant, which is under development.
The Chakla coal block is awarded to Essar Power to supply coal to Essar Power’s
Jharkhand-Tori power plant, which is under development.
The Ashok Karkata coal block is awarded to Essar Power to supply coal to Essar Power’s
Jharkhand-Tori power plant, which is under development.
Phase II (200 MW) of the Bhander Power-Hazira power plant is commissioned.
2008 The 155 MW Phase I generation unit of the Bhander Power-Hazira power plant is registered
with United Nations Framework Convention on Climate Change (‘‘UNFCCC’’) as a clean
development mechanism project.
Essar Power Transco is granted a transmission licence to construct, operate and maintain
certain elements of the transmission system for Essar Power MP-Mahan.
The Vadinar Power-Jamnagar cogeneration power plant is commissioned.
Phase III (145 MW) of the Bhander Power-Hazira power plant is commissioned.
2009 The Essar Power (Canada) (formerly Algoma Energy) cogeneration power plant is
commissioned.
Oil and Gas

1989 The oil and gas business is established with the incorporation of Essar Oil.
1992–93 The refinery industry in India is opened to private-sector participation.
1995 Essar Oil’s shares are listed on the Bombay Stock Exchange and the National Stock Exchange.
1995 Construction of the Vadinar refinery begins.
1996 Essar Oil is awarded the Ratna Fields, and becomes one of the first private entities to enter the
oil and gas exploration and production sector in India.
1998 A cyclone damages the then under-construction Vadinar refinery, halting its construction.
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2002 Essar Oil is awarded its first CSG block, the Raniganj Block in the Raniganj region of India.
2003 Essar Oil commences building its network of franchised retail fuel stations.
2004 Essar Oil and its lenders complete the renegotiation of the financing facility for the Vadinar
refinery.
2005 Construction of the Vadinar refinery recommences.
2006 The Vadinar refinery commences operations on a trial-run basis following the commissioning of
its crude distillation and vacuum distillation units. Sales of trial-run petroleum products also
commence.
2007 Essar Exploration and Production Limited (Nigeria) (‘‘EEPLN’’) is awarded the Nigeria Block.
Essar Oil implements plans to debottleneck Vadinar refinery to expand its annual capacity.
2008 Construction of all units at the Vadinar refinery completed. The Vadinar refinery commences
commercial operations.
2009 Essar Oil is declared provisional winner of exploration and production rights in the Rajmahal
Block.
2010 EEPLN signs the PSC for the Nigeria Block.
The Essar Group is currently in discussions with Shell International Petroleum Company Limited (‘‘Shell
International’’) regarding the potential acquisition by the Company of Shell International’s oil refinery in
Stanlow, United Kingdom, and Shell International’s refineries in Hamburg and Heide, Germany
(collectively, the ‘‘Shell Refineries’’). Shell International and the Company have not entered into any
binding commitments in relation to the purchase of these refineries at this time. The contemplated
acquisition of the Shell Refineries is consistent with the Company’s strategy. While the final terms of any
potential acquisition have not yet been finalised and the Shell Refineries would represent a significant
portion of the Company’s revenue, any investment would represent only a relatively small proportion of
the Company’s current asset base and capital investment programme.
The potential acquisition would require approval of the Board and, depending on its classification under
the Listing Rules, the Company’s shareholders following Admission.
Strengths
Positioned to take advantage of strong Indian macroeconomic and energy growth
India experienced GDP growth of 5.4% in 2009, as compared to a global economic contraction of 1.4%
according to the International Monetary Fund’s World Economic Outlook Database, October 2009. The
Planning Commission of India’s 11th Plan (2007-08 to 2011-12) aims for a GDP growth rate of 7% to 9%
each year. The primary driver of India’s economic growth is rising domestic demand (in 2008/09, exports
accounted for only 24% of Indian GDP), resulting in increased resilience to global macroeconomic shocks
relative to other major emerging markets.
Major economic reforms enacted in the early 1990s combined with the deregulation of key industrial
sectors have resulted in rapid industrialisation, urbanisation and wealth creation in India, with per capita
GDP increasing at a CAGR of 7.3% for the past ten years according to the IMF. This growth and these
reforms are leading to increasing investment in India’s infrastructure. Concurrent with this growth is a
rapidly increasing demand for energy that has outstripped India’s current domestic energy production
capacity.
Annual per capita power consumption has grown from 410 kWh in 2002 to 610 kWh in 2007. Despite this
growth, per capita power consumption remains much lower than in the other BRIC countries (China:
2,346 kWh; Brazil: 2,154 kWh; Russia: 6,338 kWh). Supply in India has failed to keep pace with demand,
resulting in serious power deficits, which have increased from 5% in 2003 to 11% in 2009. (Source:
A.T. Kearney.) This imbalance, coupled with power sector deregulation, means that the Company is
strongly positioned to benefit from the growth in demand for power in India.
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Part 6 The Business
India, with more than 15% of the world’s population and a strong economic growth profile, has emerged as
a significant consumer of energy resources. Coal, oil and natural gas are India’s primary sources of energy,
accounting for 92% of total energy consumption, as well as representing areas on which the Company’s
business is heavily focused. Growing demand for refined petroleum products is driven in part by an
increase in demand from the transport sector as a result of increased vehicle ownership, which is currently
still among the lowest in the world at approximately 35 vehicles per 1,000 of the driving population in 2009.
In addition, government policy currently favours the increased use of natural gas, which is expected to
result in annual growth in demand of 8% to 9% through 2016/17.
Strong operational performance and efficiency

The Company’s operations across power and oil and gas are characterised by strong operational
performance and efficiency.
Power
The Company is India’s second-largest private-sector power producer (based on publicly available
information in respect of operating plants) with an operating track record in the power business of
12 years. The Company has demonstrated good operational performance with higher plant availability,
lower station heat rate and lower auxiliary consumption as compared to the norms set by CERC for
combined cycle gas plants. (Source: KPMG)
The Company’s power plants enjoy a substantially secure fuel supply which provides volume and price
security. The Company’s power business is being geared to sell its non-captive power nationally via a
network of third-party and the Company’s own high voltage transmission links, both on a merchant basis
and under long-term power off-take contracts.
Oil and Gas

The Company owns the second-largest private-sector refinery in India, a facility in Vadinar in the state of
Gujarat that enjoys a strong structural cost advantage as a result of its location, scale, asset quality and
workforce. According to data provided by the Company, the Vadinar refinery currently has refining
operating costs of approximately US$1 per barrel lower than the average costs within the industry (source:
KBC). Vadinar benefits from a strategic location on the west coast of India, providing efficient access to
indigenous crude and Middle East-based crude. This location also allows access to high-growth domestic
markets as well as to export markets in South East Asia and Africa, which account for a growing
proportion of global petroleum demand. The scale and complexity of the Vadinar refinery provides the
Company with significant crude processing flexibility, including the ability to process a higher proportion of
less-expensive crudes such as heavier, sourer and higher-acidity crude oils, with 72% of the refinery’s
current throughput comprising medium, heavy and ultra heavy crude oils. The Vadinar refinery is able to
achieve a low capital and operating cost base while maintaining safe and efficient operations.
The Company maintains a refined product marketing and retail network in India, which allows it to
capture potential upside from volatility in the difference between the price of crude oil and the selling
price of refined products. This network also makes the Company well-placed to take advantage of any
relaxation of current regulatory restrictions in the marketing and retail industry in India.
New growth projects poised to significantly bolster the Company’s competitive positioning and market leadership
Power
The Company’s power generation capacity is expected to be substantially increased from the current 1,220
MW by 10,250 MW to 11,470 MW by 2014. The Company has already signed loan agreements for four out
of the six Phase I Power Projects and for a further Phase I Power Project (Essar Power Jharkhand-Tori), it
has signed a binding loan agreement for part of the necessary debt and obtained an in-principle approval
for the remainder. The Company has also substantially secured fuel supplies to achieve the first stage of
growth of 6,100 MW by 2012.
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Part 6 The Business
Of the total expansion of 10,250 MW, 42% relates to those Power Plant Projects which are focused on the
lower cost brownfield expansion projects to be constructed on land already secured or proposed to be
secured by the Company for its operational power plants and Power Plant Projects.
As part of this growth profile the Company plans to use a range of off-take agreements, including growing
merchant sales (estimated to account for 26% of power MW sales by 2014) as well as sales to government
and industrial customers pursuant to long-term PPAs. Over 74% of the total installed MW capacity by 2014
is expected to be sold pursuant to PPAs.
Oil and Gas

The Company has a regional oil and natural gas exploration and production portfolio with significant
potential arising from several large-scale projects such as the Raniganj Block, India with 200.8 bcf of
2C contingent resources and 792.0 bcf of best estimate prospective resources. The Company’s exploration
and production operations benefit directly from the growing energy demand within India and provide
integration benefits when combined with the Vadinar refinery.
The Refinery Expansion Projects are expected to result in enhanced scale from the Vadinar refinery’s
current operating capacity of 14 mmtpa to 36 mmtpa and increased complexity from the current Nelson
Complexity Index of 6.1 to 12.8. This will further strengthen the Vadinar refinery’s cost leadership position,
crude processing flexibility and capability to manufacture a wider range of refined products.
The capital cost of the existing Vadinar refinery at its current operating capacity of 14 mmtpa is US$1,532
per complexity barrel. On completion of the Phase I Refinery Project, at an operating capacity of
18 mmtpa, the expected capital cost will be US$1,011 per complexity barrel. On completion of the Phase II
Refinery Project, at an operating capacity of 36 mmtpa, the expected capital cost will be US$962 per
complexity barrel, representing a significant overall reduction of approximately 35%.
Proven execution track record of successfully delivering and operating large-scale projects
The Company’s strong project management experience, coupled with the large scale of its projects, have
been key factors in achieving its historical track record of successfully executing projects at a competitive
cost. Through projects such as the operational facilities for the generation of 1,220 MW of power and the
Vadinar refinery, the Company has demonstrated that it can successfully implement complex, large-scale
projects.
The Company believes that it is making good progress on its expansion projects and currently expects
substantially all the projects, barring unforeseen circumstances, to be delivered broadly in line with the
planned schedule and budgets with clear paths to completion for each planned expansion or new facility:
• Environmental and the other government approvals, subject to the fulfilment of required conditions,
have been substantially obtained for the Phase I Power Projects and the Refinery Expansion Projects.
• Land has been secured (subject to the fulfilment of requisite title documentation) for five of the six
Phase I Power Projects and the Refinery Expansion Projects, with the remaining land for the Phase I
Power Projects expected to be secured by July 2010.
• The remaining equity needed for completing the Phase I Power Projects and the Phase I Refinery
Project will be funded from the Offering. Approximately 73% of the total debt financing requirements
for Phase I Power Projects is fully committed (97% if non-binding sanction letters are included); these
are expected to be converted into committed financing by mid 2010). The equity for the Phase II
Power Projects will be funded from the Offer and cashflow from operations.
• Standardised construction processes, plans and input items have been implemented to reduce risks
and costs of construction and ongoing operations.
The Company also benefits from leveraging the well-established engineering, procurement and
construction (‘‘EPC’’) capabilities of the Essar Group’s Projects division in the areas of project design,
engineering, procurement, labour and construction to successfully carry out the construction of existing
projects at a low capital cost.
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Part 6 The Business
Breadth and depth of experience in the Board and management teams

The Company is led by a highly experienced and entrepreneurial executive and operational management
team. The members of the power senior management team each have industry experience of at least
30 years on average and have held senior positions in leading power companies such as NTPC, PGCIL and
Tata Power. The members of the oil and gas senior management team also each have industry experience
of at least 30 years on average and have held senior positions in leading oil and gas companies such as BP
p.l.c, IOC, ONGC, IBP, Petronet LNG and Reliance Industries. The strong operating performance of the
Vadinar refinery, as evidenced by its high capacity utilisation and more than 700 days without lost time
incidents, demonstrates the strength of the Company’s oil and gas management team.
Essar Energy plc’s Board is committed to the highest standards of independence and corporate governance
and advancing the interests of all shareholders equally. As from the date of Admission relationships with
the Essar Group will be at arm’s length and on normal commercial terms except certain de minimis
transactions.
Strong relationship with one of India’s leading corporates

Essar Energy plc’s controlling shareholder, Essar Global, is the holding company of the Essar Group, a
leading corporate in India. The Essar Group seeks to be a long term shareholder in its listed assets and is
well-positioned to support the Company’s continued growth and development. To date, Essar Global has
invested equity of over US$2.8 billion in the Company. The Company is able to leverage the Essar Group
companies’ expertise in EPC and major projects, shipping and port access on terms at least as favourable
as those that could be obtained from third parties.
The Essar Group has a 40-year track record in building successful businesses across multiple industries,
and the Company believes this experience and expertise will be of significant benefit to it.
Strategy
The Company’s strategy is to create a world-class, low-cost integrated India-focused energy company by
capitalising on India’s rapidly growing demand for energy. This will be achieved by:
Optimising performance of all existing assets

The Company intends to capitalise on its existing assets by drawing on the Essar Group’s significant
experience and expertise to carry out a number of organic development projects that will consolidate the
Company’s position as one of India’s largest energy groups. This will be achieved through a combination of
debottlenecking operating plants, further improving efficiency, expanding output and increasing economies
of scale.
Delivering growth through a variety of power and oil and gas projects
The Company plans to pursue further growth through both greenfield and brownfield energy projects in
the areas of exploration and production, refining, marketing, power generation, raw material acquisition,
transmission and distribution. The Company is currently pursuing a number of major projects, including
the Phase I and Phase II Power Projects, the development of existing exploration blocks, the Phase I
Refinery Project and the development of captive coal mines.
Leveraging skills and Indian asset base to identify growth opportunities

The Company intends to leverage its established skills and Indian asset base in oil and gas and power to
seek organic and inorganic growth opportunities in India and overseas, with the objective of improving
market leadership, economies of scale, synergies and maximising shareholder value.
Being a good corporate citizen

The Company will continue to act as a good corporate citizen with respect to the health and safety of its
employees and the communities in which it operates. The maintenance of high environmental performance
standards are significant responsibilities within the conduct of the Company’s operations. The Company’s
aim is to be recognised as a leader in health, safety and environmental management.
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Part 6 The Business
POWER
Overview
The following table provides an overview of the Company’s operational power plants and Power Plant
Projects:
Expected
Gross commissioning
Project capacity Fuel dates(1)
Operational power plants Essar Power-Hazira 515 Gas(4) 1997
Vadinar Power-Jamnagar 120 Refinery residue* 2008
Bhander Power-Hazira 500 Gas 2006 to 2008
Essar Power (Canada) 85 Blast furnace and coke oven gas* 2009
Phase I Power Projects Essar Power MP-Mahan 1,200 Domestic Coal—pit head(6) 2011
Essar Power Gujarat-Salaya 1,200 Imported Coal 2011
(4)
Vadinar Power-Expansion 380 Gas 2010
Phase I
Vadinar Power-Expansion 510 Imported coal(5) 2011
Phase II
Essar Power Hazira-Hazira 270 Corex gas/fines* 2012
Essar Power Orissa-Paradip 120 Domestic coal—linkage 2012
Essar Power Jharkhand-Tori 1,200 Domestic coal—pit head(6) 2012
Phase II Power Projects(2) Essar Power Jharkhand-Tori 600 Domestic coal—pit head 2013
Expansion
Essar Power MP-Mahan(3) 600 Domestic coal—linkage 2013
Expansion
Salaya II 1,320 Imported coal 2013
Salaya III 600 Pet coke* 2013
Neptune I 1,050 Domestic Coal—pit head 2013
(3)
Neptune II 1,200 Imported coal 2014
* Captive fuel supplied by off-taker.
(1) For the operational power plants, commissioning dates are actual dates. For the Power Plant Projects, commissioning dates are
expected dates.
(2) The Phase II Power Projects are subject to securing committed financing.
(3) Subject to securing fuel supply. May also use domestic coal subject to allocation by government.
(4) Can also use naphtha.
(5) Can also use refinery liquid fuels.
(6) In the event of any delay in the development of the relevant captive coal mines, the Company expects, subject to government
approval, to use domestic coal linkages for these power plants until coal from these mines becomes available.
The Company’s power business aims to become a vertically integrated power business focused primarily on
India, with operations across the power value chain from fuel ownership to generation and transmission.
Operation and maintenance functions at each of the power business’s operational plants are performed
in-house by an operations and maintenance team of experienced and qualified expert engineers and
technicians. The Company currently expects that the operation and maintenance of each of the Power
Plant Projects will also be undertaken in-house.
Most of the Company’s operational power plants and Power Plant Projects are located in central, eastern
and western India, with the domestic coal-fuelled power plants located in central India and the imported
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coal-fuelled power plants being located on the west coast. This is expected to enable the Company to
better optimise its delivered cost of power.
For each of the Essar Power MP-Mahan, Essar Power Gujarat-Salaya and Essar Power Jharkhand-Tori
Phase I Power Projects, the Company is employing standardised equipment for BTG modules,
ash-handling units, cooling towers and electrical and mechanical equipment. This enables the Company to
leverage the combined scale of these projects to obtain competitive prices and firm commitments on
delivery schedules from key suppliers. The Company’s power business is also expected to benefit from
being able to achieve efficiency in relation to operating personnel and spares supply through the use of a
standardised module across most of its operational power plants and Power Plant Projects.
The power business benefits from its relationship to Essar Affiliated Companies in accessing transport
services and fuel, providing off-take partners and accessing project implementation expertise, including
EPC expertise.
Arrangements with Essar Affiliated Companies include the following:
• Essar Projects is providing construction services and procurement services for the domestic equipment
required for all of the Power Plant Projects.
• Essar Project Management is providing project management services for certain of the Power Plant
Projects.
• Essar Projects, Essar Logistics and Essar Shipping are providing services for the construction of
transport and delivery infrastructure to ensure the delivery of fuel to the Power Plant Projects.
• Essar Engineering is assisting the power business with setting the technical specifications for its Power
Plant Projects.
• Global Supplies is providing procurement services for the imported equipment required for the Power
Plant Projects.
For a description of the arrangements with Essar Affiliated Companies in relation to the Power Plant
Projects, see also Part 15 ‘‘Relationship with Essar Group’’ and paragraph 13 of Part 16 ‘‘Additional
Information—Material Contracts’’.
The following table provides an overview of the power business’s current and expected sources of fuel
supplies for its operational power plants and its Power Plant Projects:
Following completion of the

Operational Power Phase I Power Phase II Power
Source Plants Projects Projects
(Percentage of fuel supply)
Domestic Coal—pit head . . . . . . . . . . . . . . . . . . . . . . . — 39% 35%
Coal—imported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 28% 37%
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83% 23% 12%
Domestic Coal—linkage . . . . . . . . . . . . . . . . . . . . . . . . — 2% 6%
Other (captive fuel) . . . . . . . . . . . . . . . . . . . . . . . . . . . 17% 8% 9%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100%
The Company has in place medium- to long-term fuel arrangements for five of the six Phase I Power
Projects (through the allocation of captive coal mines in India, the acquisition of coal mines outside India
and contractual arrangements with Essar Affiliated Companies) and continues to work towards long-term
fuel security. Although the Company’s allocation of a captive coal mine for the Essar Power MP-Mahan
project for 1,200 MW of proposed installed capacity has already expired, and its allocation of a captive coal
mine for the Essar Power Jharkhand-Tori project, which is proposed to have an installed capacity of
1,200 MW, will expire prior to the scheduled date of commencement of mining operations, the Company
has already applied to the Government of India for an extension of the coal block allocations for the Essar
Power MP-Mahan project and the Essar Power Jharkhand-Tori project. In addition, in the event that
mining approvals for the Mahan and Chakla coal blocks are not received in time for the commissioning of
the Essar Power MP-Mahan and Essar Power Jharkhand-Tori plants, respectively, the Company has
applied to the Government of India for temporary coal linkages to meet the plants’ respective coal
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Part 6 The Business
requirements during any such period. The Company’s power business expects that the proposed use of coal
from its existing and future coal mines will allow a majority of the Company’s coal-fuelled Power Plant
Projects to have a dedicated fuel supply, resulting in lower costs for procuring fuel and additional
protection against fuel price volatility.
The following table provides an overview of the current fuel supply arrangements for the existing power
plants, Phase I Power Projects and Phase II Power Projects:
Coal mine
Project MW Fuel type Fuel source reserves(1)
mmt
Essar Power Hazira— 515 Gas Gas contracts with Reliance Industries
Hazira Limited and Gujarat State Petroleum
Corporation Limited
Bhander Power—Hazira 500 Gas Fuel supplied by off-taker (Essar Steel)
(2)
Vadinar Power— 380 Gas Fuel supplied by off-taker (Essar Oil)
Expansion Phase I
Vadinar Power—Jamnagar 120 Captive fuel—refinery Fuel supplied by the off-taker (Essar
residue Oil)
Essar Power (Canada) 85 Captive fuel—blast Fuel supplied by the off-taker (Essar
furnace and coke Steel Algoma)
oven gas
Essar Power Gujarat— 1,200 Imported coal— Aries mine Indonesia and Mozambique 64
Salaya captive coal mine mine—captive mine acquired by Essar
Power
Vadinar Power— 510 Imported coal— As above. 35
Expansion Phase II captive coal mine For 390 MW(3), fuel to be supplied by
off-taker (Essar Oil 301 MW and Essar
Steel 90 MW)
Essar Power MP—Mahan 1,200 Domestic coal— Mahan captive coal mine—allocation to 73
captive coal mine Mahan Project
Essar Power Jharkhand— 1,200 Domestic coal— Chakla and Ashok Karkata captive coal 71/100(5)
Tori captive coal mine mines
Essar Power Jharkhand— 600 Domestic coal— As above
Tori II captive coal mine
Essar Power Hazira— 270 Captive fuel—corex Fuel supplied by off-taker (Essar Steel)
Hazira fines/gas
Essar Power Gujarat— 600 Captive fuel—pet Fuel to be supplied by Essar Oil
Salaya III Expansion coke
Neptune I(4) 1,050 Domestic coal— Captive coal mine allocated to the 112
captive coal mine Neptune project
Essar Power Gujarat— 1,320 Imported coal Contracts with Essar Shipping &
Salaya II Logistics Ltd(6)
Essar Power Orissa— 120 Captive fuel— Fuel supplied by off-taker (Essar Steel)
Paradip domestic coal linkage
Total 9,670 455
(1) Certain coal mines are subject to extensions of the respective allocation periods.
(4) The Company is currently intending to increase its stake from 39% to 100%. See ‘‘Neptune I and II—Orissa (2,250 MW)’’
below for further details. Reserve number shown represents 100% of the coal allocated to Neptune.
(5) This amount is for both Essar Power Jharkhand Tori and Essar Power Jharkhand Tori II.
(6) Essar Power Gujarat is obliged to utilize the coal extracted from the mines owned or allocated to the Company’s power business
(net of the commitment for Essar Power Gujarat—Salaya). Accordingly any difference between the amount available from such
mines and the plant’s required amounts will be supplied under these conditions.
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Of the 1,220 MW combined installed capacity of the power business’s operational power plants, 300 MW is
dedicated to GUVNL, 671 MW to Essar Steel Group (with an option to purchase 123 MW), 120 MW to
Essar Oil and 4.5 MW to Essar Affiliated Companies (with an option to purchase an additional 1.5 MW).
The Company has entered and expects to enter into additional long-term PPAs with Essar Affiliated
Companies and other industrial companies and state utilities, including GUVNL, for approximately 60%
to 70% of the currently planned additional power generation capacity from the Power Plant Projects to
provide security of revenues, including for the servicing of the Company’s obligations under the related
project financing arrangements. The Company expects to sell the remaining power on a short-term basis as
merchant sales in order to capture market rates.
The following table provides an overview of the power business’s current and expected sources of power
off-take by customer category:

Operational Power Phase I Power Phase II Power
Off-take Plants Projects Projects
(Percentage of total off-take)
Captive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75% 36% 19%
SEBs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25% 47% 55%
Merchant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0% 17% 26%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100%
Financing Arrangements
Essar Power Hazira and the relevant Power Plant Project subsidiaries have entered into long-term project
financing arrangements to finance the operational power plants and certain of the Phase I Power Projects
and expect to enter into further financing arrangements for the financing of the remainder of the Power
Plant Projects.
The existing project financing arrangements are, and the future project financing arrangements are
expected to be, secured by charges over substantially all the assets of the relevant project subsidiary
(including receivables under power off-take agreements), downstream guarantees by Essar Power, pledges
over shares of the relevant Power Plant Project and charges over all accounts of the relevant project
subsidiary.
The project financing arrangements generally cover and are expected to cover 75% of the costs of each
Power Plant Project, with the Company required to provide equity financing for the remaining 25%.
For additional information about the Company’s project financing arrangements, see ‘‘Indebtedness’’ in
Part 9 ‘‘Operating and Financial Review’’. For more information about the phasing of the Company’s
capital expenditures for the Power Plant Projects and planned funding required therefor, see ‘‘Factors
Affecting Results of Operations and Financial Condition—Funding Costs for the Expansion Projects’’ in
Part 9 ‘‘Operating and Financial Review’’. For details of the pledge agreements see paragraph 13.4 of
Part 16 ‘‘Additional Information’’.
Long-Term PPAs
The discussion below describes the Company’s long-term PPAs with its captive off-take customers. The
Company’s PPAs with GUVNL are discussed under the operational power plant or Phase I Power Project
to which they relate.
The Company’s long-term PPAs with off-take customers that do not supply the relevant power plant’s fuel
requirements provide for two-part tariffs for the power, comprising a capacity charge and an energy
charge, while PPAs with customers that supply the relevant power plant’s fuel requirements generally
contain only a capacity charge. In PPAs with captive customers, the provision of fuel is the responsibility of
the off-take customer. The capacity charge mainly depends on the capital and operating cost of the
relevant power project, and is designed to enable the generation facility to recover its fixed costs and earn a
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return on investment at an assured level of plant availability for the contracted demand. Generally, the
capacity charge includes:
• operating and maintenance expenses, repairs, equipment, spares and related overhead;
• depreciation;
• interest on long-term debt;
• interest on specified working capital;
• income taxes; and
• a return on the equity capital of the power plant.
The recovery of this capacity charge is generally based on the level of normative plant availability. The
capacity charge provides the Company with a relatively predictable and recurring source of revenues
designed to provide the necessary incentive for construction of the relevant Power Plant Project and for
continued operation of existing plants. A power plant is eligible to receive the capacity charge regardless of
how often the plant is called upon to generate power, so long as it is available when needed to maintain
desired power generation levels. If the average plant available capacity in any year exceeds contracted
availability, the Company is entitled to an incentive fee on the power made available above the normative
availability threshold for certain of the power plants. If, on the other hand, the average plant available
capacity in any year falls below a specified percentage due to the fault of the Company, a penalty fee may
be imposed, which is generally in proportion to the fixed-capacity charge.
The energy charge generally covers most variable operating costs, the largest of which is fuel. This charge
may have an escalation feature tied to certain third-party inflation statistics.
The long-term PPAs also generally contain provisions regarding:
• the scheduled commissioning date for the relevant power plant. If this commissioning date is not met,
the buyer is entitled to liquidated damages for each day of the delay or may terminate the PPA;
• the term of the contract from the commissioning date of the power plant;
• the requirement that the buyer provide the power plant with dispatch instructions for the delivery of
the contracted capacity to the buyer by specific deadlines. If the buyer fails to provide dispatch
instructions for any portion of the contracted capacity by the deadline, the power plant is free to sell
this portion to other buyers without losing the right to receive the full capacity charge from the buyer.
However, the proceeds from sales to other buyers post variable charges generally accrue for the
benefit of the buyer and the seller under the PPA;
• payment security provisions, usually in the form of an unconditional, irrevocable and revolving letter
of credit with a term of 12 months; and
• events of default, including the power plant’s failure to achieve a certain average plant availability in a
specified period or the cessation of the power plant’s operations. Buyer events of default include
certain payment failures. If an event of default occurs, the buyer and the operator of the power plant
are required to consult with each other for a specified period of time, after which the operator is free
to sell the buyer’s contracted capacity to other buyers.
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Part 6 The Business
Operational Power Plants

Overview
The Company currently has four operational power plants:
Average
Installed Major availability
gross equipment Commissioning per year since
Project capacity Location suppliers date commissioning Fuel Off-take
(1)
Essar Power-Hazira 515 MW Gujarat, General Electric, October 1997 96% Natural Essar Steel and
India Siemens, Gas/naphtha GUVNL
Honeywell
Vadinar Power- 120 MW Gujarat, Mitsubishi May 2008 97.14% Refinery Vadinar refinery
Jamnagar(2) India Deutsche residue
Babcock
Bhander Power- 500 MW Gujarat, Areva, BHEL, October 2008(4) 98.98% Natural gas Essar Steel Group
Hazira(3) India Hitachi, Deltak, companies and
IHI, Hangzhou, other Essar
Siemens Affiliated
Companies
Essar Power 85 MW Ontario, Mitsubishi June 2009 79%(5) Blast Essar Steel Algoma
(Canada) Canada Canada Ltd., furnace gas
INDECKeystone and coke
Energy LLC oven gas
Total 1,220 MW
(1) Based on average availability for last three years.

(2) 26% owned by Essar Oil.
(3) 26% of the equity investment owned by Essar Steel Group companies and other Essar Affiliated Companies.
(4) The first, 155-MW unit of this plant was commissioned in January 2006; the second, 200-MW unit in December 2007; and the
third, 145-MW unit in October 2008.
(5) Since date of commissioning.
Essar Power-Hazira (515 MW)

Overview
Commissioned in October 1997, the Essar Power-Hazira power plant is a multi-fuel (naphtha, high-speed
diesel, natural gasoline liquid and/or natural gas) combined-cycle power plant located near the Essar Steel
facility in Hazira, Gujarat. The Company owns approximately 26.3 hectares of land in the area, of which
the plant currently occupies 16.6 hectares.
The table below presents the plant availability, plant load factor, auxiliary consumption and units of
electricity generated for the Essar Power-Hazira power plant for the periods indicated.
1 April 2009 to
12 months ended 31 March 31 December
2007 2008 2009 2009
Plant availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.10% 95.40% 94.61% 96.49%

Plant load factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.20% 78.64% 65.89% 61.28%
Auxiliary consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.69% 1.61% 1.79% 1.96%
Units of electricity generated (MKwH) . . . . . . . . . . . . . . . . 3,387 3,573 2,964 2,083
Water and Fuel Supply

Water for plant operations is drawn from the Singanpur weir and is supplied by Essar Steel.
Under a fuel management agreement dated 18 October 1996, Essar Steel is responsible for procuring and
supplying the fuel needed to generate the power that Essar Steel has committed to take pursuant to its
PPA. For details of this fuel management agreement, see also Part 15 ‘‘Relationship with the Essar
Group’’.
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In addition, the Company has entered into agreements with Gujarat State Petroleum Corporation Limited
(‘‘GSPC’’), Reliance Industries Limited and Niko (NECO) Limited (‘‘Niko’’) for the purchase of natural
gas that the power plant needs to generate the power required pursuant to the PPA with GUVNL. The
agreements are on a ‘‘take or pay’’ basis which obligates the Company to pay for an amount equal to the
‘‘take or pay’’ quantity. However, there is also a back-to-back arrangement with GUVNL to assume the
Company’s obligations under these agreements. The expiration date for the agreement with GSPC is
31 December 2013, while the agreements with Reliance Industries Limited and Niko expire on 31 March
2014.
Power Off-Take Arrangements

The power generated by the plant is sold under two long-term PPAs, including:
• 300 MW to GUVNL; and
• 215 MW to Essar Steel.
GUVNL PPA: Under the PPA with GUVNL expiring in 2016 GUVNL has agreed to purchase 300 MW of
power from the power plant. The tariff payable under the PPA is the sum of:
• a capacity charge comprising depreciation, interest expenses, tax, operation and maintenance
expenses and a return on equity equal to 13% per year;
• an energy charge comprising the actual cost of fuel, calculated on the basis of an assumed heat rate for
the power plant; and
• an incentive payment of 0.575% if the power plant generates between 6,132 MKwH and 7,008 MKwH
in a year and 0.4% for any amounts generated in excess of 7,008 MKwH per year.
Since July 2006 the benefit of ‘‘deemed generation’’ under the PPA, which requires GUVNL to pay
capacity charges based on declared capacity (to the extent of GUVNL’s power allocation) is not available.
GUVNL pays capacity charges only on actual off-take and not on the declared capacity.
Essar Steel PPA: Under the PPA with Essar Steel expiring in 2026, the tariff payable is an annual fixed
charge comprising depreciation, interest expenses, tax, operation and maintenance expenses and a return
on equity, irrespective of the actual power off-take.
Evacuation Facilities
The Company evacuates power from the Essar Power-Hazira plant at 220 KV through four generator
transformers to a 220-KV switchyard and then evacuates power from the switchyard to Essar Steel on a
220-KV line and to GUVNL through four 220-KV transmission lines. Two of the transmission lines are
connected to the Icchapore sub-station and two to the Sachin sub-station, located at distances from the
plant of, respectively, 18 km and 30 km.
Regulatory Compliance and Emissions

Essar Power-Hazira is in compliance with all material environmental, health and safety regulations.
Vadinar Power-Jamnagar (120 MW)

Overview
The Vadinar Power-Jamnagar power plant, located on 4.1 hectares of land at the Vadinar refinery complex,
is the Vadinar refinery’s captive power and steam cogeneration plant. The plant is a refinery residue-based
multi-fuel captive co-generation plant with capacity to generate 77 MW of power and 230 tph of steam.
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electricity and steam generated at the Vadinar Power-Jamnagar plant for the periods indicated.
1 May 2008 to 1 April 2009 to

31 March 31 December
2009(1) 2009
Plant availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.47% 94.00%

Plant load factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91.21% 88.40%
Auxiliary consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.55% 4.68%
Units of electricity generated (MKwH) . . . . . . . . . . . . . . . . . . . . . . . . . . 441 318
Steam generated (tonnes) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.77 2.71
(1) Plant commenced commercial operations on 1 May 2008.

Water for the plant is drawn from the sea and is then treated and supplied to the plant by Essar Oil.
Essar Oil provides the fuel required at the power plant to generate the power and steam for the power
plant’s operations.
Power Off-Take
The Vadinar Power-Jamnagar plant was set up to meet the power and steam requirements of the Vadinar
refinery and hence the entire output of power and steam generated by this plant is supplied to the Vadinar
refinery. The Processing Agreement, effective from 1 April 2007, is for a term of 15 years.
Power from the Vadinar-Power Jamnagar plant is evacuated through a 33-KV line to the Vadinar refinery’s
main receiving sub-station, from which the power is then evacuated to the refinery.

The Vadinar Power-Jamnagar plant is in compliance with all material environmental, health and safety
regulations.
Bhander Power-Hazira (500 MW)

Overview
The Bhander Power-Hazira plant is a natural gas-fired combined-cycle captive power plant located in
Hazira, Gujarat on 20 hectares of land. The plant was commissioned in phases from 15 January 2006
onwards, commencing full commercial operations in October 2008.
electricity generated for Bhander Power-Hazira for the periods indicated.
7 October 2008 to 1 April 2009 to

2009(1) 2009
Plant availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.62% 98.12%

Plant load factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.68% 53.47%
Auxiliary consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.30% 2.17%
Units of electricity generated (MKwH) . . . . . . . . . . . . . . . . . . . . . . . . 786 1,762
(1) Plant achieved full capacity of 500 MW on 7 October 2008.

Essar Steel provides water for the plant’s operations.
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Part 6 The Business
Essar Steel and other Essar Affiliated Companies are responsible for providing the natural gas required by
the Bhander Power-Hazira plant to generate the power that they have committed to take pursuant to their
PPAs with Bhander Power. All risks associated with the procurement of the fuel, its price and its delivery to
the project site are borne by the respective off-take customers. To the extent that the off-take is optional,
the relevant off-take customer is only responsible for the fuel if they elect to take such additional capacity.

The Company has entered into PPAs dated 8 March 2010 for the sale of power from the plant with the
following companies in the Essar Affiliated Companies:
• 240 MW to Essar Steel;
• 118.5 MW to Essar Steel Hazira;
• 7.5 MW to Hazira Plate;
• 4.5 MW to Hazira Pipe Mill;
• 1.5 MW to Essar Bulk Terminal;
• 1.5 MW to Essar Projects; and
• 1.5 MW to Essar Heavy Engineering Services.
The tariff payable under each PPA is a fixed capacity charge comprising depreciation, interest expenses,
tax, operation and maintenance expenses and a return on equity.
For the balance capacity of 125 MW, the off-takers listed above have an option to purchase at a fixed
capacity charge of Rs. 1 per unit.
Each of the PPAs terminates on 31 March 2030.
Bhander Power evacuates power from the plant to Essar Steel through two 220-KV lines of approximately
500 m in length and to Essar Steel Hazira through two 220-KV lines of five km in length and to other Essar
Group companies through 33-KV cables.
Clean Development Mechanism Projects

This plant is being operated as a clean development mechanism project under the UNFCCC in two stages:
• 155 MW for the first phase of the project; and
• 340 MW for the second phase of the project.
During the performance guarantee tests, the installed capacity was certified as 500 MW.
The first phase’s 155-MW generation unit was registered as a clean development mechanism project under
the UNFCCC on 26 February 2008, a registration that will remain valid until 25 February 2018. Assuming a
plant load factor of 85%, the plant is expected (as per time baseline at the time of registration) to generate
190,876 certified emission reductions (‘‘CERs’’) per year for a period of ten years. The initial verification
for the period from 26 February 2008 to 30 April 2009 is currently underway. The carbon credits for this
period are expected to be 67,826 CERs, lower than originally estimated due to the lower than expected
plant load factor of the Bhander Power-Hazira plant.
With respect to the second phase’s 340-MW generation unit, validation has been completed by the Bureau
Veritas Certification and its validation report has been submitted to the UNFCCC for registration. The
Company expects the project to be registered by the second quarter of 2010, with effect from November
2009. The estimated carbon credit generation at an 85% plant load factor is expected to be 300,000 CERs
per year for a period of ten years.

Bhander Power is in compliance with all material environmental, health and safety regulations.
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Part 6 The Business
Essar Power (Canada)

Overview
The Company’s wholly owned subsidiary Essar Power (Canada) (formerly Algoma Energy LLP) owns and
operates the Essar Power (Canada) power generation plant in Sault Ste. Marie, Ontario, Canada. This
85-MW cogeneration plant was commissioned on 13 June 2009. The plant’s facilities include two 375,000
pound/hour boilers, a 105-MW turbine and other related components, including generators, a blast furnace
gas holder, condensate and feed-water systems, a water treatment plant, a cooling tower, a transformer and
a distributed control system.
The power plant converts waste gases from the iron-making and coke-making operations of Essar Steel
Algoma, an Essar Affiliated Company and the third largest steel producer in Canada, into electricity and
steam for Essar Steel Algoma’s steelworks. The Essar Power (Canada) power plant was constructed to
reduce Essar Steel Algoma’s reliance on the Ontario province’s local power grid by 50% on average,
freeing up this capacity for the rest of the province. By employing low-NOx burner technology and
eliminating the need to flare by-product fuel, the Essar Power (Canada) power plant has reduced Essar
Steel Algoma’s nitrous oxide emissions by 15%, or approximately 400 metric tonnes per year.
The Company acquired a 49.9% equity interest in Essar Power (Canada) from Essar Steel Algoma in
December 2007 for a consideration and capital contribution of US$126.52 million and acquired the
remaining 50.1% equity interest in November 2009 from Essar Steel Algoma for a purchase price of
US$134.76 million.
electricity generated for the Essar Power (Canada) power plant for the period indicated.
13 June to 31 December 2009(1)
Plant availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79%

Plant load factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65%
Auxiliary consumption (MKwH) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.28
Units of electricity generated (MKwH) . . . . . . . . . . . . . . . . . . . . . . . . . . . 234.69
(1) Plant commenced commercial operations on 13 June 2009.
Fuel Supply
Essar Steel Algoma supplies surplus blast furnace gas and coke oven gas to Essar Power (Canada) and
receives power and steam in return.

The Essar Power (Canada) plant has entered into a 20-year PPA expiring in May 2029 with the Ontario
Power Authority for the purchase of 63 MW of power. Pursuant to the PPA, Essar Power (Canada) is
guaranteed the PPA rate per MWh from the Ontario Power Authority. Essar Power (Canada) sells all of
the power generated by the plant to Essar Steel Algoma at market rates and the Ontario Power Authority
funds the difference between the market rate and the PPA rate per MWh up to the contract capacity. In
effect, the Ontario Power Authority underwrites the minimum price payable under the PPA.
Power from Essar Power (Canada) is transmitted to Essar Steel Algoma via Essar Steel Algoma’s 34.5-KV
power distribution system. In the event that the power plant’s power generation exceeds Essar Steel
Algoma’s load, the surplus power is sent to the provincial grid.

The Essar Power (Canada) plant is in compliance with all material environmental and health and safety
regulations.
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Phase I Power Projects

Overview
Phase I Power Projects
The following table provides information about the Company’s Phase I Power Projects:
Expected
installed Expected
gross Estimated Estimated commissioning
Project capacity Location cost cost date Fuel supply Expected off-take
(Rs. in (US$ in
billion) million)
Essar Power MP-Mahan(1) 1,200 MW Singrauli, 48.60 1,041.00 Q3 Captive coal 30% ROFR; 11.75% Essar
Madhya 2011 mine(5) Steel; 50.75% merchant;
Pradesh, 7.5% power at variable
India cost
Essar Power 1,200 MW Jamnagar, 48.20 1,032.56 Q2 Imported 89.1% GUVNL; 10.9%
Gujarat-Salaya Gujarat, 2011 coal merchant
India
Essar Power 1,200 MW Latehar, 57.00 1,221.08 Q4 Captive coal 48% PPA(2); 25%
Jharkhand-Tori Jharkhand, 2012 mine(5) ROFR;15% merchant;
India 12% power at variable cost
Essar Power 270 MW Hazira, 14.33 308.00 Q4 Corex gas/ 100% Essar Steel Hazira
Hazira-Hazira(3) Gujarat, 2012 fines(6)
India
Essar Power 120 MW Paradip, 6.83 146.31 Q2 Domestic 100% Essar Steel Orissa
Orissa-Paradip(3) Orissa, India 2012 coal-linkage
Vadinar 890 MW Vadinar, 30.73 658.31 78.2% Essar Oil; 11.8%
Power(4)-Expansion Gujarat, merchant; 10% Essar Steel
India Hazira
Phase I 380MW 7.25 155.31 Q3 Gas(7)
2010
Phase II 510MW 23.48 502.99 Q3 Imported
2011 coal(8)
Total 4,880 MW
(1) Essar Steel and Essar Steel Hazira, both of which are Essar Affiliated Companies, are expected to acquire a 26% equity interest
in the Essar Power MP-Mahan Phase I Power Project in order to enable it to qualify for captive power plant status, although it is
intended to put in place arrangements for the Company to retain an economic interest of 99.79%. If Essar Steel and Essar Steel
Hazira do not purchase the equity interest, the project would not qualify for captive power plant status and the Company would
need to fund the Rs. 26 million (US$0.56 million) required for the equity interest.
(2) The Company expects to sign long-term PPAs aggregating to 48% of the power produced by this power plant. The Company is
currently participating in a bidding round with the Bihar State Electricity Board, and, if successful, expects to sell approximately
40.5% of the power from the Essar Power Jharkhand-Tori plant under a long term PPA to this entity.
(3) Members of the Essar Steel Group have a 26% equity interest in Essar Power Orissa-Paradip and will have a 26% equity
interest in Essar Power Hazira-Hazira for the purposes of complying with the Indian captive power policies, although it is
intended to also put in place arrangements for the economic interest to remain over 98% with the Company. If members of the
Essar Steel Group do not purchase the equity interest, the project would not qualify for captive power plant status and the
Company would need to fund the Rs. 26 million (US$ 0.56 million) required for these equity interests.
(4) Essar Steel Hazira, an Essar Affiliated Company, is expected to acquire a 5% equity interest in the Vadinar Power-Jamnagar
plant in order to enable it to qualify for captive power plant status, although it is intended to put in place arrangements for the
economic interest to remain at 97.92% with the Company.
(5) In the event of any delay in the development of the relevant captive coal mine, these plants expect, subject to government
approval, to use domestic coal linkages until coal from these mines becomes available.
(6) Captive fuel supplied by off-taker.
For more information about the phasing of the Company’s capital expenditures for the Phase I Power
Plant Projects and planned funding required therefor, see ‘‘Factors Affecting Results of Operations and
Financial Condition—Funding Costs for the Expansion Projects’’ in Part 9 ‘‘Operating and Financial
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Review’’. For further information on the proposed capital structure of the Group at and after Admission,
see paragraph 3 of Part 16 ‘‘Additional Information—Pre-IPO Reorganisation and Group Structure’’.
Essar Power MP-Mahan (1,200 MW)

Overview
The Essar Power MP-Mahan project is a 1,200 MW (2x600 MW) captive coal-fired pit-head power plant
located in Singrauli district, Madhya Pradesh. The Company has entered into a shareholders’ agreement
with Essar Steel and Essar Steel Hazira in conjunction with Essar Power MP, pursuant to which Essar Steel
and Essar Steel Hazira are expected to acquire 13% each of the equity shares of Essar Power MP, the
owner of the planned Essar Power MP-Mahan power plant.
The proposed site for the project is 700 hectares. The Company currently owns or has a leasehold interest
in respect of 540 hectares; and occupies 533 hectares at this site. Passing of title and/or taking occupation
for the remainder of the site is still pending as at the date of this document.
The Company expects the plant’s first 600-MW capacity unit to be commercially operational by the second
quarter of 2011 and the second 600-MW capacity unit to be commercially operational by the third quarter
of 2011.
The Company expects the Essar Power MP-Mahan project to cost approximately Rs. 48.60 billion
(US$1,041.00 million). The status of the funding for this project as at 31 December 2009 is set forth in the
table below:
Estimated Estimated
Available/ Required/ total Available/ Required/ total
Funding arranged shortfall funding arranged shortfall funding
(Rs. in billion) (US$ in million)
Equity . . . . . . . . . . . . . . . . . . . . . . . . . 7.76 4.39 12.15 166.24 93.91 260.15
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 36.45 — 36.45 780.85 — 780.85
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 44.21 4.39 48.60 947.09 93.91 1,041.00
On 21 January 2009, Essar Power MP entered into a rupee-denominated facility agreement with ICICI
Bank Limited, Power Finance Corporation, Rural Electrification Corporation Ltd and the Punjab National
Bank in the amount of Rs. 36.75 billion (US$787.28 million) of which it intends to drawdown
Rs. 36.45 billion (US$780.85 million) to fund the project.
Procurement/Implementation
Essar Power MP has entered into an offshore supply contract with Global Supplies. The procurement work
for the project is almost complete.
Essar Power MP has entered into various contracts with Essar Projects for onshore supply and onshore
construction and with Essar Logistics for offshore transport and onshore transport.
Essar Engineering is providing onshore engineering services and assisting Essar Power MP in the
preparation of technical specifications for this power project. Essar Power MP will handle the operation
and maintenance of the power plant internally. Essar Power MP is in the process of obtaining all statutory
and non-statutory approvals and clearances required for the construction of the project. Essar Project
Management is providing project management services to Essar Power MP.
Subject to the fulfilment of required conditions, Essar Power MP has obtained pollution control approval,
water availability approval, environmental approval and civil aviation approval.

Water for the Essar Power MP-Mahan project will be sourced from the Govind Vallabh Pant Sagar, a water
reservoir located approximately 37 km from the project site.
The Government of India has allocated the Mahan coal block, located at a distance of four km from the
power plant, jointly to Hindalco and Essar Power for the captive consumption supply of coal to the
respective proposed power plants of Essar Power MP and Hindalco. The mine is operated by Mahan Coal,
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a 50:50 joint venture between Hindalco and Essar Power. Pursuant to the terms of the coal allocation made
in April 2006, mining was required to commence within 36 to 42 months, a period which has since expired.
Mahan Coal has applied for an extension of this allocation. Further, although the coal block was granted to
Essar Power MP for purposes of a 1,000 MW power plant, Essar Power MP has informed the Government
of India of its intention to operate the plant at the increased capacity of 1,200 MW.
Moreover, on account of the captive coal mine allocation being made in the name of Essar Power, but the
project being implemented by Essar Power MP, Essar Power has submitted an undertaking to the Ministry
of Coal of the Government of India that Essar Power shall hold 51% voting rights in Essar Power MP for
the life of the Mahan coal block.
Essar Power MP has entered into a coal off-take agreement with Mahan Coal as well as a memorandum of
understanding with Hindalco in connection with this coal off-take agreement. Under these arrangements,
Mahan Coal will supply 60% of the coal mined at the Mahan coal block to Essar Power MP at a price
equal to the sum of the base price, royalties, taxes, statutory charges and levies. Pursuant to these
arrangements the base price will comprise:
• a fixed price which is the sum of fixed charges paid to the mining contractors, a post-tax return on
equity of 12.5%, overheads of Mahan Coal (except those which are variable linked to the quantity of
coal provided), depreciation on fixed assets, interest on loans, lease rent and dead rent; and
• a variable price which is the sum of the variable charges paid to the mining contractors, amortisation
costs, interest on working capital and any other variable expenses.
For the Essar Power MP—Mahan project, Essar Power MP’s share of the Mahan coal mine is estimated to
be sufficient to operate the 1,200 MW plant for 12.5 years, and the Company has applied for further
domestic coal linkage in this regard. The annual coal requirement for this project is estimated at 5.55 mtpa
for 1,200 MW capacity.
In addition, because it is possible that mining at the Mahan coal mine will not commence during the last
quarter of 2010 as initially anticipated due to delays in the receipt of certain mining approvals, Essar Power
MP has applied to the Government of India for a temporary coal linkage of 5.55 mtpa until such time as
the Mahan coal mine commences commercial production.
For additional information about the Mahan coal block, see ‘‘—Coal Mines—Mahan Coal Block’’.

The Company entered into two 25-year PPAs in August 2007 (to commence on the same date on which the
power plant’s commercial operations commence) with Essar Steel Hazira and Essar Steel for the supply of
292 MW and 390 MW of power, respectively, corresponding to a total of 62.5% of the plant’s planned
installed capacity. The tariff payable under these PPAs is the sum of:
• a capacity charge per kWh fixed for each year;
• an energy charge per kWh fixed for each year; and
• an incentive payment of Rs. 0.25 per kWh if plant availability exceeds 85% or a penalty payment if
plant availability decreases below 75%.
Under the implementation agreement, the state of Madhya Pradesh will purchase a maximum of 7.5% of
the net power produced by the plant at variable cost. Essar Power MP must also offer to sell an additional
30% of the aggregate capacity of the generating unit to the state of Madhya Pradesh, but the state is not
obligated to purchase this power. The tariff payable under the implementation agreement comprises
variable charges and fixed capacity charges as determined by the Madhya Pradesh Electricity Regulatory
Commission.
The PPA of Essar Power MP-Mahan with Essar Steel Group provides an option to Essar Power MP-Mahan
to sell power to any third party for any undispatched capacity to be off-taken under the PPA. Essar Power
MP-Mahan proposes to sell this undispatched capacity on a merchant sales basis although there is a
mechanism in the PPA allowing the Company to recover a portion of the capacity charges that would
otherwise be payable by the Essar Steel Group if the price per unit for such merchant sales is less than the
price agreed in the PPA (subject to obtaining lender consent).
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The Company estimates that at least 141 MW is required to be sold each year for a period of ten years to
the Essar Steel Group to comply with custom and excise duty exemption conditions. See Part 15
‘‘Relationship with the Essar Group’’ for further details of this requirement.
It is expected that from the first quarter of 2011 the evacuation will be through a 400-KV double circuit
line from Mahan to Sipat pooling station and a 400-KV double circuit line from Gandhar to a new 400-KV
switchyard at Hazira located approximately 97 km away. The Company plans to construct this power
evacuation infrastructure through its wholly-owned subsidiary Essar Power Transco.
Essar Power MP has entered into a transmission agreement under which Essar Power Transco will provide
transmission services to Essar Power MP for the transmission of power produced at the Essar Power
MP-Mahan plant to power purchasers under the PPA and any third party purchaser.
Essar Power Gujarat-Salaya (1,200 MW)

Overview
The Essar Power Gujarat-Salaya project will be an imported coal-fuelled thermal power plant with two
600-MW generation units, located in Jamnagar district, Gujarat. The Company is implementing this
project through its wholly-owned subsidiary Essar Power Gujarat.
This project will be located near Essar Oil’s refinery complex at Vadinar and approximately 18 km from the
Salaya port. Essar Power Gujarat has obtained possession of about 330 hectares of land from the
Government of Gujarat. The proximity of the proposed Salaya port being developed by Essar Bulk
Terminal, an Essar Affiliated Company, is an advantage in respect of coal transport from overseas sources.
The Company expects the first 600-MW capacity unit to be commercially operational by the first quarter of
2011 and the second 600-MW capacity unit to be commercially operational by the second quarter of 2011.
The Company expects this project to cost approximately Rs. 48.20 billion (US$1,032.56 million). The status
of the funding for this project as at 31 December 2009 is set forth in the table below:
Available/ Required/ Estimated Available/ Required/ Estimated

Funding arranged shortfall total funding arranged shortfall total funding
Equity . . . . . . . . . . . . . . . . . . . . . 6.73 5.32 12.05 144.19 113.95 258.14
Debt . . . . . . . . . . . . . . . . . . . . . . . 36.15 — 36.15 774.42 — 774.42
Total . . . . . . . . . . . . . . . . . . . . . . 42.88 5.32 48.20 918.61 113.95 1,032.56
To provide funding for this project, in September 2008 Essar Power Gujarat entered into a rupee-
denominated loan facility agreement with the State Bank of India and certain other lenders for
Rs. 25.525 billion (US$546.80 million). In addition, in May 2009 Essar Power Gujarat entered into a rupee-
denominated loan facility agreement with ICICI Bank Limited for Rs. 10.250 billion (US$219.58 million)
and with Essar Power for Rs. 375 million (US$8 million).
Essar Power Gujarat has entered into an offshore supply contract with Global Supplies. The procurement
work for the project is almost complete.
Essar Power Gujarat has entered into various contracts with Essar Projects for onshore supply and
construction, Essar Logistics for offshore and onshore transport, and Essar Project Management for
project management services.
Essar Engineering is providing onshore engineering services and is assisting Essar Power Gujarat in the
preparation of technical specifications for this power project. Essar Power Gujarat will handle the
operation and maintenance of the power plant internally.
Subject to the fulfilment of required conditions, Essar Power Gujarat has obtained all statutory and
non-statutory approvals and clearances required for the construction of the project relating to pollution
clearance, environmental clearance and civil aviation clearance.
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Essar Power Gujarat expects to source the water required for the project from the sea. While Essar Bulk
Terminal has obtained approval in principle from the Gujarat Maritime Board with respect to sea water
usage (which has expired and is subject to renewal), Gujarat Water Infrastructure Ltd has also granted
approval in principle to use 80 MLD of untreated fresh water until the completion of the planned
desalination plant for the project. Essar Power Gujarat also expects to enter into a contract for the use of
sea water for this project.
Essar Power Gujarat has entered into a 25-year fuel supply agreement with Essar Shipping and Logistics
for the supply of coal from the date that commercial operations at the Essar Power Gujarat-Salaya project
commences. However, Essar Shipping and Logistics does not currently have a back-to-back coal supply
arrangement in place. The amount of coal to be supplied each year shall be agreed between the parties.
Pursuant to the acquisition of captive coal mines in Indonesia and Mozambique, the terms of the fuel
supply agreement have been amended by an agreement dated 6 April 2010. This amendment requires
Essar Power Gujarat to use coal extracted from the mines of the ‘‘Power Group’’ (defined in the
amendment agreement to mean Essar Power Holdings, Mauritius and its subsidiaries and associates) in the
first instance for this power plant, and shall require Essar Shipping and Logistics to supply coal only in the
event of a shortfall. The aforesaid amendment is subject to approval of lenders of Essar Power Gujarat,
and other approvals, statutory or otherwise, as may be required for the same.
Essar Power Gujarat has entered into a 25-year contract of affreightment (from 15 September 2010) with
Essar Shipping and Logistics, dated 24 December 2008, for the transport of 3.6 to 4.4 mmt of coal per year
in bulk from Richards Bay in South Africa, or Tanjung Bara in Indonesia, to the Salaya port in India.
Essar Power Gujarat has also entered into a 20-year coal handling agreement with Essar Bulk Terminal,
dated 24 December 2008, to access certain terminal and transportation facilities at the Salaya port which
will be constructed and operated by Essar Bulk Terminal. Under the agreement, Essar Bulk Terminal will
provide receipt, handling and transport facilities for the coal through a conveyor system from the port to
the plant.

On 26 February 2007, Essar Power entered into a 25-year PPA with GUVNL for the sale of 1,000 MW per
year of power, with power supply from the first and second units commencing in February 2011 and August
2011, respectively. This PPA was assigned to Essar Power Gujarat on 25 November 2008. The tariff payable
under the PPA is the sum of:
• a fixed capacity charge;
• a variable energy charge; and
• certain incentives, penalties and unscheduled interchange charges.
Essar Power Gujarat is required to make power available to GUVNL at Essar Power Gujarat’s 400-KV
busbar.
Essar Power Jharkhand-Tori (1,200 MW)

Overview
The Essar Power Jharkhand-Tori project will be a captive pit-head coal-fired power plant comprised of two
generation units of 600-MW capacity each located in Latehar district, Jharkhand. The Company will
implement this project through its wholly-owned subsidiary Essar Power Jharkhand.
The project will require an area of 300 hectares, of which 158 hectares have already been acquired and the
remainder are in the process of being acquired.
The Company expects the first 600-MW capacity unit to be commercially operational by the third quarter
of 2012 and the second 600-MW capacity unit to be commercially operational by the fourth quarter of
2012.
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The Company expects the total project cost of this plant to be Rs. 57 billion (US$1,221.08 million). The
status of the funding for this project as at 31 December 2009 is set forth in the table below:
Available/ Estimated Available/ Estimated

Funding arranged Required total funding arranged Required total funding
Equity . . . . . . . . . . . . . . . . . . . . . . 0.32 13.98 14.30 6.83 299.51 306.34
Debt . . . . . . . . . . . . . . . . . . . . . . . 15.00 27.70 42.70 321.34 593.40 914.74
Total . . . . . . . . . . . . . . . . . . . . . . . 15.32 41.68 57.00 328.17 892.91 1,221.08
Essar Power Jharkhand-Tori has a non-binding sanction letter for an aggregate amount of Rs. 42.70 billion
(US$914.74 million), which includes a letter of credit facility for an aggregate amount of Rs. 15 billion
(US$321.34 million).
Essar Power Jharkhand has entered into an offshore supply contract with Global Supplies, an Essar
Affiliated Company, and has also entered into various contracts with Essar Projects for onshore supply and
onshore construction and with Essar Engineering for onshore engineering services. Essar Power Jharkhand
also entered into an offshore transport contract and an onshore transport contract with Essar Logistics.
Subject to the fulfilment of required conditions, an environmental approval for the first phase of the
project has been obtained. However, because this approval was granted for purposes of a 2,000-MW power
plant, Essar Power Jharkhand intends to apply in due course to amend the environmental approval to
reflect the modified capacity of the plant. Water availability approval for the first unit of 600-MW has also
been obtained subject to the fulfilment of certain conditions.

The Company received approval for the use of 2,461 m3/hr from Amanat river and 5,593 m3/hr from
Damodar Valley Corporation (‘‘DVC’’) as per a consent dated 22 February 2008. The Amanat river
approval is sufficient to meet the water needs of the first unit of 600 MW. The water allotment for the
DVC portion is for the remaining capacity and is subject to approval from DVC, which is pending.
In February 2007 and November 2007, the Government of India allocated the Chakla and Ashok Karkata
coal blocks, respectively, to Essar Power to source fuel for the Essar Power Jharkhand-Tori project. The
mines will be operated by Essar Power Jharkhand. On account of the captive coal mine allocation for the
Chakla block being made in the name of Essar Power, but the project being implemented by Essar Power
Jharkhand, Essar Power has submitted an undertaking to the Ministry of Coal of the Government of India
that Essar Power will hold 51% of the voting rights in Essar Power Jharkhand for the life of the Chakla
coal block. In addition, because the allocation for the Ashok Karkata block was also made in the name of
Essar Power, but the project is being implemented by Essar Power Jharkhand, the Company believes that
the Ministry of Coal of the Government of India will require Essar Power to undertake to hold 51% of the
voting rights in Essar Power Jharkhand for the life of the Ashok Karkata coal block.
The Chakla coal block is an open-cast coal mine located in Latehar district, Jharkhand approximately
four km from the Essar Power Jharkhand-Tori project site. The Company expects production from this
mine to commence by the first quarter of 2012. The Ashok Karkata coal block will also be an open-cast
coal mine and is located in Chakla district, Jharkhand approximately 20 km from the project site. Pursuant
to the terms of the coal allocations made in February 2007 and November 2007, mining was to commence
within 36 to 54 months (depending on the type of mine and the nature of the land). Because there have
been delays in the receipt of certain mining approvals which may delay the development of the mines, the
Company has applied for an extension of these periods.
In the event that mining at the Chakla coal mine does not commence in time for the scheduled
commissioning of the Essar Power Jharkhand-Tori plant, Essar Power Jharkhand has applied to the
Government of India for a temporary coal linkage of 5.4 mtpa until such time as the Chakla coal mine
commences commercial production. Essar Power Jharkhand has also applied to the Government of India
for an extension of the pre-set coal mine development milestones set forth in the coal allocation letter for
the Chakla coal mine. Moreover, because the development of the Ashok Karkata coal mine is not expected
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to be complete until 42 months from March 2010, Essar Power Jharkhand has applied to the Government
of India either to allow mining of up to 5.4 mtpa from the Chakla coal block (thus amending the original
allocation setting a limit of 4.5 mtpa) until such time as the Ashok Karkata coal block commences
commercial production, or, in the alternative, for the allocation of another coal linkage to meet the
expected shortfall of 0.9 mtpa.
In addition, because both the Chakla and Ashok Karkata coal allocations were granted to Essar Power
assuming the construction of a power plant with a capacity of 1,000 MW, the Company has informed the
Government of India of the revised capacity and applied for a modification of the original allocations.
The requirement of coal for this power plant is estimated to be 5.44 mmt per year. The Company expects
the mineable reserves from the above two coal blocks to be sufficient for the life of the plant.

The Company expects to sign long-term PPAs aggregating to 48% of the power produced by this power
plant. The Company is currently participating in a bidding round with the Bihar State Electricity Board,
and, if successful, expects to sell approximately 40.5% of the power from the Essar Power Jharkhand-Tori
plant under a long-term PPA to this entity.
Pursuant to a memorandum of understanding between Essar Power and the Government of Jharkhand,
the state of Jharkhand is entitled to purchase 12% of the power delivered by this plant at a variable rate,
and has a right of first refusal to purchase up to 25% of the power at a rate to be determined by the
appropriate regulatory commission. The detailed terms of these sales will be set out in a PPA. The
remaining 15% of the power generated by this plant is expected to be sold pursuant to merchant sales. The
Company intends to apply for Mega Power status for this project.
The power generated at the Essar Power Jharkhand-Tori plant will be stepped up to transmission voltage of
400 KV and evacuated by two 400-KV double circuit lines from the power plant to the pooling station near
Ranchi. Arrangements for this transmission to the pooling station are to be made by Essar Power
Jharkhand. The Company expects the pooling station near Ranchi to be constructed by Power Grid
Corporation of India Limited (‘‘PGCIL’’), the central transmission utility of the Government of India. A
transmission agreement with PCGIL has been signed.
Essar Power Hazira-Hazira (270 MW)

Overview
The Essar Power Hazira-Hazira project, located at Hazira, Gujarat will be fuelled predominantly by
imported coal and corex gas fines from the adjacent Essar Steel plant and comprise two generation units of
135-MW capacity each. The project is being implemented by the Company’s wholly-owned subsidiary
Essar Power Hazira.
The land for the project, comprising 15 hectares, is owned by the Essar Steel Group and is expected to be
leased to Essar Power Hazira. The project is well-connected by road, rail and port.
The Company expects the first 135-MW capacity generation unit to be commercially operational by the
third quarter of 2012 and the second 135-MW capacity generation unit to be commercially operational by
the fourth quarter of 2012.
The Company estimates that the total cost of the Essar Power Hazira-Hazira project will be
Rs. 14.39 billion (US$308 million). The current status of the funding for this project is set forth in the table
below:
Currently Currently
available/ Estimated available/ Estimated
Equity . . . . . . . . . . . . . . . . . . . . . . 0 3.59 3.59 0 77.00 77.00
Debt . . . . . . . . . . . . . . . . . . . . . . . 10.80 0 10.80 231.00 0 231.00
Total . . . . . . . . . . . . . . . . . . . . . . . 10.80 3.59 14.39 231.00 77.00 308.00
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Essar Power Hazira-Hazira has entered into a loan agreement dated 31 March 2010 with the Infrastructure
Development Finance Company for a term loan of Rs. 10.80 billion (US$231 million) for this project.
Essar Power Hazira has entered into contracts with Essar Projects for construction and onshore supply of
all plant equipment and spares, as well as a contract with Essar Engineering for onshore engineering
services.
Subject to the fulfilment of required conditions, Essar Steel Hazira has obtained the necessary statutory
and non-statutory environmental approvals required for this project, including environmental and
pollution clearances, which will be transferred to Essar Power Hazira when approved by the relevant
authorities.

Under the terms of the PPA, water and fuel for the project will be supplied by Essar Steel Hazira without
charge to Essar Power Hazira in respect of the contracted capacity under the PPA.

The Company has entered into a PPA dated 10 March 2010 for the sale of power from the plant with Essar
Steel Hazira for a contracted capacity of 243 MW.
The tariff payable under the PPA is a fixed charge comprising interest on debt, depreciation, operation and
maintenance cost, income tax and a certain return on equity. The annual fixed charge calculated on the
basis of the aforementioned components is Rs. 3620 million (US$77.55 million). The indemnity liability of
each party is stated to be limited to 0.5% of the average annual fixed charges.
The term of the PPA is 25 years from the date of commencement of the commercial operations in relation
to the contracted capacity.
The power generated from this plant is expected to be supplied to a 200-KV switchyard which is connected
to Essar Steel Hazira’s main receiving substation.
Essar Power Orissa-Paradip (120 MW)

Overview
The Essar Power Orissa-Paradip power plant will be a coal-fired power plant comprised of four generation
units of 30 MW each located in Paradip, Orissa. Paradip is a well-equipped and serviced port, which should
be an advantage in the supply of imported coal. The Company will implement this project through its
wholly-owned subsidiary Essar Power Orissa.
Essar Steel Orissa is in the process of acquiring land for this project which is expected to be leased to Essar
Power Orissa-Paradip upon completion of acquisition formalities.
The Company expects the first two 30-MW capacity generation units to be commercially operational by the
fourth quarter of 2011 and the second two 30-MW capacity generation units to be commercially
operational by the second quarter of 2012.
The Company estimates the total cost of the project to be Rs. 6.82 billion (US$146.00 million). The status
of the funding for this project as at 31 December 2009 is set forth in the table below:
Available/ Estimated Available/ Estimated

Equity . . . . . . . . . . . . . . . . . . . . . . 0.35 1.36 1.70 7.40 29.10 36.50
Debt . . . . . . . . . . . . . . . . . . . . . . . — 5.12 5.12 — 109.50 109.50
Total . . . . . . . . . . . . . . . . . . . . . . . 0.35 6.48 6.82 7.40 138.60 146.00
The Company is in discussions with lenders to secure debt financing commitments for this power project.
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Essar Power Orissa has entered into contracts for the two 30-MW units for the first phase of the Essar
Power Orissa-Paradip power plant with Essar Projects for onshore construction services and for onshore
supply of all plant, equipments and spares, as well as a contract with Essar Engineering to provide onshore
engineering services. Essar Power Orissa has entered into similar contracts with Essar Projects for the two
30-MW units for the second phase of the Essar Power Orissa-Paradip power plant.

Water and fuel for the project will be supplied by Essar Steel Orissa.

On 11 November 2009, Essar Power Orissa entered into two PPAs with Essar Steel Orissa Limited for the
sale of power from each of the 2x30 MW phases of the Essar Power Orissa-Paradip power plant on an
exclusive basis. The term of these PPAs is 25 years from the date commercial operations of each unit of the
first phase commence unless terminated earlier or extended before 180 days of the expiration of the
respective PPAs. Essar Steel Orissa Limited has an obligation to provide fuel and water (including the
transport thereof to the plant) and is making arrangements with the Grid Corporation of Orissa for the
receipt of power for the commissioning of the power plant. Essar Steel Orissa Limited is also responsible
for all tariff payments and assisting Essar Power Orissa in the acquisition of land for the power plant.
Under these PPAs, the annual capacity charges are the sum of interest expenses, depreciation, return on
equity according to the financing plan of the project, operation and maintenance expenses and income tax.
The annual fixed charges calculated on the basis of the aforementioned components is Rs. 1500 million
(US$32.13 million).
The power generated from this plant is expected to be supplied to a 200-KV switchyard which is connected
to Essar Steel Orissa’s main receiving substation.
Vadinar Power Plant Expansion (890 MW)

Overview
The Vadinar power plant expansion project, located on 61 hectares of land, will be implemented in two
phases, and, including the steam capacity, will increase the plant’s total installed equivalent megawatt
capacity by 890 MW. The first phase consists of 220 MW of gas-fuelled generation capacity and 630 tph of
steam capacity. This phase is expected to be commercially operational by the third quarter of 2010. The
second phase will consist of a multi-fuel (coal, naphtha, light cycle oil, clarified slurry oil and furnace oil)
co-generation power plant with 325 MW of power capacity and 900 tph of steam capacity. This second
phase is expected to be commercially operational by the third quarter of 2011.
The Company estimates the total cost of the both phases of the project to be Rs. 30.73 billion
(US$658.31 million). The current status of the funding for this project is set forth in the table below:
Available/ Required Estimated Available/ Required Estimated

Funding arranged shortfall total funding arranged shortfall total funding
Equity . . . . . . . . . . . . . . . . . . . . . . 4.81 2.87 7.68 103.04 61.54 164.58
Debt . . . . . . . . . . . . . . . . . . . . . . . 23.05 0 23.05 493.73 0 493.73
Total . . . . . . . . . . . . . . . . . . . . . . . 27.86 2.87 30.73 596.77 61.54 658.31
For the financing of the first phase of this project, VPCL entered into a rupee denominated common loan
agreement dated 17 March 2010 with Axis Bank Limited and Power Finance Corporation for the amount
of Rs. 5.44 billion (US$116.48 million).
For the financing of the second phase of this project, VPCL entered into a rupee denominated common
loan agreement dated 17 March 2010 with Axis Bank Limited, Power Finance Corporation, Syndicate
Bank, State Bank of Patiala, United Bank of India and Corporation Bank in the amount of
Rs. 17.61 billion (US$377.25 million).
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VPCL has entered into separate contracts for each of the two phases of this co-generation project.
In relation to the first phase, VPCL has entered into an engineering contract with Essar Engineering for
the provision of detailed plant engineering services. In addition, VPCL has entered into onshore supply
and construction contracts with Essar Projects for the provision of, respectively, design, engineering,
manufacturing, packing and transportation services and the construction of the plant.
In relation to the second phase, VPCL has entered into, respectively, an offshore supply contract with
Global Supplies for the provision of design, engineering, procurement, manufacturing and training services
in relation to certain equipment; offshore and onshore transportation contracts with Essar Logistics with
respect to transportation services in relation to certain equipment; an onshore construction contract and
an onshore supply contract with Essar Projects and an onshore engineering contract with Essar
Engineering for the provision of engineering services, including design, engineering, procurement,
manufacturing, supply, inspection and testing services, with respect to certain equipment. Essar Project
Management is providing project management services for both phases of the project.
Basic engineering for the first phase of the project has been completed, and detailed engineering is nearly
complete. In addition, procurement of all equipment has been completed, and almost all of the necessary
equipment has arrived at the plant site. Construction and commissioning activities for this phase of the
project are currently underway.
Basic engineering for the second phase of the project is almost complete, and detailed engineering is in
progress. Procurement is at an advanced stage and delivery of equipment to the site has begun.
Subject to the fulfilment of required conditions, VPCL has obtained all necessary regulatory clearances for
this plant.

Water for the Vadinar power plant expansion project will be supplied by Essar Oil and the cost will be
borne by Essar Oil, Essar Steel Hazira and VPCL in the proportions of power respectively consumed by
them.
The Company expects to use gas for fuel for the first phase and imported coal for the fuel required for the
second phase of the Vadinar power plant expansion project. In addition, the Company is continuously
evaluating opportunities to, and is already in advanced discussions to, acquire coal mines for the purposes
of meeting the fuel requirements of the Vadinar power plant expansion project. The Company also
proposes to use refinery outputs produced by the Vadinar refinery, such as light cycle oil, naphtha, high
speed diesel, clarified slurry oil and heavy furnace oil, in case sufficient coal is not available.
VPCL has entered into a fuel supply agreement with Essar Oil and Essar Steel Hazira, under which:
• the fuel required by the power plant for the power and steam will be procured by Essar Oil;
• the fuel required by the power plant for the power to be supplied to Essar Steel Hazira will be
procured by Essar Oil and paid for by Essar Steel Hazira; and
• the fuel required by the power plant for the power sold to third parties on a merchant basis will be
procured by Essar Oil and paid for by VPCL.
The agreement is for a period of 15 years from the date of commencement of the fuel supply.

VPCL has entered into a 25-year PPA (from the date commercial operations commence) with Essar Oil,
dated 18 May 2009, for the supply of 300 MW of power and 1,530 tph of steam.
In conjunction with the second phase of the project, VPCL has also entered into a 25-year PPA (from the
date commercial operations commence) with Essar Steel Hazira, dated 18 May 2009, for the supply of
90 MW of power.
The Company expects to sell the remaining 119 MW of power on a merchant basis.
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Part 6 The Business
The power generated from this plant will be supplied to the 220-KV switchyard at Essar Oil. The power
will then be distributed from the switchyard to Essar Steel Hazira as well as to merchant customers.
Phase II Power Projects

Overview
The Company is currently developing the following Phase II Power Projects as part of the expansion of its
power generation capacity, with commercial operations targeted to commence predominantly in 2013:
Expected
Gross commissioning
Project Capacity Location Estimated cost Estimated cost date Fuel supply
Essar Power MP-Mahan 600 MW Singrauli, 23.30 499.14 Q3 2013 Domestic coal-
expansion Madhya Pradesh, linkage
India
Essar Power Gujarat- 1,320 MW Jamnagar, 52.09 1,115.90 Q3 2013 Imported coal
Salaya II expansion Gujarat, India
Essar Power Jharkhand- 600 MW Latehar, 23.30 499.14 Q3 2013 Captive coal mine
Tori expansion Jharkhand, India
Essar Power Gujarat- 600 MW Jamnagar, 33.00 706.94 Q3 2013 Petroleum coke
Salaya III expansion Gujarat, India
Neptune I—Orissa 1,050 MW Orissa, India 46.54 997.00 Q3 2013 Captive coal mine
Neptune II—Orissa 1,200 MW Orissa, India 49.50 1,060.41 Q3 2014 Imported coal
expansion
Total 5,370 MW 227.73 4,878.53
Essar Power MP-Mahan Expansion (600 MW)

Overview
Essar Power MP is proposing to add a 600-MW unit to the Essar Power MP-Mahan project that is under
construction. The power project will occupy land already allotted to the Essar Power MP-Mahan expansion
project.
The Company estimates the total cost of the project to be Rs. 23.30 billion (US$499.14 million).
Currently, the Company has not secured any debt financing commitments for this project, but expects to
fund the project with 75% debt and 25% equity.
For the engineering, procurement and construction of this project, Essar Power MP has entered into: (i) an
offshore supply contract with Global Supplies; (ii) an offshore transport contract and an onshore transport
contract with Essar Logistics; (iii) an onshore supply contract and an onshore construction contract with
Essar Projects; and (iv) an onshore engineering contract with Essar Engineering.
Subject to the fulfilment of required conditions, the Company has obtained certain significant regulatory
clearances for this project, including water and environmental.

The Company has made an application for a supply of domestic coal to fuel the additional capacity at the
plant arising from the expansion project. Water is available as well.

The Company expects to sell the power generated by this expansion project to power distribution
companies and industrial consumers, as well as on a merchant basis.
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Essar Power Gujarat-Salaya II Expansion (1,320 MW)

Overview
Essar Power Gujarat is proposing to add a 1,320-MW supercritical expansion comprised of two 660-MW
generating units to the 1,200-MW Essar Power Gujarat-Salaya plant currently under construction. The
land required for the proposed expansion project is already owned by Essar Power Gujarat.
The Company estimates the total cost of the project to be Rs. 52.09 billion (US$1,115.9 million), but
expects to fund it with 75% debt and 25% equity.
Currently, the Company has not secured any debt financing commitments for this project.
For the engineering, procurement and construction of this project, Essar Power Gujarat has entered into:
(i) an offshore supply contract with Global Supplies; (ii) an offshore transport contract and an onshore
transport contract with Essar Logistics; (iii) an onshore supply contract and an onshore construction
contract with Essar Projects; and (iv) an onshore engineering contract with Essar Engineering.
Essar Power Gujarat is awaiting the necessary regulatory clearances, including environmental clearances.

The Company expects to fuel the proposed expansion with imported coal.
Essar Power Gujarat has entered into a 25-year coal supply agreement (from the date commercial
operations of the Essar Power Gujarat-Salaya II project commence) with Essar Shipping and Logistics and
has entered into a 25-year coal affreightment agreement (from 15 January 2013) with Essar Shipping and
Logistics to transport coal from South Africa and Indonesia to the Salaya port for the Essar Power
Gujarat-Salaya II project.
Pursuant to the acquisition of captive coal mines in Indonesia and Mozambique, the terms of the coal
supply agreement have been amended by an agreement dated 6 April 2010. This amendment requires
Essar Power Gujarat to use coal extracted from the mines of the ‘‘Power Group’’ (defined in the
amendment agreement to mean Essar Power Holdings, Mauritius and its subsidiaries and associates) in the
first instance for this power plant, and shall require Essar Shipping and Logistics to supply coal only in the
event of a shortfall. The aforesaid obligation to use coal extracted from mines of the Power Group shall be
after the coal requirements for the Essar Power Gujarat—Salaya (1200 MW) Phase I power project are
met.
Essar Power Gujarat has also entered into a 20-year coal handling agreement with Essar Bulk Terminal to
access certain terminal and transportation facilities at the Salaya port which will be constructed and
operated by Essar Bulk Terminal. Under the agreement, Essar Bulk Terminal will provide receipt, handling
and transport facilities for the coal through a conveyor system from the port to the plant.
Essar Bulk Terminal has obtained approval in-principle from the Gujarat Maritime Board with respect to
sea water usage. Essar Power Gujarat is expected to enter into a contract for sea water usage for this power
plant.

companies, industrial consumers and on a merchant basis.
The Company has received a letter of intent for the supply of 800 MW of power to GUVNL on a long term
basis. Essar Power Gujarat expects to enter into a PPA with GUVNL for the above supply of power during
the second quarter of 2010.
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Essar Power Jharkhand-Tori Expansion (600 MW)

Overview
Essar Power Jharkhand also proposes to expand the Essar Power Jharkhand-Tori power plant through the
installation of an additional generation unit of 600 MW. Essar Power Jharkhand expects to acquire the land
for the project by the second quarter of 2010.
The Company estimates the total cost of the project to be Rs. 23.30 billion (US$499.14 million).
Currently, the Company has not secured any debt financing commitments for this power project, but
expects to fund it with 75% debt and 25% equity.
For the engineering, procurement and construction of this project, Essar Power Jharkhand has entered
into: (i) an offshore supply contract with Global Supplies; (ii) an offshore transport contract and an
onshore transport contract with Essar Logistics; (iii) an onshore supply contract and an onshore
construction contract with Essar Projects; and (iv) an onshore engineering contract with Essar
Engineering.
The water and environmental clearances for the project are currently being obtained.

The Company expects to fuel the expansion project via dedicated coal mines already allocated to it at
Chakla and Ashok Karkata.

companies and industrial consumers, as well as on a merchant basis.
Essar Power Salaya-Salaya III Expansion (600 MW)

Overview
The Company proposes to build a pet coke-based power plant at Salaya in Jamnagar. The plant will be
based on circulating fluidised bed combustion technology and will utilise multiple units for a total
combined installed capacity of 600 MW.
The Company expects the total cost of the project to be Rs. 33 billion (US$706.9 million).
Currently, the Company has not secured any debt funding for the project, but expects to fund it with 75%
debt and 25% equity.
For the engineering, procurement and construction of this project, Essar Power Salaya has entered into:
(i) an offshore supply contract with Global Supplies; (ii) an offshore transport contract and an onshore
transport contract with Essar Logistics; (iii) an onshore supply contract and an onshore construction
contract with Essar Projects; and (iv) an onshore engineering contract with Essar Engineering.
The Company has applied for certain regulatory clearances necessary for this project.

The pet coke which will be used as fuel for this project is anticipated to be supplied by the Vadinar refinery
after the completion of the Phase I Refinery Project. Essar Power Salaya is expected to enter into a fuel
supply agreement with Essar Oil for the pet coke. The water source for the project will be sea water. Essar
Bulk Terminal has obtained approval in-principle from the Gujarat Maritime Board with respect to sea
water usage. Essar Power Salaya is expected to enter into a contract for the use of sea water for this power
plant.
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The power generated from this project will be sold in the merchant market.
Neptune I and II—Orissa (2,250 MW)

Essar Power has subscribed to convertible preference shares with the right to convert into shares
representing approximately 79% of the equity in Neptune Holding Company, which, in turn, holds an
equity stake of just under 50% in Neptune Limited, which is implementing a 2,250 MW coal-fuelled power
plant in Orissa, India, in two phases—a 1,050 MW phase and 1,200 MW phase. Essar Power proposes to
acquire 21% of the equity in Neptune Holding Company as well as 50% of the equity in Neptune Limited,
the underlying operating company, thereby taking 100% control of Neptune Limited, which is pending
discussions and commercial negotiations. The Company expects the capital expenditure required for the
project to be Rs. 96.34 billion (US$2,057.41 million). Assuming the Company acquires a 100% interest in
Neptune Limited and as a result may have access to 112 mmt of the accompanying coal mine and linkage,
the Company expects to have fuel security for 1,050 MW of power generation at Neptune I.
Pursuant to its proposal to acquire a 100% stake in Neptune Limited, the Company has undertaken a due
diligence exercise. This exercise revealed that while certain approvals have been obtained for the Neptune
Phase I Power Project and coal blocks from government authorities and a PPA has been executed, a
substantial number of these approvals received from central and state government authorities (including
those pertaining to fuel supply and water) and the PPA need to be renewed and certain conditions
precedent need to be complied with in order for them to be effective. Neptune Limited has received a
show cause notice from the Ministry of Coal of the Government of India in relation to its coal blocks,
alleging non-compliance of certain milestones provided in the relevant allocation letter. A reply to this
notice has been filed. In the event the terms of allocation are not complied with, the allocation of the coal
blocks may be revoked. If the revocation order to the allocation becomes effective, the Company and
Neptune Limited would explore various options depending on the stage in the Neptune projects when such
order were to become effective. That is, if the order were to become effective at an early stage (before
investment by the Company of significant capital in the projects), the Company may consider, among other
options, not acquiring the remaining stake in Neptune Limited, or exiting the projects altogether which
would result in a loss of its initial investment. If, on the other hand, the order were to become effective at a
later stage (after investment of significant capital, the majority of which is expected to be invested from
2012 onwards), the Company and Neptune would need to take remedial measures, such as applying to the
Government for coal linkages or making other alternate arrangements for domestic or imported coal, any
of which could lead to substantially higher fuel costs for Neptune Limited. Assuming Neptune Limited is
able to secure other sources for the supply of coal, this is not expected to have a material impact on the
timing of the projects, or on the required capital expenditure, although it would have an impact on
earnings from the projects. Based on the Company’s experience and publicly available information, the
Directors believe that the probability of revocation is low, and that even if the coal allocation was revoked,
the overall impact on the Company would be minimal.
Neptune Limited will also need to obtain additional approvals for its phase I power project and its coal
blocks. After completion of the acquisition, the Company will need to take such steps as are necessary for
the approvals and the PPA to be effective and there can be no assurance that the Company will be able to
complete the same in a timely manner or at all.
Coal Mines
Overview
The Company has been granted allocations by the Government of India for three domestic coal blocks: the
Mahan coal block in Madhya Pradesh, and the Chakla and Ashok Karkata coal blocks in Jharkhand. The
coal from these mines will be used to fuel the pit-head coal-fuelled Essar Power MP-Mahan and Essar
Power Jharkhand-Tori Phase I Power Projects.
Mahan Coal Block

The Government of India has allocated the Mahan coal block located at a distance of four kilometres from
the Essar Power MP-Mahan power plant jointly to Hindalco and Essar Power for the captive supply of coal
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Part 6 The Business
to Essar Power MP-Mahan’s and Hindalco’s respective planned power plants. The mine is operated by
Mahan Coal, a 50:50 joint venture between Hindalco and Essar Power. The joint venture provides for the
development of the coal mines for the respective projects of the joint venture partners.
The Mahan coal block is operated by Mahan Coal, a joint venture between Hindalco and the Company,
under which they share management rights over the joint venture’s coal mines. Pursuant to the terms of
the coal allocation made in April 2006, mining was required to commence within 36 to 42 months, a period
which has since expired. Mahan Coal has applied for an extension of this allocation.
According to the Central Mine Planning and Design Institute Limited (‘‘CMPDIL’’), a Government of
India organisation, the Mahan coal block is estimated to have 122 mmt of mineable coal reserves and an
approved annual production of 8.5 mmt of which the Company is entitled to 60% of the reserves,
i.e., 73 mmt. The Company expects that this mine will supply coal to the Essar Power MP-Mahan (1,200
MW) Phase I Power Project for approximately 12.5 years. The coal is of E/F grade, which produces
approximate gross calorific value of 3,800 Kcal/kg. Environmental clearances were obtained in December
2008. A mining licence is expected to be granted within two to three months of forest clearance, with
mining expected to commence within six months thereafter. The Company is in the process of acquiring
land for afforestation (which is required for the forest clearance permit).
Chakla and Ashok Karkata Coal Blocks

The Government of India has allocated to the Company the Chakla and Ashok Karkata coal blocks in the
state of Jharkhand to meet the coal requirements of the 1,200 MW Essar Power Jharkhand-Tori power
project. According to CMPDIL, the Chakla coal block has approximately 71 mmt of mineable coal reserves
and an approved annual production of 4.5 mmtpa. Based on the Geological Report by the Government of
India, Essar Energy plc believes that the calorific value of the coal in the Chakla block is between 3,300
and 3,800 Kcal/kg. The Ashok Karkata block is a larger block located on the same coal seam. The
Government of India has estimated that this block contains 110 mmt of reserves of which the Company
expects approximately 100 mmt will be mineable reserves. Although it is expected to have the same
calorific value as the Chakla block, no geological survey has been done to verify this. The coal block
boundaries for the Ashok Karkata block were recently re-assigned, clearing the way for further block
development, although part of the block overlaps with the CSG block that has been awarded to ONGC
and subject to its exploration rights. Both blocks are expected to supply coal to the Essar Power
Jharkhand-Tori plant for 20 years following the commencement of production.
Overseas Coal Blocks

The Company is currently in the process of acquiring coal mines in selected overseas regions. Essar
Recursos de Minerais de Mozambique Ltd, an Essar Affiliated Company holds a coal licence in the
Cambulatsitsi area near Tete, Mozambique. Based on an initial exploration of the area, the mines were
independently estimated to contain resources of approximately 35 mmt of mineable reserves. In addition,
Essar Group has entered into a memorandum of understanding with CCFB (consortium of CFM-RITES-
IRCON) for transporting the coal to Beira port. The Company has executed a definitive share purchase
agreement to acquire the entire equity stake (including the existing shareholders’ loan) in Essar Recursos
de Minerais de Mozambique Ltd by Essar Power & Minerals S. A. Ltd and Essar Power Overseas Ltd, BVI
for approximately US$30 million.
In April 2010 the Company also acquired a 100% interest in approximately 5,000 hectares of mining area,
located in the West Kutai region of East Kalimantan, Indonesia for approximately US$118 million. A Joint
Ore Reserves Committee compliant resource assessment estimates that the block contains approximately
64 mmt of mineable reserves with an annual potential production of 4 mmt of coal with an average gross
calorific value of 5,400 to 5,500 Kcal/kg. It is expected that production will begin in the second or third
quarter of 2011. The Company has also executed an agreement to provide a loan facility of US$175 million
to Essar Minerals FZE to fund acquisition and development costs of the Indonesian mines.
Essar Power Transco

The Company has established Essar Power Transco as a wholly-owned subsidiary to build, own and operate
electricity transmission systems and networks and carry out transmission-related activities. Essar Power
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Transco received a transmission licence from the CERC in April 2008 for the Mahan power project.
Although the Company expects Essar Power Transco initially to undertake the transmission business only
for the Company’s power projects, Essar Power Transco is also expected to develop, own and operate
independent transmission projects and to develop transmission systems for third parties.
Essar Power Transco’s first project is the construction of a transmission system to evacuate the power from
Essar Power MP-Mahan to Essar Steel Hazira, Essar Steel and MP Power Trading Company. This project
will consist of three transmission lines and a sub-station. The transmission lines will include a 315-km
400-KV D/C (quad conductor) line from Essar Power MP-Mahan to Sipat Pooling sub-station, and a 97-km
400-KV D/C (twin conductor) line from the Gandhar NTPC switchyard to Hazira in Gujarat. A 400-KV
20-km line-in/line-out line will be established on the Vindhyachal-Korba line to meet the initial
requirement of start-up power and power evacuation. For this purpose, Essar Power Transco entered into
an agreement with NTPC Limited in February 2010 for the use of 2x400-KV bays at the switchyard of
NTPC’s Jhanor Gandher gas power station in Gujarat. This agreement is subject to the availability of such
infrastructure, NTPC’s requirements for the gas power station and other conditions. The sub-station will
be a 400/220-KV, 3500 MVA sub-station located at Hazira. The current overall cost of this project is
estimated to be Rs. 13.35 billion (US$285.99 million). The project will be financed with 70% debt and 30%
equity. The Company has received approval in principle from Power Finance Corporation and Rural
Electrification Corporation Limited to provide debt financing for this project.
Essar Trading
The Company proposes through its wholly-owned subsidiary Essar Trading to trade the surplus power
capacity following the commissioning of the Company’s Power Plant Projects and to source power from
external power suppliers.
Essar Trading has a category ‘‘C’’ trading licence from the CERC. Under this licence, Essar Trading is
entitled to trade up to 500 million units of electricity per year, primarily to trade Essar Energy’s own
surplus power.
Essar Trading is also a professional member of the Indian Energy Exchange, which enables it to purchase
and sell power both on its own behalf and on behalf of its clients.
Wind power
The Company proposes to manufacture and market 1.5 MW wind turbines under a licence that permits an
annual production capacity of up to 300 units the Company’s wind turbine assembly workshop is proposed
to be set up at Bhuj which is well located for transport by both road and sea. Operations are scheduled to
commence by the third quarter of 2010.
The total cost of setting up the factory is estimated to be Rs. 693 million (US$14.85 million), which is
proposed to be met wholly through equity. The factory is proposed to be constructed on leased land. The
lease deed for this land, the applications for licences and approvals and contracts related to the
construction of the factory are expected to be in place in due course. Construction work will commence in
the second quarter of 2010 and is expected to be completed by the third quarter of 2010.
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OIL AND GAS—E&P

Exploration and Production
Overview
The Company currently has participating interests in 13 blocks and fields for the exploration and
production of oil and gas in India, Australia, Indonesia, Madagascar, Nigeria and Vietnam. In addition, the
Company has been declared provisional winner of one CSG block in India in the Government of India’s
recently concluded CBM IV round of bidding. The Company has a combined surface area of
approximately 23,000 km2 of onshore oil and gas blocks and fields and approximately 21,000 km2 of
offshore oil and gas blocks and fields.
The map below shows the locations of the Company’s oil and gas exploration and production blocks and
fields.
Mehsana Block Rajmahal Block Assam Blocks (b) Vietnam Block (a)
100% interest (d) 100% interest 100% interest in two 100% interest
CSG block exploration blocks
Nigeria Block (a)
100 % (c) interest
Indonesia Block (a)

Mumbai Offshore Block (a)
49.5% interest
50% interest
Australia Blocks (a)

Madagascar Blocks (a) 100% interest
100% interest
Ratna Fields Raniganj Block
50% interest 100% interest in

CSG block
(a) Subject to necessary approvals for transfer to Essar Oil

(b) 90% share under transfer to Essar Oil
(c) In discussions with local Nigerian partner to transfer 37%
(d) For the ESU field, the Company’s interest is 70%; it holds 100% of the remaining block 13APR201021230524
The Company became one of the first private sector participants in various bidding rounds conducted by
the Government of India in domestic oil and gas exploration and production blocks when Essar Oil was
awarded the Ratna Fields in 1996. Through subsequent bidding rounds, the Company has been awarded
five additional blocks in India within its current portfolio. In addition, Essar Oil has an early mover
advantage in entering the CSG segment in India and has built up relevant knowledge and experience.
Essar Oil expects there will be significant progress in building infrastructure, including the laying of
pipelines, in the West Bengal region for transporting CSG to the local market. The Company has obtained
exploration rights for its blocks and fields in other countries outside of India pursuant to the international
bidding rounds held by the relevant government owners of these assets.
The Company’s PSCs (as well as other forms of exploration and production contracts) generally contain:
• provisions for the payment by the Company to the government owner of the oil and gas asset of
certain signing bonuses, yearly administrative fees, royalty payments, production-level payments and
the payment of certain bonuses upon the achievement of certain production milestones;
• the term of the initial exploration and development period, with an option to extend this period if
certain discoveries are made;
• the obligations of the Company (and any other operators of the asset) to bear the risk and costs of
exploration and development activities and/or production operations;
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Part 6 The Business
• the scope and timescale for the Company (and any other operators of the asset) to undertake
exploration and production activities;
• provision for the Company (and any other operators of the asset), if commercial production is
successful, to recover its exploration, development costs and production costs by being allocated a
share of the oil and gas produced;
• the percentage allocation of oil and gas production between the government owner and the Company
(and any other operators) following the Company’s recovery of its costs or the payment of royalty fees
to the government owner in lieu of such allocation;
• provision that the title to petroleum at all times lies with the government owner, except where title to
crude oil or natural gas has passed in accordance with the provisions of the PSC;
• provision for the creation of a management committee to be comprised of members appointed by the
Company (and any other operators) and the government owner for governing the operations of the oil
and gas asset, including powers to approve annual work programmes and budgets, proposals for the
declaration of a discovery as commercial and the boundaries for or additions to a development area;
and
• requirements for the Company to provide financial and performance guarantees to the government
owner to secure the Company’s exploration and production work commitments.
The Company is required, until such time as India attains self sufficiency in the supply of crude oil and
natural gas, to sell in the Indian domestic market all of the contractor’s entitlement to the crude oil or
natural gas extracted from Indian blocks under the relevant PSCs.
The Company’s exploration and production companies Essar Oil, Essar Exploration & Production Limited
(‘‘EEPL’’), and EEPL’s wholly-owned Nigerian subsidiary, EEPLN, act as the operators under the PSCs
(as well as other forms of exploration and production contracts) for all blocks and fields in which the
Company has an interest except as indicated in the table below.
In addition to continuing to undertake exploration activities on its existing oil and gas exploration assets,
the Company intends to pursue new exploration opportunities through farm-in and participation in future
bidding rounds that may be launched by various countries. The Company continuously evaluates new
exploration and production blocks, both in India and elsewhere.
The Company’s oil and gas exploration and production technical team consists of geologists, geophysicists,
petrophysicists, petroleum engineers, reservoir engineers, well loggers, project managers and drillers,
supported by a management team consisting of professionals in finance, commerce, business development,
logistics, human resources, procurement, contract execution and project consultancy. This team operates
the Company’s oil and gas exploration and production blocks using what the Company believes are the
best practices of the international oil and gas industry in relation to health, safety and environmental
concerns.
The Company believes it was the first company in India to identify CSG potential in the early 1990s and to
demonstrate the technical and commercial feasibility of CSG gas production through its pilot project in the
Mehsana Sobhasan lignito-bituminous coals, which was supported by the United States Agency for
International Development. The Company carried out numerous geological and geophysical studies,
drilled and hydraulically fractured CSG wells, and dewatered and depressurised the deep Sobhasan coal
seams to establish critical CSG parameters, including production of CSG from this project in 1994. The
Company has since developed practices for CSG-well drilling, using a combination of water-well drilling
for non-coal sections, and air drilling for deeper coal sections, resulting in faster drilling of wells and cost
savings, as well as minimising reservoir damage, leading to early CSG production.
The table below sets forth certain information regarding the Company’s oil and gas exploration and
production assets.
PROSPECTIVE RESOURCES RELATE TO UNDISCOVERED ACCUMULATIONS AND,
ACCORDINGLY, ARE HIGHLY SPECULATIVE. A POSSIBILITY EXISTS THAT THE PROSPECTS
WILL NOT RESULT IN THE SUCCESSFUL DISCOVERY OF ECONOMIC RESOURCES, IN WHICH
CASE THERE WOULD BE NO COMMERCIAL DEVELOPMENT.
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Project Goliath Prospectus
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6810DM/0D Foot:
The
Company’s
Onshore/ Total contract Year percentage Date PSC
Development and production assets(1) Country Offshore area (km2) awarded interest Executed(4) JV partner Operator
Premier Oil(7)
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
Ratna Fields . . . . . . . . . . . . . . . . India Offshore 1,000 1996 50% — ONGC (40%) and Premier Oil (10%)
Mehsana Block . . . . . . . . . . . . . . . India Onshore 143.5 1996 70%(6) 16 July 1998 ONGC (30%) Essar Oil
Raniganj Block . . . . . . . . . . . . . . . India Onshore 500 2002 100% 26 July 2002 NA Essar Oil
0D/
The
Company’s
0D VJ RSeq: 1 Clr: 0
Onshore/ Total contract Year percentage Date PSC
Exploration assets(2) Country Offshore area (km2) awarded interest Executed(4) JV partner Operator
(5) (5)
Nigeria Block . . . . . . . . . . . . . . . . . Nigeria Offshore 1,530 2007 100% 10 March 2010 NA EEPLN
Rajmahal Block . . . . . . . . . . . . . . . . India Onshore 1,128 2009(3) 100% — NA Essar Oil
Vietnam Block . . . . . . . . . . . . . . . . . Vietnam Offshore 5,905 2008 100% 24 November 2009 NA EEPL
Assam Blocks . . . . . . . . . . . . . . . . . India Onshore 1,298 2006 100% 2 March 2007 NA Essar Oil
File: CF70801A.;89
Mumbai Offshore Block . . . . . . . . . . . India Offshore 2,810 2008 50% 22 December 2008 Noble Energy EEPL
113
Madagascar Blocks . . . . . . . . . . . . . . Madagascar Onshore 18,050 2006 100% 31 October 2006 NA EEPL
Indonesia Block . . . . . . . . . . . . . . . . Indonesia Onshore 2,310 2008 49.5% 13 November 2008 GSPC GSPC
Australia Blocks . . . . . . . . . . . . . . . . Australia Offshore 9,730 2008 100% 25 September 2008 NA EEPL
Key: ‘‘NA’’ not applicable
(1) ‘‘Development and production assets’’ refers to those assets where production and/or development activities have either commenced or are at such stage as to be expected to
commence shortly.
(2) ‘‘Exploration assets’’ refers to those assets that are in various stages of exploration but where no production and development activities have commenced.
(3) Provisional winner (formal award awaited).
(4) PSCs as well as other forms of exploration and production contracts/permits. The exploration activities in Australia are concluded on the basis of permits issued by the competent
authorities; there is no production sharing regime.
(5) The Company has signed the PSC with 100% participating interest and is currently in discussions with a local Nigerian partner which is expected to acquire a 37% interest in the
Part 6
Nigeria Block, subject to requisite approvals from the Nigerian government.
(6) For the ESU field, the Company’s interest is 70%; it holds 100% of the remainder of the block.
The Business
(7) Essar Oil, ONGC and Premier Oil are in discussions relating to the implementation of a joint operating model for the Ratna Fields. Subject to obtaining the required approvals and
entering into a PSC for the Ratna Fields, the Company expects to implement this model.
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Part 6
6810DM/0D Foot:
The Business
Best estimate Prospective Unrisked In-place
2P Reserves 2C Contingent Resources Resources Resources(9)
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
Net(1) Net(1) Net(1) Net(1)

Assets Country Oil Gas Total Oil Gas Total Oil Gas Total Oil Gas Total
0D/
mmbbls Bcf mmboe mmbbls Bcf mmboe mmbbls Bcf mmboe mmbbls Bcf mmboe
Development and production assets(2)
Ratna Fields(4) . . . . . . . . . . . . . . . . . . . . . . . . . India — — — 74.4 39.8 81.0 — — — — — —
Mehsana Block(7) . . . . . . . . . . . . . . . . . . . . . . . . India 2.0 — 2.0 — — — — — — — — —
Raniganj Block(6) . . . . . . . . . . . . . . . . . . . . . . . . India — — — — 200.8 33.5 — 792.0 132.0 — — —
Exploration assets(3)
Nigeria Block(6)(8) . . . . . . . . . . . . . . . . . . . . . . . . Nigeria — — — 10.5 136.0 33.2 48.6 264.4 92.7 — — —
Rajmahal Block(5) . . . . . . . . . . . . . . . . . . . . . . . India — — — — — — — 4,722.8 787.1 — — —
Vietnam Block(7) . . . . . . . . . . . . . . . . . . . . . . . . Vietnam — — — — — — — — — — 1,000.0 166.7
File: CF70801A.;89
Assam Blocks(7) . . . . . . . . . . . . . . . . . . . . . . . . . India — — — — — — — — — 10.0 — 10.0

114
Mumbai Offshore Block(7) . . . . . . . . . . . . . . . . . . India — — — — — — — — — — 185.0 30.8

Indonesia Block(7) . . . . . . . . . . . . . . . . . . . . . . . Indonesia — — — — — — — — — 30.0 — 30.0
(1) Net working interest to the Company which, where applicable, does not have any PSC terms accounted for.
(2) ‘‘Development and production assets’’ refers to those assets where production and/or development activities have either commenced or are at such stage as to be expected to
commence shortly.
(3) ‘‘Exploration assets’’ refers to those assets that are in various stages of exploration but where no production and development activities have commenced.
(4) Source: RPS. RPS has also calculated that the 2C net entitlement resources attributable to the Ratna Fields are 50.15 mmbbl of oil and 26.88 bcf of gas.
(5) Source: ARI.
(6) Source: NSAI. The 2C gas and associated condensate resources (approximately 23.7 mmboe) in the Nigeria Block are classified as development not viable.
(7) The Company’s internal estimates.
(8) The Company’s net working interest assuming a 37% interest is transferred to a local Nigerian partner.
(9) Undiscovered
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Part 6 The Business
Development and Production Assets

Ratna Fields (Mumbai, India)—Development Asset—Oil and Gas
The Ratna Fields consist of a number of offshore oil and gas accumulations at water depths of 45 metres
located approximately 130 km southwest of Mumbai. These accumulations are south of the Heera and
Neelam fields, which are large producing oil fields belonging to ONGC. The Company holds a 50%
interest in the Ratna Fields in a consortium together with ONGC (which holds a 40% interest) and
Premier Oil (which holds a 10% interest). ONGC has previously drilled 35 exploration and nine
development wells in the Ratna Fields.
The Ratna Fields offer the following potentially significant benefits:
• light sweet crude oil, with a ready off-take by a government refiner at international prices applicable
to similar grade of crude;
• significant exploration upside with 3D seismic survey planned to cover the entire block area; and
• connecting to and using the existing Heera-Uran trunkline for transporting crude oil to the onshore
processing facility.
The terms of the PSC, the joint operating agreement and the off-take agreement for the Ratna Fields have
been negotiated between the parties and the management of the Company expects to sign the PSC for the
Ratna Fields by June 2010. See ‘‘The success of the Company’s exploration and production operations
depends on its PSCs and similar arrangements as well as on its relationship with its joint venture partners.
The Company may become liable under the security arrangements if it does not complete the minimum
work commitments in its PSCs’’ in Part 1 ‘‘Risk Factors’’. Once the PSC and other agreements have been
executed, the Company intends to submit a revised development plan and commence development
activities in the Ratna Fields. If the PSC and other agreements, which are subject to the government
approval process, are executed and development activities commence as expected, the Company expects
the Ratna Fields to begin commercial production of oil and gas in the fourth quarter of 2013 and the off-
take is expected to be sold to government nominated PSUs.
At the Ratna Fields, there are certain existing facilities, including an R-12 platform and a single-buoy
mooring terminal, that may be used after refurbishment alongside additional development infrastructure
and facilities to be put in place for the fields’ development.
RPS has estimated the gross and net oil and gas contingent resources in the Ratna Fields as of
31 December 2009, as set forth in the table below.
Oil(1) Gas(1)
Category Gross Net Gross Net
(mmbbl) (mmbbl) (bcf) (bcf)
1C contingent resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123.6 61.8 62.3 31.2
Source: RPS Ratna & R-Series Fields Report.
(1) Gross oil and gas contingent resources are 100% of the resources attributable to the fields, and net oil and gas contingent
resources are those attributable to the Company’s 50% working interest. RPS has also calculated that the 2C net entitlement
resources attributable to the Ratna Fields are 50.15 mmbbl of oil and 26.88 bcf of gas.
The off-take from this field is expected to be evacuated by a 40km pipeline to be laid, which will connect to
existing pipelines.
Mehsana Block (Cambay, India)—Production Asset—Oil and Gas

The Mehsana Block is located on the eastern flank of the onshore Cambay basin in Mehsana, Gujarat,
India.
Essar Oil has a 100% participating interest in the exploration of Mehsana Block and has executed a
25-year PSC with the Government of India and ONGC in July 1998, which is extendable by five years
generally and by 10 years if the production of non-associated natural gas is expected to continue beyond
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Part 6 The Business
the term of the PSC. Under the PSC, the Government of India has the right to acquire a participating
interest of 30% in any development area containing a commercial discovery. The Government of India
may exercise this right through its designated nominee. In July 1998, Essar Oil and ONGC entered into a
joint operating agreement setting out their respective rights, liabilities and obligations with regard to the
exploration, development and production operations to be carried out in the Mehsana Block.
The government of the state of Gujarat issued a petroleum exploration licence to ONGC (the licensee) in
February 2003. Since then, Essar Oil has completed all three phases of the exploration of the Mehsana
Block and is currently seeking an extension from the Government of India in order to carry out additional
exploration work in the block. In addition, Essar Oil has carried out 3D seismic analysis of over 180 km2 of
the Mehsana Block and has reprocessed 1,300 line kms of 2D data sets. The field development plan for the
EEU field has been submitted for approval to the Mehsana Block’s management committee.
Essar Oil began commercial production of oil at the ESU field of the Mehsana Block in June 2007.
Following commercial discovery and its subsequent approval by the management committee in August
2006, ONGC exercised its back-in rights to 30% of the ESU field. Consequently, the Company has a 70%
participating interest in the ESU field, with ONGC holding the balance of 30%. The Company’s internal
estimate of 2P reserves is 2 mmbbls for its 70% share.
IOCL is the Government of India’s nominee under the PSC for the off-take of crude oil from the Mehsana
Block.
In addition to oil reserves, the Company estimates that the Mehsana Block contains thick deposits of coal/
lignite with the potential for CSG exploitation. Although the Mehsana Block PSC does not permit CSG
exploitation at present, the Company was granted permission by the MoPNG to conduct CSG research and
development activities in the block at its own cost. As part of the above, the Company has drilled 5
core-holes (EML 1 to 5) and entered old oil and gas wells to collect valuable CSG specific data for
assessment of the CSG prospect in this block. To date, the Company has spent around US$7 million on its
CSG research and development activities in the CB-ON/3 block pursuant to permission granted by the
MoPNG. In the Mehsana Report, ARI estimates 2C contingent resources of 747.4 bcf of CSG at the
Mehsana Block.
The Government of India has published a draft strategy paper in 2007 for assessing the possibility of
allowing CSG and oil and gas to be exploited in the same field by a single operator. The Company is
currently seeking permission from the Government of India to exploit CSG from the Mehsana Block and
has submitted a proposal for a separate contract for the exploration and production of CSG in and around
the Mehsana Block. The Company has proposed that the contract be based on standard existing CSG
contracts as prescribed by the Government of India, which provide for a 10% royalty payable to the
Government of India on well-head value and follow the production level payment structure on CSG
production.
Raniganj Block (Raniganj, West Bengal, India)

The Raniganj Block is located in the Damodar Valley coal field in the Raniganj region of West Bengal.
Essar Oil entered into a 35-year contract with the Government of India for the exploration and production
of CSG in the Raniganj Block in July 2002. Under the terms of the contract, royalty payments at the rate of
10% of the sale value at the well-head are payable by Essar Oil to the government of West Bengal.
Production-level payments based on a percentage of the sale value of the CSG are also payable by Essar
Oil to the Government of India. In March 2005, Essar Oil was granted a petroleum exploration licence for
this block by the government of West Bengal.
Essar Oil’s exploration and development activities in Raniganj, West Bengal are expected to yield a flow of
CSG by the second quarter of 2010, with commercial production expected to begin by the fourth quarter of
2010.
Essar Oil completed exploration phase I in the Raniganj Block on 1 May 2009, drilling 17 coreholes and 15
CSG production test wells and conducting 78 line km of 2D high-resolution seismic surveys under its
contractual work commitments for this block.
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Part 6 The Business
Essar Oil exercised its option under the contract to move to phase II the pilot assessment and market
survey. The phase II work commitment includes the drilling of 75 pilot wells, which are required to be
completed by 1 May 2011, and carrying out a market assessment for CSG.
The Company has prepared a field development plan for accelerated development of the entire block area
comprising around 500 wells that will be drilled in the block. Additionally, infrastructure in terms of
surface facilities will be put in place to transport this gas to customers. This field development plan has
been submitted to the Directorate General of Hydrocarbons for approval.
In November 2009, the Company entered into a gas sale and purchase agreement with its first customer in
the neighbouring Durgapur industrial area for the sale of 58,700 standard cubic metres of CSG per day
from the Raniganj Block. The Company is in the process of identifying further prospective off-take
customers for the Raniganj Block’s CSG production and finalising further gas off-take agreements with
customers. The Company has also entered into a gas sale and purchase agreement with Matix Fertilisers
and Chemicals Ltd. for the supply of approximately 2.8 mmscmd of CSG commencing from April 2012 for
this company’s proposed ammonia-urea plant to be set up in Panagarh, West Bengal, India.
In addition, to service local customers in the Durgapur region, the Company is constructing an
approximately 48-km-long gas transmission pipeline from this block to the Durgapur industrial area. The
Company is also exploring marketing CSG off-take through city gas distribution in the Kolkata region,
which includes pursuing discussions with PSU and state government undertakings. In addition, the
Company is also exploring the option of transporting gas via a pipeline to Kolkata, approximately 160 km
from the Raniganj Block.
In September 2009, the Company submitted an application seeking approval from the Government of
India’s Ministry of Petroleum and Natural Gas regarding the pricing of initial gas produced from the
Raniganj Block. The Company expects the Ministry’s approval shortly.
NSAI has estimated the gross CSG gas resources in the Raniganj Block as of 31 December 2009 as set
forth in the table below.
CSG
Category (bcf)
1C contingent resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.3
Low Estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412.8
Best Estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792.0
High Estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,631.9
Source: NSAI RG (East)-CBM-2001/1 Block Report.
Exploration Assets
Nigeria Block (Nigeria)
The offshore Nigeria Block is situated in the central offshore Niger Delta and in water depths of between
40 to 180 metres. The Nigeria Block is situated in the prolific oil and gas province in shallow waters off the
coast of Nigeria. A few wells drilled by earlier operators within the Nigeria Block area have shown the
presence of good quantities of oil and gas as interpreted from log and well data. The Nigeria Block
comprises more than 1,500 km2 in area and is situated only 40 km away from the coast. Prospective
horizons are also at reasonable depths of less than 3,000 meters and rock properties are of very good
quality.
EEPLN was awarded the interest in the Nigeria Block in May 2007 by the Nigerian government and the
PSC for this block was signed on 10 March 2010. The Company has signed the PSC with a 100%
participating interest and is currently in discussions with a local Nigerian partner that is expected to
acquire a 37% ‘‘carried interest’’ in this block, subject to requisite approvals from the Nigerian
government.
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Part 6 The Business
Pursuant to the terms of the PSC, EEPLN is required to carry out the first phase of the exploratory work
commitments for the Nigeria Block, including a 3D seismic analysis of 500 km2 and the drilling of one
exploratory well in the first phase of exploration.
EEPLN is the operator of the Nigeria Block.
NSAI has estimated oil and gas resources in the Nigeria Block as of 31 December 2009 as set forth in the
table below:
Oil Gas
Category(3) Gross(1) Net(2) Gross(1) Net(2)
(mmbbl) (mmbbl) (bcf) (bcf)
1C contingent resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.9 7.5 139.6 87.9
Low estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . 41.3 26.0 223.4 140.7
Best estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . 77.2 48.6 419.7 264.4
High estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . 141.1 88.9 846.8 533.5
Source: NSAI OPL 226 Block Report.
(1) Gross oil and gas resources are 100% of the resources attributable to this block.
(2) Net oil and gas resources are those attributable to the Company’s 63% working interest assuming that a 37% interest is
transferred to a local Nigerian partner and do not take into account the terms of the PSC entered into in relation to the Nigeria
Block.
(3) Contingent resources include various sub-classes, including ‘‘development pending’’ and ‘‘development not viable’’ resources.
For further details, please refer to the NSAI OPL 226 Block Report.
Rajmahal Block (Rajmahal, India)

The Company has been declared provisional winner of the Rajmahal block in the CBM IV round of
bidding conducted by the Government of India. This block is approximately 100 km from the Company’s
existing Raniganj CSG block and covers an area of 1,128 km2. The initial exploration period for this block
is for a period of two years from the effective date. The Company will be required to complete 30 core
holes and two test wells during this exploration phase.
Under the award, the Company will be the operator of the Rajmahal Block. The close proximity of this
block to the Raniganj Block could yield synergies. ARI has estimated the prospective CSG resources in the
Rajmahal Block as of 31 December 2009 as set forth in the table below:
CSG(1)
Category (bcf)
Low estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,830.0
Best estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,722.8
High estimate prospective resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,564.0
Source: ARI RM(E)—CBM—2008/IV Block Report.
(1) Recoverable volume
Vietnam Block (Vietnam)

The Vietnam Block is an oil and gas block located in shallow waters off the coast of Vietnam and is in the
vicinity of a gas discovery in block 112. EEPL and Vietnam Oil and Gas, Vietnam’s state-owned national
oil company, entered into a PSC for the Vietnam Block on 24 November 2009. The PSC provides for an
initial exploration period of seven years, which may be extended for two years depending on the results of
exploration activities and the likelihood of making a commercial discovery of oil and gas. The PSC also
provides for the payment of a US$3 million signature bonus to Vietnam Oil and Gas Group. EEPL bears
the risk and cost of all exploration and production activities on the Vietnam Block. Under the PSC,
EEPL’s work commitments include geological and geophysical studies, 3D seismic analysis and the drilling
of wells.
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Assam Blocks (Assam, India)

The Assam Blocks, namely, the AA-ONN-2004/3 block and the AA—ONN—2004/5 block are located in
the polycyclic Assam—Arakan frontier basin in the north-eastern part of India.
Essar Oil and EEH entered into the PSCs for the Assam Blocks, with the Government of India in March
2007. The PSCs grant Essar Oil and EEH production rights for 20 years for each of the two blocks upon
development, together with a seven-year exploration period in respect of the AA—ONN—2004/5 block
and a six-year exploration period in respect of the AA—ONN—2004/3 block. The initial 20-year term is
extendable by a further five-year term if oil is discovered, and a further 10-year term if natural gas is
discovered.
Pursuant to the terms of the PSC for the AA—ONN—2004/3 block, Essar Oil and EEH’s work
commitments include 2D seismic analysis of 400 line kms, 3D seismic analysis of 50 km2 and the drilling of
one exploratory well for the first phase of exploration. Pursuant to the terms of the PSC for the AA—
ONN—2004/5 block, the Essar Oil and EEH’s work commitments include 2D seismic analysis of 180 line
kms, 3D seismic analysis of 50 km2 and the drilling of one exploratory well for the first phase of
exploration. The exploration activities in these two blocks are currently under way. Essar Oil and EEH
have already completed the committed reprocessing of seismic data and acquisition of 2D seismic data for
the AA—ONN—2004/3 block is in progress.
Mumbai Offshore Block (Mumbai, India)

The Mumbai Offshore Block is located in the Mumbai basin, west of the Bombay High Field.
EEPL and Noble Energy International Limited (‘‘Noble Energy’’) each hold a 50% participating interest in
the Mumbai Offshore Block. The PSC for this block was executed between EEPL, Noble Energy and the
Government of India in December 2008. The PSC grants the parties exploration rights for an initial period
of seven years, with production rights for a subsequent period of 20 years upon development. In December
2009 EEPL and Noble Energy entered into a joint operating agreement setting out their respective rights,
liabilities and obligations with regard to the exploration, development and production operations to be
carried out at this block.
EEPL and Noble Energy received a petroleum exploration licence in February 2009 for the Mumbai
Offshore Block from the Government of India’s Ministry of Petroleum and Natural Gas.
EEPL’s work commitments together with its joint venture partner’s under the PSC include geological and
geophysical studies, reprocessing existing seismic data, the acquisition, processing and interpretation of 600
km2 of 3D seismic data and the acquisition of 100 km2 of high-resolution 3D seismic data in the first phase
of the exploration period. EEPL has recently commenced exploration activities in the Mumbai Offshore
Block and is currently reprocessing the existing seismic data, including 2,000 line kms of 2D seismic survey
data.
Madagascar Blocks (Madagascar)

The 3103 (Melaky) and 3110 (Morombe) onshore blocks (the ‘‘Madagascar Blocks’’) are located in the
Morondava basin in the western part of Madagascar.
EEPL holds a 100% participating interest in these blocks and is the operator of the blocks.
The PSCs for Madagascar Blocks 3103 and 3110 were entered into with the Madagascar Office of National
Mines and Strategic Industries in October 2006. The initial exploration periods under the PSCs are eight
years, divided into three phases, with the first phase being four years and the second and third phases being
two years each. At the end of each phase of the exploration period, EEPL has the option to proceed to the
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next phase of the exploration period or to terminate the relevant PSC. EEPL’s work commitments for the
first phase of the exploration period are as follows:
Block Work commitment
3103 block . . . . . . . . . . . . an airborne gravity and magnetic survey of 1,000 line kilometres;
a 3D seismic analysis of 100 km2; and
drilling of two exploratory wells.
3110 block . . . . . . . . . . . . an airborne gravity and magnetic survey of 1,000 line kilometres;
a 2D seismic analysis of 200 line kilometres; and
drilling of one exploratory well.
To date, EEPL has completed the reprocessing of existing seismic data sets for the 3103 and 3110 blocks
and has completed acquisition, processing and interpretation of 6,481 line km of the airborne gravity and
magnetic survey for these blocks.
If EEPL makes a commercial discovery within the exploration period, the production phase under the
relevant PSC will be for a period of 25 years (35 years in the case of a predominantly natural gas
discovery).
Indonesia Block (Indonesia)

EEPL has a 49.5% participating interest in the Indonesia Block in the south Sumatra basin of Indonesia,
with the remaining 50.5% interest being held by the GSPC.
EEPL and GSPC entered into a 30-year PSC for the Indonesia Block in November 2008 with the
Indonesian government’s Badan Pelaksana Kegiatan Usaha Hulu Minyak Dan Gas Bumi. The PSC
provides for an initial exploration phase of six years, with the option to extend this period by a maximum of
four years. EEPL and GSPC bear the risk and cost of all exploration and production activities in the
Indonesia Block. The exploration activities in this block are currently at a preliminary stage.
GSPC is operator of the Indonesia Block.
Australia Blocks (Australia)

The Australia Blocks are located in the Bonaparte basin of north-western Australia, in average water
depths of 15 to 50 metres.
EEPL’s work commitments in connection with these permits include geological and geophysical studies,
2D seismic analysis, 3D seismic analysis and the drilling of wells.
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OIL AND GAS—REFINING

Vadinar Refinery (Vadinar, India)
Overview
The Vadinar refinery, located near the Vadinar port in the state of Gujarat, began commercial operations
on 1 May 2008, after having undertaken trial runs from November 2006. The refinery’s primary processing
units, namely its crude distillation unit and vacuum distillation unit, were commissioned in November 2006.
The secondary units were commissioned in a phased manner thereafter until the refinery commenced
commercial operations.
The Vadinar refinery is a cracking refinery with an average Nelson Complexity Index rating of 6.1, utilising
fluid catalytic conversion as the refinery’s primary conversion technology. The refinery is configured to
produce up to Euro IV diesel grades, but is currently producing up to Euro III grades of petrol and diesel,
in addition to other refined products, such as LPG, kerosene, ATF, naphtha, fuel oil, bitumen and sulphur.
The refinery processed 11.95 mmt of crude oil between 1 May 2008 and 31 March 2009 and 9.90 mmt of
crude oil between 1 April 2009 and 31 December 2009. In each of these periods, the refinery had a higher
capacity utilisation rate, on an annualised basis, than its annual design capacity rate of 10.5 mmtpa, largely
due to measures implemented by the Company to better optimise the refinery’s asset utilisation.
The Vadinar refinery and associated facilities, including those to be constructed in connection with the
Refinery Expansion Projects, are located on a site with a total area of approximately 2,252 hectares located
approximately 20 km from the port of Vadinar in the Jamnagar District of the state of Gujarat. The
Vadinar refinery’s location in the western part of India affords easy access to both western and northern
India, which are India’s main petroleum product markets. The Vadinar refinery is connected by an
approximately 20-km-long pipeline to the shipping port terminal at Vadinar. This terminal includes a
single-buoy mooring for the exclusive use of the refinery, capable of handling crude oil vessels up to
325,000 dwt and servicing marine product dispatch capacity of parcel sizes up to 100,000 dwt. The port is
India’s closest port to the Middle East and its coastal regions, the world’s largest single source of crude oil
and the main source of imported crude oil for India. This port also provides access to the growing markets
of China, Southeast Asia and East Africa and to the established markets of Europe and North America.
The following map shows the connection of the Vadinar refinery to the Arabian Sea:
Turkey Turkmenistan
Syria
Afghanistan
Iraq China
Iran
Pakistan
Egypt Nepal
India
Crude intake
Saudi Vadinar
Arabia
Oman
Vadinar Euro II/III/IV/V
Markets globally Mumbai
Yemen
Crude intake
30MAR201014194271
In addition, the Vadinar refinery is well connected to India’s rail network and national highways. The
refinery has on-site rail-car and truck loading facilities. The refinery is located approximately 12 km from
the broad-gauge railway line between Rajkot and Okha and has access to this railway line via a branch line
terminating at the refinery. The refinery is also located on the Jamnagar-Okha state highway number 25,
providing for easy transport of refined products via road to India’s western and northern markets.
VOTL, an Essar Affiliated Company, owns and operates the Vadinar port terminal (including the single
buoy mooring) and all of the Vadinar refinery’s pipelines, crude oil and refined product storage facilities,
rail-car and tank truck-loading facilities and road-loading gantries. In addition, Essar Logistics, another
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Part 6 The Business
Essar Affiliated Company, provides all of the Vadinar refinery’s logistical services for transporting by road
refined petroleum products from the refinery to depots and other places.
The Vadinar refinery’s current refining operating costs are approximately US$1 lower per barrel than the
average costs within the industry (Source: KBC). The following table gives an overview of the Vadinar
refinery’s refining operating costs per barrel based on data from the Company for the nine months ended
31 December 2009.
Cost item US$/barrel

(1)
Asset management costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.30
Manpower costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15
Purchased energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.31
Other overhead costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.39
Operations variable costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.19
Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33
Source: KBC.
(1) Includes costs of shutdowns, turnarounds, maintenance and repair and other routine maintenance.
In addition to the above refining operating costs, the Company has incurred product handling charges and
other corporate and marketing expenses of US$0.96 per barrel.
Throughput and Production Overview

The following table provides a summary of crude throughput and production data for the Vadinar refinery
for the period indicated:

31 March 2009 31 December 2009
Percentage of Percentage of
total total
mmt throughput mmt throughput
Throughput operating capacity per annum .............. 13.04 14.0

Crude unit throughput:
Light . . . . . . . . . . . . . . . . . . . . . . . . . . .............. 3.4 29% 2.7 28%
Medium and Heavy . . . . . . . . . . . . . . . .............. 6.8 57% 5.5 55%
Ultra-heavy . . . . . . . . . . . . . . . . . . . . . .............. 1.8 14% 1.7 17%
Total crude unit throughput . . . . . . . . . . . . . . . . . . . . . . . . . 12.0 100% 9.9 100%
Source: Company

total total
mmt production mmt production
Production:
Liquefied petroleum gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.46 3.8% 0.40 4.1%
Naphtha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.03 0.3% 0.11 1.1%
Motor spirit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.10 17.6% 1.67 16.8%
Kerosene/Aviation turbine fuel . . . . . . . . . . . . . . . . . . . . . . . 0.57 4.8% 0.66 6.7%
High speed diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.10 42.7% 4.02 40.6%
Fuel oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.72 22.7% 1.97 19.9%
Sulphur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.07 0.6% 0.06 0.6%
Bitumen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.13 1.1% 0.40 4.1%
Fuel loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.77 6.4% 0.61 6.1%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.95 100% 9.90 100%
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Part 6 The Business
Main Process Units

The following table sets forth the main process units for the Vadinar refinery, their current capacity, the
related process licensors and the units’ special design features:
Current operating
Unit Design capacity capacity(1) Process licensors Design features
(mmtpa, except (mmtpa, except
as indicated) as indicated)
Crude Distillation (CDU) 10.5 14.0 Open Art – Crude column of 90 metres in
height with 76 valve trays
– Superior swing capabilities
Vacuum Distillation (VDU) 5.5 7.2 Open Art Low-pressure steam ejectors with
vacuum pumps, providing energy
savings
Visbreaker (VBU) 1.9 2.2 Axens Soaker with vacuum column,
generating improved conversion
rates and efficiencies
Fluid Catalytic Cracker 2.93 3.3 Shaw, Stone & Webster Light and heavy VGO processing
(FCCU) capabilities
Diesel Hydro 3.7 4.5 Axens Euro IV-grade diesel production
Desulphurisation (DHDS) capabilities
Naphtha Hydrotreater (NHT) 1.5 1.6 Axens High sulphur naphtha
desulphurisation capabilities,
VBU and FCC naphtha
processing
Continuous Catalytic 0.9 1.0 Axens High hydrogen-recovery
Reformer (CCR) capabilities
– Hydrogen by-product
completely utilised in diesel
hydro desulphurisation unit
Sulphur Recovery (SRU) 440 tpd 440 tpd Stork Comprimo
Amine Regeneration (ARU) 3.1 3.1 Open Art
Sour Water Stripper (SWS) 1.5 1.5 Open Art
Kero Merox 2x1,900 tpd 2x1,900 tpd Merichem
Gasoline Merox 1,500 tpd 1,700 tpd Merichem
Unsat LPG Merox 2,800 tpd 2,800 tpd Merichem
Hydrogen Manufacturing 1x10,000
NM3/hr
(1) On an annualised basis.
Product Slate
The Vadinar refinery’s configuration is designed to optimise the refinery’s gross refining margins by
processing low-cost, heavier and acidic crude oils into higher-value products, such as middle distillates.
Since the Vadinar refinery was commissioned, the Company has implemented measures to further improve
the refinery’s processing capabilities. For example, the refinery’s production of lower-margin naphtha has
been substantially reduced by absorption of naphtha in diesel/gasoline by modifying the process. As a
result of laboratory studies and operational trials, the Vadinar refinery is now producing bitumen, a
product with potentially higher gross refining margins than fuel oil. In addition, the Company has designed
and modified refinery operations to shift production within specified ranges to meet product demand.
Crude Oil and Other Feedstock Procurement

The Company aims to further improve the Vadinar refinery’s refining margins by enhancing the ability of
the refinery to process heavy and tough crudes to produce higher margin petroleum products. During the
period from 1 April 2009 to 31 December 2009, approximately 72% of the crudes processed by the Vadinar
refinery were medium, heavy or ultra-heavy crudes. The average API density of all the crude, processed by
the refinery was 32.3. These crudes are currently available at lower prices than light crudes.
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Part 6 The Business
The Company currently procures crude oil through a combination of term contracts and spot market
purchases. The Company continuously evaluates the mix of term purchase contracts and spot market
purchases needed to achieve the procurement of crude oil at the most favourable prices and optimise
refining margins. Approximately 53% of the Company’s crude oil procurement by volume was through
term contracts in the period from 1 April 2009 to 31 December 2009. The Company believes that term
contracts with national oil companies provide better reliability of supplies and generally better pricing
terms than spot market purchases. In the period from 1 April 2009 to 31 December 2009, the Vadinar
refinery obtained approximately 46.4% of its total crude supplies by volume pursuant to term purchase
contracts from national oil companies, including Abu Dhabi National Oil Company, Saudi Arabian Oil
Company and NIOC and 6.4% of its total crude supplies by volume pursuant to a term purchase contract
with an oil major. The current contract with Abu Dhabi National Oil Company has a term from 1 January
2010 to 31 December 2010 and provides for a total committed supply of 14,000 bpd of crude oil, including
Murban, Lower Zakum, Umm Shaif and Upper Zakum crude types. The current contract with Saudi
Arabian Oil Company has a term from 1 January 2010 to 31 December 2010 with a total committed supply
of 20,000 bpd of Arabian Extra Light crude oil. The current contract with NIOC has a term from 1 October
2009 to 31 December 2010 and provides for a total committed supply of 9,600,000 barrels of crude oil per
quarter, including Iranian heavy, Foroozan, Soroosh and Nowrooz crude types. In addition to the term
contract with NIOC, the Company purchased 1.99 million barrels of crude oil of Iranian origin in the year
to 31 March 2010 and 0.20 million barrels of crude oil of Sudanese origin in the year to 31 March 2009, in
each case through international oil companies. In the year to 31 March 2010, the aggregate amount of
crude oil of Iranian origin purchased by the Company was 40 million barrels. The Company believes that
spot market purchases are useful in helping the Vadinar refinery to adjust its crude mix to changes in
market conditions and any unexpected events that may impact the refinery’s operations by enabling a
portion of crude supplies to be purchased on a quick ‘‘as needed’’ basis. The Vadinar refinery procures
crude oil supplies on a spot basis from national oil companies, such as Saudi Arabian Oil Company and
Petroleos de Venezuela SA; oil majors, including BP, Shell and Total as well as oil traders, including
Glencore and Vitol.
The Company’s strategy is to diversify the regions from which it sources its crude oil supplies to help
minimise its exposure to any one region. During the period from 1 April 2009 to 31 December 2009, the
Company sourced 74% of its crude oil by volume from the Middle East, 15% from South America, 6%
from Africa and 5% from Russia. The Refinery Expansion Projects are expected to increase the Vadinar
refinery’s ability to process tougher and more acidic crudes, enabling the Company to source a higher
percentage of its crude oil from regions outside the Middle East.
The Vadinar refinery uses catalysts and other chemicals for various production processes. The Company
procures catalysts from a variety of international suppliers, generally under term contracts. Other
chemicals are also generally purchased under longer-term contractual arrangements from a variety of
international and domestic suppliers.
Supply Chain Planning

The Company’s goal is to optimise the Vadinar refinery’s supply of crude oil and other feedstocks and the
off-take of the refinery’s refined products. The Company has two teams working together who are
responsible for managing the Vadinar refinery’s supply chain and related activities: the Economic Planning
and Scheduling (‘‘EPS’’) team and the International Supply and Trading (‘‘IST’’) team. The EPS team is
tasked with general short-term and long-term refinery operational planning, while the IST team is tasked
with the purchase of crude oil and export of petroleum products and interaction with the international oil
and petroleum product markets.
The choice of the optimal feedstock is an iterative process that the EPS team performs using market
analyses of crude oil availability, quality and prices and refined petroleum product prices provided by IST
team and domestic product demand provided by the Company’s marketing team. The EPS team seeks to
leverage the Vadinar refinery’s ability to process crudes with a broad range of API, sulphur and acidity
characteristics to minimise crude costs while maximising refining margins. The Vadinar refinery is able to
process crude oils with density gravities ranging from 16 API to 61 API with appropriate blending, which
allows the Company to use lower-cost crude oils to maximise refining margins. The EPS team aims to
optimise purchases of crude oils between this API range. The EPS team begins establishing refining input
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Part 6 The Business
and output plans for the Vadinar refinery generally three to four months in advance of when the crude is
actually processed, while the IST team decides the mix of spot and term crude purchases for the refinery
and negotiates the terms of such purchases. The EPS team also aims to maximise the Vadinar refinery’s
capacity by analysing and implementing techno-economic studies for debottlenecking of refinery
constraints and setting refinery maintenance and shutdown schedules.
The EPS team aims to optimise the Vadinar refinery’s operations and thereby maximise refining margins
by managing the sale of refined products and by evaluating and recommending time periods and quality
criteria. The EPS team is responsible for ensuring that the right qualities and quantities of products are
available from the Vadinar refinery. The IST team is responsible for ensuring that exports from the
Vadinar refinery are carried out in appropriate quantities and in a timely manner in coordination with
EPS. The IST team also decides the mix of spot and term export sales of refined petroleum products.
To enable the Company to determine how best to optimise the Vadinar refinery’s crude and product slate,
the EPS team uses software, such as Aspens Process Industry Modelling System as well as crude assay
databases licensed from Royal Dutch Shell PLC through Spiral Software Limited.
The following table shows, for the periods indicated, the Vadinar refinery’s gross refining margins
compared to the International Energy Agency Singapore Margin (Dubai Hydrocracking Margin) crack
spreads for the periods indicated.

Vadinar refinery’s gross refining margin (including sales

tax incentive) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$7.97 per barrel US$4.46 per barrel
Vadinar refinery’s gross refining margin (excluding sales
tax incentive) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$5.02 per barrel US$2.12 per barrel
International Energy Agency Singapore Margin (Dubai
Hydrocracking Margin) crack spread . . . . . . . . . . . . . . . US$2.14 per barrel US($2.33) per barrel
Source: Company/IEA
For more information about the Vadinar refinery’s gross refining margins, see ‘‘Gross refining margin or
GRM’’ in Part 2 ‘‘Presentation of Financial and Other Information’’ and ‘‘Factors Affecting Results of
Operations and Financial Condition—Gross Refining Margins’’ in Part 9 ‘‘Operating and Financial
Review’’.
The IST team utilises hedging instruments, to a certain extent, to reduce the impact of price volatility in
crude oil and refined petroleum products on the Company’s profitability. To this end, the IST team uses a
wide range of conventional oil price-related commodity derivatives traded on the OTC market and
overseas commodity exchanges. To the extent derivative instruments are used for hedging purposes, they
typically do not expose the Company to market risk because the change in their market value is largely
offset by a corresponding opposite change in the market value of the asset, liability or transaction being
hedged. All derivatives transactions are cash settled.
Power and Steam

The Vadinar refinery currently has an average electrical demand of between 62 MW and 67 MW.
The Vadinar refinery’s current electric power and high pressure steam requirements are provided by the
power business’s Vadinar Power-Jamnagar captive power plant located within the Vadinar refinery
complex. The power plant consists of two turbines of 38.5 MW each and three boilers with a capacity of
175 tonnes per hour. Under normal conditions, the plant supplies approximately 230 tonnes per hour of
steam and between 275 to 330 tonnes per hour of de-aerated water to the Vadinar refinery. The power
plant is designed to burn fuel oil, natural gas and refinery gas simultaneously, though currently is burning
primarily furnace oil provided by the Vadinar refinery. Beginning in April 2010, this furnace oil will be
replaced by higher-calorie natural gas, which the Company expects to lead to substantial savings due to
reduced fuel consumption. The Vadinar refinery also purchases power from the local electricity grid to
meet its additional power needs during maintenance shutdowns at the Vadinar Power-Jamnagar power
plant.
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Part 6 The Business
The power plant also provides power to VOTL (via its power purchase agreement with Essar Oil) for
powering the Vadinar terminal.
For more information about the Vadinar Power-Jamnagar power plant, see ‘‘—Power—Operational Power
Plants—Vadinar Power-Jamnagar (120 MW)’’.
The Refinery Expansion Projects

Overview
The following table sets forth certain data for the Vadinar refinery on an actual basis as of 31 December
2009, as well as on an expected basis following completion of the Phase I Refinery Project and the Phase II
Refinery Project:
As at Phase I Phase II
31 December 2009 Refinery Project Refinery Project
Nelson Complexity Index . . . . . . . . . . . . . . 6.1 11.8 12.8

Annualised operating capacity (in mmtpa) . . 14 18(1) 36
Average API density . . . . . . . . . . . . . . . . . 32.3 24.8 24.0
Average crude sulphur content . . . . . . . . . . 1.60% 3.0% 3.0%
Highest refined product grade . . . . . . . . . . Euro III/IV Euro IV/V Euro V/US
specifications/California
Air Resources Board
specifications
(1) Inclusive of 2 mmtpa crude oil processing in the visbreaking unit taking the crude oil throughput to 18 mmtpa.
Top 30 refiners worldwide(1)
(2)
13 Phase 2
(March 2013)
Phase 1
(March 2011)
11
(3)
Phase 2
(March 2013)
Nelson complexity
Reliance
9
Phase 1
(March 2011) PDVSA Cardon
7 GS Caltex – Yosu
Essar refinery
today SK Ulsan
5
Essar refinery
today
3
1
0 200 400 600 800 1,000 1,200 1,400
Capacity (kbbl/d)
(a)
KBC Company 8APR201020273509
(1) The complexity figures for the refineries (other than Essar refinery as indicated) are based on the post-1998 methodology used
in a report prepared by KBC.
(2) The Company has calculated the average Nelson Complexity Index rating of the current Vadinar refinery to be 6.1, which is
expected to increase to 11.8 following completion of the Phase I Refinery Project and to 12.8 following completion of the
Phase II Refinery Project based on the pre-1997 Nelson methodology and including some additional process units (sour water
strippers and sulphur recovery units). The Company also applies a ‘‘Hydrocracker’’ factor to the high pressure VGO
Hydrotreater and includes it in its calculations. In contrast, a report prepared by KBC calculates the average Nelson Complexity
Index rating of the current Vadinar refinery to be 4.8, which it expects to increase to 8.4 following completion of the Phase I
Refinery Project and to 10.0 following completion of the Phase II Refinery Project using the post-1998 methodology and having
not taking into account the aforementioned additional process units.
For the purposes of the Prospectus, the figures used in the complexity of the Vadinar refinery are those as calculated by the
Company.
(3) The timing for Phase II will be finalised based on a review of market conditions and securing committed financing.
Source: Company information/KBC.
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Part 6 The Business
The Refinery Expansion Projects are designed to further maximise the Vadinar refinery’s production of
higher-margin products, such as ATF and transport fuels, while minimising the refinery’s production of
lower-margin products, such as fuel oil. The Vadinar refinery’s higher complexity following completion of
the Phase II Refinery Project is expected to enable the refinery to process a greater variety of crudes and to
process low-cost, heavy and acidic crude oils. Approximately 37% of the refinery’s product slate is expected
to consist of diesel, of which up to 60% can be produced to meet Euro V product quality standards without
sacrificing economic operations. In addition, the Company expects approximately 24% of the refinery’s
product slate to consist of gasoline, of which 70% can be produced to meet Euro V grade product quality
standards without sacrificing economic operations. Following completion of the Refinery Expansion
Projects, the Company expects the Vadinar refinery to have growth opportunities within the petrochemical
business with feedstock availability for the complete petrochemical product range.
In connection with the Phase I Refinery Project, the Company is currently in the process of upgrading and
increasing the average Nelson Complexity Index of the Vadinar refinery from 6.1 to an expected 11.8,
through a programme of debottlenecking and by adding new process units. The Phase I Refinery Project
also involves the construction of ancillary facilities for the Vadinar refinery such as additional tanks to
receive the crude oil, product tanks to store a wider variety of products, an additional berth at the Vadinar
terminal facility and additional dispatch facilities by road.
The Company expects the refinery’s overall weighted average Nelson Complexity Index to increase to 12.8
on completion of the Phase II Refinery Project.
The Phase I Refinery Project is expected to be completed by March 2011.
The Company intends to finalise the timing for implementation and completion of the Phase II Refinery
Project following a review of market conditions and the securing of financing commitments for the project.
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Part 6 The Business
The following table sets forth the Vadinar refinery’s main process units and their expected capacity
following completion of the Phase I Refinery Project and the Phase II Refinery Project as well as the
names of the process licensors for various process unit technologies. The data set forth in the table below is
indicative data only.

Phase I Refinery Project Phase II Refinery Project Total
Process Process
Unit Capacity licensors Capacity licensors Capacity
mmtpa, mmtpa, mmtpa,
except as except as except as
indicated indicated indicated
Crude Distillation/Vacuum Distillation . 16.0 Open Art 18.0 Open Art 34
VisBreaker . . . . . . . . . . . . . . . . . . . . 2.2 Axens — — 2.2
Fluid Catalytic Cracker . . . . . . . . . . . 3.3 Stone & 7.1 UOP 10.4
Webster
Vacuum Gasoil Hydrotreater . . . . . . . 6.2 UOP 6.2 UOP 12.4
Diesel Hydro De-Sulphurisation . . . . . 4.5 Axens — — 4.5
Diesel Hydrotreater . . . . . . . . . . . . . . 3.8 UOP 3.8 UOP 7.6
Naphtha Hydrotreater . . . . . . . . . . . . 1.6 Axens 3.8 UOP 5.4
Delayed Coker . . . . . . . . . . . . . . . . . 6.0 Lummus 6.0 Lummus 12.0
Continuous Catalytic Reformer . . . . . . 1.0 Axens 3.1 UOP 4.1
Isomerization . . . . . . . . . . . . . . . . . . 0.7 UOP — — 0.7
Sulphur Recovery . . . . . . . . . . . . . . . 440 + 675 Jacobs 1350 tpd Jacobs 2,465 tpd
tpd Nederland Nederland
ATF Hydrotreater . . . . . . . . . . . . . . . 1.0 UOP — — 1.0
Alkylation . . . . . . . . . . . . . . . . . . . . — — 1.2 Dupont 1.2
Butamer . . . . . . . . . . . . . . . . . . . . . . — — 0.7 UOP 0.7
Propylene Recovery . . . . . . . . . . . . . . — — 1.0 UOP 1.0
Gasoline Merox . . . . . . . . . . . . . . . . 1,700 tpd Merichem 11,270 UOP 12,970 tpd
tpd
Unsat LPG Merox . . . . . . . . . . . . . . . 2,800 tpd Merichem 7,700 tpd UOP 10,500 tpd
Kero Merox . . . . . . . . . . . . . . . . . . . 2x1,900 Merichem — — 8,300 tpd
tpd + 4,500
tpd
Amine Regeneration . . . . . . . . . . . . . (3.1 +8.0) UOP 8.0 UOP 19.1
Sour Water Stripper . . . . . . . . . . . . . (1.5 + 1.9) UOP 1.9 UOP 5.3
Hydrogen Manufacturing . . . . . . . . . . 1x10,000 + Haldor 2x130,000 Haldor 400,000
1x130,000 Topsoe NM3/hr Topsoe NM3/hr
NM3/hr
Prime-G . . . . . . . . . . . . . . . . . . . . . . 1.5 Axens 1.5
Source: KBC
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Part 6 The Business
Set out below is a schematic overview of the main process units of the Vadinar refinery following the
completion of the Phase I Refinery Project.
Process flow and main units at Vadinar refinery
ISOM
Gas streams
Refinery fuel gas
LPG TRTG LPG

LPG
SGU LTN
Naphtha
NHT/CCR
REF Gasoline
Gasoline
Treating
CDU Kero ATF TRTG
Crude PRU Jet/Kero
/ HT butamer
and alkylation
DSL Propylene
DHDS
VBU RFG LPG
CKN CRN
VGO Diesel
VGO HT FCCU LCO
DHDT
CKDSL
VGO EXP
Residue
DCU
CLO
FO
Fuel oil
blending
Cutlers
Base Refinery Bitumen

Bitumen
blending
Phase -1 units
Coke
Phase -2 units
15APR201012474538
Source: Company information
Upon completion of Phase I Refinery Project, which is expected to extend the Vadinar refinery’s total
throughput capacity to 18 mmtpa, the expected process flow of the refinery is as set out in the diagram
above. The key processes are as follows:
• Crude oil will be transported to the refinery through a pipeline and processed in the Crude
Distillation Unit (‘‘CDU’’), the Vacuum Distillation Unit (‘‘VDU’’) and concurrently in the modified
Visbreaking Unit (‘‘VBU’’) to produce light and medium and heavy products and residue;
• the light products comprising of LPG and naphtha will be processed through the SGU to separate the
LPG (which would then be processed through the LPG Treating Unit and sent onwards to storage)
from the naphtha. Naphtha/Gasoline streams from the CDU and Delayed Coker Unit (‘‘DCU’’) will
be processed in the Naphtha Hydrotreater Unit (‘‘NHT’’), where the naphtha will be separated into
light and heavy naphtha. The light naphtha will then be processed in the Isomerisation Unit
(‘‘ISOM’’) and the heavy naphtha in the Continuous Catalytic Reforming Unit (‘‘CCR’’). The
Naphtha/Gasoline streams will then be blended with cracked gasoline from the Fluid Catalytic
Cracking Unit (‘‘FCCU’’) to produce marketable Motor Spirit. High octane gasoline meeting
Euro IV/V specifications will also be produced through the blending of streams;
• Kerosene/ATF will be processed through an ATF treating unit before despatch to storage;
• the vacuum residue from the VDU will be processed in the DCU which will generate valuable light
products including naphtha, coker gasoil, heavy coker gasoil and petcoke;
• the heavy gasoils from the VDU as well as the DCU will be processed through the VGO Hydrotreater
and thereafter through the FCCU to generate LPG, gasoline, light cycle oil and clarified slurry oil;
and
• diesel products from the CDU/VDU, DCU and FCCU will be processed through the Diesel Hydro
desulphurisation (‘‘DHDS’’) and then the Diesel Hydrotreater (‘‘DHDT’’) units and the two streams
blended to produce marketable HSD meeting Euro IV/V quality norms.
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Part 6 The Business
Fuel oil and bitumen are also produced through appropriate blending of residue components with cutter
stocks.
To meet stringent environmental regulations, the off-gases from the hydrotreaters will be treated in the
Sour Water Stripping unit (‘‘SWS’’), Amine Regeneration unit (‘‘ARU’’) and finally converted to elemental
sulphur in the Sulphur Recovery unit (‘‘SRU’’).
Upon the completion of the configuration of process units resulting from the Phase I Refinery Project, the
Vadinar refinery should be capable of processing a higher percentage of tough and opportunity crudes,
thereby enhancing gross refining margins and profitability.
Following completion of the Phase I Refinery Project, the Vadinar refinery’s process units will be further
optimised for additional throughput beyond design capacity.
The Vadinar refinery is expected to receive a regular supply of crude oil from an indigenous Indian source
beginning in May 2010, which will be transported through a direct pipeline from the well to the refinery.
This new crude will be processed in the refinery blended with the other crudes which are currently being
processed. Following the completion of the Phase I Refinery Project, and once the delayed coker unit is
commissioned, the existing visbreaker unit will be used as a crude distillation unit. Once completed, this
VBU will be able to process the new crude in a capacity of up to 2 mmtpa, thereby increasing the
throughput capacity of the crude distillation unit to 18 mmtpa.
The Vadinar captive power plant’s capacity is currently being expanded to substantially meet the refinery’s
capacity requirements upon completion of the Refinery Expansion Projects. For information about the
expansion plans for the Vadinar power plant, see ‘‘—Power—Phase I Power Projects—Vadinar Power
Plant Expansion’’. Currently, the Vadinar refinery is consuming internal fuel oil for its captive power plant
to meet power and steam requirements. Internal fuel oil will be replaced by natural gas from May 2010,
resulting in substantial savings in the refinery’s fuel consumption. The refinery intends to eventually
replace the natural gas it will be utilising beginning in April 2010 to fuel its power and steam requirements
with coal, a less expensive fuel.
Expected Throughput
Upon completion of the Phase II Refinery Project, the Company expects that the Vadinar refinery’s crude
oil requirements will be more than double its current requirements. The Company expects that the Vadinar
refinery will be able to process a majority of the different grades of crude oil available in the international
market, including crude oils from the Middle East and Latin America. Depending on market conditions
and the price differentials between crudes, the Company expects the proportion of heavy and tough crudes
processed at the Vadinar refinery to increase compared to the proportion of light crudes and sweet crudes
processed. The Company plans to source the majority of the Vadinar refinery’s crude supplies from Latin
America and the Middle East through long-term contracts with suppliers, including national oil companies,
which will be supplemented by spot market purchases.
The table below provides an overview of the Vadinar refinery’s expected throughput mix following
completion of the Phase I Refinery Project and Phase II Refinery Project. The refinery’s actual crude oil
throughput may differ from those set forth in the table below due to changes in the availability of various
types of crude oil, market prices for crude oil and refined products and market demand for different types
of refined products. The data set forth in the table below is indicative only.
Crude Oil Phase I Refinery Project(1) Phase II Refinery Project(1)
Light . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11% 5%
Medium and Heavy . . . . . . . . . . . . . . . . . . . . . . . . . 25% 32%
Ultra-heavy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64% 63%
Total throughput . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 mmtpa 36 mmtpa
375 kbpd 750 kbpd
(1) Expected throughput.
Source: KBC
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Expected Product Slate

The table below provides an overview of the Company’s expected product slate following completion of the
Phase I Refinery Project and the Phase II Refinery Project. This data set forth in the table below is
indicative data only. The refinery’s actual product slates may differ from those set forth in the table below
due to changes in the availability of and market prices for various types of crude oil, market prices for
refined products and market demand for different types of refined products.

Phase I Refinery Phase II Refinery
Project Project
total product total product
Products mmtpa slate mmtpa slate
Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.49 13.86% 8.76 24.36%

Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.72 42.91% 13.57 37.75%
ATF/SKO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.17 6.52% 3.94 10.96%
LPG/Naphtha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.41 7.83% 1.50 4.18%
Coke . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.83 10.18% 4.10 11.40%
Fuel oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.60 3.33% 0.60 1.67%
Feedstock (VGO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.84 10.24% 0.00 0.00%
Feedstock (propylene) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 0.00 0.99 2.75%
Sulphur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.21 1.15% 0.54 1.51%
Furnace oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Bitumen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Fuel and loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.72 3.98% 1.95 5.42%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.98 100% 35.95 100%
Source: KBC
Following completion of the Phase I Refinery Project it will be possible to produce all gasoline to Euro IV
sulphur quality. There will also be the capability to produce up to 40% to Euro V sulphur quality if
required. Up to 50% of the gasoline could be produced to 95 RON. It will also be possible to produce all
diesel to Euro IV sulphur quality; there will also be the capability to produce up to 25% to Euro V sulphur
quality if required.
Following completion of the Phase II Refinery Project it will be possible to produce more than 70% of
gasoline to Euro V sulphur quality without sacrificing economic operation and a further 15% could be
produced at a higher cost. All the gasoline could be produced to 95 RON. It will be possible to produce up
to 60% of diesel to Euro V sulphur quality without sacrificing economic operation and a further 10-15%
could be produced at higher costs.
Project Costs and Financing

The Company estimates total costs of Rs. 78.1 billion (US$1,673.1 million) for the Phase I Refinery Project
and of Rs. 222 billion (US$4,756 million) for the Phase II Refinery Project.
The breakdown of the estimated project cost for the Phase I Refinery Project is as follows:
Percentage of
Phase I Refinery Project costs Rs. US$ total cost
(in millions) (in millions)
Land and buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 930 19.9 1%
Plant and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 59,560 1,275.9 76%
Project management and engineering fees . . . . . . . . . . . . . .... 6,350 136.1 9%
Preliminary & pre-operational expenses and interest during
construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 11,260 241.2 14%
Total project costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,100 1,673.1 100%
The estimates in the table above are subject to change.
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The Company plans to finance the Phase I Refinery Project through a mixture of cash flow from
operations, equity contributions, and third-party debt financing.
The Phase I Refinery Project has a cost of US$1,673 million, of which US$985 million has been committed
through third party debt financing. Of the remaining US$688 million of equity financing, US$428 million
has been funded from cash flows from operations and equity injected by the Essar Group, and
US$260 million will be funded from the proceeds of the Offer. The Company has secured these financing
commitments. See ‘‘Indebtedness—Funding the Expansion Projects—Financing Arrangements for the
Phase I Refinery Project’’ in Part 9 ‘‘Operating and Financial Review.’’
Project Status—Phase I Refinery Project

The Company has contracted with various Essar Affiliated Companies for detailed engineering services,
project management services, construction services and the supply of onshore and offshore equipment and
bulk materials in relation to this project. The status of each of these service providers as of
28 February 2010 is as follows:
• Essar Engineering is undertaking the detailed engineering works for the Phase I Refinery Project.
Essar Engineering, in turn, has subcontracted with third-party engineering firms, such as Technip
India Limited, Aker Kvaerner Powergas Limited and Toyo Engineering India Limited, to carry out the
detailed engineering for the Phase I Project’s critical process units. Essar Engineering has completed
approximately 86% of the detailed engineering works for the Phase I Project.
• Essar Projects is undertaking construction work for the Phase I Refinery Project and has completed
approximately 29% of the construction, including commencing the civil engineering works and
pre-cast work for pipe racks and completing the foundation work for the pipe racks and other large
equipment.
• The Company has entered into a contract with Global Supplies for the procurement of the Phase I
Refinery Project’s non-Indian equipment requirements and with Essar Projects, an Essar Affiliated
Company for the procurement of the project’s equipment requirements from within India and certain
imported equipment. These companies have completed the ordering of all major long lead-time
material and equipment.
• The Company has entered into contracts with Essar Logistics for the transportation of imported plant
and equipment to the project site for the Phase I Refinery Project.
• The Company has entered into a contract with Essar Project Management, an Essar Affiliated
Company, for the project management and consulting services for the Phase I Refinery Project. Under
this contract, Essar Project Management will provide all services for managing the implementation of
the Phase I Refinery Project.
• Vadinar Ports & Terminal Limited (‘‘VPTL’’), an Essar Affiliated Company, is providing services for
the receipt, handling, storage and dispatch of crude oil and petroleum products for the Phase I
Refinery Project on a take-and-pay basis for a term of 20 years.
The terms of each of the contracts referred to above are summarised in paragraph 14 of Part 16
‘‘Additional Information—Material Contracts.’’
The Company has also entered into contracts with the following unaffiliated, third-party providers for the
supply of process technology for the Phase I Refinery Project:
Provider Product/Service
UOP . . . . . . . . . . . . . . . . For VGO hydrotreater, diesel hydrotreater, ATF hydrotreater,

isomerisation, amine regeneration, sour water stripper and ATF merox
Lummus Technologies Inc. For delayed coker unit
Jacobs Nederland . . . . . . . For sulphur recovery unit
Haldor Topsoe . . . . . . . . . For hydrogen manufacturing unit
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Part 6 The Business
Project Status—Phase II Refinery Project

UOP is expected to be the primary technology supplier for the Phase II Refinery Project and will provide
key technology licensing for the fluid catalytic cracking, VGO hydrotreater, diesel hydrotreater, naphtha
hydrotreater, continuous catalytic reformer, butamer, propylene recovery, gasoline merox, unsaturated
LPG merox, amine regeneration, sour water stripper and ATF Merox units. In addition, the Company has
obtained licences for a delayed coker unit from Lummus Technologies Inc., for a sulphur recovery unit
from Jacobs Nederland and for a hydrogen manufacturing unit from Haldor Topsoe. The Company has
also entered into contracts for the supply of process technology for an alkylation unit from Dupont, for a
bitumen processing unit from Poerner and for a Prime-G unit from Axens.
Licensing and basic engineering contracts for the Phase II Refinery Project will become part of Essar Oil
upon the merger of Essar Oil Vadinar Limited (‘‘EOVL’’) with Essar Oil. All other existing EPC contracts
of EOVL have been cancelled and new contracts have been entered into with Essar Projects and Essar
Project Management for the Phase II Refinery Project.
Further work on the Phase II Refinery Project is expected to take place once the Company has assessed
market conditions and has obtained definitive financing commitments for the project. Essar Oil has
entered into two contracts in relation to the implementation of the Phase II Refinery Project, one with
Essar Project Management in respect of the project management services and the second contract is with
Essar Projects in respect of engineering, procurement and construction services for the refinery. The work
under these contracts will commence only after definitive financial commitments being entered into, and
following which, if Essar Oil has not notified the counter-parties that the work is to commence by
September 2011, the contracts will terminate. For further information on the terms of these contracts, refer
to Paragraph 13 of Part 16 ‘‘Additional Information-Material Contracts’’.
Mombasa Refinery (Kenya)

The Company, through Essar Energy Overseas Ltd. (‘‘Essar Energy Overseas’’), holds a 50% interest in
KPRL, with the other 50% interest being held by the Government of Kenya. KPRL owns and operates the
refinery in Mombasa, Kenya, and related infrastructure, including fuel storage tanks. The Mombasa
refinery is the only oil refinery in East Africa and serves primarily the markets of Kenya and the
neighbouring countries of Uganda, Burundi and Rwanda.
The Group acquired its interest in KPRL in July 2009 with the acquisition of the stakes of BP plc
(approximately 16%), The Shell Petroleum Company Limited (approximately 17%) and Chevron Global
Energy Inc. (approximately 17%) in KPRL.
The Mombasa refinery was commissioned in 1963 and has a nameplate capacity of approximately 4 mmtpa
(80,000 bpd). The refinery currently processes only 1.6 mmtpa (32,000 bpd) of crude oil, primarily Murban
crude sourced from the United Arab Emirates. Due to the lack of investments historically in maintaining
and upgrading the facilities, the refinery is forced to run at sub-optimal capacity. The refinery is configured
as a simple hydroskimming type with atmospheric distillation and catalytic reforming units, with
approximately 32% of the refinery’s production by volume constituting fuel oil and the remainder
constituting LPG, gasoline, kerosene and diesel.
The Mombasa refinery processes crude into refined petroleum products based on tolling arrangements
with refined petroleum product marketing companies. The marketing companies are required to process at
KPRL a minimum of 1.6 mmtpa of their marketing requirement under the tolling arrangements. The
refinery’s earnings are linked to the amount of crude oil processed.
The Mombasa refinery is capable of receiving crude oil by ship and distributing its products by pipeline,
rail and road. The Mombasa port provides access to the Indian Ocean. The Mombasa refinery has access
to the Trans Kenya Oil Pipeline to Nairobi and onwards to Eldoret and Kisumu, enabling the refinery to
supply Kenya’s major inland population and industrial centres.
The Company has committed to contribute equity required to modernise the Mombasa refinery subject to
the economic viability of such an investment programme. KPRL has appointed a consultant to carry out
detailed feasibility and configuration studies. Implementation of the modernisation programme will occur
only after feasibility has been established and the programme has been approved by the board of directors
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Part 6 The Business
of KPRL. It is proposed to fund the modernisation through an equity contribution of 30%, with the
balance to be funded by KPRL through debt financing.
Planned upgrades include the re-configuration and modernization of the refinery to enable it to run at its
design capacity of approximately 4 mmtpa including the construction of residue conversion facilities, the
minimisation of emissions and the capability to produce products meeting AFRI IV specifications. With
the modernisation, the refinery is expected to increase its yield on gasoline, kerosene and diesel by as much
as 18% of its total crude throughput. In addition, the Company is of the view that the refinery’s LPG
production is likely to go up from the current 30,000 metric tonnes per year to 115,000 metric tonnes per
year. KPRL also intends to have a captive power plant built at the refinery to reduce disruptions in power
supplies.
Refined Products Marketing and Sales

Overview
The Company markets refined petroleum products both in the domestic Indian market, including through
direct bulk sales and retail sales through the Company’s network of retail fuel stations, and in the
international export market. In addition to sales of products refined at the Vadinar refinery, the Company
engages in sales of products refined by other refiners (‘‘traded refined petroleum products’’) through its
retail and direct bulk network.
The following table sets forth certain information about the Company’s sales of refined petroleum
products for the periods indicated:

Percentage Percentage
of total of total
product product
US$ in Rs. in sales US$ in Rs. in sales
Refined petroleum product sales million billion revenue million billion revenue
Domestic Indian sales . . . . . . . . . . . . . . . 5,714.8 262.4 72.7% 4,020.8 192.7 76.4%
Direct sales—oil marketing companies . 5,215.1 239.4 66.3% 3,215.5 154.1 61.1%
Bulk sales . . . . . . . . . . . . . . . . . . . . . . 291.9 13.4 3.7% 358.6 17.2 6.8%
Retail sales . . . . . . . . . . . . . . . . . . . . . 207.8 9.6 2.6% 446.7 21.4 8.5%
Export sales . . . . . . . . . . . . . . . . . . . . . . 2,148.1 98.6 27.3% 1,241.8 59.5 23.6%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,862.9 361.0 100.0% 5,262.6 252.2 100.0%
Own refined petroleum products . . . . . . . 7,691.5 353.1 97.8% 4,974.9 238.4 94.5%
Traded refined petroleum products . . . . . . 171.4 7.9 2.2% 287.7 13.8 5.5%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,862.9 361.0 100.0% 5,262.6 252.2 100.0%
The Company’s domestic sales and international export sales as a percentage of the Company’s total sales
have historically varied from quarter to quarter, primarily due to fluctuations in domestic sales. Therefore,
international export sales, on a quantity basis, accounted for 26% of the Company’s total sales of refined
petroleum products in the quarter ended 31 March 2009, 13% in the quarter ended 30 June 2009, 27% in
the quarter ended 30 September 2009 and 34% in the quarter ended 31 December 2009.
Compared to international export sales, the Company has more flexibility in choice of delivery channels for
domestic direct sales, as products may be shipped not only by sea but also by road, rail or pipeline.
Depending on market conditions, domestic bulk prices are generally equivalent to, or, in certain cases,
higher than those on the international spot market, enabling the Company to generate higher profit
margins.
Essar Energy’s domestic direct sales include both spot and term sales for primarily motor spirits, HSD,
kerosene, LPG, fuel oil, sulphur and bitumen. The Company sells a significant proportion of its refined
petroleum products, including motor spirits and HSD on a bulk-sales basis to domestic oil marketing
companies whose marketing requirements are greater than what their own refineries produce, as well as to
domestic industrial customers.
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Part 6 The Business
Domestic Sales to Oil Marketing Companies

The Company sold 61.1% of its total sales (in terms of revenue) to the major oil marketing companies
(‘‘OMCs’’) in India in the period from 1 April 2009 to 31 December 2009.
The Company has entered into a four-year off-take agreement with BPCL effective from April 2008, a
four-year off-take agreement with HPCL effective from January 2008 and a two-year off-take agreement
with IOCL effective from April 2009 for the sale of refined petroleum products, including motor spirits,
HSD, SKO and ATF. The quantity for the year is finalised with each OMC at the beginning of each
financial year. However, the off-take agreements contain no binding commitments from the OMCs to
purchase any minimum volume of products. Additionally, 100% of LPG production is also sold to these
OMCs. The Company sold approximately 7 million metric tonnes of refined products in the year ended
31 March 2009 and 5.6 million metric tonnes in the period from 1 April 2009 to 31 December 2009 to the
OMCs.
Motor spirit and HSD products sold under these agreements are priced at 80% of the prevailing prices at
which the relevant products could be imported into India plus 20% of the prevailing prices at which the
relevant products could be sold for export outside of India, with prices being adjusted on a fortnightly
basis. ATF and SKO products sold under these agreements are priced at 100% of the prevailing prices at
which the relevant products could be imported into India, with prices being adjusted on a fortnightly and
monthly basis, respectively at the relevant rupee dollar parity rates. Since import prices include the impact
of freight, insurance and import duties, the Company generally generates higher refining margins on sales
to the OMCs than on exports.
The OMCs are obligated to pay the base purchase price for the products within 21 days of invoicing, and
the other costs on duties, taxes etc are on relevant appropriate dates. In relation to product delivery costs,
the Company absorbs the central sales tax related to rail, road, pipeline and coastal transport and the
notional coastal freight charges related to coastal transport.
Domestic Bulk Sales

The Company sold 6.8% of its total sales (in terms of revenue) through direct bulk sales in the period from
1 April 2009 to 31 December 2009. Of the refinery’s total production, 31% of its fuel oil and 100% of its
bitumen and sulphur was sold in the domestic market in the period from 1 April 2009 to 31 December
2009.
Depending on market conditions, domestic bulk prices are generally equivalent to, or, in certain cases,
higher than those on the international spot market, enabling the Company to generate higher profit
margins with lower rail transportation costs.
The Company’s domestic direct sales include both spot and term sales for primarily HSD, fuel oil, sulphur
and bitumen. The Company’s direct sales customers include:
• petroleum product traders; and
• direct commercial users, like cement factories for furnace oil and power plants for refinery residue.
Direct sales to customers are priced at a discount to the import parity price for fuel oil and bitumen and to
the trade parity price for HSD prevailing in the market at the time of sale, with the amount of the discount
varying by customer and depending on the discount offered by the OMCs on similar sales. Sales to these
customers are generally made against advance payment or the provision of letters of credit. The Company
does not have any long-term off-take agreements with any of its direct sales customers.
The Company’s direct sales to traders are generally under one-year off-take agreements. These contracts
include limitations on the trader’s sales territory, security deposit and advance payment requirements and
end-user certification requirements. The Company also sells products to Essar Affiliated Companies,
including Essar Agrotech, Essar Projects and Essar Steel at market price.
In August 2008, the Company obtained approval from the Directorate General of Aeronautical Quality
Assurance of the Government of India’s Department of Defence Production and Supplies for the supply of
ATF to the Indian defence services at Jamnagar airport.
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Part 6 The Business
Domestic Retail Sales

Overview
With approximately 1,300 retail fuel stations across India, the Company currently has India’s largest active
private retail fuel station network. The Company sold 8.5% of its total sales (in terms of revenue) through
its retail fuel stations in the period from 1 April 2009 to 31 December 2009. The Company sells gasoline
and HSD under the ‘‘Essar’’ brand through the Company’s retail fuel station network. The Company is
currently one of three private companies authorised to market retail petroleum products in India. The
Company had 1,293 retail fuel stations as of 31 December 2009, compared to 1,173 as of 31 March 2008
and 683 as of 31 March 2007. The map below shows the location of the Company’s retail fuel stations.
30MAR201015201948
Products are delivered directly to the Company’s retail stations by road from the nearest terminals or
depots. The Company has terminals at Vadinar, Sirohi in the state of Rajasthan and at Jawaharlal Nehru
Port Terminal near Mumbai in the state of Maharashtra. The Company has also made arrangements with
PSU oil marketing companies for trading of petroleum products for its retail network.
Franchisee-Owned and -Operated Model
The Company runs its retail fuel stations on a franchisee model and believes it was the first private entity
to establish a retail station franchisee model in India. This model is designed to limit Essar Energy’s capital
commitments to the construction and development of retail fuel stations. Under the franchisee model, a
third-party or franchisee generally owns or controls the land on which the station is located and leases or
sub-leases the land to the Company for a period of 20 to 30 years. The Company then enters into land
leaseback and franchisee agreements with the franchisee. Under the franchisee agreement, the franchisee
is obligated to make all necessary investments related to the construction and installation of the retail
station in accordance with the Company’s specifications and designs. In addition, the franchisee is required
to bear all costs related to the operation of the retail station. In return, the Company makes rental
payments for the land on which the station is situated to the franchisee or third-party landowner at an
annual rent of 5% of the land’s assessed value, and 5% return on capital costs to set up the station, which is
linked to the monthly targets decided at the time of the finalisation of the franchisee agreements. The
franchisee also earns a fixed commission on the product sold from the retail fuel station. This commission
is a mark up in the retail selling price that the franchisee would charge to the final customer from the
station. In addition, in circumstances where the franchisees are not able to earn a return on product sold as
a result of higher fuel prices compared to its PSU competitors, the Company has in the past paid the
franchisees an amount equal to 12.5% p.a. of their investment to compensate them. Lease rent and return
on investment paid to franchisees under the franchisee agreements amounted to Rs. 89.1 million
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Part 6 The Business
(US$1.86 million) in the nine months ended 31 December 2009. Under the franchisee agreements,
franchisees are required to purchase the products they sell from the Company only.
Government Policy
The profitability of the Company’s domestic retail operations is critically dependent on the international
crude/product prices and the retail selling prices. The Company has to follow the selling prices of the PSU
retail outlets to remain competitive. The Government of India controls the retail prices in India for sales
by PSUs, which control approximately 92% of the total retail fuel stations within India. Where the retail
prices are not adequate to cover the crude prices, the Government of India compensates PSUs through a
subsidy mechanism involving the issuance of oil bonds/cash subsidy/discounts on the crude prices supplied
by the Government of India’s upstream companies. When the prices at PSU retail fuel stations are below
cost, the Company’s retail sales operations are reduced. However, in select markets a small premium is
charged to the PSU retail prices to continue sales operations. The Company has used its flexible franchisee
model to its advantage by increasing its sales in retail operations when retail selling prices are above the
crude prices and, when retail selling prices are below the crude prices, decreasing its retail sales. An expert
panel under the chairmanship of Dr. Kirit S. Parikh submitted its report on ‘‘A Viable and Sustainable
System of Pricing of Petroleum Products’’ in February 2010 and has, among other proposals, recommended
that the prices of petrol and diesel should be determined by the market for both PSUs and private
companies. Should this recommendation be passed, as the Company believes is likely, this would enable
the Company to significantly step up the expansion of its retail operations. Any changes resulting in
deregulation of auto fuel pricing will benefit the Company.
Other Business Opportunities
The Company has recently started exploring opportunities for the marketing of other petroleum products
as well as non-petroleum products through its retail station network. The Company plans to sell
automobile LPG and CNG through its retail stations by partnering with LPG and CNG companies. In
addition, the Company has entered into revenue-sharing arrangements with certain third parties with
regard to the sale of products such as automobile lubricants and batteries, fertilizers, agricultural seeds,
food and beverages, as well as the provision of automated teller machines, to further enhance franchisees’
revenue-earning options.
Export Sales
The Company accounted for 23.6% of its total sales (in terms of revenue) through export sales in the
period from 1 April 2009 to 31 December 2009. Over the years the Company’s exports include fuel oil, gas
oil, jet fuel, gasoline and naphtha to over 15 countries. The Company employs a combination of spot
contracts and short-term contracts for international export sales. Term contracts for exports are generally
for six months or less in duration with the variable pricing terms generally tied to prevailing market prices
at the time the products are loaded for delivery to customers. Depending on the buyer, the Company may
require letters of credit to support payment obligations under term contracts. the Company exports
products primarily on a free-on-board basis but also on a cost-and-freight basis, depending on the
customer’s requirements and trading conditions.
The Company’s export customers include:
• oil majors such as BP, Shell, Chevron, Conoco Philips and Total;
• international petroleum product traders such as Fal Oil, Koch, Marubeni, Glencore, Trafigura and
Vitol; and
• the national oil companies of countries such as Sri Lanka, Malaysia and Indonesia.
In addition, in January 2009, Essar Energy exported 0.3 million barrels of gasoline to an international oil
company, which was destined for the port of Bandar Abbas in Iran. The Company expects that the
Refinery Expansion Projects, and the increased complexity of the refinery, will enable the Company to
further diversify its refined petroleum product exports geographically. It will also allow it to seek enhanced
refining margins along with the market access the Mombasa refinery and any other potential acquisitions
may provide.
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Petroleum Handling Agreement

The Company has a petroleum handling agreement with VOTL, an Essar Affiliated Company. Pursuant to
this agreement, VOTL has agreed to handle the Company’s crude oil and intermediate and refined
petroleum products on a take-or-pay basis. Under the terms of the petroleum handling agreement, the
Company is required to pay VOTL a monthly charge calculated on the basis of the higher of the actual
quantity of crude oil and petroleum products handled or the minimum quantity specified in the
Agreement. For a description of the Company’s agreements with VOTL, see Part 15 ‘‘Relationship with
the Essar Group’’.
Distribution Facilities and Tankage

All of the Vadinar refinery’s distribution and storage facilities described below are owned by VOTL. The
Vadinar refinery’s refined petroleum products are transported to customers by road, rail, sea and pipeline.
Crude oil imported from abroad is transported to the facilities of VOTL located in the Vadinar port by way
of tankers and very large crude carriers that anchor at the single-buoy mooring station located
approximately 8.5 kms offshore in the Gulf of Kutch.
The Vadinar refinery is connected by an approximately 20-km-long dedicated crude pipeline to oil
terminals owned and operated by VOTL at the port of Vadinar. VOTL provides the port and terminal
facilities required for the Vadinar refinery’s import of crude and other feedstocks and the facilities
required for the distribution of refined petroleum products by rail, road, sea and pipeline.
The Vadinar refinery is located approximately 12 kms from the broad-gauge railway line between Rajkot
and Okha. The refinery has access to this railway line via a branch railway line terminating at the refinery.
In connection with the Phase II Refinery Project, the Company intends to construct an extender bridge line
to connect the additional refinery stream to this existing railway connection line. The refinery is located on
the Jamnagar-Okha state highway number 25, providing easy transport of refined products via road to
India’s western and northern domestic markets.
The Vadinar oil terminal facilities currently include, among others:
• a single-buoy mooring facility capable of the receiving of crude oil carriers of up to 325,000 dwt in size
and a jetty capable of servicing marine product dispatch carriers with parcel sizes of up to 100,000 dwt;
• 5.5 million barrels of crude and other feedstock tank storage facilities;
• 4.86 million barrels of tank product storage facilities;
• 1.9 million barrels of intermediate tank product storage facilities;
• truck-loading facilities equipped with 5 truck-loading gantries; and
• railcar loading facilities connecting to the Western Railway with the capacity to load two rakes
simultaneously.
The Vadinar oil terminal also includes an on-site facility for transporting 0.5 mmtpa LPG through the Gas
Authority of India Limited’s LPG pipeline.
In addition, VPTL is currently configuring its facilities to be able to provide the additional annual capacity
the Vadinar refinery will require upon completion of the Refinery Expansion Projects. The costs for these
additional facilities will be financed by VPTL.
The Vadinar refinery’s on-site tankage capacity is 12.26 million barrels, with 5.5 million barrels dedicated
to crude and other feedstock and 6.76 million barrels to intermediate and finished products.
The facilities that are planned to be added during this phase include an additional berth, crude, product
and intermediate tankages, as well as other related infrastructure facilities.
For a description of the Company’s agreements with VOTL, see Part 15 ‘‘Relationship with the Essar
Group’’.
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Part 6 The Business
Transportation Services
Essar Logistics provides the Vadinar refinery’s logistical services for transporting refined petroleum
products from the refinery to various locations within India where these products are ultimately sold. For
the import of crude oil and the dispatch of refined petroleum products, Essar Oil charters tankers directly
from the market. For the import of capital goods, Essar Logistics provides transport services for moving
materials and equipment from the shipment port to the destination port, including port handling,
clearance, unloading of equipment at the site and related services.
For a description of the Company’s agreements with Essar Logistics, see Part 15 ‘‘Relationship with the
Essar Group’’.
For the import of crude oil and the despatch of certain refined products, the Company charters tankers on
the open market.
To supply petroleum products to its retail fuel station network, the Company has product purchase
agreements with the Indian national oil companies. the Company also has a terminal service agreement
with Indian Oil Tanking Limited at Jawahar Lal Nehru Port Trust and Jainsons at Kosikalan and has its
own location under a finance lease at Sirohi, Rajasthan. In total, the Company currently has 29 locations
across India from which it sells products from the refinery; in addition, it sells refined petroleum products
through its network of retail stations.
The Company is presently in discussions with HPCL for the distribution of refined petroleum products to
the Company’s retail fuel stations through the Mundra-Delhi pipeline.
To service the expected expansion of its retail station network, the Company plans to:
• open inland storage points at strategic locations;
• use private tanks that may already be available or construct new depots or terminals on a
build-own-operate-transfer basis. Some of these terminals are expected to also have rail unloading
facilities; and
• continue negotiations with PSUs for the lease of certain of their depots and terminal facilities.
COMPETITION
Power
The Indian power sector is becoming increasingly competitive, largely as a result of the Government of
India’s measures to deregulate, liberalise and increase private investment in the Indian power sector.
The Company’s largest power company competitors include National Thermal Power Corporation,
Reliance Power Limited, The Tata Power Company Limited, Adani Power Limited and JSW Energy
Limited.
Oil and Gas

The oil and gas industry is highly competitive both in India and internationally. The Company’s oil and gas
business spans the entire oil and gas value chain, including oil and gas exploration and production,
petroleum refining, and the marketing and sales of refined petroleum products, including retail sales.
The principal competitive factors that affect the Company’s refining operations are the price and
availability of crude oil and other feedstocks, refinery efficiencies, refined product mix, product
distribution and transportation costs. The Company competes for supply of feedstocks with Indian and
international competitors. The Company expects that competition in the domestic Indian refining sector is
likely to increase as additional refineries are constructed and as capacity upgrades at existing refineries in
India are completed. These developments could result in overcapacity and reduced refining margins. Essar
Energy’s principal competitors in the refining sector are multinational oil companies, such as Shell, BP and
ExxonMobil, as well as domestic Indian competitors, such as the Reliance Group, that produce the same
products as the Company and are engaged in the same petroleum industry businesses as the Company,
including exploration, production, refining, marketing and transport.
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Part 6 The Business
In its exploration and production business, the Company faces significant competition from other Indian
companies, including ONGC and Reliance Industries Limited, major multinational oil companies, such as
Shell, BP and ExxonMobil, and other international companies, such as Cairn and Premier Oil.
In retail distribution of refined petroleum products, the Company’s primary competitors are the
PSU-owned or controlled retail stations. As of 30 November 2009, the PSUs owned 35,621 out of a total of
38,573 retail stations in India according to Industrial Performance Review. Within the PSUs, the Company
faces significant competition from IOCL, BPCL and HPCL. In the aggregate, these entities sold 36.8 TMT
of the total of 37.8 TMT of retail petroleum products sold in India in the period from 1 April 2009 to
30 November 2009. The Government of India provides PSUs with price subsidies for retail refined
petroleum products, enabling the PSUs to price their products below cost. Although the Company is free
to set its own prices, as long as the PSUs sell petroleum products below cost, the Company either has to
sell its refined petroleum products below cost for a loss, or charge higher, non-competitive prices.
INSURANCE
Overview
The Company’s operations are subject to the risks normally associated with exploration and production
activities, oil refining, the transportation and storage of crude oil, coal, natural gas, the generation and
transmission of power and other raw materials and the transportation and storage of petroleum products.
In addition, the Company’s operations are subject to the general hazards associated with the disposal of
waste.
In addition to the insurance coverage described below, the Company also possesses public liability
insurance coverage.
The Company believes that its existing insurance coverage is adequate to cover all general material risks
associated with the Company’s operations and is in accordance with industry standards in India.
Power
The Company believes that it possesses adequate insurance to cover the power business’s current
operations. The Essar Power-Hazira and Bhander Power-Hazira plants are insured under an annually
renewable umbrella policy covering material damage, loss of profits and equipment failure as well as a
public liability policy covering third-party liabilities. Standard exclusions apply to this policy, including
exclusions for wilful misconduct, fines, penalties and punitive damages, war, invasion, acts of foreign
enemies and nuclear risks. For these two power plants, the Company also maintains marine (import and
inland) and marine open cover (cargo) insurance policies covering certain items in transit to or from the
relevant power plant, money policies and fidelity guarantee policies, but excluding losses resulting from
terrorism, under which the total coverage for these two plants is Rs. 46.32 billion (US$992.28 million).
For other power projects, the Company maintains an umbrella marine and erection insurance policy
covering marine transit risks as well as risks relating to erection, testing and commissioning, under which
the coverage is Rs. 122.62 billion (US$2.62 billion). The power projects are also covered for acts of
terrorism for an aggregate amount of Rs. 10 billion (US$214.22 million).
The power business obtains insurance coverage for all power projects during the construction phase, in
accordance with the core perceived risk exposures for the power plants and also in accordance with the
requirements of Group’s lenders’ insurance consultants. This includes third-party insurance for these
projects in respect of the risks associated with the Company’s assets, as well as infrastructure that is
ancillary to the projects during the construction phase. The Company’s power project financing
arrangements also require the Company to maintain a certain level of insurance coverage for the term of
the financing.
Oil and Gas

The existing Vadinar refinery is insured under an annually renewable umbrella risk insurance policy
covering material damage, including equipment failures, business interruption and loss of profit caused by
equipment failures, under which the coverage is Rs. 204,200 million (US$4,374 million) (Essar Oil
Rs. 170,000 million (US$ 3,642 million), VOTL Rs. 26,800 million (US$574 million) and VPCL
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Part 6 The Business
Rs. 7,400 million (US$159 million). In addition, the Company has a marine import insurance umbrella
policy covering crude shipments under which the coverage is Rs. 225,000 million (US$4,820 million), a
stocks declaration umbrella policy covering raw material inventories, work in process and finished goods
under which the coverage is Rs. 3,500 million (US$750 million), an operational umbrella policy covering
the single buoy mooring at the Vadinar terminal and associated pipelines, risers and other equipment
under which the coverage is Rs. 5,580 million (US$120 million) (Essar Oil Rs. 990 million (US$21 million),
VOTL Rs. 3,780 million (US$81 million), an umbrella policy covering acts of terrorism under which the
coverage is Rs. 204,200 million (US$4,374 million) (Essar Oil Rs. 170,000 million (US$3,642 million),
VOTL Rs. 26,800 million (US$574 million) and VPCL Rs. 7,400 million (US$159 million), an umbrella
public liability policy covering third-party liabilities under which the coverage is Rs. 150 million
(US$3 million) and other insurance policies covering other specific risks faced in its operations in
accordance with industry standards.
The Company has also obtained an umbrella policy covering marine and erection insurance to provide
cover for potential losses associated with the Phase I Refinery Project, including cover for the value of
certain items of equipment damaged or destroyed during transit by ocean, air, rail and road to the project
site and erection, commissioning and testing of the equipment at the project site, under which the coverage
is Rs. 62,510 million (US$1,339 million) for erection all risks works, Rs. 43,250 million (US$927 million)
for the value of equipment damaged or destroyed during transit by ocean, air and rail and Rs. 750 million
(US$16 million) for third party liability arising out of project work at site. Standard exclusions apply to this
policy, such as for wilful misconduct, ordinary wear and tear, unsuitability of packing, war, invasion, acts of
foreign enemies and nuclear risks.
EMPLOYEES
The following table provides an overview of the Company’s full-time-equivalent employees by business
(including employees shared between the businesses) and by function as of the dates indicated:
As of
As of 31 March 31 December
2007 2008 2009 2009
Power
MD/CEO and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6 7 7
Finance accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 22 33 37
Technical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 216 290 322
HR and Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 16 25 26
Business development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3 8 5
Project development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 55 58 65
Materials and procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 0 0 0
Project Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 0 57 50
IT/CSR/Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 19 12 15
Trainee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 49 38 63
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 0 0 0
Subtotal—Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276 386 528 590
Energy
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 91 148 167
Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 231 283 322
Refinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459 541 487 667
International supply and trading . . . . . . . . . . . . . . . . . . . . . . . . . . 39 65 40 37
Exploration and production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 115 159 182
Refinery expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 141 202 178
Petrochemical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 110 42 0
Subtotal—Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,035 1,294 1,361 1,553
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,311 1,680 1,889 2,143
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Part 6 The Business
Essar Energy has implemented various initiatives to improve employee performance such as
comprehensive feedback systems, productivity enhancement schemes and performance management
systems. In addition, to upgrade the technical skills of employees, the Company has introduced various
initiatives such as training programmes, executive development reviews, learning management systems,
coaching and mentoring programmes and team building programmes. The power business offers its
employees comprehensive ongoing training and has designed a 26-week training programme to raise their
skills and capabilities with respect to power project operations. The power business also participates in a
BS degree programme in power engineering in conjunction with the Birla Institute of Technology and
Science in Pilani. In addition, the power business plans to set up a simulator centre for training operational
and maintenance personnel. The oil and gas business, in addition to offering its employees comprehensive
ongoing training, participates in the M.Tech (Process Engineering and Design) Programme, M.Tech
(Refinery and Petrochemical Engineering) Programme, M.B.A. (Oil and Gas Management) Programme,
Post Graduate Diploma (Refinery Technology) and M.Tech (Exploration and Production) in conjunction
with the Indian School of Petroleum and Energy (ISPE) and the University of Petroleum Studies.
The Company has staff welfare schemes in place, including employee health and social security schemes.
The Company’s corporate activities are directed by senior management from its corporate office in
Mauritius.
The Company believes it enjoys good relations with its employees. The Company has not experienced any
instances of industrial actions that have had a material adverse effect on the Company’s results of
operation.
HEALTH, SAFETY AND ENVIRONMENT

Overview
The Company is committed to protecting the health and safety of employees and contractors working at all
of the Company’s locations, the people who come into contact with or are affected by the Company’s
operations and the health and sustainability of the environment in which the Company operates. The
Company’s goal is to be fully compliant with applicable environmental and health and safety laws and
regulations at each of its locations and to operate in accordance with best practices specific to that site and
industry. The Company seeks to implement this goal by:
• establishing and maintaining systems and procedures;
• training employees in safe and environmentally friendly work practices;
• encouraging an atmosphere of open communication;
• involving employees in improving safety and environmental practices;
• reporting, recording and investigating all accidents to avoid recurrence; and
• auditing and reviewing systems and procedures including implementation of recommendations.
The Company’s operating power plants and refineries have health, safety and environment programmes
that meet or exceed applicable regulatory requirements. The Company maintains comprehensive safety
management systems, including policies, procedures, recordkeeping, internal reviews, training, incident
reviews and corrective and preventive actions. The Company uses methods to track health, safety and
environmental performance at the Company’s operating power plants and refineries. These methods
include implementing and monitoring recommendations resulting from internal and external audits and
tracking ‘‘near miss’’ events or unsafe acts and conditions, equipment malfunctions, occupational health,
first aid and medical treatments, lost time due to injuries and other occurrences through the concept of
leading and lagging indicators. Third-party audits are conducted for all of the Company’s offshore and
onshore installations by established national and international health, safety and environment agencies.
The Company believes that it is important to manage both process safety and occupational safety
effectively. The Company’s management gives priority to accident and incident reporting and investigation
with root cause analysis to ensure that the Company learns from experience. The Company strives to
continually improve its corporate health, safety and environment management processes and to
periodically review the flexibility and functionality of the Company’s processes.
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While the Company takes precautions to avoid accidents and leakages, spillages and any other incidents of
pollution, the Company has trained emergency response teams and equipment to deal with any emergency
at the Vadinar refinery and the Company’s operating power plants. To gauge the performance of the
emergency response team, mock emergency response drills are carried out on a regular basis.
The Company has also established a Health, Safety and Environment Committee, for further information,
see ‘‘Corporate Governance’’ in Part 8 ‘‘Directors, Senior Management and Corporate Governance’’.
Power
Each of the Company’s operating power plants has, and each Power Plant Project once operational, is
intended to have, its own health, safety and environment department to ensure compliance with applicable
health, safety and environmental standards. The Company has established procedures to oversee work
safety and to determine safety measures and standards across all of the Company’s existing power plants
and Power Plant Projects in accordance with the relevant safety laws and regulations in India and Canada.
Starting at the design and engineering stage of a power project, the Company adopts fail-safe technology
for all equipment, electrical machines and electronic control systems in accordance with international
standards of industrial safety. The Company’s operational power plants have, and each of the Power Plant
Projects once operational is intended to have, integrated safety systems and emergency shutdown systems
for smooth and safe stoppage in emergency and abnormal conditions. The Company expects to have
available 24-hour, experienced and well-equipped fire fighting crews for all of the Company’s future power
plants once they commence operations.
Essar Power has ISO 14001 certification for its four operational power plants. In addition, all operational
power plants in India have OHSAS 18001 certification.
Prior to the commencement of any power project, the Company undertakes environmental impact
assessment studies to international standards to determine the environmental impact of the construction
and operation of the project at the selected site. Generally, the major pollutants likely to affect the
environment at the projects currently under development include sulphur dioxide, nitrogen oxide
emissions, liquid effluents and noise generated during project operations. The Company equips all of its
power plants with devices for the control of pollutants to levels within required norms.
Oil and Gas

The Vadinar refinery’s fixed and mobile fire-fighting resource is designed in accordance with the standards
of the Oil Industry Safety Directorate, an organisation recognised by many petroleum companies in India
which sets safety standards in the petroleum industry. The fire-fighting resource is capable of fighting fires
at two different locations simultaneously. The Company has also established an occupational health centre
at the Vadinar refinery and is currently providing health services to all employees and contractors, with
particular emphasis on workplace monitoring of the facilities and reducing employee exposure to
occupational health hazards. The Company’s Refinery Integrated Management System was implemented
in June 2009 and received ISO 9001:2008, ISO 14001: 2004 and OHSAS 18001: 2007 certifications in
September 2009. In addition, the Company is currently implementing in phases process safety management
practices that are aimed at reducing the likelihood and severity of process-related incidents.
Due to the nature of the Company’s oil and gas operations, internal and external audits are conducted
regularly to ensure the Company’s compliance with health, safety and environmental protection norms, to
maintain effective waste prevention and reduction capabilities and to identify opportunities for
improvement.
PROPERTY
At Vadinar, the Company owns approximately 2,252 hectares of land acquired through direct purchases
and grants by the Government of Gujarat, including the site for the existing Vadinar refinery and the
Refinery Expansion Projects. Of these 2,252 hectares of land, the Company has leased approximately 1,003
hectares to VOTL for the construction of its terminal facilities and approximately 65 hectares of this land
to VPCL for its power facilities.
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The Company also owns approximately 25 hectares of freehold land at Baid Village in Jamnagar District in
the state of Gujarat which has been leased out to Vadinar Properties Limited (‘‘Vadinar Properties’’), an
Essar Affiliated Company, which has built a residential colony for employees involved in the construction
of the Vadinar refinery and the Refinery Expansion Projects. The Company also owns land, together with
approximately 73 residential flats in Jamnagar, India. The Company has also entered into a lease
agreement with Vadinar Properties, and Essar Affiliated Company, to lease transit accommodation and
other assorted facilities for the use of visiting employees and guests, also in Jamnagar.
The Company entered into a rental agreement with Essar House, to lease three floors of the Essar House
building at 11, Keshavrao Khadye Marg, Opp, Race Course, Mahalaxmi Mumbai 400034 in April 2006 for
a period of 11 months from 1 April 2006, for a refundable deposit of Rs. 202.6 million and a monthly rent
of Rs. 1 million (US$0.02 million) for its oil and gas business. The rental agreement has been extended
until 31 March 2011. In addition, for its power business, the Company has entered into three rental
agreements with Essar House to lease three additional floors of the Essar House building for a period of
36 months from 1 January 2008, for an aggregate refundable deposit of Rs. 240 million (US$5.1 million)
and a monthly rent of Rs. 2.1 million (US$0.04 million).
INTELLECTUAL PROPERTY
The Company has registered some of the brands under which it sells its refined petroleum products, such
as ‘‘DDX’’, ‘‘Essar Ace’’ and ‘‘Punch’’, under certain classes of trademarks. In addition, certain members of
the Group have been granted the right to use the ‘‘Essar’’ name for the purposes of their corporate
identities and for operating their business worldwide. For further information see Part 15 ‘‘Relationship
with the Essar Group’’ and paragraph 13.8 of Part 16 ‘‘Additional Information—Material Contracts.’’
LEGAL AND OTHER PROCEEDINGS
For information about the Company’s legal and other proceedings, see ‘‘Litigation’’ in Part 16 ‘‘Additional
Information’’.
CORPORATE SOCIAL RESPONSIBILITY

The Company’s corporate social responsibility programme focuses on taking care of its employees and
enabling and enriching the communities located around its facilities. The Company’s commitment to local
communities is both an enterprise-level activity and a personal commitment for many of its employees,
whose participation in such activities is actively encouraged by the Company. The Company provides
disaster relief, supports employee initiatives and undertakes focused development efforts for local
communities, such as building and maintaining local infrastructure for the provision of electricity, drinking
water and community toilets; the construction of primary health centres and the provision of subsidised
medical care; installing the infrastructure to support local primary schools; the provision of technical
training programmes to teach local residents new job skills; and supporting other community activities and
events. In times of national environmental calamities, the Company provides aid and assistance by way of
donations as well as relief supplies. Group employee initiatives include motivating employees to participate
in and contribute to community activities, creating self-help groups for village women and awareness
programmes about AIDS and substance abuse.
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PART 7
REGULATORY OVERVIEW
Set forth below is a brief overview of the laws and regulations governing the power and the oil and gas
industries in India.
POWER
The generation and transmission of power in India is governed by various rules and regulations described
below.
Electricity Act 2003

The Electricity Act is the main legislation relating to generation, transmission, distribution, trading and use
of electricity.
Under the Electricity Act, transmission, distribution and trade of electricity are regulated activities which
require licences from the appropriate electricity regulatory commission, established under the Electricity
Regulatory Commissions Act 1998, unless exempted by the appropriate government in accordance with the
provisions of the Electricity Act. The respective regulatory commissions determine the tariff for supply of
electricity from a generating company to any distribution licensee, transmission of electricity, wheeling of
electricity and retail sale of electricity. The Electricity Act was amended in 2007 to exempt captive power
generation plants from licensing requirements for supply to any licensee or consumer. The Central
Government also announced a National Electricity Policy in 2005, to guide the development of the
electricity sector in India.
An appellate tribunal has been established to hear appeal against the decisions of the CERC and SERCs.
Licensing
The Electricity Act stipulates that no person can transmit or distribute or undertake trading in electricity,
unless he is authorised to do so by a licence, or otherwise exempt under the Electricity Act.
Generation
Currently under Indian law, any generating company can establish, operate and maintain a generating
station if it complies with the technical standards relating to connectivity with the transmission grid.
Approvals from the central government, state government and the techno-economic clearance from the
CEA are required only for hydroelectric projects. Generating companies are now permitted to sell
electricity to any licensees and where permitted by the respective SERCs, to consumers.
The Electricity Rules 2005 (the ‘‘Rules’’) lay down the conditions for a power plant to be categorised as a
‘‘captive power plant’’, as defined under the Electricity Act. The Rules provide that no power plant
qualifies as a captive power plant unless:
• not less than 26 percent of the ownership is held by the captive user(s); and
• not less than 51 percent of the aggregate electricity generated in such plant, determined on an annual
basis, is consumed by the captive user.
Therefore, if two or more companies together own 26 percent or more of a power plant and consume, in
aggregate, more than 51 percent of the electricity generated by a power plant, also it will be considered a
captive power plant.
No restriction is placed on the establishment of a captive power plant by any consumer or group of
consumers for their own consumption. Further, no separate licence is required for supply of electricity
generated from the captive power plant to any licensee or the consumer.
Transmission
The Electricity Act vests the responsibility of efficient, economical and integrated transmission and supply
of electricity with the Government of India and empowers it to designate regions of the country for this
purpose. In addition, the Central Government is required to facilitate voluntary inter-connections and
coordination of facilities for inter-state, regional and inter-regional generation and transmission of
electricity.
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Part 7 Regulatory Overview
The transmission licensee is required to comply with technical standards of operation and maintenance of
transmission lines specified by the CEA, for building, maintaining and operating an efficient transmission
system, and to provide non-discriminatory open access to its transmission system for use by any licensee or
generating company on payment of transmission charges and surcharge in accordance with the Electricity
Act.
A CERC notification dated 20 May 2009 amended the CERC (Open Access in Inter-State Transmission)
Regulation 2008, providing that long-term customers and the medium-term customers shall have priority
over short-term customers for use of the interstate transmission system.
Trading
The Electricity Act specifies trading in electricity as a licensed activity. A CERC notification dated
16 February 2009, implemented the CERC (Procedure, Terms and Conditions for grant of trading licence
and other related matters) Regulations, 2009 (the ‘‘Trading Licence Regulations’’) to regulate inter-state
trading of electricity.
Under the Trading Licence Regulations, any person who wishes to undertake inter-state trading in
electricity is required to make an application to the CERC for the grant of a licence. The National and
Regional Load Despatch Centres, central transmission utility and state transmission utilities, and other
transmission licensees are not allowed to trade in power, to prevent unfair competition. The relevant
electricity regulatory commissions also have the right to fix a ceiling on trading margins in intra-state
trading.
Distribution and Retail Supply

Under the Electricity Act, no licence is required for the purposes of supply of electricity. Thus, a
distribution licensee can undertake three activities: trading, distribution and supply through one licence.
The distribution licensee may engage in any other activities for optimal utilisation of its assets with prior
permission of the appropriate commission.
Unregulated Rural Markets

The licensing requirement does not apply where a person intends to generate and distribute electricity in
rural areas as, specified by the state government. However, the supplier is required to comply with the
requirements of the CEA and system specifications for supply and transmission of electricity. The
Electricity Act mandates formulation of national policies governing rural electrification and local
distribution and rural off-grid supply.
Tariff Principles
The Electricity Act has introduced significant changes in terms of tariff principles applicable to the
electricity industry. Under the Electricity Act, the appropriate electricity regulatory commissions are
empowered to determine the tariff for supply of electricity by a generating company to a distribution
licensee, provided that the appropriate commission may, in case of shortage of supply of electricity, fix the
minimum and maximum tariffs for:
• sale or purchase of electricity under agreements between a generating company and a licensee or
between licensees, for a period not exceeding one year, to ensure reasonable prices of electricity;
• transmission of electricity;
• wheeling of electricity; and
• retail sale of electricity, provided that in case of distribution of electricity in the same area by two or
more distribution licensees, the appropriate commission may, for promoting competition among
distribution licensees, only fix the maximum tariff for retail sale of electricity.
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The appropriate Electricity Regulatory Commission is required to observe the following principles in
determining tariffs:
• the principles and methodologies specified by the CERC for determination of the tariff applicable to
generating companies and licensees;
• generation, transmission, distribution and supply of electricity are to be conducted on commercial
principles;
• the factors which would encourage competition, efficiency, economical use of resources, good
performance and optimum investments;
• safeguarding consumer interests and ensuring recovery of the cost of electricity in a reasonable
manner;
• incorporation of principles which reward efficiency in performance;
• multi-year tariff principles;
• tariffs are to progressively reflect the cost of supply of electricity, at an adequate and improving level
of efficiency;
• tariffs are to progressively reduce and eliminate cross-subsidies as specified by the CERC;
• the promotion of co-generation and generation of electricity from renewable sources of energy; and
• the National Electricity Policy and Tariff Policy.
Unlike the CERC, the Electricity Regulatory Commissions have not been expressly permitted to depart
from the tariff determining factors set out above.
However, the Electricity Act provides that the Electricity Regulatory Commission shall adopt such tariff as
is determined through a transparent process of bidding in accordance with the guidelines issued by the
Central Government. The Ministry of Power has issued Guidelines for Determination of Tariff by Bidding
Process for Procurement of Power by Distribution Licensees 2005 (‘‘Bidding Guidelines’’) for
competitively bid projects.
The determination of the tariff for a particular power project depends on the mode of participation in the
project. Broadly, tariffs can be determined in two ways: (i) based on the principles prescribed by the CERC
(cost-plus basis consisting of a capacity charge, an energy charge, an unscheduled interchange charge and
incentive payments); or (ii) competitive bidding route where the tariff is purely market based.
The Electricity Act empowers the state regulatory commissions to specify tariff regulations from time to
time as applicable for the respective states. The state governments are also empowered under Electricity
Act to grant a subsidy on the tariff specified by the respective state regulatory commissions, subject to
certain conditions.
Modes of Participation in Power Projects

The Government of India announced major policy reforms in October 1991 widening the scope of private
sector participation in power generation. The two modes of participating in power projects are either
through the MoU route or the bidding route. The initial batch of private sector power projects were
therefore awarded generally on the basis of negotiation between the SEB and a single developer
(‘‘MoU route’’).
MoU Route
The MoU route with a cost plus approach initially adapted to attract investment. However, there were
several complications in calculating the above costs, despite the capital cost of the project being frozen by
the CEA. Under the Electricity Act, the CEA no longer has power to determine capital cost for the
projects and the requisite filings for approval of capital cost and tariff are with the regulatory commissions.
This cost-plus tariff mechanism is not ideally suited for competitive bidding, as it would require bidding on
every element of cost of generation, which becomes difficult to verify and monitor over the life of the PPA.
Further, the nature of costs for independent power plants is very different from public sector power project
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costs and in the absence of complete knowledge of cost profile, it would be impossible to design a
competitive bidding process based on the cost-plus approach that is fair to both sides, so as to elicit good
investor response. In light of the same, a competitive bid route was envisaged.
Bid Route
Under the Electricity Act, the regulatory commission is required to adopt a bid-based tariff, although the
Bidding Guidelines permit the bidding authority to reject all price bids received. The Bidding Guidelines
recommend bid evaluation on the basis of levelised tariff. The Bidding Guidelines envisages two types of
bids: Case I bids, where the location, technology and fuel is not specified by the procurers, (i.e. the
generating company has the freedom to choose the site and the technology for the power plant); and Case
II bids, where the projects are location specific and fuel specific.
The Tariff Policy 2006 requires that all procurement of power after 6 January 2006 (except for PPAs
approved or submitted for approval before 6 January 2006 or projects whose financing has been tied up
prior to 6 January 2006) by distribution licensees has to be through competitive bidding. However, some
state regulators have continued to purchase power under the MoU route, stating that the Tariff Policy is
merely indicative and not binding.
Policy for Setting up Mega Power Projects

The Mega Power Policy was introduced by the Ministry of Power on 10 November 1995, whereby projects
with capacity of 1,000 MW or more supplying power to more than one state were classified as ‘‘mega power
projects’’.
The following concessions and goods benefits are available for mega power projects:
Zero Customs Duty: The import of capital equipment is free of customs duty for these projects.
Deemed Export Benefits: Deemed export benefits are available to domestic bidders for projects both under
public and private sector on meeting certain requirements.
Pre-conditions for availing of benefits: Goods required for setting up of any mega power project qualify for
the above fiscal benefits after the project has been certified such that:
• the power purchasing state has granted to the regulatory commissions full powers to fix tariffs; and
• the power purchasing state undertakes, in principle, to privatise distribution in all cities in that state
having a population of more than one million, within a period to be fixed by the Ministry of Power.
Income Tax benefits: In addition, an income-tax holiday under Section 80-IA of the Income Tax Act 1961 is
also available.
Environmental Regulations
The Company’s power generation operations are required to comply with the provisions of the
Environmental Protection Act 1986, relevant Forest Conservation Acts, the Water (Prevention and Control
of Pollution) Act 1974, the Air (Prevention and Control of Pollution) Act 1981 and the Hazardous Waste
(Management and Handling) Rules 1989, as amended from time to time. The Company is required to
obtain and maintain statutory clearances relating to pollution control and environment in relation to its
power projects.
OIL AND GAS

Oil and gas exploration and production activities in India are subject to extensive government regulations.
These regulations govern exploration for oil and gas reserves, determining the viability of undertaking
commercial extraction of oil and gas resources and undertaking all activities associated with extracting the
oil and gas from the reservoir (including marketing the oil and gas produced from the source to the
relevant downstream purchasers).
MoPNG of India issues guidelines related to petroleum and natural gas, including exploration and
production, refining, marketing and the transportation of oil and gas. MoPNG set up the Directorate
General of Hydrocarbons in 1993, whose main functions include, in respect of discovered fields, ensuring
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optimum exploitation, reviewing and approving development plans, work programmes, budgets, reservoir
evaluations and advising on mid-course corrections and, in respect of the exploration blocks, appraising
work programmes and monitoring exploration activities. Other bodies under the control of the MoPNG
include the Oil Industry Safety Directorate, which develops standards for safety, fire fighting, training
programmes and information dissemination, and conducts periodic safety audits of all petroleum-handling
facilities; and the Oil Industry Development Board, which provides financial and other assistance for the
conducive development of the oil industry. The safety standards prescribed by the Oil Industry Safety
Directorate apply to oil companies. Companies must also comply with safety regulations prescribed by the
Director General of Mines and Safety in respect of onshore petroleum mining installations.
Oilfields (Regulation and Development) Act, 1948 (the ‘‘Oilfields Act’’)

Oil and natural gas exploration activities are governed by the Oilfields Act, which provides for the
regulation of oilfields and for the development of mineral oil resources. ‘‘Oilfields’’ are defined as areas
where any operation, for the purpose of obtaining natural gas and petroleum, crude oil, refined oil,
partially refined oil and any of the products of petroleum in a liquid or solid state, is to be or is being
carried on; and ‘‘mineral oils’’ are defined to include natural gas and petroleum. Under the Oilfields Act,
the Government of India is empowered to frame rules with respect to regulating the granting of mining
leases, prohibiting the grant of such leases, granting a petroleum exploration or prospecting licence, the
conservation and development of mineral oils, the production of oil and regulation of oilfields. Under the
Oilfields Act, a ‘‘mining lease’’ is defined as a lease for the purpose of searching for, winning, working,
getting, making merchantable, carrying away or disposing of mineral oils, including natural gas and
petroleum. The Oilfields Act also provides for payment of royalties in respect of any mineral oil mined,
quarried, excavated or collected from the leased area. Pursuant to its powers under the Oilfields Act, the
Government of India framed the Petroleum and Natural Gas Rules, 1959.
Under the Oilfields Act, the Directorate General of Hydrocarbons has been designated as the authority or
agency to exercise the powers and functions of the Government of India with a view to promoting sound
management of the hydrocarbon resources in India. The Directorate General of Hydrocarbons
(i) monitors upstream petroleum operations in India; (ii) reviews and monitors the exploration programme
and development plans for commercial discoveries of hydrocarbon reserves proposed by licensees or
lessees; (iii) reviews the management of petroleum reservoirs by a licensee or a lessee; (iv) asks for and
maintains all geo-scientific data, reports and information from a licensee or a lessee; (v) reviews the
reserves discovered by the licensee or lessee in accordance with generally accepted international petroleum
industry practices; (vi) lays down norms for the declaration or announcement of discoveries by a licensee
or a lessee; (vii) exercises the powers of the Government of India; and (viii) monitors oil and gas
production and the payment of royalties or any other charges, fees or levies due to the Government of
India. Where the Government of India has executed a PSC, the Directorate General of Hydrocarbons is
required to discharge its duties in accordance with, and in a manner consistent with, such PSC.
Petroleum Exploration Licence (‘‘PEL’’) and Petroleum Mining Lease (‘‘PML’’) under the Petroleum and
Natural Gas Rules, 1959 (the ‘‘P&NG Rules’’)
The P&NG Rules provide the framework for the granting of PELs and PMLs. The P&NG Rules prohibit
the prospecting or exploitation of any oil or gas unless a licence or lease has been granted thereunder. A
PML gives the lessee an exclusive right to extract oil and gas from the relevant contract area. PELs and
PMLs are granted by the MoPNG for offshore areas and by the relevant state governments, with the prior
approval of the Government of India, for onshore areas. A PEL or a PML must contain the terms and
conditions specified in the P&NG Rules. However, they may also contain additional terms and conditions
agreed between the licensee or the lessee and the Government of India.
The term of a PEL is for a period of four years, renewable twice for a period of one year. The term of a
PML is generally 20 years, and the area covered by it should ordinarily be 250 km2. Upon grant of the
PML, the lessee has to pay either the prescribed rental or the royalty, whichever is higher, in relation to the
concerned lease. While the rental is payable based on the area of the land leased, the royalty is the amount
that is generally payable as a percentage of the value at well head of the natural gas obtained by the lessee.
The Government of India has the right to order a royalty to be paid in natural gas obtained instead of
149

money. Under the Oilfield Act, the levy of a royalty is permitted up to 20% of the sale price of the mineral
oil, which includes natural gas.
The Government of India, in the event of a national emergency in respect of petroleum, has, during the
period of such an emergency, the right of pre-emption in relation to the natural gas extracted from the
area under a lease, at fair market price prevailing at the time of the pre-emption.
Further, the licensee or lessee is under an obligation to provide to the Government of India or its
designated agency all data obtained or to be obtained as a result of petroleum operations under the licence
or lease, including geological, geophysical, geochemical, petrophysical and engineering data, well logs,
maps, magnetic tapes, cores, cuttings and production data as well as all interpretive and derivative data,
including, reports, analysis, interpretations and evaluations prepared in respect of petroleum operations.
Such data is the property of the Government of India, provided that the licensee or lessee shall have the
right to make use of such data, free of cost, for the purposes of petroleum operations under the licence or
lease.
The Government of India has the right to disclose to the public all non-proprietary data without the
consent of the licensee or lessee and all proprietary data with the consent of the licensee or lessee. The
Government of India is the sole authority to determine what is proprietary and what is not.
Further, under the P&NG Rules, the Government of India may, in the interests of conservation of mineral
oils (which include natural gas), restrict the amount of petroleum or natural gas that may be produced by a
lessee in a particular field.
The Mines Act 1952

This act regulates the law relating to the regulation of labour and safety in mines. If an accident were to
occur in a mine, the owner, agent or manager of the mine is required to give notice of the occurrence to
the relevant appointed body. The Central Government may order for a formal inquiry into the causes of
and circumstances leading to the accident and appoint a competent person to hold such inquiry.
The Oil Industry Development Act 1974

This act provides for the establishment of a board for the development of the oil industry. The purpose of
the board is to render financial and other assistance for the promotion of all such measures conducive to
the development of oil industry. The act also provides for levy and collection of duty of excise on specific
items specified in the act including crude oil, which is produced in India. The levy is set at such rate as the
Central Government may, by notification in the Official Gazette, specify. This levy is payable by the person
by the producer of a specified item. In the case of crude oil, the duty is payable on the quantity received in
a refinery.
The proceeds of the duty levied under the act is initially credited to the Consolidated Fund of India. The
Central Government may pay to the board from time to time, from out of such proceeds, after deducting
the expenses of collection, such sums of money as it may think fit for being utilised exclusively for the
purposes of this act.
The Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976
This act regulates the exploration and production of oil and petroleum in offshore areas and provides for
the grant of a licence by the Government of India to explore and exploit the resources of the continental
shelf and the exclusive economic zone.
The Essential Commodities Act, 1955

This act contains provisions controlling the production, supply and distribution of certain essential
commodities, including petroleum and petroleum products including natural gas.
Environmental Regulations
The Environmental Protection Act 1986, the Water (Prevention and Control of Pollution) Act 1974, and
the Air (Prevention and Control of Pollution) Act 1981 provide for the prevention, control and abatement
150

of pollution. Pollution control boards have been established in states in India to exercise the powers under
these statutes for the purpose of preventing and controlling pollution. Companies must obtain the prior
clearance of the relevant state pollution control board for emissions and discharge of effluent into the
environment.
The Hazardous Waste (Management and Handling) Rules 1989, issued under the Environmental
(Protection) Act 1986, as amended from time to time, define ‘‘waste oils and emulsions’’ as one of the
hazardous wastes and impose an obligation on each occupier and operator of any facility generating
hazardous waste to dispose of such hazardous wastes properly and without any adverse effects, and also
impose obligations in respect of the collection, treatment and storage of hazardous wastes. Each occupier
and operator of any facility generating hazardous waste is required to obtain an approval from the relevant
state Pollution Control Board for collecting, storing and treating and disposing of the hazardous waste.
In addition, the Merchant Shipping Act 1958 provides for liability in respect of loss or damage caused
outside the ship by contamination resulting from the escape or discharge of oil from the ship, wherever
such escape or discharge occurs.
India is a signatory to the International Convention on Civil Liability for Oil Pollution Damage 1992 and
the International Convention on the Establishment of an International Fund for Compensation for Oil
Pollution Damage 1992. These Conventions govern liability for pollution damage caused by ships.
New Exploration Licensing Policy

To encourage investment in the oil and gas sector, licences are offered under NELP. NELP was formulated
by the Government of India in 1997-98 to provide a level playing field in which all parties may compete on
equal terms for the award of exploration acreage. The successful bidder must enter into a PSC with the
Government of India, a draft of which is part of NELP documents provided by the Government of India.
The salient features of NELP are as follows:
General terms
• fiscal stability provisions in the PSC;
• finalisation of a contract on the basis of a model PSC;
• petroleum tax guide to facilitate investments; and
• possibility of the use of seismic data in the first phase of the exploration period.
Fiscal and contractual terms

• no payment of signature, discovery or production bonuses;
• no customs duty on imports required for petroleum operations;
• no minimum expenditure commitment during the exploration period;
• no mandatory state participation by national oil companies and no mandatory carried interest in their
favour;
• freedom for the operator to market oil and gas in the domestic market;
• biddable cost recovery limit up to 100%;
• sharing of profit petroleum based on investment multiple achieved by the operator;
• royalty for onshore areas payable at the rate of 12.5% for crude oil and 10% for natural gas, and
royalty for offshore areas payable at the rate of 10% for both crude oil and natural gas; and
• royalty for discoveries in deep water areas beyond 400m isobath chargeable at half the applicable rate
for offshore areas for the first seven years of commercial production;
• option to amortise exploration and drilling expenditures over a period of ten years from first
commercial production;
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• income tax holiday for seven years from the start of commercial production;
• provisions for assignment; and
• dispute resolution in accordance with the Indian Arbitration and Conciliation Act, 1996.
Regulation of Refining and Marketing of Refined Petroleum Products

MoPNG issues guidelines in respect of the refining and marketing of petroleum products, and operates
directly and through organisations under its administrative control, including the Petroleum Planning and
Analysis Cell, which is responsible for analysing market and price trends, maintaining an information
database and administering government subsidies in the petroleum industry.
Retail Marketing
Oil marketing companies can freely commission new retail outlets at locations of their choice based on the
Government of India guidelines. Dealers are selected by the oil marketing companies themselves pursuant
to their own internal guidelines.
The Government of India through a Gazette Notification dated 8 March 2002 authorised companies
investing or proposing to invest at least Rs. 20 billion (US$428.45 million) in exploration, production,
refining, pipelines or terminals, to market transportation fuels. Apart from relevant marketing rights, a
variety of local regulatory approvals are required for the commissioning of a retail outlet.
The Petroleum Act 1934 and the Petroleum Rules 2002

The Petroleum Act 1934 provides that no person shall produce, refine, blend, store or transport petroleum
except in accordance with the rules framed by the Government of India under the Petroleum Act 1934.
The Petroleum Rules 2002 now regulate these activities.
The Petroleum and Natural Gas Regulatory Board Act 2006

The Petroleum and Natural Gas Regulatory Board Act 2006 provides for the establishment of the
Petroleum and Natural Gas Regulatory Board to regulate the refining, processing, storage, transportation,
distribution, marketing and sale of petroleum, petroleum products and natural gas (excluding production
of crude oil and natural gas) so as to protect the interests of consumers and entities engaged in specific
activities relating to petroleum, petroleum products and natural gas and to ensure uninterrupted and
adequate supplies of petroleum, petroleum products and natural gas in all parts of the country and to
promote competitive markets.
Petroleum Pipeline Guidelines

The Petroleum Product Pipeline Policy, announced by the Government of India in December 2002,
provides a mechanism for laying pipelines in India on the basis of a ‘‘common carrier’’ principle. Pursuant
to the policy, any company that intends to lay a pipeline originating from a port or a pipeline exceeding 300
km in length and originating from a refinery must publish its intention and allow other interested
companies to take capacity in the pipeline on a ‘‘take or pay’’ or other mutually agreed basis. Companies
laying new pipelines are required to provide at least 25% extra capacity beyond that needed by themselves
and their interested companies for other users.
The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act 1962
This provides the framework governing the acquisition of rights of a user in land for laying pipelines for the
transportation of petroleum and minerals and other matters connected therewith. This law is limited to the
acquisition procedure, restrictions on use of land and compensation payable to the persons interested in
the land.
Other Approvals
Essar Oil needs to obtain certain approvals from various Central and State Ministries, agencies and
regulators in connection with the existing refinery and Refinery Expansion Projects. These include
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approvals and licences required for the refinery sites from the GPCB, Ministry of Environment and
Forests, Gujarat Maritime Board, Chief Controller of Explosives, Director of Industrial Safety & Health-
Government of Gujarat, Director of Boiler-Government of Gujarat, and necessary licence for concessional
rate of custom duty from the Director General of Foreign Trade under the Ministry of Commerce.
Pricing
As per the model production sharing contract provided by the Government of India under NELP (‘‘Model
PSC’’), the Indian domestic market has the first call on production of gas. Although the contractor is free
to sell gas within India, he is required to do so only on the basis of arms-length transactions between
non-affiliates. In terms of the Model PSC, parties may either determine the sales price of crude oil or
natural gas through a competitive bidding process or may negotiate sales price of crude oil or natural gas,
subject to the Government of India approval of the formula or basis on which such prices were
determined, prior to sale of crude oil or natural gas to buyers. For this purpose, the Government of India
may take into consideration any prevailing pricing policy or any linkages with traded liquid fuels. Typically,
each long-term crude oil or natural gas supply contract has a price review clause every 5 years.
The Government of India, by a notice dated 6 March 2007, has directed that uniform pool prices shall be
charged on supply of re-gasified liquid natural gas to all customers under all long term contracts, on a
non-discriminatory basis.
Currently in India, the pricing of most refined petroleum products is influenced by market factors but
subject to limited freedom to revise prices within a moving price band. Due to the market domination of
large national oil companies, which are directly or indirectly controlled by the Government of India,
refinery prices cannot be said to be currently based on competitive pricing parameters.
Kyoto protocol and carbon credits

Under the Kyoto Protocol, governments have been separated into developed nations (who have accepted
green house gases emission reduction obligations) and developing nations (who have no green house gases
emission reduction obligations). The protocol includes ‘‘flexible mechanisms’’ which allow developed
nations to meet their green house gases emission limitation by purchasing green house gases emission
reductions from elsewhere. These can be bought either from financial exchanges, from projects which
reduce emissions in developing nations under the clean development mechanism, the joint implementation
scheme or from developed nations with excess allowances.
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MERRILL CORPORATION JDICKSO//30-APR-10 12:39 DISK116:[10ZAU1.10ZAU70801]CP70801A.;83
PART 8
DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE
Directors
The following table lists the names, positions and ages of the Directors of Essar Energy plc:
Name Age Position Date appointed
Ravi Ruia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 yrs Chairman 6 April 2010

Prashant Ruia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 yrs Vice-Chairman 6 April 2010
Naresh Nayyar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 yrs CEO 6 April 2010
Sattar Hajee Abdoula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 yrs NED 6 April 2010
Philip Aiken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 yrs NED 6 April 2010
Subhash C. Lallah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 yrs NED 6 April 2010
Simon Murray . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 yrs NED 6 April 2010
The business address of each of the Directors is the DCDM Building, 10 Frere Felix de Valois Street, Port
Louis, Mauritius.
The management expertise and experience of each of the Directors are set out below:
Ravi Ruia, Chairman

Mr Ruia, a non-resident Indian is the Chairman of Essar Energy and Vice-Chairman of Essar Group. He
began his career in the family business and has worked together ever since with his elder brother, Shashi
Ruia. Mr Ruia is an engineer by training and is involved in the strategy and direction of the Essar Group in
order to take full benefits of the emerging opportunities in India. He has participated in the growth and
diversification of the Essar Group into its various businesses, and in growing the Essar Group to a premier
position and expanding the Essar footprint within India as well as operations in other markets such as
South East Asia, Africa and North America.
Mr Ravi Ruia is recognised as one of Indian industry’s leading members who led the private sector’s
contribution to the economy by setting up projects in key sectors. Mr Ruia is the Chairman of Vodafone
Essar and a member of the World President’s Organisation.
Prashant Ruia, Vice-Chairman

Mr Prashant Ruia, a non-resident Indian, is Vice-Chairman of Essar Energy and chief executive of Essar
Group. Born in 1969, Mr Ruia has been involved with the Group’s operations and management since 1985.
He is fundamental to the Essar Group strategy, and is actively involved in the Group’s growth and
diversification both within India and internationally. Mr Ruia is also a director of Essar Steel Holdings Ltd.
Mr Ruia was instrumental in structuring the Vodafone and Essar Partnership, commissioning the Vadinar
Refinery in record time, and involved in the acquisition of Algoma Steel in Canada. He has been
responsible for driving the adoption of best practice corporate governance and health, safety and
environmental practices within the Essar Group.
Mr Ruia holds several key positions on various regulatory and professional boards, and was recently
appointed to the audit committee of the World Steel Association. He was also a member of the prime
minister of India’s advisory council on trade and industry in 2007. Mr Ruia is a member of the Energy
Boardroom at the World Economic Forum.
Naresh Nayyar, CEO

Mr Nayyar is Chief Executive Officer of Essar Energy as well as the managing director and CEO of Essar
Oil. Mr Nayyar joined Essar Oil in October 2007. Prior to joining Essar Oil, Mr Nayyar was the CEO of
ONGC Mittal Energy Limited (a joint venture between Oil & Natural Gas Corporation Limited and
Mittal Investments) from November 2005 to September 2007.
Previously, Mr Nayyar was director of planning and business development at Indian Oil Corporation
Limited from October 2002 to November 2005, where he had worked since 1975. Mr Nayyar was also
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Part 8 Directors, Senior Management and Corporate Governance
chairman of Lanka IOC Limited from October 2002 to November 2005 and a member of the boards of
Oil & Natural Gas Corporation Limited, Petronet LNG and IBP. He was also the chairman of the Indian
Oil Marubeni Panipat Power Project from March 2003 to November 2005.
Sattar Hajee Abdoula, non-executive director

Mr Hajee Abdoula is an independent director on the Board of the Company. He has been the transaction
services partner of Grant Thornton in Mauritius since its launch in 1999. Mr Hajee Abdoula is also the
lead partner for litigation support. He has over 30 years experience in accounting, audit and consultancy.
Since 1999 he has been specialising in transaction services and advising clients in various sectors including,
banking, financial services, insolvency and global business.
Mr Hajee Abdoula is actively involved in providing support to Grant Thornton offices in African countries.
He sits as an independent member on the board of two non-bank financial institutions in Mauritius and is
also the chairman of the Audit Committee. Mr Hajee Abdoula has significant experience in global business
(offshore) where he has been advising on structures and tax issues. Mr Hajee Abdoula is a lead advisor to
the Government of Ghana in setting up the Ghana International Financial Services Centre.
Mr Hajee Abdoula qualified as a Chartered Accountant (ICAEW) in 1985 and became a fellow of the
Institute in 1995.
Simon Murray, non-executive director

Mr Murray has joined Essar Energy as a Non-Executive Director. Currently, Mr Murray is also a director
of a number of public companies, which include Vodafone Group plc; Cheung Kong Holdings Ltd.; Orient
Overseas (International) Ltd.; USI Holdings Ltd.; Arnhold Holdings Ltd.; and Richemont SA. Previously,
between 1975 and 1993, Mr Murray served on the boards of a number of Hong Kong public companies
including South China Morning Post; Cross Harbour Tunnel Company; Hong Kong Aircraft &
Engineering Corporation; and Hong Kong Electric. He was also chairman of the Sheraton and Hilton
Hotels between 1985 and 1993.
In 1984 Mr Murray became the group managing director of Hutchison Whampoa, where he stayed for the
next 10 years. He was instrumental in the launching of AsiaSat, China’s first international launching of a
satellite, on the board of which he served as chairman between 1989 and 1993. After 10 years at Hutchison,
Mr Murray became the executive chairman of Asia/Pacific, Deutsche Bank Group.
Mr Murray is also a member of the advisory board of both China National Offshore Oil Corporation and
of Imperial College London. Mr Murray has served as a member of the International Advisory Board of
General Electric Co. (USA); Bain (the consultancy company); and N.M. Rothschild. He is currently an
advisor to Macquarie Bank.
Subhash C Lallah, non-executive director

Mr Lallah is an independent director on the Board of Essar Energy. He has represented domestic and
international companies in arbitration and has a legal career that spans 40 years. Mr Lallah sits as
independent director on the boards of many international funds. His independent directorships include
Mauritian Eagle Insurance Company Ltd, Mauritian Eagle Leasing Co Ltd and Deutsche Bank Offshore
Mauritius Ltd.
He is a former member of the board of governors of the Mauritius Broadcasting Corporation and he has
acted as chairman of the National Transport Corporation and appeared as chairman and counsel in a
number of enquiries. Mr Lallah was a member of parliament of the Republic of Mauritius between 1982 to
1995 and was also a deputy chief whip and deputy speaker of the national assembly.
Mr Lallah read law and political science and was called to the UK Bar in 1970 and the Mauritius Bar in
1971.
Philip Aiken, non-executive director

Philip Aiken is currently Chairman of Robert Walters plc, Senior Independent Director of Kazakhmys plc
and a Non Executive Director of National Grid plc and Miclyn Express Offshore. He has over 35 years
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experience in industry and commerce having previously from 1997 to 2006 been Group President Energy
and President Petroleum of BHP Billiton. Prior to that he held senior positions with BTR (1995-1997) and
The BOC Group (1970-1995), both in the UK and Australia. He has also been a Senior Advisor for
Macquarie Capital (Europe), was Chairman of the 2004 Sydney World Energy Congress and served on the
Boards of Governor of Guangdong International Consultative Council, World Energy Council and
Monash Mt Eliza Business School.
In addition, Essar Energy intends to appoint a fifth independent non-executive Board member and is
currently in the process of identifying suitable candidates. It is intended that the fifth non-executive
director has appropriate UK market experience.
Senior Management Teams

The Company’s current senior management, in addition to the Executive Directors listed above, is as
follows:
The following tables list the names, positions and ages of the Senior Management teams for the Company’s
power business and oil and gas business.
The Company’s Corporate Senior Management team is as follows:
Name Age Position
Gerry Bacon . . . . . . . . . . . . . . . . . . . . . . . . . 47 yrs CFO

Mark Lidiard . . . . . . . . . . . . . . . . . . . . . . . . 44 yrs Head of Investor Relations and
Communications
Gerry Bacon, CFO

Mr Bacon has been employed as a consultant in the role of interim Chief Financial Officer designate from
January 2010 and was appointed as CFO in April 2010. Mr Bacon was Group Treasurer for Vodafone from
1993 to 2009 and Chief Financial Officer at one of its operating subsidiaries from 2004 to 2009. Previously,
he worked for Kingfisher, Merrill Lynch and Stoy Hayward. Mr Bacon was the President of the Association
of Corporate Treasurers until April 2010 and has NED positions at a Maltese insurance group and an
autistic charity. He is also a Chartered Accountant, holds an MBA from Cranfield School of Management,
is a fellow of the Association of Corporate Treasurers and is an Associate Fellow of Oxford Said Business
School and holds a degree in Mathematics.
Mark Lidiard, Head of Investor Relations and Communications

Mr Lidiard is currently employed as a consultant to the company and will take up full time employment
with Essar Energy on Admission. Mr Lidiard was previously group communications director at Lloyds TSB
from 2008 to 2009, vice president of investor relations and communications at BHP Billiton from 2002 to
2007 and head of investor relations at Powergen Plc from 2000 to 2002.
From 1997 to 2000, Mr Lidiard was assistant group treasurer and head of project finance at Powergen
which included responsibility for power project financings in India. He has a post graduate certificate in
business management from Thames Valley University and a degree in Physics with Geology from
Southampton University.
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The Company’s Senior Management team of the power business is as follows:
Name Age Position
K V B Reddy . . . . . . . . . . . . . . . . . . . . . . . . 49 yrs Executive Director, Essar Power-Hazira

Group
Shubh Shrivastava . . . . . . . . . . . . . . . . . . . . 54 yrs Head Development and Regulatory, Essar
Power
V. Suresh . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 yrs CFO Essar Power
B.C.P. Singh . . . . . . . . . . . . . . . . . . . . . . . . . 63 yrs CEO, Essar Power Gujarat-Salaya and
Vadinar Power-Jamnagar
R.K. Narayan . . . . . . . . . . . . . . . . . . . . . . . . 72 yrs Head of Transmission
R.P. Gupta . . . . . . . . . . . . . . . . . . . . . . . . . . 61 yrs CEO, Essar Power MP-Mahan
AK Singh . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 yrs CEO, Essar Power Jharkhand-Tori
T.S. Bhatt . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 yrs MD, Bhander Power-Hazira
K V B Reddy, Executive Director, Essar Power Group

Mr Reddy is a graduate in mechanical engineering from N.I.T Bhopal with more than 25 years of
experience in the power industry. He has previously worked for the National Thermal Power Corporation
where he gained in-depth experience in the areas of project planning, materials, commercial and erection
and commissioning. During this time he set up three gas-based combined cycle power projects at Anta,
Auraiya and Kawas. He has been involved with the Company’s power business since 1995.
In addition to being executive director of Essar Power, Mr Reddy is also responsible for formulating and
directing the overall business strategy of the power business group and project execution.
Shubh Shrivastava, Head Development and Regulatory, Essar Power

Mr Shrivastava has more than 27 years experience in the power and oil and gas industry. During this time
he has gained experience working for a number of industry players including NTPC, Enron/Dabhol Power
Company and Shell Gas and Power.
Mr Shrivastava is also currently responsible for developing the new businesses and projects, as well as the
commercial and regulatory functions, of the power business group.
V Suresh, CFO, Essar Power

Mr Suresh is a chartered accountant and company secretary and has more than 25 years of experience in
investment banking and management consultancy. His extensive experience covers a wide range of
industries including power, oil and gas, steel, media, pharmaceuticals, construction and consumer markets.
Currently, Mr Suresh is chief financial officer of the power business group and is in overall charge of the
corporate and project finance, financial accounts, budgeting and corporate secretarial functions of the
entire power business.
Mr Suresh joined the Essar Group in 2002. Prior to joining Essar Power, Mr Suresh was chief financial
officer of Essar Oil and was responsible for project and corporate finance, financial accounts and
budgeting.
B.C.P. Singh, CEO, Essar Power Gujarat-Salaya and Vadinar Power-Jamnagar

Mr Singh has more than 38 years of experience in the power sector. He has experience in the construction
of large thermal, hydro and nuclear power plants within both the public and private sectors, including
NTPC, Department of Atomic Energy, Aditya Birla Group, Sterlite and LNT Bilwara Group.
Mr Singh is presently designated as chief executive officer for implementation of the Company’s 2 600
MW imported coal-based power plant near Salaya, Jamnagar in Gujarat.
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R.K. Narayan, Head of Transmission

Mr Narayan has had extensive experience in the field of power. He has held many senior level positions,
including chairman and managing director of U P Power Corporation Ltd, chairman and managing
director of Power Grid Corporation of India, chairman of Damodar Valley Corporation, Member of
(Thermal) Central Electricity Authority, general manager and chief executive of Delhi Electric Supply
Undertaking and president of the International Association of Electricity, Generation, Transmission and
Distribution (Afro-Asian).
Besides the above Mr Narayan was also on the Board of NTPC, NLC and GRIDCO—ORISSA among
others.
R.P. Gupta, CEO, Essar Power MP-Mahan

Mr Gupta has more than 36 years of experience in power projects in both the public and private sector.
e sectors, including NTPC, SAIL at Bokaro Steel Plants etc. He has also been Head of the 3,260 MW
Vindhyachal Super Thermal Power Project, the largest power station in India.
Mr Gupta has been associated with Essar since June 2007. He is, at present, designated as Chief Executive
Officer for implementation of the Company’s 2x600 MW coal-fired pit-head thermal power plant near the
Mahan coal block, Bandhaura, Khairahi and Karsua village, Dist. Singrauli, Madhya Pradesh.
Ashwini Kumar Singh, CEO, Essar Power Jharkhand-Tori

Mr Singh is presently resident director of Essar Steel Ltd. He graduated in Electrical Engineering in 1965
from Jadavpur University and joined Rourkela Steel Plant, HSL in the same year. He later also worked in
the Bokaro Steel Plant in various capacities in various areas. After 25 years of experience in various
departments in Rourkela and Bokaro, in 1993 he took leadership of the HRD function at SAIL as an
additional director. He played a key role in improving MTI, Ranchi, the Management College of SAIL, to
the level of an ISO-9001 institute.
Mr Singh has had extensive management experience in many areas such as: manufacturing; training; HRD;
corporate planning and marketing. He has attended several higher management programmes in IIMs,
ASCI Hyderabad and MTI Ranchi. Mr Singh is a Fellow of Institution of Engineers, a Fellow of National
HRD Network, a Fellow of All India Management Association and a Fellow of Indian Council Of
Arbitration. He is also a council member of the Indian Institute of Metals.
T.S. Bhatt, MD, Bhander Power-Hazira

Prior to joining Essar in 1997, Mr Bhatt was with the National Thermal Power Corporation where he was
involved in the designing, engineering, erection and commissioning of large sized power plants. Mr. Bhatt
is currently in charge of the maintenance and operations of the both the power plants at Hazira.
The Company’s Senior Management team of the oil and gas business is as follows:
Name Age Position
C. Manoharan . . . . . . . . . . . . . . . . . . . . . . . 56 yrs Head, Refining

Shishir Agarwal . . . . . . . . . . . . . . . . . . . . . . 54 yrs Head, Exploration and Production
S. Thangapandian . . . . . . . . . . . . . . . . . . . . . 48 yrs Head, Marketing
P. Sampath . . . . . . . . . . . . . . . . . . . . . . . . . . 54 yrs CFO, Oil and Gas
Iftikhar Nasir . . . . . . . . . . . . . . . . . . . . . . . . 44 yrs Executive Director, Strategy and Business
Development
Krishnamurthy Govindarajan . . . . . . . . . . . . . 59 yrs Head, Refinery Expansion
Narendra Vachharajani . . . . . . . . . . . . . . . . . 58 yrs Head, Operations and IST
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C. Manoharan, Head of Refining

Mr. C. Manoharan is head of refining at Essar Oil. He joined the Essar Group in May 2008. A graduate in
chemical engineering, Mr Manoharan is in charge of technical, production and marketing functions
associated with refinery management and is also responsible for the smooth and safe commissioning of all
of the process units and other facilities related to refinery expansion and management.
Prior to joining the Essar Group, Mr Manoharan had enjoyed a long and illustrious career with Indian Oil
Corporation Limited from 1977 to 2008. During this period, he handled a variety of key assignments in
Refinery Operations, Maintenance and Technical Services and was closely involved in revamping,
debottlenecking, and the construction and commissioning of various process units and other facilities. As
an Executive Director of IOCL, he led the operations and new projects of the Panipat Refinery between
2006 and 2008. Mr Manoharan also briefly worked for the Oman Refineries and Petrochemicals Company
in 2008.
Shishir Agrawal, Head of Exploration and Production

Mr Agrawal is CEO of exploration and production. He joined the Essar Group in May 1986. Mr Agrawal’s
responsibilities at Essar include managing the commercial operations of the Group and its exploration and
production business. Mr. Agrawal is a certified chartered accountant from the Institute of Chartered
Accountants of India and has also passed the Company Secretary’s examination from the Institute of
Company Secretaries of India.
Prior to joining the Essar Group, Mr Agrawal was employed by Estrella Batteries as a full-time director.
S. Thangapandian, Head of Marketing

Mr Thangapandian has over 28 years of experience and has successfully set up and introduced companies,
brands and products into the Indian market. He joined Essar in 2004 and is currently the chief executive
officer of marketing with the energy business group.
Mr Thangapandian has also been involved in setting up operating teams for companies in India as well as
abroad. He has worked extensively with organisations such as HPCL, Gulf Oil India Limited, Petrofina,
Total Finaelf and Reliance Petroleum Limited.
Prior to joining Essar Mr Thangapandian was executive director of retail at National Oil and Chemical
Marketing Co., Nigeria where he was in charge of the overall operations of 250 outlets.
Mr Thangapandian has done his BSc. from Madurai Kamraj University.
P. Sampath, CFO Oil and Gas

Mr Sampath joined Essar in 2008. He is the director of finance of Essar Oil and chief financial officer of oil
and gas. Mr Sampath has over 30 years of experience in the many fields including global corporate finance
and treasury, mergers and acquisitions, corporate business planning, investor relations, global HR strategy
and financial and management accounting.
Prior to joining Essar, Mr Sampath held a senior position as management board member and group chief
financial officer of RPG Enterprise Ltd. He also progressed to the position of managing director of
GHCL Ltd where he worked for 18 years.
Mr Sampath holds a Bachelor of Commerce from Madras University and a Fellow member of the Institute
of Cost and Works Accountants of India and the Institute of Company Secretaries of India.
Iftikhar Nasir, Executive Director, Strategy and Business Development

Mr Nasir joined Essar in 2008. He is executive director of strategy and business development for Essar Oil.
Mr Nasir has over 20 years of industry experience and has previously worked for BP plc, London where he
was the vice president of group business development. During his time with BP Mr Nasir led a range of
business activities across the energy value chain from exploration and production to petrochemicals.
Mr. Nasir’s recent assignments include taking responsibility for BP’s exploration and production activities
(strategy, commercial and business development) across the Middle East, managing non-technical risks for
159

the African, Middle East, Russian and Caspian regions and more recently, leading Group Strategy and
business development activities in Southern Asia.
Mr Nasir is a graduate of the Royal Society of Chemistry, a post-graduate member of the Chartered
Institute of Marketing and has completed the Stanford Senior Executive Program.
Krishnamurthy Govindarajan, Head of Refinery Expansion

Mr Govindarajan joined Essar 2008. He is the chief executive officer of the Refinery Expansion Projects.
He has over 35 years of experience in various refinery projects, operations, maintenance and overall
supervision. Mr Govindarajan also has considerable experience in the area of LNG/gas marketing as well
as refinery planning and coordination.
Prior to Joining Essar, Mr Govindarajan was an executive director of petrochemicals with Indian Oil
Corporation Ltd. (‘‘IOC’’). During this time Mr Govindarajan was involved in the implementation of
IOC’s petrochemicals master plan strategy which included the marketing of petrochemical products such
as LAB, Para Xylene and PTA. Mr Govindarajan was also responsible for initiating the strategy for the
marketing of Polymers.
Mr Govindarajan has a graduate degree in Chemical Engineering from the Indian Institute of Technology,
Madras.
Narendra Vachharajani, Head of Operations and IST

Mr Vachharajani joined Essar in 1996. He is the chief executive officer of operations at Essar Oil.
Mr Vachharajani has over 35 years of experience and has worked within both the public and private sector.
He has held key roles in the Department of Chemicals and Petrochemicals, Government of India, Indian
Petrochemicals Corporation Limited (IPCL) Calico Mills, and Duphar Interfarn Limited.
Prior to joining Essar, Mr Vachharajani worked with IPCL for over 18 yeas, at Vadodara, Calcutta and
Delhi. During this time he was responsible for sales, marketing and business development.
Mr Vachharajani was seconded to the Government of India, Ministry of Petroleum and Chemicals as a
Deputy Secretary cum project officer, responsible for policy planning of the petrochemicals industry.
Mr Vachharajani graduated in Chemistry and took his post graduate diploma in marketing management.
Corporate governance
Combined Code
The Board is committed to the highest standards of corporate governance. On and following Admission,
the Board will comply with the requirements of the Combined Code on Corporate Governance published
in June 2008 by the Financial Reporting Council save that the Chairman did not on appointment meet the
independence criteria of the Combined Code due to his interest in the Company as disclosed in
‘‘Directors’, Senior Management and other interests’’ in Part 16 ‘‘Additional Information’’. However, in
view of the Chairman’s extensive involvement with Essar Oil and Essar Power over a period of many years,
the Board considers that he has made a major contribution to the Company’s growth and success and is
unanimously of the opinion that his continued involvement is crucially important to the ongoing success of
the Company following Admission.
The Combined Code recommends that at least half the board of directors of a UK listed company,
excluding the chairman, should comprise non-executive directors determined by the board to be
independent in character and judgement and free from relationships or circumstances which may affect, or
could appear to affect, the director’s judgement. The Board will initially consist of the Chairman, the Vice
Chairman, the CEO of Essar Energy plc and four independent non-executive directors. In addition, Essar
Energy intends to appoint a fifth independent non-executive Board member and is currently in the process
of identifying suitable candidates. It is intended that the fifth non-executive director has appropriate
UK market experience. The Board considers that the Company complies with the requirements of the
Combined Code in this regard.
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Pursuant to the relationship agreement described in Part 15, Essar Global Limited is entitled, by giving
written notice to Essar Energy plc, to nominate for appointment to the Board such number of directors as
are required to ensure that the composition of the Board complies with Combined Code requirements on
board composition. The Nominations and Governance Committee will therefore work collaboratively with
Essar Global Limited regarding appointments to the Board and, to this extent, the board appointment
process differs from that set out in Code provision A.4.1.
As recommended by the Combined Code, the Board has established three committees: an audit
committee, a nominations and governance committee and a remuneration committee. It has set up a
number of additional committees including the management committee, the financial management
Committee, the investment committee and the health, safety and environment committee. If the need
should arise, the Board may set up additional committees as appropriate.
The Combined Code also recommends that the Board should appoint one of the independent
non-executive directors to be the senior independent director. The senior independent director should be
available to shareholders if they have concerns which contact through the normal channels of chairman or
chief executive has failed to resolve or for which such contact is inappropriate. Simon Murray has been
appointed Senior Independent Director.
Audit committee
The audit committee’s role is to assist the Board with the discharge of its responsibilities in relation to
internal and external audits and controls, including reviewing Essar Energy plc’s annual financial
statements and interim reports prior to approval, focusing on changes in accounting policies and practices,
considering the scope of the annual audit and the extent of the non audit work undertaken by external
auditors, advising on the appointment of external auditors and reviewing the effectiveness of the internal
control systems in place within Essar Energy plc. The audit committee will meet at least three times a year.
The audit committee is chaired by Sattar Hajee Abdoula, an independent non-executive Director with a
financial background. Its other members are Simon Murray and Subhash C Lallah. The Combined Code
recommends that all members of the audit committee be independent non-executive directors. The Board
considers that Essar Energy plc complies with the requirements of the Combined Code in this regard.
Nominations and governance committee

The nominations and governance committee assists the Board in determining the composition and make
up of the Board. It is also responsible for periodically reviewing the Board’s structure and identifying
potential candidates to be appointed as Directors, as the need may arise. The nominations and governance
committee also determines succession plans for the Chairman and Chief Executive. The nominations and
governance committee will meet at least twice a year.
The nominations and governance committee is chaired by Simon Murray and its other members are
Prashant Ruia and Subhash C Lallah. The Combined Code recommends that a majority of members the
nominations and governance committee be independent non-executive directors. The Board considers that
Essar Energy plc complies with the requirements of the Combined Code in this regard.
Remuneration committee
The remuneration committee recommends what policy the Company should adopt on executive
remuneration, determines the levels of remuneration for Executive Directors, the Chairman and the Vice-
Chairman and recommends and monitors the level and structure of remuneration for members of senior
management. The committee will also review the operation of share and share option schemes and the
granting of such options, as well as prepare an annual remuneration report to be approved by the members
of Essar Energy plc at the annual general meeting. The remuneration committee will meet at least twice a
year.
The remuneration committee is chaired by Subhash C Lallah, and its other members are Simon Murray
and Philip Aiken, all of whom are independent. The Combined Code recommends that all members of the
remuneration committee be independent non-executive directors. The Board considers that the Company
complies with the requirements of the Combined Code in this regard.
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Health, Safety and Environment committee

The health, safety and environment committee is responsible for evaluating the effectiveness of the
Company’s policies and systems for identifying and managing health, safety and environmental risks within
its operations. It assesses the policies and systems within the Company for ensuring compliance with
health, safety and environmental regulatory requirements. The committee is responsible for assessing the
performance of the Company with regard to the impact of health, safety and environmental decisions and
actions upon employees, communities and other third parties and on the reputation of the Company. It
shall, on behalf of the Board, receive reports from management concerning any fatalities and/or serious
accidents within the Company and any resulting action. The health, safety and environment committee will
meet at least twice per year.
The health, safety and environment committee is chaired by Philip Aiken, an independent non-executive
director, with Prashant Ruia, Naresh Nayyar and KVB Reddy as members.
Management Committee
The management committee focuses on monitoring the Company’s strategy, organisational design and
operational matters to ensure the Board’s strategic directions are implemented and to make
recommendations to the Board. The management committee meets on a monthly basis to review the
operating performance of each of the principal subsidiaries. The management committee comprises
Prashant Ruia (Chair), Naresh Nayyar, Business Group Chief Executive Officers, Gerry Bacon and Mark
Lidiard.
Financial Management Committee

The financial management committee assists the management committee in fulfilling its responsibilities to
the Company and the Board including making recommendations on the Company’s capital structure,
assisting in treasury functions and investment management, and making recommendations to the Board on
major investments, acquisitions and divestitures.
The members of the financial management committee are Gerry Bacon, P. Sampath, V. Suresh, the Group
Treasurer (once appointed) and the Group Financial Controller. The financial management committee
shall meet ten times per year.
Investment Committee
The purpose of the investment committee is to assist the management committee in providing oversight of
the Company’s investment guidelines. The members of the Investment Committee are Prashant Ruia,
Naresh Nayyar, Gerry Bacon and the Group Treasurer (once appointed) and the Group Financial
Controller. The Investment Committee will meet twice a year.
Share dealing code

The Company has adopted, with effect from Admission, a code of securities dealings in relation to the
Shares which is based on, and is at least as rigorous as, the model code as published in the Listing Rules.
The code adopted will apply to the Directors and other relevant employees of the Company.
Relationship with the Essar Group

For information about the Company’s relationship with the Essar Group, see ‘‘Relationship with the Essar
Group’’ in Part 15.
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MERRILL CORPORATION JDICKSO//30-APR-10 12:34 DISK116:[10ZAU1.10ZAU70801]CR70801A.;50
PART 9
OPERATING AND FINANCIAL REVIEW
The following discussion of the Company’s financial condition and results of operations should be read in
conjunction with Part 5 ‘‘Industry Overview’’, Part 6 ‘‘The Business’’ and the Company’s combined financial
information as of and for the years ended 31 March 2009, 2008 and 2007 and the nine months ended
31 December 2009 and 2008, including the schedules and notes thereto and the reports thereon, which appear
in Part 11: ‘‘Financial Information’’. The combined financial information referred to in this discussion have
been prepared in accordance with IFRS as adopted by the European Union except for the purposes of presenting
the financial information on a combined basis in respect of certain matters explained in Part 11 ‘‘Financial
Information’’. The financial information considered below has been extracted from Part 11 ‘‘Financial
Information’’.
The Company’s financial year ends on 31 December, whereas the financial year end of its operating subsidiaries
is 31 March. The inclusion of financial information as of and for the years ended 31 March 2009, 2008 and
2007 reflects the financial year of the Company’s operating and other subsidiaries.
The following discussion of the Company’s results of operations and financial conditions contains forward-
looking statements. The Company’s actual results could differ materially from those that it discusses in these
forward-looking statements. Factors that could cause or contribute to such differences include those discussed
below and elsewhere in this document, particularly in Part 1’’Risk Factors’’ and ‘‘Information regarding
forward-looking statements’’ in Part 2 ‘‘Presentation of Financial and Other Information’’.
OVERVIEW
The Company is a power and oil and gas group predominantly located in India. The Company’s power
business owns and operates three power plants in India as well as one power plant in Canada. The
Company’s oil and gas business is engaged in the exploration and production of oil and gas, petroleum
refining and the sales and marketing of petroleum products.
On 29 April 2010 EGL completed a reorganisation whereby the power and oil and gas businesses of the
Essar Group were reorganised under the Company for the purposes of listing on the London Stock
Exchange. For further details see paragraph 3 of Part 16 ‘‘Additional Information’’.
The Company generated revenues of US$8,453.1 million in the year ended 31 March 2009 and
US$5,654.6 million in the nine months ended 31 December 2009. The Company’s EBITDA for the year
ended 31 March 2009 was US$123.7 million and US$433.1 million for the nine months ended 31 December
2009.
SEGMENTAL REPORTING
The Company has three segments for accounting purposes:
• power, which comprises the Company’s power operations as described under ‘‘Power’’ in Part 6 ‘‘The
Business’’;
• exploration and production, which comprises the Company’s oil and gas exploration and production
operations as described under ‘‘Oil and Gas—Exploration and Production’’ in Part 6 ‘‘The Business’’;
and
• refining and marketing, which comprises the Company’s refinery and refined petroleum product sales
and marketing operations as described under ‘‘Oil and Gas—Vadinar Refinery’’ and ‘‘Oil and Gas—
Mombasa Refinery’’ in Part 6 ‘‘The Business’’.
To date, the exploration and production segment has not contributed materially to the Company’s results
of operations nor had any material impact on the Company’s financial condition. The Company expects
expenses of the exploration and production segment to increase over the next few years as it intensifies and
expands its exploration and production activities. As the exploration and production segment’s assets begin
commercial production, the Company expects to generate additional revenues from these operations.
For information about the results of operations of the exploration and production segment, see Note 3 to
the Company’s financial statements included in Part 11 ‘‘Financial Information’’.
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Part 9 Operating and Financial Review
FACTORS AFFECTING RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Recent and Future Expansion of Operations
The Company’s pursuit of its growth strategy in recent years has involved the installation of additional
megawatt capacity through the acquisition or construction of additional power plants, and the construction
of the Vadinar refinery. In financial periods ending on or prior to 31 March 2008, the Company’s revenues
were primarily derived from:
• its power business’s operation of its 515-MW Essar Power-Hazira power plant, which was
commissioned in 1997; the first, 155-MW unit of the Bhander Power-Hazira plant, which was
commissioned in January 2006 and acquired from an Essar Affiliated Company in September 2006;
and the second, 200-MW unit of the Bhander Power-Hazira plant, which was commissioned in
December 2007; and
• its oil and gas business’s petroleum products sales and marketing business, which was acquired in June
2006 with the acquisition of Essar Oil.
The Company’s financial information for the periods ending after 31 March 2008 also include the results of
operations of:
• the third, 145-MW unit of Bhander Power-Hazira plant following its commissioning on 7 October
2008; and
• the Vadinar refinery following commencement of its commercial operations on 1 May 2008, including
the refinery’s captive 120-MW Vadinar Power-Jamnagar co-generation power plant.
The Company’s financial information for the nine months ended 31 December 2009 include:
• the results of operations of the 85-MW Essar Power (Canada) plant following its commissioning on
13 June 2009; and
• The Company’s 50% interest in Kenya Petroleum Refinery following the Company’s acquisition of
this interest on 31 July 2009. This interest has been accounted for as an acquisition in the Company’s
financial statements. This acquisition has not had a material impact on the Company’s results for the
nine months ended 31 December 2009.
As a result, certain periods are not directly comparable.
Essar Energy’s growth strategy in the next few years involves:
• an increase in the power business’s installed megawatt capacity through the Phase I Power Projects,
which involve an expansion of the power business’s installed power generation capacity by 4,880 MW
through the construction of six additional power plants that are expected to be completed between
2011 and 2012; and
• the expansion of the Vadinar refinery’s production capacity from its current level of 14 mmtpa to
18 mmtpa through the Phase I Refinery Project.
In addition, the Company will seek to further expand its operations with the Phase II Power Projects. The
Phase II Power Projects involve development projects for the construction and/or expansion of six power
plants expected to be completed in 2013 and 2014, and will add a further 5,370 MW of installed capacity.
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The following table provides an overview of the Company’s historical actual and expected total installed
megawatt capacity at its operational and planned power plants and the historical actual and expected
throughput capacity at the Vadinar refinery.
For the 12 months ended For the 12 months ending

2007(1) 2008(1) 2009(1) 2009 2010 2011 2012
Actual capacity Expected capacity
Power
Installed megawatt capacity in MW . . . . . . . . . 670 870 1,135 1,220 1,600 4,570 6,100
Actual throughput Expected capacity

(2)
Oil and gas
Vadinar refining throughput in mmtpa . . . . . . . 1.75 6.53 12.91 13.21 13.22 16.11 18.00
(1) Actual throughput prior to the Vadinar refinery’s commencement of commercial operations on 1 May 2008 related to trial runs.
Throughput as of 31 March 2009 includes trial run throughput of 0.96 MMT.
(2) Not including throughput or capacity of the Mombasa refinery in Kenya.
For a discussion of the factors that could lead to delays and costs overruns for the Expansion Projects, see
the risk factor ‘‘The Company plans to expand significantly, involving substantial capital expenditures and
execution risks that it may not be able to manage. The expansion projects may not be completed on time,
according to specifications or within budget’’ in Part 1 ‘‘Risk Factors’’.
Funding Costs for the Expansion Projects

The Company operates in a capital intensive industry and has significant funding requirements for its
existing operations and its growth strategy. The Company’s major growth projects will be funded by a
combination of debt as well as by the net proceeds from the Offer and excess cash flows from operations. It
is currently expected that the net proceeds from the Offer, along with cash from operations, will be used to
fund the projected equity funding requirements of its various growth projects as follows:
total installed capacity to 11,470 MW, which, is currently estimated to require approximately
US$1.94 billion of equity funding, comprising of US$0.45 billion for the Phase I Power Projects,
estimated to require approximately US$0.25 billion of equity funding for the period 2010-2014; and
18 mmtpa, which is currently estimated to require approximately US$0.26 billion of equity funding.
In addition a further US$0.50 billion from the net proceeds from the Offer will be used for general
corporate purposes including working capital requirements for the oil & gas business.
The above amounts are the current best estimate of capex and funding plans and given the long term
nature of some of these projects may be subject to change.
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MERRILL CORPORATION JDICKSO//30-APR-10 12:38 DISK116:[10ZAU1.10ZAU70801]CS70801A.;58
Part 9
The following table shows the current estimated phasing of capital expenditure and the planned debt-to-equity funding required for the Company’s
6810DM/0D Foot:
expansion projects (at an exchange rate of US$1 : Rs. 46.68). The data set forth in the table below is indicative and subject to change, based on, among
Operating and Financial Review

other factors, exchange rate movements, changes in costs, project design specifications and the availability of financing.(1)
Capital expenditure
Year ended
31 December Year ended 31 December Planned funding split
2009 and
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
Project Capex Periods Capacity earlier 2010 2011 2012 2013-14 Total Debt Debt Obtained(6) Required Equity Equity Obtained Required
(US$ in million) (%) % (US$ in million)
POWER
0D/
Phase I
Essar Power MP-Mahan . . . . . . . . . . . . . . . . . . . . . . . 2009-2011 1,200 MW 316 660 65 — — 1,041 75% 781 781 — 25% 260 166 94
Essar Power Gujarat-Salaya . . . . . . . . . . . . . . . . . . . . . 2009-2011 1,200 MW 323 659 51 — — 1,033 75% 774 774 — 25% 258 144 114
Vadinar Power-Expansion Phase 1 . . . . . . . . . . . . . . . . . 2009-2010 380 MW 116 39 — — — 155 75% 116 116 — 25% 39 39 —
Vadinar Power-Expansion Phase 2 . . . . . . . . . . . . . . . . . 2009-2011 510 MW 73 369 61 — — 503 75% 377 377 — 25% 126 64 62
Essar Hazira, Power Hazira . . . . . . . . . . . . . . . . . . . . . 2010-2012 270 MW — 108 157 43 — 308 75% 231 231 — 25% 77 — 77
Essar Power Orissa-Paradip . . . . . . . . . . . . . . . . . . . . . 2009-2012 120 MW 7 56 69 14 — 146 75% 110 0 110 25% 37 7 29
Transmission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009-2011 — 14 227 44 — — 286 70% 200 200 — 30% 86 14 71
Essar Power Jharkhand-Tori . . . . . . . . . . . . . . . . . . . . . 2009-2012 1,200 MV 7 360 638 216 — 1,221 75% 915 915 — 25% 306 7 299
Equity required(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 0 300 (300)
Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,880 MW 856 2,478 1,085 273 4,693 3,504 3,394 110 1,188 742 446
File: CS70801A.;58
Phase II
Essar Power Jharkhand-Tori Expansion . . . . . . . . . . . . . . . 2010-2013 600 MW — 1 93 323 82 499 75% 374 — 374 25% 125 — 125
166
Essar Power MP-Mahan Expansion . . . . . . . . . . . . . . . . . 2010-2013 600 MW — 27 238 164 70 499 75% 374 — 374 25% 125 — 125
Salaya II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010-2013 1,320 MW — 26 598 330 162 1,116 75% 837 — 837 25% 279 — 279
Salaya III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010-2013 600 MW — 6 252 283 165 707 75% 530 — 530 25% 177 — 177
Neptune I(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010-2013 1,050 MW — 44 482 312 159 997 75% 748 — 748 25% 249 — 249
Neptune II(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010-2014 1,200 MW — 0 47 505 509 1,060 75% 795 — 795 25% 265 — 265
Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,370 MW 0 105 1,711 1,917 1,147 4,879 3,659 0 3,659 1,220 0 1,220
Mines(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010-2011 0 110 12 — — 122 0% — — — 100% 122 0 122
Power (including coal mines)—total . . . . . . . . . . . . . . . . 10,250 MW 856 2,693 2,808 2,191 1,147 9,694 7,164 3,394 3,769 2,530 742 1,788
EXPLORATION and PRODUCTION(5)
Ratna Fields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 9 27 79 296 414 72% 298 — 298 28% 116 3 113
Raniganj Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 97 131 46 19 327 63% 207 — 207 37% 120 34 86
Other blocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 27 20 8 0 178 — — 0 100% 178 123 55
Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . up to 2014 160 133 178 133 315 919 55% 505 0 505 45% 414 160 254
REFINING
(7)
Vadinar Refinery—Phase 1 . . . . . . . . . . . . . . . . . . . . . 2009-2011 18 mmtpa 613 975 85 — — 1,673 59% 985 985 0 41% 688 428 260
GRAND TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,630 3,801 3,071 2,324 1,462 12,287 8,654 4,379 4,274 3,632 1,330 2,302
(1) Figures rounded to nearest million. Totals may not match due to rounding errors. This table does not include any capital expenditure costs in relation to the Mombasa refinery.
(2) Equity required reflects equity infused by Essar Global which is yet to be apportioned to specific Phase I Power Projects.
(3) Assumes 100% capital expenditure for Neptune, however current economic interest of 39%.
(4) Coal mine capital expenditure includes Mahan, Chakla and the Indonesia coal block.
(5) The stated capital expenditure is up to and including CY2014 for Ratna Fields and Raniganj Block projects; for the remaining E&P blocks the stated capex is for a 27-month period to March 2012 based on minimum work commitments. The E&P
equity requirement is inclusive of internal accruals.
(6) In respect of the Phase I Power Projects, US$2,601 million is committed and an additional US$793 million is agreed by way of non-binding MOUs or sanction letters.
(7) Capital expenditure for expansion from 14 mmtpa to 18 mmtpa.
MERRILL CORPORATION JDICKSO//30-APR-10 12:34 DISK116:[10ZAU1.10ZAU70801]CW70801A.;61
As a substantial portion of the funding for the Company’s expansion projects is expected to be
indebtedness, the Company will have a substantially higher level of indebtedness and increased interest
expense in the future. In addition, Essar Energy may incur additional capital expenditures and
indebtedness not reflected in the table above, including for the Shell Refineries in the event they are
acquired.
Essar Energy has currently secured commitments for 73% (97% if non-binding sanction letters are
included) of the total expected debt financing required for the Phase I Power Projects. Essar Energy
currently has not secured any debt financing commitments for the Phase II Power Projects. Essar Energy
has entered into project financing arrangements for the total expected debt financing required for the
Phase I Refinery Project, including Rupee term-loan agreements, LC facility agreements and a foreign-
currency facility agreement. Essar Energy currently has incurred some expenditure on certain work such as
basic/detailed engineering but will not proceed with equipment procurement and construction until all
debt and equity commitments for the Phase II Refinery Project have been tied up. The projected capital
expenditure for 2010 and 2011 in respect of the Company’s exploration and production assets are focused
on activities in its Raniganj Block and Ratna Fields and the Company has only minimal capital
commitments under the PSCs for its other oil and gas blocks. The Company is currently in discussions with
various banks in order to secure funding for the Raniganj CSG project; as of 31 March 2010 it had raised a
short-term bridge loan of Rs. 500 million (US$10.71 million). The majority of the Company’s future capital
expenditure for the Phase II Power Projects, the Phase II Refinery Project and the exploration and
production projects is expected to be incurred in 2012 and beyond.
For a discussion of the factors related to funding the Company’s growth strategy, see ‘‘The Company has
substantial debt requirements. The structure and terms of the Company’s financing arrangements could
give rise to additional risks’’ in Part 1 ‘‘Risk Factors’’.
Capitalisation of Expenses and Revenues

As was the case with the Company’s expansion projects that were constructed and completed during the
period under review, the applicable costs related to the construction of each Expansion Project will be
capitalised on the Company’s balance sheet. Once the production facility related to that project is
commissioned for commercial operations, the Company’s income statement will reflect revenue and cost
streams arising from the project. For example, the Vadinar refinery was under trial runs for the crude and
vacuum distillation units from November 2006 until it commenced commercial operations on 1 May 2008
upon the sequential completion of construction and integration of the remaining refinery units. Crude oil
expenses and other applicable costs (other than general and administrative expenses) related to these trial
runs as well as the proceeds received from sales of refined petroleum products produced in these trial runs
were capitalised until the refinery commenced commercial operations on 1 May 2008.
Long-Term Power and Other Off-take Agreements

Substantially all of the Company’s current power production that is not used by Essar Oil is sold and is
expected to continue to be sold pursuant to long-term PPAs. The Company’s power business derived
approximately 92% of its revenue in the period from 1 April 2009 to 31 December 2009 from sales of
power pursuant to long-term PPAs to captive customers and the state-utility company GUVNL with terms
of between 20 and 30 years. Once the 10,250MW combined additional installed capacity from the Power
Plant Projects has been commissioned, the Company currently expects to reach a combined installed
capacity of 11,470MW, of which 74% is expected to be sold pursuant to long-term PPAs with captive and
other customers.
The Company’s long-term PPAs with:
• off-take customers, other than one PPA with GUVNL for Essar Power—Hazira, that do not supply
the relevant power plant’s fuel requirements provide for two-part tariffs for the power comprising a
fixed component called a capacity charge and a variable component called an energy charge; and
• with off-take customers that supply the relevant power plant’s fuel requirements generally contain
only a capacity charge. In PPAs with such captive customers, the provision and costs of fuel are the
responsibility of the off-take customer.
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The capacity charge under the PPAs is generally recovered at the relevant contracted plant availability. The
recovery mechanism provides the Company with a relatively predictable and recurring source of revenues
designed to provide the necessary incentive for construction of the relevant power project and continued
operation of operating plants. A power plant is generally eligible to receive the capacity charge regardless
of how often the plant is operated so long as the plant is available when needed to maintain desired power
generation levels. Moreover, under its PPAs with captive customers, the Company is not exposed to
adverse changes in fuel prices. However, as a result of the long-term nature of the PPAs, the Company is
unable to capture the benefits of any future increases in market prices for power to the extent it has
committed to sell its generation capacity under PPAs.
As a result of capacity charges under its PPAs, the power business’s results of operations may be affected if
its power plants, due to the fault of the Company, fail to achieve the availability levels contracted for in
their respective PPAs. If this were to happen, the capacity charge received under the plant’s PPA would be
generally adjusted downwards for the shortfall in generation below the contracted available capacity.
While the Company has achieved the contracted availability levels in all of its PPAs during the period
under review, if the Company’s power plants do not achieve their contracted available capacity, the
relevant power plant may not succeed in recovering its fixed costs from its off-take customers.
The tariffs under the PPAs are designed to allow the Company to recover its expected costs and provide a
return on capital invested and there is no provision for escalation in any of the PPAs governing current
generation capacity. Therefore, the Company’s profit margin on power sold under the PPAs is in part
determined by the Company’s ability to run its power plants efficiently and keep its operating and fuel
costs for PPAs with non-captive customers low.
For additional information about the Company’s PPAs, see ‘‘Power—Long-Term PPAs’’ in Part 6 ‘‘The
Business’’. See also the risk factor ‘‘If the Company does not operate its power plants efficiently or
otherwise breaches its PPA contractual obligations, the Company may face increased irrecoverable costs.
The Company’s expansion into merchant sales is subject to certain risks’’ in Part 1 ‘‘Risk Factors’’ and
paragraph 14.1 ‘‘Dispute with GUVNL’’ in Part 16 ‘‘Additional Information’’.
Fuel Expenses
The largest variable cost for the Company’s power business is the cost of fuel. Historically, the Company
has not been subject to the risk of fluctuations in fuel expenses, as captive off-take customers are
responsible for, and bear the risk of, supplying fuel to the Company’s captive power plants, and the
Company has entered into long-term fixed-price fuel supply arrangements for certain of its expected fuel
needs. See ‘‘Power—Overview’’ in Part 6 ‘‘The Business’’. While the Company expects that the fuel needs
for some of the Power Plant Projects will be supplied pursuant to similar supply arrangements, the
Company expects that approximately 35% of its total installed megawatt capacity following completion of
the Power Plant Projects will be fuelled by coal mined by the Company in India. The Company has no prior
experience in coal-mining activities and plans to mine coal using expertise of individuals hired from other
coal mine operators and to subcontract certain other coal-mining operations. The profitability of the power
plants that are fuelled by coal mined by the Company will be dependent on the success of the Company’s
coal-mining operations and on its ability to control the cost of these operations. There may be greater
variability in the operating expenses of these power plants than in the operating expenses of the Company’s
other power plants.
Merchant Power Sales

While the Company historically has not engaged in any merchant sales of power, the Company expects that
once the 10,250MW combined additional installed capacity from the Power Plant Projects has been
commissioned, 26% of the Company’s total installed megawatt capacity is expected to be sold pursuant to
merchant sales. Merchant sales are sales on a merchant basis pursuant to short-term or spot sales at
market rates in the open wholesale market. While long-term PPAs create greater stability of revenue
streams, merchant sales allow the Company to benefit from potentially higher market prices. Merchant
sales will create additional variability in the power business’s revenues. In addition, the price per unit
received for merchant sales will fluctuate due to a number of factors, including daily and hourly changes in
demand for electricity, instances of extreme peak energy demand, price and availability of fuel supply,
electric transmission availability and reliability within and between regions, procedures used to maintain
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the integrity of the overall electricity generation and transmission system during extreme conditions and
the number of generating units undergoing maintenance. In making capital expenditures to create
additional installed power generation capacity for merchant sales, the Company is assuming that the power
deficit in the regions of India served by the Power Plant Projects will continue in the long term. Should the
power deficit not continue as the Company expects, this could make it more difficult for the Company to
make merchant sales on profitable terms. The Company could experience seasonality in the level of its
revenues from merchant sales, especially during the monsoon season months of July to September, when
electricity demand generally decreases.
The amount of electricity that the Company will be able to generate and sell as merchant sales is
dependent on the availability and efficiency of the Company’s power plants. If the Company’s power plants
are not able to generate electricity efficiently, the Company’s operating expenses increase and the
Company may earn lower margins on merchant sales. In addition, merchant sales may not provide the
Company with the same level of protection for coverage of the fixed and variable costs involved in
generating power that the Company currently receives under some of its existing PPAs and other long-term
off-take agreements.
Gross Refining Margins

The Company’s oil and gas business’s results from its refinery operations are driven substantially by
realised gross refining margins. Gross refining margins generally represent the difference between realised
refined petroleum product prices and the prices for crude oil used to produce the refined petroleum
products. The cost to acquire crude oil and the price of refined petroleum products ultimately sold depend
on numerous factors beyond the Company’s control, including the supply of, and demand for, crude oil,
gasoline, diesel and other refined petroleum products, which, in turn, depend on, among other factors,
changes in global and regional economies, weather conditions, global and regional political affairs,
production levels, available refining capacity, availability of crude oil imports, the marketing of competitive
fuels, prevailing exchange rates and the extent of government regulation. Other factors affecting refining
margins include changes in the cost and availability of logistics services for crude oil (which is often
reflected directly in the cost of crude oil) and for refined petroleum products (the effect of which is likely
to be greater where transport distances are greater). See ‘‘Gross refining margin or GRM’’ in Part 2
‘‘Presentation of Financial and Other Information’’ for a description of how the Company calculates the
Vadinar refinery’s GRM.
The Company’s gross refining margins, and consequently its operating profits, are impacted significantly by
the benefit of sales tax incentives provided by the state of Gujarat with respect to sales of refined
petroleum products made in that state. For a discussion of the risks associated with these incentives, see
‘‘The Company enjoys significant tax incentives, which may not be available in the future, and is involved in
announced in February 2010 may have a material adverse effect on the Company’s results of operations.’’
in Part I ‘‘Risk Factors’’ and ‘‘Litigation—Dispute in relation to sales tax incentives’’ in Part 16 ‘‘Additional
Information’’. For further details of the tax incentives, see ‘‘—Sales Tax Incentives’’ below.
The following table shows the Vadinar refinery’s gross refining margin per barrel for the financial periods
indicated:
Eleven months ended Eight months ended Nine months ended

31 March 2009(1) 31 December 2008(1) 31 December 2009
GRM per barrel (including sales tax

incentive) . . . ...................... US$7.97 per bbl US$7.03 per bbl US$4.46 per bbl
GRM per barrel (excluding sales tax
incentive) . . . ...................... US$5.02 per bbl US$3.62 per bbl US$2.12 per bbl
(1) The Vadinar refinery commenced commercial operations on 1 May 2008. Therefore, GRMs are shown for eleven months and
eight months for year ended 31 March 2009 and the nine months ended 31 December 2008, respectively.
The Vadinar refinery’s gross refining margins have been impacted by changing mix of the refinery’s crude
oil throughput over the period under review. Processing heavy and tough crudes generally results in higher
gross refining margins. Therefore, the refinery’s ability to maintain and improve its gross refining margins
depends critically on its ability to maximise its use of lower-cost heavy and tough crude oils and to produce
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the optimal slate of higher value products demanded by the markets. The Phase I and Phase II Refinery
Projects are expected to improve the Vadinar refinery’s refining margins by increasing its weighted average
complexity from 6.1 to 12.8 as per the Company’s calculation. For a description of how the Company’s
Nelson Complexity Index calculations differ from the standard methodology, see ‘‘Nelson Complexity
Index’’ in Part 2 ‘‘Presentation of Financial and Other Information’’. This higher refinery complexity is
expected to enable the Vadinar refinery to use a wider range and percentage of low-cost, heavier and tough
crude oils than are currently being used to produce high-quality transport fuels and other value-added
petroleum products and thereby increase its gross refining margins. The following table shows the Vadinar
refinery’s crude oil throughput for the periods indicated:
Eleven months ended Eight months ended Nine months ended

31 March 2009(1) 31 December 2008(1) 31 December 2009
Light . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29% 29% 28%

Medium and Heavy . . . . . . . . . . . . . . . . . . . . 57% 56% 55%
Ultra-heavy . . . . . . . . . . . . . . . . . . . . . . . . . . 14% 15% 17%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100%
Total in KT . . . . . . . . . . . . . . . . . . . . . . . . . . 11,949 8,637 9,900
(1) The Vadinar refinery commenced commercial operations on 1 May 2008. Therefore, the throughput figures are for eleven and
eight months for the year ended 31 March 2009 and the nine months ended 31 December 2008, respectively.
Crude Oil Prices

Changes in crude oil prices significantly affect the Vadinar refinery’s gross refining margins. Crude oil costs
have historically been subject to wide fluctuations both between periods as well as within periods, as
indicated by the following table showing per-barrel WTI Futures Front month crude oil benchmark prices:
Nine months
1 May 2008 to 1 May 2008 to ended
31 March 2009 31 December 2008 31 December 2009
(US$)
High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147.27 147.27 82.00
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.40 32.40 43.83
Close (average) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.15 98.80 68.09
Source: Reuters
The Company’s gross refining margins and operating results are influenced by changes in the prices of
refined petroleum products and changes in crude oil prices. While the Vadinar refinery generally processes
crude oil within 20 to 30 days from the date of its purchase, any change in the price of crude oil will still
affect the cost of inventory, resulting in inventory gains or losses. For example, the steep decline in crude
oil prices in the second half of 2008, particularly in the fourth quarter of 2008 had a negative impact on the
Vadinar refinery’s gross refining margin, with the margin (including the sales tax incentive) decreasing
from US$8.90 per barrel in the quarter ending September 2008 to US$2.68 per barrel in the quarter ending
December 2008. This decrease was largely due to the accounting of inventory losses resulting from the
decline in crude oil prices during the fourth quarter coupled with lower refined petroleum product
margins.
The Company expects the Vadinar refinery’s gross refining margins to improve in 2010 from their levels in
2009, as the global demand for crude oil and refined petroleum products is projected to increase in
connection with the global economic revival. In India in particular, the Company expects that the strong
increase in auto vehicle sales in recent years will result in strong demand for refined petroleum products,
particularly motor spirit.
Hedging Activities
The Company’s oil and gas business engages in hedging or commodity price risk management activities in a
limited manner in relation to the price of crude oil and crack spreads. These activities are intended for risk
protection and not carried out for speculative purposes. These activities are carried out within regulatory
170

requirements. The Company currently has not applied hedge accounting under IFRS. Prior to the Vadinar
refinery’s commissioning of commercial production on 1 May 2008, gains and losses relating to commodity
derivatives were separately classified on the income statement under net loss on commodity derivatives,
net. Following commissioning, gains and losses relating to commodity derivatives are included on the
income statement under revenues for refined petroleum product derivative instruments and under the cost
of sales for crude derivatives.
Gains and losses on commodity derivative instruments have had a material effect on the Company’s results
of operations. The Company’s results were affected by losses on these instruments of US$10.9 million in
the year ended 31 March 2007, US$199.8 million in the year ended 31 March 2008 and US$61.2 million in
period from 1 April 2008 to 30 April 2008. In the period from 1 May 2008 to 31 March 2009, The Company
recorded gains of US$25.5 million on crude commodity derivatives instruments and of US$53.4 million on
refined petroleum product commodity derivatives.
In the period from 1 April 2009 to 31 December 2009, the Company recorded gains of US$16.6 million on
refined petroleum commodity derivatives and losses of US$56.6 million on crude oil commodity
derivatives.
For additional information about the Company’s commodity price risk management, see ‘‘—Quantitative
and Qualitative Disclosures About Market Risks—Commodity Price Risk’’.
Exchange Rates
The prices of the crude oil, feedstocks, natural gas and imported coal needed to run the Company’s power
operations and the Company’s production of refined petroleum products are generally denominated in or
tied to the US dollar, while most of the Company’s other operating expenses and revenues are
denominated in rupees. Therefore, the Company’s profitability will be affected by exchange rate
fluctuations to the Company’s aggregate US dollar-denominated expenses and revenues to the extent such
expenses and revenues do not match its rupee-denominated expenses and revenues. In its oil and gas
business, the Company currently hedges a portion of its foreign currency exposure. See ‘‘—Quantitative
and Qualitative Disclosures About Market Risks—Foreign Currency Risk’’.
Additionally, a substantial number of contracts for critical plant and equipment and the transportation
thereof into India for the Company’s Power Plant Projects are denominated in US dollars, and the
Company’s power operations in India are not expected to have any revenues in US dollars. Payments in
most of these contracts is in stages or on pre-determined dates in the future, and the Company has not
currently entered into any contractual arrangements to hedge the risks associated with the Indian Rupee
depreciating against the US dollar in relation to such contracts, which, in the event of unfavourable
currency movements, may significantly increase outflows and consequently the capital cost of the relevant
power projects.
In the oil and gas business the Company covers its exchange rate risks on a regular basis. As of
31 December 2009 out of Rs. 111.68 billion (US$2.39 billion) of liabilities in currencies other than the
rupee the Company had taken forward/option cover of Rs. 65.40 billion (US$1.40 billion) which included
capital credit.
Changes in the exchange rate of the rupee against other currencies in which the Company does business, in
particular, the US dollar, will affect the Company’s results of operations. For example, depreciation of the
rupee against the US dollar will significantly increase the rupee cost of the Company’s US dollar-
denominated or correlated payment obligations but will be partially offset by the Company’s US dollar-
denominated or correlated revenues. The exchange rate between the rupee and other major currencies has
fluctuated significantly in recent years. The Company faces exchange rate risks in particular in relation to
its revenues from sales of refined petroleum products to PSUs, which are received in rupees at import
parity rates of exchange against the US dollar that are reset at fortnightly or monthly intervals. When there
are rapid fluctuations in exchange rates, there may be a mismatch between the Company’s rupee-
denominated revenues and the rupee-equivalent cost of its US dollar-denominated expenditures on, in
particular, capital goods procured for its Expansion Projects. See ‘‘The Company is exposed to fluctuations
in exchange rates’’ in Part 1 ‘‘Risk Factors’’.
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The Company’s functional and presentational currency is the US dollar. Therefore, it also faces translation
risks to the extent that the assets, liabilities, revenues and expenses of its subsidiaries are denominated in
currencies other than the US dollar. In preparing the Company’s financial statements, the values of those
assets, liabilities, revenues and expenses are translated into US dollars at the applicable exchange rates.
Consequently, increases and decreases in the value of the US dollar against other currencies, in particular
the rupee, will affect the value of these items in the Company’s financial statements, even if their value has
not changed in their original currency. Changes in the exchange rate between the Indian rupee and the US
dollar have had a significant effect on the Company’s results of operations. The Indian rupee depreciated
against the US dollar by approximately 27.5% in the year ended 31 March 2009 and appreciated by
approximately 8% in the nine months ended 31 December 2009. Primarily as a result of these changes, the
Company experienced a loss of US$459.0 million for the year ended 31 March 2009 and a gain of
US$146.1 million for the nine months ended 31 December 2009 from currency exchange effects in
translating items to the Company’s functional currency.
Sales Tax Incentives

The Vadinar Refinery avails itself of certain sales tax incentives provided by the State of Gujarat pursuant
to which the Company believes it may retain sales tax collected on domestic sale of refined petroleum
products in the state of Gujarat up to an amount equal to 125% of the eligible fixed capital investment,
which is estimated to be Rs. 91 billion (US$1,949.4 million). The Company is required to repay the
retained sales tax to the state of Gujarat in six equal annual instalments from 2021/2022 or on the
exhaustion of the full eligible limit, whichever is earlier. The Company collected sales tax in the amount of
Rs.15.16 billion (US$330.3 million) and Rs.10.6 billion (US$221.3 million) under this scheme during the
periods from 1 May 2008 to 31 March 2009 and from 1 April 2009 to 31 December 2009, respectively. The
Company assigned its sales tax liability of US$551.6 million as of 31 December 2009 to Essar House, an
Essar Affiliated Company and paid the agreed assignment value of US$112.3 million to Essar House to
take on such liability. The Company remains ultimately liable for the payment of the sales tax liability to
the state of Gujarat in the event that Essar House does not make payments on the due dates. The
Company has accounted for the difference between the value of its sales tax liability (US$551.6 million)
and its present value (US$113.3 million) in the Company’s income statement under revenues under IFRS.
The Company believes that it is entitled to this treatment in view of a judgment given in its favour by the
High Court of Gujarat. However, the state government of Gujarat continues to assert that the Company is
not eligible to participate in the sales tax incentive scheme on the grounds that the Vadinar refinery did not
commence commercial production by 15 August 2003 and has challenged this ruling before the Supreme
Court of India and the matter is pending before the court. If the final decision of the Supreme Court were
to be adverse to the Company, the Company would be required to recognize the sales tax benefit as an
expense to the extent already considered as income, in its income statement, which was US$413.4 million,
net of unwinding of discounts and contribution to social welfare fund as of 31 December 2009. In addition
there may be other potential consequences associated with this, that may result in future interest cost. See
‘‘The Company enjoys significant tax incentives, which may not be available in the future, and is involved in
announced in February 2010 may have a material adverse effect on the Company’s results of operations’’ in
Part 1 ‘‘Risk Factors’’ and ‘‘Litigation—Dispute in relation to sales tax incentives’’ in Part 16 ‘‘Additional
Information’’.
Income Tax Benefits

Some of the Company’s operational power plants are, and some of the Power Plant Projects are expected
to be, entitled to certain tax benefits under the Indian Income Tax Act, 1961. For example, with respect to
the computation of total income for Indian tax purposes, these plants and projects are entitled to a
deduction of 100% of profits derived from the generation, distribution or transmission of power for any ten
consecutive tax assessment years out of 15 years beginning in the year in which the relevant plant begins
generating, transmitting or distributing power, provided that such date is prior to 31 March 2011. The
Essar Power-Hazira power plant’s benefit under this exemption expired in the year ended 31 March 2007.
The Company’s oil and gas business also benefits from a 100% exemption from Indian income taxes on the
Vadinar refinery’s profits for the period from 1 April 2008 to 31 March 2015. To date, Essar Oil has not
made any claim under the tax holiday, as it has incurred tax losses. The availability of this seven-year
income tax holiday was recently extended to all refineries that commence operations by 31 March 2012.
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DESCRIPTION OF KEY LINE ITEMS

Revenues
In the power business, revenues include revenues received under PPAs and other off-take agreements.
In the oil and gas business, revenues include revenues from sales of refined and traded petroleum products
(net of trade discounts), income arising from sales tax incentives and, following commencement of the
Vadinar refinery’s commercial operations on 1 May 2008, gains or losses on instruments hedging the risk of
movements in refined petroleum product prices.
Cost of Sales
In the power business, cost of sales includes primarily:
• fuel costs, including gas and naphtha, to the extent that fuel is not provided by off-take customers;
• wages and salaries of plant personnel;
• operating and maintenance expenses;
• depreciation of power plant assets; and
• consumption of stores and spares.
In the oil and gas business, cost of sales includes primarily:
• cost of crude oil and chemicals and catalysts;
• power, water and fuel costs;
• changes in inventories of finished and intermediate products;
• cost of traded refined petroleum products;
• consumption of stores and spares;
• following commencement of the Vadinar refinery’s commercial operations on 1 May 2008, gains and
losses on commodity derivatives for hedging the risk of movements in crude oil prices;
• operating expenses;
• salaries and wages of operational personnel; and
• depreciation of refinery and exploration and production assets.
Other Operating Income

Other operating income includes primarily profits on sale of investments, operational and maintenance
income of power plants, port terminal income, income from technical services and other miscellaneous
income.
Selling and Distribution Expenses

Selling and distribution expenses are incurred only by the oil and gas business and include:
• handling charges for refined petroleum products, including tankage, terminalling and transportation
costs;
• brokerage and sales commissions, including commissions paid to retail petrol station franchisees;
• wharfage charges on sales;
• lease payments to franchisees and return on investment made by franchisees; and
• wages and salaries paid to sales and marketing personnel.
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General and Administrative Expenses

General and administrative expenses include primarily rents, rates and taxes; insurance premiums;
professional and advisory fees; travelling expenses; IT expenses, contributions to the state of Gujarat
welfare scheme, wages and salaries paid to corporate and administrative personnel; and depreciation
related to the administrative offices, including office and IT equipment.
Net Loss on Commodity Derivatives

Net losses on commodity derivatives include net losses on crude and refined product hedges during the
trial run period for the Vadinar refinery, which ended on 30 April 2008.
Net Finance Costs

Finance costs include primarily interest on term borrowings, debentures and working capital borrowings;
finance lease cost and other finance charges, net of borrowing costs capitalised.
Finance income mainly comprises of interest from bank deposits.
Other Gains/(Losses)
Other gains/(losses) primarily comprise the consequences of exchange rate movements between the date of
foreign currency transactions or opening exchange rates at beginning of the year and settlement of
transactions or year-end exchange rate in respect of monetary items. During the period under review,
currency exchange differences have related mostly to the oil and gas business. In addition other gains/
(losses) in the nine month period ended 31 December 2009, includes the surplus arising on the acquisition
of joint controlled entities.
174

RESULTS OF OPERATIONS
The following table sets forth the Company’s results of operations for the periods indicated:
Nine months ended

2007 2008 2009 2008(1) 2009
(US$ in million)
Continuing Operations
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202.7 372.3 8,453.1 7,083.9 5,654.6
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.8 232.5 260.5 192.3 196.9
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95.9 139.8 8,192.6 6,891.6 5,457.7
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (162.7) (297.4) (7,771.4) (6,658.0) (5,332.2)
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67.5) (149.7) (153.4) (114.3) (101.6)
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (95.2) (147.7) (7,618.0) (6,543.7) (5,230.6)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 74.9 681.7 425.9 322.4
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.3 82.8 107.1 78.0 95.3
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7 (7.9) 574.6 347.9 227.1
Other Operating Income . . . . . . . . . . . . . . . . . . . . . . 2.4 3.5 11.4 5.7 11.8
Selling and distribution expenses(2) . . . . . . . . . . . . . . . (6.4) (1.9) (76.7) (61.6) (61.6)
General and administration expenses . . . . . . . . . . . . . (35.6) (64.7) (81.2) (51.3) (75.5)
Net loss on commodity derivatives(2) . . . . . . . . . . . . . . (10.9) (199.8) (61.2) (62.9) —
(Loss)/Profit before net finance cost and other gains/
(losses) . . . . . . . ......................... . (10.5) (188.0) 474.0 255.8 197.1
Net finance costs . . ......................... . (50.7) (44.9) (259.7) (191.6) (215.7)
Power . . . . . . . . ......................... . (20.6) (45.1) (47.7) (32.4) (37.4)
Oil and gas . . . . ......................... . (30.1) 0.2 (212.0) (159.2) (178.3)
Other gains/(losses) ......................... . 34.7 114.5 (459.0) (447.3) 165.9
(Loss)/Profit before tax . . . . . . . . . . . . . . . . . . . . . . . (26.5) (118.4) (244.7) (383.1) 147.3
Power . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . 13.6 26.0 52.7 39.6 54.7
Oil and gas . . . . ... . . . . . . . . . . . . . . . . . . . . . . . (40.1) (144.4) (297.4) (422.7) 92.6
Current tax . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . (0.2) (0.1) (2.4) (2.2) (2.6)
Deferred tax . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . 1.1 33.6 80.1 131.2 (25.0)
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 33.5 77.7 129.0 (27.6)
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.2) (10.9) (8.9) (6.5) (11.3)
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 44.4 86.6 135.5 (16.3)
(Loss)/Profit after tax . . . . . . . . . . . . . . . . . . . . . . . . (25.6) (84.9) (167.0) (254.1) 119.7
Attributable to:
Equity holders of the parent . . . . . . . . . . . . . . . . . . . (28.0) (70.6) (133.4) (197.4) 88.8
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 (14.3) (33.6) (56.7) 30.9
(1) Unaudited.
(2) Incurred only in the oil and gas business.
175

The following table shows certain line items from the income statement as a percentage of revenues for the
periods indicated:
Nine months
ended
2007 2008 2009 2008(1) 2009
(as a percentage of revenues)
Gross profit margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.7% 20.1% 8.1% 6.0% 5.7%
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.8% 35.6% 41.1% 40.6% 48.4%
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7% (5.7%) 7.0% 5.0% 4.2%
Selling and distribution expenses(2) . . . . . . . . . . . . . . . . . (3.2)% (0.5)% (0.9)% (0.9)% (1.1)%
General and administration expenses . . . . . . . . . . . . . . . (17.6)% (17.4)% (1.0)% (0.7)% (1.3)%
Net finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25.0)% (12.1)% (3.1)% (2.7)% (3.8)%
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19.3)% (19.4)% (18.3)% (16.8)% (19.0)%
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31.4)% 0.1% (2.6)% (2.3)% (3.3)%
(Loss)/Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . (13.1)% (31.8)% (2.9)% (5.4)% 2.6%
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.7% 11.2% 20.2% 20.6% 27.8%
Oil and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41.8)% (103.3)% (3.6)% (6.1)% 1.7%
(1) Unaudited.
(2) Incurred only in the oil and gas business.
The following table provides certain operational data for the periods indicated:
Nine months
ended
2007 2008 2009 2008 2009(1)
Power business(2)
Essar Power sales in MKWh . . . . . . . . . . . . . . . . . . . . . . . . . . 1,877 3,498 2,891 2,178 2,012
Bhander Power sales in MKWh . . . . . . . . . . . . . . . . . . . . . . . 1,298 1,786 1,850 1,394 1,724
Total (in MKWh) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,175 5,284 4,741 3,572 3,736
Oil and gas business(3)
Crude processed following commissioning of the Vadinar
refinery on 1 May 2008 (in MMT) . . . . . . . . . . . . . . . . . . . . — — 12.0 8.64 9.9
Refined petroleum products sold following commissioning of
the Vadinar refinery on 1 May 2008 (in MMT) . . . . . . . . . . . — — 11.3 8.18 9.26
Gross refining margin (including sales tax incentive) per barrel
in US$ following commissioning of Vadinar refinery on
1 May 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 7.97 7.03 4.46
Gross refining margin per barrel (excluding sales tax incentive)
in US$ following commissioning of Vadinar refinery on
1 May 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 5.02 3.62 2.12
(1) The Vadinar refinery was shut down for 18 days in April 2009 for a planned maintenance turnaround.
(2) Both Essar Power and Bhander Power were acquired on 30 September 2006. Figures exclude Vadinar Power-Jamnagar because
the power it generates is used in the Vadinar refinery’s operations.
(3) The crude oil and other expenses incurred during the Vadinar refinery’s trial runs as well as the proceeds received from sales of
refined petroleum products produced in these trial runs were capitalised until the refinery commenced commercial operations
on 1 May 2008. Therefore, the data in the table does not include data for the trial runs.
176

Results of Operations for the Nine Months Ended 31 December 2008 and 2009
Revenues
The Company’s revenues decreased from US$7,083.9 million in the nine months ended 31 December 2008
to US$5,654.6 million in the nine months ended 31 December 2009.
The power business’s revenues increased from US$192.3 million in the nine months ended 31 December
2008 to US$196.9 million in the nine months ended 31 December 2009. The increase was primarily due to
full period of operations of the third, 145-MW unit of the Bhander Power-Hazira plant, which was
commissioned on 7 October 2008, and commissioning of Essar Power (Canada) on 13 June 2009, partially
offset by lower sales to GUVNL from the Essar-Power Hazira plant.
The oil and gas business’s revenues decreased from US$6,891.6 million in the nine months ended
31 December 2008 to US$5,457.7 million in the nine months ended 31 December 2009. The decrease was
primarily due to a decrease in average sales prices of refined petroleum products by US$ 269.4/MT from
US$ 835.2/MT for the nine months ended 31 December 2008 to US$565.8/MT for the nine months ended
31 December 2009 largely due to downward pricing pressure on refined petroleum products resulting from
the effects of lower crude prices, despite an increase in overall sales volumes from 8.1 mmt to 9.6 mmt,
respectively.
Cost of Sales
The Company’s cost of sales decreased from US$6,658.0 million in the nine months ended 31 December
2008 to US$5,332.2 million in the nine months ended 31 December 2009.
The power business’s cost of sales decreased from US$114.3 million in the nine months ended
31 December 2008 to US$101.6 million in the nine months ended 31 December 2009. The decrease was
primarily due to a decrease in power supplied to GUVNL from Essar-Power Hazira, which was partly
offset by an increase in cost of sales due to full period operations of the third 145-MW unit of the Bhander
Power-Hazira plant and commissioning of the Essar Power (Canada) plant in June 2009. As a percentage
of revenues, cost of sales was 59.4% and 51.6% in the nine months ended 31 December 2008 and 2009,
respectively. The lower percentage in the nine months ended 31 December 2009 was primarily due to the
decrease in revenues from GUVNL at the Essar Power-Hazira plant.
The oil and gas business’s cost of sales decreased from US$6,543.7 million in the nine months ended
31 December 2008 to US$5,230.6 million in the nine months ended 31 December 2009. The decrease was
primarily due to a decrease in raw material cost, predominantly crude oil costs, during the nine months
ended 31 December 2008. Average raw material costs during the nine months ended 31 December 2008
was USD$708.55/MT compared to US$486.51/MT during the nine months ended 31 December 2009. As a
percentage of revenues, cost of sales was 95.0% and 95.8% in the nine months ended 31 December 2008
and 2009, respectively. The higher percentage in the nine months ended 31 December 2009 was primarily
due to the prices for refined products decreasing at a greater rate than the decrease in the cost of crude oil.
Gross Profit
Largely due to the factors discussed above:
• The Company’s gross profit decreased from US$425.9 million in the nine months ended 31 December
2008 to US$322.4 million in the nine months ended 31 December 2009;
• the power business’s gross profit increased from US$78.0 million in the nine months ended
31 December 2008 to US$95.3 million in the nine months ended 31 December 2009; and
• the oil and gas business’s gross profit margin decreased from US$347.9 million in the nine months
ended 31 December 2008 to US$227.1 million in the nine months ended 31 December 2009.

The Company’s other income increased from US$5.7 million in the nine months ended 31 December 2008
to US$11.8 million in the nine months ended 31 December 2009.
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The Company’s oil and gas business’s selling and distribution expenses were US$61.6 million for both the
nine months ended 31 December 2008 and the nine months ended 31 December 2009. As a percentage of
revenues, selling and distribution expenses were 0.9% and 1.1% in the nine months ended 31 December
2008 and 2009, respectively. The higher percentage in the nine months ended 31 December 2009 was
primarily due to selling and distribution expenses incurred on sales of refined petroleum products
produced during trial runs of the Vadinar refinery in the amount of US$3.5 million being capitalised prior
to the commencement of commercial production of the Vadinar refinery on 1 May 2008 and only the
expenses related to traded refined petroleum products being recorded under the selling and distribution
expenses on the income statement during the period from 1 April 2008 to 30 April 2008.
General and Administration Expenses

The Company’s general and administration expenses increased from US$51.3 million in the nine months
ended 31 December 2008 to US$75.5 million in the nine months ended 31 December 2009. The increase
was primarily due to higher provisions recorded for the welfare scheme in the state of Gujarat in
pursuance of the sales tax incentives scheme, professional fees, insurance expenses as well as repair and
maintenance expenses related to the planned 19-day maintenance shut-down of the Vadinar refinery. As a
percentage of revenues, general and administrative expenses were 0.7% and 1.3% in the nine months
ended 31 December 2008 and 2009, respectively. The higher percentage in the nine months ended
31 December 2009 was primarily due to an increase in expenses coupled with a decrease in average sales
prices in the oil and gas business during nine months ended 31 December 2009.

Net loss on commodity derivatives for the nine months ended 31 December 2008 was US$62.9 million
compared to nil for the nine months ended 31 December 2009. Prior to the start of commercial production
of the Vadinar Refinery, gains and losses relating to commodity derivative instruments are separately
classified on the income statement under ‘‘loss on commodity derivative instruments, net’’. Post
commissioning such gains and losses relating to commodity derivative instruments are included in the sale
of refined petroleum products in the case of product derivative instruments and in the cost of sales for
crude derivative instruments.
Accordingly, gains of US$28.6 million and US$16.6 million were included in sales revenue during the
period ended 31 December 2008 and 31 December 2009 respectively and gains of US$17.9 million and
losses of US$56.6 million were included in cost of sales during the period ended 31 December 2008 and
31 December 2009, respectively.
(Loss)/Profit before net finance cost and other gains/(losses)

Largely due to the factors discussed above, the Company’s (loss)/profit before net finance cost and other
gains/(losses) decreased from US$255.8 million in the nine months ended 31 December 2008 to
US$197.1 million in the nine months ended 31 December 2009.
Net Finance Cost

The Company’s net finance cost increased from US$ 191.6 million in the nine months ended 31 December
2008 to US$215.7 million in the nine months ended 31 December 2009. The increase was primarily due to
higher interest expenses and higher bank charges in the nine months ended 31 December 2009 and also
due to a full period of interest on borrowings related to the third unit of the Bhander Power-Hazira plant
and the commissioning of the Essar Power (Canada) plant on 13 June 2009.
The Company recognised other losses of US$447.3 million in the nine months ended 31 December 2008
and other gains of US$165.9 million in the nine months ended 31 December 2009. Foreign currency loses
were US$447.3 million in the nine months ended 31 December 2008 compared to foreign currency gains of
US$146.1 million in the nine months ended 31 December 2009. The net negative effect in the nine months
ended 31 December 2008 largely reflected the depreciation of the rupee against the US dollar in that
period. The net positive effect in the nine months ended 31 December 2009 largely reflected the 8.4%
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appreciation of the rupee against the US dollar in that period. During the nine months ended
31 December 2009, the oil and gas business acquired a 50% interest in Kenya Petroleum Refinery and
accounted for US$19.1 million as a surplus arising on acquisition.
(Loss)/Profit Before Tax

• The Company’s profit/loss before tax increased from a loss of US$383.1 million in the nine months
ended 31 December 2008 to a profit of US$147.3 million in the nine months ended 31 December
2009;
• the power business had a profit before tax of US$39.6 million in the nine months ended 31 December
2008 compared to US$54.7 million in the nine months ended 31 December 2009; and
• the oil and gas business had a loss before tax of US$422.7 million in the nine months ended
31 December 2008 compared to a profit before tax of US$92.6 million in the nine months ended
31 December 2009.
Tax
The Company recognised an income tax benefit of US$129.0 million and an income tax expense of
US$27.6 million in the nine months ended 31 December 2008 and 2009, respectively. The income tax
benefit in the nine months ended 31 December 2008 was primarily due to the loss before tax in that period.
The income tax expense in the nine month ended 31 December 2009 was primarily due to the profit before
tax in that period. The Company’s effective tax rate was 33.7% and 18.7% in the nine months ended
31 December 2008 and 2009, respectively. These effective tax rates reflect the lack of tax benefits in the oil
and gas business given the historical lack of profits in that business. Under Indian tax laws, there is no
consolidation for offsetting revenues and profits of one subsidiary against those of another subsidiary;
therefore, the tax losses of the Company’s Indian subsidiaries may not be used to offset the taxable profits
of other the Company Indian subsidiaries.
(Loss)/Profit After Tax

Largely due to the factors discussed above, the Company’s loss after tax was US$254.1 million in the nine
months ended 31 December 2008 and the Company’s profit after tax was US$119.7 million in the nine
months ended 31 December 2009.
Results of Operations for the Years Ended 31 March 2007, 2008 and 2009
Revenues
The Company’s revenues increased from US$202.7 million in the year ended 31 March 2007 to
US$372.3 million in the year ended 31 March 2008 and to US$8,453.1 million in the year ended 31 March
2009.
The power business’s revenues increased from US$106.8 million in the year ended 31 March 2007 to
US$232.5 million in the year ended 31 March 2008 and to US$260.5 million in the year ended 31 March
2009. The increase in the year ended 31 March 2008 compared to the year ended 31 March 2007 was
primarily due to:
• an increase in revenues of approximately US$69.0 million from the full-year of results of the Essar
Power plant, which was acquired in September 2006;
• an approximately US$19.0 million increase in variable charges received by Essar Power from GUVNL
largely due to higher power supply; and
• an increase in revenues of approximately US$18.0 million from the full year of results of the first,
155-MW unit of Bhander Power-Hazira plant, which was acquired in September 2006 and from the
commissioning of the second, 200-MW unit of the Bhander Power-Hazira plant in December 2007.
179

The increase in revenues in the year ended 31 March 2009 compared to the year ended 31 March 2008 was
primarily due to:
• an increase in revenues of approximately US$24 million due to the commissioning of the third,
145-MW unit of the Bhander Power-Hazira plant on 7 October 2008 and full year operation of the
second, 200-MW unit of the Bhander Power-Hazira plant;
• approximately US$26 million net increase in variable charges received by Essar Power from GUVNL
from the pass-through of higher charges, primarily higher average fuel costs;
• partially offset by the depreciation of the Indian rupee against the US dollar.
The oil and gas business’s revenues increased from US$95.9 million in the year ended 31 March 2007 to
2009. The increase in the year ended 31 March 2008 was primarily due to an increase in traded petroleum
products sales volume from 106,188 MT to 147,218 MT largely as a result of higher sales to the Group’s
retail petrol stations, as well as higher prices following on from the increase in crude oil prices. Although
the Vadinar refinery produced significant quantities of refined petroleum products during its trial runs,
which took place from November 2006 until 30 April 2008 and during which construction of the remaining
units was occurring in parallel. Revenues generated on products produced during these trial runs in the
amount of Rs. 213,161.1 million (US$5,152.6 million calculated at 41.37 Rs:1 USD, being the average
exchange rate for the period 24 November 2006 to 30 April 2008) were capitalised after adjusting for the
cost of raw materials and other related operating expenses. The increase in revenues in the year ended
31 March 2009 was primarily due to the Vadinar refinery’s commencement of commercial production on
1 May 2008. Refined petroleum prices followed the trend in crude oil prices in that year, increasing
significantly from April 2008 to June 2008 and then decreasing significantly thereafter until December
2008. In addition, the oil and gas business recorded income of US$264.6 million under revenues in the year
ended 31 March 2009 in relation to the fair value of the sales tax incentive of US$330.3 million as of
31 March 2009. In the year ended 31 March 2009, the Company also recorded a gain on commodity
hedging instruments for refined petroleum products of US$53.4 million.
Cost of Sales
The Company’s cost of sales increased from US$162.7 million in the year ended 31 March 2007 to
2009.
The power business’s cost of sales increased from US$67.5 million in the year ended 31 March 2007 to
2009. The increase in the year ended 31 March 2008 was largely due to the first full-year results of the first,
155-MW unit of the Bhander Power plant and of the Essar Power-Hazira power plant, both of which were
acquired in September 2006, and the commissioning of the second, 200-MW unit of Bhander Power-Hazira
plant in December 2007. These factors largely resulted in gas consumption increasing from 8.7 million
mmBTU to 15.6 million mmBTU. The increase in the year ended 31 March 2009 was primarily due to
per-unit fuel costs increasing from Rs. 269/mmBTU to Rs. 415/mmBTU as well as the first full year of
operations of the second, 200-MW unit and the commissioning in October 2008 of the third, 145-MW unit
of the Bhander Power-Hazira plant, partially offset by lower gas consumption at the first unit of the Essar
Power-Hazira plant as a result of a decrease in power supply to GUVNL. Cost of sales as a percentage of
revenues in the power business increased from 63.2% in the year ended 31 March 2007 to 64.4% in the
year ended 31 March 2008 and decreased to 58.9% in the year ended 31 March 2009, primarily due to
higher costs of fuel and lower sales to GUVNL, respectively.
The oil and gas business’s cost of sales increased from US$95.2 million in the year ended 31 March 2007, to
2009. The increase in the year ended 31 March 2008 was primarily due to an increase in the volume of
traded refined petroleum products sold to retail petrol stations. In the year ended 31 March 2008, the
Company sold 145,217 MT compared to 105,188 MT in the year ended 31 March 2007. Cost of sales as a
percentage of revenues increased from 99.3% in the year ended 31 March 2007 to 105.7% in the year
ended 31 March 2008. This increase was primarily due to per-unit cost of traded petroleum products
increasing at a higher rate than the prices realised on their sales, largely due to pricing pressures from the
subsidized prices offered by the Indian national oil companies. The increase in cost of sales in the year
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ended 31 March 2009 was primarily due to an increase in sales volume following the Vadinar refinery’s
commencement of commercial production on 1 May 2008.
General wage inflation, which has averaged around 10% year-on-year, as well as additional headcount and
bonuses paid in connection with the commissioning of the Vadinar refinery and second and third units of
the Bhander Power-Hazira plant have also driven the year-to-year increases in costs of sales.
Gross Profit
• The Company’s gross profit increased from US$40.0 million in the year ended 31 March 2007 to
2009;
• the power business’s gross profit decreased from 36.8% in the year ended 31 March 2007 to 35.6% in
the year ended 31 March 2008 and to 41.1% in the year ended 31 March 2009; and
• the oil and gas business’s gross profit margin decreased from profit of 0.7% in the year ended
31 March 2007 to (5.7)% in the year ended 31 March 2008 and increased to a profit of 7.0% in the
year ended 31 March 2009.

The Company’s other income increased from US$2.4 million in the year ended 31 March 2007 to
US$3.5 million in the year ended 31 March 2008 and to US$11.4 million in the year ended 31 March 2009.
In the oil and gas business, other income for the years ended 31 March 2007 and 31 March 2008 was
capitalised because the Vadinar refinery was under project stage and accordingly was lower than expected
in the profit and loss account. However, in the year 2008-2009, other income post commencement of
commercial production from May 2008 was considered in the profit and loss account resulting in higher
income.

The Company’s oil and gas business’s selling and distribution expenses decreased from US$6.4 million in
the year ended 31 March 2007 to US$1.9 million in the year ended 31 March 2008 and increased to
US$76.7 million in the year ended 31 March 2009. Prior to the commissioning of the Vadinar refinery on
1 May 2008, selling and distribution expenses incurred on sales of refined petroleum products produced
during trial runs of the Vadinar refinery in the amount of US$3.5 million were capitalised and only the
expenses related to traded refined petroleum products were recorded under selling and distribution
expenses on the income statement. Once the Vadinar refinery was commissioned, all selling and
distribution expenses related to the Vadinar refinery’s production were recorded under selling and
distribution expenses on the income statement.
General and Administration Expenses

The Company’s general and administration expenses increased from US$35.6 million in the year ended
31 March 2007 to US$64.7 million in the year ended 31 March 2008 and to US$81.2 million in the year
ended 31 March 2009. The increase in the year ended 31 March 2008 was primarily due to the first-full
year of results of the Essar Oil in that year, following its acquisition in June 2006. In addition, the
Company incurred additional expenses of $3.0 million in the exploration and production segment. The
increase in the year ended 31 March 2009 was largely due to the provisions relating to contributions to the
state of Gujarat welfare scheme and additional expenses of $9.91 million in the exploration and production
segment.

Net loss on commodity derivatives, during the Vadinar refinery’s trial runs was US$10.9 million in the year
ended 31 March 2007, US$199.8 million in the year ended 31 March 2008 and US$61.2 million in the year
ended 31 March 2009. Prior to the start of commercial production of the Vadinar refinery, gains and losses
relating to commodity derivatives were separately classified on the income statement under ‘‘loss on
commodity derivative instruments, net’’. Post commissioning such gains and losses relating to commodity
181

derivative instruments are included in the sale of refined petroleum products in the case of product
derivative instruments and in the cost of sales for crude derivative instruments. Accordingly, gains of
US$53.4 million, US$28.6 million and US$16.6 million were included in sales revenue during the years/
periods ended 31 March 2009, 31 December 2008 and 31 December 2009, respectively, and gains of
US$25.5 million, US$17.9 million and a loss of US$56.6 million were included in cost of sales during the
years/periods ended 31 March 2009, 31 December 2008 and 31 December 2009, respectively.
(Loss)/Profit Before Net Finance Cost and Other Gains/(losses)

Largely due to the factors discussed above, the Company had a (loss)/profit before net finance cost and
other gains/(losses) of US$10.5 million in the year ended 31 March 2007 and of US$188.0 million in the
year ended 31 March 2008 and a (loss)/profit before net finance cost and other gains/(losses) of
US$474.0 million in the year ended 31 March 2009.
Net Finance Costs

The Company’s net finance costs decreased from US$50.7 million in the year ended 31 March 2007 to
US$44.9 million in the year ended 31 March 2008 and increased to US$259.7 million in the year ended
31 March 2009. In the oil and gas business, net finance expense for the years ended 31 March 2007 and
31 March 2008 were capitalised because the Vadinar refinery was under construction and accordingly were
lower than expected in the profit and loss account. However, in the year 2008/09, net finance expense post
commencement of commercial production from May 2008 was considered in the profit and loss account
resulting in higher finance expenses. In the year ended 31 March 2008, gross interest charges were
US$304.0 million, of which US$260.1 million were capitalised, compared to US$253.3 million of which
US$40.1 million were capitalised, respectively, in the year ended 31 March 2009. The higher gross interest
charges and higher capitalised interest expenses in the year ended 31 March 2008 were primarily due to
higher amounts borrowed in that year for capital works in progress. Net borrowings were
US$2,557.6 million, US$3,097.7 million and US$2,447.6 million as of 31 March 2007, 2008 and 2009,
respectively.
The Company recognised other gains of US$34.7 million and US$114.4 million in the years ended
31 March 2007 and 2008, respectively, compared to other losses of US$459.0 million in the year ended
31 March 2009. These gains and losses related to currency exchange differences. The gains in the year
ended 31 March 2008 largely reflected the 8.4% appreciation of the rupee against the US dollar in that
year. The negative effect in the year ended 31 March 2009 largely reflected the 27.5% depreciation of the
rupee against the US dollar in that year.
(Loss)/Profit Before Tax

• the Company had a loss before tax of US$26.5 million in the year ended 31 March 2007, of
US$118.4 million in the year ended 31 March 2008 and of US$244.7 million in the year ended
31 March 2009;
• the power business’s profit before tax increased from US$13.6 million in the year ended 31 March
2007 to US$26.0 million in the year ended 31 March 2008 and US$52.7 in the year ended 31 March
2009; and
• the oil and gas business’s loss before tax increased from US$40.1 million in the year ended 31 March
2007 to US$144.4 million in the year ended 31 March 2008 and US$297.4 million in the year ended
31 March 2009.
Income Tax
The Company recognised income tax benefits of US$0.9 million, US$33.5 million and US$77.7 million in
the years ended 31 March 2007, 2008 and 2009, respectively. Essar Energy’s effective tax rate was 3.4%,
28.3% and 31.8%, respectively.
182

The tax rate for 2007 was lower in comparison to other periods as a result of losses incurred where a
deferred tax asset was not created because it was not probable that the losses would be utilised. In 2008
and 2009, the effective rate increased as a result of profits being generated.
(Loss)/profit After Tax

Largely due to the factors discussed above, the Company’s loss after tax was US$25.6 million,
US$84.9 million and US$167.0 million in the years ended 31 March 2007, 2008 and 2009 respectively.
LIQUIDITY AND CASH FLOWS

Overview
The Company’s power generation and oil and gas businesses are capital intensive. To date, the Company
has funded its power expansion and oil and gas projects through borrowings, equity issuances and surplus
cash from operations. The Company’s Expansion Projects will require substantial capital expenditures,
which the Company expects to fund through a combination of the net proceeds of the Offer, additional
debt and equity financing and increasingly from surplus operating cash flows as the projects are completed
over the next few years.
The following table summarises the Company’s cashflows for the periods indicated:
Nine months
ended
2007 2008 2009 2008(1) 2009
(US$ in million)
Net cash generated/(used) in operating activities . . . . . . . (47.7) (126.5) 350.1 229.6 164.2
Net cash used in investing activities . . . . . . . . . . . . . . . . . (1,289.3) (589.6) (498.2) (413.4) (556.9)
Net cash provided by financing activities . . . . . . . . . . . . . 1,367.1 772.2 97.9 89.7 392.6
Net increase/(decrease) in cash and cash equivalents . . . . 30.1 56.1 (50.2) (94.1) (0.1)
Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 4.1 12.3 6.6 8.9
Cash and cash equivalents at beginning of period . . . . . . . — 40.3 100.5 100.5 62.6
Cash and cash equivalents at end of period . . . . . . . . . . . 40.3 100.5 62.6 13.0 71.4
(1) Unaudited
Nine Months Ended 31 December 2008 and 2009

Cash Flows From Operating Activities
Operating activities generated net cash of US$229.6 million and US$164.2 million in the nine months
ended 31 December 2008 and 2009, respectively. The lower net cash generated by operating activities in
the nine months ended 31 December 2009 was largely due to:
• in the power business, net cash generated by operating activities was US$32.8 million and
US$82.9 million in the nine months ended 31 December 2008 and 2009, respectively, and related
primarily to higher profits and increase in trade and other payables;
• in the oil and gas business, net cash generated by operating activities was US$196.8 million and
US$81.3 million in the nine months ended 31 December 2008 and 2009, respectively. The net loss
during the period ended 31 December 2008 was US$422.7 million as compared to a net profit of
US$92.6 million for the period ended 31 December 2009. After adjustments for non-cash currency
losses, depreciation and amortisation and other non-cash items, and net finance expenses, the oil and
gas business recorded a net cash inflow from operating activities before working capital changes of
US$312.4 million for the period ended 31 December 2008 and US$130.1 million for the period ended
31 December 2009; and
• working capital related changes and income tax payment charges resulted in cash outflow of
US$115.6 million in December 2008 as against cash outflows of US$48.8 million in December 2009.
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Cash Flows Used in Investing Activities

Net cash used in investing activities was US$413.4 million and US$556.9 million in the nine months ended
31 December 2008 and 2009, respectively.
During the period under review, investment activities relate primarily to additions to fixed assets and
capital work in progress related to the Vadinar refinery, the expansion of installed megawatt capacity and
investments in subsidiaries and associates and the expansion of exploration and production activities.
The movements in cash outlays for investing activities in the nine months period ended 31 December 2008
and 2009 primarily reflect:
• in the exploration and production segment, net cash outlays related to the exploration and production
activities were US$18.3 million and US$20.1 million in the nine months ended 31 December 2008 and
2009, respectively, and related primarily to exploration expenditure;
• in the power business, net cash used in investing activities was US$141.5 million and US$372.0 million
in the nine months ended 31 December 2008 and 2009, respectively, and related primarily to change
in fixed assets and capital working progress for projects and the acquisition of 50.1% interest in Essar
Power (Canada); and
• in the oil and gas business, net cash used in investing activities was US$253.6 million and
US$164.8 million in the nine months ended 31 December 2008 and 2009, respectively, and related
primarily to the refinery and refinery expansion project.
For more information about the Company’s historical capital expenditures, see ‘‘—Capital Expenditures—
Historical Capital Expenditures’’.
Cash Flows From Financing Activities

Net cash provided by financing activities was US$89.7 million and US$392.6 million in the nine months
ended 31 December 2008 and 2009 respectively. The movements in cash provided by financing activities
primarily reflect:
• In the nine months ended 31 December 2008, the power business received net proceeds from
financing activities in the amount of US$100.3 million, primarily reflecting US$130.7 million of net
proceeds received from the issuance of shares and share application money and US$89.5 million from
borrowings, offset by repayment of borrowings of US$90.8 million and interest payment in the amount
of US$29.1 million. In the nine months ended 31 December 2009, the power business received net
proceeds from financing activities in the amount of US$287.7 million, primarily reflecting
US$89.1 million of net proceeds received from the issuance of shares and share application money
and US$365.8 million from borrowings, offset by repayment of borrowings of US$92.7 million and
interest payment in the amount of US$74.5 million; and
• in the nine months ended 31 December 2008, the oil and gas business used net cash in financing
activities in the amount of US$10.6 million, primarily reflecting net proceeds in the amount of
US$107.8 million from Essar Oil’s issuance of global depositary shares and changes in the balance of
bills of exchange accepted in the amount of US$61.5 million, partially offset by interest payments of
US$119.9 million and net repayments of borrowings of US$60.0 million; in the nine months ended
31 December 2009, the oil and gas business received net proceeds from financing activities in the
amount of US$104.9 million, primarily reflecting net proceeds from borrowings of US$146.5 million
and changes in the balance of bills of exchange accepted of US$77.8 million, partially offset by interest
payments of US$104.3 million and payment of share application of US$15.1 million due to EEPSEAL
carve-out.
For more information about historical the Company’s indebtedness, see ‘‘—Indebtedness’’.
Years Ended 31 March 2007, 2008 and 2009

Cash Flows From Operating Activities
Operating activities generated net cash of US$350.1 million in the year ended 31 March 2009 compared
to net cash used in operating activities of US$47.7 million and US$126.5 million in the year ended
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31 March 2007 and 2008, respectively. The switch to positive cash generation from operating activities in
the year ended 31 March 2009 is largely attributable to the Vadinar refinery commencing commercial
operations on 1 May 2008. The power business also generated positive net cash flows from operating
activities in each of the years ended 31 March 2007, 2008 and 2009.
The higher net cash used in operating activities in the year ended 31 March 2008 compared to 31 March
2007 was largely due to:
• in the power business, net cash flows generated by operating activities were US$50.4 million and
US$68.9 million for the years ended 31 March 2007 and 2008, respectively. Net working capital
changes used cash of US$31.8 million in the year ended 31 March 2008 and were largely due to an
increase in trade and other receivables and other assets as a result of a dispute with GUVNL under its
PPA and payment of upfront finance charges to banks; and
• in the oil and gas business, net cash flows used in operating activities was US$98.1 million and
US$195.4 million for the years ended 31 March 2007 and 2008, respectively, and related primarily to
traded refined petroleum product operations. Key factors in the negative cash flow from operations in
these years include the sale of traded refined petroleum products below their cost, largely due to
pricing pressures from the subsidized prices offered by the Indian national oil companies.
The Company’s net cash generated by operating activities in the year ended 31 March 2009 compared to
the net cash used in operating activities in the year ended 31 March 2008 was primarily due to:
• cash flows generated by operating activities in the total amount of US$350.1 million in the year ended
31 March 2009 compared to cash flows used in operating activities of US$126.5 million in the year
ended 31 March 2008 following adjustments arising from non-cash currency losses, depreciation and
amortisation and net finance expenses;
• in the power business, net cash flows generated by operating activities was US$70.0 million for the
year ended 31 March 2009. There was a net negative movement in working capital and payment of
taxes of US$55.2 million. This change largely reflected a decrease in current liabilities on account of
payment to creditors and finance lease payment; and
• in the oil and gas business, net cash flows generated from operating activities were US$280.1 million
for the year ended 31 March 2009, primarily reflecting the gross refining margins generated by, and
the volume of production of, the Vadinar refinery, which commenced commercial production on
1 May 2008. After adjustments for non-cash currency losses, depreciation and amortisation and other
non-cash items, the oil and gas business recorded a net cash inflow from operating activities before
working capital changes of US$514.3 million in the year ended 31 March 2009. Changes in the level of
working capital and payment of taxes decreased operating cash flow to US$234.2 million in that year.
These changes included decreases in trade and other payables, including provisions and payment of
taxes, to US$349.1 million and an increase in receivables, advances and deposits to US$481.5 million,
partially offset by a decrease in the level of inventory by US$596.4 million.
Cash Flows Used in Investing Activities

Net cash used in investing activities was US$1,289.3 million, US$589.6 million and US$498.2 million in the
years ended 31 March 2007, 2008 and 2009, respectively.
The movements in cash outlays for investing activities in the years ended 31 March 2007, 2008 and 2009
primarily reflect:
• in the exploration and production segment, net cash outlays related to exploration and production
activities were US$23.1 million, US$56.3 million and US$18.1 million in the years ended 31 March
2007, 2008 and 2009, respectively;
• net cash used for the acquisition of subsidiaries and minority interests was US$740.2 million,
US$295.8 million and US$nil in the years ended 31 March 2007, 2008 and 2009, respectively. In the
year ended 31 March 2007, the power business’s acquisition of Essar Power Holdings Ltd. (‘‘EPH’’)
and other subsidiaries used cash of US$1.3 million and the oil and gas business’s acquisition of Essar
Vadinar Oil, including its shares in Essar Oil and Vadinar Power Company Limited (‘‘VPCL’’), and
other subsidiaries used net cash of US$738.9 million. In the year ended 31 March 2008, the oil and gas
185

business used cash of US$212.1 million for its acquisition of minority interests and the power business
used net cash of US$83.7 million for its acquisition of its initial 49.9% stake in Essar Power (Canada)
(formerly, Algoma Energy LLP);
• in the power business, cash outlays of US$47.5 million, US$168.3 million and US$223.0 million in the
years ended 31 March 2007, 2008 and 2009, respectively, related primarily to changes in fixed assets
and capital work-in-progress and purchases/sale of investments. In the year ended 31 March 2007, the
outlays related primarily to the construction of the second and third units of the Bhander Power-
Hazira plant and modification and upgrade capital expenditures for the Essar Power-Hazira plant. In
the year ended 31 March 2008, the outlays related primarily to construction of the second and third
units of the Bhander Power-Hazira plant, the Essar Power-Salaya project and the Essar Power
MP-Mahan plant. In the year ended 31 March 2009, the outlays related primarily to the construction
of the Essar Power (Canada) plant, the Essar Power MP-Mahan plant, the Essar Power-Salaya project
and the third unit of Bhander Power-Hazira plant; and
• the oil and gas business used net cash for purchases of property, plant and equipment of
US$477.8 million, US$68.7 million and US$257.1 million in the years ended 31 March 2007, 2008 and
2009, respectively. The higher cash outlays in the year ended 31 March 2007 compared to the prior
year related primarily to higher expenditures during the Vadinar refinery’s construction and trial runs.
The high cash outlays in the year ended 31 March 2009 compared to the prior year related primarily
to payments made in connection with the Refinery Expansion Projects, including purchases of land.
Cash Flows From Financing Activities

Net cash provided by financing activities was US$1,367.1 million, US$772.2 million and US$97.9 million in
the years ended 31 March 2007, 2008, 2009, respectively. The movements in cash provided by financing
activities primarily reflect:
• in year ended 31 March 2007, the power business received US$8.7 million net proceeds from financing
activities, primarily reflecting US$10.4 million of net proceeds received from the issuance of shares
and share application money and proceeds from borrowing in the amount of US$56.1 million, offset
by interest payments in the amount of US$20.1 million and the repayment of borrowings in the
amount of US$37.7 million. In year ended 31 March 2008, the power business received net proceeds
from financing activities in the amount of US$204.7 million, primarily reflecting net proceeds from
issuance of share application money in the amount of US$361.7 million and proceeds from borrowings
in the amount of US$64.1 million, partially offset by repayments of long-term bank borrowings,
including prepayment of a loan to Power Finance Corporation, in the amount of $167.2 million and
interest payments in the amount of US$53.9 million. In the year ended 31 March 2009, the power
business received net proceeds from financing activities in the amount of US$138.7 million, primarily
reflecting net proceeds from the issuance of shares and share application money in the amount of
US$143.7 million and proceeds from borrowings in the amount of US$152.5 million, partially offset by
repayments of borrowings, including a loan related to the third unit of the Bhander Power-Hazira
plant, in the amount of US$112.8 million and interest payments in the amount of US$44.7 million;
and
• in the year ended 31 March 2007, the oil and gas business received net proceeds from financing
activities in the amount of US$1,358.4 million, primarily reflecting net proceeds from borrowings in
the amount of US$1,258.0 million, net proceeds from the issuance of share capital in the amount of
US$183.4 million and changes in the balance of bills of exchange accepted of US$12.0 million partially
offset by interest payments in the amount of US$95.0 million. In the year ended 31 March 2008, the
oil and gas business received net proceeds from financing activities of US$567.5 million, primarily
reflecting net proceeds from long term borrowings in the amount of US$278.3 million and net
proceeds from the issuance of share capital in the amount of US$426.0 million, partially offset by a
change in the balance of bills of exchange accepted in the amount of US$11.2 million and by interest
payments of US$125.6 million. In the year ended 31 March 2009, the oil and gas business used net
cash from financing activities of US$40.8 million primarily reflecting net proceeds in the amount of
US$130.2 million from Essar Oil’s issuance of global depositary shares and changes in the balance of
bills of exchange accepted in the amount of US$197.6 million, partially offset by interest payments of
US$154.3 million and net repayments of borrowings of US$214.3 million. In accordance with the
186

terms of the Vadinar refinery’s project financing arrangements, the oil and gas business began making
quarterly interest payments under these arrangements from the quarter ended March 2008, which
largely resulted in the increased use of cash for interest payments during the year ended 31 March
2009.
CAPITAL EXPENDITURES
Historical Capital Expenditures
The following table provides an overview of the Company’s capital expenditures and other capital
investments for the periods indicated:
Nine months
ended
2007 2008 2009 2009
(US$ in million)
Power business
Construction of the Bhander Power-Hazira plant . . . . . . . . . . . . . 35.2 52.0 6.6 —
Construction of the Vadinar Power-Jamnagar power plant . . . . . . . 4.0 — 68.6 110.0
Essar Power MP-Mahan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 83.2 111.8 129.3
Essar Power Jharkhand-Tori . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.7 6.6 0.5
Essar Power Gujarat-Salaya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 14.2 123.0 176.1
Essar Power (Canada) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 33.2 49.6 43.3
Sustaining capital expenditures etc . . . . . . . . . . . . . . . . . . . . . . . . 12.6 11.2 3.2 22.1
Power business total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.8 194.5 369.4 481.3
Oil and gas business
Construction of the base Vadinar refinery . . . . . . . . . . . . . . . . . . . 375.8 445.3 (34.1) 16.1
Upgrades to the Vadinar refinery . . . . . . . . . . . . . . . . . . . . . . . . . 47.0 152.9 262.9 168.1
Other oil and gas business capital expenditures . . . . . . . . . . . . . . . 15.4 80.60 9.4 22.9
Oil and gas total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438.2 678.8 238.2 207.1
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490.0 873.3 607.6 688.4
Planned Capital Expenditures

For information regarding the expected capital expenditures that will need to be made to complete the
Company’s various expansion projects, see—‘‘Recent and Future Expansion of Operations—Funding
Costs for the Expansion Projects’’.
INDEBTEDNESS
Overview
The Company’s policy is generally to optimise borrowings at an operating company level within an
acceptable level of debt. The Company’s existing and future project financing arrangements are usually
secured by pledges and charges over substantially all of the assets to which the financing arrangements
relate, including the shares of significant subsidiaries of the Company. The Company’s target capital
structure by project is 75%:25% debt-to-equity ratio for power projects and 60%:40% debt-to-equity ratio
for refining projects. Equity funding for existing operations or new projects and acquisitions is raised
centrally, first from equity financing or operating cashflows and then from new group-level borrowings,
while retaining an acceptable level of debt for the consolidated the Company group. The Company’s policy
is to borrow using a mixture of long-term and short-term debt from both local and international financial
markets as well as multilateral organisations.
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Historical Indebtedness
The following table sets forth the Company’s financial indebtedness as of the dates indicated:
As of
As of 31 March 31 December
2007 2008 2009 2009
(US$ in million)
Non-convertible debentures . . . . . . . . . . . . . . . . . . . . . . . . . 254.5 159.8 105.8 104.2
Borrowings from banks and financial institutions . . . . . . . . . . 2,052.7 2,447.9 1,981.8 2,349.5
Cumulative redeemable preference . . . . . . . . . . . . . . . . . . . . — — 69.6 86.4
Working capital loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147.0 415.1 260.8 474.8
Loan from related parties . . . . . . . . . . . . . . . . . . . . . . . . . . 110.7 82.1 34.1 97.8
Total borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,564.9 3,104.9 2,452.1 3,112.7
Less: unamortized finance cost . . . . . . . . . . . . . . . . . . . . . . . (7.3) (7.2) (4.5) (3.7)
Net borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,557.6 3,097.7 2,447.6 3,109.0
Power business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529.2 495.8 440.8 773.1
Oil and gas business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,028.4 2,601.9 2,006.8 2,335.9
Less: payable within one year . . . . . . . . . . . . . . . . . . . . . . . . (385.4) (745.7) (581.5) (918.9)
Non-current borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,172.2 2,352.0 1,866.1 2,190.1
Of the Company’s total borrowing as of 31 December 2009:

• US$2,693.8 million related to fixed-rate borrowings and US$415.2 million related to floating-rate
borrowings; and
• US$2,318.1 million related to rupee-denominated borrowings and US$606.6 million related to US$
dollar-denominated borrowings.
As of 31 December 2009, the Company’s cost of debt was 8.0% to 20.5% on Indian rupee borrowings in
the amount of US$2,318.1 million and 1% to 7% on US dollar borrowings in the amount of
US$606.6 million.
As of 31 December 2009, the Company had available committed working capital facilities in the amount of
US$2,252.5 million, of which US$1,296.9 million was outstanding.
The following table shows the Company’s gearing ratio as of 31 December 2009:
As of
31 December
2009
(US$ in million)
Interest bearing loans and borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,109.0
Less: cash and bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.4
Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,037.6
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,038.8
Equity and net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,076.4
Gearing ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.8%
188

MERRILL CORPORATION JDICKSO//30-APR-10 12:31 DISK116:[10ZAU1.10ZAU70801]DB70801A.;57
The table below summarises the power business’s financial indebtedness as of 31 December 2009 in
US dollars (computed at an exchange rate of US$1.00 : Rs. 46.68) and rounded to the nearest million.
Management believes that the facilities listed in the table below contain terms and conditions that are
standard for facilities of these types in the power sector in India.
Facilities Facilities Amount

committed agreed outstanding
as at as at as at
31 December Rate of 31 December 31 December
(1)
Purpose of debt 2009 Interest 2009(2) Term 2009
ESSAR POWER LTD(4)
Rupee term loan . . . . . . . . . . . . . . . . 210 8.83% June 2010—June 2013 108
Short term loans . . . . . . . . . . . . . . . . . 107 13.03% April 2010—December 2010 107
Working capital . . . . . . . . . . . . . . . . . 188 12.06% 61
Equipment lease . . . . . . . . . . . . . . . . . 38 14.40% September—December 2013 18
TOTAL . . . . . . . . . . . . . . . . . . . . . . 543 294
BHANDER POWER LTD
Rupee term loan . . . . . . . . . . . . . . . . 161 10.33% November 2013—December 2016 115
VADINAR POWER COMPANY LTD
(BASE PLANT 120MW)
Rupee term loan . . . . . . . . . . . . . . . . 80 13.24% January 2013 50
ESSAR POWER M.P. LIMITED
Rupee term loan . . . . . . . . . . . . . . . . 787 12% July 2022 72
ESSAR POWER GUJARAT LIMITED
Rupee term loan . . . . . . . . . . . . . . . . 766 11.25% June 2021—June 2023 32
Unsecured loan . . . . . . . . . . . . . . . . . 8 0 1
TOTAL . . . . . . . . . . . . . . . . . . . . . . 774 33
VADINAR POWER COMPANY LTD
(EXPANSION)
Rupee term loan . . . . . . . . . . . . . . . . 494(3) 12.60% —
ESSAR POWER TRANSMISSION
COMPANY LTD
Rupee term loan . . . . . . . . . . . . . . . . 11.70% 200 —
ESSAR POWER (JHARKHAND) LTD
Rupee term loan . . . . . . . . . . . . . . . . 321.34(3) 11.50% 593.4 —
TOTAL . . . . . . . . . . . . . . . . . . . . . . 593.4 —
ESSAR POWER HAZIRA LTD
Rupee term loan . . . . . . . . . . . . . . . . 231(3) 8.73% —
ESSAR POWER CANADA
term loan . . . . . . . . . . . . . . . . . . . . . 190.5 9.10% May 2020 190.5
ESSAR POWER OVERSEAS BVI . . . . . . 300(3) 11% March 2011 —
(1) Facilities committed means facilities in respect of which binding loan agreements have been entered into.
(2) Facilities agreed means facilities which have been agreed with lenders in the form of non-binding term sheets or sanction letters.
(3) These facilities have been committed post 31 December 2009.
(4) Axis Bank has entered into a subscription agreement dated 19 April 2010 to subscribe to secured redeemable non convertible
debentures at 11.25% for a term starting fiscal year 2011 to fiscal year 2018 of Essar Power Limited on a private placement basis
for Rs. 8,000 million (US$171.38 million). The purpose for this sanction is to refinance the existing term loans of Essar Power
Limited and general corporate purposes.
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mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:31 DISK116:[10ZAU1.10ZAU70801]DC70801A.;61
Part 9
6810DM/0D Foot:
The table below summarises the oil and gas business’s debt facilities available as of 31 December 2009 in US dollars (computed at an exchange rate of
Operating and Financial Review

US$1.00 : Rs. 46.68) and as of 31 March 2010 in US dollars (computed at an exchange rate of US$1.00 : Rs. 45.14) and in both cases rounded to the
nearest million. Other than the MRA discussed at ‘‘Corporate Debt Restructuring’’ below, management believes that the facilities listed in the table below
contain terms and conditions that are standard for facilities of these types in the oil and gas sector in India.
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
Facilities Facilities Amount

committed agreed outstanding
Date of as at as at as at
Agreement 31 December 31 December 31 December
0D/
(1)
Purpose of debt Lenders Facility type entered 2009 2009(2) Rate of Interest Term 2009
Base Refinery . . . . . . . . . Various Banks & debenture Debt restructured as per MRA 17-Dec-04 — Per MRA terms Per MRA 1,660
holders covered by MRA
American Express Bank(3) ECB (including funded interest) 15-May-01 50 Libor + 2.25% 8 years 73
Debenture holders not covered Non Convertible Debentures 12-Jan-95 — 6 to 9.25% Repayable in 13
by MRA March 2010(4)
Group Companies Inter company debt/Finance lease Various dates 174 0 to 14% Between 2 to 113
20 Years
Working Capital(5) . . . . . . . Various banks Working capital 30-Mar-09 2,193(6) 63 Various Various 1,291
File: DC70801A.;61
Bills Discounting Various dates 311 MIBOR + 2.5 to 3.0% 12 months 107
190
Short term loan 30-Mar-10 — — 6.5% 15 days —

Phase I Refinery
Expansion . . . . . . . . . . ICICI Bank ECB 26-Jun-07 100 Libor + 1.50% up to Oct-09 and 11 Years 99.22
Libor + 2.75% thereafter
Various Banks Rupee Term Loan(7) Agreement yet 900 Various rates linked to PLR 8.5 Years 280
to be entered
E&P Business . . . . . . . . . Bank Rupee Debt 31-Mar-08 5 11.25% 5 Years 4
Bank Conditional Grant 28-Apr-93 1 N.A. N.A. 1
Bank Short term loan 31-Mar-10 — — 11% 6 months —
(1) Facilities committed means facilities in respect of which binding loan agreements have been entered into.
(2) Facilities agreed means facilities which have been agreed with lenders in the form of non binding term sheets or sanction letters.
(3) The American Express Bank Loan was settled by making a lump sum payment of US$63 million in March 2010.
(4) Repaid by the Company in March 2010.
(5) See ‘‘Other Available Sources of Liquidity—Oil and gas business’’ below for a description of this facility. In addition, Essar Oil has a committed credit line from two suppliers, State Trading Corporation and MSTC
Limited.
(6) This facility has been renewed and the current facility is for Rs. 106,500 million (US$2,281.5 million).
(7) Prior to final documentation being signed the lenders have permitted Essar Oil to draw down up to US$643 million as LC facilities.
MERRILL CORPORATION JDICKSO//30-APR-10 12:31 DISK116:[10ZAU1.10ZAU70801]DE70801A.;56
For information on the extent to which the Company has secured debt financing for the Expansion
Projects, see ‘‘Factors Affecting Results of Operations and Financial Condition—Funding Costs for the
Expansion Projects’’.
Corporate Debt Restructuring

As of 31 December 2009, Essar Oil had Rs. 77,486.5 million (US$1,659.9 million) of indebtedness
outstanding that was subject to the corporate debt restructuring scheme discussed below.
Due to the Vadinar refinery construction coming to a standstill for various reasons but mainly on account
of disruptions caused by a tropical cyclone, Essar Oil was referred to the Corporate Debt Restructuring in
2003 by ICICI Bank being the lead bank to restructure Essar Oil’s then-outstanding indebtedness of
Rs. 50,120 million.
On 17 December 2004, Essar Oil entered into corporate debt restructuring scheme (the ‘‘CDR Scheme’’)
with its then-existing lenders by executing a master restructuring agreement. The CDR Scheme provided
for, among other things: the rescheduling of accrued interest; the restructuring of existing loans, including
the extension of the relevant repayment schedules and the reduction of interest rates; a waiver of
liquidated damages, disbursement of further loans, etc.
Essar Oil and its then-existing lenders (being ICICI Bank Limited, Industrial Development Bank of India
Limited, IFCI Limited, Punjab National Bank, Life Insurance Corporation of India, United India
Insurance Company Limited, General Insurance Corporation of India, National Insurance Company
Limited, New India Assurance Company Limited, Oriental Insurance Company Limited, Allahabad Bank,
and Central Bank of India, (the ‘‘Existing Lenders’’) subsequently entered into a master restructuring
agreement, dated 17 December 2004 (the ‘‘MRA 2004’’). In terms of the MRA, Essar Oil was eligible to
avail further loans, called the additional priority loans. Pursuant to entering into these additional priority
loans, State Bank of India, State Bank of Saurashtra, Indian Bank, Indian Overseas Bank, Syndicate Bank,
Oriental Bank of Commerce, Housing and Urban Development Corporation Limited and Bank of Baroda
(the ‘‘Acceded Lenders’’ and together with the Existing Lenders, the ‘‘Lenders’’) also became party to the
MRA. An amendment agreement dated November 21, 2006 was entered into between Essar Oil and the
Lenders in order to amend certain terms of MRA 2004 (the ‘‘Amended MRA’’ and together with MRA
2004, the ‘‘MRA’’).
Under the terms of the MRA, the interest rates under the then-existing loans were reset and the
repayment schedules were revised. All interest on loans at the contracted rate of interest for the Vadinar
refinery project for the period from October 1, 1998 to December 23, 2003 was converted into a funded
interest facility called Facility Stoppage carrying interest at the rate of 5% per year and maturing on
31 March 2026. The amount of Facility Stoppage totalled approximately Rs. 26,747 million as of
31 December 2009. Interest on various facilities including Facility Stoppage for the period from
30 December 2003 until 30 September 2004 was funded and converted into a facility called Facility
Pre-Start. The amount of Facility Pre-Start totalled approximately Rs. 2,923.1 million as of 31 December
2009. Interest on Facility Pre-Start for the period up to 31 March 2007 totalled approximately
Rs. 633.2 million was also funded. The Facility Pre-Start and interest accrued thereon until 31 March 2007
will mature on 31 March 2027. Under the MRA, Essar Oil, subject to the consent of its Lenders, can
prepay the Facility Stoppage at its net present value by applying discounted rate of 10% per year on
quarterly basis. The indebtedness under the MRA has been at interest rates ranging from 5% to 12.5% per
year subject to variation of these interest rates on prepayment of any of the facilities under the terms of the
MRA.
Additionally, a lenders monitoring committee (the ‘‘Lenders Monitoring Committee’’) was constituted
under the MRA to monitor the implementation of the CDR Scheme and procedures as laid down in the
MRA.
Pursuant to the terms of the CDR Scheme, the Lenders have the right to appoint four directors to the
board of directors of Essar Oil. The Lenders have appointed three directors and have the right to appoint
a further director. Further, the right of the promoters of Essar Oil to appoint the non-executive chairman
of Essar Oil’s board of directors is subject to the approval of the Lenders Monitoring Committee. The
Lenders Monitoring Committee can also direct Essar Oil to appoint one of the independent directors as
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the chairman of the board of directors. Further, a nominee of the Lenders is required to be a member of
the audit committee of the board of directors of Essar Oil.
Pursuant to the terms of the MRA, Essar Oil requires prior approval of the Lenders for certain corporate
actions, including, availing any further indebtedness, seeking an extension of any existing indebtedness,
making any investment in any other concern, undertaking any new project or expansion or acquiring or
leasing any assets exceeding Rs. 250 million (US$5.4 million), declaring dividends, undertaking a merger or
consolidation or entering into any related party transactions. Further, any change to the terms of sanction
of the MRA requires an approval of the CDR Empowered Group of the CDR forum.
It is a condition of the MRA that Essar Oil obtains the benefit of the sales tax deferral. While the CDR
lenders have provided extensions since 2005, with the current extension valid until June 2011, in the event
Essar Oil is unable to receive further extensions from the CDR lenders, or the ongoing sales tax incentive
litigation described in paragraph 14.8 of Part 16 ‘‘Additional Information’’ is not resolved in Essar Oil’s
favour, this may be considered an event of default under the MRA.
Other events of default under the MRA include: (i) any non-performance by Essar Oil of its obligations
under the MRA, or (ii) the occurrence of an event of default under the VOTL master restructuring
agreement or the exercise by the VOTL lenders of a right of revocation under the VOTL master
restructuring agreement. Each Lender, on occurrence of an event of default, may convert all or any
portion of the amounts outstanding into shares of Essar Oil. This maybe at a price lower than the market
price of the shares of Essar Oil. Where the event of default relates to a failure to make repayments or
interest payments on due dates, Essar Oil may be liable to pay interest at the rate of 14.5% per annum
quarterly from the date of such default on such amounts.
Further, in the event the Lenders Monitoring Committee, in its sole discretion, determines that the cash
flows of Essar Oil allow acceleration in repayment, then it may accelerate the repayments on a pro-rata
basis. If the Lenders believe that the profitability and cash flows of Essar Oil are such that recompense
payments can be made by Essar Oil, then it will be required to make additional recompense payments to
the Lenders in respect of certain facilities, at either (i) 14% for Rs. lenders or (ii) LIBOR plus 4%/9.5%
for lenders in other currencies, in each case per annum depending upon the type of facilities, payable
quarterly (‘‘Recompense Payments’’). However, the Lenders cannot seek Recompense Payments if Essar
Oil makes repayment within five years of the completion date (i.e., 24 April 2007) or prepays the facilities
in terms of the MRA otherwise than out of its cash flows.
The Lenders also have a right to revoke the remedies provided to Essar Oil under the MRA, in the event
of certain events taking place, which include any material breach of representations and warranties
provided by Essar Oil.
The Amended MRA requires Essar Oil to maintain specific ratio levels for the total outside liabilities to
tangible net worth; gross debt service coverage ratio; and the debt to equity ratio. In the event of
non-adherence of any two of these ratios, where the adverse deviation shall be more than 20%, Essar Oil
shall be liable to pay a penal interest of 1% per annum on the document rate during the period of
non-adherence. In addition, in the event of continuous non-compliance with such financial covenants, the
Lenders have the right to stipulate further conditions or covenants on Essar Oil.
In terms of the MRA, a first-ranking security interest has been created over all Essar Oil’s movable and
immovable assets, both present and future for the facilities provided by the Lenders under the MRA,
except on the port facilities, facilities for import, storage and export of petroleum, certain receivables
under specific contracts and assets in relation to exploration, development and production of petroleum by
Essar Oil in the Ratna Fields. Further, 51% of shares having voting rights of Essar Oil is pledged and is
required to be pledged at all times till the MRA subsists. Further, Lenders through the security trustee
have an option to exercise vote on the pledges shares, upon notification to the pledgors, even prior to an
event of default.
Essar Oil intends to exit the CDR Scheme at an appropriate time and continues to evaluate its options
with regard to such an exit. In the nine months ended 31 December 2009, the weighted average interest
rate on the borrowings under the CDR Scheme was approximately 9.0%.
Essar Investments and VOTL, Essar Affiliated Companies, have provided guarantees to the lenders for
certain of Essar Oil’s obligations under the corporate debt restructuring.
192

For a discussion of some of the risks related to the Group’s current and future financing arrangements, see
‘‘The Company has substantial debt requirements. The structure and terms of the Company’s financing
arrangements could give rise to additional risks’’ in Part 1 ‘‘Risk Factors’’.
Funding the Expansion Projects

The Company expects to fund its plans for the development and construction of the Expansion Projects
through a combination of net proceeds of the Offer, additional debt and equity financing and increasingly
from excess operating cash flows as the projects are completed over the next few years. For a description of
the current and expected funding arrangements for:
• the Power Plant Projects, see ‘‘Power—Financing Arrangements’’, ‘‘Power—Phase I Power Projects’’
and Power—Phase II Power Projects’’ in Part 6 ‘‘The Business’’; and
• the Phase I Refinery Project, see ‘‘Oil and Gas—Vadinar Refinery—The Refinery Expansion
Projects—Project Costs and Financing’’ in Part 6 ‘‘The Business’’.
Essar Global, an Essar Affiliated Company, has guaranteed Essar Oil’s obligations under the facility
arrangements in relation to Phase I Refinery Project.
Power Project Financing Arrangements

The debt financing for the Power Plant Projects is expected to be financed under project financing
arrangements similar to those that Essar Power Limited and certain of its subsidiaries that were or are
involved in setting up of the operational power plants and the Power Plant Projects (the ‘‘Project
Companies’’) have entered into, including term-loan agreements with individual lenders and financing
agreements with a consortia of lenders (collectively, ‘‘Project Financing Arrangements’’).
The Project Financing Arrangements limit the use of all borrowings to fund the relevant power plant
project.
In most cases, the Project Companies do not have an option to prepay the outstanding principal amounts
of the facilities in full or in part without prior approval of the lenders and may be required to pay
prepayment premium.
The Project Financing Arrangements are secured by security interests over substantially all the assets of
the relevant Project Companies in relation to the project, corporate guarantees by Essar Investments,
Essar Global and Essar Projects, Essar Affiliated Companies, pledge over shares of Project Companies and
charges on trust and retention accounts, debt service reserve accounts and other bank accounts of the
Project Companies. The Project Companies are required to provide additional security as acceptable to the
lender to cover any deficiency in the securities created and perfected in favour of the lenders.
Each of the Project Financing Arrangements provides the interest rate for the facility, along with
additional interest payable by the Project Companies for any failure to create and perfect security within
the agreed period and default interest rate payable by Project Companies for non-payment on the due
date.
The Project Financing Arrangements impose a number of restrictive covenants on the Project Companies,
including limitations on the Project Companies:
• creating liens or charges on any assets to be mortgaged or charged as security;
• selling or otherwise disposing of assets;
• incurring additional debt or making any inter-corporate investments;
• repaying subordinated debt;
• changing the general scope of their business;
• changing their registered office;
• entering into mergers, acquisitions, consolidation or corporate restructuring;
• making any material investment or capital expenditure;
193

• undertaking new project or expansion/modification of existing facilities;

• making any change in their capital structure;
• undertaking guarantee obligation on behalf of any other person;
• changing their ownership or management structure;
• declaring of dividends;
• issuing debentures, equity or preference capital;
• paying commission to promoters, directors or managers for furnishing guarantees or indemnities or
undertaking;
• acquiring companies or incorporating subsidiaries;
• amending or modifying memorandum of association or articles of association; and
• listing or delisting the shares on any stock exchange.
Further, the Project Financing Arrangements contain certain affirmative covenants that the Project
Companies, including requiring the Project Companies to:
• provide financial and other information;
• comply with certain financial ratios, including a debt equity ratio, a debt service coverage ratio and a
loan to collateral ratio;
• appoint nominee directors on behalf of the lenders;
• maintaining adequate insurances coverage on the projects;
• making out a good and marketable title of the secured properties to the satisfaction of lenders;
• operating the projects properly and complying will all its obligations under the projects
documentation; and
• maintaining certain debt/equity ratios.
The Project Financing Arrangements generally include the following events of default:
• failure to make principal and interest payments on time;
• misrepresentations;
• non compliance with covenants and obligations;
• cross-default;
• insolvency and analogous events;
• change of control without prior approval of the lender;
• illegality;
• termination or breach of certain financing and project documents;
• destruction or abandonment of the project;
• inadequate insurance/failure to insure/suspension of insurance contract;
• buyers’ failure to issue letter of credit under the relevant PPAs;
• cessation or threatened cessation of business;
• expropriation or a moratorium declared by a government agency;
• failure to create and perfect security; and
• delay in achieving project completion date.
194

In the event of defaults in payment, lenders under certain Project Financing Arrangements have certain
rights including the right to convert the whole or part of the outstanding amount into fully paid equity
shares of the concerned Project Company.
Financing Arrangements for the Phase I Refinery Project

Essar Oil has entered into project financing arrangements for the Phase I Refinery Project with ICICI
Bank, ICICI Bank, Bahrain, IDBI Bank Limited and State Bank of India, including external commercial
borrowings and rupee term loan agreements. The proceeds of the financing arrangements are required to
be used for the Phase I Refinery Project.
Essar Oil has, in most cases, the option to prepay the outstanding principal amounts of the facilities in full
or in part upon an agreed notice period or with prior approval of the lender. Essar Oil is, in certain
circumstances, such as receipt of certain insurance proceeds or excess cash flow, required to prepay the
facilities in full or in part.
The financing arrangements are secured by security interests over substantially all the assets of Essar Oil in
relation to the Refinery Project, corporate guarantees by Essar Global, an Essar Affiliated Company, in
certain cases, a pledge over a part of shares/GDS of Essar Oil and Essar Oil’s other ownership interests
under the project documents. Essar Oil is required to create and perfect the security within the period
provided in the respective financing agreements and to provide additional security as acceptable to the
lender to cover any deficiency in the securities created and perfected in favour of the lenders.
Each of the financing arrangements provides the interest rate for the facility, along with an additional
interest rate payable by Essar Oil for non creation and perfection of security within the agreed period and
a default interest rate payable by Essar Oil for non payment of dues on the due date. The interest rates
applicable to the financing arrangements with ICICI Bank, IDBI Bank and State Bank of India for the
Phase I Refinery Project are the ICICI Bank benchmark advance rate plus liquidity premium minus 2%
per year, the IDBI benchmark prime lending rate minus 1% p.a. and the State Bank of India advance rate,
respectively. In addition, there are interest tax and or other statutory levies applicable to such interest
payments. The interest rate paid by Essar Oil under the foreign currency facility agreement with ICICI
Bank is the London Interbank offered rate plus a 1.50% margin until October 2009 and thereafter a 2.75%
margin.
The Phase I Refinery Project financing arrangements impose a number of standard restrictive covenants
on Essar Oil, including regarding the incurrence of additional debt, creation of liens on security granted to
the lender, disposing of project assets, entering into mergers or acquisitions or consolidation or corporate
restructuring, making any material investment or capital expenditure, undertaking new project or
expansion/modification of schemes and making any material change in capital structure. There are further
restrictions on Essar Oil’s ability to undertake guarantee obligations on behalf of any other person, change
ownership or management structure, declare dividends, issue any debentures, equity or preference capital,
accept deposits from the public or acquire a company or incorporate a subsidiary.
Further, certain affirmative covenants are also required to be complied with by Essar Oil under the
financing arrangements, including, maintaining certain insurances, complying with specified financial
ratios, including debt equity ratio, debt service coverage ratio and loan to collateral ratio, appointment of
nominee director(s) on behalf of the lenders and making out a good and marketable title of the secured
properties to the satisfaction of lenders.
The financing agreements include certain representations and warranties, undertakings and events of
default.
Under certain of the financing arrangements for the Phase I Refinery Project, the lenders have a right to
unconditionally cancel the relevant arrangements if part of the funding limits are not utilised by Essar Oil,
there is a deterioration in the loans accounts or if Essar Oil fails to comply with the terms and conditions of
the arrangements. In addition, if there is default in payment, the lenders under certain financing
arrangements have the right to convert the whole or part of the outstanding amount into equity shares of
Essar Oil.
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Other Available Sources of Liquidity

Oil and gas businesses
To finance the working capital requirements including the oil imports of the Vadinar refinery, Essar Oil
entered into a working capital consortium agreement dated 15 March 2010 for a working capital facility in
the amount of Rs. 106,500 million (US$2,359 million) with a consortium of 14 bank lenders, with State
Bank of India as the lead bank, renewing the working capital consortium agreement dated 30 March 2009.
The working capital consortium agreement provides that the working capital facility may be used to meet
the working capital needs and requirements of the oil and gas business’s Vadinar refinery and its marketing
and sales operations in India and comprises of the following components:
Amount
outstanding
as at
Component 31 March
Component limit 2010 Rate of interest Typical term
(US$ millions) (US$ millions)
Funded facility*—cash credit . . . 266 — BPLR + 0 to 2.75% 12 months
Non-funded facilities** (including
letters of credit, bank
guarantees) . . . . . . . . . . . . . . 2,093 1,306 Commissions of 0.45 to 2.78% 30–180 days
* The funded facility of US$244 million is fully interchangeable with non-funded facilities.
** The non-funded facilities also includes buyers credit facilities funded by foreign banks against letters of comfort, interest rates
for which range from 0.6% to 1.5% above LIBOR.
The working capital facility is secured by first charge security over the current assets and a second charge
security over the refining assets of Essar Oil with certain exclusions; a corporate guarantee by Essar
Investments Limited, an Essar Affiliated Company, personal guarantees by Shashikant Ruia, Ravi Ruia
and Prashant Ruia; pledges of the promoters’ 51% shareholding in Essar Oil with voting rights and pledges
over 63,125,095 shares of Essar Shipping Ports and Logistics, an Essar Affiliated Company, held by
another Essar Affiliated Company and a charge over Essar House, which is owned by an Essar Affiliated
Company. Under the working capital agreement, the lenders may, at their sole discretion, elect not to
accept security offered by Essar Oil and cease making advances against such security.
The working capital consortium agreement contains covenants that restrict certain activities of Essar Oil,
including restrictions on creating security interests over any or all of its properties or assets, formulating
schemes of amalgamation or reconstruction, giving certain guarantees, making certain loans or
investments, making drastic changes in management or changing its capital structure.
The working capital consortium agreement also contains financial covenants requiring Essar Oil to
maintain a current asset cover ratio and any other ratio as required by the lenders.
As of 31 March 2010, an amount of Rs. 58,956 million (US$1,306 million) were outstanding under the
working capital facility.
Essar Oil keeps availing an overdraft facility against its own fixed deposits with the banks. No amounts
were outstanding under this facility as of 31 March 2010.
Essar Exploration & Production Ltd. has a guarantee facility of US$50 million with Bank of India for
providing performance guarantees under various oil and gas exploration contracts. As at 31 March 2010
the limit utilised was US$6.84 million.
In addition, Essar Oil has arrangements with two government corporations, MSTC Limited and
STC Limited for the purchase of crude oil on a long payment basis. The total sanctioned facility from
MSTC Limited and STC Limited amounts to Rs. 53,000.00 million (US$1,135 million) as at 31 December
2009 and the outstanding amount under the facilities was Rs. 23,100 million (US$512 million) as at
31 March 2010.
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Other Guarantees
Essar Steel, an Essar Affiliated Company, has provided a guarantee in favour of the Punjab National Bank
for an amount of Rs. 1,485 million (US$32.9 million) plus interest and other dues thereon. Pursuant to the
term loan agreement dated 29 March 2001, which is now one of the facilities under the MRA, the
repayment for the facility shall be under the terms of the MRA.
Further, Essar Investments, an Essar Affiliated Company, has guaranteed Essar Oil’s obligations for
repayment of differential interest/ liquidated damages, in an amount of Rs. 2,068 million
(US$45.8 million), to IDBI Bank Limited pursuant to IDBI Bank Limited’s letter dated 31 March 2009.
The amount is repayable on 31 March 2031.
Power
To finance its working capital requirements, Essar Power has entered into a working capital consortium
agreement dated 7 October 2009 with State Bank of India, State Bank of Mysore, Central Bank of India,
Bank of India and Yes Bank Limited. The working capital facilities under the working capital consortium
agreement aggregates to an amount of Rs. 2,780 million (US$61.6 million).
The working capital consortium agreement comprises various facilities including overdrafts, cash credits,
pre-shipments and post-shipment credit, opening of letter of credits, issuing of guarantees including
deferred payment guarantees and indemnities and bill discounting. The working capital facility is secured
by security interest over Essar Power’s assets including by way of a first charge over Essar Power’s current
assets, receivables and book debts and by way of second charge over fixed assets, both present and future.
The lenders may, at their sole discretion, not accept the security offered by Essar Power and discontinue
the facilities.
The working capital consortium agreement contains covenants that restrict certain activities of Essar
Power including the creation of security interests, changes of capital structure, formulation of schemes for
amalgamation and reconstruction, expansion or modernisation (other than routine capital expenditure)
and the provision of certain guarantees without the prior consent of the lenders. The working capital
consortium agreement also contains certain financial covenants including the requirement to maintain a
prescribed current asset cover ratios and security margins.
Essar Power has agreed to indemnify the lenders for claims, losses or expenses incurred by them in respect
of the facilities. Essar Investments has guaranteed Essar Power’s obligation under the working capital
consortium agreement. As of 31 March 2010, borrowings in the amount of Rs. 1,012 million
(US$22.4 million) were outstanding under the working capital facility.
Outside the limits covered by the working capital consortium agreement, Essar Power enjoys working
capital facilities in the form of supplier’s channel credit, bid bond, cash credit, letters of credit and
guarantees aggregating to Rs. 1,455 million (US$32.2 million) from Bank of India. The outstanding
borrowing under these facilities as of 31 March 2010 was Rs. 751 million (US$16.6 million). Also, outside
the limits covered by the working capital consortium agreement, State Bank of India has provided a bid
bond guarantee of Rs. 90 million (US$2.0 million) and Yes Bank Limited has provided a bid guarantee of
Rs. 359 million (US$7.9 million) to Essar Power, of which Rs. 90 million (US$2.0 million) and
Rs. 359 million (US$7.9 million), respectively, were outstanding as of 31 March 2010.
Axis Bank has provided bank guarantees aggregating to Rs. 1,280 million (US$28.4 million) to Essar Power
of which Rs. 973 million (US$21.5 million) was outstanding as of 31 March 2010.
Essar Power also has domestic bill discounting facilities of Rs. 800 million (US$17.7 million) from HDFC
Bank Limited and of Rs. 2,000 million (US$44.3 million) from Bank of Baroda. The outstanding borrowing
under these bill discounting facilities as of 31 March 2010 was Rs. 350 million (US$7.8 million).
Financing arrangements post 31 December 2009

As of 31 March 2010, the Company had US$3.7 billion of borrowings outstanding, including borrowings
under long term and short term debt facilities including working capital facilities.
Essar Power Overseas BVI has entered into a bridging facility of US$300 million dated 30 March 2010 with
Standard Chartered Bank to finance the acquisition and development of the Indonesia and Mozambique
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coal mines discussed in ‘‘Overseas Coal Blocks’’ in Part 6 ‘‘The Business’’ as well as to bridge other capex
requirements for Power Projects. The amount outstanding under this facility as of 31 March 2010 was
US$300 million.
In accordance with a sanction letter dated 7 April 2010 and a subscription agreement dated 19 April 2010,
Axis Bank has agreed to subscribe for Rs. 8 billion (US$171.4 million) of secured redeemable
non-convertible debentures of Essar Power. The primary purpose of this issuance is to refinance Essar
Power’s existing term loans. These debentures are to be redeemed in eight unequal annual installments
commencing 31 March 2011.
See Part 10 ‘‘Capitalisation and Indebtedness Statement’’ for a statement of the Company’s capitalisation
and indebtedness as of 31 March 2010.
Short term loans

Essar Power has also obtained short term loan facilities from Canara Bank for an amount of
Rs. 2,000 million (US$44.3 million), State Bank of Mysore for an amount of Rs. 500 (US$11.1 million),
State Bank of Bikaner and Jaipur for an amount of Rs. 500 million (US$11.1 million), Allahabad Bank for
an amount of Rs. 1,000 million (US$22.2 million) and The Jammu and Kashmir Bank Limited for an
amount of Rs. 1,000 million (US$22.2 million).
Certain of these short term loan agreements contain covenants including financial covenants such as the
requirement to maintain a prescribed current ratio and interest coverage ratio and certain other covenants
including restriction on the creation of security interests, change of capital structure, formulation of
scheme for amalgamation and reconstruction and providing certain guarantees without the prior consent
of the short term lenders.
As of 31 March 2010, borrowings in the amount of Rs. 5 billion (US$110.8 million) were outstanding under
these short term loan facilities.
Equipment lease finance

In addition, Essar Power has equipment lease finance facilities from IFCI Limited and ICICI Bank for
certain equipment for its Essar Power Hazira power plant. The outstanding lease rentals payable under
these facilities as of 31 December 2009 was Rs. 606.8 million (US$13.0 million) to IFCI Limited and
Rs. 224 million (US$4.8 million) to ICICI Bank. These equipment lease facilities contain covenants
primarily in relation to the specific equipment being leased pursuant thereto to secure the lessor’s interest
and to safeguard the lessor’s investment in such equipment, including indemnity to the lessor for any loss
caused to, or on account of such leased equipment. Essar Steel has guaranteed Essar Power’s obligations
under these lease finance facilities.
CONTRACTUAL COMMITMENTS
Borrowings
The following table sets forth the Company’s borrowings, excluding interest, as they come due as of
31 December 2009:
Within One to More than

one year five years five years Total
($ in million)
920.5 1,374.8 833.7 3,129.0
Capital Commitments
As of 31 December 2009, the Company estimated amount of contracts, largely relating to the development
and construction of the Phase I Power Projects and the Refinery Expansion Projects, remaining to be
executed on capital account and not provided for on 31 December 2009 was US$6,877.2 million, including
the Company’s joint venture shares in such amounts.
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Other Contractual Commitments and Obligations

The following table sets forth the Company’s other contractual obligations and commitments as they come
due as of 31 December 2009:
Within One to More than

one year five years five years Total
($ in million)
Finance lease and hire purchase commitments . . . . . . . . . . . 11.9 20.2 5.7 37.8
Export obligations(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.5 — — 101.5
Crude oil purchases(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,770.0 — — 3,770.0
Fuel purchases (pass through) . . . . . . . . . . . . . . . . . . . . . . . — — — —
(1) Relates to future obligations for refined petroleum product exports under term contracts for periods beyond 31 December
2010. These obligations were calculated using information current as of 31 December 2009 and, as such, the commitment
amount may vary, based factors such as product price and actual quantity exported.
(2) Relates to contractual obligations for future crude oil term sales and purchases. These obligations were calculated using
information current as of 31 December 2009 and, as such, the actual commitment amount may vary, based on factors such as oil
price and volume purchased.
CONTINGENCIES
The following table sets forth the Company’s contingent liabilities not otherwise provided for in the
Company’s combined financial statements as of 31 December 2009:
($ in million)
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.9
Interest* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.3
Corporate guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.8
Bank guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98.5
Disputed custom duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.0
Disputed income and indirect tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.8
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334.9
* The Group has assumed that certain facilities as will be paid at the earliest redemption date after obtaining required consent of
the lenders and this interest charge has been based on applicable early redemption rates. This amount represents the additional
interest that would have been charged to the income statement in the period if the debt was assured to run to the maximum
term of the loan.
The contingent liabilities in the table above relate primary to actual or potential legal claims relating to the
Company for which the amounts of the potential liability are reasonably assessable but the liability is not
probable. In addition, there are a number of legal claims against the Company for which the outcome is
uncertain and the potential liability is not reasonably assessable. Potential liabilities for these claims are
not included in the table above. For a discussion of these contingencies see Note 24 ‘‘Contingencies and
Commitments’’ in Part 11 ‘‘Financial Information’’.
Corporate guarantees given on behalf of entities outside of the Company of US$58.7 million consist of a
guarantee Essar Oil has provided in respect of a bank loan to VOTL, an Essar Affiliated Company, to
finance the construction of its existing terminal facilities at Vadinar, which serve the Vadinar refinery. The
facility is due for repayment in instalments on various dates between 2010 to 2014.
Other Contingencies post 31 December 2009

Essar Power has guaranteed Loop Telecom Limited’s bank guarantee provided by the State Bank of India
in an amount of Rs. 8,120 million (US$174.0 million) issued in favour of the Department of
Telecommunications, Government of India, on behalf of Loop Telecom Private Limited. As at the date of
this document, Loop Telecom Limited has yet to incur any liability to the Department of
Telecommunications. Essar Steel has also provided a similar guarantee. Essar Power and Essar Steel have
entered into a memorandum of understanding for sharing claims, if any, equally in relation to this
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guarantee. Loop Mobile Holdings India Limited (promoter of Loop Telecom Private Limited and formerly
known as BPL Communications Limited) pays a commission to Essar Power at the rate of 0.5% per annum
of the amount of the bank guarantee. This commission is shared equally between Essar Power and Essar
Steel pursuant to the memorandum of understanding. Further, Essar Power and Essar Steel have jointly
guaranteed Loop Telecom Limited’s term loan facility dated 7 January 2010 with State Bank of India for
an amount of Rs. 4,000 million (US$85.7 million) issued in favour of State Bank of India. Essar Power and
Essar Steel have amended the aforementioned memorandum of understanding thereby extending it to
cover the said term loan facility dated 7 January 2010 for sharing claims, if any, equally in relation to their
guarantee for the aforesaid term loan facility. Loop Mobile Holdings India Limited pays a commission at
the rate of 1% per annum of the amount of the term loan, which is shared by Essar Power and Essar Steel
in equal proportion. The Company has also received a back-to-back guarantee from Mobile Holdings India
for these two guarantees with the counter guarantee amount being capped to Rs. 15,370.0 million
(US$329.3 million) and Rs. 4,000 million (US$85.7 million) for the first and second guarantees referred to
herein above.
FINANCING ARRANGEMENT WITH ESSAR AFFILIATED COMPANIES

Members of the Group have certain loan facilities with Essar Affiliated Companies, as described below.
The total outstanding amount of the Company’s borrowings from Essar Affiliated Companies for the nine
months ended 31 December 2009 was Rs. 5,280.8 million (US$113.1 million).
Essar Oil has three inter company loans outstanding with Essar Investments, each of which is for a five
year term and under which Essar Oil borrowed Rs. 1,250.0 million (US$26.8 million), Rs. 2,000.0 million
(US$42.8 million) and a further Rs. 2,000.0 million (US$42.8 million) on 15 December 2009, 16 November
2009 and 15 April 2009 respectively, at interest rates of 9.50%, 9.75% and 12.25% per annum respectively.
The total outstanding balance under these loans as at 31 December 2009 was Rs. 3,432 million
(US$73.5 million).
EOVL has a temporary unsecured interest free loan facility of up to Rs. 1,000 million (US$21.4 million)
with Essar Investments. As at 31 December 2009, the outstanding balance was Rs. 54 million
(US$1.2 million).
VOTL provided a loan of Rs. 960.0 million (US$20.5 million) to Essar Oil on 1 April 2006, at an interest
rate of 10.25% per annum. The loan was provided from VOTL to Essar Oil on the same terms as Essar
Oil’s master restructuring agreement dated 17 December 2004 (see Part 9 ‘‘Operating and Financial
Review’’ for further details of this agreement). Accordingly, interest payments are made quarterly and the
repayment of the principal amount is to be made in instalments up to 25 April 2014. The outstanding
balance under this loan as at 31 December 2009 was Rs. 1,102.0 million (US$23.6 million).
Essar Oil also has two further facility agreements with Essar Investments, one for Rs. 2,500.0 million
(US$55.4 million) dated 8 March 2010, and one for Rs. 5,000 million (US$110.7 million) dated 19 March
2010. Each facility agreement is for a term of five years, with an interest rate of 9.5% per annum. As at
31 March 2010 Essar Oil has drawn Rs. 2,465 million (US$54.6 million) under the Rs. 2,500.0 million
facility and Rs. 730 million (US$16.2 million) under the Rs. 5,000 million facility.
OFF-BALANCE SHEET ARRANGEMENTS

Other than as set forth above under ‘‘—Contingent Obligations’’, the Company does not have any
off-balance sheets arrangements that could have a material adverse effect on the Company’s results of
operations and financial condition.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Financial Risk Management Objectives and Policies
The Company’s principal financial liabilities, other than derivatives, comprise bank loans and overdrafts,
debentures, finance leases, trade payables, hire purchase contracts and loans taken. The main purpose of
these financial liabilities is to raise funding for the Company’s operations and the expansion plans. The
Company has various financial assets, including as trade receivables, cash, short-term deposits and put
options, that arise directly from its operations.
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The Company also enters into derivative transactions, primarily in the nature of commodity option and
swap contracts and forward currency contracts, to manage commodity price risk and currency risks arising
from the Company’s operations.
The main risks arising from the Company’s financial instruments are market risk, interest rate risk,
liquidity risk, foreign currency risk, commodity price risk and credit risk. The Board of Directors reviews
and approves policies for managing each of these types of risks.
Interest Rate Risk

The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
long-term debt obligations with floating interest rates.
The Company’s policy is to manage its interest cost using a mix of fixed and floating rate borrowings.
As of 31 December 2009, the Company’s total borrowings were US$3,109.0 million, of which
US$2,693.8 million were fixed-rate borrowings and US$415.2 million were floating-rate borrowings. The
following table shows the effect that a change in interest rates, with all other variables held constant, on the
Company’s floating rate borrowings as of 31 December 2009 would have had on the Company’s loss before
tax for the nine months ended 31 December 2009:
Effect on profit
Borrowing type Change before tax
($ in million)
US-dollar denominated borrowings . . . . . . . . . . . . . . . . . . . . 50 basis point decrease 1.0
50 basis point increase (1.0)
Rupee-denominated borrowings . . . . . . . . . . . . . . . . . . . . . . . 50 basis point decrease 0.7
50 basis points increase (0.7)
Foreign Currency Risk

While the Company’s functional currency is the US dollar, the Company has significant investments and
operations in India. Accordingly, the Company’s results of operations and financial condition can be
materially affected significantly by movements in the Rs./US$ exchange rates.
The Company has foreign currency transaction exposures. Such exposure arises from sales or purchases by
an operating unit in currencies other than the a subsidiary’s functional currency. The Company uses
foreign currency swaps, options and forward contracts to mitigate the risk arising from fluctuations in
foreign exchange rates.
The carrying amounts of the Company’s financial assets and liabilities in different currencies were as
follows as of 31 December 2009:
Financial assets Financial liabilities

($ in million)
Rupees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,254.2 3,164.4
US dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119.8 2,315.4
Canadian dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.7 191.4
Euros . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 1.3
Pounds sterling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.1
The Company’s exposure to foreign currency translation risks arises where a Group subsidiary holds
financial assets and liabilities denominated in a currency, primarily US dollars, different from that
subsidiary’s functional currency. A 10% strengthening of US dollar over the rupee compared to the
exchange rate prevailing as of 31 December 2009 would have decreased Group’s profit before tax by
US$80.3 million in the nine months ended 31 December 2009 in the translation of the subsidiaries’ non-US
dollar denominated financial assets and liabilities.
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Credit Risk
The Company is exposed to credit risk from trade receivables, receivables from Essar Affiliated
Companies, term deposits, liquid investments and other financial instruments. The Company’s policy is to
hold cash, liquid investments and term deposits in banks with strong credit ratings.
The Company trades with recognised and creditworthy third parties. The Company’s policy is to subject all
customers that wish to trade on credit terms to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis to ensure that the Company’s exposure to bad debts is
insignificant. For transactions that do not occur in the country where the relevant subsidiary is located, the
Company’s policy is not to offer credit terms without the approval of the appropriate authority within the
Company. The Company believes that it does not have any significant credit risks in relation to the Essar
Affiliated Companies.
The Company’s history of trade receivables shows negligible provisions for bad and doubtful debts. As of
31 December 2009, US$139.7 million US$114.3 million as of 31 March 2009, US$106.1 million as of
31 March 2008 and US$76.5 million as of 31 March 2007 of trade receivables were past due but not
impaired. As of 31 December 2009, US$105.2 million (US$68.1 million as of 31 March 2009,
US$58.7 million as of 31 March 2008 and US$33.6 million as of 31 March 2007) were overdue for more
than 90 days.
In the nine months ended 31 December 2009, the Group’s three largest customers—Indian national oil
companies, each contributing revenues of US$1,455.4 million, US$840.5 million and US$899.8 million,
respectively—accounted for approximately 56.5% of the Company’s revenues.
The Company establishes an allowance for doubtful accounts that represents its estimate of incurred losses
in respect of trade and other receivables. The main components of this allowance are a specific provision
that relates to individual exposures and a provision for expected losses that have been incurred but have
not been identified. The Company’s had no allowances for doubtful accounts as of 31 December 2009.
Liquidity Risk
The Company monitors its liquidity risk using a recurring liquidity planning tool. This tool considers the
maturity of both its financial investments and financial assets, such as accounts receivables and other
financial assets, and its projected cash flows from operations. The Company aims to maintain a balance
between continuity of funding and flexibility through the use of bank loans, debentures, preference shares
and finance leases.
Commodity Price Risk

The Company’s revenues are exposed to the risk of fluctuation in prices of crude oil and refined petroleum
products in the international markets. From time to time, Essar Energy uses commodity derivative
instruments to hedge the price risk of planned transactions, including expected crude oil purchases and
refined petroleum product sales. These derivative transactions are considered economic hedges for which
changes in their fair value are recorded in the Company’s income statement.
The Company operates a risk management desk that uses hedging instruments to reduce the impact of
market volatility in crude oil and refined petroleum product prices on Group’s profitability. To this end,
the Company’s risk management desk uses a range of conventional oil-price-related commodity derivative
instruments, including as futures, swaps and options available in the international commodity derivative
markets. The derivative instruments used for hedging purposes generally do not expose the Company to
market risk because the change in their market value is generally offset by a corresponding opposite
change in the market value of the underlying asset, liability or transaction being hedged. The Company’s
open positions in commodity derivative instruments are monitored and managed on a daily basis to ensure
compliance with its stated risk management policy which has been approved by the Group’s management.
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Set out below is the impact the change in the value of the Company’s commodity derivative contracts as of
31 December 2009 from a 10% increase or decrease in base crude and petroleum product prices over their
levels as of 31 December 2009 would have on the Company’s pre-tax results:
Effect of 10%
increase in
prices
(US$ in
million)
Crude oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.3)
Crack spread(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.7)
Effect of 10%
decrease in
prices
(US$ in
million)
Crude oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2
Crack spread(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7
(1) Crack spread refers to the difference between the per-barrel price of refined petroleum products and the related cost of crude
oil used for their production.
Capital Management
For information about the Company’s capital management, see ‘‘—Indebtedness—Overview’’.
CRITICAL ACCOUNTING JUDGEMENT AND ESTIMATES

The preparation of the Company’s financial statements in conformity with IFRS requires the use of
estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and
related disclosure of contingent assets and liabilities. Management bases its estimates on historical
experience and on various other assumptions that management believes are reasonable under the
circumstances and provide a basis for making judgments about the carrying value of assets and liabilities
that are not readily available through open market quotes. Estimates and assumptions are reviewed
periodically, and actual results may differ from those estimates under different assumptions or conditions.
Management must use its judgment related to uncertainties in order to make these estimates and
assumptions.
Below is a summary of the Company’s accounting estimates that require more subjective judgment by its
management in making assumptions or estimates regarding the effects of matters that are inherently
uncertain and for which changes in conditions may significantly affect the results in the Company’s
financial statements.
Sales Tax Incentive

The Group benefits from certain sales tax incentives given by the state of Gujarat provided if the sales are
made from the state of Gujarat. Under these incentive schemes, the Group is able to defer the payment of
up to approximately Rs. 91 billion (US$1.95 billion) collected as sales tax for eligible domestic sales made
from the state of Gujarat until the financial year ending 31 March 2021 (or earlier if the full eligible limit is
exhausted), after which it is required to repay the retained amounts of sales tax in six equal annual
instalments. There are a number of conditions under which this benefit has been granted including:
(i) ensuring that certain percentages of the employees are local people; (ii) re-investing certain amounts of
the benefit; (iii) adhering to specified pollution control measures; and (iv) contributing a certain amount to
the prescribed rural development scheme in the state of Gujarat. The Group recorded a benefit of
US$264.6 million in the year ended 31 March 2009 and US$173.7 million in the nine months to
31 December 2009. The majority of the benefit is expected to be earned over a period of five to seven years
from the date on which the Vadinar refinery commenced commercial operations.
The amount of benefit recorded is based on management’s expectation that it will begin repayments in
2021 and that it will comply with all the related conditions. This is based on the fact that management
intends to comply with all such conditions, is able to control its compliance, and intends to monitor the
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sales to allow the Group to benefit from the maximum deferral period. Any change in this assessment
would result in a change in the benefit that would be recorded in that period.
The Group has recorded the sales tax benefit as revenue in the period in which the associated eligible
domestic sales are made to customers. Under IAS 20, the benefit may only be recognised when there is
reasonable assurance that the entity will comply with the conditions attached to the benefit and must be
recognised over the period necessary to match the benefit systematically with the related costs which they
are intended to compensate. Recognition of the benefit in profit or loss on a receipts basis is appropriate
only where no suitable basis exists for allocating the benefit to periods other than the one in which it is
received.
Management has exercised its judgement in assessing the period over which to recognise the benefit and
believes there are no significant costs or expenses that the incentive is intended to compensate, as the
plant’s location was determined before the incentive became available and as this incentive was set up,
amongst other things, to improve the economic wellbeing of the state of Gujarat. Accordingly, the Group
has recognised the benefit in the period of the eligible domestic sales made from the state of Gujarat,
being the primary condition associated with the benefit. An alternative view would be that the sales tax
benefit is intended to compensate recipients for the costs of setting up and/or conducting their business in
the state of Gujarat, in which case the benefit could be recognised over the period necessary to match such
costs. For example, a differing judgement may be to (a) recognise the benefit during the period in which
the Company incurs operating expenses whilst it enjoys the benefit (for example, 13 years being the
remaining period for which the sales tax payment can be deferred) or (b) recognise the benefit over the
expected life of the capital asset constructed, namely the Vadinar refinery (the depreciation period for
which is 40 years) both of which would result in materially different results in the periods presented with
significantly lower revenue and profit.
Contingencies and Commitments

In the normal course of business, contingent liabilities may arise from legal and other claims against the
Company. Potential liabilities that have a low probability of crystallising or are difficult to quantify reliably,
are treated as contingent liabilities. These liabilities are disclosed in the notes to the Company’s financial
statements but are not provided for in the consolidated financial statements themselves. There can be no
assurance regarding the final outcome of these legal proceedings.
Tax
The Group is subject to tax, principally within India. The amount of tax payable in respect of any period is
dependent upon the interpretation of the relevant tax rules. Whilst an assessment must be made of the
deferred tax position of each entity within the Group, these matters are inherently uncertain until the
position of each entity is agreed with the relevant tax authorities.
Depreciable lives
The Group’s relevant non-current assets are depreciable over their estimate useful lives as set out in
section 2.1 above. Such lives are dependent upon an assessment of both the technical lives of the assets and
also their likely economic lives based on factors including commodity prices, alternative sources of supply,
relative efficiency and operating costs. Accordingly depreciable lives are reviewed annually using the best
information available to management.
Impairment testing
Goodwill is tested for impairment annually. Other non-current assets are tested for impairment when
conditions suggest that there is a risk of impairment. Where impairment testing is carried out,
management use the best information available to them to assess the likely cash flows available to the
relevant asset. Key assumptions are inherently uncertain and include commodity prices, anticipated
production costs, likely asset lives, the timing of granting of licenses and permits and the relevant discount
rates.
204

Exploration and evaluation expenditure

Exploration and evaluation expenditure are capitalised in accordance with the accounting policy in
Note 2.1.17. In making a decision about whether to continue to capitalise exploration and evaluation
expenditures, it is necessary to make judgements about the satisfaction of , if (a) proved reserves are
booked or (b) (i) if they have found commercially producible quantities of reserves and (ii) if they are
subject to further exploration or appraisal activity in that either drilling of additional exploratory wells is
under way or firmly planned for the near future or other activities are being undertaken to sufficiently
progress the assessing of reserves and the economic and operating viability of the project. If there is a
change in one of these judgements in a subsequent period, then the related capitalised exploration and
evaluation expenditures would be expensed in that period resulting in a charge to income. For further
details, refer note 9.
REVENUES AND CAPITAL EXPENDITURES BY GEOGRAPHICAL MARKET

For information about the Company’s revenues by geographical market, see Note 3b to the financial
statements included in Part 11 ‘‘Financial Information’’.
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PART 10
CAPITALISATION AND INDEBTEDNESS STATEMENT
Capitalisation and indebtedness
The table below sets out the Company’s capitalisation as of 31 March 2010.
As of
31 March
2010
(US$ in million)
Current debt
Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 947.9
Unguaranteed/unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256.7
Non-current debt
Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,256.8
Unguaranteed/unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247.1
Total debt(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,708.5
Equity
Invested capital(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,629.4
Legal reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (506.4)
Minority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378.0
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,501.0
Total capitalisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,209.5
Other than as set forth in footnotes 2 and 3 below, there has been no material change since 31 March 2010.
The following table sets out the Company’s net indebtedness as of 31 March 2010.
As of
31 March
2010
(US$ in million)
Current financial receivable
Cash and cash equivalents(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444.7
Current financial debt
Current bank debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,003.1
Current portion of non-current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2
Other current financial debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190.3
Non-current financial debt
Non-current bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,258.2
Bonds issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Other non current loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245.7
Net debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,263.8
(1) Excludes finance lease obligations as of 31 March 2010 of US$10.2 million and US$22.0 million in current and non-current
liabilities, respectively.
(2) Total debt increased since 31 March 2010 as a result of additional draw downs of facilities, including primarily facilities in
respect of Mahan (US$42 million); Salaya (US$8 million) and Vadinar Power (US$29 million).
(3) Investments of equity since 31 March 2010 has increased Essar Global’s invested capital in the Company to over US$2.8 billion.
(4) Cash and cash equivalents reduced since 31 March 2010 as a result of US$250 million of capital expenditure in the Power
Business.
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PART 11
FINANCIAL INFORMATION
Section A—Accountant’s report on combined financial information of Essar Energy plc
5MAY200502184203
Deloitte LLP
2 New Street Square
London EC4A 3BZ
The Board of Directors
on behalf of Essar Energy plc
8th Floor
20 Berkeley Square
London
W1J 6EQ
J.P. Morgan Securities Ltd.
125 London Wall
EC24 5AJ
30 April 2010
Dear Sirs
Essar Energy plc (the ‘‘Company’’ and, together with its subsidiaries, the ‘‘Group’’)
We report on the financial information set out Part 11 of the prospectus dated 30 April 2010 of Essar
Energy plc (the ‘‘Prospectus’’). This financial information has been prepared for inclusion in the
Prospectus on the basis of the accounting policies set out in Note 2 to the financial information. This
report is required by Annex I item 20.1 of Commission Regulation (EC) No 809/2004 (the ‘‘Prospectus
Directive Regulation’’) and is given for the purpose of complying with that requirement and for no other
purpose.
Responsibilities
The Directors of the Company are responsible for preparing the financial information on the basis of
preparation set out in Note 1 to the financial information.
It is our responsibility to form an opinion as to whether the financial information gives a true and fair view,
for the purposes of the Prospectus, and to report our opinion to you.
Save for any responsibility arising under Prospectus Rule 5.5.3R(2)(f) to any person as and to the extent
there provided, to the fullest extent permitted by law we do not assume any responsibility and will not
accept any liability to any other person for any loss suffered by any such other person as a result of, arising
out of, or in accordance with this report or our statement, required by and given solely for the purposes of
complying with Annex I item 23.1 of the Prospectus Directive Regulation, consenting to its inclusion in the
Prospectus.
Basis of opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing
Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the
amounts and disclosures in the financial information. It also included an assessment of significant
estimates and judgments made by those responsible for the preparation of the financial information and
whether the accounting policies are appropriate to the entity’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our work so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
financial information is free from material misstatement whether caused by fraud or other irregularity or
error.
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Part 11 Financial Information
Our work has not been carried out in accordance with auditing or other standards and practices generally
accepted in jurisdictions outside the United Kingdom, including the United States of America, and
accordingly should not be relied upon as if it had been carried out in accordance with those standards and
practices.
Opinion
In our opinion, the financial information gives, for the purposes of the Prospectus, a true and fair view of
the state of affairs of the Group (excluding the Company) as at the dates stated and of its results, cash
flows and comprehensive income and changes in equity for the periods then ended in accordance with the
basis of preparation set out in Note 1.
Declaration
For the purposes of Prospectus Rule 5.5.3R(2)(f), we are responsible for this report as part of the
Prospectus and declare that we have taken all reasonable care to ensure that the information contained in
this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to
affect its import. This declaration is included in the Prospectus in compliance with Annex I item 1.2 and
Annex III item 1.2 of the Prospectus Directive Regulation.
Yours faithfully
26APR201017151818
Deloitte LLP
Chartered Accountants
Deloitte LLP is a limited liability partnership registered in England and Wales with registered number
OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Deloitte LLP
is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms
are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of
the legal structure of DTT and its member firms.
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Section B—Combined financial information of Essar Energy plc

Combined Income Statement
For the nine months

For the year ended 31 March ended 31 December
Note 2007 2008 2009 2008 2009
(Unaudited)
US$ million US$ million US$ million US$ million US$ million
Continuing operations
Revenue . . . . . . . . . . . . . . . . . . . . 4 202.7 372.3 8,453.1 7,083.9 5,654.6
Cost of sales . . . . . . . . . . . . . . . . . 5 (162.7) (297.4) (7,771.4) (6,658.0) (5,332.2)
Gross profit . . . . . . . . . . . . . . . . . 40.0 74.9 681.7 425.9 322.4
Other operating income . . . . . . . . . 4 2.4 3.5 11.4 5.7 11.8
Selling and distribution expenses . . (6.4) (1.9) (76.7) (61.6) (61.6)
General and administration
expenses . . . . . . . . . . . . . . . . . . (35.6) (64.7) (81.2) (51.3) (75.5)
Net loss on commodity derivatives . 5 (10.9) (199.8) (61.2) (62.9) —
(Loss)/profit before net finance
costs and other gains/(losses) . . . 5 (10.5) (188.0) 474.0 255.8 197.1
Net finance costs . . . . . . . . . . . . . . 6 (50.7) (44.9) (259.7) (191.6) (215.7)
Other gains/(losses) . . . . . . . . . . . . 7 34.7 114.5 (459.0) (447.3) 165.9
(Loss)/profit before tax . . . . . . . . . 5 (26.5) (118.4) (244.7) (383.1) 147.3
Tax . . . . . . . . . . . . . . . . . . . . . . . . 8 0.9 33.5 77.7 129.0 (27.6)
(Loss)/profit after tax . . . . . . . . . . (25.6) (84.9) (167.0) (254.1) 119.7
Attributable to:
Equity interest . . . . . . . . . . . . . . . (28.0) (70.6) (133.4) (197.4) 88.8
Minority interest . . . . . . . . . . . . . . 2.4 (14.3) (33.6) (56.7) 30.9
Notes 1 to 27 form an integral part of this combined historical financial information
Combined Statement of Comprehensive Income
For the nine months ended

For the year ended 31 March 31 December
Note 2007 2008 2009 2008 2009
(Unaudited)
(Loss)/profit for the year/period . . . (25.6) (84.9) (167.0) (254.1) 119.7
Exchange difference arising on
translation of foreign operations . 71.3 128.3 (447.0) (365.6) 165.3
Unrealised (loss)/gain on available
for sale investments . . . . . . . . . . 11 — — 16.3 (1.1) (1.6)
Other comprehensive income/(loss) 71.3 128.3 (430.7) (366.7) 163.7
Total comprehensive income/(loss)
for the year/period . . . . . . . . . . . 45.7 43.4 (597.7) (620.8) 283.4
Attributable to:
Equity interest . . . . . . . . . . . . . . . 22.6 21.4 (473.6) (489.0) 210.6
Minority interest . . . . . . . . . . . . . . 23.1 22.0 (124.1) (131.8) 72.8
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Combined Balance Sheet
As at
As at 31 March 31 December
Note 2007 2008 2009 2009
US$ million US$ million US$ million US$ million
Non-current assets
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10b 136.4 148.3 117.1 127.5
Other intangible assets . . . . . . . . . . . . . . . . . . 10a 2.1 59.9 50.0 56.6
Property, plant and equipment . . . . . . . . . . . . 9 3,877.7 5,067.1 4,441.3 5,453.9
Investments in joint controlled entities . . . . . . . 23 0.7 1.2 0.8 29.0
Trade and other receivables . . . . . . . . . . . . . . 12b 29.9 50.7 31.9 194.4
Other financial assets . . . . . . . . . . . . . . . . . . . 13b 15.7 17.4 9.8 18.5
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . 8 — — 0.3 0.4
Total non-current assets . . . . . . . . . . . . . . . . . 4,062.5 5,344.6 4,651.2 5,880.3
Current assets
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 799.6 1,240.9 457.5 864.2
Trade and other receivables . . . . . . . . . . . . . . 12a 291.6 607.4 586.2 859.1
Available for sale investments . . . . . . . . . . . . . 11 — — 41.3 41.3
Other financial assets . . . . . . . . . . . . . . . . . . . 13a 136.6 329.6 241.2 292.6
Derivative financial assets . . . . . . . . . . . . . . . . 18a 6.7 3.7 20.3 6.9
Cash and cash equivalents . . . . . . . . . . . . . . . 15 40.3 100.5 62.6 71.4
Total current assets . . . . . . . . . . . . . . . . . . . . 1,274.8 2,282.1 1,409.1 2,135.5
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . 5,337.3 7,626.7 6,060.3 8,015.8
Current liabilities
Trade and other payables . . . . . . . . . . . . . . . . 17a 1,011.6 2,090.7 1,585.1 2,512.1
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . 24 6.1 10.2 9.1 10.4
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . 16 385.4 745.7 581.5 918.9
Derivative financial liabilities . . . . . . . . . . . . . 18b 13.8 38.1 9.3 12.3
Total current liabilities . . . . . . . . . . . . . . . . . . 1,416.9 2,884.7 2,185.0 3,453.7
Non-current liabilities
Trade and other payables . . . . . . . . . . . . . . . . 17b 14.4 18.1 72.6 130.7
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . 24 31.3 40.9 26.7 22.7
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . 16 2,172.2 2,352.0 1,866.1 2,190.1
Deferred tax liabilities . . . . . . . . . . . . . . . . . . 8 260.5 267.6 139.9 179.8
Total non-current liabilities . . . . . . . . . . . . . . 2,478.4 2,678.6 2,105.3 2,523.3
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . 3,895.3 5,563.3 4,290.3 5,977.0
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,442.0 2,063.4 1,770.0 2,038.8
Equity
Invested capital . . . ...... . . . . . . . . . . . . . . 19 1,147.6 1,953.8 2,227.7 2,301.7
Currency translation reserve . . . . . . . . . . . . . . 50.6 142.6 (212.9) (89.5)
Fair value reserve . . ...... . . . . . . . . . . . . . . — — 15.3 13.7
Retained deficit . . . ...... . . . . . . . . . . . . . . (116.5) (425.9) (549.7) (543.4)
Equity interest . . . . . . . . . . . . . . . . . . . . . . . . 1,081.7 1,670.5 1,480.4 1,682.5
Minority interest . . . . . . . . . . . . . . . . . . . . . . 360.3 392.9 289.6 356.3
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . 1,442.0 2,063.4 1,770.0 2,038.8
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Combined Statement of Changes in Equity
Attributable to equity interest

Currency
Invested translation Fair value Retained Minority
capital reserve reserve deficit Total interest Total equity
US$ million US$ million US$ million US$ million US$ million US$ million US$ million
Balance At 1 April 2006 . . . . . . — — — — — — —
Acquisition of Essar Power
Holdings Ltd . . . . . . . . . . . . . 72.0 — — — 72.0 62.0 134.0
Acquisition of Essar Energy
Holdings Limited . . . . . . . . . . 433.5 — — — 433.5 — 433.5
Minority arising on business
combination (Note 22 b) . . . . — — — — — 314.4 314.4
Capital contribution . . . . . . . . . 592.1 — — — 592.1 — 592.1
Acquisition of Hazira Steel 2 . . . 50.0 — — — 50.0 — 50.0
Acquisition of minority interest . — — — (73.1) (73.1) (60.7) (133.8)
Increase of minority interest . . . — — — (2.4) (2.4) 24.4 22.0
Common control transaction . . . — — — (13.0) (13.0) (2.9) (15.9)
Total comprehensive income/
(loss) for the year . . . . . . . . . — 50.6 — (28.0) 22.6 23.1 45.7
Balance at 31 March 2007 . . . . . 1,147.6 50.6 — (116.5) 1,081.7 360.3 1,442.0
Acquisition of Algoma
Energy LLP . . . . . . . . . . . . . — — — (15.6) (15.6) — (15.6)
Acquisition of minority interest . — — — (223.2) (223.2) 10.6 (212.6)
(loss) for the year . . . . . . . . . — 92.0 — (70.6) 21.4 22.0 43.4
Balance at 31 March 2008 . . . . . 1,953.8 142.6 — (425.9) 1,670.5 392.9 2,063.4
Acquisition of minority interest . — — — 9.6 9.6 20.8 30.4
Total comprehensive (loss)/
income for the year . . . . . . . . — (355.5) 15.3 (133.4) (473.6) (124.1) (597.7)
Balance at 31 March 2009 . . . . . 2,227.7 (212.9) 15.3 (549.7) 1,480.4 289.6 1,770.0
Capital Contribution . . . . . . . . . 74.0 — — — 74.0 — 74.0
Acquisition of minority interest . — — — (82.5) (82.5) (6.1) (88.6)
(loss) for the period . . . . . . . . — 123.4 (1.6) 88.8 210.6 72.8 283.4
Balance at 31 December 2009 . . 2,301.7 (89.5) 13.7 (543.4) 1,682.5 356.3 2,038.8
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Combined Cash Flow Statement
For the nine months

For the year ended 31 March ended 31 December
2007 2008 2009 2008 2009
(Unaudited)
Cash flow from operating activities
(Loss)/profit before tax . . . . . . . . . . . . . . . . . . . . (26.5) (118.4) (244.7) (383.1) 147.3
Adjustments to reconcile (loss)/profit before tax to
net cash(used in)/generated from operating
activities:
Depreciation and amortisation . . . . . . . . . . . . . . . 13.2 30.5 108.7 84.6 89.9
Unrealised loss/(gain) on derivatives . . . . . . . . . . . 7.1 34.4 (11.0) (13.5) 5.4
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.7 43.9 213.2 154.2 153.2
Loss on disposal of property, plant and equipment . — — — — 0.8
Surplus on acquisition of joint controlled entity . . . — — — — (19.1)
Share in profit of joint controlled entities . . . . . . . — — — — (0.7)
Inventory written down . . . . . . . . . . . . . . . . . . . . — 0.6 114.3 114.5 13.6
Foreign exchange (gains)/losses . . . . . . . . . . . . . . . (34.7) (114.5) 459.0 447.3 (146.1)
Changes in assets and liabilities:
Trade and other receivables . . . . . . . . . . . . . . . . . (19.5) (105.9) (250.9) (454.6) (305.7)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35.5) 23.3 593.2 583.2 (369.9)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.0) (1.5) (240.4) (218.4) (40.9)
Trade and other payables . . . . . . . . . . . . . . . . . . . 15.0 (64.6) (311.6) (27.9) 656.6
Other liabilities and provisions . . . . . . . . . . . . . . . (8.8) 24.6 (77.0) (57.0) (17.7)
Tax (paid)/refund . . . . . . . . . . . . . . . . . . . . . . . . (2.7) (8.1) (2.7) 0.3 (2.5)
Net cash (used in)/generated from operating
activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47.7) (126.5) 350.1 229.6 164.2
Cash flow from investing activities
Acquisition of businesses (net of cash acquired) ... (735.0) 0.4 — — —
Purchase of property, plant and equipment . . . ... (516.0) (244.3) (449.6) (391.0) (405.5)
Payment for exploration and evaluation assets . ... (23.1) (56.3) (18.1) (18.3) (20.1)
Proceeds on disposal of property, plant and
equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0.4 — 1.1
Payment for purchase of intangible assets . . . . . . . (1.2) (2.9) (3.1) (1.8) (0.3)
Payment for purchase of investments . . . . . . . . . . . (8.1) (7.7) (27.8) (2.3) (3.3)
Investments in joint controlled entities . . . . . . . . . (0.7) (0.5) — — (8.8)
Proceeds from disposal of investments . . . . . . . . . . — 17.9 — — —
Acquisition of minority interest . . . . . . . . . . . . . . . (5.2) (296.2) — — (120.0)
Net cash used in investing activities . . . . . . . . . . . (1,289.3) (589.6) (498.2) (413.4) (556.9)
Cash flow from financing activities
Proceeds from issuance of invested capital . . . . . . . 193.8 787.7 273.9 238.5 74.0
Proceeds from borrowings . . . . . . . . . . . . . . . . . . 1,307.7 177.0 141.6 73.0 345.0
Repayment of borrowings . . . . . . . . . . . . . . . . . . (199.8) (212.1) (182.6) (130.3) (143.5)
Movement in acceptances . . . . . . . . . . . . . . . . . . 12.0 (11.2) 197.6 61.5 77.8
Movement in bills of exchange and other financing . 168.5 210.3 (133.6) (4.0) 218.1
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115.1) (179.5) (199.0) (149.0) (178.8)
Net cash provided by financing activities . . . . . . . . 1,367.1 772.2 97.9 89.7 392.6
Net increase/(decrease) in cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.1 56.1 (50.2) (94.1) (0.1)
Effect of exchange rate changes on cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 4.1 12.3 6.6 8.9
Cash and cash equivalents at the beginning of the
year/period . . . . . . . . . . . . . . . . . . . . . . . . . . . — 40.3 100.5 100.5 62.6
Cash and cash equivalents at the end of the year/
period (Note 15) . . . . . . . . . . . . . . . . . . . . . . . 40.3 100.5 62.6 13.0 71.4
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Notes to the combined historical financial information

1. PRESENTATION OF COMBINED HISTORICAL FINANCIAL INFORMATION
1.1 Corporate Information
Essar Energy plc (the ‘‘Company’’) is currently a wholly owned subsidiary of Essar Global Limited
(‘‘EGL’’) (together with its subsidiaries the ‘‘Essar Group’’). The Essar Group has been established for
over 40 years and operates in various businesses. In 2006-07 it consolidated its oil, gas and power
businesses through the acquisition of:
• 67.22% of Essar Oil Limited by EGL’s subsidiary Vadinar Oil on 30 June 2006 and the acquisition of
Essar Energy Holdings Limited (and its subsidiaries) by EGL in September 2006. Immediately
thereafter Essar Energy Holdings Limited became the holding company of Vadinar Oil. As a result,
Essar Energy Holdings Limited and its subsidiaries formed the energy business of the Essar Group
(the ‘‘Energy Group’’).
• 100% of Essar Power Holdings Ltd (‘‘EPHL’’) on 13 September 2006 (together with its subsidiaries,
the ‘‘Power Group’’), that held a 42.86% interest in Essar Power Limited. The Essar Group also
acquired a 36.26% interest in Essar Power Limited through another subsidiary on 5 October 2006.
Essar Power Holdings Ltd’s interest in Essar Power Limited increased over the period presented in
the historical financial information to 66.20%.
The combined Energy and Power groups are defined as the Group in the combined historical financial
information. The Energy and Power groups were expanded by further acquisitions during the periods
presented (see Note 22).
On 29 April 2010, and as detailed in Note 27, EGL completed a reorganisation whereby the Energy and
Power groups, were reorganised under the Company (the ‘‘Pre-IPO Reorganisation’’), for the purposes of
listing on the Main market of the London Stock Exchange. Accordingly, the combined historical financial
information presented in this Part 11: ‘‘Financial Information’’ is in respect of the entities brought in to the
Group under the Pre-IPO Reorganisation (the ‘‘Group’’). The ultimate Shareholder of these companies
was EGL both before and after the Pre-IPO Reorganisation and this economic interest is not transitory,
and they were therefore under common ownership.
The Company is a public limited company incorporated on 18 December 2009 under the Companies Act
2006 and registered in England and Wales (registered number 07108619). The Company’s registered office
is 3rd Floor Lansdowne House, Berkeley Square, London, W1J 6ER. The Company is not included in the
combined historical financial information and it did not trade or enter into any transaction between the
date of its incorporation and 31 December 2009. Its balance sheet at such date comprised £1 share capital.
Prior to listing the Company was ultimately held by EGL. The financial statements of EGL are not publicly
available.
The combined historical financial information for the years ended 31 March 2007, 2008, 2009 and nine
months ended 31 December 2009 (and the comparative nine months ended 31 December 2008) in respect
of the Group was authorised for issue by the Board of Directors of the Company on 30 April 2010.
The Group’s principal businesses are oil refining, the generation of power and the exploration and
production of oil and gas. A significant portion of the Group’s activities have been executed with Essar
Group related parties who do not form part of this combined historical financial information.
Entities included in the combined historical financial information are listed in Note 26.
1.2 Basis of preparation

The combined historical financial information comprises the historical financial information of the oil, gas
and power businesses of the Essar Group represented by the Energy and Power Group which will comprise
the Group at the date of admission of the Company’s shares to the London Stock Exchange.
These legal entities have not previously constituted a legal Group and hence consolidated historical
financial information does not exist for the Group. Accordingly, the financial information, which has been
prepared specifically for the purposes of the prospectus, is prepared on a basis that combines the results
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and assets and liabilities of the Power and Energy Groups, acquired by the Company under the pre-IPO
Reorganisation.
Unaudited comparative financial information for nine months ended 31 December 2008 has also been
included. The comparative balance sheet is represented by the balance sheet as at 31 March 2008. Internal
transactions within the Group have been eliminated on combination.
The combined historical financial information has been prepared in accordance with the requirements of
the Prospectus Directive regulation and the UK Listing Rules and in accordance with this basis of
preparation. The basis of preparation describes how the financial information has been prepared in
accordance with International Financial Reporting Standards as adopted by the European Union
(‘‘IFRS’’) that are effective for financial years beginning on or after 1 April 2009, except as described
below.
IFRS does not provide for the preparation of combined historical financial information, and accordingly in
preparing the combined historical financial information certain accounting conventions commonly used for
the preparation of historical financial information for inclusion in investment circulars as described in the
Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on
historical financial information) issued by the UK Auditing Practices Board have been applied. The
application of these conventions results in the following material departure from IFRS:
The historical financial information is prepared on a combined basis and therefore does not comply
with the requirements of IAS 27 Consolidated and Separate Financial Statements, however the
combined historical financial information has been prepared by applying the principles underlying the
consolidation procedures of IAS 27.
In all other respects IFRS as adopted by the European Union have been applied. This basis of preparation
has resulted in the following:
When the Essar Group has control of entities which have later been transferred in to the Energy or Power
Group, the Group has consolidated such entities from the date the Essar Group obtained control with the
portion of the entity not owned by the EGL Group reflected as minority interest. Further acquisitions of
minority interests in those entities have been reflected as a change in reserves.
The results and net assets of an associate interest held by the Power Group, a steel business, did not form
part of the Group transferred to the Company as part of the Pre-IPO Reorganisation and therefore has not
been reflected in the combined historical financial information. Accordingly, the requirements of IAS 28
Investments in Associates to equity account for the interest in the aforementioned steel associate has not
been complied with in this respect.
Further, this interest in the steel business was exchanged for a smaller interest in the Teletech Investments
India Limited during the period of the combined historical financial information. This did not form part of
the Group to be listed, and so is excluded from the combined historical financial information.
Oil and gas interests in an exploration block, Myanmar, which have been distributed within the Essar
Group have similarly been excluded from the combined historical financial information.
The combined historical financial information has been prepared based on the following:
• The assets, liabilities and the profit or loss of the entities comprising the Group have been aggregated.
All transactions and balances between entities included within the combined historical financial
information have been eliminated. Transactions and balances with entities in the Essar Group that are
not within the combined Group are classified as related party transactions.
• The share capital, share application monies and share premium of the Energy and Power Groups have
been combined and reflected as invested capital. All other items within equity have been aggregated
in a manner consistent with the assets and liabilities.
• The minority interest in the Power and Energy Group reduced throughout the periods presented as a
result of a number of further direct and indirect acquisitions by the Group.
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• The Essar Group acquired certain other entities through the Energy and Power Groups during the
periods presented in the combined historical financial information. These are detailed in Note 22 and
have been recorded in accordance with the business combination policy described below.
In addition, due to the fact that these entities were part of the larger Essar Group and therefore benefited
from its structure and central operations, there are certain items within this financial information that may
not be indicative of the Group’s future performance and does not necessarily reflect what the Group’s
financial position and results of operations would have been had it operated as a separate, stand-alone
entity during the periods presented. These include, but are not limited to, the following:
• Administrative cost include payments to the Essar Group for administrative services comprising
administration, management and other services based on the historical intercompany charges. These
costs were affected by the arrangements that existed in the Essar Group and are not necessarily
representative of the position that would have been reported had the Group been an independent
Group or that may prevail in the future. Further details of shared services between the Group and
Essar Group companies are included in Note 25.
• Interest income and expenses recorded in the combined income statement have been determined in
accordance with the historical financing arrangements within the Essar Group. They are not
necessarily representative of the interest income and expenses that would have been reported had the
Group been an independent Group. They are not necessarily representative of the interest income
and expenses that may arise in the future.
• Essar Group undertakes capital projects for the Group. The amounts recorded reflect the
arrangements in place at the time and are not necessarily reflective of alternate arrangements the
Group could have entered into had the Group been an independent Group. They are not necessarily
representative of the capital expenditure that may be incurred in the future.
• The Essar Group purchases power from the Group’s power station. The amounts recorded are
reflective of the arrangements in place at the time and are not reflective of alternative arrangements
the Group may have entered into had it been an independent Group.
• No information is presented for proposed directors of the Company or for individuals who served as
directors of companies within the Group but who are not to be directors of the Group following the
transaction.
1.3 Going concern

In assessing its going concern status, the Group has taken account of its financial position, anticipated
future trading performance, its bank and other facilities, the net proceeds receivable by the Group in the
underwritten offer of new shares and its capital expenditure commitment and plans, together with the
other risks facing the Group.
After making appropriate enquiries, the Group considers that it has adequate resources to continue in
operational existence for at least the next 12 months from the date of this document and that it is
appropriate to adopt the going concern basis in preparing this financial information.
1.4 Standards, interpretations and amendments to published standards that are not yet effective
The Group has applied all accounting standards and interpretations issued by the IASB and IFRIC except
for the following standards and interpretations which were in issue but not yet effective:
• IFRS 1—Amendment—Limited Exemption from Comparative IFRS 7 Disclosures for First-time
Adopters 1 July 2010
• IFRS 2—Amendment—Group Cash-settled Share-based Payment Transactions 1 January 2010
• IFRS 9—Financial instruments 1 January 2013
• IAS 24—Related Party Disclosure (Revised) 1 January 2011
• IAS 27—Consolidated and Separate Financial Statements (Revised) 1 July 2009
• IAS 39—Amendment—Eligible Hedged Items 1 July 2009
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• IAS 39 and IFRIC 9—Amendment—Embedded Derivatives 1 July 2009

• IFRIC 14—Amendment—Prepayments of a Minimum Funding Requirement 1 January 2011
• IFRIC 17—Distributions of Non-Cash Assets to Owners 1 July 2009
• IFRIC 18—Transfers of Assets from Customers 1 July 2009
• IFRIC 19—Extinguishing Financial Liabilities with Equity Instruments 1 July 2010
• Improvements to IFRSs 2009, 1 January 2010
The adoption of these standards and interpretations is not expected to have a material impact on the
financial information of the Group in future reporting periods, the Group plans to adopt these standards
on their effective date as described above.
2. ACCOUNTING POLICIES AND ESTIMATES

2.1 Significant accounting policies
2.1.1 Business combinations
The acquisition of subsidiaries and businesses from third parties are accounted for using the purchase
method. The cost of acquisition is measured at the aggregate value of the identifiable assets, liabilities
incurred or assumed and equity instruments issued by the Group on the basis of fair value at the date of
acquisition in exchange for control of the acquiree, plus cost directly attributable to the acquisition, except
for a business combination under common control which is described below. The acquiree’s identifiable
assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 Business
Combinations are recognised at their fair value at the date of acquisition, except for non-current assets that
are classified as held for sale in accordance with IFRS 5 Non-Current Assets held for sale and discontinued
operations which are recognised at fair value less costs to sell.
Where it is not possible to complete the determination of fair values by the date on which the first
post-acquisition financial statements are approved, a provisional assessment of fair values is made and any
adjustments required to those provisional fair values, and the corresponding adjustments to purchased
goodwill, are finalised within twelve months of the acquisition date.
Goodwill arising on acquisition is recognised as an asset and is initially measured at cost, being the excess
of the cost of the business consideration over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities recognised. If, after reassessment, the fair values of the
identifiable assets, liabilities and contingent liabilities exceeds the cost of acquisition, the excess is
recognised immediately in profit or loss.
The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of
the net fair value of the assets, liabilities and contingent liabilities recognised.
The Group follows the entity concept method of accounting for changes in ownership interest in
subsidiaries. In the event of a purchase of a minority shareholder’s interest where the Group holds the
controlling interest in a subsidiary, any excess over the Group’s share of net assets is recorded in retained
earnings.
Common control acquisition

The assets and liabilities of subsidiaries acquired from entities under common control are recorded at the
carrying value recognised by the transferor. Any differences between the carrying value of the net assets of
subsidiaries acquired, and the consideration paid by the Group is accounted for as an adjustment to
retained earnings. When the transferor contributes the subsidiaries to the Group, the original cost paid by
the transferor is recorded as capital investment with the differences recorded as an increase in retained
earnings. The net asset of the subsidiaries and their results are recognised from the date on which control
of the subsidiaries was obtained by the transferor.
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2.1.2 Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest
in the fair value of the identifiable assets and liabilities of a subsidiary, associate or joint controlled entity
at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured
at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for
impairment at least annually. Any impairment is recognised immediately in profit or loss and is not
subsequently reversed. Internally generated goodwill is not recognised.
For the purpose of impairment testing goodwill is allocated to each of the Group’s cash generating units
expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has
been allocated are tested for impairment annually, or more frequently when there is an indication that the
unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying
amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of
each asset in the unit.
On disposal of a subsidiary, associate or joint controlled entity, the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.
2.1.3 Revenue recognition

Revenue from the sale of petroleum products is measured at the fair value of consideration received or
receivable, net of trade discounts, volume rebates, value added tax, sales taxes and duties. A sale is
recognised when economic benefits associated with the sale are expected to flow to the Group and the
significant risks and rewards of ownership of the goods have passed and it can be reliably measured. This is
usually when title and insurance risk has passed to the customer.
Revenue from power supply is accounted for on the basis of billings to consumers. Generally all consumers
are billed on the basis of recording of consumption of electricity by installed meters. Sales of electricity are
accounted for based on relevant tariff rates approved under the contract with the customer.
Revenue associated with sales tax deferral is recognised in accordance with the Group’s policy for
accounting for sales tax incentives set out in 2.1.4.
2.1.4 Sales tax incentives

The Group receives the benefit of certain sales tax incentives under the Capital Investment Incentive
Premier/Prestigious Units Scheme 1995 - 2000 (the ‘‘Sale Tax Incentive Scheme’’). The benefits under the
Sales Tax Incentive Scheme are recognised when it is reasonable to expect that the benefit will be received
and that all related conditions will be met. The benefit of a sales tax deferral with no associated interest
outflow is recognised as a liability in accordance with the imputation rule under IAS 20 Accounting for
Government grants and disclosure of Government Assistance. This deferred liability is measured in
accordance with IAS 39 Financial Instruments: Recognition and Measurement. The benefit of the below
market rate of interest (or no interest) is measured as the difference between initial carrying value of the
loan as determined in accordance with IAS 39 and the sales tax collected.
The benefits under the Sales Tax Incentive Scheme are available only when eligible domestic sales are
made from the Gujarat State and the sale is therefore treated as the key condition giving rise to the
recognition of the benefit. It is expected that all other conditions related to the deferral of sales tax will be
met and therefore the benefit is recognised as eligible domestic sales are made. The deferred liability to
the State is recognised at its net present value, and therefore a finance charge is recorded as the discount
on this liability unwinds.
2.1.5 Foreign currency transactions and translation

Each entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency. Transactions in currencies other
than the functional currency are translated into functional currency at the exchange rates at the date of
transaction. Monetary assets and liabilities denominated in other currencies are translated into functional
217

currency at exchange rates at the balance sheet date and exchange differences are recognised in profit or
loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in
a foreign currency are translated using the exchange rates at the date when the fair value was determined.
The combined historical financial information is presented in US dollars. For the purposes of combination,
the income statement items of those entities for which the US dollar is not the functional currency are
translated into US dollars at the average rates of exchange during the year. The related balance sheets are
translated at the rates at the balance sheet date. Exchange differences arising on translation are reported
in the combined statement of changes in equity.
The rates used to translate the combined historical financial information were as follows:
2007 2008 2009 2008 2009
INR/US$ INR/US$ INR/US$ INR/US$ INR/US$
Average Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.90* 40.24 45.91 44.68 47.92
Closing Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.59 39.97 50.95 48.50 46.68
* Blended rate for the period
2.1.6 Derivative financial instruments

In order to reduce its exposure to foreign exchange, commodity price and interest rate risk, the Group
enters into forward, option and swap contracts. The Group does not use derivative financial instruments
for speculative purposes. All derivative contracts and instruments are held at fair value in the balance sheet
within other financial assets or other financial liabilities. A derivative is presented as a non-current asset or
liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be
realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.
At present, the Group’s derivative arrangements are not designated hedges under the definitions of
IAS 39. Consequently, all fair value movements in respect of derivative financial instruments are taken to
the income statement. Further details of derivative financial instruments including fair value
measurements are disclosed in Note 18.
2.1.7 Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses, if
any. The initial cost of an asset comprises its purchase price or construction cost, any costs directly
attributable to bringing the asset to the location and condition necessary for it to be capable of operating in
the manner intended by the management, the initial estimate of the decommissioning obligation and for
qualifying assets, borrowing costs if the recognition criteria are met.
Costs directly related to construction, including costs and revenues arising from testing, are capitalised up
to the point where the property, plant and equipment become operational. Property, plant and equipment
becomes operational once all testing and trial runs are complete and it is ready for use in the manner
management intended. Income from the sale of products as a result of testing and trial runs of a new asset
are part of the directly attributable cost of assets and therefore deducted from the cost of the asset. The
purchase price or construction cost is the aggregate amount paid and the fair value of any other
consideration given to acquire the asset. The capitalised value of a finance lease is also included within
property, plant and equipment. Likewise, when a major inspection or major maintenance is, its cost is
recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria
are satisfied. All other repairs and maintenance costs are recognised in the profit or loss as incurred.
Property, plant and equipment in the course of construction is carried at cost, less accumulated impairment
losses, if any, and is not depreciated.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
218

(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in profit or loss in the year the asset is derecognised.
The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted if
appropriate, at each financial year end.
Depreciation of property, plant and equipment other than freehold land and properties under construction
is calculated to write off the cost of the asset to its residual value using the straight line method or the
written down value method or on a unit of production basis as appropriate, over its expected useful life.
Depreciation begins when the assets become operational.
Depreciation is calculated over the estimates useful lives of assets and on the basis of depreciation
methods are as follows:
Expected
useful life
Asset Depreciation Method (years)
Buildings . . . . . . . . . . . . . . . . ......... Straight line 40

Plant and equipment
—Refinery . . . . . . . . . . . . . . . . . . . . . . . Straight line 40
—Power plant . . . . . . . . . . . . . . . . . . . . . Straight line 25
—Related assets . . . . . . . . . . . . . . . . . . . Straight line 10-25
Producing properties . . . . . . . . . . . . . . . . Based on reserves on a unit of production basis
Office equipment and fixtures . . . . . . . . . Written down value 3-20
Motor Vehicles . . . . . . . . . . . . . . . . . . . . Written down value 9-11
Property, plant and equipment held under finance leases is depreciated over the shorter of lease term and
estimated useful life.
2.1.8 Impairment of non-financial assets

The carrying amounts of property, plant and equipment, including producing properties and leases,
intangible asset (excluding goodwill) and investments in joint controlled entities are reviewed for
impairment at each balance sheet date if events or changes in circumstances indicate that the carrying
value of an asset may not be recoverable. Where it is not possible to estimate the recoverable amount of an
individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset
belongs. If there are indicators of impairment, an assessment is made to determine whether the asset’s
carrying value exceeds its recoverable amount. Whenever the carrying value of an asset exceeds its
recoverable amount, the carrying value of the asset or the cash generating unit is reduced to its recoverable
amount and impairment loss is recognised in profit or loss.
An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs to
sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable amount, but such that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss.
2.1.9 Borrowing costs

Borrowing costs directly relating to the acquisition, construction or production of qualifying assets are
added to the costs of those assets during the construction phase on an effective interest basis, until such
time as the assets are ready for their intended use or sale which, in the case of producing properties, is
when saleable material begins to be extracted from the producing properties. The Group also capitalises
exchange differences arising from foreign currency borrowings used for the construction of qualifying
assets to the extent that they are regarded as an adjustment to interest costs. Where surplus funds are
219

available for a short term out of money borrowed specifically to finance a project and/or a qualified asset,
the income generated from such short term investments is deducted from capitalised borrowing costs.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
2.1.10 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the
arrangement at inception date of whether the fulfilment of the arrangement is dependent on the use of a
specific asset or assets or the arrangement conveys a right to use the asset.
Assets held under finance leases are initially recognised as assets of the Group at the inception of the lease
at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised
in the income statement, unless they are directly attributable to qualifying assets, in which case they are
capitalised in accordance with the Group’s policy on borrowing costs (see above).
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the
lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease
term.
Payments made under operating leases, where the lessors effectively retain substantially all the risk and
benefits of ownership of the lease property, plant and equipment are recognised in the income statement
on a straight line basis over the lease term. Lease incentives received are recognised as an integral part of
the total lease expense over the term of the lease. Property, plant and equipment used by the Group under
operating leases are not recognised in the Group’s balance sheet.
2.1.11 Financial assets

All financial assets are recognised and derecognised on a trade date where the purchase or sale of a
financial asset is under a contract whose terms require delivery of the financial asset within the timeframe
established by the market concerned, and are initially measured at fair value, plus transaction costs, except
for those financial assets classified as at fair value through profit or loss, which are initially measured at fair
value.
The Group classifies its financial assets into the following specified categories; at Fair Value Through
Profit or Loss (FVTPL), cash and cash equivalents, loans and receivables and Available-for-sale (AFS)
financial assets. The classification is dependent on the nature and purpose of the financial assets acquired.
Management determines the classification of its financial assets at initial recognition. Further details on
the Group’s financial assets and fair value measurement are disclosed in Note 21.
Financial assets at FVTPL

Financial assets at FVTPL include financial assets held for trading or designated upon initial recognition
as at FVTPL. Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised
in profit or loss.
Financial assets are classified as held for trading if:
(i) acquired principally for the purpose of selling in the near term;
(ii) they are a part of an identified portfolio of financial instruments that the Group manages together and
has a recent actual pattern of short-term profit-taking; or
(iii) they are derivatives unless these are designated as effective hedging instruments.
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial
recognition if:
(i) such designation eliminates or significantly reduces a measurement or recognition inconsistency that
would otherwise arise;
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(ii) the financial asset forms part of a Group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Group’s
documented risk management or investment strategy, and information about the Grouping is
provided internally on that basis; or
(iii) it forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the
entire combined contract (asset or liability) to be designated as at FVTPL.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement
recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or
interest earned on the financial asset and is included in the ‘other gains and losses’ line item in the income
statement. Fair value is determined in the manner described in Note 21.
Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. After initial measurement loans and receivables are measured at amortised
cost using the effective interest method less any allowance for impairment. Interest income is recognised
by applying effective interest rate, except for short term receivables when the recognition of interest would
be immaterial. Gains and losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired as well as through the amortisation process.
AFS financial investments

Listed shares held by the Group that are traded in an active market are classified as being AFS and are
stated at fair value. The Group also has investments in unlisted shares that are not traded in an active
market but are also classified as AFS financial assets and stated at fair value (because the directors
consider that fair value can be reliably measured). Fair value is determined in the manner described in
Note 21. Gains and losses arising from changes in fair value are recognised in other comprehensive income
and accumulated reserves with the exception of impairment losses, interest calculated using the effective
interest method and foreign exchange gains and losses on monetary assets, which are recognised directly in
profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or
loss previously recognised in the investments revaluation reserve is reclassified to profit or loss.
Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the
dividend is established. The fair value of AFS monetary assets denominated in a foreign currency is
determined in that foreign currency and translated at the spot rate at the balance sheet date. The foreign
exchange gains and losses that are recognised in profit or loss are determined based on the amortised cost
of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive
income.
Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance
sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more
events that occurred after the initial recognition of the financial asset, the estimated future cash flows of
the investment have been affected.
For financial assets carried at amortised cost the Group assesses whether objective evidence of impairment
exists for assets that are individually significant, or collectively for financial assets that are not individually
significant. Objective evidence of impairment could include:
(i) significant financial difficulty of the issuer or counterparty;
(ii) default or delinquency in interest or principal payments; or
(iii) it becoming probable that the borrower will enter bankruptcy or financial reorganisation.
If there is objective evidence that an impairment loss has incurred, the amount of the loss is measured as
the difference between the asset’s carrying amount and the present value of estimated future cash flows
(excluding future expected credit losses that have not yet been incurred). The present value of the
estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has
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a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest
rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount
of the loss is recognised in the income statement.
For AFS financial investments, the Group assesses at each reporting date whether there is objective
evidence that an investment or a Group of investments is impaired.
In the case of equity investments classified as AFS, objective evidence for impairment would include a
significant or prolonged decline in the fair value of the investment below its cost. Where there is evidence
of impairment, the cumulative loss (measured as the difference between the acquisition cost and the
current fair value, less any impairment loss on that investment previously recognised in the income
statement) is removed from other comprehensive income and recognised in the income statement.
Impairment losses on equity investments are not reversed through the income statement; increases in their
fair value after impairment are recognised directly in other comprehensive income.
2.1.12 Financial liabilities

Financial liabilities are classified as financial liabilities at FVTPL or other financial liabilities at initial
recognition. The Group’s other financial liabilities include borrowings, trade and other payables and
finance lease payables. All financial liabilities are recognised initially at fair value and in the case of loans
and borrowings, include directly attributable transaction costs.
The measurement of financial liabilities depends on their classification as follows:
Financial liabilities at FVTPL

Financial liabilities at FVTPL include those held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if
they are acquired for the purpose of selling in the near term. Gains or losses on liabilities held for trading
are recognised in the income statement.
Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction
costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest
method, with interest expense recognised on an effective yield basis. The effective interest method is a
method of calculating the amortised cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability, or, where appropriate, a shorter period, to the net
carrying amount on initial recognition. Gains and losses are recognised in the income statement when the
liabilities are derecognised as well as through the amortisation process.
Financial guarantee contracts

The Group provides certain guarantees in respect of the indebtedness of subsidiary undertakings, claims
under contract and other arrangements in the ordinary course of business. The Group evaluates each
arrangement to determine whether it is an insurance or a financial guarantee contract. Financial guarantee
contract liabilities are measured initially at their fair values and, if not designated as at FVTPL, are
subsequently measured at the higher of the amount of the obligation under the contract and the amount
initially recognised less cumulative amortisation.
Insurance contracts are disclosed as contingent liabilities unless the obligations under guarantee become
probable.
Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled or expire.
222

2.1.13 Provisions and contingencies

Provisions are recognised when the Group has a present legal or constructive obligation, as a result of past
events, and it is probable that an outflow of resources, that can reliably be estimated, will be required to
settle such an obligation. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate
that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability. Unwinding of the discount is recognised in the income statement as a finance cost.
Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.
A contingent liability is disclosed where the existence of an obligation will only be confirmed by future
events or where the amount of the obligation cannot be measured reliably. Contingent assets are not
recognised, but are disclosed where an inflow of economic benefits is probable.
In normal course of business, contingent liabilities may arise from litigation and other claims against the
Group.
2.1.14 Inventories
Inventories (other than crude oil extracted by the exploration and production segment) are valued at lower
of cost and net realisable value. Crude oil extracted and in saleable condition is valued at net realisable
value.
Cost is determined on the following bases:
(a) Raw materials and consumables are determined at weighted average cost except crude oil for the
refinery which is measured at first-in first-out basis.
(b) Finished products and work in progress are determined at direct material cost, labour cost and a
proportion of manufacturing overheads based on normal or allocated capacity.
(c) Inventories held for trading purposes are determined at weighted average cost.
Net realisable value is determined by reference to estimated prices existing at the balance sheet date for
inventories less all estimated costs of completion and costs necessary to make the sale.
2.1.15 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible
assets acquired in a business combination is fair value as at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less accumulated amortisation and accumulated
impairment losses, if any.
Intangible assets with finite lives are amortised over their useful lives and assessed for impairment
whenever there is an indication that an intangible asset may be impaired. The asset’s useful lives and
methods of amortisation are reviewed, and adjusted if appropriate, at each financial year end.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when
the asset is derecognised.
Finite lives intangible assets which are subject to amortisation are amortised over their useful lives as
mentioned below:
Expected
useful life
Intangible asset (years)
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5
Power sales contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.1.16 Joint controlled entities

A joint controlled entity is an entity in which the Group shares joint control over the strategic, financial
and operating decisions with one or more ventures under a contractual arrangement.
223

Investment in joint controlled entities are accounted for using the equity method of accounting, except
when the investment is classified as held for sale, which is recognised at fair value less costs to sell. In
accordance with the equity method, investments in joint controlled entities are measured at cost plus post
acquisition changes in the Group’s share of net assets of joint controlled entities, less any impairment in
the value of individual investments.
Goodwill arising from the excess of the cost of acquisition over the Group’s interest in the net fair value of
the identifiable assets, liabilities and contingent liabilities recognised of the joint controlled entities is
included in the carrying amount of the investment and is assessed for impairment as part of that
investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and
contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or
loss.
The income statement reflects share of results of operations of the joint controlled entities. Where there
has been a change recognised directly in equity of the joint controlled entities, the Group recognises its
share of any changes, when applicable, in the statement of changes in equity. Profits and losses resulting
from transactions between the Group and the joint controlled entities are eliminated to the extent of the
Group’s interest in the relevant joint controlled entities.
2.1.17 Exploration and evaluation expenditure

Exploration and evaluation activity involves the search for oil and gas resources, the determination of
technical feasibility and the assessment of commercial viability of an identified resource.
Exploration and evaluation activity includes:
(a) researching and analysing historical exploration data;
(b) gathering exploration data through geological and geophysical studies;
(c) exploratory and appraisal drilling;
(d) evaluating and testing discoveries;
(e) determining transportation and infrastructure requirements; and
(f) conducting market and finance studies.
Administration costs that are not directly attributable to a specific exploration area are charged to the
profit and loss account. License costs paid in connection with a right to explore an existing exploration area
are capitalised. Exploration and evaluation expenditure (including amortisation of capitalised license
costs) is charged to the profit and loss account as incurred except in the following circumstances:
(a) the exploration and evaluation activity is related to an established discovery for which commercially
recoverable reserves have already been established; or
(b) at the balance sheet date, exploration and evaluation activity has not reached a stage which permits a
reasonable assessment of the existence of commercially recoverable reserves.
Capitalised exploration and evaluation expenditure considered to be tangible is recorded as a component
of property, plant and equipment at cost less impairment losses, if any. All capitalised exploration and
evaluation expenditure is monitored for indicators of impairment. Where a potential impairment is
indicated, an impairment test of the capitalised exploration and evaluation expenditure is performed for
each area of interest in conjunction with the Group or pool of operating assets (representing a cash
generating unit) to which the exploration is attributed. To the extent that capitalised expenditure is not
expected to be recovered it is charged to the profit and loss account. Exploration areas at which reserves
have been discovered but that require major capital expenditure before production can begin are
continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional
exploration or evaluation work is under way or planned.
2.1.18 Development expenditure

When commercially recoverable reserves are determined and development is sanctioned, the capitalised
exploration and evaluation expenditure is transferred to assets under construction after impairment is
224

assessed and any resulting impairment loss is recognised. Expenditure on the construction, installation or
completion of infrastructure facilities such as platforms, pipelines and the drilling of development wells are
capitalised as assets under construction.
On completion of a development, all capitalised exploration and evaluation expenditure together with the
subsequent development expenditure transferred to producing properties are depreciated using unit of
production method. This is carried out with reference to quantities, with depletion computed on the basis
of the ratio that oil and gas production bears to balance proved and probable reserves at commencement
of the year.
2.1.19 Tax
Tax expense represents the sum of current tax and deferred tax.
Current tax is provided on taxable income at amounts expected to be paid or recovered, using the tax rates
and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is provided, using the balance sheet method, on all temporary differences at the balance sheet
date between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred tax is recognised for all taxable temporary differences, except:
(i) where the deferred tax arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting nor taxable profit or loss; and
(ii) in respect of taxable temporary differences associated with investments in subsidiaries and interests in
joint controlled entities, where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, unused tax credits carried
forward and unused tax losses, to the extent that it is probable that sufficient taxable profit will be available
to allow all or part of the assets to be recovered. The carrying amount of deferred tax assets is reviewed at
each balance sheet date and is adjusted to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset will be realised or the liability will be settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the balance sheet date. Unrecognised deferred income tax assets are
reassessed at each balance sheet date and are recognised to the extent that it has become probable that
future taxable profit will allow the deferred tax asset to be recovered.
Current and deferred tax are recognised as an expense or income in the income statement, except when
they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in
equity, or where they arise from the initial accounting for a business combination. In the case of a business
combination, the tax effect is taken into account in calculating goodwill or in determining the excess of the
acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent
liabilities over the cost of the business combination.
Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists
to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the
same taxable entity and the same tax authority.
2.1.20 Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand, short-term deposits
with banks with original maturity of less than 90 days and short-term highly liquid investments, that are
readily convertible into cash and which are subject to insignificant risk of changes in the principal amount.
Bank overdrafts, which are repayable on demand and form an integral part of operations are included in
cash and cash equivalents.
225

2.1.21 Retirement benefits

The Group operates both defined benefit and defined contribution schemes for its employees as well as
post employment benefit plans. For defined contribution schemes the amount charged as expense is the
contributions paid or payable when employees have rendered services entitling them to the contributions.
For defined benefit pension and post-employment benefit plans, full actuarial valuations are carried out
every year end using the projected unit credit method. Actuarial gains and losses arising during the year
are recognised in profit and loss account.
Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise
is amortised on a straight line basis over the average period until the benefits become vested.
The employee benefit obligation recognised in the balance sheet represents the present value of the
defined benefit obligation as reduced by the fair value of the related plan assets. Any asset resulting from
this calculation is limited to the reductions in future contributions to the plan.
2.2 CRITICAL ACCOUNTING JUDGMENT AND ESTIMATES
In the course of applying the policies outlined in all notes under section 2.1 above, management have made
estimations and assumptions that impact the amounts recognised in the combined historical financial
information and related disclosures. Several of these estimates and judgments are related to matters that
are inherently uncertain as they pertain to future events. These estimates and judgments are evaluated at
each reporting date and are based on historical experience, internal controls, advice from external experts
and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The resulting accounting estimates may vary from the actual results. The Group believes
that the assumptions, judgments and estimations that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial period are the
following areas:
2.2.1 Sales tax incentives

The Group benefits from certain sales tax incentives given by the state of Gujarat provided if the sales are
made from the state of Gujarat. Under these incentive schemes, the Group is able to defer the payment of
up to approximately Rs. 91 billion (US$1.95 billion) collected as sales tax for eligible domestic sales made
from the state of Gujarat until the financial year ending 31 March 2021 (or earlier if the full eligible limit is
exhausted), after which it is required to repay the retained amounts of sales tax in six equal annual
instalments. There are a number of conditions under which this benefit has been granted including:
(i) ensuring that certain percentages of the employees are local people; (ii) re-investing certain amounts of
the benefit; (iii) adhering to specified pollution control measures; and (iv) contributing a certain amount to
the prescribed rural development scheme in the state of Gujarat. The Group recorded a benefit of
US$264.6 million in the year ended 31 March 2009 and US$173.7 million in the nine months to
31 December 2009. The majority of the benefit is expected to be earned over a period of five to seven years
from the date on which the Vadinar refinery commenced commercial operations.
The amount of benefit recorded is based on management’s expectation that it will begin repayments in
2021 and that it will comply with all the related conditions. This is based on the fact that management
intends to comply with all such conditions, is able to control its compliance, and intends to monitor the
sales to allow the Group to benefit from the maximum deferral period. Any change in this assessment
would result in a change in the benefit that would be recorded in that period.
The Group has recorded the sales tax benefit as revenue in the period in which the associated eligible
domestic sales are made to customers. Under IAS 20, the benefit may only be recognised when there is
reasonable assurance that the entity will comply with the conditions attached to the benefit and must be
recognised over the period necessary to match the benefit systematically with the related costs which they
are intended to compensate. Recognition of the benefit in profit or loss on a receipts basis is appropriate
only where no suitable basis exists for allocating the benefit to periods other than the one in which it is
received.
Management has exercised its judgement in assessing the period over which to recognise the benefit and
believes there are no significant costs or expenses that the incentive is intended to compensate, as the
226

plant’s location was determined before the incentive became available and as this incentive was set up,
amongst other things, to improve the economic wellbeing of the state of Gujarat. Accordingly, the Group
has recognised the benefit in the period of the eligible domestic sales made from the state of Gujarat,
being the primary condition associated with the benefit. An alternative view would be that the sales tax
benefit is intended to compensate recipients for the costs of setting up and/or conducting their business in
the state of Gujarat, in which case the benefit could be recognised over the period necessary to match such
costs. For example, a differing judgement may be to (a) recognise the benefit during the period in which
the Company incurs operating expenses whilst it enjoys the benefit (for example, 13 years being the
remaining period for which the sales tax payment can be deferred) or (b) recognise the benefit over the
expected life of the capital asset constructed, namely the Vadinar refinery (the depreciation period for
which is 40 years) both of which would result in materially different results in the periods presented with
significantly lower revenue and profit.
Further, the Group’s eligibility to participate in the Scheme is being challenged by the State Government
of Gujarat (see Note 24).
2.2.2 Contingencies and commitments

In the normal course of business, contingent liabilities may arise from litigation and other claims against
the Group. Potential liabilities that have a low probability of crystallising or are very difficult to quantify
reliably, are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not provided
for in the combined historical financial information. There can be no assurance regarding the final
outcome of these legal proceedings, but the Group does not expect them to have a materially adverse
impact on its financial position or profitability. For further details, refer Note 24.
2.2.3 Depreciable lives

The Group’s relevant non-current assets are depreciable over their estimate useful lives as set out in
section 2.1 above. Such lives are dependent upon an assessment of both the technical lives of the assets and
also their likely economic lives based on factors including commodity prices, alternative sources of supply,
relative efficiency and operating costs. Accordingly depreciable lives are reviewed annually using the best
information available to management.
2.2.4 Impairment testing

Goodwill is tested for impairment annually. Other non-current assets are tested for impairment when
conditions suggest that there is a risk of impairment. Where impairment testing is carried out,
management use the best information available to them to assess the likely cash flows available to the
relevant asset. Key assumptions are inherently uncertain and include commodity prices, anticipated
production costs, likely asset lives, the timing of granting of licenses and permits and the relevant discount
rates.
2.2.5 Tax
The Group is subject to tax, principally within India. The amount of tax payable in respect of any period is
dependent upon the interpretation of the relevant tax rules. Whilst an assessment must be made of the
deferred tax position of each entity within the Group, these matters are inherently uncertain until the
position of each entity is agreed with the relevant tax authorities.
2.2.6 Exploration and evaluation expenditure

Exploration and evaluation expenditure are capitalised in accordance with the accounting policy in
Note 2.1.17. In making a decision about whether to continue to capitalise exploration and evaluation
expenditures, it is necessary to make judgements about the satisfaction of , if (a) proved reserves are
booked or (b) (i) if they have found commercially producible quantities of reserves and (ii) if they are
subject to further exploration or appraisal activity in that either drilling of additional exploratory wells is
under way or firmly planned for the near future or other activities are being undertaken to sufficiently
progress the assessing of reserves and the economic and operating viability of the project. If there is a
change in one of these judgements in a subsequent period, then the related capitalised exploration and
227

evaluation expenditures would be expensed in that period resulting in a charge to income. For further
details, refer note 9.
3a. SEGMENT INFORMATION

Information reported to the board for the purpose of resource allocation and assessment of performance is
primarily determined by the nature of the different activities that the Group engages in, rather than the
geographical location of these operations. This is reflected by the Group’s organisational structure and
internal financial reporting systems. The profitability of the segments is reviewed based on profit or loss
after tax and is based on IFRS. The Group has the following reportable operating segments:
(i) Refinery and marketing: The Group owns a petroleum refinery on the west coast of India and oil
retailing stations on franchise across India. Its main products are high speed diesel, motor spirit, fuel
oil and superior kerosene oil. The activities of refining and marketing include the refining of crude oil
and trading, marketing and transportation of finished products and by products.
(ii) Exploration and production: The Group has a diverse portfolio of blocks for the exploration and
production of oil and gas in India, Australia, Indonesia, Madagascar, Nigeria and Vietnam.
(iii) Power: The Group operates a number of electricity generating plants across various locations in India
and Canada. This includes gas and liquid fuel based power plants.
Sales between the segments are made at contractually agreed prices. The segment revenues and segment
results include transaction between business segments. All inter and intra transactions including all profit
or loss made within these segments are eliminated on Group combination.
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OPERATING SEGMENTS
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IFRS 8 requires operating segments to be identified on the basis of internal report about components of the Group that are regularly received by the board to
allocate resources to the segments and to assess their performance. The Group comprises three classes of business; refining and marketing, exploration and
production and power. The following tables present revenue, profit and certain asset and liability information regarding the Group’s operating segments for the
years ended 31 March 2007, 2008, 2009 and for the nine months ended 31 December 2008 and 2009:
For the year ended 31 March
2007 2008 2009
Refining Exploration Refining Exploration Refining Exploration
File: DP70801A.;34
and and and and and and

marketing production Power Eliminations Total marketing production Power Eliminations Total marketing production Power Eliminations Total
229
US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million
Revenue from external customers 95.9 — 106.8 — 202.7 138.8 1.0 232.5 — 372.3 8,192.3 0.3 260.5 — 8,453.1
Inter-segment revenue . . . . . . . — — — — — — — — — — 0.4 — 25.2 (25.6) —
Total segment revenue . . . . . . . 95.9 — 106.8 — 202.7 138.8 1.0 232.5 — 372.3 8,192.7 0.3 285.7 (25.6) 8,453.1
Gross profit/(loss) . . . . . . . . . 0.7 — 39.3 — 40.0 (8.3) 0.4 82.8 — 74.9 576.2 (1.6) 107.1 — 681.7
Depreciation and amortisation . . (0.5) — (12.7) — (13.2) (0.3) (0.3) (29.9) — (30.5) (75.8) (0.1) (32.8) — (108.7)
Loss on commodity derivative
instruments . . . . . . . . . . . . (10.9) — — — (10.9) (199.8) — — — (199.8) (61.2) — — — (61.2)
Finance income . . . . . . . . . . . 0.7 — 1.0 — 1.7 2.0 — 1.1 — 3.1 26.3 0.1 1.5 — 27.9
Finance cost . . . . . . . . . . . . (30.8) — (21.6) — (52.4) (1.8) — (46.2) — (48.0) (238.2) (0.2) (49.2) — (287.6)
Part 11
Segment (loss)/profit before tax . (39.8) (0.3) 13.6 — (26.5) (142.5) (1.9) 26.0 — (118.4) (289.6) (7.8) 52.7 — (244.7)
Tax . . . . . . . . . . . . . . . . . . 4.1 — (3.2) — 0.9 44.4 — (10.9) — 33.5 87.0 (0.4) (8.9) — 77.7
(Loss)/profit after tax . . . . . . . (35.7) (0.3) 10.4 — (25.6) (98.1) (1.9) 15.1 — (84.9) (202.6) (8.2) 43.8 — (167.0)
Financial Information
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2008
(unaudited) 2009
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Refining Exploration Refining Exploration
and and and and
marketing production Power Eliminations Total marketing production Power Eliminations Total
US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million US$ million
Revenue from external customers . . . . 6,891.3 0.3 192.3 — 7,083.9 5,457.7 — 196.9 — 5,654.6
Inter-segment revenue . . . . . . . . . . . 0.2 — 19.1 (19.3) — — — 20.7 (20.7) —
Total segment revenue . . . . . . . . . . . 6,891.5 0.3 211.4 (19.3) 7,083.9 5,457.7 — 217.6 (20.7) 5,654.6
Gross profit . . . . . . . . . . . . . . . . . 348.4 (0.5) 78.0 — 425.9 227.2 (0.1) 95.3 — 322.4
File: DP70801A.;34
Depreciation and amortisation . . . . . . (58.7) (0.3) (25.6) — (84.6) (61.1) (0.1) (28.7) — (89.9)
Loss on commodity derivative
230
instruments . . . . . . . . . . . . . . . . (62.9) — — — (62.9) — — — — —

Finance income . . . . . . . . . . . . . . . 22.6 — 1.4 — 24.0 20.3 — 1.8 — 22.1
Finance cost . . . . . . . . . . . . . . . . . (181.6) (0.2) (33.8) — (215.6) (198.2) (0.4) (39.2) — (237.8)
Segment (loss)/profit before tax . . . . . (421.7) (1.0) 39.6 — (383.1) 94.2 (1.6) 54.7 — 147.3
Tax . . . . . . . . . . . . . . . . . . . . . . . 135.5 — (6.5) — 129.0 (16.2) (0.1) (11.3) — (27.6)
(Loss)/profit after tax . . . . . . . . . . . (286.2) (1.0) 33.1 — (254.1) 78.0 (1.7) 43.4 — 119.7
Two customers in the Power segment, contributing revenues of $72.3 million and $34.5 million respectively, accounted for approximately 52.7% of the Group’s
net sales (2008: Two customers in the Power segment contributing revenues of $152.8 million and $79.7 million respectively, accounted for approximately 62.4%
of the Group’s net sales) (2009: Three customers in the Refining and marketing segment contributing revenues of $2,315.9 million, $1,656.0 million and
$1,490.1 million respectively accounted for approximately 64.6% of the Group’s net sales) (December 2008: Three customers in the Refining and marketing
segment contributing revenues of $1,950.4 million, $1,344.4 million and $1,217.1 million respectively accounted for approximately 63.7% of the Group’s net
sales). (December 2009: Three customers in the Refining and marketing segment contributing revenues of $1,455.4 million, $840.5 million and $899.8 million
respectively accounted for approximately 56.5% of the Group’s net sales).
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0D/
Segment assets and liabilities
As at 31 March 2007 As at 31 March 2008
and and and and
Segment assets . . . . . . . . . . . . . . . . 4,371.5 59.1 960.2 (53.5) 5,337.3 6,170.9 129.5 1,384.1 (57.8) 7,626.7
Borrowings . . . . . . . . . . . . . . . . . . 2,024.1 4.3 529.2 — 2,557.6 2,597.3 4.6 495.8 — 3,097.7
File: DP70801A.;34
Other liabilities . . . . . . . . . . . . . . . 1,106.1 35.4 226.1 (29.9) 1,337.7 2,149.7 43.8 303.7 (31.6) 2,465.6
231
Segment liabilities . . . . . . . . . . . . . 3,130.2 39.7 755.3 (29.9) 3,895.3 4,747.0 48.4 799.5 (31.6) 5,563.3
As at 31 March 2009 As at 31 December 2009

and and and and
Segment assets . . . . . . . . . . . . . . . . 4,532.3 140.0 1,442.0 (54.0) 6,060.3 5,871.3 243.8 2,051.1 (150.4) 8,015.8
Borrowings . . . . . . . . . . . . . . . . . . 2,000.9 5.9 440.8 — 2,447.6 2,330.3 5.5 773.2 — 3,109.0
Part 11
Other liabilities . . . . . . . . . . . . . . . 1,495.9 46.2 334.7 (33.3) 1,842.7 2,382.5 112.1 494.6 (121.2) 2,868.0
Segment liabilities . . . . . . . . . . . . . 3,496.0 52.1 775.5 (33.3) 4,290.3 4,712.8 117.6 1,267.8 (121.2) 5,977.0
MERRILL CORPORATION JDICKSO//30-APR-10 12:38 DISK116:[10ZAU1.10ZAU70801]DQ70801A.;26
3b. GEOGRAPHICAL INFORMATION

The Group’s operations are mainly located in India. The following table provides an analysis of the
Group’s revenue by destination, irrespective of the origin of the goods:
For the year ended For the nine months ended

2007 2008 2009 2008 2009
(Unaudited)
India . . . . . . . . . . . . . . . . . . . . . . . . . . . 202.7 372.3 6,305.0 5,210.9 4,395.8
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . — — 228.2 82.8 196.1
Singapore . . . . . . . . . . . . . . . . . . . . . . . . — — 819.1 759.2 82.4
United Arab Emirates . . . . . . . . . . . . . . . — — 1,040.0 994.5 627.2
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 60.8 36.5 353.1
Total revenue . . . . . . . . . . . . . . . . . . . . . 202.7 372.3 8,453.1 7,083.9 5,654.6
4. REVENUE

2007 2008 2009 2008 2009
(Unaudited)
Sale of petroleum products . . . . . . . . . . . 95.9 139.8 7,928.0 6,673.6 5,284.0
Revenue from power supply . . . . . . . . . . 106.8 232.5 260.5 192.3 196.9
Sales tax benefit . . . . . . . . . . . . . . . . . . . — — 264.6 218.0 173.7
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . 202.7 372.3 8,453.1 7,083.9 5,654.6
Other operating income . . . . . . . . . . . . . 2.4 3.5 11.4 5.7 11.8
Finance income . . . . . . . . . . . . . . . . . . . 1.7 3.1 27.9 24.0 22.1
Total revenue . . . . . . . . . . . . . . . . . . . . . 206.8 378.9 8,492.4 7,113.6 5,688.5
The sales tax benefit above relates to the benefit recognised on eligible domestic sales from the State of
Gujarat. Under the Sales Tax Incentive Scheme, sales tax collected with sales from Gujarat is deferred for
payment to the Sales Tax Authority in the State of Gujarat by up to 13 years. This deferral gives rise to time
value benefit as the difference between the cash received and the net present value of the liability to the
State. The benefit is earned as the eligible domestic sales are made from the State of Gujarat as the benefit
does not compensate the Group for any particular costs or expenses, and the Group expects all other
conditions related to the benefit to be met in full. The benefit is included within revenue as it is derived
directly from sales made to customers.
5. (LOSS)/PROFIT BEFORE TAX

2007 2008 2009 2008 2009
(Unaudited)
(Loss)/profit before tax is stated after
charging:
Cost of inventories recognised as an
expense . . . . . . . . . . . . . . . . . . . . . . . . 149.1 264.2 7,628.2 6,559.4 5,125.7
Net losses on commodity derivatives . . . . 10.9 199.8 61.2 62.9 —
(Gains)/ losses on commodity derivatives
recognised within gross profit . . . . . . . . — — (78.9) (46.5) 40.0
Depreciation and amortisation . . . . . . . . . 13.2 30.5 108.7 84.6 89.9
Staff costs . . . . . . . . . . . . . . . . . . . . . . . 6.4 22.9 32.8 23.6 22.0
232

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: DQ70801A.;26
Loss on commodity derivative instruments

The Group incurred a net loss in respect of commodity derivative transactions undertaken to hedge the
price risk of crude and petroleum products used during the refinery project testing trials which were
completed in April 2008. These amounts have been charged to the income statement outside gross profit
as the plant was not commissioned in this period. Subsequent to commission such items appear within
gross profit.
Cost of inventories recognised as an expense

Cost of inventories recognised as an expense includes inventory write downs amounting to US$nil (2008:
US$0.6 million) (2009: US$114.3 million) (31 December 2008: US$114.5 million) (31 December 2009:
US$13.6 million).
Staff cost

2007 2008 2009 2008 2009
(Unaudited)
Salaries and wages . . . . . . . . . . . . . . . . . 11.9 41.5 42.1 32.2 25.3
Defined benefit plans . . . . . . . . . . . . . . . 0.8 1.6 1.4 1.0 0.9
Defined contribution plans . . . . . . . . . . . 0.3 0.3 0.4 0.5 0.4
Total staff cost . . . . . . . . . . . . . . . . . . . . 13.0 43.4 43.9 33.7 26.6
Less: staff cost capitalised . . . . . . . . . . . . (6.6) (20.5) (11.1) (10.1) (4.6)
Staff costs charged to the income
statement . . . . . . . . . . . . . . . . . . . . . . 6.4 22.9 32.8 23.6 22.0
6. NET FINANCE COSTS

2007 2008 2009 2008 2009
(Unaudited)
Finance Costs
Interest . . . . . . . . . . . . . . . . . . . . . . . . . (185.4) (304.0) (253.3) (191.3) (212.2)
Bank charges . . . . . . . . . . . . . . . . . . . . . (2.7) (2.4) (64.3) (53.4) (69.9)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . — (1.7) (8.6) (8.0) (7.8)
Total finance cost . . . . . . . . . . . . . . . . . . (188.1) (308.1) (326.2) (252.7) (289.9)
Less: amounts capitalised . . . . . . . . . . . . 135.7 260.1 40.1 37.1 59.0
Unwinding of discount . . . . . . . . . . . . . . — — (1.5) — (6.9)
Finance cost charged to the income
statement . . . . . . . . . . . . . . . . . . . . . . (52.4) (48.0) (287.6) (215.6) (237.8)
Finance income
Interest accrued on assigned receivables . . — — — — 5.7
Interest income on bank deposits . . . . . . . 7.2 17.6 31.2 24.6 16.5
Total finance income . . . . . . . . . . . . . . . . 7.2 17.6 31.2 24.6 22.2
Less: interest capitalised . . . . . . . . . . . . . (5.5) (14.5) (3.3) (0.6) (0.1)
Finance income recognised in the income
statement . . . . . . . . . . . . . . . . . . . . . . 1.7 3.1 27.9 24.0 22.1
Net finance costs . . . . . . . . . . . . . . . . . . (50.7) (44.9) (259.7) (191.6) (215.7)
Borrowing costs included in the cost of assets during the historical financial period arose on the specific
borrowings taken on to finance those assets based on the interest rate of those borrowings.
233

As sales tax is collected from customers, a corresponding liability to the State of Gujarat is recognised at its
net present value. Accordingly, the discount on the liability unwinds over time resulting in the finance costs
as shown above. In a related transaction, the Group has deposited amounts based on the net present value
of its future sales tax payments with a related party. The interest accruing on these deposits is included in
finance income above.
7. OTHER GAINS/(LOSSES)

2007 2008 2009 2008 2009
(Unaudited)
Foreign exchange gains/(losses) . . . . . . . . 34.7 114.5 (459.0) (447.3) 146.1
Surplus on acquisition of joint controlled
entities (Note 23) . . . . . . . . . . . . . . . . — — — — 19.1
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 0.7
Total other gains/(losses) . . . . . . . . . . . . 34.7 114.5 (459.0) (447.3) 165.9
8. TAX

2007 2008 2009 2008 2009
(Unaudited)
Current tax . . . . . . . . . . . . . . . . . . . . . . . (0.2) (0.1) (2.4) (2.2) (2.6)
Deferred tax . . . . . . . . . . . . . . . . . . . . . . 1.1 33.6 80.1 131.2 (25.0)
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 33.5 77.7 129.0 (27.6)
Effective tax rate (%) . . . . . . . . . . . . . . . 3.4 28.3 31.8 33.7 18.7
A reconciliation of the income tax expense applicable to the (loss)/profit before income tax at statutory
India rate to the income tax expense at the Group’s effective income tax rate for the years ended 31 March
2007, 2008, 2009 and the nine months ended December 2008 and 2009 is as follows:

2007 2008 2009 2008 2009
(Unaudited)
(Loss)/profit before tax . . . . . . . . . . . . . . (26.5) (118.4) (244.7) (383.1) 147.3
Income tax
Tax at the standard rate of corporation
tax 33.66% (2008, 2009: 33.99%)
(December 2008, 2009: 33.99%) . . . . . . 8.9 40.2 83.2 130.2 (50.1)
Surplus on acquisition of joint controlled
entities . . . . . . . . . . . . . . . . . . . . . . . . — — — — 2.9
Deferred tax not recognised . . . . . . . . . . (4.6) (2.9) (1.8) (0.6) (0.7)
Minimum alternate tax (MAT) . . . . . . . . (1.1) (1.6) (1.7) (0.3) (2.5)
Tax holidays / non taxable income . . . . . . 1.0 0.2 5.6 6.0 2.9
Effect of non-Indian rates . . . . . . . . . . . . (4.4) (1.1) (2.9) (1.1) 2.6
Adjustment in respect of prior period . . . — — — — 6.0
Others . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 (1.3) (4.7) (5.2) 11.3
Income taxes recognised in the income
statement . . . . . . . . . . . . . . . . . . . . . . 0.9 33.5 77.7 129.0 (27.6)
The applicable tax rate is the standard effective corporate income tax rate in India. The Indian tax rate
increased from 33.66% to 33.99% with effect from 1 April 2008. Indian companies are subject to corporate
234

income tax or Minimum Alternative Tax (MAT). If MAT is greater than corporate income tax then MAT is
levied. MAT is charged on book profits at a rate of 11.22%, but is available as a credit against corporate
income tax in the following seven years (2008 and 2009: 11.33% and 7 years) (December 2008: 11.33% and
7 years) (December 2009: 16.995% and 10 years).
The Finance Bill 2010 includes proposals to reduce the effective corporate income tax rate to 33.22% and
to increase the rate of MAT to 19.93% from 1 April 2010.
Deferred tax assets and liabilities
As at
2007 2008 2009 2009
Deferred tax asset
Property, plant and equipment . . . . . . . . . . . . . . . . . — — 0.3 0.3
Unabsorbed depreciation . . . . . . . . . . . . . . . . . . . . . 13.3 17.3 37.6 18.0
Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 85.1 170.4
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.0 21.7 20.1 18.6
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.3 20.0 15.7 17.0
Other temporary differences . . . . . . . . . . . . . . . . . . . 5.3 2.4 7.1 17.0
Total deferred tax asset . . . . . . . . . . . . . . . . . . . . . . 52.9 61.4 165.9 241.3
Deferred tax liabilities
Property, plant and equipment . . . . . . . . . . . . . . . . . 310.2 308.9 282.0 398.2
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . — 17.5 14.3 16.4
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 2.6 1.3 0.4
Other temporary differences . . . . . . . . . . . . . . . . . . . — — 7.9 5.7
Total deferred tax liability . . . . . . . . . . . . . . . . . . . . 313.4 329.0 305.5 420.7
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . 260.5 267.6 139.6 179.4
The net deferred tax liability is recorded in the financial information based on the tax position of each
Group company as follows:
Movement in deferred tax liabilities
As at
2007 2008 2009 2009
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . — 260.5 267.6 139.9
Addition due to acquisition (Note 22) . . . . . . . . . . . . 243.8 16.9 — —
(Credited)/ charged to income statement . . . . . . . . . . (1.1) (33.6) (79.7) 25.0
Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . 17.8 23.8 (48.0) 14.9
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260.5 267.6 139.9 179.8
Movement in deferred tax assets
As at
2007 2008 2009 2009
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 0.3
Credited to income statement . . . . . . . . . . . . . . . . . . — — 0.4 —
Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . — — (0.1) 0.1
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 0.3 0.4
235

Deferred tax recognised in Income Statement

2007 2008 2009 2008 2009
(Unaudited)
Depreciation and amortisation . . . . . . . . . 0.7 40.1 79.5 135.8 (15.1)
Borrowings . . . . . . . . . . . . . . . . . . . . . . . (0.7) (4.0) 3.3 0.5 (3.2)
Others . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 (2.5) (2.7) (5.1) (6.7)
Total deferred tax recognised in Income
Statement . . . . . . . . . . . . . . . . . . . . . . 1.1 33.6 80.1 131.2 (25.0)
The Group has unrecognised deferred tax assets related to unutilised tax losses. These temporary
differences will expire in accordance with prevailing tax laws as follows:
As at
2007 2008 2009 2009
Expiry Date
31 March 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 5.1 5.7 6.2
31 March 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9 9.7 8.3 9.1
31 March 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 4.0 3.4 3.7
31 March 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2.3 1.8 2.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.3 21.1 19.2 21.0
The Group also has unrecognised deferred tax assets of US$7.1 million as at 31 December 2009 in respect
of credits for MAT which have not been recognised.
No benefit has been recognised for the above losses and credits on the grounds that it is not probable that
suitable taxable profits will arise before the tax losses and credits expire.
The deferred tax liabilities for taxes that would be payable on the unremitted earnings of certain of the
Group’s subsidiaries or joint controlled entities have not been recognised as:
(i) the Group has determined that undistributed profit of its subsidiaries will not be distributed in the
foreseeable future, but rather tax-free returns of capital may be made if necessary; and
(ii) the Group’s joint controlled entities cannot distribute their profits without consent of all joint
controlled entities partners. The Group does not foresee giving such consent at the balance sheet
date.
The temporary differences associated with investment in subsidiaries and joint controlled entities, for
which deferred tax liabilities have not been recognised, as explained above, aggregate to US$15.0 million
(2008: US$23.7 million) (2009: US$19.9 million) (December 2009: US$25.2 million).
236

9. PROPERTY, PLANT AND EQUIPMENT
Freehold Assets Exploration

Producing land and Plant and under and
properties buildings equipment construction evaluation Other Total
Cost
At 1 April 2006 . . . . . . . . — — — — — — —
Additions . . . . . . . . . . . . — 1.3 11.5 458.7 15.5 3.0 490.0
Addition due to business
combination (refer
Note 22) . . . . . . . . . . . — 146.9 444.6 2,582.1 30.6 2.8 3,207.0
Exchange difference . . . . . — 8.4 22.6 162.1 2.3 0.2 195.6
At 31 March 2007 . . . . . . — 156.6 478.7 3,202.9 48.4 6.0 3,892.6
Additions . . . . . . . . . . . . 14.4 25.2 48.9 736.0 45.0 3.8 873.3
Transfers . . . . . . . . . . . . 20.9 — 79.9 (79.9) (20.9) — —
Addition due to business
combination (refer
Note 22) . . . . . . . . . . . — — — 7.6 — — 7.6
Disposals . . . . . . . . . . . . — — — (10.2) — (1.1) (11.3)
Exchange difference . . . . . 0.2 14.2 43.5 291.1 4.4 0.5 353.9
At 31 March 2008 . . . . . . 35.5 196.0 651.0 4,147.5 76.9 9.2 5,116.1
Additions . . . . . . . . . . . . — 35.4 4.5 542.1 22.8 2.8 607.6
Transfers . . . . . . . . . . . . 8.1 65.7 3,099.2 (3,164.9) (8.1) — —
Disposals . . . . . . . . . . . . — (2.6) (9.6) — — — (12.2)
Exchange difference . . . . . (8.5) (51.9) (444.9) (614.7) (9.6) (2.1) (1,131.7)
At 31 March 2009 . . . . . . 35.1 242.6 3,300.2 910.0 82.0 9.9 4,579.8
Additions . . . . . . . . . . . . — 23.1 30.6 611.4 21.9 1.4 688.4
Transfers . . . . . . . . . . . . — 15.3 139.7 (157.1) — 2.1 —
Disposals . . . . . . . . . . . . — — (1.0) — (0.8) (0.1) (1.9)
Exchange difference . . . . . 3.2 23.5 310.1 87.3 4.2 1.0 429.3
At 31 December 2009 . . . . 38.3 304.5 3,779.6 1,451.6 107.3 14.3 5,695.6
Freehold Assets Exploration

Producing land and Plant and under and
properties buildings equipment construction evaluation Other Total
Accumulated depreciation
At 1 April 2006 . . . . . . . . — — — — — — —
Charge for the year . . . . . — 0.5 13.0 — — 1.1 14.6
Exchange difference . . . . . — — 0.3 — — — 0.3
At 31 March 2007 . . . . . . — 0.5 13.3 — — 1.1 14.9
Charge for the year . . . . . 0.3 1.2 30.3 — — 1.9 33.7
Disposals . . . . . . . . . . . . — — — — — (1.0) (1.0)
Exchange difference . . . . . — — 1.3 — — 0.1 1.4
At 31 March 2008 . . . . . . 0.3 1.7 44.9 — — 2.1 49.0
Charge for the year . . . . . 0.1 8.8 101.7 — — 2.0 112.6
Disposals . . . . . . . . . . . . — — (1.4) — — — (1.4)
Exchange difference . . . . . (0.1) (1.0) (19.8) — — (0.8) (21.7)
At 31 March 2009 . . . . . . 0.3 9.5 125.4 — — 3.3 138.5
Charge for the year . . . . . — 6.4 80.2 — — 1.5 88.1
Disposals . . . . . . . . . . . . — — — — — — —
Exchange difference . . . . . — 1.0 13.7 — — 0.4 15.1
At 31 December 2009 . . . . 0.3 16.9 219.3 — — 5.2 241.7
Net book value

At 31 March 2007 . . . . . . — 156.1 465.4 3,202.9 48.4 4.9 3,877.7
At 31 March 2008 . . . . . . 35.2 194.3 606.1 4,147.5 76.9 7.1 5,067.1
At 31 March 2009 . . . . . . 34.8 233.1 3,174.8 910.0 82.0 6.6 4,441.3
At 31 December 2009 . . . . 38.0 287.6 3,560.3 1,451.6 107.3 9.1 5,453.9
237

Major items included in asset under construction
As at
2007 2008 2009 2009
Petroleum refinery . . . . . . . . . . . . . . . . . . . . . . . . . . 2,956.9 3,779.1 — —
Power plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246.0 325.6 460.9 838.4
Expansion of petroleum refinery . . . . . . . . . . . . . . . . — 42.8 449.1 613.2
3,202.9 4,147.5 910.0 1,451.6
The carrying value of assets held under finance leases included above is set out below:
As at
2007 2008 2009 2009
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 16.1 7.5 5.7
Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . 32.1 29.2 18.0 18.1
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.1 0.2 0.2
Total assets under finance lease . . . . . . . . . . . . . . . . 32.1 45.4 25.7 24.0
238

MERRILL CORPORATION JDICKSO//30-APR-10 12:31 DISK116:[10ZAU1.10ZAU70801]DR70801A.;34
10a. OTHER INTANGIBLE ASSETS
Power sales
contract Software Total
US$ million US$ million US$ million
Cost
At 1 April 2006 . . . . . . . .................. . . . . . . . . . . . . . — — —
Addition due to business combination (Note 22) . . . . . . . . . . . . . . — 1.1 1.1
Additions . . . . . . . . . . . .................. . . . . . . . . . . . . . — 1.2 1.2
Exchange difference . . . .................. . . . . . . . . . . . . . — 0.1 0.1
At 31 March 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2.4 2.4
Addition due to business combination (Note 22) . . . . . . . . . . . . . . 53.4 — 53.4
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2.9 2.9
Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 — 2.3
At 31 March 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.7 5.3 61.0
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3.1 3.1
Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10.1) (2.1) (12.2)
At 31 March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.6 6.3 51.9
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.3 0.3
Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0 1.1 9.1
At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.6 7.7 61.3
Accumulated amortisation
At 1 April 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — —
Amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.3 0.3
At 31 March 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.3 0.3
Amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.8 0.8
At 31 March 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1.1 1.1
Amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1.2 1.2
Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.4) (0.4)
At 31 March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1.9 1.9
Amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 1.1 2.7
Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.1 0.1
At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 3.1 4.7
Net book value
At 31 March 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2.1 2.1
At 31 March 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55.7 4.2 59.9
At 31 March 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.6 4.4 50.0
At 31 December 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.0 4.6 56.6
The power sales contract relates to the Algoma power plant (Note 22a(iii)) and is amortised from the
commencement of generation for a period of 20 years. Software is amortised over 3-5 years.
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10b. GOODWILL
As at
2007 2008 2009 2009
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . — 136.4 148.3 117.1
Goodwill arising on business acquisition (Note 22) . . . 131.1 — — —
Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . 5.3 11.9 (31.2) 10.4
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136.4 148.3 117.1 127.5
Goodwill relates to the following acquisitions:
As at
2007 2008 2009 2009
Petroleum Refinery . . . . . . . . . . . . . . . . . . . . . . . . . 103.7 113.1 88.4 96.6
Bhander power plant, Hazira . . . . . . . . . . . . . . . . . . 4.8 5.5 4.3 4.7
Essar power plant, Hazira . . . . . . . . . . . . . . . . . . . . 27.9 29.7 24.4 26.2
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136.4 148.3 117.1 127.5
In assessing whether goodwill has been impaired, the carrying amount of the cash-generating unit
(including goodwill) is compared with the recoverable amount of the cash-generating unit. The recoverable
amount is the higher of fair value less costs to sell and value in use. In the absence of any information
about the fair value of a cash-generating unit, the recoverable amount is deemed to be the value in use.
The Group calculates the recoverable amount as the value in use using a discounted cash flow model. The
future cash flows are adjusted for risks specific to the cash-generating unit and are discounted using a
pre-tax discount rate. The discount rate is derived from the Group’s pre-tax weighted average cost of
capital and is adjusted where applicable to take into account any specific risks relating to the country where
the cash-generating unit is located.
Petroleum Refinery
The three-year business plans are used together with long term market expectations to estimate gross
refining margins and other cash flows for 17 years, which are approved on an annual basis by management,
and are the primary source of information for the determination of value in use based on a discount factor
of 11.11% p.a. (2008: 13.76% p.a.) (2009: 10.01%) (December 2009: 10.77% p.a.). The three-year business
plans contain forecasts for refinery throughputs, sales volumes for various types of refined products
(e.g. gasoline and lubricants), revenues, costs and capital expenditure. As an initial step in the preparation
of these plans, various economic assumptions, such as oil prices, refining margins, refined product margins
and cost inflation rates, are set by senior management. The estimated recoverable amount for the refinery
unit exceeds its carrying amount in all periods.
Gross Refining Margin (GRM) is the difference between revenue from refined petroleum products and
related cost of crude oil used for their production. GRM is worked out based on market information and
past experience of management. Prices of the petroleum products and crude are exposed to movement in
crude prices on the Nymex, International Petroleum Exchange and Dubai Mercantile Exchange. If GRM
falls by 11% (2008: 16%) (2009: 5%) compared to what is considered for impairment testing, Refinery
Project’s recoverable amount would be equal to its carrying amount.
The discount rate is estimated based on the weighted average cost of the capital of Essar Oil Limited
(EOL). If discount rate increased by 12% (2008: 20%) (2009: 35%) above what is considered for
impairment testing, Refinery Project’s recoverable amount would be equal to its carrying amount.
Power Plants
The company uses the long term power sale agreements for estimating the cash flows, which are approved
based on signed contracts in place and are the primary source of information for the determination of
value in use based on a discount factor of 11.02% p.a. These contain forecasts for plant load factor,
240

generation in Megawatts (MW), fixed and variable revenue, operating costs and sustaining capital
expenditure. The estimated recoverable amount for the power plants exceeds its carrying amount in all
approvals.
Plant load factor is the generation capacity of the plant at a given point of time and is based on the demand
from the customer with a direct impact on variable revenue. If plant load factor falls by 10%, the
recoverable amount will decrease by US$31.0 million. Similarly if plant load factor increases by 10%, then
the coverable amount of power plans will increase by US$16.0 million.
Discount rates reflect the current market assessment of the risks specific to each cash generating unit. The
discount rate is estimated based on the weighted average cost of the capital of power entity. A 1% increase
in discount rate reduces the recoverable amount by US$23.5 million.
11. AVAILABLE FOR SALE INVESTMENTS
As at
2007 2008 2009 2009
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 41.3
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 17.9 27.8 3.3
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (17.9) — (4.9)
Movement in fair value . . . . . . . . . . . . . . . . . . . . . . — — 16.3 (1.6)
Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . — — (2.8) 3.2
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 41.3 41.3
Available for sale investments are unquoted. The above investments relate to a shareholding of 3.23% of
the shares in Essar Steel Limited, an unlisted company in which the Essar Group is the majority
shareholder. These shares were sold on 14 April 2010 by the Group to Essar Steel Holdings Limited, a
company in the Essar Group, for cash at their fair value at that date for US$31.5 million. This formed part
of a wider Group reorganisation, details of which are disclosed in Note 27.
12. TRADE AND OTHER RECEIVABLES

12a. Trade and other receivables (Current)
As at
2007 2008 2009 2009
Trade receivables . . . . . ...... . . . . . . . . . . . . . . . . 140.2 404.8 374.5 627.0
Receivable from related parties . . . . . . . . . . . . . . . . 60.5 133.5 51.3 80.9
Tax receivable . . . . . . . ...... . . . . . . . . . . . . . . . . 7.0 12.3 10.3 18.3
Sales tax receivable . . . ...... . . . . . . . . . . . . . . . . — — 46.5 50.8
Others receivables . . . . ...... . . . . . . . . . . . . . . . . 20.9 17.0 25.0 36.3
Prepayments . . . . . . . . ...... . . . . . . . . . . . . . . . . 2.6 4.5 56.7 31.6
Advances to suppliers . ...... . . . . . . . . . . . . . . . . 60.4 35.3 21.9 14.2
Total current trade and other receivables . . . . . . . . . 291.6 607.4 586.2 859.1
Sales tax receivable represents amount receivable by Essar Oil Limited (EOL) from the sales tax
authorities being sales tax collected and deposited for the period when EOL was entitled to the sales tax
deferral scheme. For further details, see Note 24.
The credit period given to customers ranges from zero to ninety days. The Group has discounted
receivables amounting to 2007: US$21.7 million (2008: US$97.4 million) (2009: nil) (December 2009:
US$107.2 million) with the lenders having recourse to the Group in the event of default by the debtor to
settle the bills discounted with the lender. These debtors have been included under trade receivables
disclosed above as they do not qualify for de-recognition.
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Management consider that the carrying amount of trade and other receivables is approximately equal to
their fair value. Details of the ageing of receivables are set out in Note 20.
12b. Trade and Other Receivables (Non-Current)
As at
2007 2008 2009 2009
Receivable from related parties . . . . . . . . . . . . . . . . 9.5 7.1 9.3 124.5
Others . . . . . . . . . . . . ...... . . . . . . . . . . . . . . . . 17.4 19.0 21.5 38.6
Prepayments . . . . . . . . ...... . . . . . . . . . . . . . . . . — 20.6 — 30.0
Advances to suppliers . ...... . . . . . . . . . . . . . . . . 3.0 4.0 1.1 1.3
Total non-current trade and other receivables . . . . . . 29.9 50.7 31.9 194.4
Amounts receivable from related parties include $nil as at 31 March 2007 (2008: nil) (2009: nil)
(31 December 2009: US$121.6 million) which reflects sales tax collected and deposited with the relevant
related party. The relevant related party has committed that such amounts plus interest will be available to
meet the Group’s sales tax liability when it becomes due in up to 17 years.
13. OTHER FINANCIAL ASSETS

13a. Other Financial Assets (Current)
As at
2007 2008 2009 2009
Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128.4 208.6 207.2 235.6
Other deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 121.0 34.0 57.0
Total current other financial assets . . . . . . . . . . . . . . 136.6 329.6 241.2 292.6
13b. Other Financial Assets (Non-Current)

As at
2007 2008 2009 2009
Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 8.1 1.1 —
Other deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8 9.3 8.7 18.5
Total non-current other financial assets . . . . . . . . . . 15.7 17.4 9.8 18.5
Bank deposits include restricted cash of US$135.2 million as at 31 March 2007 (2008: US$216.7 million)
(2009: US$204.0 million) (31 December 200: US$235.0 million). Restricted cash represents margin
deposits with banks against various bank facilities such as guarantees, letters of credit for import of raw
material and capital goods. Other deposits are principally deposits to government controlled business
parties.
14. INVENTORIES
As at
2007 2008 2009 2009
Raw material and consumables . . . . . . . . . . . . . . . . . 518.0 854.4 280.6 562.8
Work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . 188.3 254.4 120.1 152.0
Finished products . . . . . . . . . . . . . . . . . . . . . . . . . . 93.3 132.1 56.8 149.4
Total inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . 799.6 1,240.9 457.5 864.2
242

15. CASH AND CASH EQUIVALENTS
As at
2007 2008 2009 2009
Cash at banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.9 83.3 39.2 23.7
Liquid investments . . . . . . . . . . . . . . . . . . . . . . . . . . — — 3.7 21.4
Bank deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4 17.2 23.8 26.3
Total cash and cash equivalent . . . . . . . . . . . . . . . . . 40.3 100.5 66.7 71.4
Less: overdrawn bank balance . . . . . . . . . . . . . . . . . — — (4.1) —
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . 40.3 100.5 62.6 71.4
Bank deposits have a maturity period of less than 90 days. Liquid investments represent cash deposited in
mutual funds which are fully liquid and can be realised without notice and without significant risk of loss of
value.
16. BORROWINGS
As at
2007 2008 2009 2009
Non-convertible debentures . . . . . . . . . . . . . . . . . . . 254.5 159.8 105.8 104.2
Banks and Financial Institutions . . . . . . . . . . . . . . . . 2,052.7 2,447.9 1,981.8 2,349.5
Cumulative Redeemable Preference Shares . . . . . . . . — — 69.6 86.4
Working Capital Loans . . . . . . . . . . . . . . . . . . . . . . 125.3 317.7 260.8 367.6
Bills of exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.7 97.4 — 107.2
Loans from related parties . . . . . . . . . . . . . . . . . . . . 110.7 82.1 34.1 97.8
Total borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,564.9 3,104.9 2,452.1 3,112.7
Less : unamortised debt issue cost . . . . . . . . . . . . . . (7.3) (7.2) (4.5) (3.7)
Net borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,557.6 3,097.7 2,447.6 3,109.0
Current borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . 385.4 745.7 581.5 918.9
Non-current borrowing . . . . . . . . . . . . . . . . . . . . . . 2,172.2 2,352.0 1,866.1 2,190.1
In addition to the amounts shown above, the Group also has long term liabilities, particularly in respect of
deferred sales tax, set out in Note 17b.
Secured non-convertible debentures

Non-convertible debentures include US$148.9 million (2008: US$147.3 million) (2009: US$105.8 million)
(31 December 2009: US$104.2 million) of debentures issued by the Energy Group during 1995-96 at
coupon rates of 6.0% to 12.5% per annum (interest expensed at effective interest rate of 10.3%),
repayments of which commenced on 30 April 2006 and will continue until 24 September 2018.
Non-convertible debentures also include US$105.6 million as at 31 March 2007, the majority of which were
converted to 8.0% Rupee term loan from banks and financial institutions in 2007-08.
Bank and financial Institutions

The Group has borrowings under various loan agreements with a number of banks and financial
institutions. These institutions provide the Group with term loans, revolving facilities and letters of credit
facilities.
Borrowings from banks and financial institutions of US$1,805.1 million as at 31 March 2007 (2008:
US$2,156.8 million) (2009: US$1,644.2 million) (31 December 2009: US$1,659.9 million) are subject to a
master restructuring agreement entered into by Essar Oil Limited with the lenders on 17 December 2004
(the ‘‘MRA’’), prior to its acquisition by the Group. The MRA provided the Essar Oil Limited, a subsidiary
of the Group, an option to make early repayments at any time over the term of borrowings. The interest
243

rates ranging from 5% to 12.5% per annum are subject to variation on prepayment of any borrowings.
Other loans held by the Group include an amount due to American Express Bank Limited (Amex) of
US$73.0 million (2008: US$67.6 million) (2007: US$71.0 million) (31 December 2009: US$72.9 million)
which were due to be separately restructured in line with MRA terms agreed by Essar Oil Limited. These
loans were repaid subsequent to the year end. Further details of the settlement are outlined in Note 27.
During the reporting period the Group breached certain terms and covenants set out in the MRA. This
was principally due to initial losses made by the Oil Refinery as a result of delays in commencement of
commercial production, adverse economic conditions and unprecedented volatility in exchange rates and
crude prices. Essar Oil Limited has obtained a letter dated 23 March 2010 from ICICI Bank, the lead bank
of the CDR lenders, confirming the compliance with the covenants subject to conditions, which at the time
of this report, had been met by Essar Oil Limited under the MRA and other restructuring documents.
Borrowings from banks and financial institutions are secured pari passu with a first charge on property,
plant and equipment, followed by charges over current assets and pledges of certain equity shares in
subsidiaries held by the Group. Working capital loans are secured by a first charge on the current assets
and a second charge on property, plant and equipment as well as certain other securities and guarantees.
Interest rates on Indian Rupee borrowings range from 8.5% to 13.5% per annum (2008: 8.0% to 13.5%)
(2009: 8.0% to 14.5%) (December 2009: 8.0% to 14.5%) while the interest rate on borrowings in other
currencies ranges from 5.0 to 7.5% per annum (2008: 5.0% to 7.5%) (2007: 2.8% to 7.2%) (December
2009: 1.0% to 7.0%).
The Group has undrawn committed facilities of US$2,487.1 million as at 31 December 2009 with
maturities ranging from 1 to 2 years. Details of the maturity and interest profile of the Group’s borrowings
are included in Note 20.
Cumulative Redeemable Preference Shares

Convertible Cumulative Redeemable Preference Shares (OCPRS) of INR 3,500 million (US$68.2 million)
were issued on 18 March 2009 by Essar Power Limited, a subsidiary of the Group. The OCPRS carry
interest rate of 0.1% and 8.0% per annum for the first two years and subsequent five years, respectively.
The OCPRS are convertible into equity shares at the option of the investor in the event of a covenant
default or an IPO of Essar Power Limited. The conversion price will be determined based on the equity
valuation of the subsidiary at the time of conversion. If there is no Qualified offering of Essar Power
Limited, until the final redemption date, then the Preference shares will be redeemed at 20.5% interest
p.a. at the end of the original term. Management believe that no events have taken place which would
trigger conversion. The Company has accounted the OCPRS at amortised cost with effective interest rate
of 20.8%. Essar Power Limited has also issued a warrant to the OCPRS holder for a consideration of
INR 100, which entitles the holder to subscribe to the equivalent of US$15.0 million of equity shares in
Essar Power Limited at any time before an IPO of Essar Power Limited at an exercise price based on a
predetermined valuation of Essar Power Limited. The OCPRS continues to be held as long term
borrowings.
Working Capital loans

The Group has a number of working capital loans which are used in the ordinary course of business which
are subject to interest rates ranging from 1% to 4% over the bank’s prime lending rate and short term in
nature.
Bills of exchange
Bills of exchange are accepted by banks towards payment of customer invoices and typically carry an
interest rate ranging from 6.0% to 12.0% per annum and are settled in a period ranging from 7 to 21 days.
Loans from related parties

The Group has entered into loan agreements with companies within the Essar Group. Amount repayable
to related parties of the Group carry a range of interest from 0% to 12.25% per annum on the outstanding
loan balance (Note 25).
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Movements in borrowings
As at
2007 2008 2009 2009
Opening balance . . . . . . . . . . . . . ............ . . — 2,557.6 3,097.7 2,447.6
Additions due to acquisition . . . . . ............ . . 1,888.0 — — —
Loans raised . . . . . . . . . . . . . . . . ............ . . 1,307.7 200.5 177.5 357.9
Loans repaid . . . . . . . . . . . . . . . . ............ . . (1,002.3) (212.1) (182.6) (143.5)
Movement in bills of exchange and other financing . . 168.5 210.3 (133.6) 218.1
Funded interest . . . . . . . . . . . . . . ............ . . 68.2 125.3 54.3 25.8
Exchange and other differences . . ............ . . 127.5 216.1 (565.7) 203.1
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,557.6 3,097.7 2,447.6 3,109.0
17. TRADE AND OTHER PAYABLES

17a. Trade and other payables (current)
As at
2007 2008 2009 2009
Trade creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 888.6 1,875.3 1,332.6 2,223.1
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 0.6 6.2 8.9
Accrued employee cost . . . . . . . . . . . . . . . . . . . . . . 1.7 3.8 7.1 5.7
Due to related parties . . . . . . . . . . . . . . . . . . . . . . . 29.5 74.8 130.7 137.7
Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 1.6 5.5 2.0
Other current payables . . . . . . . . . . . . . . . . . . . . . . . 60.7 78.3 73.4 56.4
Advances from customers . . . . . . . . . . . . . . . . . . . . . 12.5 49.5 24.8 65.7
Financial guarantee obligations . . . . . . . . . . . . . . . . . 6.8 6.8 4.8 4.6
Tax payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 8.0
Total current trade and other payables . . . . . . . . . . . 1,011.6 2,090.7 1,585.1 2,512.1
Trade creditors include amounts payable within 180-365 days of as at 31 March 2007 US$47.4 million,
(2008: US$31.3 million), (2009: US$193.4 million) and (December 2009: US$518.6 million) which carry
interest ranging from 6.0% to 18.0%. Other trade creditors are not interest bearing and are normally
settled within 60 to 90 days.
17b. Trade and Other Payables (Non-Current)
As at
2007 2008 2009 2009
Interest accrued but not due . . . . . . . . . . . . . . . . . . 4.2 4.4 — —
Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 4.5 —
Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 3.6 1.3 0.4
Due to related party . . . . . . . . . . . . . . . . . . . . . . . . — — — 0.5
Deferred sales tax liability . . . . . . . . . . . . . . . . . . . . — — 60.5 122.1
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9 10.1 6.3 7.7
Total non-current trade and other payables . . . . . . . . 14.4 18.1 72.6 130.7
Retirement benefit obligations

As stated in the accounting policies, the Group operates a defined benefit scheme for its employees. The
net liability associated with the scheme at (31 March 2007: US$0.5 million) (2008: US$0.3 million), (2009:
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US$0.2 million), (31 December 2009: US$0.4 million) included above. Further disclosure is not provided as
the amounts included are immaterial.
18. DERIVATIVES
18a. Derivative financial assets (current)
As at
2007 2008 2009 2009
Commodity swaps . . . . . . . . . . . . . . . . . . . . . . . . . . 6.0 3.7 2.4 5.3
Commodity options . . . . . . . . . . . . . . . . . . . . . . . . . 0.7 — 6.0 1.6
Currency forward contracts . . . . . . . . . . . . . . . . . . . — — 11.9 —
Total derivative financial assets (current) . . . . . . . . . 6.7 3.7 20.3 6.9
18b. Derivatives financial liabilities (current)
As at
2007 2008 2009 2009
Commodity swaps . . . . . . . . . . . . . . . . . . . . . . . . . . 9.8 38.1 2.4 2.2
Commodity options . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 — 2.6 —
Currency forward contracts . . . . . . . . . . . . . . . . . . . 0.8 — 4.3 10.1
Total derivative financial liabilities (current) . . . . . . . 13.8 38.1 9.3 12.3
The fair values of derivative instruments are calculated using quoted prices. Where such prices are not
available, a discounted cash flow analysis is performed using the applicable yield curve for the duration of
the instruments for non-optional derivatives, and option pricing models for optional derivatives. Foreign
currency forward contracts are measured using quoted forward exchange rates and yield curves derived
from quoted interest rates matching maturities of the contracts. Commodity swaps are measured using a
forward curve based on quoted futures or forward prices and yield curves derived from quoted interest
rates matching maturities of the contracts. Commodity options are measured using the same data as the
commodity swaps, but also uses a volatility surface derived from quoted option volatilities Interest rate
swaps are measured at the present value of future cash flows estimated and discounted based on the
applicable yield curves derived from quoted interest rates. No derivatives are designated as hedges for the
purposes of financial reporting.
19. INVESTED CAPITAL
As at
2007 2008 2009 2009
Opening balances . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,147.6 1,953.8 2,227.7
Acquisition of Essar Power Holdings Ltd . . . . . . . . . 72.0 — — —
Acquisition of Essar Energy Holdings Limited . . . . . . 433.5 — — —
Acquisition of Hazira Steel 2 . . . . . . . . . . . . . . . . . . 50.0 — — —
Capital contribution . . . . . . . . . . . . . . . . . . . . . . . . . 592.1 806.2 273.9 74.0
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,147.6 1,953.8 2,227.7 2,301.7
As described in Note 1, the share capital and share application money of the Energy and Power Groups
have been combined and reflected in invested capital. The Energy and Power Groups were acquired by the
Essar Group during 2006 and therefore their capital is initially brought into the combined historical
financial information as acquisitions.
Hazira Steel 2 was acquired by the Essar Group in September 2006 with the intention that it would form
part of the Group to be listed and has therefore been reflected in the combined historical financial
246

information from this date. However, it did not become a subsidiary of the Energy Group until September
2007 when it was transferred within the commonly controlled Essar Group to Essar Energy Holdings
Limited for consideration of US$50.0 million in the form of shares. Therefore, the net assets of Hazira
Steel 2 are brought into the combined historical financial information as invested capital in 2007.
Capital contribution represents further capital and share application money invested by EGL in Essar
Energy Holdings Limited and Essar Power Holdings Ltd.
20. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial liabilities, other than derivatives, comprise bank loans and overdrafts,
debentures, finance leases, trade payables, and loans taken. The main purpose of these financial liabilities
is to raise finance for the Group’s operations. The Group has various financial assets such as trade
receivables, cash, and short-term deposits, which arise directly from its operations.
The Group is subject to fluctuations in commodity prices and currency exchange rates due to nature of its
operations. The Group enters into derivative transactions, primarily in the nature of commodity option
and swap contracts and forward currency contracts. The purpose is to manage commodity price risk and
currency risks arising from the Group’s operations.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign
currency risk, commodity price risk and credit risk. The Board of Directors reviews and agrees policies for
managing each of these risks which are summarised below.
Interest rate risk

The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s
long-term debt obligations with floating interest rates. The Group’s policy is to manage its interest cost
using a mix of fixed and floating rate debts.
The following table provides a breakdown of the Group’s fixed and floating rate borrowings:
As at
2007 2008 2009 2009
Fixed rate borrowings . . . . . . . . . . . . . . . . . . . . . . . 2,292.4 2,666.6 2,049.6 2,693.8
Floating rate borrowings . . . . . . . . . . . . . . . . . . . . . 265.2 431.1 398.0 415.2
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, being a
0.5% increase or decrease in interest rate, with all other variables held constant, of the Group’s (loss)/
profit before tax due to the impact on floating rate borrowings.
As at
2007 2008 2009 2009
Effect on profit before tax:
LIBOR—Decrease by 50 bps . . . . . . . . . . . . . . . . . . — — 1.6 1.0
PLR*—Decrease by 50 bps . . . . . . . . . . . . . . . . . . . 0.1 0.2 0.5 0.7
* Prime Lending Rate (‘‘PLR’’)
The impact of a 50 bps increase in interest rates on profit before tax will be as disclosed above with the
exception of gains which would be converted to losses.
Foreign currency risk

The Group has significant investments and operations in India. Accordingly, its financial state of affairs
can be affected significantly by movements in the Rs./US dollar exchange rates.
247

The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an
operating unit in currencies other than the unit’s functional currency. Foreign currency swaps, options and
forward contracts are used to mitigate the risk arising from fluctuations in foreign exchange rates.
The carrying amounts of the Group’s financial assets and liabilities denominated in different currencies are
as follows:
As at
2007 2008 2009 2009
Financial assets
Indian Rupees (INR) . . . . . . . . . . . . . . . . . . . . . . . . 390.5 962.1 795.0 1,254.2
United States Dollar (USD) . . . . . . . . . . . . . . . . . . . 57.3 69.1 107.4 119.8
Canadian Dollars (CAD) . . . . . . . . . . . . . . . . . . . . . — 0.7 0.7 12.7
Euro (EUR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 0.7 0.2 2.0
Great Britain Pound (GBP) . . . . . . . . . . . . . . . . . . . — — — 0.1
447.8 1,032.6 903.3 1,388.8
As at
2007 2008 2009 2009
Financial liabilities
Indian Rupees (INR) . . . . . . . . . . . . . . . . . . . . . . . . 2,592.6 3,891.4 2,487.8 3,164.4
United States Dollar (USD) . . . . . . . . . . . . . . . . . . . 967.2 1,286.9 1,572.6 2,315.4
Canadian Dollars (CAD) . . . . . . . . . . . . . . . . . . . . . — 5.7 15.8 191.4
Euro (EUR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8 2.1 2.5 1.3
Great Britain Pound (GBP) . . . . . . . . . . . . . . . . . . . 0.2 0.7 0.3 0.1
3,567.8 5,186.8 4,079.0 5,672.6
The Group’s exposure to foreign currency arises where a Group company holds financial assets and
liabilities denominated in a currency different from the functional currency of that entity with US dollar
being the major non-functional currency of the Group’s main operating subsidiaries. Set out below is the
impact of a 10% movement in the US dollar on profit before tax arising as a result of the revaluation of the
Group’s foreign currency financial assets and liabilities:
As at
2007 2008 2009 2009
Effect of 10% strengthening of US Dollars on
profit before tax:
INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (91.7) (121.7) (52.1) (80.3)
The Group enters into forward foreign exchange contracts to cover foreign currency payments and
receipts. The Group also enters into forward foreign exchange contracts to manage the risk associated with
anticipated sales and purchase transactions.
The Group has taken forward cover of US$35.9 million (2008: US$20.0 million) (2009: US$986.9 million)
(December 2009: US$1,377.3 million) to hedge against currency risk against movement in Rs./US dollar.
The impact of a 10% weakening of the US Dollar on profit before tax will be the same as disclosed above
except that losses would be converted to gains.
Credit risk
The Group is exposed to credit risk in the event of non-payment by customers. The Group is exposed to
credit risk from trade receivables, dues from related parties, term deposits, liquid investments and other
financial instruments.
248

The Group trades with recognised and creditworthy third parties. Cash, liquid investments and term
deposits are held in banks with high credit ratings. It is the Group’s policy that all customers who wish to
trade on credit terms are subject to credit verification procedures. In addition, receivable balances are
monitored on an ongoing basis. For transactions that do not occur in the country of the relevant operating
unit, the Group does not offer credit terms without the approval of the appropriate authority. There are no
significant credit risks with related parties of the Group.
The Group is exposed to credit risk in the event of non payment by customers. The Group establishes an
allowance for doubtful accounts that represents its estimate of incurred losses in respect of trade and other
receivables. Trade receivables disclosed above include amounts (see below for aged analysis) which are
past due at the reporting date but against which the Group has not recognised an allowance for doubtful
receivables because there has not been a significant change in credit quality and the amounts are still
considered recoverable. The allowance for doubtful accounts at 31 March 2007 was nil (2008: nil) (2009:
nil) (31 December 2009: nil). The Group does not hold any collateral or other credit enhancements over
these balances nor does it have a legal right of offset against any amounts owed by the Group to the
counterparty.
Ageing of past due but not impaired receivables is as follows:
As at
2007 2008 2009 2009
0-30 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.9 12.2 13.0 14.9
30-60 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.9 14.9 15.1 9.4
60-90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1 20.3 17.4 10.2
90-120 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.7 11.5 13.9 13.6
120-365 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 24.2 36.2 70.7
5 years plus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.4 23.0 18.7 20.9
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.5 106.1 114.3 139.7
The aged receivables include US$56.1 million (2008: US$83.1 million) (2009: US$95.6 million) (December
2009: US$118.8 million) in respect of amounts billed for supply of power to GUVNL. Payments are
received from GUVNL regularly and are off set against amounts due. Overdue amounts which are five
years or greater are in relation to amounts due for construction activities performed which the Company
have been successful in securing award of payment through arbitration proceedings. The awards have since
been challenged by the counter parties. The amounts have not been provided for on the basis of the
arbitration award in favour of the Company.
Liquidity risk
The Group monitors its risk of shortage of funds using a cash flow forecasting model. This model considers
the maturity of both its financial investments and projected cash flows from operations.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the
use of bank loans, debentures, preference shares and finance leases. Out of the Group’s liabilities, 37.9%
will mature in less than one year at 31 March 2007 (2008: 53.0%) (2009: 51.3%) (31 December 2009:
58.5%). The maturity profile of the Group’s recognised financial liabilities is given in the table below:
Weighted Average
effective
At 31 March 2007 interest rate <1yr 1-5 yrs >5 yrs Total
% US$ million US$ million US$ million US$ million
Borrowings . . . . . . . . . . . . . . . . . . . 8.0 388.9 936.4 1,243.5 2,568.8
Trade and other payables . . . . . . . . . 938.3 2.1 11.8 952.2
Derivatives . . . . . . . . . . . . . . . . . . . . 13.8 — — 13.8
Finance lease payables . . . . . . . . . . . 10.0 9.6 36.8 1.6 48.0
Financial guarantee contracts . . . . . . 6.8 — — 6.8
1,357.4 975.3 1,256.9 3,589.6
249

Weighted Average
effective
At 31 March 2008 interest rate <1yr 1-5 yrs >5 yrs Total
Borrowings . . . . . . . . . . . . . . . . . . . 8.8 749.3 1,132.7 1,251.4 3,133.4
Trade and other payables . . . . . . . . . 1,975.3 4.4 13.4 1,993.1
Derivatives . . . . . . . . . . . . . . . . . . . . 38.1 — — 38.1
2,783.2 1,181.2 1,285.1 5,249.5
Weighted Average
effective
At 31 March 2009 interest rate % <1yr 1-5 yrs >5 yrs Total
Borrowings . . . . . . . . . . . . . . . . . . . 8.6 584.7 1,028.5 858.9 2,472.1
Derivative . . . . . . . . . . . . . . . . . . . . 9.3 — — 9.3
2,119.0 1,068.3 934.9 4,122.2
Weighted Average
effective
At 31 December 2009 interest rate <1yr 1-5 yrs >5 yrs Total
Borrowings . . . . . . . . . . . . . . . . . . . 8.2 920.5 1,374.8 833.7 3,129.0
Derivative . . . . . . . . . . . . . . . . . . . . 12.3 — — 12.3
3,332.6 1,403.2 961.5 5,697.3
The majority of the Group’s derivative financial instruments mature within 12 months of each reporting
end. The undiscounted cash flows in respect of derivative financial instruments are US$42.2 million (2008:
US$54.4 million) (2009: US$983.5 million) (December 2009: US$1,317.6 million). Note where the amount
payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected
interest rates as illustrated by the yield curves existing at the reporting date.
Commodity price risk

The prices of refined petroleum products and crude oil are linked to the international prices. The Group’s
revenues are exposed to the risk of fluctuation in prices of crude oil and petroleum products in the
international markets. From time to time, the Group uses commodity derivative instruments to hedge the
price risk of forecasted transactions such as forecasted crude oil purchases and refined product sales.
These derivative instruments are considered economic hedges for which changes in their fair value are
currently recorded in the combined income statement.
The Group operates a risk management desk that uses hedging instruments to seek to reduce the impact of
market volatility in crude oil and product prices on Group’s profitability. To this end, the Group’s risk
management desk uses a range of conventional oil price-related commodity derivative instruments such as
futures, swaps and options that are available in the commodity derivative markets. The derivative
instruments used for hedging purposes typically do not expose the Group to market risk because the
change in their market value is generally offset by a corresponding change in the market value of the
underlying asset, liability or transaction being hedged. The Group’s open positions in commodity derivative
instruments are monitored and managed on a daily basis to ensure compliance with its stated risk
management policy which has been approved by the management.
250

Set out below is the impact of 10% increase or decrease in base crude and petroleum product prices on
profit before tax as a result of change in value of the Group’s commodity derivative instruments:
As at
2007 2008 2009 2009
Effect of 10% increase in prices on (loss)/profit
before tax
Crude Oil . . . . . . . . . . . . . . . . . . . . . . . . . . .... (4.9) (14.1) (3.3) (10.3)
Crack . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... (0.9) (19.3) (5.4) (0.7)
Effect of 10% decrease in prices on (loss)/profit
before tax
Crude Oil . . . . . . . . . . . . . . . . . . . . . . . . . . .... 4.6 14.1 3.3 9.2
Crack . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 1.1 19.3 5.6 0.7
Crack refers to the difference between the per barrel price of petroleum products and related cost of crude
oil used for their production.
Capital management
The Group’s objectives while managing capital are to safeguard its ability to continue as a going concern
and to provide adequate returns for its shareholders and benefits for other stakeholders. The Group’s
policy is generally to optimise borrowings at an operating Company level, on a non-recourse basis, within
an acceptable level of debt. Equity funding for existing operations or new acquisitions is raised centrally,
first from excess cash and then from new borrowings while retaining on an acceptable level of debt for the
consolidated Group. The Group’s policy is to borrow using a mixture of long-term and short-term debts
from both local and international financial markets as well as multi-lateral organisations together with cash
generated to meet anticipated funding requirements.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.
The Group’s policy is to keep the gearing ratio between 50% and 75%. The Group includes within net
debt, interest bearing loans and borrowings less cash and cash equivalents. Total Equity includes equity
attributable to the equity holders of the Group as well as minority interests.
As at
2007 2008 2009 2009
Interest-bearing borrowings . . . . . . . . . . . . . . . . . . . 2,557.6 3,097.7 2,447.6 3,109.0
Less: cash and cash equivalents . . . . . . . . . . . . . . . . 40.3 100.5 62.6 71.4
Net debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,517.3 2,997.2 2,385.0 3,037.6
Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,442.0 2,063.4 1,770.0 2,038.8
Equity and net debt . . . . . . . . . . . . . . . . . . . . . . . . . 3,959.3 5,060.6 4,155.0 5,076.4
Gearing ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.6% 59.2% 57.4% 59.8%
251

MERRILL CORPORATION JDICKSO//30-APR-10 12:39 DISK116:[10ZAU1.10ZAU70801]DT70801A.;48
21. FINANCIAL INSTRUMENTS

The accounting classification of each category of financial instruments and their carrying amounts has been
tabulated below:
Carrying amount
As at
2007 2008 2009 2009
Financial assets
At FVTPL
—Held for trading (derivatives) ................ 6.7 3.7 20.3 6.9
Cash and cash equivalents . . . . ................ 40.3 100.5 62.6 71.4
Loan and receivables
—Trade and other receivables . ................ 248.5 581.4 528.1 958.1
—Other assets . . . . . . . . . . . . . ................ 152.3 347.0 251.0 311.1
AFS investments . . . . . . . . . . . ................ — — 41.3 41.3
447.8 1,032.6 903.3 1,388.8
Financial liabilities
At FVTPL
—Held for trading (derivatives) ................ 13.8 38.1 9.3 12.3
At amortised cost
—Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,557.6 3,097.7 2,447.6 3,109.0
—Trade and other payables . . . . . . . . . . . . . . . . . . . 952.2 1,993.1 1,581.5 2,513.6
—Finance lease payables . . . . . . . . . . . . . . . . . . . . . 37.4 51.1 35.8 33.1
Financial guarantee contracts . . . . . . . . . . . . . . . . . 6.8 6.8 4.8 4.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,567.8 5,186.8 4,079.0 5,672.6
The fair value of the financial assets and liabilities are estimated at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale. The following methods and assumptions were used to estimate the fair values:
a) Cash and short-term deposits, trade and other receivables, trade and other payables, and other
current liabilities approximate their carrying amounts largely due to the short-term maturities or
nature of these instruments.
b) The fair value of listed investments is determined by reference to market price at the close of business
on the balance sheet date. The fair value of unlisted investments held by the Group is estimated with
reference to the net assets of the underlying businesses at each reporting date.
c) The fair value of loans from banks and other financial indebtedness as well as other non-current
financial liabilities is estimated by discounting future cash flows using rates currently available for debt
or similar terms and remaining maturities. The discounting rate ranges from 11.25% to 12.00%.
d) Fair value of derivatives—refer to Note 18.
The Group financial assets and liabilities that are measured subsequent to initial recognition at fair value
are derivatives (Note 18) and AFS investments (Note 11). Derivative financial assets and liabilities are
classified as Level 2 fair value measurements, as defined by IFRS 7, being those derived from inputs other
than quoted prices that are observable for the assets or liability, either directly (i.e. price) or indirectly
(i.e. derived from prices). AFS investments are classified as Level 3 fair value measurements, as assets held
are unquoted. There were no transfers between categories throughout the historical financial period. The
carrying value of all other financial assets and liabilities closely approximate their fair value except for
borrowings (Note 16) where fair values are estimated to be US$2,503.2 million (2008: US$2,985.6 million)
(2009: US$2,348.0 million) (December 2009: US$3,004.1 million).
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Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: DT70801A.;48
22. BUSINESS COMBINATIONS

Below is set out a summary of the business combinations which have taken place during the historical
period.
Total net Share of Initial
assets at Minority net assets acquisition
Note fair value interest acquired cost Goodwill Equity
US$ million US$ million US$ million US$ million US$ million US$ million
Essar Power Holding Ltd . 22a.(i) 103.2 (59.1) 44.1 72.0 27.9 —
Hazira Steel 2 . . . . . . . . . 22a.(ii) 45.1 — 45.1 50.0 4.9 —
Algoma Energy LLP . . . . 22a.(iii) 36.6 — 36.6 36.6 — —
Essar Oil Limited . . . . . . 22b 959.2 (314.4) 644.8 743.1 98.3 —
Essar Energy Holding Ltd 22b 393.4 — 393.4 433.5 — 40.1
22a. POWER SEGMENT
(i) Acquisition of Essar Power Holdings Ltd (EPHL)

On 13 September 2006, the Group acquired 100% of Essar Power Holdings Ltd (EPHL), a holding
company which held a 42.86% stake in Essar Power Limited (EPOL) and its subsidiaries. At approximately
the same time, Essar Group acquired a 36.26% stake in EPOL and through its direct and indirect
ownership controlled EPOL.
EPOL was an unlisted company based in India which operated three dual fuel fired combined cycle power
plants with a total capacity of 515 MW.
As a consequence of further transactions described below, the Group, owns 74% of EPOL at the date of
approving these financial statements, of which 12.26% was acquired from companies within the Essar
Group. In accordance with the Group’s policy for accounting for common control transactions, and as a
consequence of these transactions resulting in control being transferred to the Group, it has consolidated
EPOL from the date that the Essar Group obtained control.
All consideration for this initial transaction has been paid in cash by the Essar Group and the business was
contributed to the Group. The contribution has been reflected as invested capital in the statement of
equity.
The fair values of the identifiable assets and liabilities of EPHL and its subsidiaries as at the date of
acquisition were as follows:
Fair value
Book value adjustments Fair value
Assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 271.5 91.0 362.5
Current assets (including cash and cash equivalents of
$1.7 million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177.7 — 177.7
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9 — 8.9
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458.1 91.0 549.1
Liabilities
Borrowings (current) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.1 (2.3) 54.8
Borrowings (non-current) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239.8 (7.9) 231.9
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.6 51.7 79.3
Finance lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 38.1 38.1
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.5) 44.3 41.8
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322.0 123.9 445.9
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136.1 (32.9) 103.2
Share in net assets @ 42.86% . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1
Net invested capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.0
Goodwill arising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27.9
253

The key fair value adjustments are as follows:

• The valuation of property, plant and equipment was determined, based on professional valuers’ report
at the time of the acquisition.
• A provision was recorded to reflect the probable outflow of economic benefit associated with a trade
dispute with a significant customer of the business.
• The fair valuation of finance lease liability was determined based on market interest rate available for
leasing asset.
From the date of acquisition to 31 March 2007, EPHL along with its subsidiaries has contributed revenues
of US$94.4 million and profits of US$4.5 million to the results of the Group before consolidation
adjustments. Had the acquisition taken place at the beginning of the year, the resultant figures for
contribution to the Group’s revenues and results for the year would have been US$164.9 million and
US$8.8 million respectively.
Subsequent to the acquisition on 13 September 2006, the Group has entered into a number of transactions
which increased its ownership in EPHL’s subsidiary EPOL. These include the following:
• The transfer of approximately 15% of EPOL from Essar, transferred in September 2007.
• Acquisition in February 2007 of 100% of Essar Power Jharkhand Limited (EPJL) for US$11,000,
which held a 5.84% interest in EPOL at the date of acquisition. EPJL also held borrowings of
US$20.6 million and other assets of US$6.7 million which were consolidated from the date of
acquisition onwards.
• The issue of new share capital of EPOL to EPHL in September 2008, which increased the Group’s
ownership interest by 3.87%.
In accordance with the Group’s accounting policy, these transactions have been treated as acquisitions of
minority interest with any surplus or deficit reflected in retained earnings.
(ii) Acquisition of Hazira Steel 2 (HS2)

On 25 September 2006 the Essar Group acquired a 100% controlling interest in HS2, which had a 91.84%
controlling stake in ETHL. As a result of this acquisition, the Essar Group also obtained a controlling
interest in Bhander Power Limited (BPOL) as BPOL was 100% subsidiary of ETHL.
In September 2007, the entire shareholding in HS2 was transferred to EPHL for nil consideration.
In accordance with the Group’s accounting policy for common control transactions, the Group has
accounted for the acquisition of HS2 and its subsidiaries retroactively as a business combination from the
date HS2 was acquired by the Essar Group. The consideration of US$50.0 million paid by the Essar Group
which as paid in cash was treated as invested capital in the Group with any difference between that and the
carrying value of the assets and liabilities of HS2 at the date of transfer in to the Group recorded as
goodwill.
254

The table below represents the fair values of the identifiable assets and liabilities of HS2 and its
subsidiaries as determined in the purchase price allocation of the Essar Group:
Fair value
Assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 157.9 17.3 175.2
$2.3 million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.4 — 12.4
Liabilities
Borrowings (current) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 — 5.3
Borrowings (non-current) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.7 — 106.7
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.2 1.0 24.2
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 5.8 6.3
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.6 10.5 45.1
Share in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.1
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9
Total consideration paid by the Essar Group . . . . . . . . . . . . . . . . 50.0
The main fair value adjustment relates to the valuation of property, plant and equipment based on
professional valuers report at the time of the acquisition and the related deferred tax.
From the date of acquisition to 31 March 2007 HS2 and its subsidiaries have contributed revenues of
US$12.5 million and profits of US$6.2 million to the results of the Group, before consolidation
adjustments. Had the acquisition taken place at the beginning of the year, the resultant figures for
contribution to the Group’s revenues and profits would have been US$18.8 million and US$7.6 million
respectively.
HS2 is an unlisted company based in India and, through its commissioned naphtha-based power plants
with a combined capacity of 500 MW in Hazira, India. These plants were put into commercial generation
in stages including 155 MW on 15 January 2006, 200 MW on 18 December 2007 and 145 MW on 7 October
2008.
(iii) Acquisition of Algoma Energy LLP (AELP)

On 18 June 2007 a 100% controlling interest in Essar Steel Algoma Inc. (ESAI) was acquired by the Essar
Group. Algoma Energy LLP was the subsidiary of ESAI as at that date.
255

The table below represents the fair values of the identifiable assets and liabilities of Algoma Energy LLP as
determined in the purchase price allocation of the Essar Group as at 18 June 2007.
Fair value
Assets
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6 — 7.6
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 53.4 53.4
$0.4 million) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4 — 0.4
Liabilities
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9 — 7.9
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 16.9 16.9
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 36.5 36.6
Share in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.6
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Total consideration paid by the Essar Group . . . . . . . . . . . . . . . . 36.6
The principal fair value adjustments relate to the valuation of the power sales contract, the benefit of
which was acquired with the business, and the related deferred tax balance. The contract was valued based
on discounted cash flow methodologies and a comparison with market power prices at the time of
acquisition. The value of the contract exceeded the value of property plant and equipment because at that
stage, the plant was in the early stages of construction.
The Group acquired Algoma Energy LLP from Essar Group, with 49.9% acquired in December 2007 for
consideration of US$84.1million and the remaining 50.1% stake acquired in November 2009 for
consideration of US$120.0 million. The difference between the consideration paid and the carrying value
of the respective share of the assets and liabilities of Algoma Energy LLP at those dates has been recorded
as an increase in the retained deficit of the Group.
Since the acquisition by the Group is a common control transaction, the reflected the acquisition as if it
occurred on 18 June 2007 (the date on which the Essar Group obtained control).
22b. REFINING AND MARKETING AND EXPLORATION AND PRODUCTION SEGMENTS

Acquisition of Essar Oil Limited (EOL)
On 30 June 2006 a 67.22% controlling interest in EOL was acquired by Vadinar Oil Limited (VOL), a
subsidiary company of the Essar Group.
On 26 October 2006, EEHL acquired 100% voting shares in Vadinar Oil Limited from Essar Group for nil
consideration. At that time VOL held the 67.22% controlling stake in EOL and its subsidiary, Vadinar
Power Company Limited (VPCL), which operates a power plant adjacent to the Vadinar refinery owned by
the EOL Group.
As at Admission, the Group owned 86.39% of EOL, through acquisitions of minority interests from the
Essar Group and from third parties.
In accordance with Group’s policy for common control transactions, EOL has been consolidated
retroactively from 30 June 2006. The consideration paid by the Essar Group has been reflected as Invested
Capital in the statement of equity.
The principal activity of EOL, whose equity is publicly traded on the Bombay Stock Exchange and the
National Stock Exchange of India, is refining of crude oil, exploration and production of crude oil and
other related energy products. The petroleum refinery project started commercial production from 1 May,
2008.
256

The table below represents the fair values of the identifiable assets and liabilities of EOL as determined in
the purchase price allocation of the Essar Group as at 30 June 2006.
Fair value
Book Value adjustments Carrying value
Assets
Property, plant and equipment . . . . . . . . . . . . . . . ... ....... 2,005.0 664.3 2,669.3
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . ... ....... 1.1 — 1.1
$4.2 million) . . . . . . . . . . . . . . . . . . . . . . . . . . ... ....... 149.1 0.4 149.5
Other non-current assets . . . . . . . . . . . . . . . . . . . ... ....... 29.6 (5.2) 24.4
Total assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,184.8 659.5 2,844.3
Liabilities
Borrowings (current) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66.5 — 66.5
Borrowings (non-current) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,364.1 38.9 1,403.0
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190.8 14.1 204.9
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 188.5 195.7
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.9 0.1 15.0
Total liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,643.5 241.6 1,885.1
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541.3 418.0 959.2
Share in net assets @ 67.22% . . . . . . . . . . . . . . . . . . . . . . . . . 644.8
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98.3
Total consideration paid by the Essar Group . . . . . . . . . . . . . . 743.1
The key fair value adjustments are as follows:

• The fair value of property, plant and equipment was revalued based on an independent professional
valuation of the tangible fixed assets acquired.
• The fair valuing of borrowings, based on the cash flows related to the borrowings over the term of the
respective loan and discounted at the market rate.
• The deferred tax liability arising on the fair value adjustments.
From the date of acquisition to 31 March 2007 EOL contributed revenues of US$95.9 million and losses of
US$15.7 million to the results of the Group before consolidation adjustments. Had the acquisition taken
place at the beginning of the year, the contribution to the Group’s revenues and results for the period
ended 31 March 2007 would have been US$104.8 million and losses of US$25.6 million respectively.
In addition to the acquisition from the Essar Group on 26 October 2006, the Group has entered into a
number of transactions which increased its ownership in EOL. These include the following:
• On 25 September 2006 the Group acquired a 100% controlling interest in Essar Energy Holdings
Limited (EEHL) for US$433.5 million. At this time EEHL held 4.28% ordinary shares in EOL.
EEHL also held trade and other payables of US$53.3 million and other non-current assets of
US$56.7 million which have been consolidated in the Group since that date.
• EOL made a preferential issuance of shares to EEHL which resulted in an increase in ownership of
1.4% in November 2006 and an additional 1.27% in January 2008.
• In January 2008, the Group acquired a further 2.49% of shares in EOL from third parties for a total
consideration of approximately US$212.1 million.
As a result of these transactions, the Group held approximately 77% of EOL at 31 December 2009. These
transactions have been treated as acquisitions of minority interest and any surplus or deficit has been as a
change in the retained deficit.
257

23. INTEREST IN JOINT CONTROLLED ENTITIES

The Group has acquired a 50% interest in Kenya Petroleum Refinery Limited (KPRL), a joint controlled
entity in July 2009. The Group is in process of fair value of assets, liabilities and contingent liabilities of
KPRL, hence considered the provisional value.
The provisional value of assets and liabilities of KPRL as at acquisition date are under:
Share of joint
controlled entities
US$ million US$ million
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.3 21.7
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.6 22.3
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27.0) (13.5)
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.1) (3.6)
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.8 26.9
Share in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.9
Cost of acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8
Surplus on acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.1
The Group also has a 50% interest in Mahan Coal Limited, a joint controlled entity, which is in the process
of setting up coal mines.
The share of revenue, profit, assets and liabilities of the joint controlled entities at 31 March 2007, 2008,
2009 and 31 December 2009 for the years then ended, which are included in the combined historical
financial information are as follows:
Share of joint
controlled entities’
results for the
nine months ended
31 December 2009
US$ million
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
Profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7
As at
2007 2008 2009 2009
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 — — 22.3
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 1.2 0.9 23.8
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (0.1) (13.0)
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . — — — (4.1)
0.7 1.2 0.8 29.0
Further Group’s share in contingent liabilities and capital commitment of joint controlled entities are as
follows:
As at
2007 2008 2009 2009
Group’s share in contingent liabilities . . . . . . . . . . . . — 4.2 3.3 3.6
Group’s share in capital commitments . . . . . . . . . . . . — — — 0.1
— 4.2 3.3 3.7
258

24. CONTINGENCIES AND COMMITMENTS
Contingent liabilities
Contingent liabilities at the balance sheet date, not otherwise provided for in the combined historical
financial information are categorised as follows:
As at
2007 2008 2009 2009
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.5 34.3 35.9 23.9
Interest* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 29.7 52.7 73.3
Corporate guarantees . . . . . . . . . . . . . . . . . . . . . . . . 50.4 153.2 124.6 61.8
Bank guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . 91.9 66.7 54.0 98.5
Disputed custom duty . . . . . . . . . . . . . . . . . . . . . . . 4.6 6.2 4.8 17.0
Disputed income and indirect tax . . . . . . . . . . . . . . . 26.9 31.4 27.9 11.8
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9 7.6 13.3 48.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204.2 329.1 313.2 334.9
* The Group has assumed that certain facilities will be paid at the earliest redemption date after obtaining required consent of
the lenders and thus interest charge has been based on applicable early redemption rates. This amount represents the
additional interest that would have been charged to the income statement in the period if the debt was assumed to run to the
maximum term of the loan.
Contingent liabilities relate predominantly to actual or potential litigation of the Group for which amounts
are reasonably assessable but the liability is not probable and therefore the Group has not provided for
such amounts in this combined historical financial information. The amounts relate to a number of actions
against the Group, none of which are individually significant. Additionally, there are a number of legal
claims or potential claims against the Group, the outcome of which cannot be foreseen at present, and for
which no amounts have been included in the table above.
In addition to amounts set out above, there are additional contingencies as described below:
Sales tax benefit

In relation to benefits under the Sales Tax Incentive Scheme, there is an ongoing dispute surrounding
eligibility of Essar Oil Limited to qualify for the Sales Tax Incentive Scheme. An order was issued by the
Hon’ble High Court of Gujarat on 22 April 2008, which confirmed, amongst other things, that Essar Oil
Limited is eligible for the Sales Tax Incentive Scheme. Subsequently the State Government of Gujarat filed
a Special Leave Petition in the Hon’ble Supreme Court, challenging the order of the Hon’ble High Court.
The case has not yet been heard by the Hon’ble Supreme Court but the Group believes it has a high
likelihood of success.
In order to qualify for the Sales Tax Incentive Scheme, various conditions must be met including ensuring
certain percentages of employees are local, re-investing certain amounts of the benefit, adhering to
specified pollution control measures and also contributing a certain amount to prescribed rural
development scheme in the state of Gujarat by the Group over a period estimated to be up to 13 years to
ensure that the full benefit of the sales tax deferral which has been recorded can be retained by the Group.
In the event that such conditions are not met, the payment of sales tax including interest to the State of
Gujarat will be accelerated, and there will be an accounting charge to reflect the fact that the liability is
discounted. As a consequence, there may be an additional potential liability resulting from a breach of
financial covenants as stipulated under the MRA of Essar Oil Limited. Management believes there is a
high likelihood that these conditions will be met. The effect of discounting (net of the effect of unwinding)
is US$nil (2008: US$nil) (2009: US$253.2 million) (31 December 2009: US$413.4 million).
Claim by customer
On 14 September 2005, GUVNL, an entity controlled by the state of Gujarat, filed a complaint against
Essar Power with the Gujarat Electricity Regulatory Commission (the ‘‘GERC’’) alleging that Essar Power
259

diverted electricity generated by its Hazira power plant to Essar Steel, an affiliate of Essar Power, in
violation of its power purchase agreement with the Gujarat Electricity Board, whose assets and liabilities
were transferred to GUVNL in 2003 and incorrectly claimed certain fuel generation credits from GUVNL
between 1996 and 2006. GUVNL claimed a total of approximately US$339.1 million from the Power
Group.
On 18 February 2009, the GERC ruled in favour of GUVNL for the diversion of electricity by Power
Group. The GERC also awarded GUVNL a refund for generation incentives incorrectly claimed from
14 September 2002 to 29 May 2006. The GERC, however, ruled that recovery of the incorrectly claimed
generation incentives and of compensation for the electricity supplied to Essar Steel in breach of the PPA
prior to September 2002 was barred by the applicable statute of limitation.
Both Essar Power and GUVNL appealed the GERC’s ruling to the Appellate Tribunal for Electricity, New
Delhi. The Appellate Tribunal held on 22 February 2010 that Essar Power was not liable to pay
compensation for alleged wrongful diversion of power to Essar Steel or for the reimbursement of the
annual fixed charges. The Appellate Tribunal further held that Essar Power was liable to refund to
GUVNL the deemed generation incentive paid on and after 14 September 2002 which the Group had
already provided for.
On 29 January 2010 Essar Power filed a petition before the GERC against GUVNL claiming certain
payments due to it under the PPA. Essar Power has made a claim for an aggregate amount of
US$84.4 million comprising delayed payment charges, depreciation, foreign exchange variation, interest on
debentures, bill discounting charges, interest on working capital and alleged wrongful deduction of rebate
by GUVNL. The matter is pending before the GERC. In respect of the outstanding claims, the Group
does not expect to incur costs in excess of amounts provided in defending its position.
Other claims
There are a number of other claims in connection with the Group, however management believes the
probability of future liabilities in respect of such claims is remote and no amounts have been provided or
disclosed as contingent liabilities over the reporting period.
Contingent assets
In June 1998 a cyclone hit the west coast of India which caused damage to the refinery leading to delays in
the construction and commencement of commercial production. The Company filed an insurance claim
against loss of profits and material damage as a result to the incident. In respect of an insurance claim filed
of US$403.3 million (2008: US$439.8 million) (2009: US$345.0 million) (December 2009:
US$376.6 million) (including interest of US$199.9 million (2008: US$218.0 million) (US$171.1 million)
(December 2009: US$186.8 million), the Group and the Insurer have agreed to settle the dispute by
arbitration. The arbitration proceedings were initiated during the year and the Group has revised its claim
amount to US$647.0 (as at 31 December 2009) million mainly to cover the interest on the claim amount up
to the date of filing the claim before the arbitration panel.
Commitments
Petrol station operators
In 2006, Essar Oil Limited (‘‘Company’’) wrote to its Petrol station operations (‘‘Franchisees’’) that it will
pay certain compensation whenever the company is required to limit the supply of Petrol and High Speed
Diesel to the Franchisees or supply at higher prices than the market, under certain abnormal conditions.
The compensation period was effective from July 2006 and was to be continued until conditions
normalised. The past advice to the franchisees might have created an obligation to compensate them
whenever the supplies are restricted in the future. The potential commitment cannot be quantified as it is
dependent upon future market conditions including supply volumes and prices. The amount paid for the
year to 31 March 2007 was US$4.9 million, (2008: US$0.6 million), (2009: US$5.3 million), (31 December
2009: US$0.1 million). The amount paid in recent periods of operations under this scheme is not
significant.
260

Finance lease—the Group as lessee

The Group has finance leases for various items of buildings and plant and machinery. These leases have
terms of renewal but no purchase options and escalation clauses. Renewals are at the option of the specific
entity that holds the lease. Future minimum lease payments under finance leases and hire purchase
contracts together with the present value of the net minimum lease payments are as follows:
Present value of minimum lease

Minimum lease payments payments
At 31 March 2007 2008 2009 2007 2008 2009
US$ million US$ million US$ million US$ million US$ million US$ million
Payable less than 1 year . . . . . . . 9.6 13.7 11.1 6.1 10.2 9.1
Payable later than 1 year and not
later than 5 years . . . . . . . . . . 36.8 44.1 27.9 29.8 35.2 22.2
Payable later than 5 years . . . . . . 1.6 20.3 15.5 1.5 5.7 4.5
Total . . . . . . . . . . . . . . . . . . . . . 48.0 78.1 54.5 37.4 51.1 35.8
Less: Future finance charges . . . . (10.6) (27.0) (18.7)
Present value of minimum lease
payments . . . . . . . . . . . . . . . . 37.4 51.1 35.8
Present value of
Minimum lease minimum lease
payments payments
At 31 December 2009 2009
US$ million US$ million
Payable less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.9 10.4
Payable later than 1 year and not later than 5 years . . . . . . . . . . . . . . . . 20.2 18.5
Payable later than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 4.2
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.8 33.1
Less: Future finance charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.7)
Present value of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . 33.1
Capital commitments
As at
2007 2008 2009 2009
Estimated amount of contracts remaining to be
executed on capital account and not provided for . . 1,494.7 6,343.9 6,809.3 6,877.2
Export obligations
The Group imports capital goods under Export Promotion Capital Goods Scheme (EPCG) and raw
materials under Advance License Scheme to utilise the benefit of zero or concessional customs duty. These
benefits are subject to future exports by the Group within stipulated period. The Group has following
outstanding export obligations:
As at
2007 2008 2009 2009
Export obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 1,355.4 1,040.4 150.7 101.5
Based on past performance, market conditions and business plans, the management expects to fulfil the
entire export obligation within the stipulated period.
261

MERRILL CORPORATION JDICKSO//30-APR-10 12:39 DISK116:[10ZAU1.10ZAU70801]DU70801A.;43
25. RELATED PARTIES

The Group, as discussed in Note 1, has historically been part of the Essar Group and as a result has
entered into a number of transactions with other Essar Group entities. The Group shares many functions
and services that are performed by various members of the Essar Group and costs are allocated across the
relevant entities which have benefited. The costs have been historically allocated on the basis that the
Essar Group believes is a reasonable reflection of the utilisation of each service provided or the benefit
received by each Essar Group company. The allocated costs, while reasonable, may not necessarily be
indicative of the costs that would have been incurred by the Company if it had performed these functions
or received these services as a stand-alone entity.
Essar Energy and Essar Global Limited have entered into a Relationship Agreement, the principal
purpose of which is to ensure that following listing, the Group is capable of carrying on its business
independently of EGL and its associates.
Balances and transactions between entities within the Group, which are related parties, have been
eliminated and are not disclosed in this note.
EGL
EGL is the ultimate parent company of the Group throughout the historic financial period. The ultimate
shareholders of EGL are the Virgo Trust and Triton Trust, discretionary trusts, whose beneficiaries include,
among others, companies, whose 100% shareholders are Ravi Ruia and Prashant Ruia.
The Group’s balances outstanding with EGL are as follows:
As at
Outstanding balances 2007 2008 2009 2009
Trade and other receivables . . . . . . . . . . . . . . . . . . . — — — 15.0
Trade and other payables . . . . . . . . . . . . . . . . . . . . . — 37.7 — 2.5
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 480.7 749.8
No significant transactions occurred with EGL during the period those which formed the combined group
as described in Note 1 and those set out above.
Transactions and balances with entities within the Essar Group

The Group had transactions and balances with affiliates, which are related parties by virtue of being
controlled by EGL, as follows:
For the year ended For the nine month ended

Transactions with Essar Group companies 2007 2008 2009 2008 2009
Sale of goods and services . . . . . . . . . . . . 43.6 99.5 117.8 85.8 112.4
Purchases of goods and services . . . . . . . . 145.7 352.0 377.0 274.3 142.4
Interest income . . . . . . . . . . . . . . . . . . . . 3.8 — 0.4 0.2 6.2
Interest expense . . . . . . . . . . . . . . . . . . . — 3.2 3.5 2.2 5.8
Purchase of investment . . . . . . . . . . . . . . — 17.9 — — 0.1
Purchases of property, plant and
equipment . . . . . . . . . . . . . . . . . . . ... 7.3 6.8 97.0 0.2 64.2
Sale of investment . . . . . . . . . . . . . . ... — 17.9 — — 3.7
Sale of property, plant and equipment ... — — 9.5 9.8 —
262

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: DU70801A.;43
As at
Balances with Essar Group companies 2007 2008 2009 2009
Trade and other receivables
—current . . . . . . . . . . . . . . . . . . . . . . . ......... 60.5 133.5 51.3 65.9
—non-current . . . . . . . . . . . . . . . . . . . . ......... 9.5 7.1 9.3 124.5
Amounts due for capital work in progress ......... 141.3 195.9 128.3 158.5
Trade and other payables
—current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.5 37.1 130.7 135.2
—non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 0.5
Loans payable—current . . . . . . . . . . . . . . . . . . . . . . 110.7 82.1 34.1 97.8
Finance lease payable . . . . . . . . . . . . . . . . . . . . . . . — 17.0 12.5 14.9
Guarantees given* . . . . . . . . . . . . . . . . . . . . . . . . . . 57.2 69.2 53.5 58.7
Guarantees received** . . . . . . . . . . . . . . . . . . . . . . . 633.9 1,467.7 2,129.1 2,383.5
* The Group has given guarantees for borrowings of related parties.
** Certain of the Group’s borrowings are the subject of guarantees provided by related parties.
Transactions with joint controlled entities

On 31 July 2009, the Group acquired 50% joint control of Kenya Petroleum Limited in Kenya (Note 26).
No significant transactions have accrued with this entity in the period since acquisition, and no balances
are outstanding.
Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on contractually agreed prices. Outstanding
balances at the year end are unsecured and bear interest at rates ranging from 0% to 10.25%. The Group
has not recorded any impairment of receivables due from related parties. An assessment for impairment of
related party receivables is undertaken each financial year through examining the financial position of the
related party and the market in which the related party operates.
Related party contracts

Essar Global Limited and companies in the Essar Group are party to (and following Admission will
continue to be a party to) a significant number of arrangements with the Group. The Group will be reliant
on the Essar Group for a number of ongoing, and in some cases, long term, arrangements including
customer and supply contracts, transport and logistics services, construction and other services in relation
to the Expansion Projects and corporate and administrative services.
These arrangements between members of the Group and the Essar Group are summarised below.
Shared services
The Group leases office and other space from certain companies in the Essar Group.
In addition, the Group receives certain services from the Essar Group relating to accommodation,
telecommunications infrastructure and internet connections, travel and related services (including
management and maintenance services for aviation related activities, technical services and ground
handling services), treasury functions, management consultancy, maintenance of greenbelt in respect of the
Vadinar refinery, technical storage facilities, business centre facilities, managerial support and corporate
functions including financial advice, legal advice, and advice on matters related to corporate governance,
environmental management, risk and insurance, taxation, aircraft usage and related services, information
technology services, payroll processing and other HR services and shared services for accounting activities.
The services are generally provided for a period of between three and seven years, terminable by either
party on 30 to 180 days’ notice.
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Intellectual Property
Certain members of the Group have been granted the right to use the ‘Essar’ name for the purposes of
their corporate identities and for operating their businesses worldwide. The total amount payable by Essar
Energy under the licence agreement is £1. The total amount payable by Essar Oil and Essar Power under
their licence agreement is equal to 0.25% of each of their net revenues (i.e. exclusive of value added tax
and excise duty in the case of Essar Power, and exclusive of taxes, duties and crude oil cost in the case of
Essar Oil) generated by their respective business each quarter, with an increase of 0.15% every year over a
period of 5 years until it reaches 1.0%.
Power Business
Construction projects
The power business has a number of contracts with companies in the Essar Group in relation to offshore
engineering, construction, procurement, transportation and project management services.
In addition, Essar Power Group has entered into an onshore turnkey contract with an Essar Group
company for the construction of the transmission system for Essar Power MP Mahan power project.
Power Purchase Agreements

The Group has entered, and expects to enter into additional, long-term PPAs with companies in the Essar
Group.
Key contracts in respect of operational power plants include:
• a PPA expiring in 2026 with Essar Steel Limited for the supply of power from the Essar Power-Hazira
power plant to Essar Steel Limited.
• PPAs expiring in 2030 with a number of companies in the Essar Group for the supply of power from
Bhander Power-Hazira power plant.
• PPAs expiring in 2029 with Essar Steel Algoma Inc. for the supply of all the power produced by the
Essar Power Canada power plant.
Key contracts in connection with power plant projects not yet operational include a number of PPAs for
the supply of power to Essar Steel Limited and other companies in the Essar Group. These contracts are
each for period of 25 from the date of commencement of commercial operations of the plant to supply the
power under the PPA. These power plant projects include the Essar Power MP-Mahan project, the Essar
Power Hazira-Hazira project, the Essar Power Orissa-Paradip project and Phase II of the Vadinar Power
Plant Expansion project. The Group has also issued a number of performance guarantees in favour of
Essar Steel and other Essar Group companies in respect of its performance under the PPAs.
Water and Fuel Supply Agreements

Members of the Group are parties to a number of contracts with members of the Essar Group for the
procurement, supply, management and handling of fuel and water needed to generate power.
Key contracts in connection with operational power plants include:
• The Group has a water and fuel management agreement with Essar Steel (to run concurrently with
the Groups PPA with Essar Steel Limited) for the procurement and supply of fuel needed to generate
the power that Essar Steel Limited has committed to take from the Essar Power-Hazira power plant
pursuant to its PPA;
• The Group has contracts with Essar Steel Limited and other Essar Companies whereby those
companies are responsible for providing the natural gas required by the Bhander Power-Hazira plant,
to generate the power that the Essar Group has committed to take pursuant to the respective PPAs;
and
• The Group is party to a contract with Essar Steel Algoma Inc. (expiring in 2029 or such later date as
agreed by the parties) pursuant to which surplus blast furnace gases and coke oven gas are supplied by
264

Essar Steel Algoma Inc. to the Group in return for power and steam for use at Essar Steel
Algoma Inc.’s steelworks.
Key contracts in connection with power plant projects not yet fully operational include:
• The Group has entered into a number of long term agreements (ranging from 20 to 25 years) for coal
supply, coal handling, coal affreightment, to secure the supply of coal to the Essar Power Gujarat-
Salaya power plant and the Essar Power Gujarat-Salaya II project.
• The Group has entered in to a 15 year water and fuel supply agreement with Essar Steel Hazira the
Vadinar power plant expansion project.
• Under certain agreement the Essar Group has an obligation to provide fuel and water for the power
plants and projects at Orissa and Hazira.
Other arrangements
Operations and maintenance agreement with Essar Steel
Essar Power has agreed to provide operations and maintenance services to Essar Steel for the 25MW
power plant of Essar Steel located at Visakhapatnam for a term of 15 years from 1 July 2006.
Leases
A company within the Group has agreed to lease the site of the Essar Orissa-Paradip power plant from the
Essar Group. The lease is required to be entered into by 11 May 2010 and will be for a period of 90 years.
Rent payable under the lease will be determined by the parties at the time of execution of the lease.
Oil and Gas Business

The Group has contracted with certain Essar Group companies for the hiring of drilling rig services, along
with related equipment, personnel, instruments, materials, stores and other services at its various
exploration blocks. These expiry dates of these agreements range from 2012 to 2019.
The Group has also contracted with certain Essar Group companies to lay gas pipelines for certain
engineering and design services.
Refinery Expansion Projects

In connection with the certain refinery projects, the Group has contracted with various Essar Group
companies for engineering services, project management services, project construction, equipment
transport and handling services, and the supply of equipment and bulk materials. Certain Essar Group
companies are required to provide performance guarantees and corporate guarantees in favour of the
Group in relation to each of the contracts for these services.
Shipping and logistics

The Essar Group provides the Vadinar refinery’s logistical services for transporting refined petroleum
products by road from the refinery to various depots and other locations within India, where those
products are ultimately sold. The contract relating to the provision of these services expires on 31 March
2017.
Petroleum handling
The Group has a petroleum handling agreement with an Essar Group company expiring on 31 March
2014, under which the Essar Group provides services for the receipt, handling, storage and dispatch of the
Group’s crude oil and intermediate and refined petroleum products. The agreement includes a minimum
monthly charge. Further, under the terms of the agreement, the Group supplies all utilities to the Essar
Group company, including power, water and steam, at no additional cost.
265

Maintenance and supplies

The Group has contracted with certain Essar Group companies to provide maintenance services, including
technical services and day to day maintenance to their facilities situated at the Vadinar Refinery.
Leases
The Group leases the site of the Vadinar port terminal operations to an Essar Group company under a
30 year lease (due to expire in December 2025 and renewable by the Essar Group for a further 30 year
period) at an annual rent of approximately US$0.1 million.
The residential township and transit accommodation, used by employees and visitors of the Petroleum
Refinery, are leased by the Group for a period of 20 years at an annual rent of approximately
US$3.1 million from a related party of the Essar Group. On expiry of the lease in 2027, the Group has an
option to extend the lease under mutually agreed terms and conditions.
Sales tax liability assignment

The Group receives certain sales tax incentives as described in Note 24. In connection with this
arrangement, the Group has assigned its liability for the sales tax collected during the three years ended
31 December 2009 to a related party of the Essar Group and has paid the present value in relation to such
liability to that entity.
Remuneration of Directors and key-management personnel

The remuneration of the directors, who are the key management personnel of the Group, is set out below
in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
For the nine month ended

For the year ended 31 March 31 December
2007 2008 2009 2008 2009
Short-term employee benefits . . . . . . . . . 0.5 0.7 0.4 0.5 0.3
Post-employment benefits . . . . . . . . . . . . — 0.1 — 0.1 —
Other long-term benefits . . . . . . . . . . . . . — — 0.1 — 0.1
Termination benefits . . . . . . . . . . . . . . . . — — — — —
0.5 0.8 0.5 0.6 0.4
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26. ENTITIES INCLUDED FOR COMBINATION
% Voting held by the Group economic % held by the Group

Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
As at As at As at As at
31 March 31 December 31 March 31 December
Country of
0D/
# Company Incorporation Principal activities 2007 2008 2009 2009 2007 2008 2009 2009
Energy entities
1 Essar Energy Holdings Limited . . . . . . . . . . . . . . . . . . Mauritius Investment holding 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
2 Vadinar Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mauritius Investment holding 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
3 Essar Oil Limited(a) . . . . . . . . . . . . . . . . . . . . . . . . . India Refinery 72.9 76.1 76.7 76.7 72.9 76.1 76.7 76.7
4 Vadinar Power Company Limited . . . . . . . . . . . . . . . . India Captive power plant 100.0 100.0 100.0 100.0 72.9 76.1 71.2 68.9
5 Essar Oil Vadinar Limited . . . . . . . . . . . . . . . . . . . . . India Refinery — 100.0 100.0 100.0 — 76.1 76.7 76.7
6 Essar Energy Overseas Ltd . . . . . . . . . . . . . . . . . . . . Mauritius Investment holding — 100.0 100.0 100.0 — 76.1 76.7 100.0
7 Essar Petroleum (East Africa) Limited . . . . . . . . . . . . . Kenya Marketing and trading — — — 100.0 — — — 100.0
File: DV70801A.;31
8 Essar Oil (UK) Limited . . . . . . . . . . . . . . . . . . . . . . United Kingdom Investment holding — — — 100.0 — — — 100.0
267
9 Essar Oil Germany GmbH: . . . . . . . . . . . . . . . . . . . . Germany Investment holding — — — 100.0 — — — 100.0

10 Essar Oil Stanlow Limited . . . . . . . . . . . . . . . . . . . . . United Kingdom Investment holding — — — 100.0 — — — 100.0
11 Essar Syngas Limited(b) . . . . . . . . . . . . . . . . . . . . . . . Mauritius Investment holding 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
12 Essar Infrastructure Africa Limited . . . . . . . . . . . . . . . Nigeria Investment holding 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
13 Essar Chemicals Limited . . . . . . . . . . . . . . . . . . . . . . Mauritius Investment holding 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
14 Essar Gujarat Petrochemicals Limited . . . . . . . . . . . . . . India Petrochemical 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
15 Essar Arkema Chemicals Holdings Limited(b) . . . . . . . . . Mauritius Investment holding — 100.0 100.0 100.0 — 100.0 100.0 100.0
16 Essar Eastman Chemicals Holdings Limited(b) . . . . . . . . . Mauritius Investment holding — 100.0 100.0 100.0 — 100.0 100.0 100.0
17 Essar Exploration and Production Limited . . . . . . . . . . . Mauritius Exploration and Production 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
18 Essar Exploration and Production Bengal Limited(c) . . . . . Mauritius Exploration and Production — 100.0 NA NA — 100.0 NA NA
Part 11
19 Essar Exploration and Production Gujarat Limited(c) . . . . Mauritius Exploration and Production 100.0 100.0 NA NA 100.0 100.0 NA NA
20 Essar Exploration & Production Limited . . . . . . . . . . . . Nigeria Exploration and Production — 100.0 100.0 100.0 — 100.0 100.0 100.0
21 Essar Exploration and Production India Limited . . . . . . . India Exploration and Production — 100.0 100.0 100.0 — 100.0 100.0 100.0
22 Essar Exploration and Production Madagascar Limited(b) . Madagascar Exploration and Production NA NA 100.0 100.0 NA NA 100.0 100.0
Power entities
23 Essar Power Holdings Ltd . . . . . . . . . . . . . . . . . . . . . Mauritius Investment holding 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
24 Hazira Steel 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mauritius Investment holding 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
25 ETHL Global Capital Limited(b) . . . . . . . . . . . . . . . . . India Investment holding 91.8 91.8 93.9 NA 91.8 91.8 93.9 NA
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Part 11
6810DM/0D Foot:
% Voting held by the Group economic % held by the Group
As at As at As at As at
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
31 March 31 December 31 March 31 December

Country of
# Company Incorporation Principal activities 2007 2008 2009 2009 2007 2008 2009 2009
0D/
26 Algoma Power Cooperatief U.A. . . . . . . . . . . . . . . . . . Dutch Investment holding N/A 100.0 100.0 100.0 N/A 100.0 100.0 100.0
27 Algoma Power B.V. . . . . . . . . . . . . . . . . . . . . . . . . . Dutch Investment holding N/A 100.0 100.0 100.0 N/A 100.0 100.0 100.0
28 Essar Power Canada Limited . . . . . . . . . . . . . . . . . . . Canada Investment holding N/A 100.0 100.0 100.0 N/A 100.0 100.0 100.0
29 Essar Power Limited(d) . . . . . . . . . . . . . . . . . . . . . . . India Power plant 63.7 66.2 66.2 66.2 62.0 64.6 65.0 66.2
30 Essar Power Overseas Limited . . . . . . . . . . . . . . . . . . BVI Investment holding 100.0 100.0 100.0 100.0 62.0 64.6 65.0 66.2
31 Essar Power Transmission Company Limited . . . . . . . . . India Power transmission 100.0 100.0 100.0 100.0 62.0 64.6 65.0 66.2
32 Essar Power (Jharkhand) Limited . . . . . . . . . . . . . . . . India Power plant 100.0 100.0 100.0 100.0 62.0 64.6 65.0 66.2
33 Essar Power Chhattisgarh Limited . . . . . . . . . . . . . . . . India Power plant — 100.0 100.0 100.0 — 64.6 65.0 66.2
34 Essar Power Hazira Limited . . . . . . . . . . . . . . . . . . . . India Power plant 100.0 100.0 100.0 100.0 62.0 64.6 65.0 66.2
File: DV70801A.;31
35 Essar Power MP Limited . . . . . . . . . . . . . . . . . . . . . . India Power plant 100.0 100.0 100.0 100.0 62.0 64.6 65.0 66.2
36 Essar Power Gujarat Limited . . . . . . . . . . . . . . . . . . . India Power plant NA 100.0 100.0 100.0 — 96.1 65.0 66.2
268
37 Essar Wind Power Private Limited . . . . . . . . . . . . . . . . India Wind turbine 100.0 100.0 100.0 100.0 100.0 100.0 65.0 66.2
38 Essar Power (Orissa) Limited(f) . . . . . . . . . . . . . . . . . . India Power plant 100.0 100.0 100.0 74.00 100.0 100.0 65.0 49.0
39 Essar Power Tamil Nadu Limited . . . . . . . . . . . . . . . . . India Power plant 100.0 100.0 100.0 100.0 100.0 100.0 65.0 66.2
40 Essar Electric Power Development Corporation Limited . . India Power trading 100.0 100.0 100.0 100.0 61.9 64.6 65.0 66.2
41 Bhander Power Limited(e) . . . . . . . . . . . . . . . . . . . . . India Power plant 72.2 74.0 74.0 74.0 44.8 47.8 48.1 49.0
42 Essar Power Salaya Limited . . . . . . . . . . . . . . . . . . . . India Power plant N/A N/A N/A 100.0 N/A N/A N/A 66.2
43 Main Street 736 (Proprietary) Limited . . . . . . . . . . . . . South Africa Investment holding N/A N/A N/A 100.0 N/A N/A N/A 100.0
(a) 2.9% (2008: 2.8%) (2009: 8.6%) (December 2009: 8.6%) held by subsidiaries of Essar Group outside Essar Energy
(b) under liquidation
(c) Merged with Essar Exploration and Production Limited, Mauritius
(d) 36.3% (2008: 33.8%) (2009: 33.8%) (December 2009: 33.8%) held by subsidiary of Essar Group outside Essar Energy
(e) 27.8% (2008: 26.0%) (2009: 26.0%) (December 2009: 26.0%) held by subsidiary of Essar Group outside Essar Energy
(f) As at 31 December 2009, 26.0% held by subsidiaries of Essar Group outside Essar Energy
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27. SUBSEQUENT EVENTS

Reorganisation of the Group prior to listing
Gifting of the Power and Energy Group to the Company
Prior to listing, the Group undertook a reorganisation to bring together the Power and Energy Group
under the holding of the Company. These businesses were previously held by the Essar Group. The
following transactions were undertaken:
(i) Energy Group—on 27 April 2010 EEHL gifted all of its shares in Vadinar Oil to the Company,
followed by the gift by EGL of all of its shares in EEHL to Vadinar Oil; and
(ii) Power Group—on 27 April 2010, EGL gifted all of its shares in EPHL to the Company.
The above reorganisation did not resulted in any change of control of the Power and Energy Group by
EGL.
On 6 April 2010 the Company changed its name from Goliath I Limited to Essar Energy Limited.
On 16 April 2010 the Company re-registered as a public company with the name Essar Energy plc.
Capitalisation of Group
For the purpose of capitalisation of the Group the following transactions were undertaken:
(i) EPHL and EEHL refunded share application money to EGL;
(ii) EGL injected the share application money into the Company in exchange for equity; and
(iii) the Company injected the share application money back into EPHL and EEHL in exchange for
equity.
Reduction of minority interest

Certain steps were undertaken to reduce minority interest in the Power and Energy Group held by other
entities of the Essar Group. Interest of approximately 8.66% in EOL was transferred to the Group from
other Essar Group companies, leaving a minority interest of 14.68%. Further, on 27 April 2010, EOL
issued Global Depository Shares to EEHL on a preferential basis, which has resulted in the Company’s
economic holding in EOL increasing by 1.07%. By Admission, after completion of all reorganisation steps,
the Company’s economic interest in EOL was 86.39%. Similarly, the Group’s interest in EPOL was
increased to 74.0%. EPHL converted part of its convertible preference shares in EPOL into equity shares,
which increased its direct holding to 54.5%.
Transfer of Myanmar block to the Essar Group

The Group’s 100% holding in Essar Exploration & Production South East Asia Limited (the company
holding the Myanmar blocks) was transferred to the Essar Group for nil consideration. As described in
Note 1, this company has been excluded from the combined historical financial information.
American Express Banks Ltd. Settlement

In March 2010 Essar Oil Limited negotiated and settled a borrowing of US$73.0 million (including
interest) which was due to be restructured under the terms of the MRA agreement. The Group was able to
settle for an amount of US$63.0 million resulting in a gain of US$10.0 million.
Acquisitions
Overseas Coal Blocks
Essar Energy is currently in the process of acquiring coal mines in selected overseas regions. Essar
Recursos de Minerais de Mozambique Ltd, an Essar Affiliated Company holds a coal licence in the
Cambulatsitsi area near Tete, Mozambique. Based on an initial exploration of the area, the mines were
independently estimated to contain resources of approximately 35 mmt of mineable reserves. In addition,
Essar Group has entered into a memorandum of understanding with CCFB (consortium of CFM-RITES-
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IRCON) for transporting the coal to Beira port. Essar Energy has executed a definitive share purchase
agreement to acquire the entire equity stake (including the existing shareholders’ loan) in Essar Recursos
de Minerais de Mozambique Ltd by Essar Power & Minerals S.A. Ltd and Essar Power Overseas Ltd, BVI
for approximately US$30 million.
In April 2010, Essar Energy also acquired a 100% interest in approximately 5,000 hectares of mining area,
located in the West Kutai region of East Kalimantan, Indonesia. The mines have had a Joint Ore Reserves
Committee compliant resource assessment which estimates the block contains approximately 64 mmt of
mineable reserves with an annual potential production of 4 mmt of coal with an average gross calorific
value of 5,400 to 5,500 Kcal/kg. It is expected that production will begin in the second or third quarter of
2011. Essar Energy has also executed an agreement to provide a loan facility to Essar Minerals FZE to
fund acquisition and development costs of the Indonesian mines. The transfer of shares to Essar Energy is
underway.
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PART 12
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Section A—Unaudited Pro Forma Statement of Net Assets
The unaudited combined pro forma statement of net assets set out below has been prepared to illustrate
the effects of the Offer, being the receipt of the net proceeds of the Global Offer, on the net assets of the
Group (as defined in the historical financial information in Part 11 of this document), had the Global Offer
taken place on 31 December 2009. The pro forma net assets statement is based on the audited historical
financial information of the Company for the nine month period ended 31 December 2009 contained in
Part 11 of the Prospectus and has been prepared in a manner consistent with the accounting policies
adopted by the Company in preparing such information.
The unaudited combined pro forma statement of net assets has been prepared for illustrative purposes
only, and by its nature addresses a hypothetical situation and, therefore, does not reflect the Company’s
actual financial position or results. The unaudited consolidated pro forma statement of net assets is
compiled on the basis set out in the notes below and in accordance with the requirements of item 20.2 of
Annex I and items 1 to 6 of Annex II to the Prospectus Rules. No account has been taken of any results or
other activity since 31 December 2009.
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Part 12 Unaudited Pro Forma Financial Information
Unaudited combined pro forma statement of net assets as of 31 December 2009
Historical
combined net Adjustments Performa combined
assets as at Net proceeds net assets as at
31 December from the 31 December
2009 Offer 2009
US$ million
Non-current assets
Goodwill . . . . . . . . . . . . . . . ...... . . . . . . . . . . . . . . . 127.5 127.5
Other intangible assets . . . . . ...... . . . . . . . . . . . . . . . 56.6 56.6
Property, plant and equipment ...... . . . . . . . . . . . . . . . 5,453.9 5,453.9
Investments in joint controlled entities . . . . . . . . . . . . . . . 29.0 29.0
Trade and other receivables . . ...... . . . . . . . . . . . . . . . 194.4 194.4
Other financial assets . . . . . . ...... . . . . . . . . . . . . . . . 18.5 18.5
Deferred tax assets . . . . . . . . ...... . . . . . . . . . . . . . . . 0.4 0.4
Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . 5,880.3 — 5,880.3
Current assets
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 864.2 864.2
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . 859.1 859.1
Available for sale investments . . . . . . . . . . . . . . . . . . . . . 41.3 41.3
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 292.6 292.6
Derivative financial assets . . . . . . . . . . . . . . . . . . . . . . . . 6.9 6.9
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . 71.4 1,849 1,920.4
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,135.5 1,849 3,984.5
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,015.8 1,849 9,864.8
Current liabilities
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . 2,512.1 2,512.1
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4 10.4
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 918.9 918.9
Derivative financial liabilities . . . . . . . . . . . . . . . . . . . . . . 12.3 12.3
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 3,453.7 — 3,453.7
Non-current liabilities
Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . 130.7 130.7
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.7 22.7
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,190.1 2,190.1
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 179.8 179.8
Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . 2,523.3 — 2,523.3
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,977.0 — 5,977.0
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,038.8 1,849 3,887.8
1. The financial information of the Company has been extracted, without material adjustment, from the historical financial
information as of 31 December 2009 as set out under ‘‘Historical Financial Information’’ in Part 11 of this document. No
separate balance sheet of Essar Energy plc has been presented as this company does not have material equity or reserves, and
therefore has no impact on the pro forma combined balance sheet.
2. The Directors believe that, had the Offer occurred at the beginning of the last financial period, the consolidated income
statement would have been affected. Assuming that a portion of the net offer proceeds were applied to reduce the borrowings
of the Company, the impact would have been to reduce finance costs associated with loans.
272

3. Net proceeds from the Offer
Pro forma
impact on
Cash and cash
equivalents
US$ millions
Gross proceeds from the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,947
Cost & expenses of the Offer (including commissions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Net proceeds from the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,849
Gross proceeds from, and costs and expenses of, the Offer are based on the Offer Price and have been extracted, without
material adjustment, from the information set out in Part 4 of this document.
4. No adjustment has been made to reflect the trading results of the company since 31 December 2009 or of any other change in
its financial position in that period.
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Section B—Report on the unaudited pro forma financial information
5MAY200502184203
Deloitte LLP
2 New Street Square
London
EC4A 3BZ
The Board of Directors
on behalf of Essar Energy plc
8th Floor
20 Berkeley Square
London
W1J 6EQ
J.P. Morgan Securities Ltd.

125 London Wall
EC24 5AJ
30 April 2010
Dear Sirs,
Essar Energy plc
We report on the pro forma financial information (the ‘‘Pro forma financial information’’) set out in
Part 12 of the prospectus dated 30 April 2010 (the ‘‘Prospectus’’), which has been prepared on the basis
described in footnotes 1 to 4, for illustrative purposes only, to provide information about how the Offer
might have affected the financial information presented on the basis of the accounting policies to be
adopted by the Company in preparing the financial statements for the period ending 31 December 2010.
This report is required by Annex I item 20.2 of Commission Regulation (EC) No 809/2004 (the
‘‘Prospectus Directive Regulation’’) and is given for the purpose of complying with that requirement and
for no other purpose.
Responsibilities
It is the responsibility of the directors of the Company (the ‘‘Directors’’) to prepare the Pro forma financial
information in accordance with Annex I item 20.2 and Annex II items 1 to 6 of the Prospectus Directive
Regulation.
It is our responsibility to form an opinion, in accordance with Annex I item 20.2 of the Prospectus
Directive Regulation, as to the proper compilation of the Pro forma financial information and to report
that opinion to you in accordance with Annex II item 7 of the Prospectus Directive Regulation.
Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent
there provided, to the fullest extent permitted by law we do not assume any responsibility and will not
accept any liability to any other person for any loss suffered by any such other person as a result of, arising
out of, or in accordance with this report or our statement, required by and given solely for the purposes of
complying with Annex I item 23.1 of the Prospectus Directive Regulation, consenting to its inclusion in the
Prospectus.
In providing this opinion we are not updating or refreshing any reports or opinions previously made by us
on any financial information used in the compilation of the Pro forma financial information, nor do we
accept responsibility for such reports or opinions beyond that owed to those to whom those reports or
opinions were addressed by us at the dates of their issue.
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Basis of Opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing
Practices Board in the United Kingdom. The work that we performed for the purpose of making this
report, which involved no independent examination of any of the underlying financial information,
consisted primarily of comparing the unadjusted financial information with the source documents,
considering the evidence supporting the adjustments and discussing the Pro forma financial information
with the Directors.
We planned and performed our work so as to obtain the information and explanations we considered
necessary in order to provide us with reasonable assurance that the Pro forma financial information has
been properly compiled on the basis stated and that such basis is consistent with the accounting policies of
the Company.
Our work has not been carried out in accordance with auditing or other standards and practices generally
accepted in jurisdictions outside the United Kingdom, including the United States of America, and
accordingly should not be relied upon as if it had been carried out in accordance with those standards or
practices.
Opinion
In our opinion:
(a) the Pro forma financial information has been properly compiled on the basis stated; and
(b) such basis is consistent with the accounting policies of the Company.
Declaration
For the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of the
Prospectus and declare that we have taken all reasonable care to ensure that the information contained in
this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to
affect its import. This declaration is included in the Prospectus in compliance with Annex I item 1.2 and
Annex III item 1.2 of the Prospectus Directive Regulation.
Yours faithfully
26APR201017151818
Deloitte LLP
Chartered Accountants
Deloitte LLP is a limited liability partnership registered in England and Wales with registered number
OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Deloitte LLP
is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, whose member firms
are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of
the legal structure of DTT and its member firms.
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MERRILL CORPORATION RGALLAG//30-APR-10 15:52 DISK116:[10ZAU1.10ZAU70801]DZ70801A.;48
PART 13
THE OFFER
Background
Pursuant to the Offer, the Company intends to issue 302,789,825 New Shares, raising proceeds of
approximately £1,208 million, net of underwriting commissions and other estimated fees and expenses of
approximately £64 million. The New Shares will represent approximately 23.24% of the expected issued
ordinary share capital of the Company immediately following Admission.
In the Offer, Shares will be offered (i) to certain institutional investors in the United Kingdom and
elsewhere outside the United States and (ii) in the United States only to QIBs in reliance on an exemption
from, or in a transaction not subject to, the registration requirements of the US Securities Act.
Certain restrictions that apply to the distribution of this document and the Shares being issued under the
Offer in jurisdictions outside the United Kingdom are described below.
The Offer is fully underwritten by the Underwriters and is subject to satisfaction of the conditions set out
in the Underwriting Agreement, including Admission occurring and becoming effective by no later than
8:00 a.m. (London time) on 7 May 2010 or such later time and/or date as the Company and the Joint
Global Coordinators may agree.
When admitted to trading, the Shares will be registered with ISIN number GB00B5SXPF57 and SEDOL
number B5SXPF5.
Immediately following Admission, it is expected that approximately 23.24% of the Company’s issued
ordinary share capital will be held in public hands (within the meaning of paragraph 6.1.19 of the Listing
Rules) assuming that no Over-allotment Shares are acquired pursuant to the Over-allotment Option
(increasing to 24.98% if the maximum number of Over-allotment Shares are acquired pursuant to the
Over-allotment Option). The Shareholders immediately prior to the Offer will be diluted by 23.24%, as a
result of the Offer.
The New Shares being issued by the Company pursuant to the Offer will, on Admission, rank pari passu in
all respects with the existing Shares in issue and will rank in full for all dividends and other distributions
thereafter declared, made or paid on the ordinary share capital of the Company. The New Shares will be
freely transferable.
Use of proceeds
The Company’s net proceeds from the Offer are estimated to be £1,208 million (approximately
US$1.8 billion), after deduction of underwriting commissions, estimated fees and expenses in connection
with the Offer.
The Company currently intends to use the net proceeds from the Offer to execute its stated strategy,
focusing on the equity funding component of its existing growth projects. The major growth projects to be
funded by the net proceeds from the Offer, as well as by cash from operations, include:
total installed capacity to 11,470 MW, which is currently estimated to require approximately
US$1.94 billion of equity financing, comprising of US$0.45 billion for the Phase I Power Projects,
estimated to require approximately US$0.25 billion of equity financing for the period 2010-2014; and
18 mmtpa, which is currently estimated to require approximately US$0.26 billion of equity financing.
In addition a further US$0.50 billion from the net proceeds from the Offer will be used for general
corporate purposes including working capital requirements for the oil & gas business.
The above amounts are the current best estimate of capital expenditure and funding plans and, given the
long term nature of some of these projects, may be subject to change. The difference between the total
uses indicated above and the net proceeds from the Offer is expected to be funded by cash from
operations.
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Part 13 The Offer
Allocation
The rights attaching to the Shares will be uniform in all respects and they will form a single class for all
purposes. The Shares allocated under the Offer have been underwritten, subject to certain conditions, by
the Underwriters as described in the paragraph headed ‘‘Underwriting arrangements’’ below and in
paragraph 7 of Part 16 ‘‘Additional Information’’. Allocations under the Offer will be determined at the
discretion of the Joint Global Coordinators following consultation with the Company. All Shares issued
pursuant to the Offer will be issued, payable in full, at the Offer Price. Liability for UK stamp duty and
stamp duty reserve tax is described in Part 14 ‘‘Taxation’’.
Dealing arrangements
The Offer is subject to the satisfaction of certain conditions contained in the Underwriting Agreement,
which are typical for an agreement of this nature. Certain conditions are related to events which are
outside the control of the Company, the Directors and the Underwriters. Further details of the
Underwriting Agreement are described in paragraph 10 of Part 16 ‘‘Additional Information’’.
It is expected that Admission will take place and unconditional dealings in the Shares will commence on
the London Stock Exchange at 8.00 a.m. (London time) on 7 May 2010. Settlement of dealings from that
date will be on a three-day rolling basis. Prior to Admission, it is expected that dealings in the Shares will
commence on a conditional basis on the London Stock Exchange on 4 May 2010. The earliest date for such
settlement of such dealings will be 7 May 2010. All dealings in the Shares prior to the commencement of
unconditional dealings will be on a ‘‘conditional basis’’, will be of no effect if Admission does not take place
and will be at the sole risk of the parties concerned. These dates and times may be changed without further
notice.
Each investor will be required to undertake to pay the Offer Price for the Shares issued to such investor in
such manner as shall be directed by the Joint Global Coordinators.
It is expected that Shares allocated to investors in the Offer will be delivered in uncertificated form and
settlement will take place through CREST on Admission. No temporary documents of title will be issued.
Dealings in advance of crediting of the relevant CREST stock account shall be at the risk of the person
concerned.
Over-allotment and stabilisation

stabilising transactions with a view to supporting the market price of the Shares at a higher level than that
which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into
such transactions and such stabilisation transactions may be effected on any securities market,
over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the
period commencing on the date of the commencement of conditional dealings in the Shares on the
London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no
obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no
assurance that stabilising transactions will be undertaken. Such stabilisation, if commenced, may be
discontinued at any time without prior notice. In no event will measures be taken to stabilise the market
price of the Shares above the Offer Price. Except as required by law or regulation, neither the Stabilising
Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilising
transactions conducted in relation to the Offer.
In connection with the Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up
to a maximum of 10% of the total number of Shares comprised in the Offer. For the purposes of allowing
the Stabilising Manager to cover short positions resulting from any such overallotments and/or from sales
of Shares effected by it during the stabilising period, the Company has granted to it the Over-allotment
Option, pursuant to which the Stabilising Manager may subscribe or procure subscribers for additional
Over-allotment Shares up to a maximum of 10% of the New Shares at the Offer Price. The Over-allotment
Option is exercisable once only in whole or in part, upon notice by the Stabilising Manager, at any time on
or before the 30th calendar day after the commencement of conditional dealings of the Shares on the
London Stock Exchange. Any Over-allotment Shares made available pursuant to the Over-allotment
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Part 13 The Offer
Option will rank pari passu in all respects with the Shares, including for all dividends and other
distributions declared, made or paid on the Shares, will be subscribed for the same terms and conditions as
the Shares being issued in the Offer and will form a single class for all purposes with the other Shares.
CREST
With effect from Admission, the Articles will permit the holding of Shares under the CREST system.
CREST is a paperless settlement system allowing securities to be transferred from one person’s CREST
account to another’s without the need to use share certificates or written instruments of transfer.
Settlement of transactions in the Shares following Admission may take place within the CREST system if
any shareholder so wishes. CREST is a voluntary system and holders of Shares who wish to receive and
retain share certificates will be able to do so.
Underwriting arrangements
The Underwriters have entered into commitments under the Underwriting Agreement pursuant to which
they have agreed, subject to certain conditions, to procure subscribers for the New Shares or Over-
allotment Shares, if any, to be issued by the Company (as agent for the Company) or, failing which,
themselves to subscribe for such Shares, at the Offer Price. The Underwriting Agreement contains
provisions entitling the Underwriters to terminate the Offer (and the arrangements associated with it) at
any time prior to Admission in certain circumstances. If this right is exercised, the Offer and these
arrangements will lapse and any moneys received in respect of the Offer will be returned to applicants
without interest. The Underwriting Agreement provides for the Underwriters to be paid commission in
respect of the New Shares issued and any Over-allotment Shares issued following exercise of the
Over-allotment Option. Any commissions received by the Underwriters may be retained, and any Shares
acquired by them may be retained or dealt in, by them, for their own benefit.
Further details of the terms of the Underwriting Agreement are set out in paragraph 10 of Part 16
‘‘Additional Information’’. Certain selling and transfer restrictions are set out below.
Lock-up arrangements
Pursuant to the Underwriting Agreement, the Company has agreed that, subject to certain exceptions,
during the period of 365 days from the date of Admission, it will not, without the prior written consent of
the Joint Global Coordinators and the Sponsor, issue, offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, any Shares (or any interest therein) or enter into any transaction with the same
economic effect as any of the foregoing.
Pursuant to the Underwriting Agreement and related arrangements, the Directors and Essar Global have
agreed that, subject to certain exceptions, during the period of 365 days from the date of Admission, they
will not, without the prior written consent of the Joint Global Coordinators, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, any Shares or enter into any transaction with the same
economic effect as any of the foregoing.
Further details of the Underwriting Agreement are set out in paragraph 13 of Part 16 ‘‘Additional
Information’’.
Withdrawal rights
In the event that the Company is required to publish any supplementary prospectus, applicants who have
applied for New Shares in the Offer shall have at least two clear business days following the publication of
the relevant supplementary prospectus within which to withdraw their offer to subscribe for New Shares in
the Offer in its entirety. The right to withdraw an application to subscribe for New Shares in the Offer in
these circumstances will be available to all investors in the Offer. If the application is not withdrawn within
the stipulated period any offer to apply for New Shares in the Offer will remain valid and binding.
Investors wishing to exercise statutory withdrawal rights after the publication of any supplementary
prospectus must do so by lodging a written notice of withdrawal by hand (during normal business hours
only) at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE, United
Kingdom, or by facsimile (during normal business hours only) on +44 870 703 6101 so as to be received no
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Part 13 The Offer
later than two business days after the date on which the supplementary prospectus is published. Notice of
withdrawal given by any other means or which is deposited with or received by the Company after expiry of
such period will not constitute a valid withdrawal.
Selling restrictions
The distribution of this document and the offer of Shares in certain jurisdictions may be restricted by law
and therefore persons into whose possession this document comes should inform themselves about and
observe any restrictions, including those set out in the paragraphs that follow. Any failure to comply with
these restrictions may constitute a violation of the securities laws of any such jurisdiction.
No action has been or will be taken in any jurisdiction that would permit a public offering of the Shares, or
possession or distribution of this document or any other offering material in any country or jurisdiction
where action for that purpose is required. Accordingly, the Shares may not be offered or sold, directly or
indirectly, and neither this document nor any other offering material or advertisement in connection with
the Shares may be distributed or published in or from any country or jurisdiction except in circumstances
that will result in compliance with any and all applicable rules and regulations of any such country or
jurisdiction. Persons into whose possession this document comes should inform themselves about and
observe any restrictions on the distribution of this document and the offer of Shares contained in this
document. Any failure to comply with these restrictions may constitute a violation of the securities laws of
any such jurisdiction. This document does not constitute an offer to subscribe for or purchase any of the
Shares to any person in any jurisdiction to whom it is unlawful to make such offer of solicitation in such
jurisdiction.
United States
The Shares have not been and will not be registered under the US Securities Act or under any applicable
securities laws or regulations of any state of the United States and, subject to certain exceptions, may not
be offered or sold within the United States except to persons reasonably believed to be QIBs in reliance on
Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of
the US Securities Act. The Shares are being offered and sold outside the United States in offshore
transactions in reliance on Regulation S.
In addition, until 40 days after the commencement of the Offer of the Shares an offer or sale of Shares
within the United States by any dealer (whether or not participating in the Offer) may violate the
registration requirements of the US Securities Act if such offer or sale is made otherwise than in
accordance with Rule 144A or another exemption from, or transaction not subject to, the registration
The Underwriting Agreement provides that the Underwriters may directly or through their respective
United States broker-dealer affiliates arrange for the offer and resale of Shares within the United States
only to QIBs in reliance on Rule 144A or another exemption from, or transaction not subject to, the
registration requirements of the US Securities Act.
Each subscriber or purchaser of Shares within the United States, by accepting delivery of this document,
will be deemed to have represented, agreed and acknowledged that it has received a copy of this document
and such other information as it deems necessary to make an investment decision and that:
(a) it is (a) a QIB within the meaning of Rule 144A, (b) acquiring the Shares for its own account or for
the account of one or more QIBs with respect to whom it has the authority to make, and does make,
the representations and warranties set forth herein, (c) acquiring the Shares for investment purposes,
and not with a view to further distribution of such Shares, and (d) aware, and each beneficial owner of
the Shares has been advised, that the sale of the Shares to it is being made in reliance on Rule 144A or
in reliance on another exemption from, or in a transaction not subject to, the registration
(b) it understands that the Shares are being offered and sold in the United States only in a transaction not
involving any public offering within the meaning of the US Securities Act and that the Shares have not
been and will not be registered under the US Securities Act or with any securities regulatory authority
of any state or other jurisdiction of the United States and may not be offered, sold, pledged or
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Part 13 The Offer
otherwise transferred except (a) to a person that it and any person acting on its behalf reasonably
believe is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting
the requirements of Rule 144A, or another exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act, (b) in an offshore transaction in accordance with
Rule 903 or Rule 904 of Regulation S, (c) pursuant to an exemption from registration under the US
Securities Act provided by Rule 144 thereunder (if available) or (d) pursuant to an effective
registration statement under the US Securities Act, in each case in accordance with any applicable
securities laws of any state of the United States. It further (a) understands that the Shares may not be
deposited into any unrestricted depositary receipt facility in respect of the Shares established or
maintained by a depositary bank, (b) acknowledges that the Shares (whether in physical certificated
form or in uncertificated form held in CREST) are ‘‘restricted securities’’ within the meaning of
Rule 144(a)(3) under the US Securities Act and that no representation is made as to the availability of
the exemption provided by Rule 144 for resales of the Shares and (c) understands that the Company
may not recognise any offer, sale, resale, pledge or other transfer of the Shares made other than in
compliance with the above-stated restrictions.
(c) it understands that the Shares (to the extent they are in certificated form), unless otherwise
determined by the Company in accordance with applicable law, will bear a legend substantially to the
following effect:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘US SECURITIES ACT’’) OR
WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON THAT THE SELLER AND ANY
PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE US SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE US SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 UNDER THE US SECURITIES ACT FOR RESALES OF THE SHARES.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE SHARES
REPRESENTED HEREBY MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY
RECEIPT FACILITY IN RESPECT OF THE SHARES ESTABLISHED OR MAINTAINED BY A
DEPOSITARY BANK. EACH HOLDER, BY ITS ACCEPTANCE OF SHARES, REPRESENTS THAT
IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS; and
(d) it represents that if, in the future, it offers, resells, pledges or otherwise transfers such Shares while
they remain ‘‘restricted securities’’ within the meaning of Rule 144, it shall notify such subsequent
transferee of the restrictions set out above.
The Company, the Underwriters and their affiliates and others will rely on the truth and accuracy of the
foregoing acknowledgements, representations and agreements.
Australia
The Prospectus has not been lodged with the Australian Securities and Investments Commission as a
disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, the Shares may
not be offered or sold and offers to purchase may not be invited, and the Prospectus may not be circulated
or distributed, whether directly or indirectly, to persons in the Commonwealth of Australia other than to:
(i) ‘‘sophisticated investors’’ under section 708(8)(a) or (b) of the Australian Corporations Act;
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Part 13 The Offer
(ii) ‘‘sophisticated investors’’ under section 708(8)(c) or (d) of the Australian Corporations Act who have
provided an accountant’s certificate pursuant to section 708(8)(c)(i) or (ii) of the Australian
Corporations Act and related regulations before an offer has been made;
(iii) persons associated with the Company under section 708(12) of the Australian Corporations Act; or
(iv) ‘‘professional investors’’ within the meaning of section 708(11)(a) or (b) of the Australian
Corporations Act.
European Economic Area

In relation to each member state of the European Economic Area which has implemented the Prospectus
Directive (each, a ‘‘relevant member state’’) no Shares have been offered or will be offered pursuant to the
Offer to the public in that relevant member state prior to the publication of a prospectus in relation to the
Shares which has been approved by the competent authority in that relevant member state or, where
appropriate, approved in another relevant member state and notified to the competent authority in that
relevant member state, all in accordance with the Prospectus Directive, except that offers of Shares may be
made to the public in that relevant member state at any time under the following exemptions under the
Prospectus Directive, if they are implemented in that relevant member state:
(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so
authorised or regulated, whose corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of (i) an average of at least 250 employees during the last
financial year; (ii) a total balance sheet of more than A43,000,000; and (iii) an annual turnover of more
than A50,000,000 as shown in its last annual or consolidated accounts;
(c) to fewer than 100 natural or legal persons in a relevant member state (other than qualified investors as
defined in the Prospectus Directive) subject to obtaining the prior consent of the Underwriters; or
(d) in any other circumstances which do not require the publication by the Company of a prospectus
pursuant to Article 3 of the Prospectus Directive,
provided that no such offer of Shares shall result in a requirement for the publication of a prospectus
pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in
a relevant member state and each person who initially acquires any Shares or to whom any offer is made
under the Offer will be deemed to have represented, acknowledged and agreed that it is a ‘‘qualified
investor’’ within the meaning of Article 2(1)(e) of the Prospectus Directive.
For the purpose of this provision the expression an ‘‘offer of any Shares to the public’’ in relation to any
Shares in any relevant member state means a communication to persons in any form and by any means
presenting sufficient information on the terms of the offer and the Shares to be offered, so as to enable an
investor to decide to acquire any Shares as the same may be varied in that member state by any measure
implementing the Prospectus Directive in that member state.
In the case of any Shares being offered to a financial intermediary as that term is used in Article 3(2) of the
Prospectus Directive, such financial intermediary will also be deemed to have represented, acknowledged
and agreed that the Shares acquired by it in the Offer have not been acquired on a non-discretionary basis
on behalf of, nor have they been acquired with a view to their offer or resale to persons in circumstances
which may give rise to an offer of any Shares to the public other than their offer or resale in a relevant
member state to qualified investors as so defined or in circumstances in which the prior consent of the
Underwriters has been obtained to each such proposed offer or resale. The Company, the Underwriters
and their affiliates, and others will rely upon the truth and accuracy of the foregoing representation,
acknowledgement and agreement. Notwithstanding the above, a person who is not a qualified investor and
who has notified the Underwriters of such fact in writing may, with the prior consent of the Underwriters,
be permitted to acquire Shares in the Offer.
Hong Kong
(i) No Shares have been offered or sold or will be offered or sold in Hong Kong, by means of any
document, other than (a) to ‘‘professional investors’’ as defined in the Securities and Futures
Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other
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Part 13 The Offer
circumstances which do not result in the document being a ‘‘prospectus’’ as defined in the Companies
Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the
meaning of that Ordinance; and
(ii) No advertisement, invitation or document relating to the Shares has been issued or has been in the
possession of any person for the purposes of issue, nor will any such advertisement, invitation or
document be issued or be in the possession of any person for the purpose of issue, whether in Hong
Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by,
the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other
than with respect to Shares which are or are intended to be disposed of only to persons outside Hong
Kong or only to ‘‘professional investors’’ as defined in the Securities and Futures Ordinance and any
rules made under that Ordinance.
India
This Prospectus will not be registered as a prospectus under the Indian Companies Act, 1956 with any
Registrar of Companies. This Prospectus may not be distributed directly or indirectly in India or to
residents of India and any Shares may not be offered or sold directly or indirectly in India to, or for the
account or benefit of, any resident of India, except as permitted by applicable Indian laws and regulations,
under which an offer to eligible Indian residents is strictly on a private and confidential basis and is limited
to select institutional investors (who are eligible to apply for such offering) and is not an offer to the public.
This Prospectus is not a prospectus or an advertisement under applicable Indian laws and should not be
circulated to any other person other than to whom the offer is made.
Japan
The Shares offered hereby have not been and will not be registered under the Financial Instruments and
Exchange Act of Japan (the ‘‘Financial Instruments and Exchange Act’’). Accordingly, no Shares will be
offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which
term as used herein means any person resident in Japan, including any corporation or other entity
organised under the laws of Japan) or to others for re-offering or resale, directly or indirectly, in Japan or
to, or for the benefit of, any resident of Japan, except pursuant to an exception from the registration
requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and
other relevant laws and regulations of Japan.
People’s Republic of China

The Shares are not being offered or sold and may not be offered or sold, directly or indirectly, in the
People’s Republic of China (for such purposes, not including the Hong Kong and Macau Special
Administrative Regions or Taiwan), except as permitted by the securities laws of the People’s Republic of
China.
Qatar
The Shares have not been offered, sold or delivered, and will not be offered, sold or delivered at any time,
directly or indirectly, in the state of Qatar in a manner that would constitute a public offering. This
Prospectus has not been reviewed or registered with or approved by the Qatari government authorities or
any other relevant Qatar regulatory body, whether under law no. 25 (2002) concerning investment funds,
Central Bank Resolution no. 15 (1997), as amended, or any associated regulations. Therefore, this
Prospectus is strictly private and confidential, and is being issued to a limited number of sophisticated
investors, and may not be reproduced or used for any other purpose, nor provided to any person other
than the recipient thereof. No general offering of the Shares has been or will be made in Qatar and the
Shares may only be offered, distributed or sold in Qatar to a limited number of investors.
Switzerland
The Shares may not be and will not be publicly offered, sold, advertised, distributed or redistributed,
directly or indirectly, in or from Switzerland, and neither this Prospectus nor any other solicitation for
investments in the Shares may be communicated, distributed or otherwise made available in Switzerland in
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Part 13 The Offer
any way that could constitute a public offering within the meaning of the Articles 652a or 1156 of the Swiss
Code of Obligations.
Singapore
Each Manager has acknowledged that this Prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, each Manager has represented and agreed that it has not
offered or sold any Shares or caused such Shares to be made the subject of an invitation for subscription or
purchase and will not offer or sell such Shares or cause such Shares to be made the subject of an invitation
for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, this
Prospectus or any other document or material in connection with the offer or sale, or invitation for
subscription or purchase, of such Shares, whether directly or indirectly, to persons in Singapore other than
(i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of
Singapore (the ‘‘SFA’’), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to
Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or
(iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the
SFA.
Note:
Where Shares are subscribed or purchased under Section 275 by a relevant person which is:
(i) a corporation (which is not an accredited investor) (as defined in Section 4A of the SFA) the sole
business of which is to hold investments and the entire share capital of which is owned by one or more
individuals, each of whom is an accredited investor; or
(ii) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and
each beneficiary of the trust is an individual who is an accredited investor,
Shares (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest
(howsoever described) in that trust shall not be transferred within 6 months after that corporation or that
trust has acquired the Shares pursuant to an offer made under Section 275 except:
(i) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any
person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
(ii) where no consideration is or will be given for the transfer;
(iii) where the transfer is by operation of law; or
(iv) as specified in Section 276(7) of the SFA.
United Arab Emirates (U.A.E.)

This Prospectus is strictly private and confidential and is being distributed to a limited number of investors.
This Prospectus must not be provided to any person other than the original recipient, and may not be
reproduced or used for any other purpose.
By receiving this Prospectus, the person or entity to whom it has been issued understands, acknowledges
and agrees that none of the Shares or the Prospectus have been approved by the U.A.E. Central Bank, the
U.A.E. Ministry of Economy and Planning or any other authorities in the United Arab Emirates, nor has
the placement agent, if any, received authorisation or licensing from the U.A.E. Central Bank, the U.A.E.
Ministry of Economy and Planning or any other authorities in the United Arab Emirates to market or sell
the Shares within the United Arab Emirates. No marketing of the Shares has been or will be made from
within the United Arab Emirates and no subscription to the Shares may or will be consummated within the
United Arab Emirates. It should not be assumed that the placement agent, if any, is a licensed broker,
dealer or investment adviser under the laws applicable in the United Arab Emirates, or that it advises
individuals resident in the United Arab Emirates as to the appropriateness of investing in or purchasing or
selling securities or other financial products. The interests in the Shares may not be offered or sold directly
or indirectly to the public in the United Arab Emirates. This does not constitute a public offer of securities
in the United Arab Emirates in accordance with the Commercial Companies Law, Federal Law No. 8 of
1984 (as amended) or otherwise.
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Nothing contained in this Prospectus is intended to constitute investment, legal, tax, accounting or other
professional advice. This Prospectus is for your information only and nothing in this Prospectus is intended
to endorse or recommend a particular course of action. You should consult with an appropriate
professional for specific advice rendered on the basis of your situation.
The Shares are not being offered, distributed, sold or publicly promoted or advertised, directly or
indirectly, to, or for the account or benefit of, any person in the Dubai International Financial Centre
(‘‘DIFC’’). This Prospectus is not intended for distribution to any person in the DIFC and any such person
that receives a copy of this Prospectus should not act or rely on this Prospectus and should ignore the
same. The Dubai Financial Services Authority has not approved the Shares or the Prospectus nor taken
steps to verify the information set out in it, and has no responsibility for it.
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PART 14
TAXATION
Overview
The statements set out below are intended only as a general guide to current UK, Mauritian and US tax
law and practice and apply only to certain categories of person. The summary does not purport to be a
complete analysis or listing of all the potential tax consequences of acquiring, holding or disposing of
Shares. Prospective subscribers or purchasers of Shares are advised to consult their own tax advisers
concerning the consequences under UK law, Mauritian law and US federal, state and local and other laws
of the acquisition, ownership and disposition of Shares.
This description of the taxation consequences is written on the basis that Essar Energy plc is and remains
solely resident in Mauritius for tax purposes and will therefore be subject to the Mauritian tax regime and
not (save in respect of any UK source income and the UK’s CFC Rules as described above in the risk
factor headed ‘‘The Company’s financial condition may be adversely affected by changes in Essar
Energy plc’s tax residence or proposed changes to the UK’s controlled foreign companies taxation rules.’’)
the UK tax regime. Dividends paid by Essar Energy plc will, on this basis, be regarded as Mauritian
dividends rather than UK dividends. Since Essar Energy plc is incorporated in England and Wales,
however, the UK stamp duty and stamp duty reserve tax regimes will be relevant to the transfer of Shares.
Prospective investors are however referred to the risk factor entitled ‘‘The Company’s financial condition may
be adversely affected by changes in Essar Energy plc’s tax residence or proposed changes to the UK’s controlled
foreign companies taxation rules’’ and should read the following paragraphs in the light of that risk factor.
If prospective investors are in any doubt as to their tax position or if they require more detailed information
than that outlined below or in the risk factor referred to above, they should consult an appropriate
professional adviser.
The following paragraphs relate to the current taxation regimes in the United Kingdom, Mauritius and the
US. In addition, under India’s income tax laws, an Indian company distributing a dividend to shareholders
is subject to a dividend tax, the current rate of which is 16.995% of the dividend paid.
1. UK Taxation
The following paragraphs are based on current UK tax legislation and published HMRC practice at the
date of this document, both of which may change, possibly with retroactive effect. The summary set forth
below is intended as a general guide for certain classes of investor and does not purport to constitute a
comprehensive analysis of the tax consequences under UK law of the acquisition, ownership and sale of
Shares. It is not intended to be, nor should it be considered, legal or tax advice. Shareholders who are in
any doubt as to their tax position, or who are subject to tax in a jurisdiction other than the UK, should
obtain their own tax advice.
Except where indicated, the summary only applies to Shareholders (a) who are resident or (in the case of
capital gains tax) ordinarily resident in (and only in) the UK for tax purposes (although it should be noted
that special rules, which are not covered, apply to such holders of Shares who are not domiciled or not
ordinarily resident in the UK) and (b) who do not hold Shares as part of or pertaining to a fixed base or
permanent establishment in Mauritius. In addition, the summary (a) only addresses the tax consequences
for Shareholders who are absolute beneficial owners of Shares and dividends paid in respect of them and
hold the Shares as capital assets (other than under an individual savings account), and does not address the
tax consequences which may be relevant to certain categories of Shareholders, for example, dealers in
securities, holders of Shares who have (or are deemed to have) acquired their Shares by virtue of an office
or employment, insurance companies and collective investment schemes and (b) does not apply to any
Shareholders who, either alone or together with one or more associated persons or companies, control
directly or indirectly at least 5% of the share capital of Essar Energy plc.
Prospective investors should consult their own professional advisers as to the consequences of the
purchase, ownership and disposition of Shares in light of their particular circumstances.
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Part 14 Taxation
1.1 Taxation of chargeable gains

UK residents
A disposal or deemed disposal of Shares by an individual Shareholder who is (at any time in the relevant
UK tax year) resident or ordinarily resident in the UK for tax purposes may depending upon the
Shareholder’s circumstances and subject to any available exemption or relief (such as the annual exempt
amount) give rise to a chargeable gain or an allowable loss for the purposes of UK capital gains tax. An
individual Shareholder who ceases to be resident or ordinarily resident in the UK for a period of less than
five years and who disposes of (or is deemed to dispose of) the Shares during that period of temporary
non-residence may, under anti-avoidance legislation, be liable to capital gains tax on his or her return to
the UK (subject to available exemptions or reliefs).
A disposal or deemed disposal of Shares by a corporate Shareholder which is resident in the UK for tax
purposes may depending upon the Shareholder’s circumstances and subject to any available exemption or
relief (such as indexation) give rise to a chargeable gain or an allowable loss for the purposes of
corporation tax.
Non-UK residents
An individual Shareholder who is not resident or ordinarily resident in the UK for tax purposes will not be
liable for capital gains tax on capital gains realised on the disposal of his or her Shares unless that
Shareholder carries on a trade, profession or vocation in the UK through a branch or agency in the UK
and the Shares were acquired for use by or for the purposes of, or used or held for the purposes of, the
branch or agency or used in or for the purposes of the trade, profession or vocation carried on by the
Shareholder through the branch or agency.
A corporate Shareholder which is not resident in the UK for tax purposes will not be liable for corporation
tax on capital gains realised on the disposal of its Shares unless it carries on a trade in the UK through a
permanent establishment in the UK and the Shares were acquired for use by or for the purposes of, or
used or held for the purposes of, the permanent establishment or used in or for the purposes of the trade
carried on by the corporate Shareholder through the permanent establishment.
1.2 Taxation of dividends

Dividend payments may be made without withholding or deduction for or on account of UK income tax.
UK resident individual Shareholders

Dividends received by UK resident individual Shareholders will be subject to UK income tax. This is
charged on the gross amount of any dividend paid as further increased for any UK tax credit available (the
‘‘gross dividend’’) as described below.
UK resident individual Shareholders will generally be entitled to a UK tax credit equal to one-ninth of the
amount of the dividend, equivalent to 10% of the gross dividend, which may be set off against the
Shareholder’s total UK income tax liability on the dividend.
An individual Shareholder who is subject to income tax at a rate or rates not exceeding the basic rate will
be liable to tax on the dividend at the rate of 10% of the gross dividend and will therefore have no UK
income tax liability to pay in respect of the dividend.
A Shareholder who is subject to income tax at the higher rate will be liable to income tax at the special
dividend rate of 32.5% to the extent that such sum, when treated as the top slice of that Shareholder’s
income, falls above the threshold for higher rate income tax. The credit will be set against but not fully
match the Shareholder’s UK tax liability on the on the gross dividend. After taking into account the 10%
tax credit, such Shareholder will therefore have to account for additional UK income tax equal to 22.5% of
the gross dividend (which is also equal to 25% of the net dividend). For example, a dividend of £180 will
carry a tax credit of £20 and the United Kingdom income tax payable on the dividend by an individual
Shareholder who is subject to income tax at the higher rate would be 32.5% of £200, namely £65, less the
tax credit of £20, leaving a net tax charge of £45.
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Part 14 Taxation
The UK Finance Act 2010 provides for, with effect from 6 April 2010, a new tax rate of 50% for taxable
income above £150,000 per annum. On and after 6 April 2010, if and to the extent that the gross dividend
received by a UK resident individual Shareholder falls above the threshold for income tax at the new 50%
rate, that individual will be subject to tax on the gross dividend at the special dividend rate of 42.5%. With
the tax credit, this will mean that such Shareholder would have to account for additional income tax on the
dividend equal to 32.5% of the gross dividend (which is also equal to 36.1% of the net dividend).
For example, a dividend of £180 will carry a tax credit of £20 and the United Kingdom income tax payable
on the dividend by an individual Shareholder who is subject to income tax at the higher rate would be
42.5% of £200, namely £85, less the tax credit of £20, leaving a net tax charge of £65.
A UK resident individual Shareholder who is not liable to income tax in respect of the gross dividend and
other UK resident taxpayers who are not liable to UK tax on dividends, including pension funds and
charities, will not be entitled to claim repayment of the UK tax credit attaching to dividends paid by Essar
Energy plc.
UK resident corporate Shareholders

Corporate Shareholders who are UK resident should note that the Finance Act 2009 made significant
changes to the corporation tax treatment of dividends, including the corporation tax treatment of dividends
paid to UK-resident companies by companies not resident in the United Kingdom (such as Essar
Energy plc). Although it is likely that most dividends paid on the Shares to UK resident corporate
shareholders would fall within one or more of the classes of dividend qualifying for exemption from
corporation tax the exemptions are not comprehensive and are also subject to anti-avoidance rules. Note
that there are special rules for Shareholders which are small companies.
Shareholders within the charge to corporation tax should consult their own professional advisers in
relation to the implications of the legislation.
The statements contained under the headings ‘‘UK resident individual Shareholders’’ and ‘‘UK resident
corporate Shareholders’’ in this paragraph 1.2 reflect historic HMRC practice and the position that Essar
Energy plc and its advisers believe to be the correct interpretation of current UK tax law. As a result of the
reduction of capital described in paragraph 2.5(c) of Part 16 ‘‘Additional Information’’, dividends may be
paid by Essar Energy plc out of distributable reserves arising upon such reduction. However, it is
understood that HMRC has sought to argue that a dividend paid out of reserves created as a result of a
reduction of capital is not subject to the rules on taxation of income distributions, but is instead within the
charge to tax on chargeable gains. In a written ministerial statement on 24 February 2010 and in Budget
Note BN05 (‘‘Capital Distributions’’) released on 24 March 2010, it was announced that HMRC intends to
legislate to ensure that such dividends would, for a corporate shareholder resident in the United Kingdom
for tax purposes, be treated in accordance with historic HMRC practice. The position of UK resident
individual shareholders was not expressly addressed. In Budget Note BN05 it was announced that the
legislation will have retrospective effect, but that UK companies will be able to elect for the legislation not
to apply retrospectively. There remains considerable uncertainty around HMRC’s position and the form of
legislation. HMRC’s position is also unclear in respect of dividends paid out of distributable reserves
arising upon the gift to Essar Energy plc of shares in Vadinar Oil and EPHL as described in note 27 of
Part 11 ‘‘Financial Information’’.
Non-UK resident Shareholder

A Shareholder who is not resident in the UK for UK tax purposes will not be liable to income or
corporation tax in the UK on dividends paid on the Shares unless such a Shareholder carries on a trade (or
profession or vocation) in the UK and the dividends are either a receipt of that trade or, in the case of
corporation tax, the Shares are held by or for a UK permanent establishment through which the trade is
carried on.
1.3 Stamp duty and stamp duty reserve tax (‘‘SDRT’’)

Except in relation to depository and clearance services (to which special rules apply), no United Kingdom
stamp duty or SDRT will arise on the issue of Shares by Essar Energy plc.
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Transfers on sale of Shares or of rights to Shares will be liable to ad valorem stamp duty normally at the
rate of 0.5% of the amount or value of the consideration given, rounded up to the nearest multiple of £5.
An exemption from stamp duty is available on an instrument transferring Shares where the amount or
value of the consideration is £1,000 or less, and it is certificated on the instrument that the transaction
effected by the instrument does not form part of a larger transaction or series of transactions for which the
aggregate consideration exceeds £1,000. A charge to SDRT, normally at the rate of 0.5% of the amount or
value of the consideration payable, arises, in the case of an unconditional agreement to transfer Shares or
rights to Shares, on the date of the agreement and, in the case of a conditional agreement, on the date the
agreement becomes unconditional. However, where an instrument of transfer is executed and duly
stamped before the expiry of a period of six years beginning with the date of that agreement (or the date
on which the agreement becomes unconditional, as the case may be), the SDRT charge is cancelled to the
extent that the SDRT has not been paid, and if any of the SDRT has been paid a claim may be made for its
repayment. The liability to pay stamp duty or SDRT is generally satisfied by the purchaser.
Under current UK legislation where Shares are issued or transferred (a) to, or to a nominee for, a person
whose business is or includes the provision of clearance services or (b) to, or to a nominee or agent for, a
person whose business is or includes issuing depositary receipts, stamp duty or SDRT will generally be
payable at the higher rate of 1.5% of the amount or value of the consideration payable or, in certain
circumstances, the value of the Shares (rounded up to the next multiple of £5 in the case of stamp duty).
This liability for stamp duty or SDRT will strictly be accountable by the depositary or clearance service
operator or their nominee, as the case may be, but will, in practice, generally be reimbursed by participants
in the clearance service or depositary receipt scheme. Transfers within the clearance service, and transfers
of depositary receipts, are then generally made free of SDRT or stamp duty. Clearance services may opt,
provided certain conditions are satisfied, for the normal rate of stamp duty or SDRT (0.5% of the amount
or value of consideration given) to apply to issues or transfers of Shares into, and to transactions within,
such services instead of the higher rate of 1.5% generally applying to an issue or transfer of Shares into the
clearance service and instead of the exemption from SDRT on transfers of Shares whilst in the service.
Following the recent European Court of Justice judgment in C-569/07 HSBC Holdings plc, Vidacos
Nominees Limited v The Commissioners of Her Majesty’s Revenue & Customs, which held that the 1.5%
SDRT charge on putting UK shares into clearance services is contrary to EU law in certain circumstances,
HMRC has confirmed that it will no longer seek to apply the 1.5% SDRT charge on the issue of shares into
a clearance service or depositary receipt system within the European Union to which a 1.5% charge would
have previously applied. The applicability of the 1.5% charge may also be affected in other circumstances.
Accordingly specific professional advice should be sought before paying the 1.5% charge. The UK Finance
Act 2010 contains anti-avoidance rules, to apply with effect from 1 October 2009, in relation to
arrangements in accordance with which shares are issued into a clearance service or depositary receipt
system within the EU and subsequently transferred to a clearance service or depositary receipt system
outside the EU.
Under the CREST system for paperless share transfers, no stamp duty or SDRT will arise on a transfer of
Shares into the system unless such a transfer is made for a consideration in money or money’s worth, in
which case a liability to SDRT (usually at a rate of 0.5%) will arise. Paperless transfers of Shares within
CREST will be liable to SDRT rather than stamp duty.
The statements in this paragraph summarise the current position and are intended as a general guide only.
Special rules apply to agreements made by, among others, intermediaries and certain categories of person
may be liable to stamp duty or SDRT at higher rates.
1.4 United Kingdom inheritance and gift taxes

The Shares will be assets situated in the UK for the purposes of UK inheritance tax. A gift of such assets
by, or the death of, an individual holder of such assets may (subject to certain exemptions and reliefs) give
rise to a liability to UK inheritance tax even if the holder is neither domiciled in the UK nor deemed to be
domiciled there under certain rules relating to long residence or previous domicile. For inheritance tax
purposes, a transfer of assets at less than full market value may be treated as a gift and particular rules
apply to gifts where the donor reserves or retains some benefit.
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Special rules also apply to close companies and to trustees of settlements who hold Shares, bringing them
within the charge to inheritance tax. Shareholders should consult an appropriate professional adviser if
they make a gift of any kind or transfer at less than market value or intend to hold any Shares through trust
arrangements.
Any person who is in doubt as to his or her taxation position or who is liable to taxation in any jurisdiction
other than the UK should consult his or her own professional adviser.
2. Mauritian Taxation
The following paragraphs are based on current Mauritian tax legislation and published Practice Notes
(‘‘PNs’’) issued by the Mauritius Revenue Authority at the date of this document, both of which may
change. The summary set forth below is intended as a general guide for certain classes of investor and does
not purport to constitute a comprehensive analysis of the tax consequences under Mauritian law of the
acquisition, ownership and sale of Shares. It is not intended to be, nor should it be considered, legal or tax
advice. Shareholders who are in any doubt as to their tax position, or who are subject to tax in a jurisdiction
other than Mauritius, should obtain their own tax advice.
Prospective investors should consult their own professional advisers as to the consequences of the
purchase, ownership and disposition of Shares in light of their particular circumstances.
Taxation of gains from the sale of Shares

Mauritius does not have a capital gains tax regime and this has been confirmed by the Mauritius Revenue
Authority in its first PN and a number of rulings from the Mauritius Revenue Authority and the Privy
Council. The PN provides that any trading profits on the sale of Shares are deemed to be capital nature
even if the alienator deals in shares, provided that the shares have been held for a period of at least six
months.
In the case of non-Mauritian resident Shareholders, they should not be subject to any tax in Mauritius
provided that they do not have a permanent establishment in Mauritius for the purposes of Share
transactions.
Taxation of dividends
Dividend payments may be made without withholding or deduction for or on account of Mauritian income
tax, provided that the dividend is paid out of the retained earnings of Essar Energy plc after having made
good any accumulated losses at the beginning of the accounting period.
The dividend distribution should be approved by the Board of Directors and should be in either cash or
shares.
Transfer taxes
As Essar Energy plc is incorporated in the UK, any issues of, transfers of or agreements to transfer Shares
or interests in or in respect of Shares are outside the scope of Mauritian transfer taxes. In Mauritius,
transfer taxes under the Land (Duties and Taxes) Act only apply if the underlying company owns freehold
property or leasehold rights in lands in Mauritius which are owned by the state of Mauritius
(‘‘State Lands’’). It is not anticipated that any tax would be due under either the Land (Duties and Taxes) Act
or the Registration Duty Act as Essar Energy plc is not expected to own any freehold property or any
leasehold rights in State Lands in Mauritius.
Any person who is in doubt as to his or her taxation position or who is liable to taxation in any jurisdiction
other than Mauritius should consult his or her own professional adviser.
3. US Federal Income Taxation

The following discussion is a general summary based on current law of certain US federal income tax
considerations relevant to the purchase, ownership and disposition of Shares. The discussion is not a
complete description of all tax considerations that may be relevant to investors and does not consider an
investor’s particular circumstances. It only applies to US Holders (as defined below) that purchase the
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Shares in the Offer at the Offer Price, hold the Shares as capital assets and use the US dollar as functional
currency. It does not address the tax treatment of investors subject to special rules, such as banks,
tax-exempt entities, regulated investment companies, real estate investment trusts, persons that received
Shares as compensation for the performance of services, insurance companies, dealers, traders in securities
that elect to mark to market treatment, investors liable for alternative minimum tax, US expatriates,
investors that directly, indirectly or constructively own 10% or more of the Company’s voting stock,
investors that are resident or ordinarily resident outside the US or hold their shares through a permanent
establishment outside of the United States or investors that hold Shares as part of a straddle, hedging,
conversion or other integrated transaction. It also does not address US state and local tax considerations.
THE STATEMENTS ABOUT US FEDERAL INCOME TAX CONSIDERATIONS ARE MADE TO
SUPPORT THE MARKETING OF THE OFFER. NO TAXPAYER CAN RELY ON THEM TO AVOID TAX
PENALTIES. EACH PROSPECTIVE PURCHASER SHOULD SEEK ADVICE FROM AN
INDEPENDENT TAX ADVISOR ABOUT THE TAX CONSEQUENCES UNDER ITS OWN PARTICULAR
CIRCUMSTANCES OF INVESTING IN THE OFFER UNDER THE LAWS OF MAURITIUS, THE
UNITED KINGDOM, THE UNITED STATES AND ITS CONSTITUENT JURISDICTIONS, AND ANY
OTHER JURISDICTIONS WHERE THE PURCHASER MAY BE SUBJECT TO TAXATION.
As used here, a ‘‘US Holder’’ means a beneficial owner of the Company’s Shares that is for US federal
income tax purposes (i) a citizen or individual resident of the United States, (ii) a corporation or other
business entity treated as a corporation created or organised under the laws of the United States or its
political subdivisions, (iii) an estate the income of which is subject to US federal income tax without regard
to its source or (iv) a trust subject to the control of one or more US persons and the primary supervision of
a US court.
The US federal income tax treatment of a partner in a partnership that holds Shares will depend on the
status of the partner and the activities of the partnership. Prospective purchasers that are partnerships
should consult their tax advisors concerning the US federal income tax consequences to their partners of
the acquisition, ownership and disposition of Shares.
The Company believes, and the following discussion assumes, that the Company is not currently and does
not expect to become a passive foreign investment company (‘‘PFIC’’) for US federal income tax purposes.
US Holders should note that the discussion above entitled ‘‘UK Taxation’’ in this Part 14 is also relevant.
See in particular the discussion entitled ‘‘Stamp duty and stamp duty reserve tax (‘‘SDRT’’)’’.
3.1 Dividends
Distributions on Shares will be ordinary income from foreign sources. The dividends will not be eligible for
the dividends-received deduction available to US corporations. Dividends received by eligible
non-corporate US holders in tax years beginning before 2011, however, should be taxed at the preferential
rate allowed for qualified dividend income if the Shares are regularly traded on the London Stock
Exchange and the Holder meets certain holding period requirements.
Dividends paid in foreign currency will be included in income in a US dollar amount based on the
exchange rate in effect on the date of receipt of the dividend, whether or not the currency is converted into
US dollars at that time. A US Holder’s tax basis in the foreign currency will equal the US dollar amount
included in income. Any gain or loss on a subsequent conversion or other disposition of the foreign
currency for a different US dollar amount will be US source ordinary income or loss.
3.2 Dispositions
A US Holder generally will recognise capital gain or loss on the sale or other disposition of Shares equal to
the difference between the US dollar value of the amount realised and the US Holder’s tax basis in the
Shares. A US Holder’s tax basis in the Shares will generally be the US dollar cost of the shares. Any gain or
loss generally will be treated as arising from US sources. The gain or loss will be long-term capital gain or
loss if the holder held Shares for more than one year. Deductions for capital loss are subject to limitations.
A US Holder that receives foreign currency on the sale or other disposition of the Shares will realise an
amount equal to the US dollar value of the foreign currency on the date of sale or other disposition (or in
the case of cash basis and electing accrual basis taxpayers, the settlement date). A US Holder will
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Part 14 Taxation
recognise currency gain or loss if the US dollar value of the currency received at the spot rate on the
settlement date differs from the amount realised. A US Holder will have a tax basis in the foreign currency
received equal to its value at the spot rate on the settlement date. Any currency gain or loss realised on the
settlement date or on a subsequent conversion of the foreign currency into US dollars will be US source
ordinary income or loss.
Passive Foreign Investment Company Considerations

A foreign corporation will be a PFIC in any taxable year in which, after taking into account the income and
assets of the corporation and certain subsidiaries pursuant to applicable ‘‘look-through rules,’’ either (i) at
least 75% of its gross income is ‘‘passive income’’ or (ii) at least 50% of the average value of its assets is
attributable to assets which produce passive income or are held for the production of passive income. The
Company believes it is not, and as a result of the receipt and application of the proceeds of the sale of the
Offer Shares contemplated hereby believes it will not become, a PFIC for U.S. federal income tax
purposes. Although income from the sales of commodities is generally passive income, a special rule treats
active business gains from the sales of commodities as non-passive income provided certain requirements
are met. To the extent the Company derives income from the sale of commodities, the Company believes
that it currently meets these requirements. The Company’s possible status as a PFIC must be determined
annually, however, and may be subject to change if the Company fails to qualify under this special rule for
any year in which a U.S. Holder holds Shares.
If the Company were to be treated as a PFIC, U.S. Holders of Shares would be required (i) to pay a special
U.S. addition to tax on certain distributions and gains on sale and (ii) to pay tax on any gain from the sale
of Shares at ordinary income (rather than capital gains) rates in addition to paying the special addition to
tax on this gain. Additionally, dividends paid by the Company would not be eligible for the special reduced
rate of tax described above under ‘‘Dividends’’. Prospective purchasers should consult their tax advisers
regarding the potential application of the PFIC regime.
3.3 Backup Withholding and Information Reporting

Dividends on Shares and proceeds from the sale or other disposition of Shares that are made within the
United States or through certain US-related financial intermediaries may be reported to the US Internal
Revenue Service (‘‘IRS’’) unless the holder is a corporation or otherwise establishes a basis for exemption.
Backup withholding tax at the applicable statutory rate may apply to amounts subject to reporting if the
holder fails to provide an accurate taxpayer identification number or otherwise establish a basis for
exemption. Any amount withheld may be credited against the holder’s US federal income tax liability or
refunded to the extent it exceeds the holder’s liability.
Recently enacted legislation requires certain US Holders to report information with respect to their
investment in Shares not held through an account with a financial institution to the IRS. Investors who fail
to report required information could become subject to substantial penalties. Potential investors are
encouraged to consult with their own tax advisors regarding the possible implications of this legislation on
their investment in the Shares.
THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS
THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR
IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN
INVESTMENT IN SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
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PART 15
RELATIONSHIP WITH THE ESSAR GROUP
1. Relationship with the Controlling Shareholder
Prior to Admission, Essar Energy plc was a wholly-owned subsidiary of Essar Global. Essar Global also
owned the companies comprising the power and the oil and gas businesses that have been transferred to
Essar Energy plc pursuant to the Pre-IPO Reorganisation described further in paragraph 3 of Part 16
‘‘Additional Information’’.
Immediately following Admission, Essar Global will own approximately 76.74% of the issued shares of
Essar Energy plc assuming no exercise of the Over-allotment Option and 75.00%. assuming the
Over-allotment Option is exercised in full. Essar Global will be a controlling shareholder of, and a related
party to, Essar Energy plc for the purposes of the UKLA Listing Rules. Essar Global is the ultimate parent
company of the Company throughout the historical financial period. The ultimate shareholders of Essar
Global are the Virgo Trust and the Triton Trust, discretionary trusts, whose beneficiaries include, among
others, companies whose 100% shareholders are Mr Ravi Ruia and Mr Prashant Ruia.
Essar Energy plc and Essar Global have entered into a relationship agreement, the principal purpose of
which is to ensure that following Admission, the Company is capable of carrying on its business
independently of Essar Global and its Associates (as defined in the relationship agreement) and that
transactions and relationships with the Essar Group and its Associates (as defined in the relationship
agreement) are at arm’s length and on normal commercial terms. See paragraph 13.2 of Part 16
‘‘Additional Information—Material Contracts’’ for further details.
2. Relationship with the Essar Group

Essar Global and companies in the Essar Group are party to (and following Admission will continue to be
a party to) a significant number of arrangements with the Company. The Company will be reliant on the
Essar Group for a number of ongoing, and in some cases, long term, arrangements including customer and
supply contracts, transport and logistics services, construction and other services in relation to the
Expansion Projects and corporate and administrative services. These arrangements between members of
Essar Energy plc’s group and the Essar Group are summarised below.
Details of the aggregate amounts payable and receivable by the Company in respect of the related party
transactions between the Company and the Essar Group during the three years ended 31 December 2009
which are described further below are disclosed in the Company’s historical financial information, note 25
in Part 11 ‘‘Financial Information’’.
Essar Energy plc believes that it and other members of its group benefit from these arrangements with the
Essar Group, which allow it to leverage the Essar Group’s construction, engineering, procurement and
project implementation expertise and provide access to transport services, fuel supply and off-take partners
on operationally efficient and competitive terms.
3. Transactions and arrangements with the Essar Group

Related party transactions with members of the Essar Group constitute a material part of the business of
the Company. In particular, Essar Steel is a key customer under long-term PPAs of the power business of
the Company, as well as a key supplier of fuel to the power business of the Company in respect of the
power taken by it pursuant to the various PPAs it has in place with the Company; and the oil and gas
business of the Company is reliant on the transport and logistics services provided by the Essar Group. In
addition, both the power business and the oil and gas business of the Company have extensive dealings
with the Essar Group in relation to the Refinery Expansion Projects and the Power Plant Projects, which
involve the provision by the Essar Group of project implementation, construction, engineering and
procurement services. A summary of the principal contractual arrangements that the Company has entered
into with the Essar Group is set out below.
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Part 15 Relationship with the Essar Group
Power Business
EPCs for Phase I and Phase II Power Projects
The power business benefits from its relationship to Essar Affiliated Companies in accessing project
implementation expertise, including engineering, construction, procurement and project management
expertise.
In relation to the implementation of the Phase I Power Projects, various members of Essar Energy plc’s
group have contracted with: (i) Global Supplies (for offshore supply of goods and services); (ii) Essar
Projects (for onshore supply of goods and services, onshore construction services); (iii) Essar Engineering
(for onshore engineering services); (iv) Essar Logistics (for onshore and offshore transportation services);
and (v) Essar Project Management (for project management services). In addition, Essar Power Transco
has also entered into an onshore turnkey contract with Essar Projects for the construction of the
transmission system for Essar Power MP Mahan power project.
In relation to the implementation of the Phase II Power Projects Essar Power Gujarat, Essar Power MP,
Essar Power Salaya and Essar Power Jharkhand have each entered into: (i) an offshore supply contract
with Global Supplies; (ii) offshore and onshore transport contracts with Essar Logistics; (iii) an onshore
supply contract and an onshore construction contract with Essar Projects; and (iv) an onshore engineering
contract with Essar Engineering.
Under the terms of each of the above contracts, the Essar Affiliated Companies which are parties to the
contracts are required to provide performance guarantees to the respective members of Essar Energy plc’s
group.
The terms of the contracts for the construction and supply of goods and services for each of the relevant
Phase I and Phase II Power Projects with Essar Affiliated Companies are summarised in paragraph 14,
Part 16 ‘‘Additional Information—Material contracts’’.
Essar Power Overseas Limited has entered into an offshore supply contract with Global Supplies for the
supply of certain goods and equipment for a thermal power project. The terms of this contract are
summarised in paragraph 13, Part 16 ‘‘Additional Information—Material Contracts’’.
Power Purchase Agreements

Essar Steel Group is currently and, following completion of the Power Plant Projects, is expected to remain
one of the power business’s largest off-take customers. In addition, the Essar Steel Group is currently a
26% shareholder in the Bhander Power-Hazira power plant and the Essar Power Orissa-Paradip power
plant, and is expected to be a 13% shareholder in the Essar Power MP-Mahan power plant, a 5%
shareholder in the Vadinar Power-Jamnagar plant and a 26% shareholder in the Essar Power Hazira-
Hazira power plant. The Company has entered and expects to enter into additional long-term PPAs with
Essar Affiliated Companies to provide security of revenues, including revenues required to service the
Company’s obligations under the related project financing arrangements (depending on their future power
and steam requirements). These power purchase arrangements are in the ordinary course of the
Company’s business.
In connection with the operational power plants:
• Essar Power is party to a PPA expiring in 2026 with Essar Steel for the supply of power from the Essar
Power-Hazira power plant to Essar Steel.
• Bhander Power-Hazira is party to PPAs, all expiring on 31 March 2030, with: (i) Essar Steel; (ii) Essar
Steel Hazira; (iii) Hazira Plate; (iv) Hazira Pipe Mill; (v) Essar Bulk Terminal; (vi) Essar Projects and
(vii) Essar Heavy Engineering Services for the supply of power from Bhander Power-Hazira power
plant.
• Essar Power (Canada) is party to a PPA expiring in 2029 with Ontario Power Authority for the supply
of power from the Essar Power Canada power plant to Essar Steel Algoma. Under the PPA, Essar
Power (Canada) supplies its power to Essar Steel Algoma at market rates, and Ontario Power
Authority funds the difference between the market rate and a specified rate per MWh under the PPA,
effectively underwriting the minimum price payable under the PPA.
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In connection with the Phase I Power Projects, the Company entered into the following contracts with
Essar Affiliated Companies:
• On 24 August 2007 Essar Power MP entered into two PPAs with Essar Steel and Essar Steel Hazira
for the supply of power from the Essar Power MP-Mahan project for a period of 25 years (from the
date which commercial operations of the plant commence). Essar Power MP has also issued
performance guarantees in favour of Essar Steel and Essar Steel Hazira in respect of its performance
under the PPAs.
• On 10 March 2010 Essar Power Hazira entered into a PPA with Essar Steel Hazira for the supply of
power from the Essar Power Hazira-Hazira project for a period of 25 years from the commercial
operations date in relation to the contracted capacity.
• On 11 November 2009 Essar Power Orissa entered into two PPAs with Essar Steel Orissa Limited for
the supply of power from the Essar Power Orissa-Paradip project for a period of 25 years from the
date on which commercial operations of each unit of the project commence.
• On 18 May 2009 Vadinar Power entered into a PPA with Essar Steel Hazira for the supply of power
from Phase II of the Vadinar Power Plant Expansion project for a period of 25 years from the date on
which commercial operations of the plant commence, which is expected to be 30 September 2011 for
Phase IIA.
Water and Fuel Supply Agreements

Members of Essar Energy plc’s group are parties to a number of contracts with members of the Essar Steel
Group for the procurement, supply, management and handling of fuel and water needed to generate
power. These contracts are in the ordinary course of the Company’s business.
In connection with the operational power plants:
• Essar Power is party to a fuel management agreement with Essar Steel (to run concurrently with Essar
Steel’s PPA with Essar Power) for the procurement and supply of fuel needed to generate the power
that Essar Steel has committed to take from the Essar Power-Hazira power plant pursuant to its PPA
and a licence agreement with Essar Steel (to run concurrently with Essar Steel’s PPA with Essar
Power) for storage and supply of water to the Essar Power-Hazira power plant.
• Under the terms of the Bhander Power PPAs, Essar Steel and other Essar Affiliated Companies are
responsible for providing the natural gas required by the Bhander Power-Hazira plant, to generate the
power that they have committed to take pursuant to their respective PPAs with Bhander Power.
Further, pursuant to an agreement dated 13 April 2010, Essar Steel is also responsible for the supply
of water required for operating the Bhander Power-Hazira plant subject to payment of requisite
charges by Bhander Power based on actual water consumption. The term of this agreement is until
31 March 2030.
• Essar Power (Canada) is party to a contract with Essar Steel Algoma (expiring in 2029 or such later
date as agreed by the parties) pursuant to which surplus blast furnace gases and coke oven gas are
supplied by Essar Steel Algoma to the Essar Power Canada power plant in return for power and steam
for use at Essar Steel Algoma’s steelworks. The contract cannot be terminated without consent of the
lenders under the credit agreement dated 21 December 2009 among Essar Power Canada, ICICI
Bank and others.
In connection with the Phase I Power Projects:
• Essar Power Gujarat has entered into three agreements on 24 December 2008 in relation to the
importation of the coal required to fuel the Essar Power Gujarat-Salaya project: (i) a 25-year coal
supply agreement (effective from the date commercial operations of the Essar Power Gujarat-Salaya
project commence), as amended on 6 April 2010, with Essar Shipping and Logistics; (ii) a 25 year coal
affreightment agreement (effective from 15 September 2010) with Essar Shipping and Logistics to
transport coal from South Africa and Indonesia to the Salaya port; and (iii) a 20-year coal handling
agreement with Essar Bulk Terminal for the handling of coal and use of certain terminal and transport
facilities at the Salaya port for the Essar Power Gujarat-Salaya project.
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• Vadinar Power has entered into a fuel supply agreement with Essar Steel Hazira and Essar Oil for the
Vadinar power plant expansion project, which provides for Essar Oil to supply the fuel and water for
this plant with Essar Steel bearing the costs for its share of the power offtake. The agreement is for a
period of 15 years from the date of commencement of the fuel supply.
• Under the terms of the two PPAs entered by Essar Power Orissa with Essar Steel Orissa, Essar Steel
Orissa has an obligation to provide fuel and water for the power plant (including transport to the
plant).
• Essar Steel Hazira has agreed to supply fuel and water for the Essar Power Hazira-Hazira Project for
the generation of the power that Essar Steel Hazira has committed to take pursuant to its PPA with
Essar Power Hazira.
In connection with the Phase II Power Projects:
• Essar Power Gujarat has entered into (i) a 25-year coal supply agreement (from the date commercial
operations of the Essar Power Gujarat-Salaya II project commence) with Essar Shipping and as
amended on 6 April 2010 Logistics; (ii) a 25-year coal affreightment agreement (from 15 January
2013) with Essar Shipping and Logistics to transport coal from South Africa and Indonesia to the
Salaya port; and (iii) a 20-year coal handling agreement (from 3 April 2010) with Essar Bulk Terminal
for the handling of coal and use of certain terminal and transport facilities at the Salaya port for the
Essar Power Gujarat-Salaya II project.
Other arrangements
Operations and maintenance agreement with Essar Steel
Essar Power has agreed to provide operations and maintenance services to Essar Steel for the 25MW
power plant of Essar Steel located at Visakhapatnam for a term of 15 years from the date Essar Power
took over operation of the plant, which occurred on 1 July 2006. The contract is in the ordinary course of
the Company’s business.
Leases
Essar Power Orissa has agreed to lease the site of the Essar Power Orissa-Paradip power plant from Essar
Steel Orissa. The lease deed is required to be entered into within six months of 11 November 2009, for a
period of 90 years and the rent payable by Essar Power Orissa Limited is to be determined by the parties at
the time of execution of the lease, when the land is acquired by Essar Steel Orissa. Pursuant to an
amendment agreement dated 20 March 2010, certain additional terms in this regard have been agreed
between Essar Steel Orissa and Essar Power Orissa. Essar Steel Orissa is expected to be granted the land
on lease of 90 years by an agency of the Government of Orissa on completion of certain land acquisition
procedures, and is consequently expected to sub-lease 100 acres of land (estimated to be required to set up
the Essar Power Orissa-Paradip power plant) to Essar Power Orissa. The cost to Essar Steel Orissa for
acquiring the requisite 100 acres is estimated at Rs. 222.8 million (US$4.8 million), and the amendment
agreement provides that Essar Power Orissa must deposit Rs. 160 million (US$3.43 million) with Essar
Steel Orissa towards this cost. Essar Power Orissa will also be required to pay Rs. 1.99 million
(US$0.04 million) per annum to the relevant Government of Orissa agency which leases the land to Essar
Steel Orissa towards ground rent (at 1% of the land cost) and land-cess (at 0.75% of the land cost) once
the sub-lease is executed. Essar Power Hazira is also expected to lease land from an Essar Affiliated
Company for the purposes of the construction of the Essar Power Hazira-Hazira power plant.
Essar Steel Algoma leases part of the site of the Ontario Steel Plant to Essar Power (Canada) for the site
of its power plant operations. The lease deed is effective from 13 June 2009 for a period of 20 years with an
option to extend this for further 30 year period by mutual agreement of the parties. Essar Power (Canada)
pays a nominal rent of US$1 per annum, together with a contribution to real property taxes of Essar Steel
Algoma of US$400,000 per annum.
Performance guarantees
Essar Investments has provided a performance related guarantee in relation to the Essar Power Gujarat-
Salaya power project. The guarantee has been provided to Union Bank of India to secure bank guarantees
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given by Union Bank of India on behalf of Essar Power Gujarat to GUVNL for a total amount of
Rs. 750 million (US$16.06 million). The bank guarantees provided by Union Bank of India to GUVNL
were required in consideration for GUVNL executing the PPA with Essar Power Gujarat for the sale of
power from the Essar Power Gujarat-Salaya power project.
EPCG Scheme
The Government of India operates the EPCG Scheme which provides that importers can benefit from
reduced duties on the import of capital goods provided that they fulfil an export obligation to export a
prescribed amount of their goods manufactured or services rendered (such amount being a multiple of the
duty saved) within a specified period. Export obligations can be fulfilled by the direct export of goods or
services outside India, or by way of ‘‘deemed exports’’, which are transactions deemed to be exports. In
addition, a proportion of the export obligation can also be satisfied by exports by ‘‘group companies’’ as
defined under the EPCG Scheme. The precise terms of the obligations are stipulated in the license issued
to the importer under the EPCG Scheme and under applicable law.
Certain members of Essar Energy plc’s group benefit from a reduced rate of customs duty on their imports
under the EPCG Scheme, and consequently have export obligations to fulfill. Pursuant to the EPCG
licences issued to them, VPCL, Essar Power Gujarat and Essar Power MP will save an aggregate amount
of customs duty of up to Rs. 11.71 billion (US$250.80 million) under the EPCG Scheme. In the event that
these companies do not meet their export obligations, they will have a customs duty exposure (together
with interest on the duty), the amount of which will be dependent upon the actual duty saved under the
EPCG Scheme and the extent of the shortfall in their export obligations. By way of example, the Company
estimates that at least 141 MW is required to be sold to the Essar Steel Group from the Essar Power MP
Mahan project for a period of 10 years from the date of the PPA to comply with certain of its export
obligations under the EPCG Scheme.
Essar Steel has provided certain corporate guarantees in favour of the President of India through the
Assistant Commissioner of Customs, Jamnagar in relation to the satisfaction of the Company’s EPCG
Scheme export obligations. The guarantees require Essar Steel to pay (on demand) the amount mentioned
in the guarantees in the event of any non-compliance by the Company of notification conditions under the
EPCG Scheme, or the non-fulfilment by the Company of its power supply obligations. The total amount
guaranteed by Essar Steel is included in the aggregate disclosure of guarantees received by the Company
set out in the Company’s historical financial information, note 25 in Part 11 ‘‘Financial Information’’.

Essar Oil has contracted with Essar Oilfield Services Limited, Mauritius and Essar Oilfield Services India
Limited (both Essar Affiliated Companies) for the hiring of drilling rig services, along with related
equipment, personnel, instruments, materials, stores and other services at its various exploration blocks.
The agreement with Essar Oilfield Services Limited, Mauritius is for a three year term, commencing on
18 May 2009, with a further two year extension if agreed by the parties, and the agreement with Essar
Oilfield Services India Limited is for a 10 year term, commencing on 1 October 2009, with a further two
year extension by mutual agreement between the parties. The agreements are otherwise terminable on
notice by Essar Oil after the first 18 months. Essar Oil has also contracted with Essar Projects to lay a
48km gas pipeline for Essar Oil’s Raniganj Block to deliver gas to customers in and around Durgapur. The
works contemplated by the contract are expected to be completed by April 2010. In addition, Essar Oil has
contracted with Hazira Pipe Mill Ltd., an Essar affiliate, to supply line pipes for a total order value placed
on 8 October 2009 of Rs. 143.53 million (US$3.07 million) for the Raniganj CSG project. The contracts
relating to the provision of these exploration and production related services are in the ordinary course of
the Company’s business.
Essar Oil has contracted with Essar Engineering for the provision of services relating to front end
engineering and design and detailed engineering for the Raniganj Block. The agreement was entered into
on 15 November 2009, amended on 4 March 2010 and 5 March 2010, and is valid until completion of the
works by Essar Engineering or until 31 March 2020, whichever is earlier. The contract will require Essar
Oil to pay Rs. 18.6 million (US$0.4 million) as consideration and additional charges are imposed by Essar
Engineering if the scope of the work contemplated under the agreement is expanded by Essar Oil. The
agreement is in the ordinary course of the Company’s business.
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Refinery Expansion Projects

In connection with the Phase I Refinery Project, the Company has contracted with various Essar Affiliated
Companies for detailed engineering services, project management services, project construction,
equipment transport and handling services, and the supply of equipment and bulk materials. In particular:
• Essar Engineering Services is undertaking the detailed engineering works for the Phase I Refinery
Project and has subcontracted with third party engineering firms, such as Technip India Limited, Aker
Kvaerner Powergas Limited and Toyo Engineering India Limited, to carry out the detailed
engineering for critical process units. As of 28 February 2010, Essar Engineering Services had
completed approximately 86% of the detailed engineering works for the Phase I Refinery Project.
• Essar Projects is undertaking all construction work for the Phase I Refinery Project and, as at
February 2010, had completed approximately 29% of the construction, including civil engineering
works, pre cast work for pipe racks and foundation work for the pipe racks and other large equipment.
• Global Supplies is acting as a centralised procurement company for the provision of the Phase I
Refinery Project’s non-Indian equipment needs, while Essar Projects is acting as a centralised
procurement company for similar services in relation to the equipment of Indian origin and certain
imported equipment. These Essar Affiliated Companies have completed the ordering of major long
lead-time materials and equipment.
• Essar Logistics is providing services in relation to the transport of imported plant and equipment to
the Phase I Refinery Project site.
• Essar Project Management is providing project management and consultancy services for the
implementation of the Phase I Refinery Project.
• VPTL is providing services for the receipt, handling, storage and dispatch of crude oil and petroleum
products for the Phase I Refinery Project on a take or pay basis for a term of 20 years.
Certain Essar Affiliated Companies are required to provide performance guarantees and corporate
guarantees in favour of Essar Oil in relation to each of the contracts referred to above (other than under
the contract with VPTL. A summary of these guarantee obligations, and other terms of each of these
contracts, is provided in paragraph 13 of Part 16 ‘‘Additional Information—Material contracts’’.
In connection with the Phase II Refinery Project, the Company has contracted with various Essar
Affiliated Companies for detailed engineering, procurement and construction services and project
management services. In particular:
• Essar Projects will be undertaking the design, detailed engineering, supply and all construction works
for the Phase II Refinery Project.
• Essar Project Management will be providing project management and consultancy services for the
implementation of the Phase II Refinery Project.
Works under the contracts shall only commence once committed financing in respect of the Phase II
Refinery Project is secured (i.e. when a legally binding commitment from equity holders and third party
lenders is obtained to provide funding for not less than 90% of the total cost of construction of the Phase II
Refinery Project). In the event that commencement has not occurred within 18 months of the date of the
contracts, the contracts shall terminate.
Certain Essar Affiliated Companies are required to provide performance guarantees and corporate
guarantees in favour of Essar Oil in relation to each of the contracts referred to above. A summary of these
guarantee obligations, and other terms of each of these contracts, is provided in paragraph 13 of Part 16
‘‘Additional Information—Material contracts’’.
Shipping and logistics and use of Vadinar port facilities

Essar Logistics provides the Vadinar refinery’s logistical services for transporting refined petroleum
products by road from the refinery to various depots and other locations within India, where those
products are ultimately sold. The contract relating to the provision of services by Essar Logistics is in the
ordinary course of the Company’s business and terminates on 31 March 2017.
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Petroleum handling
The Company has a petroleum handling agreement with VOTL, an Essar Affiliated Company, expiring on
31 March 2014. Pursuant to this agreement, VOTL provides services for the receipt, handling, storage and
dispatch of the Company’s crude oil and intermediate and refined petroleum products. Under the
agreement, Essar Oil is required to pay VOTL a monthly charge calculated on the basis of the higher of
the actual quantity of crude oil and petroleum products handled or the minimum quantity stipulated in the
agreement. Further, under the terms of the agreement, Essar Oil supplies all utilities to VOTL, including
power, water and steam, at no additional cost. The contract is in the ordinary course of the Company’s
business.
Sales and Services to Essar Affiliated Companies

In the nine months ended 31 December 2009, 6.8% of the total sales of the Company’s oil and gas business
were direct bulk sales. In the same period, 38% of the refinery’s fuel oil and 100% of its bitumen was sold
in the Indian domestic market, including to OMCs. Of domestic bulk sales, less than 1% were made to
Essar Affiliated Companies, including Essar Agrotech, Essar Constructions, Essar Projects and Essar
Steel. Bulk sales to Essar Affiliated Companies are made in the ordinary course of the Company’s
business, on arm’s length terms, and at the prevailing market price. In addition, Essar Oil has a contract
with certain Essar Affiliated Companies (members of the Essar Steel Group, Essar Agrotech Limited,
Essar Offshore Subsea Limited, VOTL, Essar Projects, Asia Motorworks Limited, Tag Offshore Limited
and Essar Bulk Terminal) to facilitate their procurement of petroleum products, oils and lubricants. The
contracts are in the ordinary course of the Company’s business, are valid for a period of 10 years from
1 April 2009, and can be extended by mutual agreement of the parties.
Essar Oil has contracted with VPTL and VOTL to provide maintenance services, including technical
services and day to day maintenance to the VPTL facilities and the VOTL facilities situated at Vadinar
Refinery. The VPTL agreement will be effective from the date VPTL commences commercial operations
and the VOTL agreement is effective from 1 April 2009. The agreements are valid for five years and can be
renewed for a further period of three years by mutual agreement between the parties. VPTL is required to
pay Rs. 10 million (US$0.21 million) per quarter to Essar Oil, subject to an adjustment for the actual costs
incurred by Essar Oil, and VOTL is required to pay Rs. 25 million (US$0.54 million) per quarter to Essar
Oil, subject to an adjustment for the actual costs incurred by Essar Oil. Essar Oil also leases certain
equipment (a Static VAR Compensator) to Essar Steel on an ongoing basis for an amount of Rs.
1.5 million per annum. These contracts are in the ordinary course of the Company’s business.
Leases
Essar Oil leases the site of the Vadinar port terminal operations to VOTL, being 1,003.57 hectares. The
lease runs from 19 December 2005 for a period of 30 years and is renewable by VOTL for a further 30 year
period. VOTL pays Rs. 2,500 (US$53.56) per annum per hectare for the land and can only assign the lease
or sub-let the land with Essar Oil’s permission. VOTL has the right to mortgage its leasehold interest in
the land as security for the funding of the construction of the port terminal (no mortgage has yet been
created).
Essar Oil leases 25.72 hectares of land to Vadinar Properties Limited, an Essar Affiliated Company, for the
site of a township. The lease runs until April 2026. Vadinar Properties has the right to mortgage its
leasehold interest in the land to its lenders (no mortgage has yet been created). The amount receivable by
the Company in respect of this lease is Rs.100,000 (US$2,142) per annum.
Essar Oil also leases certain properties comprising a residential township and transit accommodation
facilities from Vadinar Properties, which are used as accommodation for Essar Oil’s employees and guests.
The lease runs until April 2027, and may be extended by mutual agreement. Essar Oil pays an annual fixed
charge calculated by reference to a formula based on Vadinar Properties’ total outstanding debt obligations
incurred in connection with the construction of the facilities and a variable charge based on operation and
maintenance expenses incurred by Vadinar Properties in respect of the facilities.
EOVL has entered into an agreement to lease township facilities from Vadinar Properties for the purpose
of housing its employees. The lease is required to be entered into by September 2012 and EOVL has paid
an advance of Rs. 60 million (US$1.3 million) as of December 2009 for the lease.
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The aggregate amounts payable and receivable in respect of the Company’s real estate leases for the year
ended 31 December 2009 have been disclosed in the Company’s consolidated financial statements, note 25
in Part 11 ‘‘Financial Information’’.
Financing
Members of Essar Energy plc’s group have loan facilities from Essar Affiliated Companies. These facilities
are summarised in Part 9 ‘‘Operating and Financial Review’’ and the total amount outstanding under these
facilities is set out in the Company’s historical financial information, note 25 in Part 11 ‘‘Financial
Information’’.
Performance guarantees
Essar Global has provided financial and performance guarantees to the Government of India in respect of
EEH’s obligations under the production sharing contracts for the Assam Blocks, including a commitment
to make available financial, technical and other resources required by EEH to carry out its obligations
under the production sharing contracts, guaranteeing due and punctual compliance of the obligations by
EEH, and guaranteeing satisfaction of EEH’s obligations under the PSC in the event a failure of EEH to
fulfil the same under the PSC.
Sales tax liability assignment

Essar Oil benefits from certain sales tax incentives provided by the state of Gujarat, pursuant to which the
Company believes it may retain sales tax collected on domestic sale of refined petroleum products in the
state of Gujarat. The Company has assigned its liability for sales tax collected between May 2008 and
31 December 2009 to Essar House, an Essar Affiliated Company and paid the present value in relation to
such liability to Essar House. Further details of the sales tax incentive scheme and the potential sales tax
liability are provided in Part 9 ‘‘Operating and Financial Review’’ and the terms of the agreement under
which Essar Oil has assigned its potential sales tax liability to Essar House are summarised in paragraph
13.6 of Part 16 ‘‘Additional Information—Material Contracts’’. In addition, please refer to Part 1 ‘‘Risk
Factors’’ for a discussion of certain risks in relation to this sales tax incentive.
Other related party contracts relating to both of the oil and gas and power businesses of the Company
Corporate guarantees
Essar Affiliated Companies provided guarantees of the Company’s obligations under external loan
facilities and equipment lease finance facilities to third parties. The guarantees subsist until the guaranteed
obligations under the relevant loan facility have been discharged. The relevant guarantor is not entitled to
receive any security or commission for providing the guarantee, or to transfer or assign its obligations
under the guarantee.
The outstanding amount of the Company’s indebtedness secured by guarantees provided by the Essar
Group is disclosed in the Company’s historical financial information, note 25 in Part 11 ‘‘Financial
Information’’ and further details of these guarantees are provided in Part 9 ‘‘Operating and Financial
Review’’.
Certain members of Essar Energy plc’s group also provide guarantees on behalf of Essar Affiliated
Companies. The amounts guaranteed by the Company are disclosed in the Company’s historical financial
information, note 25 in Part 11 ‘‘Financial Information’’ and further details of these guarantees are
provided in Part 9 ‘‘Operating and Financial Review’’.
Essar Global Indemnity

Essar Global has provided an indemnity to Essar Energy plc, EEH, EPH, VOL and HS 2 for any costs,
fees, expenses or penalties incurred by any or all of them in connection with the consolidation of the
interests in the power business and the oil and gas business under Essar Energy plc including in connection
with the unwinding of the cross holdings of various Essar Affiliated Companies in these businesses. The
terms of this indemnity are summarised in paragraph 13.4 of Part 16 ‘‘Additional Information—Material
Contracts.’’
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Shared services
The Company leases office space from certain Essar Affiliated Companies in various locations in India for
marketing and corporate services for the oil and gas and power businesses, and for general administrative
services provided to the Vadinar refinery. The leases are on arm’s length terms.
The Company receives certain services from Essar Affiliated Companies relating to: (i) accommodation;
(ii) telecommunications infrastructure and internet connections; (iii) travel and related services;
(iv) provision of foreign exchange and treasury functions; (v) management consultancy services including
technical and advisory services; (vi) maintenance of greenbelt in respect of the Vadinar refinery;
(vii) business centre facilities; (viii) managerial support and corporate functions including financial advice,
legal advice, and advice on matters related to corporate governance, environmental management, risk and
insurance, management and taxation; (ix) aircraft usage and related services including management and
maintenance services for aviation related activities, technical services and ground handling services;
(x) information technology services including consulting, application, infrastructure and integration
management of IT applications; (xi) payroll processing; (xii) purchasing of supplies and equipment; and
(xiii) scoping services for engineering works.
All such services are provided by the Essar Group to the Company on arm’s length terms and documented.
The services are generally provided for a period of between three and seven years, terminable by either
party on 30 to 180 days’ notice. Some of the agreements provide for a further extension of three years by
mutual consent of the parties.
Insurance
Members of the Essar Energy plc’s group also obtain insurance under the same master polices as Essar
Affiliated Companies. The combined insurance policies have been obtained in respect of: (i) all risks
relating to the Vadinar refinery (including, for example, business interruption, machinery breakdown,
property damage and loss of profit caused by machinery breakdown); (ii) terrorism; (iii) public liability;
(iv) expansion; and (v) all risks relating to marine and construction (covering the value of goods
transported by ocean, air, rail and road to the relevant project site and the erection of equipment on the
relevant project site). Members of Essar Energy plc’s group each pay a stipulated premium to the third
party insurer and are then covered by such master Essar Group policies. Claims under the policies are
handled centrally by the Essar Group’s centralised insurance function.
Group level service agreements for corporate and administration services

Certain members of Essar Energy plc’s group have entered into agreements for corporate and
administrative services to be provided by Essar Affiliated Companies for an initial period of 7 years and
continuing thereafter until terminated by either party on 6 months’ notice. The service agreements cover
the provision of: (i) financial accounting transaction processing and financial reporting support services;
(ii) taxation services; (iii) human resources management; (iv) legal services; (v) environmental, health and
safety management services; (vi) insurance services; (vii) corporate social responsibility activities;
(viii) corporate communications services; (ix) IT systems and processes services; and (x) office facilities and
equipment and associated office services. For a summary of these agreements, see paragraph 13.7 of
Intellectual Property
Certain members of Essar Energy plc’s group have been granted the right to use the ‘Essar’ name for the
purposes of their corporate identities and for operating their businesses worldwide.
The terms of each of the IP licence agreements referred to above are summarised in paragraph 13.8 of
Other
Directors and senior management/conflicts of interest
Certain directors of Essar Energy plc’s group companies are also directors of Essar Affiliated Companies.
In order to take advantage of certain benefits given to companies under the same management pursuant to
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the EPCG Scheme, directors of Essar Power MP and Essar Power Gujarat are also directors of of Essar
Steel Group companies. This arrangement is expected to continue after Admission.
In addition, certain directors of Essar Affiliated Companies (including of Essar Global) are also directors
of Essar Energy plc’s group companies (including of Essar Energy plc). The directors believe that after
Admission, this arrangement will allow the Company to benefit from the expertise of the Essar Group’s
management team and enable it to leverage its relationship with the Essar Group in order to operate on
efficient and competitive terms. Please refer to Part 8 ‘‘Directors, Senior Management and Corporate
Governance’’ for further details of Essar Energy plc’s directors and their relationships with Essar Affiliated
Companies. Please also refer to paragraph 4 of Part 16 ‘‘Additional Information’’ for details of Essar
Energy plc’s articles of association governing the appointment, removal and permitted interests of
Directors of Essar Energy plc’s and paragraph 13.2 of the same Part for details of the relationship
agreement which Essar Energy plc’s has entered into with Essar Global to ensure that it can carry on its
business independently of the Essar Group.
In respect of directors who sit on the boards of both the Company’s Indian operating companies and
certain Essar Affiliated Companies, Indian law provides various protection measures to preserve the
independence of the boards of directors of such companies and to manage potential conflicts of interest.
Broadly, these include the following: (i) governmental approval is required for the giving or receiving of
loans, guarantees or security between a company (or its parent company) and its directors; (ii) board
approval and, in cases where a company’s share capital exceeds Rs. 10 million (US$0.21 million)
governmental approval is required for a company to enter into contracts for the sale of goods or services
with its directors (unless for market value); (iii) prior disclosure of a director’s interest in contracts and
arrangements of a company is required (directors holding more than 2% of the share capital of a company
are considered to be interested); (iv) directors cannot vote in board meetings or count in the quorum for
board meetings discussing any contract or arrangement of the company in which they are interested;
(v) shareholder and governmental approval is required for the remuneration of directors to exceed certain
thresholds; and (vi) one third of a listed company’s board must be made up of independent directors for
the purpose of enforcing good corporate governance and managing conflicts of interest.
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PART 16
ADDITIONAL INFORMATION
1. Responsibility
The Directors, whose names appear on page 154, and Essar Energy plc accept responsibility for the
information contained in this document. To the best of the knowledge and belief of the Directors and Essar
Energy plc (each of whom has taken all reasonable care to ensure that such is the case), the information
contained in this document is in accordance with the facts and contains no omissions likely to affect its
import.
2. Incorporation and share capital

2.1 Essar Energy plc was incorporated and registered in England and Wales on 18 December 2009 as a
private company limited by shares under the Companies Act with the name Goliath I Limited and
with the registered number 7108619.
2.2 On 6 April 2010 Essar Energy plc changed its name to Essar Energy Limited and on 16 April 2010 it
was re-registered as a public company limited by shares with its current name, Essar Energy plc.
2.3 Essar Energy plc’s registered office is at 3rd Floor, Lansdowne House, 57 Berkeley Square, London
W1J 6ER, United Kingdom and its head office is at DCDM Building, 10 Frere Felix de Valois Street,
Port Louis, Mauritius. Essar Energy plc’s telephone number is +44 20 7408 8700.
2.4 The principal laws and legislation under which Essar Energy plc operates and the ordinary shares
have been created, are the Companies Act and regulations made thereunder.
2.5 The share capital history of Essar Energy plc is as follows:
(a) On incorporation the issued share capital of Essar Energy plc was £1.00 divided into one share of
£1.00.
(b) On 6 April 2010, Essar Energy plc resolved by a written resolution of its sole member to sub-divide
its existing share capital into 20 Shares of 5 pence each and the Board resolved to allot further
ordinary shares to Essar Global. Pursuant to such resolution, Essar Energy plc issued 844,841,250
Shares of 5 pence each for a cash consideration of 95 pence per Share.
(c) On 6 April 2010, by a written resolution of the sole member of Essar Energy plc, it was resolved that
Essar Energy plc reduce its share capital in accordance with the procedure set out in sections 641-644
of the Companies Act 2006 by cancelling its share premium account in an amount of £760,357,125.58
and crediting that amount to its retained earnings reserve.
(d) On 16 April 2010, the Board of Essar Energy plc resolved to allot further Shares to Essar Global.
Pursuant to such resolution, Essar Energy plc issued a further 155,158,730 Shares for a cash
consideration of £1.10 per Share.
2.6 On 30 April 2010, at a General Meeting of Essar Energy plc convened on short notice in accordance
with the provisions of the Companies Act, the following resolutions were passed:
(a) the Directors were generally and unconditionally authorised pursuant to section 551 of the
Companies Act, in substitution for all prior authorities conferred upon them, but without prejudice
to any allotments made pursuant to the terms of such authorities, to exercise all the powers of Essar
Energy plc to allot relevant securities (within the meaning of that section) in connection with the
Offer up to an aggregate nominal amount of £16,654,642.70 and separately, to certain Directors and
members of senior management of Essar Energy plc and certain individuals in an aggregate nominal
amount of £12,023.85 for the period expiring (unless previously revoked, varied or renewed)
immediately following Admission save that Essar Energy plc may, before Admission make an offer or
agreement (including exercise of the Over-allotment Option) which would or might require relevant
securities to be allotted after expiry of this authority and the Directors may allot relevant securities in
pursuance of such an offer or agreement as if the authority had not expired;
(b) subject to paragraph 2.6(a) above, the Directors were generally and unconditionally authorised
pursuant to section 551 of the Companies Act, in substitution for all prior authorities conferred upon
them, but without prejudice to any allotments made pursuant to the terms of such authorities, to
exercise all the powers of Essar Energy plc to allot relevant securities (within the meaning of that
section) up to an aggregate nominal amount equal to the aggregate nominal amount of one-third of
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Part 16 Additional Information
the ordinary share capital of Essar Energy plc in issue immediately following completion of the Offer
and expiring (unless previously revoked, varied or renewed) at the conclusion of the next annual
general meeting of Essar Energy plc, save that Essar Energy plc may before such expiry make an
offer or agreement which would or might require relevant securities to be allotted after such expiry
and the Directors may allot relevant securities in pursuance of such an offer or agreement as if the
authority had not expired;
(c) the Directors were empowered to allot equity securities (within the meaning of Section 560(1) of the
Companies Act) for cash, pursuant to the general authorities described in the sub-paragraphs above
in substitution for all prior powers conferred upon the Board but without prejudice to any allotments
made pursuant to the terms of such powers, as if section 561(1) of the Companies Act did not apply
to any such allotment, such power being limited to:
(i) the allotment of up to an aggregate nominal amount of £15,151,515.10 pursuant to the Offer or
otherwise prior to Admission;
(ii) the allotment of up to an aggregate nominal amount of £1,515,151.45 before and/or after
Admission pursuant to the Over-allotment Option;
(iii) the allotment of equity securities in connection with an issue in favour of holders of shares in
the capital of Essar Energy plc in proportion (as nearly as may be) to their existing holdings of
shares but subject to such exclusions or other arrangements as the Directors deem necessary or
expedient in relation to fractional entitlements or any legal or practical problems under the
laws of any territory, or the requirements of any regulatory body or stock exchange; and
(iv) the allotment of equity securities for cash (otherwise than as described in sub-paragraphs (i) to
(iii) above) up to an aggregate amount equal to 5% of the issued and unconditionally allotted
share capital of Essar Energy plc immediately following completion of the Offer,
provided always that such power expires (unless previously revoked, varied or renewed) at the
conclusion of the next annual general meeting of Essar Energy plc, save that the Company may
before the end of such period make an offer or agreement which would or might require equity
securities to be allotted after expiry of this authority and the Directors may allot equity securities in
pursuance of such an offer or agreement as if this power had not expired;
(d) conditional upon Admission, the Directors were authorised to make market purchases of Shares,
subject to the following conditions:
(i) the maximum number of Shares authorised to be purchased may not be more than 130,303,030;
(ii) the minimum price which may be paid for a Share is 5 pence, being the nominal value of each
Share;
(iii) the maximum price which may be paid for each Share shall be the higher of: (x) an amount
equal to 105%. of the average of the middle market quotations of a Share as derived from the
London Stock Exchange Daily Official List for the five business days immediately preceding
the day on which the Share is contracted to be purchased; and (y) an amount equal to the
higher of the price of the last independent trade of a Share and the highest current
independent bid for a Share as derived from the London Stock Exchange Trading System
(SETS);
(iv) the authority shall expire at the conclusion of the next annual general meeting of Essar Energy
plc; and
(v) a contract to purchase shares under this authority may be made prior to the expiry of this
authority, and concluded in whole or in part after expiry of this authority.
2.7 Immediately prior to the publication of this document, the issued share capital of Essar Energy plc
was £50,000,000, comprising 1,000,000,000 shares of 5 pence each (all of which were fully paid or
credited as fully paid).
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2.8 Save as disclosed above and in paragraphs 3, 4 and 5 below:

(a) no share or loan capital of Essar Energy plc has, within three years of the date of this document,
been issued or agreed to be issued, or is now proposed to be issued (other than pursuant to the
Offer), fully or partly paid, either for cash or for a consideration other than cash, to any person;
(b) no commissions, discounts, brokerages or other special terms have been granted by the Company in
connection with the issue or sale of any share or loan capital of any such company; and
(c) no share or loan capital of Essar Energy plc is under option or agreed conditionally or
unconditionally to be put under option.
2.9 Essar Energy plc will be subject to the continuing obligations of the UK Listing Authority with regard
to the issue of shares for cash. The provisions of Section 561(1) of the Companies Act (which confer
on Shareholders rights of pre-emption in respect of the allotment of equity securities which are, or
are to be, paid up in cash other than by way of allotment to employees under an employees’ share
scheme as defined in section 1166 of the Companies Act) apply to the authorised but unissued share
capital of Essar Energy plc (in respect of which the Directors have authority to make allotments
pursuant to section 551 of the Companies Act as referred to in sub-paragraph 2.6(a) and (b) above)
except to the extent such provisions have been disapplied as referred to in sub-paragraph 2.6(c)
above.
3. Pre-IPO Reorganisation and Group Structure

Pre-IPO Reorganisation
Creating the Company
Prior to Admission, Essar Energy plc was a wholly-owned subsidiary of Essar Global. In order to
consolidate Essar Global’s shareholdings in the oil and gas business and the power business and create the
Company, the Essar Group took a number of steps, including the following:
(a) in relation to the Essar Group’s interests in the power business, on 29 April 2010, Essar Global gifted
all of its shares in EPH to Essar Energy plc; and
(b) in relation to the Essar Group’s interests in the oil and gas business, on 29 April 2010, EEH gifted all
of its shares in Vadinar Oil to Essar Energy plc, followed by the gift by Essar Global of all of its
shares in EEH to Vadinar Oil.
The above reorganisation has not resulted in any change of control of the interests of Essar Global in its
power and oil and gas businesses.
Group Structure
Controlling Shareholder of Essar Energy plc
Immediately following Admission, Essar Global will own 76.74% of the issued ordinary share capital of
Essar Energy plc assuming no exercise of the Over-allotment Option and 75.00% assuming the
Over-allotment Option is exercised in full. Accordingly, Essar Global will continue to control Essar
Energy plc and its subsidiaries having interests in the power business and the oil and gas business. Essar
Global has pledged the shares it owns in Essar Energy plc, and any future shares (whether in the ordinary
equity share capital or otherwise) issued to it by Essar Energy plc, for the purposes of securing various
financing facilities of the Essar Group. For further details of the terms of this pledge of shares, please refer
to paragraph 13.4 of Part 16 ‘‘Additional Information—Material Contracts’’.
Minority Interests held by Essar Affiliated Companies and third parties in the Group
Certain minority interests in members of Essar Energy plc’s group are held by Essar Affiliated Companies
and other third parties. These minority interests are shown in the structure chart below entitled ‘‘The
Company’s Corporate Structure as at Admission’’.
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Power Business
In relation to the Company’s interests in the power business, an aggregate of 74% of the issued equity
share capital of Essar Power is held by EPH directly, and through its wholly-owned subsidiary Hazira Steel
2, and the remaining 26% is held by Essar Steel, an Essar Affiliated Company. Essar Steel has entered into
a share purchase agreement with EPH pursuant to which Essar Steel has agreed, subject to applicable law
and subject to the satisfaction of certain conditions precedent, to sell its entire shareholding in Essar Power
to EPH for Rs. 4.4 billion (US$94.3 million). One of the conditions precedent is that EPH provide Essar
Steel with an indemnity towards reimbursement of any cross subsidy surcharge payable by Essar Steel
under applicable law as a result of the transfer of its shareholding in Essar Power. However, this condition
precedent may be waived by Essar Steel at its discretion. The other conditions precedent to completion
may be waived by EPH at its discretion. Pending completion of such sale, Essar Steel has agreed that the
exercise of its voting rights in respect of its shares in Essar Power, in relation to certain specified matters,
shall be subject to the prior approval of EPH. The long stop date for completion of the sale under the
share purchase agreement is 30 September 2011. On completion of the share purchase agreement, the
Company will own 100% of the shares of Essar Power. Further details of the share purchase agreement are
summarised in paragraph 13.4 of Part 16 ‘‘Additional Information—Material Contracts’’.
EPH currently holds 96.54% of the economic interest in Essar Power through a combination of its equity
interest and its holding of compulsorily convertible preference shares in Essar Power (CCPS) which carry a
fixed cumulative coupon rate of 0.01% per annum. EPH has been issued 1,086,399,901 CCPS as at
Admission. EPH is entitled to convert the CCPS at any time after a period of 6 months, and up to a period
of 10 years, from the date of their respective allotments. The remainder of the economic interest in Essar
Power (3.46%) is currently held by Essar Steel through its equity interest and is proposed to be purchased
under the share purchase agreement with EPH as described above. As at Admission, 563,058,376 CCPS
are freely convertible into equity shares of Essar Power and the remaining 523,341,525 CCPS can be
converted in September and October 2010. The total equity shareholding of EPH (on a fully diluted basis)
in Essar Power, following conversion of all CCPS currently in issue, will be 96.54%. After the expiry of
10 years from the date of allotment of the CCPS, each CCPS is compulsorily convertible into equity shares
of Essar Power.
A third party, the India Infrastructure Fund, acting through IDFC Trustee Company Limited (IIF) holds
cumulative redeemable optionally convertible preference shares (the Preference Shares) in Essar Power,
carrying a fixed coupon rate per annum plus a return per annum based on the valuation of Essar Power at
the time of an Initial Public Offering of Essar Power (as defined in the investment agreement between IIF
and Essar Power, Essar Global, EPH and certain subsidiaries of Essar Power, the terms and conditions of
which are summarised in paragraph 13.5 of Part 16 ‘‘Additional Information—Material Contracts’’). IIF
has the right to convert the Preference Shares into equity shares in the capital of Essar Power in the event
that Essar Power undertakes an initial public offering prior to 18 March 2016. The percentage of equity
shares arising on the conversion of the Preference Shares is linked to the valuation of Essar Power at the
time of the initial public offering. IIF also holds warrants in Essar Power, entitling IIF to subscribe to the
equivalent of Rs. 700 million (US$15.0 million) worth of equity shares in Essar Power at any time prior to
an initial public offering of Essar Power at an exercise price calculated in accordance with the terms of the
investment agreement.
In addition, pursuant to the Indian Government’s captive power policies, Essar Steel and other Essar
Affiliated Companies are required to maintain a minimum equity interest in certain subsidiaries of the
Company which are, or will become, their captive power providers, in order to enter into power off-take
agreements with those subsidiaries. Accordingly, as at Admission, 26% of the issued equity share capital
(on a fully diluted basis) of Bhander Power and Essar Power Orissa is held by Essar Steel and other Essar
Affiliated Companies, with Essar Power holding the remaining 74% equity interest in these entities.
Following Admission, it is intended that Essar Power will maintain its equity interest of 74% in these
entities but will increase its economic interest in Essar Power Orissa from 74% to approximately 98.28%
(on a fully diluted basis) by way of the issue by Essar Power Orissa of participating preference shares to
Essar Power. Essar Power will have the right (at its sole discretion) to convert such participating preference
shares into equity shares of Essar Power Orissa at any time after a period of 6 months from the date of
their allotment and these shares will be compulsorily convertible 20 years from the date of their allotment.
In addition Essar Power, Essar Steel and Essar Steel Hazira have entered into an agreement in relation to
the shares of Essar Power MP, pursuant to which Essar Steel and Essar Steel Hazira must acquire 26% of
305

the issued equity share capital of Essar Power MP with Essar Power holding the remaining 74% equity
interest, in the event Essar Power MP becomes a captive power provider to Essar Steel and Essar Steel
Hazira. This equity percentage ratio shall be maintained throughout the term of the agreement. In the
event of a dilution of its equity shareholding in Essar Power MP to 74%, Essar Power intends to increase
its economic interest in Essar Power MP to approximately 99.79% by way of subscribing for participating
preference shares in Essar Power MP. Essar Power will have the right (at its sole discretion) to convert such
participating preference shares into equity shares of Essar Power MP at any time after a period of
6 months from the date of their allotment and these participating preference shares will be compulsorily
convertible 20 years from the date of their allotment. Further details of this agreement are summarised at
paragraph 13.4 of Part 16 ‘‘Additional Information’’.
In addition it is also intended that the Essar Steel Group will acquire 26% of the issued equity share capital
of Essar Power Hazira and 5% of the issued equity share capital of VPCL in the event these companies
become captive power providers to the Essar Steel Group. Upon dilution of its equity shareholding in
Essar Power Hazira to 74%, and in VPCL to 95%, the Company intends to increase its economic interest
in Essar Power Hazira to approximately 99.11% and in VPCL to approximately 97.92% by way of
subscribing to participating preference shares in Essar Power Hazira and VPCL. The Company will have
the right (at its sole discretion) to convert such participating preference shares into equity shares of Essar
Power Hazira and VPCL (as applicable) at any time after a period of 6 months from the date of their
allotment and these shares will be compulsorily convertible 20 years from the date of their allotment. In
addition to the above minority interests, 50% of the issued equity share capital of Mahan Coal is held by
EPH, indirectly through Essar Power, and the remaining 50% is held by Hindalco Industries Limited, a
third party. A summary of the terms of the joint venture agreement in respect of Mahan Coal is provide at
paragraph 13 of Part 16 ‘‘Additional Information’’. Further, Essar Power holds optionally convertible and
reedemable preference shares in Neptune Holding Company (OCRPs), which, at Admission are
convertible (at Essar Power’s sole discretion) to approximately 79% of the issued equity share capital of
Neptune Holding Company, which in turn holds an equity stake of just under 50% of Neptune Limited.

In relation to the Company’s interests in the oil and gas business, an aggregate of 86.39% of the issued
equity share capital (on a fully diluted basis) of Essar Oil is held by EEH and Vadinar Oil. EEH holds
5.84% of the equity share capital (on a fully diluted basis) in the form of ordinary shares and 16.28% in the
form of Global Depositary Securities (GDS). In addition, EEH holds the beneficial interest in 7.97% of
Essar Oil’s ordinary shares, which shares are registered in the names of Essar Investments (7.67%) and
Essar Shipping (0.30%) and are held by them as nominees of EEH. These shares are currently pledged for
the benefit of certain Indian banks pursuant to the terms of an amended and restated pledge agreement
dated 15 March 2010 given in relation to certain debt facilities provided to Essar Oil (the Essar Oil Pledge
Agreement). This agreement is summarised at paragraph 13.4 of Part 16 ‘‘Additional Information—Material
Contracts’’. EEH has also made an application to the Reserve Bank of India for permission to pledge these
shares of Essar Oil. Once the permission from the Reserve Bank of India is received, the shares will be
registered in the name of EEH and will be pledged by EEH in favour of Essar Oil’s lenders pursuant to the
terms of the Essar Oil Pledge Agreement. In the event that permission to pledge the shares is not received
from the Reserve Bank of India, EEH will retain the beneficial interest in the shares and will be able to
exercise all voting, income and capital rights to the shares in accordance with Indian law. Vadinar Oil holds
GDS which represent shares constituting 56.28% of the issued equity share capital (on a fully diluted basis)
of Essar Oil. The remaining 13.61% of the issued equity share capital (on a fully diluted basis) of Essar Oil
is held by Essar Investments (3.02%) (subject to the call option described below) and the public (10.59%).
Essar Oil is listed on the Bombay Stock Exchange and the National Stock Exchange.
Whilst it is expected that the permission from the Reserve Bank of India for creating a pledge over 7.97%
of the issued equity share capital of Essar Oil presently held by Essar Investments (7.67%) and Essar
Shipping (0.30%) as nominees of EEH pursuant to the share purchase agreement dated 14 April 2010, will
be received in due course, in the unlikely event EEH does not receive the said permission, the Group may
have to adopt alternative structures in order to ensure that the legal title to the shares may be consolidated
within the Group, including through the provision of alternate securities to the lenders. However, the
Group would continue to hold the beneficial ownership over 7.97% of Essar Oil (held through its
nominees, Essar Investments and Essar Shipping) in the event of non-receipt of permission from the
306

Reserve Bank of India for creation of the pledge and the existing pledge given by Essar Shipping and Essar
Investments would remain in place.
EEH and Vadinar Oil are not entitled to exercise voting rights in respect of the GDS currently held by
them. The voting rights of the GDS are only exercisable by the depositary on the instructions of the board
of directors of Essar Oil. As at Admission, the Group would have a direct equity and voting interest of
86.39% in Essar Oil, if all the GDS held by EEH and Vadinar Oil at Admission were converted. Under
applicable Indian laws and regulations, the acquisition of the equity shares underlying the GDS by EEH
and/or Vadinar Oil would result in them having to make a mandatory open offer to the public shareholders
of Essar Oil if they acquire more than 5% of the equity shares of Essar Oil in any given financial year, as a
result of the conversion of the GDS at any time when their aggregate equity shareholding is between 15%
and 55% of the issued equity share capital of Essar Oil, or if they acquire any equity shares as a result of
the conversion of the GDS at any time when their aggregate equity shareholding is more than 55% of the
issued equity share capital of Essar Oil. In addition, EEH and Vadinar Oil would also be under an
obligation to disclose the acquisition of further equity shares in Essar Oil every time they convert GDS if
the conversion results in the increase of their shareholding in Essar Oil by more than 2% or is in excess of
certain other thresholds prescribed under applicable law. If required to make a mandatory open offer, the
Company would be required to acquire any shares tendered by the public shareholders of Essar Oil for a
minimum consideration to be determined in accordance with Indian law (which is linked to the market
price of the shares of Essar Oil). In order to retain its listing, Essar Oil is required to maintain a 10% free
float public shareholding. Accordingly, in the event that the mandatory open offer results in the Company’s
holding of Essar Oil shares exceeding 90%, the Company would be required to divest a certain number of
these shares so that Essar Oil could continue to comply with the 10% minimum public shareholding
requirement. In the event of continuing non-compliance with the minimum public shareholding
requirement, the shares of Essar Oil could be compulsorily delisted from the Bombay Stock Exchange and
the National Stock Exchange.
In order to enable Essar Energy plc to consolidate its holdings in the oil and gas business further, EEH has
also entered into a call option agreement in respect of 3.02% of the issued equity share capital of Essar Oil
which is currently held by Essar Investments. EEH has the right to acquire these shares at any time
between 1 May 2010 and 31 December 2010 at the higher of: (a) Rs.142/- per share with a carry of 10% per
annum compounded on a 30/360 basis per annum; and (b) the minimum price required to be paid under
applicable law, which is currently the closing price of the shares of Essar Oil on the relevant stock exchange
on the date preceding the date of the transfer of the shares. The agreement is governed by English law and
would be enforceable under English law. However, in light of certain inconsistencies under Indian
securities laws and in the absence of specific judicial precedent on this matter, the enforceability of the call
option under Indian law is not free from doubt. In addition, the shares held by Essar Investments are
presently pledged in favour of various Indian banks and the actual transfer of the shares pursuant to the
exercise of the call option by EEH will be subject to the release of these pledges by the relevant
Indian banks.
In addition, an aggregate of 50% of the issued equity share capital of KPRL is held by Vadinar Oil,
through its wholly owned subsidiaries EEH and Essar Energy Overseas, and the remaining issued share
capital is held by the Government of Kenya. A summary of the terms of the shareholders’ agreement in
respect of KPRL is provided at paragraph 13.4, Part 16 ‘‘Additional Information—Material Contracts’’.
Contracts relating to the Pre-IPO Reorganisation and Group structure

The terms of the contracts relating to the Pre-IPO Reorganisation and Group structure are summarised in
paragraph 13.4 ‘‘Material Contracts’’ of this Part 16.
307

mrll_0909.fmt Free:
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Part 16
The Company’s Corporate Structure as at Admission
6810DM/0D Foot:
Additional Information
Essar Global Limited
Public
93.21% (indirect)
Public 76.74%(10) (10)

23.24%
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
Essar Energy 100%

Service Companies Essar Energy plc
6.79%(9) (UK and Mauritius)
100% 100%
0D/
Other Essar
Affiliated Companies Essar Steel Limited Essar Power
Vadinar Oil
(members of the Holdings Ltd
Essar Steel Group)
(3) (1)
26% 74%
CCPS 100%
26% 96.54% economic
ownership(2) Essar Energy Essar
Essar Power Limited Holdings Investments Public
79%(5) 56.28% Limited Limited
100% 50% (held
through (8)
(6) 3.02% 10.59%
GDS)
74% 74% 50% 100% 100% 30.11%
(of which
Essar 16.28%
Power Kenya held
Other
Bhander Power Canada Other Oil Petroleum through
Neptune Holding (4) Vadinar Power Co Mahan Coal Limited Power
GDS)(7)
File: EJ70801A.;113
Limited and Segment Refinery

Company Limited(4) (50:50 joint venture) Segment
Essar Power Orissa(4) Essar Wind Companies 50:50 joint
Companies
Power Private venture
308
Limited (India) Essar Oil Limited
50%
26% 100%
Neptune Limited (5)

Essar Oil Vadinar
Limited (India)
30APR201010202253
(1) EPH holds 59.03% directly and 14.97% indirectly through its wholly owned subsidiary, Hazira Steel 2.
(2) At Admission, the economic interest in EPL is 96.54%, this includes the CCPS which are not convertible as at Admission and are only convertible as of September 2010 and October 2010. CCPS may be converted at the
sole discretion of EPH after 6 months and within 10 years of issue, and are compulsorily convertible after that point.
(3) EPH has agreed to acquire the shares of EPL held by Essar Steel, subject to the satisfaction of certain conditions precedent. On completion of the share purchase agreement Essar Energy plc will own 100% of the shares
of Essar Power.
(4) Essar Steel and other Essar Affiliated Companies are required to maintain a 26% equity interest in the Company’s subsidiaries which are their captive power providers. It is expected that Essar Power will increase its
economic interest in Essar Power Orissa to 98.28% post Admission by subscribing to participating preference shares. In addition, Essar Steel Group is expected to acquire 26% equity interest in Essar Power MP and
Essar Power Hazira and a 5% equity interest in VPCL. Upon dilution of the Company’s shareholding in these entities, it is expected that Essar Power will increase the the Company’s economic interest in Essar
Power MP to 99.79%, in Essar Power Hazira to 99.11% and in VPCL to 97.92%, by subscribing for participating preference shares in each of those entities.
(5) Essar Power holds optionally convertible and redeemable preference shares in Neptune Holding Company, which, as at Admission, is convertible into approximately 79% of Neptune Holding Company. Neptune
Holding Company in turn holds an equity stake of just under 50% in Neptune Limited.
(6) EEH and VOL can convert the non-voting GDS held by them into ordinary shares of Essar Oil with voting rights at any time.
(7) EEH has beneficial ownership of 7.97% of the ordinary shares of Essar Oil, which shares are currently held by Essar Investments and Essar Shipping. These shares will be registered in the name of EEH, subject to
simultaneous creation of a pledge by EEH on these shares in favour of certain Indian lenders, after receipt of approval of the Reserve Bank of India for the creation of such pledge.
(8) EEH has the option to acquire the shares representing 3.02% of Essar Oil held by Essar Investments, between 1 May 2010 and 1 December 2010, pursuant to a call option agreement.
(9) A scheme of amalgamation has been filed for the amalgamation of certain Essar Affiliated Companies with Essar Steel. Accordingly, post Admission, upon the amalgamation becoming effective, the effective
shareholding of Essar Global in Essar Steel is expected to increase from 93.21% to 95.72%. Essar Investments will hold 0.33% of the effective shareholding of Essar Steel and the public shareholding is expected to
reduce from 6.79% to 3.95%. This amalgamation may result in a larger proportion of the shares of Bhander Power, which are currently held between members of the Essar Steel Group, being held directly by Essar Steel,
but the overall shareholding of the Essar Steel Group in Bhander Power will not change.
(10) Assuming the Over-allotment Option is not exercised.
MERRILL CORPORATION JDICKSO//30-APR-10 12:37 DISK116:[10ZAU1.10ZAU70801]EL70801A.;46
4. Articles of Association
The Articles of Association of Essar Energy plc (the ‘‘Articles’’) include provisions to the following effect:
4.1 Share rights

Subject to the provisions of the Companies Act, and without prejudice to any rights attached to any
existing shares or class of shares, any share may be issued with such rights or restrictions as Essar
Energy plc may by ordinary resolution determine or, subject to and in default of such determination, as the
Board shall determine.
Subject to the provisions of the Companies Act and without prejudice to any rights attached to any existing
shares or class of shares, the Board may issue shares which are to be redeemed or are liable to be
redeemed at the option of Essar Energy plc or the holder. Subject to the Articles and to the Companies
Act, all the shares for the time being in the capital are at the disposal of the Board.
4.2 Voting rights

Subject to any rights or restrictions attached to any shares, on a show of hands every member who is
present in person shall have one vote and on a poll every member present in person or by proxy shall have
one vote for every share of which he is the holder.
No member shall be entitled to vote at any general meeting unless all moneys presently payable by him in
respect of shares in Essar Energy plc have been paid.
If at any time the Board is satisfied that any member, or any other person appearing to be interested in
shares held by such member, has been duly served with a notice under section 793 of the Companies Act
and is in default for the prescribed period in supplying to Essar Energy plc the information thereby
required, or, in purported compliance with such a notice, has made a statement which is false or
inadequate in a material particular, then the board may, in its absolute discretion at any time thereafter by
notice to such member direct that, in respect of the shares in relation to which the default occurred, the
member shall not be entitled to attend or vote either personally or by proxy at a general meeting or at a
separate meeting of the holders of that class of shares or on a poll.
4.3 Dividends and other distributions

Subject to the provisions of the Companies Act, Essar Energy plc may by ordinary resolution declare
dividends in accordance with the respective rights of the members, but no dividend shall exceed the
amount recommended by the Board. Except as otherwise provided by the rights attached to shares, all
dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend
is paid, but no amount paid on a share in advance of calls shall be treated for these purposes as paid on the
share.
Subject to the provisions of the Companies Act, the Board may pay interim dividends if it appears to the
Board that they are justified by the profits of Essar Energy plc available for distribution
The Board may also pay, at intervals determined by it, any dividend at a fixed rate if it appears to the
Board that the profits available for distribution justify the payment. If the Board acts in good faith it shall
not incur any liability to the holders of shares conferring preferred rights for any loss they may suffer by the
lawful payment of an interim dividend on any shares having deferred or non-preferred rights.
No dividend or other moneys payable in respect of a share shall bear interest against Essar Energy plc
unless otherwise provided by the rights attached to the share.
If at any time the Board is satisfied that any member, or any other person appearing to be interested in
shares held by such member, has been duly served with a notice under section 793 of the Companies Act
and is in default for the prescribed period in supplying to Essar Energy plc the information thereby
required, or, in purported compliance with such a notice, has made a statement which is false or
inadequate in a material particular, then the board may, in its absolute discretion at any time thereafter
serve a direction notice on such member and withhold payment from such member of any dividend
otherwise payable, if the relevant shares represent at least a 0.25% interest in the Company’s shares or any
class thereof.
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Except as otherwise provided by the rights and restrictions attached to any class of shares, all dividends will
be declared and paid according to the amounts paid-up on the shares during any portion of the period in
respect of which the dividend is paid.
The Board may, if authorised by an ordinary resolution of Essar Energy plc, offer any holder of shares the
right to elect to receive shares by way of scrip dividend instead of cash in respect of the whole (or some
part, to be determined by the Board) of any dividend.
Any dividend which has remained unclaimed for 12 years from the date when it became due for payment
shall, if the Board so resolves, be forfeited and cease to remain owing by Essar Energy plc.
A liquidator may, with the sanction of a special resolution and any other sanction required by the
Insolvency Act 1986, divide among the members in specie the whole or any part of the assets of Essar
Energy plc and may, for that purpose, value any assets and determine how the division shall be carried out
as between the members or different classes of members.
4.4 Variation of rights

Rights attached to any class of shares may be varied or abrogated with the written consent of the holders of
three-quarters in nominal value of the issued shares of the class, or the sanction of a special resolution
passed at a separate general meeting of the holders of the shares of the class.
4.5 Lien and forfeiture

Essar Energy plc shall have a first and paramount lien on every share (not being a fully paid share) for all
moneys payable to it (whether presently or not) in respect of that share. Essar Energy plc may sell any
share on which it has a lien if a sum in respect of which the lien exists is presently payable and is not paid
within 14 clear days after notice has been sent to the holder of the share demanding payment and stating
that if the notice is not complied with the share may be sold.
The Board may from time to time make calls on the members in respect of any moneys unpaid on their
shares. Each member shall (subject to receiving at least 14 clear days’ notice) pay to Essar Energy plc the
amount called on his shares. If a call or any instalment of a call remains unpaid in whole or in part after it
has become due and payable, the board may give the person from whom it is due not less than 14 clear
days’ notice requiring payment of the amount unpaid together with any interest which may have accrued
and any costs, charges and expenses incurred by Essar Energy plc by reason of such non-payment. The
notice shall name the place where payment is to be made and shall state that if the notice is not complied
with the shares in respect of which the call was made will be liable to be forfeited.
4.6 Transfer of shares

A member may transfer all or any of his certificated shares by an instrument of transfer in any usual form
or in any other form which the Board may approve. An instrument of transfer shall be signed by or on
behalf of the transferor and, unless the share is fully paid, by or on behalf of the transferee. An instrument
of transfer need not be under seal.
The Board may, in its absolute discretion, refuse to register the transfer of a certificated share which is not
a fully paid share, provided that the refusal does not prevent dealings in shares in the Company from
taking place on an open and proper basis. The Board may also refuse to register the transfer of a
certificated share unless the instrument of transfer:
(a) is lodged, duly stamped (if stampable), at the office or at another place appointed by the Board
accompanied by the certificate for the share to which it relates and such other evidence as the Board
may reasonably require to show the right of the transferor to make the transfer;
(b) is in respect of one class of share only; and
(c) is in favour of not more than four persons.
If the Board refuses to register a transfer of a share in certificated form, it shall send the transferee notice
of its refusal within two months after the date on which the instrument of transfer was lodged with Essar
Energy plc.
No fee shall be charged for the registration of any instrument of transfer or other document relating to or
affecting the title to a share.
310

Subject to the provisions of the Regulations, the Board may permit the holding of shares in any class of
shares in uncertificated form and the transfer of title to shares in that class by means of a relevant system
and may determine that any class of shares shall cease to be a participating security.
4.7 General meetings

The Board shall convene and Essar Energy plc shall hold general meetings as annual general meetings in
accordance with the requirements of the Companies Act. The Board may call general meetings whenever
and at such times and places as it shall determine.
4.8 Directors
(a) Appointment of Directors
Unless otherwise determined by ordinary resolution, the number of Directors shall be not less than
six but shall not be subject to any maximum in number. Directors may be appointed by ordinary
resolution of Shareholders or by the Board. A Director appointed by the Board holds office only
until the next following annual general meeting and if not re-appointed at such annual general
meeting shall vacate office at its conclusion.
(b) No share qualification
A Director shall not be required to hold any shares in the capital of Essar Energy plc by way of
qualification.
(c) Retirement of Directors by rotation
The initial term of the directors is three years. Thereafter at every annual general meeting one-third
of the Directors who are subject to retirement by rotation or, if their number is not three or a
multiple of three, the number nearest to one-third shall retire from office. But, if any director has at
the start of the annual general meeting been in office for three years or more since his last
appointment or re-appointment, he shall retire at that annual general meeting. The Directors to
retire by rotation shall be first, those who wish to retire and not be re-appointed to office, and
second, those who have been longest in office since their last appointment or re-appointment or in
the case of those who were appointed or re-appointed on the same day, will be (unless they otherwise
agree) determined by lot. The directors to retire on each occasion (both as to number and identity)
shall be determined by the composition of the board at the date of the notice convening the annual
general meeting. No director shall be required to retire or be relieved from retiring or be retired by
reason of any change in the number or identity of the directors after the date of the notice but before
the close of the meeting. A retiring Director shall be eligible for re-election.
(d) Remuneration of Directors
The emoluments of any Director holding executive office for his services as such shall be determined
by the Board, and may be of any description.
The ordinary remuneration of the independent NEDs who do not hold executive office for their
services (excluding amounts payable under any other provision of these Articles) shall not exceed in
aggregate £5 million per annum or such higher amount as Essar Energy plc may from time to time by
ordinary resolution determine. Subject thereto, each such Director shall be paid a fee (which shall be
deemed to accrue from day to day) at such rate as may from time to time be determined by the
Board. In addition, any Director who does not hold executive office and who performs special
services which in the opinion of the Board are outside the scope of the ordinary duties of a Director
may be paid such extra remuneration as the Board may determine.
In addition to any remuneration to which the Directors are entitled under the Articles, they may be
paid all travelling, hotel and other expenses properly incurred by them in connection with their
attendance at meetings of the Board or committees of the Board, general meetings or separate
meetings of the holders of any class of shares or of debentures of Essar Energy plc or otherwise in
connection with the discharge of their duties.
The Board may provide benefits, whether by the payment of gratuities or pensions or by insurance or
otherwise, for any past or present Director or employee of Essar Energy plc or any of its subsidiary
undertakings or any body corporate associated with, or any business acquired by, any of them, and
for any member of his family or any person who is or was dependent on him.
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(e) Permitted interests of Directors

Subject to the provisions of the Companies Act, and provided that he has disclosed to the Board the
nature and extent of any material interest of his, a Director notwithstanding his office:
(i) may be a party to, or otherwise interested in, any transaction or arrangement with Essar
Energy plc in which Essar Energy plc is otherwise interested;
(ii) may act by himself or his firm in a professional capacity for Essar Energy plc (otherwise than as
auditor), and he or his firm shall be entitled to remuneration for professional services as if he
were not a Director;
(iii) may be a director or other officer of, or employed by, or a party to any transaction or
arrangement with, or otherwise interested in, any body corporate promoted by Essar
Energy plc or in which Essar Energy plc is otherwise interested; and
(iv) shall not, by reason of his office, be accountable to Essar Energy plc for any benefit which he
derives from any such office or employment or from any such transaction or arrangement or
from any interest in any such body corporate and no such transaction or arrangement shall be
liable to be avoided on the ground of any such interest or benefit.
(f) Restrictions on voting
A Director shall not vote on any resolution of the Board concerning a matter in which he has an
interest which (together with any interest of any person connected with him) is to his knowledge
material, but these prohibitions shall not apply to:
(i) the giving of a guarantee, security or indemnity in respect of money lent or obligations incurred
by him or any other person at the request of, or for the benefit of, Essar Energy plc or any of its
subsidiary undertakings;
(ii) the giving of a guarantee, security or indemnity in respect of a debt or obligation of Essar
Energy plc or any of its subsidiary undertakings for which the Director has assumed
responsibility (in whole or part and whether alone or jointly with others) under a guarantee or
indemnity or by the giving of security;
(iii) a contract, arrangement, transaction or proposal concerning an offer of shares, debentures or
other securities of Essar Energy plc or any of its subsidiary undertakings for subscription or
purchase, in which offer he is or may be entitled to participate as a holder of securities or in the
underwriting or sub-underwriting of which he is to participate;
(iv) a contract, arrangement, transaction or proposal concerning any other body corporate in which
he or any person connected with him is interested, directly or indirectly, and whether as an
officer, Shareholder, creditor or otherwise, if he and any persons connected with him do not to
his knowledge hold an interest (as that term is used in sections 820 to 825 of the Companies
Act) representing 1% or more of either any class of the equity share capital of such body
corporate (or any other body corporate through which his interest is derived) or of the voting
rights available to members of the relevant body corporate (any such interest being deemed for
the purpose of this Article to be a material interest in all circumstances):
(v) a contract, arrangement, transaction or proposal for the benefit of employees of Essar
Energy plc or of any of its subsidiary undertakings which does not award him any privilege or
benefit not generally accorded to the employees to whom the arrangement relates; and
(vi) a contract, arrangement, transaction or proposal concerning any insurance which the Company
is empowered to purchase or maintain for, or for the benefit of, any Directors or for persons
who include Directors.
(g) Borrowing powers
The Board may exercise all the powers of Essar Energy plc to borrow money, to guarantee, to
indemnify, to mortgage or charge its undertaking, property, assets (present and future) and uncalled
capital, and to issue debentures and other securities whether outright or as collateral security for any
debt, liability or obligation of Essar Energy plc or of any third party.
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(h) Indemnity of officers

Subject to the provisions of the Companies Act but without prejudice to any indemnity to which a
Director may otherwise be entitled, every Director or other officer of Essar Energy plc shall be
indemnified out of the assets of Essar Energy plc against any liability incurred by him for negligence,
default, breach of duty or breach of trust in relation to the affairs of the Company.
5. Directors’, Senior Managements’ and other interests

5.1 The interests in the share capital of Essar Energy plc of the Directors (all of which, unless otherwise
stated, are beneficial or are interests of a person connected with a Director or Senior Manager) as at
30 April 2010 (the latest practicable date prior to the publication of this document) were as follows:
Percentage of
Number of Shares issued share
in which the Percentage of capital
Director or Percentage of Number of Shares issued share assuming full
Senior Manager existing immediately capital on exercise of the
has a direct or issued share following Admission Over-allotment
indirect interest capital (%) Admission (%) Option (%)
Director
Ravi Ruia(1) . . . . . . . . . 1,000,000,000 100% 1,000,000,000 76.74% 75.00%
Prashant Ruia(1) . . . . . . 1,000,000,000 100% 1,000,000,000 76.74% 75.00%
Simon Murray(2) . . . . . . — — 71,428 0.005% 0.005%
Philip Aiken(3) . . . . . . . — — 14,285 0.001% 0.001%
Sattar Hajee Abdoula(4) — — 23,809 0.002% 0.002%
Senior Manager
Gerry Bacon(5) . . . . . . . — — 35,718 0.003% 0.003%
Mark Lidiard(6) . . . . . . — — 35,714 0.003% 0.003%
Iftikhar Nasir(7) . . . . . . — — 35,714 0.003% 0.003%
(1) Includes shares held by Essar Global Limited.

(2) Including 71,428 shares subscribed for at the Offer Price pursuant to a subscription letter dated 30 April 2010.
(7) Including 35,714 shares subscribed for jointly with Beverley Nasir pursuant to a subscription letter dated 30 April 2010.
5.2 As at 30 April 2010, Essar Energy plc was aware of the following shareholders who held a direct or
indirect interest in three % or more of the issued share capital of Essar Energy plc:
Percentage of
issued share
Percentage of capital
Percentage of Number of Shares issued share assuming full
existing immediately capital on exercise of the
Number of issued share following Admission Over-allotment
Shareholders Shares held capital % Admission (%) Option (%)
Essar Global Limited 1,000,000,000 100% 1,000,000,000 76.74 75.00
5.3 Save as disclosed in paragraph 7 below, no Director has or has had any interest in any transactions
which are or were unusual in their nature or conditions or are or were significant to the business of
Essar Energy plc or any of its subsidiary undertakings and which were effected by Essar Energy plc
or any of its subsidiaries during the current or immediately preceding financial year or during an
earlier financial year and which remain in any respect outstanding or unperformed.
5.4 There are no outstanding loans or guarantees granted or provided by any member of the Group to or
for the benefit of any of the Directors.
313

6. Directors’ terms and conditions

6.1 The Directors and their functions are set out in Part 8 ‘‘Directors, Senior Management and
Corporate Governance’’. On 16 April 2010, Ravi Ruia and Prashant Ruia entered into letters of
appointment with the Company in respect of their duties as Chairman and Vice-Chairman
respectively. On 6 April 2010, each of the Non-Executive Directors entered into a letter of
appointment with Essar Energy plc. On 16 April 2010 Naresh Nayyar entered into a service
agreement with Essar Energy Services Mauritius Limited, a wholly owned subsidiary of Essar
Energy plc, which is conditional on Admission.
6.2. Executive Director
6.2.1 Naresh Nayyar is entitled to a salary of £682,870 per annum under his service agreement with Essar
Energy Services Mauritius Limited. He is eligible to participate in an Annual Performance Linked
Incentive Scheme which shall provide a payment of up to £284,530 subject to the achievement of
certain performance targets relating to corporate and personal performance (with £227,624 for
achieving target performance). Mr Nayyar is also eligible to participate in the Essar Energy plc
Employee Stock Option Plan. He is entitled to a cash payment equal to 10% of his basic salary to
provide for long term financial planning into retirement and to provide for any dependants in the
event of his death, and private medical insurance. Mr Nayyar’s service agreement is terminable by
either party on service of six months prior written notice. The Company has the ability to terminate
the agreement by the payment of a cash sum in lieu of notice equal to the salary and other
contractual benefits, excluding bonus, payable for any unexpired portion of the notice period. The
Company has the discretion to make the payment in lieu of notice as a lump sum within one month
of the termination date or in equal monthly instalments subject to deductions for mitigation.
Mr Nayyar is subject to a confidentiality undertaking without limitation in time and to
non-competition, non-solicitation, non-dealing and non-hiring restrictive covenants for a period of
twelve months after the termination of his employment.
In addition to his duties as CEO, Mr Nayyar will continue to undertake an existing role as Managing
Director of Essar Oil following Admission, and his service agreement with Essar Oil dated 24 July
2007 will continue in force following Admission. Under this service agreement he is entitled to fixed
pay of Rs. 12,800,000 (approximately £188,000) per annum and is eligible to receive a payment of up
to Rs. 4,000,000 (approximately £59,000) under the Annual Performance Linked Incentive Scheme
subject to achievement of certain performance targets relating to corporate and personal
performance (with Rs. 3,200,000 (approximately £47,000)) for achieving target performance. This
remuneration will be in addition to that paid to him under his service agreement with Essar Energy
Services Mauritius Limited. In the event of termination of the service agreement with Essar Oil,
Mr Nayyar is entitled to six months’ remuneration.
6.3. Chairman, Vice-Chairman and Non-Executive Directors
6.3.1 The appointment of the Chairman, Vice-Chairman and each of the Non-Executive Directors
commenced on 6 April 2010 and will continue until the Company’s first AGM. If the appointment is
renewed at the AGM it will continue for a term of three years at the end of which it will terminate,
save that a director may be required to resign at any AGM before then in accordance with the
Company’s Articles of Association which require one third of the directors to resign on an annual
basis. The appointment may be also be terminated at any time by Essar Energy plc in accordance
with its Articles of Association or the Companies Act 2006. Upon termination, none of the
Chairman, the Vice-Chairman or any of the Non-Executive Directors is entitled to any damages for
loss of office and no fee shall be payable in respect of any unexpired portion of the term of the
appointment. These appointments are otherwise subject to the provisions of the Company’s Articles
of Association.
The Chairman and the Vice-Chairman are entitled to an annual fee of £300,000 and £175,000
respectively for their services. The Non-Executive Directors are each entitled to an annual fee of
£60,000 together with an additional fee of £15,000 per annum for chairing a Board committee or
alternatively £10,000 per annum for serving on a Board Committee. The Chairman, the
Vice-Chairman and the Non-Executive Directors are entitled to reimbursement of reasonable
expenses. There is no entitlement to participate in Company bonus, pension or share plans. All are
314

subject to certain restrictive covenants during the appointment and for a period of twelve months
following termination of the appointment.
The letters of appointment of the Chairman, Vice-Chairman and Non-Executive Directors require
them to devote sufficient time to the affairs of the Company as are necessary to perform their
respective duties. The Board has consented to the Chairman and Vice-Chairman continuing to
perform duties in relation to Essar Affiliated Companies under existing employment arrangements
with companies outside the Essar Energy Group. In addition, the Board has consented to the
Chairman and Vice-Chairman retaining their existing directorships as set out in paragraph 6.6.
Neither the Chairman nor the Vice-Chairman is permitted without Board consent to take on any
additional chairmanships or directorships of any quoted company, any consultancy, advisory or
trustee role or any public office.
6.3.2 Save as disclosed in paragraphs 6.2.1 to 6.3.1 above, there are no existing or proposed service
agreements or letters of appointment between Directors and any member of Essar Energy plc’s
Group.
6.4 Directors’ and Senior Management Remuneration
The aggregate remuneration, including bonuses and benefits in kind, granted by all members of
Essar Energy plc to the Directors and Senior Management in respect of the financial year ended
31 December 2009 was £2,238,000. On the basis of the arrangements set out above, the aggregate
amount payable by all members of Essar Energy plc to the Directors and Senior Management in
respect of the financial year ended 31 December 2010 is expected to be £4,367,000, which excludes
any amounts in respect of bonuses which may be payable to the Directors and Senior Management.
Under the terms of their service contracts and applicable incentive plans, in the financial year ended
31 December 2009, the Directors were entitled to the remuneration and benefits set out below:
Date of
appointment to the
Name Position Annual Salary/Fee/Benefits 2009 Company
Ravi Ruia . . . . . Chairman Nil 6 April 2010
Prashant Ruia . . Vice Essar Oil: Sitting fees as director of Rs. 7,500 6 April 2010
Chairman for each meeting of the board of directors and
Rs. 5,000 for each meeting of Committees
thereof, aggregating Rs. 50,000 for 2009
KPRL: Sitting fees as director of Kenyan

Shilling 20,000 for each meeting of the Board
of Directors, aggregating Kenyan
Shilling 20,000 for 2009
Naresh Nayyar . CEO Rs. 11,600,000 salary/bonus for 2009 15 October 2007
6.5 There is no arrangement under which any Director has waived or agreed to waive future emoluments
nor has there been any waiver of emoluments during the financial year immediately preceding the
date of this document.
6.6 In addition to their directorships in Essar Energy plc and certain of its subsidiaries of, the Directors
and Senior Managers of Essar Energy plc hold, or have held within the past five years, the following
directorships:
Position
still held
Name Current or former directorships/partnerships (Y/N)
Director
Ravi Ruia . . . . . . . . . . . . . . . . . Essar Global Ltd Y
Vodafone Essar Ltd Y
(formerly known as Hutchison Essar Ltd)
Essar Steel Holdings Ltd Y
Essar Communications (Mauritius) Ltd Y
Copper Canyon Holdings Ltd Y
Primus Group Invest Ltd Y
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Position
still held
Zeni Group Invest Ltd Y

Grand Richmond Investments Ltd Y
Grand Pinnacle Investments Ltd Y
Essar Steel Algoma Inc. Y
Essar Shipping Ports & Logistics Ltd N
(Formerly known as Essar Shipping Ltd)
Essar Oil Ltd N
Energy Transportation International Ltd N
Essar Steel Ltd N
Essar Steel (Hazira) Ltd N
Essar Power Ltd N
Essar Steel Sharjah FZE N
Energy II Ltd N
Arya Infrastructure Holdings Ltd N
International Fabrics Ltd N
Essar Minerals St Lucia Ltd N
Essar Steel Caribbean Ltd N
Essar Steel Caribbean Holdings Ltd N
India Securities Ltd N
Essar Investments Ltd N
Hazira Plate Ltd N
Karthik Financial Services Ltd N
Essar Shipping and Logistics Ltd. N
Essar Steel Karnataka Ltd. N
Prashant Ruia . . . . . . . . . . . . . . Essar Steel Algoma Inc. Y
Essar Steel Ltd. Y
Essar Steel Orissa Ltd Y
Kama Schachter Jewellery Ltd Y
(formerly known as Kama Jewellery (India)
Pvt Ltd)
Essar Oil Ltd. Y
Vodafone Essar Ltd Y
(formerly known as Hutchison Essar Ltd) Y
Kenya Petroleum Refinery Ltd Y
Essar Steel Holdings Ltd Y
Essar Minas de Mozambique Limitada Y
Essar Steel Minnesota LLC Y
Woodstock Group Invest Ltd N
Grand Escada Investment Ltd N
Astra Star Investments Ltd N
Essar Shipping & Logistics Ltd N
Essar Capital Ltd N
Essar Bulk Terminal Ltd N
Vadinar Oil Terminal Ltd N
Vadinar Properties Ltd N
Essar Power MP Ltd N
Essar Power Ltd N
Essar Minerals St Lucia Ltd N
Essar Steel Carribean Holdings Ltd N
Arya Infrastructure Holdings Ltd N
Hazira Pipe Mill Ltd N
Hazira Plate Ltd N
Essar Information Technology Ltd N
Essar Pipeline Ltd N
Hazira Steel Ltd N
Hy-Grade Pellets Ltd N
316

Position
still held
Karthik Financial Services Ltd N

Naresh Nayyar . . . . . . . . . . . . . Essar Oil Limited Y
SNS Creations Private Ltd. Y
Essar Oil Vadinar Limited Y
Vadinar Power Company Ltd. Y
Matix Fertilisers and Chemicals Ltd. Y
Kenya Petroleum Refineries Limited Y
Essar Power Limited Y
IBP Limited N
ONGC Mittal Services Limited N
ONGC Mittal Energy UK Ltd. N
ONGC Mittal Energy Nigeria Ltd. N
ONGC Mittal Nigeria International Ltd. N
OMEL Exploration and Production Nigeria Ltd. N
Indian Oil Panipat Power Consortium Ltd N
Lanka IOC Ltd N
Indian Oil Corporation Ltd N
Oil & Natural Gas Corporation Ltd N
Petronet LNG Ltd N
Philip Aiken . . . . . . . . . . . . . . . National Grid plc Y
Australia Day Foundation Limited (Chairman) Y
Australian Business (Chairman) Y
Kazakhmys PLC Y
Molten Group (Chairman) Y
Robert Walters PLC (Chairman) Y
Sloane Residents Limited Y
Miclyn Express Offshore Y
BHP Billiton (International Exploration) PTY Ltd N
BHP Billiton Group Limited N
BHP Billiton Petroleum Great Britain Limited N
BHP Billiton Petroleum Great Britain N
Limited (South Africa)
BHP Billiton Petroleum International Pty Limited N
BHP Billiton Petroleum Pty LTD N
Sattar Hajee Abdoula . . . . . . . . Grant Thornton (Business School) Ltd Y
Grant Thornton (BPO) Ltd Y
Mission Agro Energy Limited Y
Ivanhoe Capital Corporation (Mtius) Ltd Y
S & S Infrastructure Holdings Ltd Y
Actel Mauritius Y
JSA Lex Holding Limited Y
Pulsarkc Global Limited Y
Starlight Hotels Mauritius (Bangalore) Ltd Y
Starlight Hotels Mauritius (Delhi) Ltd Y
Starlight Hotels Mauritius (Hyderabad) Ltd Y
Starlight Hotels Mauritius (Lucknow) Ltd Y
Starlight Mauritius Ltd Y
Starlight Real Estate (Ascot) Mauritius Ltd Y
Starlight Real Estate (Ashtavinayak) Mauritius Ltd Y
Starlight Real Estate (Orlanda) Mauritius Ltd Y
Starlight Real Estate Mauritius Ltd Y
Tack Ltd Y
African Consulting & Services Ltd Y
Basan Ltd Y
Blue Hackle Africa Y
317

Position
still held
East Anglia Company Ltd Y

Bremar (Brevets et Marques) Ltd Y
LMKR Holdings Y
Madagascar Capital Development Partners Y
Minvest International Corporation Y
Monvey International Ltd Y
Oasis Interholdings Ltd Y
Schomould Technology International Limited Y
Anex Consultancy Services Ltd Y
Tantalum Holdings (Mauritius) Ltd Y
Thermax International Limited Y
Mosther Ltd Y
Shah Institute of Technology Ltd Ltd Y
Riverplate Limited Y
Compagnie Maritime De Mile Limited Y
IPF1 Asia Investments Y
IPF One (Mauritius) Limited Y
Meherji Cassinath Limited Y
Alliance Travel & Trade Limited Y
AVLP Asian Investments Y
AVLP Mauritius Limited Y
The NetCampus Y
Blue Sky Trustees Limited Y
Metmar Mauritius Limited Y
Metmar Africa Ltd Y
Kitara OFIL Y
DARYA INVEST Y
Anex Management Services Ltd Y
AMSL Consultancy Ltd Y
Grant Thornton (Indian Ocean) Ltd Y
Gonin Holdings Limited Y
Milton Services Limited Y
Africa Oil Supply Limited Y
Grant Thornton Ltd Y
SARL Solinfo Y
Phyto Health Holding (Mauritius) N
Phyto Health Group (Mauritius) N
Starlight Investments Mauritius Ltd N
Danube Investment Limited N
JSA Lex Holdings Ltd N
State Street Syntel Services (Mauritius) Limited N
Starlight Real Estate Mauritius Ltd N
Starlight Real Estate (Ascot) Mauritius Ltd N
Starlight Hotels Mauritius (Pune) Ltd N
Starlight Real Estate Mauritius 2 Ltd N
Starlight Hotels Mauritius (Andheri) Ltd N
Starlight Hotels Mauritius (Chennai) Ltd N
Starlight Hotels Mauritius (Hyderabad) Ltd N
Starlight Hotels operations Mauritius Ltd N
Starlight Real Estate Operations Mauritius Ltd N
Starlight Hotels Mauritius (Ludhiana) Ltd N
Starlight Hotels Mauritius (Lucknow) Ltd N
Starlight Hotels Mauritius (Cochin) Ltd N
318

Position
still held
Starlight Hotels Mauritius (Callicut) Ltd N

Starlight Hotels Mauritius (Agra) Ltd N
DD International N
Invista Real Estate (Mauritius) Ltd N
Bitucorp (Mauritius) Limited N
Mercantile Shipping Limited N
Inter Global Shipping Limited N
Richmerc Holdings Ltd N
Taha Holding Ltd N
The Lala Transocean N
A1 International N
AmberPoint Technology Mauritius Private Ltd N
Britex Marketing Ltd N
Dhunn-Car Venture N
Dhunn-Carr Capital Ltd N
East Africa Renewable Energy Ltd N
Essel Centrum FVCI Limited N
Jaguar Energy & Power Limited N
L & H Holding N
LMK Resources N
Mediatectools N
North Africa Renewable Energy Ltd N
Westham Ltd N
Subhash C. Lallah . . . . . . . . . . Admiralty Investments (Mauritius) Limited Y
Amansa Investments Limited Y
ARMF (Mauritius) Ltd Y
ARMF ll Co-Investment (Mauritius) Ltd Y
ARMF ll (Mauritius) Limited Y
ARUNA FUND LIMITED Y
Asian Real Estate Investments Ltd Y
Asian Tigers Pte Ltd Y
ASPF ll (Mauritius) Limited Y
Bal Sam India Holdings Limited Y
Bedrock Investments Limited Y
Bristol Investments Ltd Y
Catalys Venture Cap Limited Y
Century Square Holdings Pte Ltd Y
Claris Pharmaservises Y
Claris Sterione Y
Cordea Nichani Indian Opportunities No. 1 Limited Y
Covanta Energy Asia Holdings Ltd Y
Covanta Energy China (Delta) Ltd Y
Covanta Energy China (Gamma) Ltd Y
Covanta Energy India (Balaji) Ltd Y
Covanta Energy India (CBM) Ltd Y
Covanta Energy India (Samalpatti) Ltd Y
Covanta Five Limited Y
Covanta Four Limited Y
Covanta One Limited Y
Covanta Three Limited Y
Covanta Two Limited Y
Covanta Waste to Energy Asia Ltd Y
Covanta Waste to Energy Asia Investments Y
Covanta Energy International Investments Limited Y
COURAGE SPECIAL SITUATION INDIA FUND Y
CPI Ballpark Investments Ltd Y
319

Position
still held
CROUPIER PRIVE MAURITIUS Y

DEUTSCHE BANK MAURITIUS LIMITED Y
Dominion Textile Mauritius Inc Y
EAAA LLC Y
EC Global Limited Y
EW India Distressed Assets Advisors LLC Y
EW Special Opportunities Advisors LLC Y
Fairview Investments Limited Y
Ferox Master Fund (Mauritius) Limited Y
Ferox BF (Mauritius) Limited Y
Gametrackers Management Limited Y
Genever Holdings Limited Y
Goa Holdings Limited Y
Golden Gate Holdings Limited Y
Gold Ridge (Mauritius) Limited Y
GTC Fund, Ltd Y
GTC Special Opportunity Fund I, Ltd Y
Haagifs Holdings Y
Highside Capital Mauritius Limited Y
Highside Offshore Mauritius Limited Y
Highside Capital 11 Mauritius Limited Y
Illovo Group Holdings Ltd Y
Illovo Group Marketing Services Limited Y
INDIA ADVANTAGE FUND Y
Indopark Holdings Limited Y
Indopark Investments Limited Y
Kilombero Holdings Ltd Y
KKR Holdings Mauritius Ltd Y
KKR Account Adviser (Mauritius) Ltd Y
L & W Holdings Limited Y
MAURITIAN EAGLE LEASING CO LTD Y
MAURITIAN EAGLE INSURANCE CO.LTD Y
Mei Tou Holdings Ltd Y
MELCHIOR SELECTED TRUST (MAURITIUS) Y
LIMITED
Merrill Lynch Asia Investments Limited Y
Merrill Lynch Holdings (Mauritius) Y
Merrill Lynch Investment Holding (Mauritius) Y
Merrill Lynch (Mauritius) Investment Limited Y
Monsanto Mauritius Y
NEW HORIZON OPPORTUNITIES MASTER Y
FUND
NINE RIVERS CAPITAL MANAGEMENT Y
LIMITED
NSR Mauritius Advisors, LLC Y
Ogden Energy (Gulf) Limited Y
Ogden Energy India (Brakeshwar) Ltd Y
Ogden Taiwan Investments Limited Y
Pacific Can Limited Y
Persepolis Investments Limited Y
Persepolis Pipe Investments Limited Y
Portcullis EM Fund Y
QVT Mauritius East Fund Y
Quintessence Mauritius East Fund Y
QVT Mauritius West Fund Y
Quintessence Mauritius West Fund Y
320

Position
still held
RASCOMSTAR -QAF Y
Ressimo PCC Y
Ridgewood Holdings Limited Y
Rockpoint Holdings (Mauritius) Limited Y
Roots Investments Limited Y
Sapphire Real Estate Fund PCC Y
SAT Limited Y
Seejak Pte Ltd Y
SHIVLING LTD Y
Silvercrest Holdings (Mauritius) Limited Y
SREI MAURITIUS INFRASTRUCTURE Y
DEVELOPMENT LIMITED
Sucoma Holdings Limited Y
Sykes India Holdings Corporation Y
Thakral Corporation (Mauritius) Ltd Y
Tiger Global Mauritius Fund Y
Tudor BVI Mauritius Limited Y
UOB IL & FS INDIA OPPORTUNITIES Y
FUND LTD
Valley Energy Investment Holdings Y
Vodacom International Limited Y
Vodacom Gateway (Mauritius) Limited Y
WF INDIA RECONNAISSANCE FUND LTD Y
Yunan Gold (Mauritius) Ltd Y
Airlink Mauritius (Pty) Ltd N
AR NEW ASIA FUND LTD N
Behringer Industries Corporation N
Central Plaza (Mauritius) Ltd N
Corbin Holdings India, Inc N
Drawbridge Century Holdings Ltd N
Drawbridge Titanium Holdings (Mauritius) Ltd N
Drawbridge Towers Ltd N
East African Supply Ltd N
FXMC (Mauritius) Limited N
Ferox CB Arbitrage Fund (Mauritius) Limited N
(Winding up
HORIZON INDIA I N
Immoplace SA N
Indian Ocean Asset Management Limited N
Mauritius Capital Partners N
Merrill Lynch (Mauritius) Portfolio Co No.2 N
Merrill Lynch (Mauritius) Portfolio Co. No.3 N
MGA Entertainment (Mauritius) Ltd N
Moneyline Telerate Mauritius N
Pacific Media Overseas N
R-QAF N
Seamaurico Pte Ltd N
SOUTHERNKRISS PCC N
Success Capital Ltd N
TWM Investment Holdings Ltd N
Tudor Global Emerging Markets Mauritius Limited N
WF INDIA DIRECT INVESTMENTS LIMITED N
Simon Murray . . . . . . . . . . . . . Arnhold Holdings Ltd Y
Asia Resources Fund Limited Y
ARF Investment Management Limited Y
321

Position
still held
Bemobile Limited Y
(formerly known as Black Dolphin Limited)
Beryl Overseas Limited Y
Beyond Asia Holdings Ltd Y
Bright Zone Enterprises Ltd Y
Capital Way Holdings Limited Y
Cheung Kong Holdings Ltd. Y
Compagnie Financière Richemont SA Y
Diamond Creek International Limited Y
Energy Success Investments Limited Y
GEMS AAA Limited Y
GEMS Oriental And General Fund II Limited Y
GEMS Oriental And General Fund Limited Y
GEMS III Limited Y
General Enterprise Management Services Limited Y
General Enterprise Management Services Y
(International) Limited
Grace Semiconductor Manufacturing Corporation Y
Guggenheim Investment Advisors (Europe) Limited Y
K.K. Jermyn Capital Y
Million Star Corporation Y
Morningstar Capital & Investment Ltd Y
Onyx Overseas Limited Y
Orient Overseas (International) Ltd. Y
Poly Stone Holdings Limited Y
San Marino Telecom Y
Silver Heritage Limited Y
Simclan Ltd. Y
Simon Film Productions Limited Y
Simon Murray & Associates Limited Y
Simon Murray & Co. (Cayman) Limited Y
Simon Murray & Co. China Fund Limited Y
Simon Murray & Co. (Japan) Limited Y
Simon Murray & Co. Limited Y
Simon Murray & Company (Hong Kong) Limited Y
Simon Murray (San Marino) Holdings Ltd Y
Sino Forest Corporation Y
SMC China Fund SPC Y
SMC (China) Capital Limited Y
SMC RMB General Partner I Limited Y
Tektite Overseas Limited Y
Ultragrand Limited Y
USI Holdings Ltd. Y
Vodafone Group Plc Y
Yarrum Limited Y
Compass Technology Holdings Ltd. N
Sunday Communications Ltd. N
Tommy Hilfiger Corporation N
Vivendi Universal N
Hermes International N
Usinor SA N
Yozan Inc. N
Pacific Century Regional Developments Ltd. N
Hutchison Whampoa Ltd. N
322

Position
still held
Senior Manager
Gerry Bacon . . . . . . . . . . . . . . . Association of Corporate Treasurers (The) Y
The Kingwood Trust Y
Act (Administration) Limited Y
Multi Risk Indemnity Company Limited Y
Multi Risk Limited Y
Multi Risk Benefits Limited Y
Vodafone 2: N
Vodafone Holdings Luxembourg Limited N
Vodafone Mobile Communications Limited N
Vodafone Worldwide Holdings Limited N
Voda Limited N
Vodafone Beneflux Limited N
Vodafone International Holdings Limited N
Vodafone Group Services Limited N
Vodafone Global Enterprise Limited N
Mark Lidiard . . . . . . . . . . . . . . None None
Power
K V B Reddy . . . . . . . . . . . . . . None None
S Shrivastava . . . . . . . . . . . . . . None None
V. Suresh . . . . . . . . . . . . . . . . . None None
B.C.P. Singh . . . . . . . . . . . . . . . None None
R.K. Narayan . . . . . . . . . . . . . . Skipper Electricals (India) Limited Y
Jaypee Power Grid Limited Y
Accurate Power Utility Private Limited Y
Power Equity Capital Advisors Private Limited Y
Delhi Transco Limited Y
Maadurga Thermal Power Company Limited Y
R.P. Gupta . . . . . . . . . . . . . . . . None None
A.K. Singh . . . . . . . . . . . . . . . . None None
T.S. Bhatt . . . . . . . . . . . . . . . . . None None
Oil
C. Manoharan . . . . . . . . . . . . . None None
Shishir Agarwal . . . . . . . . . . . . None None
S. Thangapandian . . . . . . . . . . . None None
P. Sampath . . . . . . . . . . . . . . . . PK IT Services Private Limited Y
Iftikhar Nasir . . . . . . . . . . . . . . Essar LNG Limited Y
Krishnamurthy Govindarajan . . . None None
Narendra Vachharajani . . . . . . . None None
6.7 None of the Directors or Senior Managers in the past five years:
(a) has had any convictions in relation to fraudulent offences;
(b) whilst director or senior manager, has been associated with any bankruptcies, receiverships or
liquidations whilst acting as a director or a senior manager;
(c) has been declared bankrupt or has entered into any individual voluntary arrangements;
(d) has been partner of any partnership preceding any compulsory liquidation, administration or
partnership voluntary arrangement of such partnership;
323

(e) has held assets which have been subject of a receivership;

(f) has been partner of any partnership within a 12 month period preceding any receivership of the
assets of such partnership;
(g) has been subject to any public incrimination and/or sanction by statutory or regulatory
authorities (including designated professional bodies); or
(h) has been disqualified by a court from acting as a member of the administrative, management or
supervisory body of any company or from acting in the management or conduct of the affairs of
any company.
6.8 Save for Ravi Ruia and Prashant Ruia, there are no family relationships between any Directors or
Senior Managers.
7. Conflicts
Mr Ravi Ruia and Mr Prashant Ruia are both directors of various entities in the Essar Group as listed in
paragraph 6.6 above and have advisory and consultancy agreements. Therefore, potential conflicts of
interests may arise between the duties owed by such directors to the Company and their duties to other
entities in the Essar Group. In addition, Mr Ruia and Mr Prashant Ruia are shareholders of companies
which are beneficiaries of trusts which ultimately control Essar Global Limited, as noted in note 25 to the
accounts set out in Part II ‘‘Financial Information’’. The Relationship Agreement between the Company
and Essar Global regulates the ongoing relationship between members of the Group and the Essar Group,
as described in paragraph 13 of this Part 16.
Mr Naresh Nayyar is a director of Matix Fertilisers and Chemicals Ltd. As discussed in ‘‘Raniganj Block’’
in Part 6 ‘‘The Business’’ the Company has entered into a gas sale and purchase agreement with Matix
Fertilisers and Chemicals Ltd. for 2.8 mmscmd of CSG commencing from April 2012.
Save for the interests disclosed above, there are no other conflicts of interest between any duties to the
Company of its Directors or the Senior Managers listed herein and their private interests and/or other
duties.
8. Employee share plans
Future Essar Energy plc Incentive Arrangement
Conditional on Admission, Essar Energy plc has adopted the Essar Energy plc Employee Stock Option
Plan (the ‘‘Plan’’).
The Plan permits the grant of options to acquire Shares at fair market value at the time of grant. The
Remuneration Committee intends that the Plan will be the primary incentive arrangement under which
share based incentives will be provided to high performing employees.
It is envisaged that the first award of options under the Plan will be made during the six weeks following
Admission and that thereafter awards will normally be made annually, within 42 days of annual results.
The principal terms of the Plan are described below.
Eligibility
All employees including Executive Directors will be eligible to participate in the Plan at the absolute
discretion of the Remuneration Committee. It will decide whether to grant options and will set policy for
the operation of the Plan.
Options will entitle the participant to acquire Shares at a price per Share determined by the Remuneration
Committee at the date of grant. The exercise price of options will be not less than the middle market
quotation of a Share derived from the London Stock Exchange Daily Official List on the dealing day
immediately preceding the date of grant of an option (or, in the case of any option under which Shares are
to be issued, the nominal value of such a Share). On exercise, participants will realise a net gain equal to
the amount (if any) by which the market price of a Share exceeds the exercise price.
Additionally, awards may take such other form as will confer on the participant an equivalent economic
benefit (for example, phantom awards that deliver cash or equity settled share appreciation rights).
Individual limits
The Remuneration Committee will determine the appropriate level of option grant for participants.
However, each participant’s participation will be limited so that the aggregate market value of the Shares
over which options are granted under the Plan in any year (averaged over the five dealing days preceding
the date of grant) shall not normally exceed an amount equivalent to 100% of the participant’s annual base
pay at the date of grant. In exceptional circumstances, such as recruitment or retention, this limit may be
exceeded at the discretion of the Remuneration Committee but in any event will not be higher than 300%
of annual base pay.
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In determining the size of individual grants, the Remuneration Committee may take account of a range of
factors including (but not limited to) the performance of the individual, their importance to the business
and any perceived need to retain the individual.
In relation to the first grant of options to be made following Admission:
• in addition to the factors described above, the Remuneration Committee may also take account of
the participant’s pre-IPO efforts in determining the size of the award; and
• it is intended that the aggregate market value of the Shares over which options are granted under the
Plan (averaged over the five dealing days preceding the date of grant) will, in the case of the Chief
Executive, be an amount equal to 100% of the annual base pay under his service agreement with
Essar Energy Services Mauritius Limited, and an amount not exceeding 100% of annual base pay in
all other cases.
Exercise period
To the extent that options vest, they may normally be exercised between the third and tenth anniversaries
of the date of grant, at the end of which period any vested but unexercised options will lapse. Options will
generally only be exercisable to the extent that the performance conditions which apply to them have been
satisfied and provided the individual remains employed by the Group on the date of the exercise.
Performance conditions
Prior to the granting of any option to an Executive Director, the Remuneration Committee will normally
determine a performance condition for such grant which it considers to be appropriately demanding. The
Remuneration Committee may impose such a performance condition in relation to grants to other
employees. Performance conditions will generally be measured over a period of three years, commencing
not earlier than the first day of the financial year in which the grant occurs.
Vesting levels will normally be determined on a sliding scale by reference to achievement of the
performance conditions. The Remuneration Committee may determine that an option should be subject to
multiple conditions or that the option should be sub-divided and that each part be subject to a different
condition. The Remuneration Committee may set different performance conditions for options granted in
different years.
The Remuneration Committee acting reasonably may vary the performance conditions applying to existing
options if the conditions are no longer considered to be a fair measure of performance provided that, in
the reasonable opinion of the Remuneration Committee, the new conditions are not materially less
challenging than the original conditions would have been.
In exceptional circumstances the Remuneration Committee may decide in its discretion that an option may
be exercised over a lesser or greater number of Shares (in the latter case not exceeding the total number of
Shares under the option) if it considers this appropriate in light of the participant’s contribution to the
growth of the Company over the relevant period.
The performance condition in relation to the first grant of options to the Chief Executive after Admission
will relate to the growth in the Company’s Earnings Per Share (‘‘EPS’’). Options will vest on a sliding scale,
with threshold vesting for achieving 5% per annum EPS growth over the three year performance period,
and full vesting for achieving 10% per annum EPS growth over that period.
Exercise of options
In relation to the first grant of options under the Plan, subject to satisfaction of the applicable performance
conditions, the option will vest on the third anniversary of the date of grant of the options. The
Remuneration Committee shall have absolute discretion to impose a different vesting schedule in relation
to subsequent grants provided that in the case of options granted to Executive Directors, the performance
period over which performance conditions are measured will not normally be less than three years.
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Cessation of employment
An option may normally only vest if the participant remains in employment with the Company. If a
participant leaves employment with the Company during the vesting period, options will normally lapse.
However, if the reason for leaving is injury, disability, ill-health, redundancy, retirement, sale of the
business or company in which the participant is employed out of the Company, or any other reason at the
Remuneration Committee’s discretion, the option will not lapse and will vest on the normal vesting date, to
the extent that the Remuneration Committee determines the performance conditions to have been
satisfied over the full performance period and subject to a time pro rating reduction (based on the total
number of complete months from grant to cessation relative to a period of 36 months). Alternatively, the
Remuneration Committee may, in its absolute discretion, determine that the option should vest on the
date of cessation (for example, if a participant is seriously ill), subject to the satisfaction of the
performance conditions at that date and a time pro rating reduction. In either circumstance, the
Remuneration Committee may determine that the pro rating reduction should not apply at all or should
apply to a lesser extent if it considers the participant’s contribution to the business would not be properly
recognised if the award was scaled down in the manner described above. In the event of a participant’s
death, an option may be released to or exercised by their personal representatives within twelve months of
such event. Vested options shall remain exercisable for a period of 6 months following cessation of
employment.
Corporate Events
In the event of a change of control, scheme of arrangement (other than a scheme of arrangement for the
purposes of creating a new holding company following which the shareholders of Essar Energy plc remain
largely unchanged) or voluntary winding-up of Essar Energy plc, vested but unexercised share options will
become exercisable following such an event for a limited period. Unvested options will vest to the extent
the performance conditions have been satisfied at the time of the relevant event and subject to a time pro
rating adjustment. The Remuneration Committee may in its discretion disapply the application of time
pro-rating or determine that it should apply to a lesser extent if it considers that the performance
conditions would have been met to a greater or lesser extent at the end of the full three-year performance
period, or if it considers that the contribution of the management team to the creation of shareholder
value during the performance period would not otherwise be properly recognised. The Remuneration
Committee will not use its discretion in such a way that unjustifiably large awards result.
In the event of an internal reorganisation, options shall not vest and shall be replaced by equivalent options
in the new holding company. The Remuneration Committee may also allow or require options to be
exchanged for equivalent options over shares in the acquiring company.
If a demerger, special dividend, variation of share capital or other similar event occurs which would affect
the market value of a Share to a material extent then the Remuneration Committee may adjust the
number of Shares subject to the option and/or the exercise price in such manner as they consider
appropriate, or in exceptional circumstances it may determine that options shall vest early, in the same
manner as on a change of control.
Time limit for grants of options

Options may not be granted more than ten years after Admission.
Satisfaction of options
Options may be satisfied with new issue Shares, a transfer of treasury shares or shares purchased in the
market. The Company may establish a non-Indian resident discretionary employee benefit trust to acquire
and hold, or enter into agreements to procure the delivery of, Shares required to satisfy options.
Overall Plan Limits

In any ten-year period, Essar Energy plc may not grant options under the Plan or any discretionary share
plans adopted by it or any other company under Essar Energy plc’s control if such grant would cause the
number of Shares issued under the plans to exceed 5% of its issued ordinary share capital at the proposed
date of grant.
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The satisfaction of options with treasury shares will be treated as an issue of Shares for the purposes of the
above limits for so long as institutional shareholder guidelines recommend this. If options are to be
satisfied by a transfer of existing Shares, the percentage limits stated above will not apply.
Other features of options

Options are not transferable, except on death, nor are they pensionable. Unless the Remuneration
Committee determines otherwise, options will lapse if a participant is declared bankrupt.
Rights attaching to Shares

Any Shares allotted when an option is exercised will rank pari passu with Shares then in issue (except for
rights arising by reference to a record date prior to their allotment).
Alterations
The Remuneration Committee may amend the Plan in any respect, provided that the prior approval of
shareholders is obtained for any amendment to the advantage of participants to the following provisions:
the individuals to whom Shares may be provided under the Plan, the limits on the number of ordinary
shares available under the Plan, the maximum individual entitlement of participants, the basis for
determining a participant’s entitlement, the adjustment of options on a variation of the share capital of
Essar Energy plc.
The requirement to obtain the prior approval of shareholders will not, however, apply to any minor
amendment made to benefit the administration of the Plan, to take account of a change in legislation or to
obtain or maintain favourable tax, exchange control or regulatory treatment for eligible employees,
participants or for Essar Energy plc or any of its subsidiaries. Shareholder approval will also not be
required for any amendment to any performance conditions.
Amendments that would adversely affect subsisting rights are subject to specified limitations.
The Remuneration Committee may grant options to overseas employees on different terms or establish
further plans, as it considers necessary or desirable to take account of or to mitigate or to comply with
relevant overseas taxation, securities or exchange control laws provided that the terms of the options are
not overall more favourable than the terms of options granted to other employees and that any shares
made available under such plans shall count towards the overall limits set out above.
9. Pensions
Retirement benefits and pensions
9.1 The Company operates a number of retirement and related benefit plans for employees. The plans
operated by the Company are regulated by central and state legislation in India. The benefits
provided by the retirement and other benefit plans vary by company within the Group and by
jurisdiction and include voluntary retirement schemes, retirement pensions, retirement lump sums
and insurance payments (including life insurance payments).
9.2 The majority of the Company’s employees are located in India, where it has a number of employee
provident fund schemes, gratuity schemes and superannuation schemes in place at various Indian
subsidiaries. Contributions to provident funds are made, in accordance with the Employees’
Provident Funds and Miscellaneous Provisions Act, 1952 (‘‘EPFMPA’’) by both the employee and
employer at a contribution rate for each of 12% of basic salary and certain other allowances per
annum (‘‘Provident Fund Contribution’’). A defined percentage of the Provident Fund Contribution
is paid into the ‘‘Employees Pension Fund’’, which provides for superannuation pension, retiring
pension and permanent total disability pension to employees of the Indian companies within the
Group. These payments are made in accordance with the ‘‘Employee Pension Scheme, 1995’’
requirements under the EPFMPA. There is no minimum statutory requirement for contributions to
superannuation schemes, which are available to employees above a specified grade in certain of the
Company’s operations, and contributions up to 15% of basic salary are made by the employer.
Employees may withdraw the full amount standing to his or her credit in any provident fund or
superannuation scheme on his or her retirement. Employees who leave their employment may
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transfer the full amount standing to his or her credit in any provident fund or superannuation scheme
to a fund or scheme with their new employer.
9.3 Gratuities are paid, in accordance with the Payment of Gratuity Act, 1972, when an employee leaves
employment after at least five years of continuous service. Gratuity payments are calculated by
reference to the employee’s basic salary at the time of leaving employment and the number of years
of service are paid by the relevant employer company. An actuarial valuation of outstanding gratuity
liabilities is made each year and a provision is made on account of these liabilities. In addition,
certain of the companies in the Group offer insurance schemes and voluntary retirement schemes to
employees.
10. Underwriting arrangements

Essar Energy plc, the Directors, Essar Global and the Underwriters have entered into the Underwriting
Agreement. Pursuant to the Underwriting Agreement:
10.1 Essar Energy plc has appointed J.P. Morgan Cazenove as Sponsor, J.P. Morgan Cazenoze and
Deutsche Bank as Joint Global Coordinators and Joint Bookrunners and BNP Paribas, Nomura and
Standard Chartered as co-managers in connection with Admission and the Offer;
10.2 Essar Energy plc has agreed, subject to certain conditions, to allot and issue, at the Offer Price, the
New Shares to be issued in connection with the Offer;
10.3 the Underwriters have severally agreed, subject to certain conditions, to use reasonable endeavours
to procure subscribers (or, failing which, subscribe themselves) for the New Shares (in such
proportions as will be set out in the Underwriting Agreement);
10.4 the Underwriters will deduct from the proceeds of the Offer to Essar Energy plc a commission of
2.25% of the product of the Offer Price and the number of New Shares allotted pursuant to the Offer
and a commission of 2.25% of the product of the Offer Price and the number of Over-allotment
Shares, if any, allotted pursuant to the Offer. In addition, Essar Energy plc may, at its sole discretion,
pay to the Joint Global Coordinators, an additional commission of up to 1% of an amount equal to
the Offer Price multiplied by the number of New Shares and Over-allotment Shares, if any, allotted
pursuant to the Offer;
10.5 the obligations of the Underwriters to procure subscribers for or, failing which, themselves to
subscribe for Shares (as the case may be) on the terms of the Underwriting Agreement will be
subject to certain conditions. These conditions include the absence of any material breach of
representation or warranty under the Underwriting Agreement and Admission occurring on or
before 8.00 a.m. on 7 May 2010 (or such later time and/or date as the Joint Global Coordinators and
Essar Energy plc may agree). In addition, the Joint Global Coordinators have the right to terminate
the Underwriting Agreement, exercisable in certain circumstances, prior to Admission;
10.6 J.P. Morgan Cazenove, as Stabilising Manager, has been granted the Over-allotment Option by Essar
Energy plc pursuant to which it may subscribe, or procure subscribers for, up to 30,303,029
Over-allotment Shares at the Offer Price for the purposes of covering short positions arising from
over-allocations, if any, in connection with the Offer, and/or any sales of Shares made during the
stabilisation period. Save as required by law or regulation, neither J.P. Morgan Cazenove, as
Stabilising Manager, nor any of its agents, intends to disclose the extent of any over-allotments
and/or stabilising transactions under the Offer. The Over-allotment Option is exercisable only once
in whole or in part, upon notice by the Stabilising Manager during the 30 days after commencement
of conditional dealings in the Shares on the London Stock Exchange;
10.7 Essar Energy plc has agreed to pay the costs, charges, fees and expenses of the Offer (together with
any related value added tax);
10.8 each of Essar Energy plc, Essar Global and the Directors has given certain representations,
warranties and undertakings to the Underwriters. The liability of Essar Energy plc is unlimited as to
amount and time and the liabilities of the Directors are limited as to amount and time. The liability
of Essar Global Limited is limited as to amount (save for a breach of warranty relating to capacity
and authority) and time;
10.9 Essar Energy plc has given an indemnity to the Underwriters;
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10.10 the parties to the Underwriting Agreement have given certain undertakings regarding compliance
with laws and regulations affecting the making of the Offer in relevant jurisdictions; and
10.11 each of Essar Energy plc, the Directors and the Shareholder has also undertaken, amongst other
things, to each of the Underwriters to comply with certain lock-up obligations, as described in Lock-
Up Arrangements in Part 13.
11. Subsidiaries and principal establishments

Subsidiaries
Essar Energy plc is the principal operating and holding company. The principal subsidiaries and subsidiary
undertakings of Essar Energy plc are as follows:
Country of Percentage of
incorporation and shares held as at
Name registered office 31 March 2010 Nature of business
Hazira Steel 2 . . . . . . . . . . . . . . . . . . . . . . Mauritius 100.0% Investment Holding
Algoma Power Cooperatief U.A . . . . . . . . . . Netherlands 100.0% Investment Holding
Algoma Power B.V . . . . . . . . . . . . . . . . . . . Netherlands 100.0% Investment Holding
Essar Power Canada Limited . . . . . . . . . . . . Canada 100.0% Investment Holding
Essar Power Limited . . . . . . . . . . . . . . . . . . India 74% Power Plant
Essar Power Overseas Ltd . . . . . . . . . . . . . . BVI 100.0% Investment Holding
Essar Power Transmission Company Limited . . India 100.0% Power Transmission
Essar Power (Jharkhand) Limited . . . . . . . . . India 100.0% Power Plant
Essar Power Chattisgarh Limited . . . . . . . . . India 100.0% Power Plant
Essar Power Hazira Limited . . . . . . . . . . . . . India 100.0%
Essar Power MP Limited . . . . . . . . . . . . . . . India 100.0% Power Plant
Essar Power Gujarat Limited . . . . . . . . . . . . India 100.0% Power Plant
Essar Wind Power Private Limited . . . . . . . . India 100.0% Wind Turbine
Essar Power (Orissa) Limited . . . . . . . . . . . . India 74.0% Power Plant
Essar Power Tamil Nadu Limited . . . . . . . . . India 100.0% Power Plant
Essar Electric Power Development
Corporation Limited . . . . . . . . . . . . . . . . India 100.0% Power Trading
Bhander Power Limited . . . . . . . . . . . . . . . . India 74.0% Power Plant
Vadinar Power Company Limited . . . . . . . . . India 100.0% Captive Power Plant
Essar Power Salaya Limited . . . . . . . . . . . . . India 100.0% Power plant
Neptune Holding Company . . . . . . . . . . . . . India 79.0% Investment Holding
Essar Power & Minerals S.A. Limited . . . . . . Mauritius 100.0% Investment Holding
Essar Power (East Africa) Limited . . . . . . . . Kenya 100.0% Power Plant
Main street 736 (Proprietary) Limited . . . . . . South Africa 100.0% Investment Holding
Essar Power Holdings Ltd . . . . . . . . . . . . . . Mauritius 100.0% Investment Holding
Vadinar Oil . . . . . . . . . . . . . . . . . . . . . . . . Mauritius 100.0% Investment Holding
Essar Petroleum (East Africa) Limited . . . . . . Kenya 100.0% Marketing and trading of
Petroleum Products
Essar Oil Limited . . . . . . . . . . . . . . . . . . . . India 76.7% Refinery
Essar Oil Vadinar Limited . . . . . . . . . . . . . . India 100.0% Refinery
Essar Energy Overseas Ltd . . . . . . . . . . . . . Mauritius 100.0% Investment Holding
Essar Syngas Limited* . . . . . . . . . . . . . . . . . Mauritius 100.0% Investment Holding
Essar Infrastructure Africa Limited . . . . . . . . Nigeria 100.0% Investment Holding
Essar Chemicals Limited . . . . . . . . . . . . . . . Mauritius 100.0% Investment Holding
Essar Gujarat Petrochemicals Limited . . . . . . India 100.0% Petrochemical
Essar Eastman Chemicals Holdings Limited* . Mauritius 100.0% Investment Holding
Essar Exploration and Production Limited . . . Mauritius 100.0% Exploration and Production
Essar Exploration and Production Limited . . . Nigeria 100.0% Exploration and Production
Essar Exploration and Production India
Limited . . . . . . . . . . . . . . . . . . . . . . . . . India 100.0% Exploration and Production
Essar Energy Holdings Limited . . . . . . . . . . . Mauritius 100.0% Investment Holding
Essar Oil (UK) Limited . . . . . . . . . . . . . . . . United Kingdom 100.0% Investment Holding
Essar Oil Germany GmBH . . . . . . . . . . . . . Germany 100.0% Investment Holding
Essar Oil Stanlow Limited . . . . . . . . . . . . . . United Kingdom 100.0% Investment Holding
Essar Arkema Chemicals Holdings Limited* . . Mauritius 100.0% Investment Holding
Essar Exploration and Production Madagascar
Limited* . . . . . . . . . . . . . . . . . . . . . . . . Madagascar 100.0% Exploration and Production
Essar E UK Services Limited . . . . . . . . . . . . UK 100.0% Service Company
Essar Energy Services (Mauritius) Limited . . . Mauritius 100.0% Service Company
* Under Liquidation
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In addition, the Company has a 50% interest in Mahan Coal, a jointly controlled entity, which is in the
process of setting up coal mines and a 79% interest in Neptune Holding Company, which in turn holds just
under a 50% interest in Neptune Limited. The Group also acquired a 50% interest in KPRL, a jointly
controlled entity, in July 2009.
Principal establishments
The following are the principal establishments of the Company:
Premises
Size of
Name Location the land Freehold/Leasehold
Mauritius head office . . . . . . . . . . . DCDM Building 6,244 sq ft Leasehold*
10 Frere Felix de Valois Street
Port Louis
Mauritius
London registered office . . . . . . . . . 3rd Floor 7,774 sq ft Leasehold
Lansdowne House
57 Berkeley Square
London WIJ 6ER
United Kingdom
Essar Power 515 MW . . . . . . . . . . . Hazira 26.25 ha Leasehold
Bhander Power 500 MW . . . . . . . . Hazira 20 ha Lease from Essar Steel
Vadinar Power 120 MW . . . . . . . . . Vadinar 4.1 ha Lease from Essar Oil
Essar Power Gujarat Ltd 1200 MW . Salaya 330.25 ha Leasehold (allotment)
Vadinar Power Expansion 890 MW . . Vadinar 61 ha Lease from Essar Oil
Essar Power Jharkhand 1200 MW . . Latehar 158 ha Freehold
Essar Power Hazira 270 MW . . . . . . Hazira 15 ha Lease from Essar Steel*
Essar Power Orissa 120 MW . . . . . . Paradeep 40 ha Lease from Essar Steel*
Orissa
Essar Power M.P. Ltd 1200 MW . . . . Singrauli 355.47 ha Freehold***
185.81 ha Leasehold
alloted by Government of
Madhya Pradesh
15.98 ha Freehold forest land**
Essar Power . . . . . . . . . . . . . . . . . 11, Keshavrao Khadye Morg 18,000 sq ft Lease from Essar House
Mahalaxmi
Mumbai 400 034
Maharashtra
Essar Oil . . . . . . . . . . . . . . . . . . . Refinery Project Site 928 ha Freehold
Head Post Office, Post Box No 24
Khambhalia—361305
District-Jamnagar
Gujarat, India
EOVL . . . . . . . . . . . . . . . . . . . . Office: Vadinar, 256 ha Freehold
Taluka Khambalia, Jamnagar Private purchase
Essar Oil . . . . . . . . . . . . . . . . . . . Vadinar 65 ha Freehold. Leased to
VPCL
Essar Oil . . . . . . . . . . . . . . . . . . . Refinery Site, 39 KM, 1003 ha Freehold. Leased to
Jamnagar-Okha Highway VOTL
Essar Oil . . . . . . . . . . . . . . . . . . . 11, Keshavrao Khadye Marg 18,084 sq ft Leased from Essar
Mahalaxmi House
Mumbai—400 034
Maharashtra, India
Essar Oil & Essar Exploration and
Production (India) Ltd. . . . . . . . . Essar Group 26,216 sq ft Leased from EITL
Old Swan Mill Compund
LBS Marg, opp BKC signal, Kuria
(W)
Mumbai—400070
Maharashtra, India
* Lease yet to be executed.

** Possession granted by government; formal acquisition yet to be concluded.
*** The Company intends to acquire a further 142.41 hectares of land for the Essar Power MP-Mahan project site. The Company
is currently in occupation of 333.39 hectares of the land at this site.
12. Presentation of statistical data and other information

12.1 By a resolution of the Directors dated 6 April 2010, Deloitte LLP, whose address is 2 New Street
Square, London EC4A 3BZ were appointed as the first auditors of the Company.
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13. Material contracts

The following contracts (not being contracts entered into in the ordinary course of business) have been
entered into by the Company: (i) within the two years immediately preceding the date of this document
(or, in the case of the Underwriting Agreement, is expected to be entered into prior to Admission) and are
or may be material to the Company; or (ii) contain any provision under which the Company has any
obligation or entitlement which is material to the Company as at the date of this document:
13.1 Underwriting Agreement

Essar Energy plc, the Directors, Essar Global and the Underwriters have entered into the Underwriting
Agreement described at paragraph 10 above.
13.2 Relationship Agreement

Immediately following Admission, Essar Global will own approximately 76.74% of the issued Shares of
Essar Energy plc assuming no exercise of the Over-allotment Option and 75.00 % assuming the
Over-allotment Option is exercised in full.
Essar Global and Essar Energy plc have entered into an agreement dated 30 April 2010, (the
‘‘Relationship Agreement’’) which will, conditional upon Admission, regulate the ongoing relationship
between them. The principal purpose of the Relationship Agreement is to ensure that the Company is
capable of carrying on its business independently of Essar Global and its Associates (as defined in the
Relationship Agreement) and that transactions and relationships with Essar Group are at arm’s length and
on normal commercial terms except certain de minimis transactions as described below. The Relationship
Agreement will continue for so long as the Ordinary Shares are listed on the premium listing segment of
the Official List and traded on the London Stock Exchange and Essar Global, together with its Associates
(as defined in the Relationship Agreement), have an aggregate interest at least of 30% in the issued Shares
of Essar Energy plc.
Under the Relationship Agreement:
(i) Essar Global will exercise its powers as shareholder to ensure that the Company is capable, at all
times, of carrying on its business independently of Essar Global and its Associates (as defined in the
Relationship Agreement);
(ii) the Company and Essar Global agree that transactions and relationships between the Group and
Essar Global and its Associates as defined in the Relationship Agreement will be at arm’s length and
on a normal commercial basis, except in the case where the size of such transaction or arrangement is
such that (a) each of the applicable percentage ratios (as defined in the Listing Rules) for such
transaction or arrangement, when aggregated with other such transactions or arrangements in any
12 month period, is equal to or less than 0.25% or (b) the Listing Rules in force at the relevant time
would not apply, whichever is the smaller;
(iii) Essar shall not and shall procure (so far as it is legally able) that its Associates shall not take any
action (or omit to take any action) to prejudice Essar Energy plc’s status as a listed company or its
suitability for listing under the Listing Rules after Admission has occurred or Essar Energy plc’s
ongoing compliance with the Listing Rules and the Disclosure Rules and Transparency Rules,
provided this does not prevent Essar Global or its Associates (as defined in the Relationship
Agreement) from accepting an offer for Essar Energy plc made under the City Code on Takeovers
and Mergers or making such an offer for Essar Energy plc;
(iv) Essar Global has agreed that except as required by law, as contemplated by the Relationship
Agreement or as unanimously agreed by the independent Non-Executive Directors, it will exercise
the rights attaching to its Ordinary Shares to ensure that, so far at it is legally able, Essar Energy plc
is managed in accordance with the Companies Act, the Listing Rules, the Disclosure Rules and
Transparency Rules and that the principles of good governance set out in the Combined Code are
complied with by Essar Energy plc;
(v) Essar Energy plc shall use its reasonable endeavours to procure and Essar Global shall exercise its
powers as shareholder to procure, so far as it is reasonably able, that at all material times: at least
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half of the Board (including the Chairman) will be independent non-executives directors, the audit
and remuneration committees will consist only of independent Non-Executive Directors and the
nominations and governance committee will consist of a majority of independent Non-Executive
Directors;
(vi) Essar Global is entitled to nominate such number of directors for appointment to the Board to as to
ensure that at least half the Board (including the Chairman) will be independent Non-Executive
Directors;
(vii) Directors of Essar Energy plc nominated by Essar Global shall not be permitted, unless the
Independent Directors agree otherwise, to vote on any resolutions of the Board to approve any
aspect of the Company’s involvement in or enforcement of any arrangements, agreements or
transactions with any member of the Essar Group;
(viii) Essar Global shall procure that the Directors nominated by Essar do not vote on any resolution at
meetings of the Board relating to the entry, variation, amendment, novation, termination, abrogation
or enforcement of any contract, arrangement or transaction between the Company and the Essar
Group;
(ix) Essar Global agrees that in the event that any member of the Essar Group is proposing to enter any
arrangements with another member of the Essar Group or with the Company in connection with
substantially similar products, goods or services, no member of the Essar Group will be offered such
arrangement on more favourable terms or be given preference over the Company;
(x) Essar Global shall notify Essar Energy plc of all dealings between the Essar Group and the Company
that are not of a revenue nature in the ordinary course of business and are of a revenue nature in the
ordinary course of business;
(xi) The parties agree to use commercially reasonable efforts to put in place a process in relation to
dealings between the Essar Group and the Company following the date of Admission to ensure, inter
alia, that dealings where the size of the dealing is such that (a) any percentage ratio (as defined in the
Listing Rules) in relation to the relevant transaction exceeds 0.25% when aggregated with other such
transactions in any 12 month period or (b) any smaller percentage ratio applicable to dealings
between related parties under the Listing Rules in force at the relevant time would apply to such
transaction, are on arm’s length terms; to agree the standard terms and conditions on which ordinary
course arrangements between the Essar Group and the Company following Admission are entered
into and to take all reasonable steps to ensure such terms and conditions apply to such arrangements
in place as at Admission;
(xii) Essar Global shall not cause or permit any amendment to the Articles which would be inconsistent
with the Relationship Agreement or affect the listing of Essar Energy plc;
(xiii) Essar Global and its Associates (as defined in the Relationship Agreement) have agreed not to
misuse and maintain confidential any confidential information received by them and are only entitled
to disclose such information in the circumstances set out in the Relationship Agreement; and
(xiv) Essar Global represents and warrants that neither it, nor, to the best of its knowledge, any of its
Associates, currently own or have any interest in any company or business the principal business of
which is crude oil refining, oil and gas exploration and production, gas or power generation
worldwide (each a ‘‘Competing Business’’) other than: through the Company or the Group; in
respect of the 30 MW thermal captive power plant at Hazira and the 35 MW thermal captive power
plant at Vizag; and in respect of the Myanmar exploration blocks. Essar Global undertakes that for
the duration of the Relationship Agreement and one year following, it shall not, and shall procure (to
the extent it is reasonably able) that its Associates (as defined in the Relationship Agreement) shall
not, acquire or have any interests in or carry on or be involved with any Competing Business except:
where any acquisition, investment, carrying on or involvement in a Competing Business has been
approved by a majority of the independent Non-Executive Directors; the acquisition or ownership of
a Competing Business, the opportunity to acquire or invest in which has been offered or made
available to the Company and which the independent Non-Executive Directors have determined
(such determination being recorded in writing) is not an opportunity which the Company is able or
willing to pursue, where (except where the independent Non-Executive Directors determined that
332

the opportunity was of a nature which it was not appropriate for the Company to pursue on any
terms, such determination being recorded in writing) Essar Global or its Associates (as defined in the
Relationship Agreement) participates in such opportunity on terms which are not more favourable
overall than those which were available to the Company; the acquisition or ownership of not more
than 15% of any Competing Business that is listed or traded on a public stock exchange, where Essar
Global has not appointed or does not have the right to appoint representatives to the board or senior
management of such business, it does not have the right to exercise material influence over such
business and such acquisition or ownership would not result in the Company being obliged to acquire
an increased ownership of such business; a passive investment only is held in a fund or similar entity
where Essar Global has no control or influence over or involvement in the management of the
relevant business held by the fund or similar entity and, so far as Essar Global is aware to the best of
its knowledge having made reasonable enquiry, no more than 15% of the fund or similar entity’s
investments by value are in Competing Businesses; in relation to the exploration, extraction and
processing of minerals (which excludes natural gases and hydrocarbons); captive power plants where
such interest, carrying on of business or involvement is for tax efficiency and/or regulatory purposes
and is approved in advance by the independent Non-Executive Directors in writing; where an interest
in, carrying on of, or involvement in a Competing Business is for a regulatory purpose and is
approved in advance by the independent Non-Executive Directors in writing; any interest in, carrying
on of business or involvement in respect of the Myanmar exploration blocks.
The Directors believe that the terms of the Relationship Agreement as described above will enable the
Company to carry on its business independently from the Essar Group and its Associates (as defined in the
Relationship Agreement).
13.3 Financing agreements

Financing arrangements for the Power Projects
The Project Companies have entered into certain contracts in relation to the project financing for the
Power Plant Projects, details of which are described above in ‘‘Funding the Expansion Projects—Power
Project Financing Arrangements ‘‘ in Part 9 ‘‘Operating and Financial Review’’.
Master Restructuring Agreement

As a result of delays in the construction of the Vadinar refinery due to damage caused to the construction
site as a result of, among other things, a tropical cyclone, Essar Oil was referred to the Corporate Debt
Restructuring in 2003 to restructure certain of its existing indebtedness. Following this Essar Oil and its
then-existing lenders entered into a master restructuring agreement, details of which are described above
in ‘‘Corporate Debt Restructuring’’ in Part 9 ‘‘Operating and Financial Review’’.
Financing arrangements for the Phase I Refinery Project

Essar Oil has entered into certain contracts in relation to the project financing for the Phase I Refinery
Project, details of which are described above in ‘‘Funding the Expansion Projects—Financing
Arrangements for the Phase I Refinery Project’’ in Part 9 ‘‘Operating and Financial Review’’.
Working capital facility

To finance its working capital requirements, including the oil imports of the Vadinar refinery, Essar Oil has
entered into a working capital consortium agreement dated 30 March 2009 and the same is renewed by an
agreement entered on 15 March 2010, details of which are described above in ‘‘Other Available Sources of
Liquidity’’ in Part 9 ‘‘Operating and Financial Review’’.
13.4 Agreements relating to the Pre-IPO Reorganisation and Group Structure

Pledge Agreements
Essar Global Pledge
Essar Global has created a pledge over all the shares it owns in the Company pursuant to a security
agreement dated 15 April 2010 (as amended and restated on 29 April 2010) entered into between Essar
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Global and Standard Chartered Bank (the Joint Security Agent). The pledge has been given to secure the
obligations of Essar Global under certain facility agreements it has with, inter alia, ICICI Bank Limited and
Standard Chartered Bank (the Essar Global Lenders). The Company’s shares and all related rights are
charged by way of first equitable mortgage in favour of the Joint Security Agent (acting as trustee for and
on behalf of the Essar Global Lenders). The pledge requires Essar Global to maintain a 75% shareholding
in the Company at all times, subject to certain limited exceptions. The pledge is enforceable by the Joint
Security Agent in the event that Essar Global defaults on its obligations under its facilities with the Essar
Global Lenders. The Joint Security Agent has undertaken that, in the event of the pledge being enforced
and it becoming the holder of the Company’s shares, it: (i) shall exercise its powers to ensure that the
Company can continue its business independently of the Joint Security Agent and the Essar Global
Lenders; and (ii) shall not and procure that the Essar Global Lenders will not take any action which
precludes or inhibits any member of the Group from carrying on its business independently of the Joint
Security Agent and the Essar Global Lenders. The security agreement is governed by English law and shall
extend to the ultimate balance of the debt due to the Essar Global Lenders, regardless of any intermediate
payment or discharge in whole or part.

Essar Oil Pledge Agreement
The promoters of Essar Oil have created a pledge over 18,11,23,601 equity shares, representing 15.74% of
the issued equity share capital of Essar Oil and 51% of the voting rights of Essar Oil pursuant to the
amended and restated pledge agreement dated March 15, 2010 entered into by and between Essar
Investments, EEH, Teletech Investments, Essar Shipping Ports & Logistics Limited (the Pledgors) and
IDBI Trusteeship Services Limited (the Essar Oil Pledge Agreement). In terms of the Essar Oil Pledge
Agreement: (a) a first priority pledge has been created over the aforesaid shares in favour of IDBI
Trusteeship Services Limited, the security trustee acting for and on behalf of the Refinery Lenders
(i.e., ICICI Bank Limited, IDBI Bank Limited, IFCI Limited, Life Insurance Corporation of India,
General Insurance Corporation of India, New India Assurance Company Limited, United India Insurance
Company Limited, National Insurance Company Limited, Oriental Insurance Company Limited,
Allahabad Bank, Central Bank of India, Punjab National Bank, Syndicate Bank, Housing and Urban
Development Corporation Limited, Oriental Bank of Commerce, State Bank of India, Indian Bank, Bank
of Baroda, Indian Overseas Bank, Oriental Bank of Commerce and the ICICI Bank Limited, Bahrain
Branch); and (b) a second priority pledge has been created in favour of IDBI Trusteeship Services Limited,
the security trustee acting for and on behalf of the working capital lenders. The aforesaid pledge has been
created in order to secure the due and timely payment, performance and discharge of the obligations of
Essar Oil to the Refinery Lenders and the working capital lenders under the facility agreements entered
into with them.
The Pledgors are required to pledge further equity shares acquired by them in Essar Oil to ensure that at
all times, equity shares representing at least 51% of the voting rights of Essar Oil is pledged in favour of
IDBI Trusteeship Services Limited for the benefit of the Refinery Lenders and the working capital lenders.
On the occurrence of an event of default under the relevant facility agreements, the security trustee is, inter
alia, entitled to exercise the following rights in respect of the pledged shares:
(a) to receive all amounts payable in respect of the pledged shares including any dividends or
distributions payable to the holders of the pledged shares;
(b) to transfer or register in the name of the Security Trustee or any person nominated by the Security
Trustee, all or any of the pledged shares, at the cost of the Pledgors;
(c) to exercise voting rights in respect of the pledged shares for the benefit of the Refinery Lenders and
the working capital lenders; and
(d) to sell or dispose of the pledged shares and apply the net proceeds in the manner as set out in the
Essar Oil Pledge Agreement.
The pledge on the aforesaid equity shares is required to continue up to the later of: (a) the date on which
Essar Oil has irrevocably and unconditionally paid and discharged, in full, all its obligations to the Refinery
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Lenders and the working capital lenders; and (b) the date on which the working capital lenders waive the
requirement of the collateral security by way of a pledge of the pledged shares.
Essar Oil and ICICI Bank Pledge Agreement

EEH and Vadinar Oil have created a pledge over 1,733,260 of the Global Depository Shares of Essar Oil,
representing 22.07% of the issued equity share capital of Essar Oil, pursuant to the amended and restated
pledge dated 8 January 2010 entered into with ICICI Bank Limited. The pledge has been given to secure
the obligations of Essar Oil under certain facility agreements it has with ICICI Bank Limited. The relevant
shares are credited to and kept in collateral accounts.
The pledge is enforceable by ICICI Bank Limited in the event that Essar Oil defaults on their obligations
under their facility agreements with ICICI Bank Limited. On the occurrence of an event of default, ICICI
Bank Limited is, inter alia, entitled to exercise the following rights in respect of the pledged shares:
(a) to request authorisation from a competent court to enforce the pledge;
(b) to transfer or register in its name the pledged shares and/or any amounts payable in respect of the
pledged shares including any dividends or distributions payable to the holders of the pledged shares;
and
(c) to sell or dispose of the pledged shares and apply the net proceeds in the discharge of Essar Oil’s
liabilities under its facility agreements.
The pledge on the aforesaid equity shares is required to continue until ICICI Bank Limited is satisfied that
all the liabilities of Essar Oil under its facility agreement have been unconditionally paid and discharged.
The amended and restated pledge is governed by Belgian law.
Power Business
Bhander Power
Essar Power has created a pledge over 189,281,145 equity shares, representing 51% of the issued equity
share capital of Bhander Power pursuant to the Deed of Pledge dated February 10, 2009 executed by and
between Essar Power, Bhander Power and IL&FS Trust Company Limited (the Bhander Pledge Agreement).
In terms of the Bhander Pledge Agreement, the pledge has been created in favour of IL&FS Trust
Company Limited, the security trustee acting for and on behalf of the Phase I&II lenders (i.e., Union Bank
of India Limited and Infrastructure Limited Finance Company Limited) and the Phase III lenders
(i.e., Syndicate Bank, Indian Bank, Canara Bank, IL&FS), who have together extended / agreed to extend
facilities of Rs. 7.80 billion (US$167.1 million) to Bhander Power in terms of the loan agreements dated
1 October 2004, 28 February 2005, 27 May 2005 and the Common Loan Agreement dated 6 February 2007
(together, the Bhander Facility Agreements).
In terms of the Bhander Pledge Agreement, the security trustee is authorized to collect and receive any
income, interest or dividend and any benefits/rights/monies relating to the pledged shares and appropriate
the same towards the dues owed to the lenders. Further, inter alia, upon the occurrence of: (a) an event of
default under the Bhander Facility Agreements; (b) any default by Bhander Power in making repayments
to the lenders; or (c) any breach of the Bhander Pledge Agreement, the security trustee has the right to sell
or dispose of the pledged shares and apply the net proceeds in the manner as set out in the Bhander
Pledge Agreement.
Essar Power Gujarat

share capital of Essar Power Gujarat pursuant to the Amended and Restated Pledge Agreement dated
19 May 2009 executed by and between Essar Power, Essar Power Gujarat and IDBI Trusteeship Services
Limited (the EPG Pledge Agreement). In terms of the EPG Pledge Agreement, the pledge has been created
in favour of IDBI Trusteeship Services Limited, the security trustee acting for and on behalf of the State
Bank of India and the Rupee Lenders (i.e., Allahabad Bank, India Infrastructure Finance Company
Limited, Punjab Bank, State Bank of India, State Bank of Indore, State Bank of Patiala, State Bank of
Travancore, Union Bank of India, Indian Overseas Bank, United Bank of India and ICICI Bank Limited
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(only 30% shares pledged in favour of ICICI Bank Limited), which have together extended / agreed to
extend fund and non-fund facilities of Rs. 36.15 billion to Essar Power Gujarat in terms of the Interim
Letter of Credit Facility Agreement dated 24 September 2008, the Rupee Loan Facility Agreement dated
29 September 2008, the ICICI Rupee Loan Facility Agreement dated 19 May 2009 and the Supplementary
Agreement to the ICICI Rupee Loan Facility Agreement dated 19 May 2009 (together, the EPG Facility
Agreements).
In terms of the EPG Pledge Agreement, until the occurrence of an event of default under any of the EPG
Facility Agreements, Essar Power is entitled to exercise voting rights in respect of the pledged shares and
receive dividends, interest and other payments in respect of the pledged shares (with the exception of
dividends paid otherwise than in cash, payments/instruments received in exchange of the pledged shares,
distributions in respect of any reduction of capital, liquidation or buyback, which are required to be
delivered to the security trustee). On the occurrence of an event of default, the security trustee is, inter alia,
entitled to exercise the following rights in respect of the pledged shares:
distributions payable to Essar Power;
(b) to transfer or register in the name of the security trustee or any person nominated by the security
trustee, all or any of the pledged shares, at the cost of Essar Power;
(c) to exercise voting rights in respect of the pledged shares; and
EPG Pledge Agreement.
The pledge on the pledged shares is required to continue up to the date on which Essar Power Gujarat has
irrevocably and unconditionally paid and discharged, in full, all its obligations to the lenders in terms of the
EPG Facility Agreements.
Essar Power has also entered into a non-disposal undertaking dated 28 May 2009 in respect of 304,801,342
equity shares representing 49% of its equity share capital of Essar Power Gujarat, in favour of IDBI
Trusteeship Services Limited, the security trustee acting for and on behalf of ICICI Bank Limited, which
has extended / agreed to extend non-fund based financial assistance of Rs. 10.25 billion (US$219.6 million)
to Essar Power Gujarat.
Essar Power MP
share capital of Essar Power MP pursuant to the Pledge Agreement dated 21 January 2009 executed by
and between Essar Power, Essar Power MP and IDBI Trusteeship Services Limited (the EPMP Pledge
Agreement). In terms of the EPMP Pledge Agreement, the pledge has been created in favour of IDBI
Trusteeship Services Limited, the security trustee acting for and on behalf of the on behalf of the Rupee
Lenders (i.e., ICICI Bank Limited, Power Finance Corporation Limited, Rural Electrification Corporation
Limited and Punjab National Bank), who have extended / agreed to extend financial assistance of
Rs. 36.45 billion (US$780.8 million) to Essar Power MP in terms of the Rupee Loan Facility Agreement
dated 21 January 2009 (the EPMP Facility Agreement).
In terms of the EPMP Pledge Agreement, until the occurrence of an event of default under the EPMP
Facility Agreement, Essar Power is entitled to exercise voting rights in respect of the pledged shares and
receive dividends, interest and other payments paid in respect of the pledged shares (with the exception of
(e) to receive all amounts payable in respect of the pledged shares including any dividends or
distributions payable to Essar Power;
(f) to transfer or register in the name of the security trustee or any person nominated by the security
trustee, all or any of the pledged shares, at the cost of Essar Power;
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(g) to exercise voting rights in respect of the pledged shares; and

(h) to sell or dispose of the pledged shares and apply the net proceeds in the manner as set out in the
EPMP Pledge Agreement.
The pledge on the pledged shares is required to continue up to the date on which Essar Power MP has
irrevocably and unconditionally paid and discharged, in full, all its obligations to the Rupee Lenders in
terms of the EPMP Facility Agreement.
Essar Power has also entered into a non-disposal undertaking dated 22 April 2008, as amended and
restated on 23 March 2010, in respect of 367,267,495 equity shares representing 49% of its equity share
capital of Essar Power MP, in favour of IDBI Trusteeship Services Limited, the security trustee acting for
and on behalf of ICICI Bank Limited, which has extended / agreed to extend non-fund based financial
assistance of Rs. 10.25 billion (US$219.6 million) to Essar Power MP and a letter of credit facility of
Rs. 15 billion (US$321.3 million) and a bank guarantee facility of Rs. 600 million (US$12.9 million) to
Essar Power (Jharkhand).
VPCL
share capital of VPCL pursuant to the Deed of Pledge Agreement dated 17 March 2010 executed by and
between Essar Power, VPCL and Power Finance Corporation (the VPCL Pledge Agreement-1). In terms of
the VPCL Pledge Agreement-1, the pledge has been created in favour of Power Finance Corporation, the
security trustee acting for and on behalf of: (a) itself and Infrastructure Development Finance Company
Limited, which have together extended / agreed to extend facilities of Rs. 3.75 billion to VPCL for the
existing 120 MW power plant in terms of the Common Loan Agreement dated 29 September 2005; and
(b) the other lenders (Power Finance Corporation, Axis Bank, Syndicate Bank, State Bank of Patiala,
United Bank of India and Corporation Bank) who have together extended / agreed to extend facilities of
Rs. 23.05 billion (US$493.8 million) to VPCL for the expansion project in terms of the Common Loan
Agreement-I and the Common Loan Agreement-II dated 17 March 2010 (together, the VPCL Facility
Agreements).
In terms of the VPCL Pledge Agreement-1, the security trustee is authorized to exercise voting rights on
the pledged shares and collect and receive any income, interest or dividend and any benefits/rights/monies
relating to the pledged shares and appropriate the same towards the dues owed to the lenders by VPCL.
Further, on the occurrence of an event of default, the security trustee is, inter alia, entitled to exercise the
following rights in respect of the pledged shares:
(a) to register the transfer of the pledged shares in favour of the security trustee; and
(b) to sell or dispose of the pledged shares and apply the net proceeds in the manner as set out in the
VPCL Pledge Agreement;
The pledge on the pledged shares is required to continue up to the date on which VPCL has irrevocably
and unconditionally paid and discharged, in full, all its obligations to the lenders in terms of the VPCL
Facility Agreements.
Essar Oil has created a pledge over 52,530,000 equity shares, representing 13.27% of the issued equity
share capital of VPCL pursuant to the Deed of Pledge Agreement dated 20 October 2005 executed by and
between Essar Oil, VPCL and Power Finance Corporation (the VPCL Pledge Agreement-2). In terms of the
VPCL Pledge Agreement-2, the pledge has been created in favour of Power Finance Corporation, the
security trustee acting for and on behalf of itself and Infrastructure Development Finance Company
Limited, which have together extended/agreed to extend facilities of Rs. 3.75 billion to VPCL for the
existing 120 MW power plant in terms of the Common Loan Agreement dated 29 September 2005 (the
Common Loan Agreement).
In terms of the VPCL Pledge Agreement-2, until the occurrence of an event of default under the Common
Loan Agreement, Essar Oil is entitled to exercise voting rights in respect of the pledged shares and receive
dividends, interest and other payments paid in respect of the pledged shares (with the exception of
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distributions payable to Essar Oil;
(b) to transfer or register in the name of the security trustee or any person nominated by the security
trustee, all or any of the pledged shares, at the cost of Essar Oil;
(c) to exercise voting rights in respect of the pledged shares; and
VPCL Pledge Agreement-2.
Essar Power (Jharkhand)

Essar Power has created a pledge over 30% of the issued share capital of Essar Power (Jharkhand) in
favour of IDBI Trustee Services, the security agent for ICICI Bank Limited. This pledge has been granted
in respect of a Rs. 15 billion (US$321.3 million) letter of credit facility and a Rs. 600 million
(US$12.9 million) bank guarantee facility. In respect of these facilities Essar Power has also entered into
non-disposal undertakings in respect of a percentage of its equity interest in Essar Power (Jharkhand).
Gift Deed—EPH
Essar Global executed a gift deed, governed by Mauritius law, dated 27 April 2010 with the Company,
pursuant to which 100% of the shares of EPH were gifted voluntarily and for no consideration to the
Company by Essar Global. The shares of EPH were gifted to the Company absolutely and irrevocably such
that the Company has the right to use and deal with them in its sole discretion. The deed states that,
subject to applicable law, no liability of Essar Global is transferred to the Company along with the
aforementioned gifts.
Share Purchase Agreement—Essar Power

EPH entered into a share purchase agreement, governed by Indian law, dated 6 April 2010 with Essar
Steel, pursuant to which Essar Steel has agreed to transfer its shareholding of 217,000,000 equity shares,
representing 26% of the issued equity share capital of Essar Power to EPH for a consideration of
Rs. 4.4 billion (US$94.3 million). Apart from customary conditions precedent, such as the receipt of all
regulatory approvals in relation to the transfer, the transfer is subject to the commencement of commercial
operations in Unit I of the Essar Power Gujarat—Salaya project, the Essar Power MP-Mahan project and
Phase 1 and Phase II of the existing power plant of VPCL. This condition precedent may be waived by
EPH at any time The sale is also subject to EPH providing Essar Steel an indemnity towards
reimbursement of any cross subsidy surcharge payable by Essar Steel under applicable law as a result of the
transfer of its shareholding in Essar Power. However, this requirement may be waived by Essar Steel at its
discretion. The transfer of Essar Steel’s shareholding in Essar Power to EPH is subject to applicable law
and may not be given effect to in the event the conditions precedent are not satisfied or waived prior to
30 September 2011.
Pending completion of such sale, Essar Steel has agreed that the exercise of its voting rights in respect of its
shares in Essar Power shall be subject to the prior approval of EPH in relation to, inter alia, the following
matters: (a) capital expenditures or acquisitions of assets, unless already in the annual business plan; (b) all
related party transactions including the terms and conditions for such transactions; and (c) declaration or
payment of any dividend.
Call Option Agreement—Essar Oil

Under a call option agreement dated 6 April 2010, EEH has the right to acquire the shares held by Essar
Investments in Essar Oil in the period between 1 May 2010 and 31 December 2010 at the higher of:
(a) Rs. 142 with a carry of 10% compounded on a 30/360 basis per annum; and (b) the minimum price
required to be paid under applicable law, which is currently the closing price of the shares of Essar Oil on
the relevant stock exchange on the date preceding the date of the transfer of the shares. The shares held by
Essar Investments are presently pledged in favour of various Indian banks and the actual transfer of the
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shares pursuant to the exercise of the call option by EEH will be subject to the release of the said pledges
by such banks. The call option agreement is governed by English Law. However, in light of certain
inconsistencies under Indian securities laws and in the absence of specific judicial precedent on this matter,
the enforceability of the call option under Indian law is not free from doubt.
Share Purchase Agreement—Essar Oil

EEH and HS2 entered into a share purchase agreement, governed by Indian law, dated 14 April 2010 with
Essar Steel Holdings Limited, Essar Investments, Infotech Capital and Essar Shipping, pursuant to which
Essar Investments and Essar Shipping transferred the beneficial ownership in equity shares representing
8.64% of the issue equity share capital of Essar Oil to EEH, subject to the existing encumbrance on the
shares in terms of the Essar Oil Pledge Agreement. The shares will be registered in the name of EEH upon
the receipt of the approval of the Reserve Bank of India permitting EEH to create a pledge over these
shares in favour of the security trustee for the benefit of certain Indian banks in accordance with the terms
of the Essar Oil Pledge Agreement and the simultaneous creation of such pledge.
Share Purchase Agreement—Essar Steel

Hazira Steel 2 entered into a share purchase agreement, governed by Indian law, dated 14 April 2010 with
Essar Steel Holdings Limited and Essar Investments, pursuant to which Hazira Steel 2 acquired 36,810,816
equity shares, representing 3.23% of the issued equity share capital of Essar Steel (‘‘ESL Shares’’) for a
consideration of US$32,749,640 and subsequently, transferred the ESL Shares to ESHL for the same
amount.
Agreement—Essar Power MP
Essar Power has entered into an agreement, governed by Indian law, dated 17 October 2008 with Essar
Steel and Essar Steel Hazira, pursuant to which Essar Steel and Essar Steel Hazira are expected to acquire
26% of the issued equity share capital of Essar Power MP with Essar Power holding the remaining 74%
equity interest, in the event that Essar Power MP becomes a captive power provider to Essar Steel and
Essar Steel Hazira. Under the agreement, Essar Power has also agreed to contribute capital to Essar Power
MP in the form of participating preference shares or other similar instruments to meet the balance
requirements of the 1200 MW coal based power project proposed to be implemented in District Singrauli,
Madhya Pradesh.
Upon acquiring 26% of the issued equity share capital of Essar Power MP, Essar Steel and Essar Steel
Hazira together have the option of nominating one joint director to the board of Essar Power MP and
Essar Power will have the option of nominating three directors and designating one of them as the
Managing Director. The presence of one director nominated by Essar Steel and Essar Steel Hazira and
one director nominated by Essar Power is required to form a quorum for all meetings of the board. The
transfer of shares to third parties (other than to affiliates of any of the parties) is subject to a right of first
refusal granted to the other shareholders. The continuing shareholders are each entitled to purchase such
number of the shares proposed to be transferred on a pro-rata basis to their current holdings.
Joint Venture Agreement—Mahan Coal Limited

Hindalco Industries Limited (HIL) and Essar Power MP Limited (EPMPL) entered into a joint venture
agreement dated 1 February 2006, as amended by the supplemental agreement dated 15 June 2006 (the
Mahan Coal JV Agreement), which set out the rights and obligations of HIL and EPMPL in respect of Mahan
Coal Limited, a company held in equal proportion between HIL and EPMPL. Mahan Coal Limited was
allocated the Mahan Coal block in the NCL area (the Mine) by the Government of India, by its letter dated
12 April 2006. Further to a letter dated 23 January 2008 from the Government of India advising Essar
Power to become a partner in Mahan Coal Limited in place of EPMPL, EPMPL transferred its
shareholding of 50% in Mahan Coal Limited to Essar Power, pursuant to which HIL, EPMPL and Essar
Power executed a deed of adherence dated 18 February 2008, whereby Essar Power agreed to be bound by
the terms of the Mahan Coal JV Agreement.
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The Mahan Coal JV Agreement shall continue for a period equal to the life of the Mine, unless terminated
earlier by the parties. Under the Mahan Coal JV Agreement:
(i) HIL and Essar Power are required to maintain an equity participation of 50% each in Mahan Coal
Limited and in the event that one of the parties is unable to subscribe to further shares in Mahan
Coal Limited to maintain the 50:50 ratio (the Non-Funding Party), it may request the other party (the
Funding Party) to subscribe to the deficit shares on its behalf with an undertaking to acquire the said
shares from the Funding Party within a period of one year for a prescribed amount;
(ii) HIL and Essar Power are not permitted to transfer or otherwise dispose of any of their shares in
Mahan Coal Limited without: (a) the prior consent of the other party for a period of four years from
the date the shares were first allotted; and (b) the prior consent of the Government of India. The
restrictions are however not applicable to transfers to associates (which means with respect to each
of HIL and Essar Power, their holding companies and their subsidiaries or companies within the
Aditya Birla Group or the Essar Group, as the case may be);
(iii) after the expiry of the four-year period referred to above: (a) in the event either party seeks to
transfer its power plant, along with its shareholding in Mahan Coal Limited and its coal entitlement
from the Mine (the Divesting Entity) to a third party, it is required to give the other party an
opportunity to match the offer made by the third party, although the Divesting Entity is under no
obligation to accept the matching offer made by the other party; (b) the transfer by either party of its
shareholding in Mahan Coal Limited and its coal entitlement from the Mine to a third party is
subject to a right of first refusal of the other party; and (c) the transfer by either party of its
shareholding in Mahan Coal Limited along with all other rights, excluding the off-take entitlement, is
subject to the prior consent of the other party;
(iv) the board of directors is required to consist of an equal number of HIL and Essar Power nominees
and the chairman is to be appointed by each of HIL and Essar Power for 2 years on a rotational
basis;
(v) certain rights accrue to each party in the event their shareholding ceases to be in the 50:50 ratio. For
instance, inter alia,: (a) the party with a higher shareholding has the right to appoint a greater
number of directors to the board and can appoint the chairman; and (b) where the shareholding of
one party is more than 50% but less than 75%, the other party has a right of veto on all matters so
long as its shareholding does not fall below 25%;
(vi) the Mahan Coal JV Agreement and the Off-Take Agreement (as defined in the Mahan Coal JV
Agreement) set out the coal off-take entitlement of each of the parties, including the price payable to
Mahan Coal Limited and the ratio (3:2) in which the entire quantity of coal available in the Mine will
be made available to Essar Power and HIL, respectively; and
(vii) certain matters are reserved matters requiring the unanimous consent of the parties in board and
shareholder meetings. These relate to, inter alia, to: (a) closure of the business of Mahan Coal
Limited; (b) modification/termination of the Off-Take Agreement; and (c) creation of any charges
over the assets of Mahan Coal Limited.
Gift Deed—Essar Exploration & Production South East Asia Limited

EEPL executed a gift deed, governed by Mauritian law, dated March 29, 2010 with Caladium Limited,
pursuant to which 67,964,854 equity shares representing 100% of the issued equity share capital of Essar
Exploration & Production South East Asia Limited were gifted to Caladium Limited voluntarily and for no
consideration. The shares of Essar Exploration & Production South East Asia Limited were gifted to
Caladium Limited absolutely and irrevocably, free such that Caladium Limited has the right to use and
deal with them in its sole discretion. The deed states that, no liability of EEPL is transferred to Caladium
Limited along with the gift.
Gift Deed—Vadinar Oil

EEH executed a gift deed, governed by Mauritian law, dated 27 April 2010 with the Company, pursuant to
which equity shares representing 100% of the issued equity share capital of Vadinar Oil were gifted to the
Company voluntarily and for no consideration. The shares of Vadinar Oil were gifted to the Company
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absolutely and irrevocably such that the Company has the right to use and deal with them in its sole
discretion. The deed states that, subject to applicable law, no liability of EEH is transferred to the
Company along with the gift.
Gift Deed—EEH
Essar Global executed a gift deed, governed by Mauritian law, dated 27 April 2010 with Vadinar Oil,
pursuant to which equity shares representing 100% of the issued equity share capital of EEH were gifted to
Vadinar Oil voluntarily and for no consideration. The shares of EEH were gifted to Vadinar Oil absolutely
and irrevocably such that Vadinar Oil has the right to use and deal with them in its sole discretion. The
deed states that, subject to applicable law, no liability of Essar Global is transferred to Vadinar Oil along
with the gift.
Shareholders’ Agreement—KPRL
The Government of the Republic of Kenya, Essar Energy Overseas and EEH entered into a shareholders’
agreement dated 31 July 2009 (the ‘‘Kenya Shareholders’ Agreement’’) which sets out the rights and
obligations of the Shareholders in respect of KPRL a joint venture company owned 50:50 by the
Government of Kenya and Essar Energy Overseas. EEH is a guarantor of Essar Energy Overseas under
the Kenya Shareholders’ Agreement.
KPRL owns and operates the Mombasa refinery in Kenya. One of the key requirements of the Kenya
Shareholders’ Agreement is that modernisation works are undertaken upon the Mombasa refinery subject
always to financial viability and by employing a third party to carry out engineering, procurement and
construction work. Under the Kenya Shareholders’ Agreement, the shareholders are required to seek and
obtain external finance to fund the modernisation. In addition, the shareholders are both committed to
each providing at least US$2 million of funding by way of a rights issue to the shareholders of further
shares in KPRL as soon as KPRL requires and in any event no later than 31 March 2010.
The Kenya Shareholders’ Agreement shall continue indefinitely unless and until a specified termination
event occurs. These termination events consist of: (a) a written agreement between the parties; (b) the
winding up of KPRL; (c) an effective listing of the shares of KPRL; or (d) either shareholder being in
material breach of its obligations under the Kenya Shareholders’ Agreement.
Under the Kenya Shareholders’ Agreement:
(i) the Government of Kenya and Essar Energy Overseas are not permitted to transfer or otherwise
dispose of any of their shares in KPRL prior to the completion of the modernisation of the Mombasa
plant unless: (a) to create collateral security to fund the modernisation; (b) the transfer of shares is
to an affiliate which must sign a deed of adherence to the terms of the Kenya Shareholders’
Agreement; or (c) the Government of Kenya transfers any of its shares to a governmental entity or
department, which must sign a deed of adherence to the terms of the Kenya Shareholders’
Agreement. After the completion of the modernisation of the Mombasa refinery, either of the
Government of Kenya and Essar Energy Overseas may transfer or otherwise dispose of any of their
shares in KPRL, but the other party has pre-emption and tag along rights;
(ii) each party has the right to appoint one director for every 12.5% of shares that it holds from time to
time. However, if either party’s shareholding falls to below 50% but is not less than 37.5%, then
although the minority party’s directors shall not be required to stand down from the board, one of
the majority party’s directors will have two votes rather than one on board matters. As long as it
holds at least 12.5% of the shares in KPRL, the Government of Kenya is to select the chairman;
(iii) certain matters are reserved matters requiring a two-thirds majority vote of the directors in board
meetings. These relate to, inter alia: (a) proceeding with modernisation plans for the Mombasa
refinery; (b) approving the engineering, procurement and construction contract for the
modernisation of the Mombasa refinery; or (c) adopting or amending the shared business plan which
relates to, inter alia, the capital expenditure and operating budget of KPRL; and
(iv) certain matters are reserved matters requiring a 60% majority vote of the shareholders in general
meeting. These relate to, inter alia: (a) altering the constitutional documents of KPRL; (b) declaring
or paying any dividends or other distributions from KPRL to its members; and (c) changes in the
341

authorised or issued share capital of KPRL (apart from the initial rights issue which is required to be
undertaken by 31 March 2010.
Essar Global Indemnity

Essar Energy plc, EEH, Vadinar Oil, EPH and Hazira Steel 2 have entered into a deed of indemnity dated
29 April 2010 with Essar Global, pursuant to which Essar Global has agreed to fully indemnify each of
Essar Energy plc, EEH, Vadinar Oil, EPH and Hazira Steel 2 for any costs, fees, expenses or penalties
incurred by any or all of them in connection with the consolidation of the interests in the power business
and the oil and gas business under Essar Energy plc including in connection with the unwinding of the
cross holdings of various Essar Affiliated Companies in these businesses. The indemnity granted by EGL
expires on 31 March 2012 and is governed by English law.
13.5 Agreements related to the Power Plant Projects

In connection with the implementation of the Power Plant Projects, the Company has entered into the
contracts described below.
I. Offshore supply contracts

The discussion below describes the Company’s offshore supply contracts with Global Supplies. Certain
commercial terms are described in the table titled ‘‘Specific terms of offshore supply contracts’’ below:
1. Scope: The scope of supplies and services under these contracts is primarily procurement of
non-Indian equipment requirements, including essential spares and commissioning spares and all
services required for designing, engineering, procurement, manufacturing and training of the
Company’s personnel and delivery of such plants and equipments.
2. Contract price: The contract price to be paid by the Company to Global Supplies is denominated in
US$ on a fob/free carriage to air basis in accordance with international commercial terms.
3. Conditions precedent: The contracts have conditions precedent for them to be effective; which include
performance guarantee to be provided by Global Supplies and letters of credit and retention
guarantee to be provided by the Company. The time limit within which these conditions precedent
have to be fulfilled vary between Phase I Power Projects and Phase II Power Projects and, generally,
the time limit for Phase I Power Projects runs from the execution of the contract whereas the time
limit for Phase II Power Projects runs from the completion of debt financing for the project.
4. Limitation of Liability: the Company is entitled to claim liquidated damages for delays in supply
subject to a maximum of 10% of the contract price and for shortfalls in agreed performance
parameters subject to a maximum of 10% of the contract price. However, the aggregate liability on
account of liquidated damages for delays in supply and shortfalls in agreed performance parameters
is subject to a maximum of 15% of the contract price. The aggregate liability of the supplier arising
out of or in connection with supply is subject to a maximum of 100% of the contract price. However,
this 100% cap on liability does not apply to loss, damage or liability arising in certain circumstances
includes wilful misconduct, fraud and acts resulting in environmental damage or liability.
5. Passing of title and risk: The title and risk of the plant and equipment will pass to the Company upon
handing-over of possession of such items to the air carrier (in case of air transport) and/or to the
ship’s rail (in case of carriage by sea and upon endorsement of documents).
6. Defect liability period: The defect liability period runs for 12 months from the date of completion of
the power project or 24 months from the date of last supply of plants and equipments, whichever
occurs later, or within 14 days thereafter if inspection is made by the Company before such expiry.
7. Termination: Either party can terminate the contract if the other party is unable to fulfil its
obligations under the contract or becomes subject to insolvency proceedings (voluntary or
involuntary). In addition, the Company can terminate the contract at any time with a prior written
notice to Global Supplies or if there is a change of control in relation to Global Supplies which
adversely affects the performance of the contract.
342

Specific terms of offshore supply contracts:
Essar Energy plc Date and Contract price Time for commencement and
S. No. Project Entity amendments (US$ in million) completion of supplies and services
1. Essar Power MP— Essar Power MP 24 August 2007, as 255.0 for each unit The supplies and services under the
Mahan (two units amended on contract to commence within 10 months
of 600 MW each) 4 February 2008 and 13 months from 24 August 2007 for
and 8 February unit one and two respectively, or as
2008 agreed mutually and to be completed
within 24 months therefrom.
2. Vadinar Power— VPCL 9 April 2009 as 107.0 The supplies and services under the
Expansion Phase II amended on contract to commence within six months
(325MW) 30 December 2009 from 9 April 2009 or as agreed mutually
and the supply is to be completed
3. Essar Power Essar Power 24 August 2007, as 265.0 for each unit The supplies and services under the
Gujarat—Salaya Gujarat amended on contract to commence within six months
(two units of 8 February 2008, and the nine months from 24 August
600MW each) 24 July 2008, 2007 for unit one and two respectively,
14 August 2008 and or as agreed mutually and to be
10 December 2008 completed within 24 months therefrom.
4. Essar Power Essar Power 18 August 2008 278.0 for each unit The supplies and services under the
Jharkhand—Tori Jharkhand contract to commence within 10 months
(two units of and the 13 months from 18 August 2008
600MW each) for unit one and two respectively, or as
agreed mutually and to be completed
5. Essar Power Essar Power 26 February 2010 255.0 The supplies and services under the
Jharkhand—Tori Jharkhand contract to commence within 10 months
Expansion from 26 February 2010 or as agreed
(600MW) mutually and to be completed within
24 months therefrom.
6. Essar Power MP— Essar Power MP 26 February 2010 255.0 The supplies and services under the
Mahan Expansion contract to commence within 10 months
(600MW) from 26 February 2010 or as agreed
mutually and to be completed within
7. Salaya II (two units Essar Power 25 February 2010, 335.63 for each unit The supplies and services under the
of 660MW each) Gujarat as amended on contract to commence within six months
7 April 2010 and the nine months from 25 February
2010 for unit one and two respectively,
or as agreed mutually and to be
completed within 24 months therefrom.
8. Salaya III (4 units Essar Power Salaya 25 February 2010 99.86 for each unit The supplies and services under the
of 150MW each) contract to commence within six
months, nine months, 12 months and
15 months from 25 February 2010
respectively for the four units or as
agreed mutually and to be completed
9. Thermal Power Essar Power 3 April 2010 US$603 million for The supplies and services under the
Project with phase I Overseas Limited phase I and contract to commence within 10 and
(3x350 MW) and US$510 million for 13 months from 3 April 2010 for
phase II phase II phase I and II respectively, or as agreed
(2x600 MW) mutually and to be completed within
24 months from date of commencement
of supplies for phase I (in relation to
phase I) and 34 months from date of
commencement of supplies for phase II
(in relation to phase II).
II. Offshore transport contracts

The discussion below describes the Company’s offshore transport contracts with Essar Logistics. Certain
commercial terms are described in the table titled ‘‘Specific terms of offshore transport contracts’’ below:
1. Scope: The scope of these contracts primarily covers transportation of plants and equipments of
non-Indian origin from the port of shipment to the port of destination as nominated by the Company
and the provision of ancillary services.
343

2. Conditions precedent: The contracts have conditions precedent for them to be effective, which include
a performance guarantee to be provided by Essar Logistics and letters of credit to be provided by the
Company.
3. Liquidated damages: The Company is entitled to claim liquidated damages of 0.5% of the contract
price for delay in supply and services, for every week of delay, subject to a maximum ranging from
10% to 15% of the contract price.
4. Passing of title and risk: Title to and ownership of the plant and equipment will at all times remain
with the Company and Essar Logistics will be deemed to have delivered the plants and equipments
upon handing over possession of such items at the port of destination.
obligations under the contract or becomes subject to an insolvency proceeding (voluntary or
involuntary). In addition, the Company can terminate the contract any time with a prior written
notice to Essar Logistics or if there is a change of control in relation to Essar Logistics which
Specific terms of offshore transport contracts:

Essar Energy plc Date and Contract price Time for commencement and completion
S. No. Project Entity amendments (US$ in million) of supplies and services
1. Essar Power MP— Essar Power MP 24 August 2007, as 10.0 for each The services under the contract to
Mahan (two units of amended on unit commence within 10 months and
600 MW each) 1 February 2008 and 13 months for unit one and two
4 February 2008. respectively, from 24 August 2007 and to
Novation agreement be completed within 26 months
dated 16 July 2008. therefrom.
2. Vadinar Power— VPCL 9 April 2009, as 4.8 The services under the contract to
Expansion Phase II amended on commence within six months from 9 April
(325MW) 30 December 2009 2009 or as mutually agreed and to be
3. Essar Power Essar Power 24 August 2007, as 10 for each unit The services under the contract to
Gujarat—Salaya Gujarat amended on commence within six months and nine
(two units of 1 February 2008 and months from 24 August 2007 for unit one
600MW each) 14 April 2009. and two respectively, or as mutually
Novation agreement agreed and to be completed within
dated 16 July 2008 26 months therefrom.
4. Essar Power Essar Power 18 August 2008. 10.6 for each The services under the contract to
Jharkhand—Tori Jharkhand Novation agreement unit commence within 10 months and
(two units of dated 3 March 2010 13 months for unit one and two
600MW each) respectively, from 18 August 2008 or as
mutually agreed and to be completed
5. Essar Power Essar Power 26 February 2010 10.6 The services under the contract to
Jharkhand—Tori Jharkhand commence within 10 months from
Expansion (600MW) 26 February 2010 or as mutually agreed
and to be completed within 26 months
therefrom.
6. Essar Power MP— Essar Power MP 26 February 2010 10 The services under the contract to
Mahan Expansion commence within 10 months from
(600MW) 26 February 2010 or as mutually agreed
therefrom.
7. Salaya II (two units Essar Power 25 February 2010 10.4 for each The services under the contract to
of 660MW each) Gujarat unit commence within six months and nine
months for unit one and two respectively,
from 25 February 2010 or as mutually
agreed and to be completed within
8. Salaya III (four units Essar Power Salaya 25 February 2010 119.63 for each The services under the contract to
of 150MW each) unit commence within six months, nine
months, 12 months and 15 months from
25 February 2010 respectively for the four
units or as mutually agreed and to be
344

III. Onshore supply contracts

The discussion below describes the Company’s onshore supply contracts with Essar Projects. Certain
commercial terms are described in the table titled ‘‘Specific terms of onshore supply contracts’’ below:
1. Scope: The scope of these contracts primarily covers supply of plant and equipment of Indian origin
and services for design, engineering, procurement, manufacturing and packing (in a condition safe
for transportation), inspection and delivery at the plant site. For Vadinar Power—Expansion Phase I,
the scope of contract covers supply of all plants and equipments.
a performance guarantee to be provided by Essar Projects, receipt of advance payment by Essar
Projects (which, in certain cases, is dependent on submission of advance payment guarantee and
advance payment cum retention guarantee by Essar Projects) and letters of credit to be provided by
the Company. The time limit within which these conditions precedents have to be fulfilled vary
between Phase I Power Projects and certain Phase II Power Projects. Generally, the time limit for
Phase I Power Projects runs from the execution of the contract whereas the time limit for certain
Phase II Power Projects runs from the completion of debt financing for the project.
3. Limitation of Liability: The Company is entitled to claim liquidated damages for delays in supply
subject to a maximum of 10% of the contract price and for shortfalls in agreed performance
account of liquidated damages for delays in supply and shortfalls in agreed performance parameters
is subject to a maximum of 15% of the contract price. The aggregate liability of the supplier arising
out of or in connection with supply is subject to a maximum of 100% of the contract price. However,
this 100% cap on liability does not apply to loss, damage or liability arising in certain circumstances
includes wilful misconduct, fraud and acts resulting in environmental damage or liability.
4. Passing of title and risk: The title and risk of the plant and equipment will pass to the Company upon
handing over possession of the plants and equipments at the site and upon endorsement of the
documents.
5. Defect liability period: The defect liability period is to be 12 months from the date of completion of
the power project or 24 months from the date of last supply of plant and equipment, whichever is
later or within 14 days thereafter in case of any inspection made before such expiry by the Company.
notice to Essar Projects or if there is a change of control in relation to Essar Projects which adversely
affects the performance of the contracts.
Specific terms of onshore supply contracts:

Contract price
Time for commencement and
Essar Energy plc Date and (Rs. in (US$ in million) completion of supplies and
S. No. Project and Unit Entity amendments million) Approximately services
1. Essar Power Essar Power MP 24 August 2007, 3,500 for 75.0 for each The supplies and services under
MP—Mahan as amended on each unit unit the contract to commence within
(two units of 600 1 February 2008 10 months and 13 months for unit
MW each) and 4 February one and two respectively, from
2008 24 August 2007 and to be
completed within 30 months
therefrom.
2. Vadinar Power— VPCL 1 February 2008, 5,432.9 0.82 The supplies and services under
Expansion as amended on the contract to commence from
Phase I 15 July 2008, the date the contract is effective
(220MW) 9 December and to be completed within
2008, 15 January 29 months therefrom.
2009,
3 November 2009
and 24 February
2010
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Contract price
3. Vadinar Power— VPCL 9 April 2009 9,600 205.66 The supplies and services under
Expansion the contract to commence within
Phase II six months from 9 April 2009 or as
(325MW) mutually agreed and to be
therefrom.
4. Essar Power Essar Power Hazira 18 November 7,560 161.95 The supplies and services under
Hazira-Hazira 2009, as the contract to commence within
(270MW) amended on six months from 18 November
20 February 2010 2009 or as mutually agreed and to
and 7 April be completed within 27 months
2010* therefrom for unit one and
30 months therefrom for unit two.
5. Essar Power Essar Power 24 August 2007, 8,500 182.09 The supplies and services under
Gujarat—Salaya Gujarat as amended on the contract to commence within
(two units of 1 February 2008, six months and nine months from
600MW each) 8 February 2008 24 August 2007 for unit one and
and 17 February two respectively, or as mutually
2010* agreed and to be completed within
6. Essar Power Essar Power 18 August 2008 9,200 197.09 The supplies and services under
Jharkhand—Tori Jharkhand as amended on the contract to commence within
(two units of 7 April 2010* 10 months and 13 months from
600MW each) 18 August 2008 for unit one and
two respectively, or as mutually
7. Essar Power Essar Power 21 September 1,800 38.56 The supplies and services under
Orissa—Paradip (Orissa) 2009 the contract to commence within
(Phase I of two six months and eight months from
units of 30 MW 21 September 2009 for unit one
each) and two respectively, or as
mutually agreed and to be
therefrom for unit one and
8. Essar Power Essar Power 16 November 1,800 38.56 The supplies and services under
Orissa—Paradip (Orissa) 2009 the contract to commence within
(Phase II of two six months and eight months from
units of 30 MW 16 November 2009 for unit one
each) and two respectively, or as
therefrom for unit one and
9. Essar Power Essar Power 26 February 2010 3,080 65.98 The supplies and services under
Jharkhand—Tori Jharkhand the contract to commence within
Expansion 10 months from 26 February 2010
(600MW) or as mutually agreed and to be
therefrom.
10. Essar Power Essar Power MP 26 February 2010 3,100 66.41 The supplies and services under
MP—Mahan the contract to commence within
Expansion 10 months from 26 February 2010
(600MW) or as mutually agreed and to be
therefrom.
11. Salaya II (two Essar Power 25 February 2010 2,250 for 48.2 for each The supplies and services under
units of 660MW Gujarat each unit unit the contract to commence within
each) six months and nine months from
25 February 2010 for unit one and
two respectively, or as mutually
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Contract price
12. Salaya III (four Essar Power Salaya 25 February 2010 1,060.57 22.72 for each The supplies and services under
units of 150MW for each unit the contract to commence within
each) unit six months, nine months,
12 months and 15 months from
25 February 2010 respectively for
the four units or as mutually
* Amendments dated 17 February 2010 and 7 April 2010 are subject to lender’s approval.
IV. Onshore transport contracts

The discussion below describes the Company’s onshore transport contracts with Essar Logistics. Certain
commercial terms are described in the table titled ‘‘Specific terms of onshore transport contracts’’ below:
1. Scope: The scope of these contracts primarily covers provision of services including port handling,
port clearance and payment of port charges at the port of arrival, inland transportation and
unloading and delivery of such plants and equipments to the project site.
a performance guarantee to be provided by Essar Logistics, receipt of advance payment by Essar
Logistics and letters of credit to be provided by the Company. The time limit within which these
conditions precedents have to be fulfilled vary between Phase I Power Projects and certain Phase II
Power Projects. Generally, the time limit for Phase I Power Projects runs from the execution of the
contract whereas the time limit for the Phase II Power Projects runs from the completion of debt
financing for the project.
price for delay in supply, for every week of delay, subject to a maximum of 15% of the contract price.
4. Passing of title and risk: Title to and ownership of the plant and equipment will at all times remain
with the Company and Essar Logistics will be deemed to have delivered the plants and equipments
upon handing over possession to the Company and upon due receipt and endorsement of documents
by the Company.
5. Termination: Either party can terminate the contract, if the other party is unable to fulfil its
involuntary). In addition, the Company can terminate the contract at any time with a prior written
notice to Essar Logistics or if there is a change of control in relation to Essar Logistics which
Specific terms of onshore transport contracts:

Contract price
1. Essar Power Essar Power MP 24 August 2007, 375 for 8.03 for each The services under the contract to
MP—Mahan as amended on each unit unit commence within 10 months and
(two units of 600 1 February 2008 13 months from 24 August 2007
MW each) and 4 February for unit one and two respectively,
2008. Novation and to be completed within
agreement dated 28 months therefrom.
16 July 2008.
2. Vadinar Power— VPCL 9 April 2009, as 130 2.78 The services under the contract to
Expansion amended on commence within six months from
Phase II 30 December 9 April 2009 or as mutually agreed
(325MW) 2009 and to be completed within
347

mrll_0909.fmt Free: 0D*/120D Foot: 0D/ 0D VJ Seq: 9 Clr: 0
Contract price
3. Essar Power Essar Power 24 August 2007, 125 for 2.68 for each The services under the contract to
Gujarat—Salaya Gujarat as amended on each unit unit commence within six months and
(two units of 1 February 2008 nine months from 24 August 2007
600MW each) and 14 April for unit one and two respectively,
2009. Novation or as mutually agreed and to be
agreement dated completed within 28 months
16 July 2008 therefrom.
4. Essar Power Essar Power 18 August 2008. 450 for 9.64 for each The services under the contract to
Jharkhand—Tori Jharkhand Novation each unit unit commence within 10 months and
(two units of agreement dated 13 months from 18 August 2008
600MW each) 3 March 2010 for unit one and two respectively,
or as mutually agreed and to be
therefrom.
5. Essar Power Essar Power 26 February 2010 415 8.89 The services under the contract to
Expansion 26 February 2010 or as mutually
(600MW) agreed and to be completed within
6. Essar Power Essar Power MP 26 February 2010 400 8.57 The services under the contract to
MP—Mahan commence within 10 months from
(600MW) agreed and to be completed within
7. Salaya II (two Essar Power 25 February 2010 150 for 3.21 for each The services under the contract to
units of 660MW Gujarat each unit unit commence within six months and
each) nine months from 25 February
2010 for unit one and two
respectively, or as mutually agreed
and to be completed within
8. Salaya III (four Essar Power Salaya 25 February 2010 32.75 for 0.7 for each The services under the contract to
units of 150MW each unit unit commence within six months, nine
each) months, 12 months and 15 months
from 25 February 2010 respectively
for the four units or as mutually
V. Onshore construction contracts

The discussion below describes the Company’s onshore civil works, erection, installation and
commissioning contracts (‘‘onshore construction contracts’’) with Essar Projects. Certain commercial
terms are described in the table titled ‘‘Specific terms of onshore construction contracts’’ below:
1. Scope: The scope of the onshore construction contracts primarily covers taking delivery of, handle
and store plants and equipments, procure materials and undertake the work of construction, erection
and installation of the plants and equipments supplied by the project companies and its
commissioning and performance testing.
a performance guarantee to be provided by Essar Projects, receipt of advance payment by Essar
Projects (which, in certain cases, is dependent on submission of advance payment guarantee and
advance payment cum retention guarantee by Essar Projects) and letters of credit to be provided by
the Company. The time limit within which these conditions precedents have to be fulfilled vary
between Phase I Power Projects and certain Phase II Power Projects. Generally, the time limit for
Phase I Power Projects runs from the execution of the contract whereas the time limit for the
Phase II Power Projects runs from the completion of debt financing for the project.
3. Limitation of Liability: The Company is entitled to claim liquidated damages for delay in supply
subject to a maximum of 10% of the contract price and for shortfall in agreed performance
account of liquidated damages for delay in supply and shortfall in agreed performance parameters is
subject to a maximum of 15% of the contract price. The aggregate liability of the supplier arising out
348

of or in connection with the execution of work is subject to a maximum of 100% of the contract price.
However, this 100% cap on liability does not apply to loss, damage or liability arising in certain
circumstances including wilful misconduct, fraud and acts resulting in environmental damage or
liability.
4. Defect liability period: The defect liability period runs for 12 months from the date of issue of
performance certificate or within 14 days thereafter if inspection is made by the Company before
such expiry.
notice to Essar Projects or if there is a change of control in relation to Essar Projects which adversely
affects the performance of the contract.
Specific terms of onshore construction contracts:

Contract price
Essar
Energy plc Date and (Rs. in (US$ in million) Time for commencement and
S. No. Project and Unit Entity amendments million) Approximately completion of supplies and services
1. Essar Power MP— Essar Power 24 August 2007, as 6,185 132.49 The work to commence within
Mahan (two units MP amended on 10 months and 13 months from
of 600 MW each) 1 February 2008, 24 August 2007 for unit one and two
4 February 2008 respectively, and to be completed
and 24 February within 36 months therefrom.
2010*
2. Vadinar Power— VPCL 1 February 2008, 534.9 11.46 The work to commence from the date
Expansion Phase I as amended on the contract is effective and to be
(220MW) 15 July 2008, completed by the scheduled
9 December 2008, completion date which may be
3 November 2009, adjusted from time to time in
30 December 2009 accordance with the provision of the
and 18 March contract.
2010***
3. Vadinar Power— VPCL 9 April 2009 4,400 94.26 The work to commence within six
Expansion Phase II months from 9 April 2009 or as
(325MW) mutually agreed and to be completed
4. Essar Power Essar Power 18 November 2009, 2,240 47.99 The work to commence within six
Hazira-Hazira Hazira as amended on months from 18 November 2009 or as
(270MW) 20 February 2010 mutually agreed and to be completed
within 30 months therefrom for unit
one and 33 months therefrom for unit
two.
5. Essar Power Essar Power 24 August 2007, as 5,685 121.79 The work to commence within six
Gujarat—Salaya Gujarat amended on months from 24 August 2007 or as
(two units of 1 February 2008, mutually agreed and to be completed
600MW each) 11 February 2008 within 36 months therefrom.
and 17 February
2010**
6. Essar Power Essar Power 18 August 2008, as 6,180 132.39 The work to commence within
Jharkhand—Tori Jharkhand amended on 10 months and 13 months from
(two units of 7 April 2010* 18 August 2008 for unit one and two
600MW each) respectively, or as mutually agreed
therefrom.
7. Essar Power Essar Power 21 September 2009 750 16.07 The work to commence within six
Orissa—Paradip (Orissa) months and eight months from
(Phase I of two 21 September 2009 for unit one and
units of 30 MW two respectively, or as mutually agreed
each) and to be completed within 22 months
therefrom for unit one and 24 months
therefrom for unit two.
8. Essar Power Essar Power 16 November 2009 700 15.0 The work to commence within six
Orissa—Paradip (Orissa) months and eight months from
(Phase II of two 16 November 2009 for unit one and
units of 30 MW two respectively, or as mutually agreed
each) and to be completed within 24 months
therefrom for unit one and 26 months
therefrom for unit two.
349

Contract price
Essar
Energy plc Date and (Rs. in (US$ in million) Time for commencement and
9. Essar Power Essar Power 26 February 2010 2,500 53.56 The work to commence within
Jharkhand—Tori Jharkhand 10 months from 26 February 2010 or
Expansion as mutually agreed and to be
(600MW) completed within 36 months
therefrom.
10. Essar Power MP— Essar Power 26 February 2010 2,703 57.9 The work to commence within
Mahan Expansion MP 10 months from 26 February 2010 or
(600MW) as mutually agreed and the to be
therefrom.
11. Salaya II (two Essar Power 25 February 2010 1,750 for 37.49 for each The work to commence within six
units of 660MW Gujarat each unit unit months and nine months from
each) 25 February 2010 for unit one and two
respectively, or as mutually agreed
therefrom.
12. Salaya III (four Essar Power 25 February 2010 687.70 for 14.73 for each The work to commence within six
units of 150MW Salaya each unit unit months, nine months, 12 months and
each) 15 months from 25 February 2010
respectively for the four units or as
mutually agreed and to be completed
* Amendments dated 24 February 2010 and 7 April 2010 are subject to lender’s approval.
** Amendment dated 17 February 2010 is subject to lender’s approval.
*** Amendment dated 18 March 2010 is subject to lender’s approval.
VI. Onshore engineering contracts

The discussion below describes the Company’s onshore engineering contracts with Essar Engineering.
Certain commercial terms are described in the table titled ‘‘Specific terms of onshore engineering
contracts’’ below:
1. Scope: The scope of these contracts primarily covers provision of engineering services for the
construction, erection and installation of the plant and equipment supplied by the project companies
and their testing and commissioning.
a performance guarantee to be provided by Essar Engineering, receipt of advance payment by Essar
Engineering and letters of credit to be provided by the Company. The time limit within which these
conditions precedents have to be fulfilled vary between Phase I Power Projects and certain Phase II
Power Projects. Generally, the time limit for Phase I Power Projects runs from the execution of the
contract whereas the time limit for the Phase II Power Projects runs from the completion of debt
financing for the project.
price for delay in services, for every week of delay, subject to a maximum of 15% of the contract
price. The aggregate liability arising out of or in connection with performance of service is subject to
a maximum of 100% of the contract price. However, this 100% cap on liability does not apply to loss,
damage or liability arising in certain circumstances including wilful misconduct, fraud and acts
resulting in environmental damage or liability.
4. Defect liability period: The defect liability period runs for 12 months from the successful completion
of the performance tests or within 14 days thereafter if inspection is made by the Company before
such expiry.
notice to Essar Engineering or if there is a change of control in relation to Essar Engineering which
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MERRILL CORPORATION JDICKSO//30-APR-10 12:36 DISK116:[10ZAU1.10ZAU70801]FB70801A.;73
Specific terms of Onshore Engineering Contracts:

Contract price
Essar Energy plc Date and (Rs. in (US$ in million) Time for commencement and
1. Essar Power Essar Power MP 24 August 2007, 120 for 2.57 for each The services under the contract to
MP—Mahan (two as amended on each unit unit commence within 10 months and
units of 600 MW 1 February 2008 13 months from 24 August 2007 for
each) and 4 February unit one and two respectively, or as
2008. Novation mutually agreed and to be
28 January 2008. therefrom.
2. Vadinar Power— VPCL 1 March 2008, as 38.2 0.82 The services under the contract to
Expansion Phase I amended on commence from the date the
(220MW) 15 July 2008, contract is effective and to be
3 November 2009, completed within 28 months
30 December therefrom.
2009 and
18 March 2010*
3. Vadinar Power— VPCL 9 April 2009 200 4.28 The services under the contract to
Expansion commence within six months from
Phase II 9 April 2009 or as mutually agreed
(325MW) and to be completed within
4. Essar Power Essar Power 18 November 200 4.28 The services under the contract to
Hazira-Hazira Hazira 2009, as amended commence within six months from
(270MW) on 20 February 18 November 2009 or as mutually
2010 agreed to be completed within
30 months therefrom for unit one
and 33 months therefrom for unit
two.
5. Essar Power Essar Power 24 August 2007, 120 for 2.57 for each The services under the contract to
Gujarat—Salaya Gujarat as amended on each unit unit commence within 10 months and
(two units of 1 February 2008 13 months from 24 August 2007 for
600MW each) and 15 February unit one and two respectively, or as
2008. Novation mutually agreed and to be
28 January 2008. therefrom.
6. Essar Power Essar Power 18 August 2008. 120 for 2.57 for each The services under the contract to
Jharkhand—Tori Jharkhand Novation each unit unit commence within 10 months and
(two units of agreement dated 13 months from 18 August 2008 for
600MW each) 26 February 2010. unit one and two respectively, or as
therefrom.
7. Essar Power Essar Power 21 September 70 1.5 The services under the contract to
Orissa—Paradip (Orissa) 2009 commence within six months and
(Phase I of two eight months from 21 September
units of 30 MW 2009 for unit one and two
each) respectively, or as mutually agreed
two.
8. Essar Power Essar Power 16 November 50 1.1 The services under the contract to
Orissa—Paradip (Orissa) 2009 commence within six months and
(Phase II of two eight months from 16 November
units of 30 MW 2009 for unit one and two
each) respectively, or as mutually agreed
two.
9. Essar Power Essar Power 26 February 2010 96 2.05 The services under the contract to
(600MW) agreed and the services will be
therefrom.
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Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: FB70801A.;73
Contract price
Essar Energy plc Date and (Rs. in (US$ in million) Time for commencement and
10. Essar Power Essar Power MP 26 February 2010 120 2.57 The services under the contract to
MP—Mahan commence within 10 months from
(600MW) agreed and the services will be
therefrom.
11. Salaya II (two Essar Power 25 February 2010 125 for 2.68 for each The services under the contract to
units of 660MW Gujarat each unit unit commence within six months and
each) nine months from 25 February 2010
for unit one and two respectively or
as mutually agreed and will be
therefrom.
12. Salaya III (four Essar Power 25 February 2010 27.750 for 0.59 for each The services under the contract to
units of 150MW Salaya each unit unit commence within six months, nine
each) months, 12 months and 15 months
from 25 February 2010 respectively
for the four units or as mutually
agreed and will be completed within
* Amendment dated 18 March 2010 is subject to lender’s approval.
VII. Project management contracts

The discussion below describes the Company’s project management contracts with Essar Project
Management entered for certain of its Phase I Power Projects. Certain commercial terms are described in
the table titled ‘‘Specific terms of Project management contracts’’ below:
1. Scope: The scope of services under the contract includes consultancy services and services such as
coordination amongst the related EPC contractors, contract administration, quality management,
site supervision and project monitoring.
2. Conditions precedent: The contracts have conditions precedent for them to be effective. The
conditions precedents include Essar Project Management providing a performance guarantee and
the Company providing letters of credit and advance payments, as stipulated under the respective
contracts.
3. Time for commencement and completion of services: Essar Project Management will commence the
performance of services under the contract immediately from the date the contract is effective. The
time for completion of the services under the contract shall be after the successful completion of the
performance tests according to the respective onshore construction contract and submission of the
as-built drawings according to the respective onshore engineering contract.
4. Limitation of liability: Subject to other terms of the contract, Essar Project Management’s aggregate
liability arising out of or in connection with the performance of the services is limited to 10% of the
contract price, provided that this limit does not extend to loss or damage caused due to, inter alia,
the wilful misconduct of Essar Project Management and in certain other cases including when an act
or omission of Essar Project Management result in any environmental damage or breach of duty
under applicable laws.
5. Termination: Either party can terminate the contracts if the other party is unable to fulfil its
obligations under the contracts or becomes subject to an insolvency proceeding (voluntary or
involuntary). In addition, the Company can terminate the contracts any time with a prior written
notice to Essar Project Management or if there is a change of control in relation to Essar Project
Management which adversely affects the performance of such contract.
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Specific terms of project management contracts:

Contract price
Essar Energy plc (Rs. in (US$ in million)
S. No. Project and Unit Entity Date and amendments million) Approximately
1. Essar Power MP—Mahan Essar Power 16 January 2008 and as 320 6.862.
(two units of 600 MW each) MP amended on 3 August 2009
2. Vadinar Power—Expansion VPCL 3 August 2009 50 1.07
Phase I (220MW)
3. Vadinar Power—Expansion VPCL 3 August 2009 120 2.57
Phase II (325MW)
4. Essar Power Gujarat— Essar Power 16 January 2008, as 320 9.10
Salaya (two units of 600MW Gujarat amended on 15 May 2009
each)
VIII. Onshore turnkey contract

Essar Power Transco entered into an onshore turnkey contract with Essar Projects dated 20 August 2009
pursuant to which Essar Projects is to carry out civil works including the erection, installation and
commissioning for associated the transmission system for 2x600 MW Mahan Thermal Power Project. The
total contract price for the contract is Rs. 9,654 million (US$206.8 million) and Essar Projects is
responsible for all taxes.
Under the contract Essar Power Transco is to provide the land for a sub station and will arrange forest
clearances. The scope of work of Essar Projects under contract covers designing and construction of
transmission line, sub station, auto transformer, conductor and insulator including performance of
transmission line detailed route survey, geotechnical investigations, profiling and tower spotting, tower
optimisation and designing, fabrication and galvanising of towers and hardware, construction of tower
foundations, stringing of conductor and ground wire, supply, delivery and transport of equipments, as well
as testing, supervision and other works required for the commissioning of the complete transmission
system. Essar Projects will obtain right of way for transmission line and all other clearances required for
implementation of transmission scheme.
Essar Projects is responsible for proper and timely completion of work according to the schedule and will
provide, at its own cost, all equipment required for execution of the works. Essar Projects will remedy any
defects or damage in the facility within 12 months of the issue of performance certificate. If Essar Projects
fails to carry out the works in accordance with the works completion schedule, then it will pay to Essar
Power Transco liquidated damages at the rate of 1% of the contract price for every week of delay.
Essar Projects will obtain a performance guarantee in the form of corporate guarantee for 10% of the
contract price and an advance payment cum retention guarantee for 25% of the contract price to secure
Essar Projects’ obligation to repay the advance payment in certain events. Essar Projects has liability for
defect and has provided a warranty for the work done for one year from the preliminary acceptance of
work.
Either party can terminate the contract if the other party is unable to fulfil its obligations under the
contract or becomes subject to an insolvency proceeding (voluntary or involuntary). In addition, Essar
Power Transco can terminate this contract any time with a prior written notice to Essar Projects or if there
is a change of control in relation to Essar Projects which adversely affects the performance of this contract.
Investment Agreement
An investment agreement dated 9 March 2009 (the Investment Agreement) was entered into by (i) India
Infrastructure Fund, a domestic venture capital fund, the trustee of which is IDFC Trustee Company
Limited, acting through IDFC Project Equity Company Limited (the Investor); (ii) Essar Power; (iii) Essar
Global, EPH and ETHL Global Capital Limited (collectively, the Promoter Group); (iv) Essar Power
Jharkhand (as a Subsidiary and a Project Company); (v) Essar Power Gujarat (as a Subsidiary and a
Project Company); (vi) VPCL (as a Project Company); (vii) Bhander Power (as a Subsidiary and a Project
Company) and (viii) Essar Power MP (as a Subsidiary and a Project Company).
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Pursuant to the Investment Agreement, the Investor subscribed for preference shares of Essar Power of
Rs. 10 each in an aggregate amount of Rs. 3,500 million (approximately US$76.24 million) (Investor
Shares). The guaranteed investment period is four years from the date of allotment.
The Investor has also subscribed for warrants of Essar Power for a consideration of Rs. 100, entitling the
Investor to subscribe to marketable equity shares of Essar Power at any time before a public offering for an
amount equivalent to 20% of the subscription price for the preference shares (Rs. 3,500 million), at an
exercise price determined on the basis of a pre-investment valuation of Essar Power at Rs. 200,000 million.
Such price will be adjustable upwards by 12% per annum after the guaranteed investment period. If Essar
Power issues any additional equity shares or securities convertible to equity shares prior to a public
offering at a price below the warrant exercise price, the warrant exercise price will be lowered and will be
subject to a full ratchet anti-dilution adjustment.
The financing plan for funding the projects of Essar Power MP, Essar Power Gujarat, Essar Power
Jharkhand and VPCL (the Being Developed Projects) as provided in the Investment Agreement envisages
a total equity investment by Essar Power of Rs. 48,000 million (US$1,028.3 million) to be funded as:
(i) Equity capital compulsorily convertible preference shares from the Promoter Group of Rs. 25,000
million (US$535.6 million);
(ii) Preference capital from investors including Investor Shares of Rs. 13,000 million (US$278.5 million);
and
(iii) Equity capital/compulsorily convertible preference shares/other investors’ subordinate shares of
Rs. 10,000 shares.
The Investment Agreement provides for an investment of Rs. 15,000 million (US$321.3 million) by the
Promoter Group in the form of equity shares compulsorily convertible preference shares or other
subordinate shares towards financing of the Project Companies to be made by 31 March 2012. Essar Power
is restricted from issuing shares to other investors in an aggregate amount exceeding Rs. 13,000 million
(US$278.5 million) without the Investor’s prior written consent. The Promoter Group has agreed to
indemnify Essar Power for any loss in relation to the disputes with GUVNL (see paragraph 14.1 of this
Part 16 ‘‘Additional Information—Litigation’’) or the calling of the guarantee provided by Essar Power on
behalf of Loop Telecom Limited (see ‘‘Other Contingencies post 31 December 2009’’ Part 9 ‘‘Operating
and Financial Review’’) by a further subscription for ordinary equity shares of Essar Power in a cash
amount equal to the amount of the loss common equity infusion.
The Investment Agreement sets out the rights and obligations in relation to the investment made by the
Investor and inter alia provides that:
(i) Essar Power and the Promoter Group shall procure that no shareholder or board resolution shall be
passed without prior written approval of the Investor in relation to certain reserved matters, which
includes: (i) entering into any transaction which is likely to result in Essar Power and its subsidiaries
incurring obligations or liabilities which such that Essar Power’s debt to equity ratio exceeds 3:1 on a
consolidated basis; (ii) material changes in material contracts; (iii) and amendments to share rights
and changes in the share capital, subject to certain conditions such as no event of default occurring as
a result of such change.
(ii) Notice to convene a general meeting at which reserved matters would be considered shall be subject
to prior approval by the Investor. The Promoter Group shall exercise all rights and powers (including
voting) to ensure that the necessary general meeting resolutions are passed to give effect to any
reserved matter which has been approved by the written consent of the Investor.
(iii) In case Essar Power decides to make an initial public offering before seven years from completion,
the Investor shall have the right to convert the Investor Shares into equity shares of Essar Power and
exercise warrants and offer them in the public offering.
(iv) Essar Power shall provide prior written notification to the Investor in certain instances, such as
instituting or settling any litigation or dispute which could result in a payment by Essar Power of at
least Rs. 250 million (US$5.4 million), selling any assets with a value exceeding Rs. 500 million
(US$10.71 million) in aggregate, or merging with any other corporation.
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(v) On occurrence of an event of default under the Investment Agreement, the Investor will become
entitled certain rights including electing a majority of the directors on the board of Essar Power and
converting all the outstanding Investor Shares along with unpaid dividends and redemption premium
into equity shares of Essar Power at a price calculated in terms of the Investment Agreement.
(vi) All related party transactions in excess of Rs. 500 million (US$10.71 million) (the ‘‘Material Related
Party Transactions’’) including any termination or amendment (having financial value of more than
2% of the contract price) of an existing Material Related Party Transaction, must be approved by the
Investor. If the Investor does not approve a Material Related Party Transaction, then Essar Power
shall refer such Material Related Party Transaction to the related party transaction committee
(‘‘RPC’’) which comprises one person nominated by Essar Power, one by Investor and two
independent directors. If consensus is not achieved in the RPC, then an independent third party, to
be appointed by the RPC, will determine if such transaction is on an arms-length commercial basis,
there is no value leakage which is detrimental to holders of Investors Shares and such transaction is
carried out at a fair market value. Only with written confirmation from the independent party to that
effect, can the transaction be recommended by the RPC and put up to the board of directors for
approval.
(vii) Without prejudice to the Investor’s rights with respect to reserved matters, Essar Power and Project
Companies shall not change or discontinue any business or start new business without the prior
written approval of the Investor.
(viii) The cumulative convertible preference shares, other promoter shares and the other investors’ shares
shall be subordinate at all times to the Investor Shares, including at the time of liquidation,
dissolution and winding up.
(ix) The Promoter Companies of the Essar Power shall use these voting powers and other rights in a way
necessary to give effect to the Investment Agreement.
The restrictions listed above also apply mutatis mutandis in respect of the Project Companies.
13.6 Agreements related to the Phase I Refinery Project and Phase II Refinery Project
In relation to implementation of the Phase I and Phase II Refinery Projects, Essar Oil has entered into the
contracts described below with Essar Affiliated Companies.
Offshore and onshore supply contracts

Essar Oil entered into an offshore supply agreement on 14 February 2007, as amended on 13 October
2007, 10 June 2009, 10 August 2009, 30 January 2010 and 12 February 2010 with Global Supplies for the
supply of imported equipment and materials and an onshore supply agreement dated 14 February 2007, as
amended on 1 October 2007, 5 October 2007, 31 July 2008, 9 June 2009, 16 September 2009, 30 January
2010 and 30 March 2010, with Essar Projects in respect of the supply of Indian-sourced equipment and
materials for the Phase I Refinery Project. The consideration payable by Essar Oil under the offshore
supply contract is US$440.80 million, delivery being on a FOB basis, and under the onshore supply
contract is Rs. 19.5 billion (US$417.74 million), delivery being on a FOR site basis, i.e., all costs including
freight up to the site and unloading charges at the site.
The offshore contract envisages completion of supply activities within 42 months from 14 February 2007
(the date the contract was signed), while the onshore supply contract envisages completion of supply
activities within 44 months from 14 February 2007 (the date the contract was signed) or the date of
payment of an advance, whichever is later.
Under the offshore supply contract, title to all materials passes to Essar Oil from the time the materials
pass the ship’s rail for shipment to India or are delivered to the air carrier in the airport of shipment to
India. Under the onshore supply contract, title to all materials passes to Essar Oil when such materials are
loaded on to the mode of transport to be used to convey such equipment to Essar Oil.
The offshore supply contract envisages an advance payment of 5% of the consideration and payment of
15% in phases on demand by Global Supplies against submission of a bank guarantee, payment of another
10% and 5% against submission of drawings in two phases and payment of the remaining 65% against the
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shipment of materials. The onshore supply contract envisages an advance payment of 30% of the
consideration and payment of the remaining 70% against shipment of equipment by Essar Projects against
presentation of documents. Both contracts require the suppliers to provide a performance guarantee of up
to 10% of the consideration and a limitation of the liability of the suppliers of up to 10% of the
consideration for any loss or damage caused to Essar Oil arising out of or in relation to the contracts. Essar
Oil may instruct the suppliers to suspend the supply for such duration as desired by Essar Oil.
Essar Oil is permitted to terminate the supply contracts at any time by giving 30 days notice to the supplier.
The suppliers are only permitted to terminate the supply contracts upon default by Essar Oil (with the
events of defaults limited to customary default terms for contracts of this type, including material breach of
the contract), occurrence of a force majeure event or the suspension of supply by Essar Oil.
For the onshore supply contract, Essar Projects Limited, Dubai has provided a corporate guarantee for
performance on 14 August 2009 for an amount of Rs. 1.19 billion (US$25.5 million) and a corporate
guarantee for advance on 30 July 2009 for an amount of Rs. 1.78 billion (US$38.1 million). Essar Projects
Limited, Dubai has provided a revised performance corporate guarantee and corporate guarantee for
advance, both dated 20 March 2010 to Essar Oil for 10% and 25% of the revised contract price (an amount
equivalent to Rs. 19.5 billion (US$417.74 million) respectively, under the onshore supply contract,
pursuant to an amendment dated 30 January 2010. The performance corporate guarantee is valid until
14 October 2011 and the corporate guarantee for advance is valid until 14 October 2010. Pursuant to the
amendment dated 30 March 2010, Essar Projects Limited, Dubai is required to furnish a corporate
guarantee for advance for an amount equivalent to 30% of the contract price.
Further, Essar Projects Limited, Dubai has provided a corporate guarantee for performance on 20 August
2009 for 10% of the contract price amounting to US$59.24 million under the offshore supply contract. The
corporate guarantee for performance is valid up to 31 December 2011.
Both supply contracts are governed by Indian law and necessitate recourse to arbitration conducted in
India under the Arbitration and Conciliation Act, 1996.
Petroleum handling agreement

Essar Oil has entered into a petroleum handling agreement with VPTL dated 16 September 2009, as
amended on 6 March 2010. VPTL is required to receive, handle, store and dispatch crude oil, intermediate
products and petroleum products on behalf of Essar Oil. These services are on an non-exclusive basis.
Pursuant to this agreement, VPTL has agreed to handle Essar Oil’s crude oil, intermediate products and
petroleum products on a take-or-pay basis. The agreement provides for a minimum obligation on VPTL to
handle certain minimum quantities of crude oil, intermediate products and petroleum products on a
monthly basis.
Under the terms of the agreement, Essar Oil is required to pay VPTL a monthly charge of Rs. 165.52
million (US$3.55 million) from 1 April 2011 or such later date that VPTL is ready to provide the services
contemplated under the agreement to Essar Oil. Essar Oil is required to supply all utilities, including
power, water and steam, to VPTL. The term of the agreement is for 20 years starting from 16 September
2009. The minimum monthly charge payable is calculated based on the minimum monthly quantities of
crude oil, intermediate products and petroleum products that VPTL has the obligation to handle. In the
event the actual annual quantities handled are more than the quantities based on which the monthly pay is
calculated, Essar Oil is required to pay an excess charge of up to Rs. 220.7 million (US$4.73 million) to
VPTL. The minimum monthly charges are due even if the quantities of cargo handled are less than the
quantities based on which the monthly pay is calculated. Essar Oil may terminate the agreement on
occurrence of an event of default by VPTL, including material breach of any provision of the agreement,
insolvency and wilful misconduct of VPTL in providing services. VPTL may terminate the agreement in
the event of failure of Essar Oil to pay amounts due to VPTL, material breach of any provision of the
agreement and not remedying the breach within 30 days of receipt of notice from VPTL. Upon service of a
default notice by VPTL on Essar Oil, if Essar Oil does not cure the default with 60 days of receipt of a
default notice, VPTL has the right to issue a termination notice. Essar Oil may terminate the agreement, if
the default is not remedied within 60 days from the date of notice of default by VPTL. The agreement
provides customary indemnity to both parties against all losses and costs incurred by either from breach of
the agreement or any actions or suits filed. The agreement is governed by Indian law.
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Construction contract
Essar Oil entered into an agreement on 14 February 2007, as amended on 1 October 2007, 3 October 2008,
11 May 2009 and 18 January 2010, with Essar Projects in respect of the construction, erection, testing and
commissioning of the Phase I Refinery Project. The construction contract envisages completion of the
work within 46 months from 14 February 2007 (the date the contract was signed) or the date of payment of
an initial mobilisation fee amounting to 10% of the contract price, whichever is later. The total
consideration payable by Essar Oil under the contract is Rs. 18.02 billion (approximately
US$386.03 million). Essar Oil has paid 20% of the consideration as mobilisation advance under the terms
of the contract. The remainder of the consideration is payable by Essar Oil in stages upon the completion
of various construction milestones set out under the contract.
Essar Projects Limited, Dubai is to furnish a performance bond for 10% of the consideration, which is
valid until the expiration of the 18-month warranty period following commissioning. The contract limits the
liability of Essar Projects for any loss or damage caused to Essar Oil arising out of or in relation to the
contract to 15% of the consideration. However, the liability limitation clause does not extend to repair and
replacement works for defective workmanship unless the defect is attributable to improper maintenance or
operation, normal wear and tear or corrosion.
Essar Oil may instruct the contractor to carry out a variation/change in the scope and terms of work. Essar
Oil is permitted to terminate the contract by giving 30 day’s notice to Essar Projects. Essar Projects is only
permitted to terminate the contract upon default by Essar Oil (with the events of defaults limited to
customary default terms for contracts of this type, including material breach of the agreement), occurrence
of a force majeure event or the suspension of work by Essar Oil for the period specified in the construction
contract.
Essar Projects Limited, Dubai has provided a corporate guarantee for performance on 24 June 2009 in
favour of Essar Oil under the contract for 10% of the contract price, amounting to Rs. 1.80 billion
(US$38.6 million). The guarantee is valid up to 30 June 2012.
The contract is governed by Indian law.
Engineering services contract

Essar Oil entered into an agreement with Essar Projects in 20 February 2007, which was novated in favour
of Essar Engineering on 31 January 2008 and amended on 31 October 2007, 20 April 2009 and 17 July
2009, for procuring detailed engineering services from Essar Engineering. The contract envisages
completion of engineering services within 38 months from 20 February 2007 (the date the contract was
signed). The total consideration payable by Essar Oil under the contract is Rs. 2.15 billion (approximately
US$46.06 million). 10% of the consideration is payable in advance, 88% in monthly instalments over the
term of the contract and the remaining 2% is to be released six months after commissioning.
Under the terms of the contract, Essar Engineering is required to furnish a corporate guarantee for
performance for 15% of the total consideration payable under the contract, with such guarantee to be valid
up to end of the ‘‘defects liability period’’ (i.e., 12 months from the date of completion of the provision of
services under the agreement). Under the contract Essar Engineering’s liability for any loss or damage
caused to Essar Oil arising out of or in relation to the contract is limited to 15% of the total consideration.
However, the liability limitation clause does not extend to services performed by Essar Engineering as a
result of examination or rejection by Essar Oil of the services rendered by Essar Engineering. Essar Oil
may instruct Essar Engineering for variation in scope of services, and Essar Engineering shall comply with
the same, unless in the case of cost over-run, amendments/changes are made to the contract.
The contract contemplates indemnities from Essar Oil and Essar Engineering in respect of any damage or
loss suffered by the other arising from or in relation to the contract. There is no monetary cap on the
indemnity obligation undertaken by Essar Oil.
Essar Oil is permitted to terminate the contract by giving 15 day’s notice to Essar Engineering. Essar
Engineering is only permitted to terminate the contract upon default by Essar Oil (with the events of
defaults limited to customary default terms for contracts of this type), the occurrence of a force majeure
event or the suspension of work by Essar Oil for the period specified in the engineering services contract.
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Essar Services Holdings Limited has provided a corporate guarantee for performance on 25 September
2009 in favour of Essar Oil under the contract for an amount of Rs. 70.5 million (US$1.5 million) and a
corporate guarantee for advance on 25 September 2009 for an amount of Rs. 47 million (US$1.01 million).
The performance corporate guarantee is valid until 31 December 2010 and the corporate guarantee for
advance is valid until 30 April 2010. The guarantees can be extended in case of extension of the contract.
Further, Arya Infrastructure Holdings Limited has provided a corporate guarantee for performance on
28 May 2008 in favour of Essar Oil under the contract for Rs. 252 million (US$5.4 million) valid until
31 March 2010 and a corporate guarantee for advance in favour of Essar Oil under the contract for
Rs. 168 million (US$3.6 million) valid until 31 March 2009.
Project management contract

Essar Oil entered into an agreement on 10 January 2008, as amended on 30 May 2009, to procure
consultancy services in relation to the Phase I Refinery Expansion Project from Essar Project
Management. The contract envisages completion of services by Essar Project Management by
31 December 2010 and the payment of Rs. 1.24 billion (approximately US$26.56 million) as consideration
to Essar Project Management in monthly instalments, as agreed.
The contract requires Essar Project Management to furnish performance guarantees for 15% of the total
consideration payable by Essar. Under the contract Essar Project Management’s liability of for any loss or
damage caused to Essar Oil arising out of or in relation to the contract is limited to 15% of the
consideration. However, if any part of the plant is found to be defective by Essar Oil as a result of faulty
field workmanship by Essar Project Management then Essar Project Management shall at its own cost and
expense, without limit, provide construction supervision for the work necessary to correct such defects.
Essar Oil may instruct Essar Project Management for variation in scope of services, and Essar Engineering
shall comply with the same, unless in case of cost over-run, necessary amendments/changes are made to the
contract. Essar Oil has agreed to indemnify Essar Project Management in respect of certain liabilities for
environmental waste or pollution.
Essar Oil is permitted to terminate the contract by giving 15 day’s notice to Essar Project Management.
Essar Project Management is only permitted to terminate the contract upon default by Essar Oil (with the
events of defaults limited to customary default terms for contracts of this type), the occurrence of a force
majeure event or the suspension of work by Essar Oil for the period specified in the project management
contract.
Essar Projects Limited, Dubai has provided a corporate guarantee for performance on 10 August 2009 in
favour of Essar Oil under the contract for 15% of the contract price, amounting to Rs. 186 million
(US$3.98 million). The guarantee is valid up to 30 June 2012.
Offshore and onshore transport contracts

Essar Oil has entered into an offshore transport agreement and an onshore transport agreement, both
dated 1 October 2008, with Essar Logistics. The transport agreements were amended on 30 May 2009,
10 December 2009, 24 December 2009 and 4 February 2010. The offshore transport contract envisages the
transportation of all of the plant and equipment (including essential spares and commissioning spares) of
non-Indian origin from the port of shipment, as nominated by Essar Oil, to the port of destination, also as
nominated by Essar Oil, and the onshore transport contract envisages the rendering of port handling
services, port clearance, clearance from customs authorities, transportation of the plant related equipment
from the port of destination to the refinery site, unloading and delivery of the plant and equipment at the
site and other services by Essar Logistics.
The offshore transport contract envisages completion of such transport within 23 months from 1 October
2008 (the date the contract was signed) and the onshore transport contract envisages completion within
24 months from 1 October 2008 (the date the contract was signed). The consideration payable under the
offshore transport contract and the onshore transport contract is US$14 million and Rs. 150 million
respectively (approximately US$3.21 million).
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The transport contracts require Essar Logistics to furnish performance guarantees for a sum of 15% of the
consideration, with validity up to 90 days after the date of completion of services under the contract. The
contracts limit the liability of Essar Logistics for liquidated damages arising out of or in relation to the
delay or failure in the performance of services under the contracts to 15% of the consideration. Further,
Essar Oil may instruct Essar Logistics to vary the services provided, unless it has a material adverse effect
upon Essar Logistics’ ability to perform the services or is not technically feasible.
Essar Oil may order Essar Logistics to suspend the services for any reason except for that of force majeure.
Essar Oil may terminate the transport contracts, after issuing a written notice, in the event of default by
Essar Logistics, which includes breach of obligations under the transport contracts by Essar Logistics,
failure to commence services or delay beyond 90 days, abandonment of services by Essar Logistics, failure
to furnish a performance guarantee, a change of control or the transfer of substantial part of the business
and the occurrence of insolvency or analogous events. Essar Logistics may terminate the offshore transport
contract, in case of event of default by Essar Oil, which includes non-payment of undisputed invoice
amount for 90 days from the due date, breach of obligations and insolvency or analogous events. Essar
Shipping Ports & Logistics has provided performance guarantees on 7 July 2009 in favour of Essar Oil for
15% of the contract price, amounting to US$2.1 million under the offshore transport contract and Rs.
22.5 million under the onshore transport contract. The guarantees are valid until all the guaranteed
amounts are indefeasibly paid or all the obligations of Essar Logistics have been performed in full. The
transport contracts are governed by Indian law.
Phase II Refinery Project

Engineering, Procurement and Construction Contract
Essar Oil entered into an agreement on 6 March 2010 with Essar Projects for the design, engineering,
procurement, construction, commissioning, trial operations and guarantee test runs of the 18 mmtpa crude
refinery proposed to be set up in Jamnagar, Gujarat (the Phase II Refinery Project). Works under the
contract shall commence upon Essar Oil issuing a notice of commencement to Essar Projects. The
commencement date must be within 18 months from 6 March 2010 and completion of the works is
scheduled to vary between 12 months for the completion of the detailed engineering works and 34 months
for completion of the construction of various process units. Essar Oil may agree with Essar Projects to
extend the completion date in the event that difficulties unforeseeable to an experienced contractor
(i.e. physical obstructions or physical conditions on site, excluding climatic conditions) or obstructions
caused by a change in law, mean that Essar Projects is unable to complete the works on time.
The total consideration payable by Essar Oil under the contract is Rs. 97.36 billion (approximately
US$2,085.69 million) plus a further US$1.71 billion, divided between three cost heads: a) design; b) supply;
and c) construction. This price is subject to change in case of unforeseeable physical obstructions or
conditions which prevent Essar Projects from completing the works on budget, (other than climatic
conditions) in which case additional costs incurred by Essar Projects shall be added to the contract price.
The contract price is also subject to adjustment for variation in costs of labour, goods and other inputs,
whether pursuant to change in law or otherwise and calculated in terms of escalation formula provided in
the contract.
Essar Projects is required to obtain a on-demand, unconditional corporate guarantee in favour of Essar Oil
under the contract for 10% of the contract price, amounting to Rs. 17.72 billion (US$379.57 million). The
guarantee will be valid and enforceable until the completion of all works in terms of the contract.
Essar Oil is permitted to terminate the contract by 14 days’ notice upon failure of Essar Projects to provide
or continue to provide the performance guarantee or upon default by Essar Projects. Essar Oil may also
terminate the contract at any time by written notice, and such termination shall take effect 28 days after
the receipt of the notice or if later, the date that the corporate guarantee is returned.
The instances pursuant to which Essar Projects may terminate the contract by giving a notice of 14 days
includes failure of Essar Oil to make payments in terms of the contract. Essar projects may terminate the
contract with immediate effect in case of prolonged suspension of the works in terms of the contract.
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Commencement under the contract shall not occur until financial closure is achieved (i.e. a legally binding
commitment by equity holders and third party lenders to provide funding for not less than 90% of the total
cost of construction of the Phase II Refinery Project.
The contract will terminate automatically in the event that the commencement notice is not given within
18 months from 6 March 2010. The contract is governed by Indian law.
Project management contract

Essar Oil entered into an agreement on 8 March 2010 with Essar Project Management for Essar Project
Management to provide project management, engineering, procurement and construction management
services, including overall management, monitoring and reporting of progress on the execution and cost
control for the Phase II Refinery Project. The total consideration payable by Essar Oil under the contract
is Rs. 2,400 million (approximately US$51.41 million) (exclusive of service tax). Essar Oil is required to pay
additional amounts in the event of Essar Project Management provides additional services, over and above
those specified in the contract.
Services under the contract shall commence upon Essar Oil issuing a notice of commencement to Essar
Project Management. The commencement date must be within 18 months from 8 March 2010.
Commencement shall not occur until committed financing is secured (i.e. a legally binding commitment by
equity holders and third party lenders to provide funding for not less than 90% of the total cost of
construction of the Phase II Refinery Project). Further, if the commencement date does not occur within
18 months from the effective date of the contract, i.e. 8 March 2010, the contract shall automatically be
terminated. Completion of the services under the contract shall be within 35 months from the date of
commencement.
Essar Project Limited, Dubai is required to provide a corporate performance bond for 15% of the contract
price amounting to Rs. 360 million (US$7.71 million), which shall remain valid until the expiry of the
defect liability period under the contract, being 18 months from the date of completion of construction of
the Phase II Refinery Project and the refinery being ready for oil-in. Further, Essar Oil may at any time
order Essar Project Management to suspend all or any part of the services for a period determined by
Essar Oil.
Essar Project Management’s aggregate liability arising out of or in connection with the contract is limited
to 15% of the contract price. However, the limited liability clause does not extend to services provided by
Essar Project Management as a result of rectification of defects, loss or damage caused due to the gross
negligence or wilful misconduct of Essar Project Management or services to be performed after
examination or rejection of the works by Essar Oil. Essar Oil has agreed to indemnify Essar Project
Management in respect of certain liabilities for environmental waste or pollution.
Either party can terminate the contract if the other party is unable to fulfil its obligations under the
contract or becomes subject to an insolvency proceeding (voluntary or involuntary). In addition, Essar Oil
can terminate this contract any time with 15 days’ prior written notice to Essar Project Management. The
contract is governed by Indian law.
Sales tax defeasance agreement

Essar Oil and Indian Securities Limited (‘‘ISL’’) have entered into an assignment agreement dated 30 June
2008 for assignment of deferred sales tax liability (for a quarter or a specified period) (the ‘‘Liability’’) by
Essar Oil to ISL in return for an agreed net present value of the Liability paid by Essar Oil to ISL within
sixty days from the date of the acceptance by ISL of the assignment of the Liability. The sales tax liability
of Essar Oil has been deferred until 14 August 2020 pursuant to the Capital Investment Incentive
Premier/Prestigious Unit Scheme (1995-2000).
Further, Essar Oil and ISL entered into a defeasance cum novation agreement dated 31 March 2009 (the
‘‘Sales Tax Defeasance Agreement’’), as amended on 5 March 2010, 10 April 2010 and 14 April 2010, with
Essar House for the assignment of the Liability, with retrospective effect, from ISL to Essar House. Under
the Sales Tax Defeasance Agreement, Essar Oil is required to send a letter indicating its intention to
defease the Liability for any particular month or a quarter at anytime during the month or the quarter or
thereafter (with effect from 30 June 2008) along with details of the Liability. Upon acceptance of this
assignment of Liability by Essar House, Essar House is unconditionally and irrevocably bound to pay the
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Liability to the relevant government authorities on behalf of Essar Oil. Essar Oil must pay Essar House the
agreed net present value of the Liability within sixty days of the acceptance.
Essar Oil and Essar House may terminate the agreement by giving notice of 90 days. Within 30 days after
expiry of the notice period. Essar House is required to repay amounts paid by Essar Oil up to the
termination date, with interest, as well as reimburse Essar Oil for reasonable break-up costs in the event of
termination by Essar House. In the event of termination by Essar Oil, Essar House shall be entitled to
deduct a reasonable break-up cost, though such cost shall not exceed 2% of the amount payable upon
termination.
13.7 Shared services agreements for corporate and administrative services

The Company’s service companies, Essar E UK Services Limited and Essar Energy Services (Mauritius)
Limited (the Service Companies) have entered into a number of agreements with Essar Affiliated
Companies (Essar Global Limited, Dubai Branch, Essar Information Technology Limited, Essar
Investments, Essar Global Services Limited, Aegis Limited and Essar Communications Mauritius Limited)
for the provision of various corporate and administrative services (the Shared Services Agreements). Each
agreement was entered into on 30 April 2010, and is governed by English law. The Service Companies have
agreed to provide or procure the provision of the Services (as defined below) to Essar Energy plc for a
nominal fee.
Pursuant to the terms of the various Shared Services Agreements:
• Essar Affiliated Companies provide: (i) human resources management and payroll processing
services; (ii) environmental, health and safety management services; (iii) insurance services;
(iv) corporate communications services; (v) IT systems and processes services; (vi) office facilities
and equipment and associated office services; (vii) financial accounting, transaction processing and
financial reporting services; (viii) taxation services; (ix) legal services; and (x) corporate social
responsibility activities (each a ‘‘Service’’ and together the ‘‘Services’’).
• The Shared Services Agreements are for an initial period of seven (7) years from the date of the
SSA, continuing thereafter until terminated by either party or six (6) months’ notice. Each separate
Service may be terminated by giving three (3) months’ notice. In the case of a material breach of any
provision of the Shared Services Agreements by a party, the other party may terminate the provision
of all or part of the Services on 30 days’ notice.
• The Essar Affiliated Companies are subject to strict confidentiality obligations, including the
non-disclosure, copying, reproduction or distribution of any confidential information relating to the
Company which is obtained in the course of the provision of the Services to the Service Companies,
without the Service Companies’ written consent.
• The charges payable by the Service Companies to the Essar Affiliated Companies for each Service
provided are calculated on a costs only basis, (subject to periodic review) with the exception of the
Shared Services Agreement between Essar Global Services Limited and Essar E UK Services
Limited, according to which there are approximate charges for office rent (£15,972 per month);
premise improvement costs (£33,325 per month); general office services (totalling £10,934.00 per
month); and payroll processing (£50 per employee per month, plus the actual cost stipulated under
each employee’s contract and a further 6% mark up).
• The parties to the Shared Services Agreements each agree to indemnify the other for the term of the
SSA against any cost, action, claim or demand incurred or suffered by the other as a result of, or
arising out of, the Services provided under the Shared Services Agreements, except to the extent that
such cost, action, claim or demand arises as the result of such party’s bad faith, wilful default,
negligence or fraud.
13.8 Licence Agreements regarding the right to use the ‘‘Essar’’ name and logo
On 6 April 2010 the Company entered into a trade mark licence agreement with Rising Groups Limited
comprising an exclusive licence to use the ‘‘Essar’’ trade mark and logo outside of India worldwide in
relation to its business. In addition, on 9 April 2010 and 13 April 2010, Essar Power Limited and Essar Oil
Limited, respectively, entered into trade mark licence agreements with Essar Investments to use the
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‘‘Essar’’ trade mark and logo in relation to their businesses exclusively within India. Except for the
consideration for the licence grant, applicable law and venue, all licence agreements have been concluded
on substantially the same terms and conditions.
As consideration for the licences, the Company pays royalties in an amount of £1. Essar Oil and Essar
Power each pay royalties in the amount of 0.25% of their net revenues (i.e. exclusive of value added tax
and excise duty in the case of Essar Power, and exclusive of taxes, duties and crude oil cost in the case of
Essar Oil) generated by their respective business each quarter, with an increase of 0.15% each year over a
period of 5 years until it reaches 1.0%. However, Essar Investments agreed to waive the licence fees for the
period of 1 April 2010 to 31 March 2011.
The licence agreements come into effect from 1 April 2010 and continue to be in force for an indefinite
period of time. Rising Groups Limited and Essar Investments may each terminate their licence agreements
at any time by giving 3 years prior written notice to their respective licensee. The licence agreement
between the Company and Rising Groups Limited is governed by English law. The licence agreement
between Essar Oil and Essar Investments as well as the licence agreement between Essar Power and Essar
Investments is governed by Indian law.
14. Litigation
Except as set out below, neither the Company nor any other member of the Group is or has been engaged
in nor, so far as the Company is aware, has pending or threatened, any governmental, legal or arbitration
proceedings which may have, or have had during the 12 months preceding the date of this document, a
significant effect on the Company’s or the Group’s financial position or profitability.
Power Business
14.1 Dispute with GUVNL
On 14 September 2005, GUVNL, an entity controlled by the state of Gujarat, filed a complaint against
Essar Power with the Gujarat Electricity Regulatory Commission (the ‘‘GERC’’) alleging that Essar Power
diverted electricity generated by its Hazira power plant to Essar Steel, an affiliate of Essar Power, in
violation of its PPA with the Gujarat Electricity Board, whose assets and liabilities were transferred to
GUVNL in 2003; and incorrectly claimed certain fuel generation credits from GUVNL between 1996 and
2006. GUVNL claimed a total of Rs. 15,830 million (approximately US$339.12 million) from Essar Power.
On 18 February 2009, the GERC ruled in favour of GUVNL for the diversion of electricity by Essar Power.
The GERC also awarded GUVNL a refund for generation incentives incorrectly claimed from
14 September 2002 to 29 May 2006. The GERC, however, ruled that recovery of the incorrectly claimed
generation incentives and of compensation for the electricity supplied to Essar Steel in breach of the PPA
prior to September 2002 was barred by the applicable statute of limitation.
Both Essar Power and GUVNL appealed the GERC’s ruling to the Appellate Tribunal for Electricity, New
Delhi. The Appellate Tribunal held on 22 February 2010 that Essar Power was not liable to pay
compensation for alleged wrongful diversion of power to Essar Steel or for the reimbursement of the
annual fixed charges. The Appellate Tribunal further held that Essar Power was liable to refund to
GUVNL the deemed generation incentive paid on and after 14 September 2002. On 9 April 2010,
GUVNL lodged an appeal with the Supreme Court in respect of the ruling dated 22 February 2010 of the
Appellate Tribunal and applied for a stay of the implementation of the said ruling. Hearing on admission
of the appeal and the application of stay is expected by mid May 2010.
On 29 January 2010 Essar Power filed a petition before the GERC against GUVNL claiming certain
payments due to it under the PPA. Essar Power has made a claim for an aggregate amount of
Rs.3,937.5 million (US$84.35 million) comprising delayed payment charges, depreciation, foreign exchange
variation, interest on debentures, bill discounting charges, interest on working capital and alleged wrongful
deduction of rebate by GUVNL. The matter is pending before the GERC.
14.2 Disputes with Gujarat Energy Transmission Corporation Limited

In a dispute between Essar Steel and Gujarat Energy Transmission Corporation Limited, the Gujarat High
Court held that the ‘‘wheeling’’ charges (fees assessed on the transporting of electric power over
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transmission lines) are also leviable in respect of 215 MW of power supplied by Essar Power to Essar Steel.
These wheeling charges aggregate to Rs. 2,439 million (approximately US$52.25 million), payable by Essar
Steel. If Essar Power becomes liable to pay wheeling charges, it may not be entitled to recover them from
Essar Steel.
Essar Power has appealed against the single judge’s order of the Gujarat High Court before the division as
bench of the Gujarat High Court on various grounds, including that it was not a party to the original
dispute, and filed an application for a stay of the order. The application for a stay was rejected by the
divisional bench and Essar Power was ordered to pay both arrears of wheeling charges and current
wheeling charges. In the appeal filed by Essar Power, the Supreme Court granted a stay subject to payment
by Essar Steel of 30% of the wheeling charges demanded in February of 2007. Essar Steel has complied
with the demand. The appeal of Essar Power and Essar Steel is pending before the divisional bench of the
Gujarat High Court.
14.3 Dispute in relation to pricing of gas

Essar Power has filed a special leave petition in the Supreme Court challenging an order by the Gujarat
High Court dismissing a petition filed by various companies including Essar Steel and Essar Power
challenging the legality of a directive dated 6 March 2007 issued by the Government of India to Petronet
LNG Limited. This directive included provisions for the pooling of prices of regasified liquefied natural
gas for existing and future customers resulting in an increase in the prices paid by Essar Steel and Essar
Power under long term contracts with other distributors, including IOCL, BPCL, Gas Authority of India
Limited and GSPC. The matter is pending. In the event Essar Power’s appeal is successful, it would be
entitled to a refund from the other distributors of the increased prices currently being paid. Due to the
nature of the litigation, the amount in dispute is not quantifiable.
14.4 Cases in relation to land acquisition for the power plant of EPMPL
Various persons have filed petitions before the High Court of Madhya Pradesh challenging notifications
and declarations issued by the government of Madhya Pradesh under the Land Acquisition Act, 1894 for
the acquisition of the land for the power plant of Essar Power MP, on the ground that certain provisions of
the Land Acquisition Act and related rules made thereunder were violated. In certain cases, the High
Court of Madhya Pradesh has passed an order of status quo and the matters are currently pending.
Certain public interest litigation petitions have also been filed in the High Court of Madhya Pradesh
challenging a notice issued by the government of Madhya Pradesh for the acquisition of the land for the
Essar Power MP power plant and seeking, among other things, cessation of any demolition and
compensation for displaced persons in the form of land at alternative sites and employment.
Certain displaced persons have also filed petitions claiming benefits as ‘‘displaced persons’’ under the
rehabilitation policy of the Land Acquisition Act, 1894.
Separately, Northern Coalfields Limited has filed a petition in the High Court of Madhya Pradesh against
M.P. Purva Kshetra Vidyut Vitran Company Limited (‘‘M.P. Purva’’) challenging the order of the Collector
of Singrauli district in Madhya Pradesh granting permission to M.P. Purva to erect poles for the supply of
power from its sub-station to Essar Power MP’s site, which has been acquired for coal mining. The High
Court of Madhya Pradesh has granted a stay and the matter is pending. Due to the nature of this litigation,
the amount in dispute is not quantifiable.

14.5 Dispute with United India Insurance Company Limited
Essar Oil obtained an insurance policy on 23 August 1996 from the United India Insurance Company
Limited (the ‘‘United India Insurance’’) covering construction all risks and advanced loss of profits up to
Rs. 35,825 million (approximately US$767.46 million) for physical losses, Rs. 100 million (approximately
US$2.14 million) for third party liability and Rs. 10,720 million (approximately US$229.65 million) for
advance loss of profits, aggregating to a total of Rs. 46,625 million (approximately US$999.25 million). In
June 1998, a cyclone hit the coastal area of the state of Gujarat and caused damage to the refinery project
and, in turn, delayed the commissioning of the project. Essar Oil claimed a sum of Rs. 2,050 million
(approximately US$43.92 million) for physical loss of which United India Insurance paid on account
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Rs. 300 million (approximately US$6.43 million), pending loss adjustment. Essar Oil claimed Rs.
8,863 million (approximately US$189.87 million) towards advanced loss of profits. Whilst a without
prejudice settlement was in discussions for a substantial period, by a letter dated 20 February 2003 United
India Insurance repudiated the claim of Essar Oil. Essar Oil filed a protective suit claiming a sum of Rs.
17,578.3 million (approximately US$376.57 million) with future interest and costs towards loss of profits in
the City Civil Court, Vadodara, Gujarat. In 2008, United India Insurance and Essar Oil jointly referred the
dispute to arbitration, with the claim of Essar Oil being Rs. 30,200 million (approximately
US$646.96 million) comprising Rs. 3,310 million (approximately US$70.91 million) towards the physical
damage claims and Rs. 26,890 million (approximately US$576.05 million) towards the loss of profits
claims, with interest thereon. Essar Oil has withdrawn the suit filed in the City Civil Court, Vadodara,
Gujarat. The matter is currently pending before the arbitral tribunal.
14.6 Public interest litigation filed by Pankti Jog

On 8 May 2009, Pankti Jog (the ‘‘Petitioner’’) filed a public interest claim against the government of
Gujarat and Union of India in the High Court of Gujarat. The Petitioner is seeking to permanently restrain
the government of Gujarat and the Union of India from granting permission for the establishment and/or
expansion of any industry, jetty, effluent treatment plant, thermal power plant, oil refinery or any other
industrial activity or expansion of any existing industries within the area of any marine national park or
marine sanctuary in any part of southern coastal region of the Gulf of Kutch, from Okha to Zinduda.
Specific reference has been made to Essar Oil and Vadinar Oil Terminal Limited in the petition. Essar Oil
is not a party to this litigation. Pursuant to an order of the High Court of Gujarat, Essar Bulk Terminal
Limited and Essar Power Gujarat Limited have also been made a party in this matter. The matter is
currently pending. As Essar Oil is not a party to the proceedings and has authorisation for the
establishment of the Vadinar refinery, the Company does not anticipate any adverse impact from this
litigation. Due to the nature of this litigation, the amount in dispute is not quantifiable.
14.7 Dispute in relation to customs duty

In May 1987, Essar Oil purchased a second hand rig, which was sent to Bahrain for repairs in June 1992.
On its return it was treated as a vessel under the then current import and export policy procedures, in
accordance with the practice at that time.
Pursuant to an agreement dated 23 December 1996, the rig was sold to Noble Asset Company Limited
(‘‘Noble’’) and was delivered to Noble on 11 December 1997 in international waters. However on 12 May
2001, the Commissioner of Customs (Preventive) Mumbai (the ‘‘CoC’’) seized the rig from Noble. The rig
was released to Noble under certain terms and conditions, including the providing by Noble of a bank
guarantee of Rs. 150 million (approximately US$3.21 million) and a bond of Rs. 970 million
(approximately US$20.78 million). By an order dated 23 March 2005, the CoC rejected the treatment of
the rig as a vessel and held that Essar Oil was liable to pay Rs. 78.9 million (approximately
US$1.69 million) as duty on repair charges for the repairs carried out in Bahrain. Further, a penalty of
Rs. 20 million (approximately US$0.43 million) was also imposed on Essar Oil and an aggregate fine of
Rs. 2.8 million (approximately US$0.06 million) levied on three of Essar Oil’s officers.
Noble was directed to pay: (i) Rs. 750 million (approximately US$16.07 million) in customs duty as the
CoC treated the action as an import of the rig, when it was bought from Essar Oil in international waters;
(ii) Rs. 860 million (approximately US$18.42 million) in customs duty as Noble had carried out repairs on
the rig in Sharjah and brought back the rig to Indian territory (although the order clarified that if Noble
paid the duty of Rs. 750 million, it would not be liable to pay further duty of Rs. 860 million (approximately
US$18.42 million)); (iii) a redemption fine of Rs. 150 million (approximately US$3.21 million); and (iv) a
penalty of Rs. 20 million (approximately US$0.43 million). In response to the CoC order against it, Noble
filed an arbitration claim of Rs. 1,786.8 million (approximately US$38.28 million) against Essar Oil before
an arbitral tribunal at London to claim indemnity under the agreement for the purchase of the rig.
Additionally, Essar Oil and Noble filed appeals against the order of the CoC before the Custom Excise and
Service Tax Appellate Tribunal, Mumbai (‘‘CESTAT’’), which CESTAT allowed. The order of CESTAT was
challenged before the Bombay High Court by the CoC. The Bombay High Court dismissed the appeal filed
by the CoC. The CoC has filed a special leave petition in the Supreme Court against the decision of the
Bombay High Court. In view of the matter pending before the Supreme Court, the arbitral tribunal in
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London has stayed the arbitration proceedings between Essar Oil and Noble. The Company believes that
the appeal by COC to the Supreme Court is unlikely to succeed and accordingly, does not anticipate any
adverse impact on Essar Oil.
14.8 Dispute in relation to sales tax incentives

Essar Oil was granted registration in June 1999 under the Capital Investment Incentive
Premier/Prestigious Unit Scheme 1995—2000 which was issued by the Industries and Mines Department,
government of Gujarat under a resolution offering certain incentives to industrial undertakings set up in
the state of Gujarat.
The scheme provided for sales tax deferment of 10 - 17 years in respect of the tax levied under the Gujarat
Sales Tax Act, 1969 for up to 125% of the eligible capital investment. This scheme was operative for the
units starting commercial production from 16 August 1995 to 15 August 2000. The conditions of approval
under the scheme required Essar Oil to commence commercial production by 15 August 2000, which
period was subsequently extended until 15 August 2003.
The Company collected sales taxes in the amount of Rs. 15.16 billion (US$330.3 million) and Rs.
10.6 billion (US$221.3 million) under this scheme and included these amounts in revenue, net of the
present value of Rs. 3.01 billion (US$65.7 million) and Rs. 2.28 billion (US$47.6 million), respectively,
during the periods from 1 May 2008 to 31 March 2009 and from 1 April 2009 to 31 December 2009,
respectively.
However, Essar Oil was not able to start commercial production by 15 August 2003 and the state of
Gujarat asserted that on account of this Essar Oil was not eligible to participate in the sales tax incentive
scheme. Essar Oil filed a special civil application before the High Court of Gujarat on various grounds,
including that the company was prevented from commencing commercial production due to external
factors including a court order and other actions of the state of Gujarat. Essar Oil requested that the date
for commencement of commercial production be extended to 16 June 2008. The High Court of Gujarat, by
its order dated 22 April 2008, allowed Essar Oil’s application and extended the date of commencement of
commercial production from 15 August 2003 to 2 April 2007 due to the exclusion of the period from
13 July 2000 to 27 February 2004.
The state of Gujarat has filed a special leave petition before the Supreme Court against the order of the
High Court of Gujarat. This special leave petition is pending for final hearing. Pursuant to the order of the
High Court of Gujarat dated 22 April 2008, as of 31 March 2009, Essar Oil had deferred sales tax liability
of an amount aggregating to Rs.15.16 billion (approximately US$330.3 million). Essar Oil assigned its sales
tax liability of Rs.25.76 billion (US$551.6 million) as of 31 December 2009 to Essar House, an Essar
Affiliated Company, under a defeasance cum novation, or factoring agreement, and paid the agreed
present value of US$112.3 million under the factoring agreement as of 31 December 2009 to Essar House.
However, Essar Oil remains ultimately liable for the payment of the sales tax to the state of Gujarat in the
event that Essar House does not make payments on the due dates.
14.9 Dispute with Gujarat Pollution Control Board

Essar Oil received a notice dated 17 August 2009 from the GPCB under Section 33-A of the Water
(Prevention and Control of Pollution Act), 1974 claiming that the production of 14 mmtpa at the Vadinar
refinery in May 2009 was higher than the approved production of 9 mmtpa in the authorisation dated
22 January 2008 and that complaints had been received from people in surrounding areas regarding
damage to health and crops. GPCB has proposed issuing the relevant directions to curtail production in
accordance with the conditions of the authorisation, as well as directions to the relevant authorities to stop
the supply of electricity and water to the refinery. In response to this notice, Essar Oil clarified in a letter
to the GPCB dated 5 September 2009 that it had applied to GPCB on 14 June 2009 to operate the refinery
at 14 mmtpa and that so far as the complaints of the villagers were concerned, Essar Oil had been meeting
the norms prescribed by GPCB for emissions, effluent and hazardous waste. GPCB has not responded to
this letter or initiated any further action. On 2 March 2010, however, Essar Oil received from GPCB an
authorisation and consent, valid until 16 September 2010, to operate the refinery at 14 mmtpa and on this
basis believes that no further action by GPCB as to this matter is likely. Due to the nature of this dispute,
the amount in dispute is not quantifiable.
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15. Working capital

In the opinion of Essar Energy plc, taking into account the bank and other facilities available to the
Company and the net proceeds receivable by the Company from New Shares available in the Offer, the
working capital available to the Company is sufficient for the Company’s present requirements, that is, for
at least the next 12 months following the date of this document.
16. No significant change

There has been no significant change in the financial or trading position of the Company since
31 December 2009, the end of the most recent financial period for which audited financial information was
prepared.
17. Related party transactions

For each of the years ended 31 March 2007, 2008 and 2009, the nine months ended 31 December 2009 and
during the period between 31 December 2009 and the date of this document the Company has not entered
into any transactions with related parties save as set out in Essar Energy’s historical financial information,
note 25 of Part 11 ‘‘Financial Information’’ and further disclosed in Part 15 ‘‘Relationship with the Essar
Group’’.
18. Consents
18.1 Deloitte LLP (a member of the Institute of Chartered Accountants in England and Wales) has given
and has not withdrawn its written consent to the inclusion in this document of its Accountant’s
Report set out in Part 11 and its Report on the Unaudited Pro Forma Financial Information set out
in Part 12 in the form and context in which they appear and has authorised the contents of those
parts of this document which comprise its reports for the purposes of Rule 5.5.3R(2)(f) of the
Prospectus Rules. As the New Shares have not been and will not be registered under the Securities
Act, Deloitte LLP has not filed and will not be required to file a consent under the Securities Act.
18.2 Advanced Resources International Inc. has given and not withdrawn its written consent to the
inclusion on this document of its report and references to it in the form and context in which they
appear and has authorised the contents of those parts of this document which comprise its report for
the purposes of Rule 5.5.3R(2)(f) of the Prospectus Rules.
18.3 Netherland, Sewell & Associates has given and not withdrawn its written consent to the inclusion in
this document of its reports and references to it in the form and context in which they appear and has
authorised the contents of those parts of this document which comprise its reports for the purposes
of Rule 5.5.3R(2)(f) of the Prospectus Rules.
18.4 RPS Energy has given and not withdrawn its written consent to the inclusion in this document of its
report and references to it in the form and context in which they appear and has authorised the
contents of those parts of this document which comprise its report for the purposes of
Rule 5.5.3R(2)(f) of the Prospectus Rules.
19. General
19.1 The expenses relating to the issue of the shares, including the Underwriters’ commission, the UK
Listing Authority listing fee, professional fees and expenses and the costs of printing and distribution
of documents are estimated to amount to £64 million (including VAT) and are payable by the
Company.
19.2 The financial information contained in this document does not amount to statutory accounts within
the meaning of Section 434(3) of the Companies Act. The Company will not be able to file audited
accounts as the first year end will be 31 December 2010.
19.3 Each New Share is expected to be issued at a premium of 415 pence to its nominal value of 5 pence.
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20. Takeover bids

Mandatory bids
The City Code will apply to Essar Energy plc. Under the City Code, if an acquisition of interests in Essar
Energy plc’s Shares were to result in the aggregate interests of an acquirer and persons acting in concert
with it in Essar Energy plc’s Shares representing 30% or more of the voting rights in Essar Energy plc, the
acquirer and, depending upon the circumstances, persons acting in concert with it, would be required
(except with the consent of The Panel on Takeovers and Mergers) to make a cash offer for the outstanding
Shares. A similar obligation to make such a mandatory offer would also arise on the acquisition of an
interest in Shares by a person holding (together with persons acting in concert with it) an interest in Shares
carrying between 30% and 50% of the voting rights in Essar Energy plc if the effect of such acquisition
were to increase that person’s percentage of the voting rights.
Squeeze-out
Under the Companies Act, if a ‘‘takeover offer’’ (as defined in section 974 of the Companies Act) is made
for the Company’s Shares and the offeror were to acquire, or unconditionally contract to acquire, not less
than 90% in value of the shares to which the offer relates (the ‘‘Offer Shares’’) and not less than 90% of
the voting rights attached to the Offer Shares, within three months of the last day on which its offer can be
accepted, it could acquire compulsorily the remaining 10%. It would do so by sending a notice to
outstanding shareholders telling them that it will acquire compulsorily their Offer Shares and then, six
weeks later, it would execute a transfer of the outstanding Offer Shares in its favour and pay the
consideration to the Company, which would hold the consideration on trust for outstanding shareholders.
The consideration offered to the shareholders whose Offer Shares are acquired compulsorily under Act
must, in general, be the same as the consideration that was available under the takeover offer.
Sell-out
The Companies Act also gives minority shareholders a right to be bought out in certain circumstances by
an offeror who has made a takeover offer. If a takeover offer related to all the Shares and at any time
before the end of the period within which the offer could be accepted the offeror held or had agreed to
acquire not less than 90% of the Shares to which the offer relates, any holder of Shares to which the offer
related who had not accepted the offer could by a written communication to the offeror require it to
acquire those Shares. The offeror is required to give any shareholder notice of his right to be bought out
within one month of that right arising. The offeror may impose a time limit on the rights of the minority
shareholders to be bought out, but that period cannot end less than three months after the end of the
acceptance period. If a shareholder exercises his or her rights, the offeror is bound to acquire those Shares
on the terms of the offer or on such other terms as may be agreed.
21. Documents available for inspection

Copies of the following documents are available for inspection during usual business hours on any weekday
(Saturdays, Sundays and public holidays excepted) for a period of 12 months following Admission at the
offices of Freshfields Bruckhaus Deringer LLP, 65 Fleet Street, London EC4Y 1HS:
(a) the articles of association of Essar Energy plc;
(b) the consent letters referred to in ‘‘Consents’’ in paragraph 18 above;
(c) the reports by Deloitte LLP which are set out in Part 11 ‘‘Financial Information’’ and Part 12
‘‘Unaudited Pro Forma Financial Information’’;
(d) the Oil and Gas Expert Reports by Advanced Resources International Inc., Netherland, Sewell &
Associates and RPS Energy set out in Part 18 ‘‘Expert Reports’’;
(e) the Mehsana Report by Advanced Resources International Inc.;
(f) the reports by A.T. Kearney Limited and the Confederation of Indian Industry, KBC Advanced
Technology PTE Ltd and KPMG India Private Limited referred to in Part 5 ‘‘Industry Overview’’;
and
(g) this document.
Dated: 30 April 2010
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MERRILL CORPORATION JDICKSO//30-APR-10 12:37 DISK116:[10ZAU1.10ZAU70801]FH70801A.;86
PART 17
DEFINITIONS AND GLOSSARY
Definitions
The following definitions apply throughout this document unless the context requires otherwise:
‘‘1C’’ . . . . . . . . . . . . . . . . . . . . . . . . contingent resources where 90% of the possible outcomes are

greater than the 1C value
‘‘1P’’ . . . . . . . . . . . . . . . . . . . . . . . . proved reserves
‘‘2P’’ . . . . . . . . . . . . . . . . . . . . . . . . proved plus probable reserves
‘‘3P’’ . . . . . . . . . . . . . . . . . . . . . . . . proved, probable and possible reserves
‘‘Companies Act’’ . . . . . . . . . . . . . . . the Companies Act 2006, as amended
‘‘Admission’’ . . . . . . . . . . . . . . . . . . . the admission of the Shares to the premium listing segment of
the Official List and to trading on the London Stock Exchange’s
main market for listed securities
‘‘Algoma Steel’’ . . . . . . . . . . . . . . . . . Algoma Steel Inc
‘‘amine regeneration unit’’ . . . . . . . . . unit used to process sour gas loaded stream of methyl di-ethanol
amine. The function of this unit is to collect rich amine solution
from different process units, remove hydrogen sulphide, carbon
dioxide, and hydrocarbons from rich amine and send
regenerated lean amine solution back to the same process units
‘‘API’’ . . . . . . . . . . . . . . . . . . . . . . . specific gravity scale developed by the American Petroleum
Institute for measuring the relative density of various petroleum
liquids
‘‘API gravity’’ . . . . . . . . . . . . . . . . . . the API gravity illustrates the density of crude oil classified by
the American Petroleum Institute. The API gravity is defined as:
141.5
131.5
Gravity of specific crude oil at 15.6C
The higher the API gravity is, the lighter is the crude oil
‘‘APM’’ . . . . . . . . . . . . . . . . . . . . . . . Administered Price Mechanism
‘‘ARI’’ . . . . . . . . . . . . . . . . . . . . . . . Advanced Resources International, Inc.
‘‘Articles’’ . . . . . . . . . . . . . . . . . . . . . the articles of association of Essar Energy plc to be adopted with
effect from Admission
‘‘Assam Blocks’’ . . . . . . . . . . . . . . . . The AA-ONN-2004/3 and AA-ONN-2004/5 onshore blocks
located in Assam
‘‘ATF’’ . . . . . . . . . . . . . . . . . . . . . . . aviation turbine fuel
‘‘A.T. Kearney’’ . . . . . . . . . . . . . . . . . A.T. Kearney’s October 2009 report entitled ‘‘Sustaining
Growth—Future of Indian Power Sector’’
‘‘Australia Blocks’’ . . . . . . . . . . . . . . . The NT/P77 and NT/P78 offshore permits located in the
Bonaparte basin of north-western Australia
‘‘barrel’’ or ‘‘bbl’’ . . . . . . . . . . . . . . . barrel of crude oil, 159 litres by volume
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Part 17 Definitions and Glossary
‘‘barrels per stream day’’ . . . . . . . . . . the maximum number of barrels of input that a distillation
facility can process within a 24-hour period when running at full
capacity with no allowance for downtime. Large petrochemical/
refineries/power plants are typically expected to run for
8,000 hours per year or 333.33 days.
‘‘bcf’’ . . . . . . . . . . . . . . . . . . . . . . . . billion cubic feet
‘‘Best Estimate’’ . . . . . . . . . . . . . . . . prospective resources where there is a 50% probability that the
resources actually covered will equal or exceed the best estimate
‘‘BG’’ . . . . . . . . . . . . . . . . . . . . . . . . Bank guarantee
‘‘Bhander Power’’ . . . . . . . . . . . . . . . Bhander Power Limited
‘‘BITS-Pilani’’ . . . . . . . . . . . . . . . . . . Birla Institution of Technology and Sciences located at Pilani,
Rajasthan, India
‘‘bitumen’’ . . . . . . . . . . . . . . . . . . . . the low value residual product of crude-oil vacuum distillation,
which is primarily used for asphalt coating of roads and roofing
materials
‘‘Board’’ or ‘‘Directors’’ . . . . . . . . . . . the board of directors of Essar Energy plc
‘‘Bombay Stock Exchange’’ . . . . . . . . Bombay Stock Exchange Limited
‘‘BNP Paribas’’ . . . . . . . . . . . . . . . . . BNP PARIBAS
‘‘BPLR’’ . . . . . . . . . . . . . . . . . . . . . . Benchmark prime lending rate
‘‘BPCL’’ . . . . . . . . . . . . . . . . . . . . . . Bharat Petroleum Corporation Limited
‘‘bpd’’ . . . . . . . . . . . . . . . . . . . . . . . barrels per calendar day
‘‘BPMIGAS’’ . . . . . . . . . . . . . . . . . . Badan Pelaksana Kegiatan Usaha Hulu Minyak Dan Gas Bumi
‘‘BTU’’ . . . . . . . . . . . . . . . . . . . . . . . British thermal unit
‘‘BU’’ . . . . . . . . . . . . . . . . . . . . . . . . billion units, a unit of energy used in India to measure annual
power generation. 1 unit = 1 kilowatt hour unit.
‘‘busbar’’ . . . . . . . . . . . . . . . . . . . . . main power terminal to which circuits are attached
‘‘BVC’’ . . . . . . . . . . . . . . . . . . . . . . . Bureau Veritas Certification
‘‘C’’ . . . . . . . . . . . . . . . . . . . . . . . . . Celsius
‘‘CAGR’’ . . . . . . . . . . . . . . . . . . . . . compound annual growth rate
‘‘CB&I’’ . . . . . . . . . . . . . . . . . . . . . . Chicago Bridge and Iron
‘‘CDR Scheme’’ . . . . . . . . . . . . . . . . Corporate debt restructuring scheme entered into by Essar Oil
on 17 December 2004 with its then-existing lenders
‘‘CEA’’ . . . . . . . . . . . . . . . . . . . . . . . Central Electricity Authority
‘‘CERC’’ . . . . . . . . . . . . . . . . . . . . . Central Electricity Regulatory Commission
‘‘CERs’’ . . . . . . . . . . . . . . . . . . . . . . Certified Emission Reductions
‘‘CESTAT’’ . . . . . . . . . . . . . . . . . . . . Customs Excise and Service Tax Appellate Tribunal, Mumbai
‘‘CFC Rules’’ . . . . . . . . . . . . . . . . . . the United Kingdom controlled foreign company rules set out in
Chapter IV of Part XVII Income and Corporation Taxes Act
1988
‘‘ckt km’’ . . . . . . . . . . . . . . . . . . . . . circuit kilometres
‘‘clarified slurry oil’’ . . . . . . . . . . . . . a heavy fraction that is generated during the fluid catalytic
cracking process
369

‘‘CNG’’ . . . . . . . . . . . . . . . . . . . . . . compressed natural gas

‘‘CoC’’ . . . . . . . . . . . . . . . . . . . . . . . Commissioner of Customs (Preventive) Mumbai
‘‘Combined Code’’ . . . . . . . . . . . . . . the Combined Code on Corporate Governance dated June 2006
published by the Financial Reporting Council
‘‘Company’’ . . . . . . . . . . . . . . . . . . . Essar Energy plc together with its subsidiaries
‘‘complexity’’ . . . . . . . . . . . . . . . . . . a key industry measure referring to an oil refinery’s ability to
process feedstocks, such as heavier and higher butane content
crude oils, into value-added products. Generally, the higher the
complexity and more flexible the feedstock slate, the better
positioned the refinery is to take advantage of the more cost
effective crude oils, resulting in incremental gross margin
opportunities for the refinery
‘‘cracking’’ . . . . . . . . . . . . . . . . . . . . the conversion of large hydrocarbon molecules into smaller
ones. Cracking is carried out either at high temperatures
(thermal cracking), or with the aid of a catalyst and high
pressure (catalytic cracking and hydrocracking). The cracking
process enables greater quantities of saturated hydrocarbons
suitable for gasoline and other light fractions to be recovered
from crude oil
‘‘crack spread’’ . . . . . . . . . . . . . . . . . a proxy, or a benchmark, for refining margins and refer to the
margin that would accrue from the simultaneous purchase of
crude oil and the sale of refined petroleum products, in each
case at the then prevailing price. For example, 3/2/1 crack spread
is often referenced and represents the approximate gross margin
resulting from processing one barrel of crude oil, assuming that
three barrels of a benchmark crude oil are converted, or
cracked, into two barrels of gasoline and one barrel of diesel
‘‘CREST’’ . . . . . . . . . . . . . . . . . . . . the UK-based system for the paperless settlement of trades in
listed securities, of which CRESTCo. Limited is the operator
‘‘crude distillation unit’’ . . . . . . . . . . . this is a key unit in which crude oil is fractioned into different
products such as light naphtha, heavy naphtha, light kerosene,
heavy kerosene, LGO and HGO by a distillation process. The
unit is comprised of a crude distillation column, a fired heater, a
network of heat exchangers, coolers and air coolers, pumps,
compressors and vessels. The unit operation is fully automatic
and is run by an advanced instrumentation and control system to
ensure safe and energy efficient operation
‘‘CSG’’ . . . . . . . . . . . . . . . . . . . . . . . Coal seam gas, also called coal bed methane (CBM), refers to
the gas (principally methane) which is found in coal seams
‘‘delayed coker unit’’ . . . . . . . . . . . . . a thermal cracking process unit for upgrading heavy petroleum
residues, such as vacuum residue, into lighter gaseous and liquid
products and solid coke (green coke)
‘‘desorption’’ . . . . . . . . . . . . . . . . . . expulsion of an adsorbed component as a result of a decrease in
pressure
‘‘Deutsche Bank’’ . . . . . . . . . . . . . . . Deutsche Bank AG, London Branch
‘‘development not viable’’ . . . . . . . . . a discovered oil or gas accumulation for which there are no
current plans to develop or to acquire additional data at the time
due to limited production potential
370

‘‘development pending’’ . . . . . . . . . . . a discovered oil or gas accumulation where project activities are
ongoing to justify commercial development in the foreseeable
future
‘‘diesel hydrotreater’’ . . . . . . . . . . . . unit used to hydrotreat a blend of raw diesel and kerosene
streams to produce low sulphur, high cetane number diesel
products
‘‘DIFC’’ . . . . . . . . . . . . . . . . . . . . . . Dubai International Finance Centre
‘‘Discussion Document’’ . . . . . . . . . . the discussion document entitled ‘‘Proposals for controlled
foreign companies (CFC) reform’’ as published in January 2010
by HM Treasury and HM Revenue & Customs
‘‘DVC’’ . . . . . . . . . . . . . . . . . . . . . . Damodar Valley Corporation
‘‘dwt’’ . . . . . . . . . . . . . . . . . . . . . . . . dead weight tonnage
‘‘E’’ . . . . . . . . . . . . . . . . . . . . . . . . . estimated
‘‘E&P’’ . . . . . . . . . . . . . . . . . . . . . . . exploration and production
‘‘EEH’’ . . . . . . . . . . . . . . . . . . . . . . Essar Energy Holdings Limited
‘‘EEPL’’ . . . . . . . . . . . . . . . . . . . . . . Essar Exploration and Production Limited
‘‘EEPLN’’ . . . . . . . . . . . . . . . . . . . . Essar Exploration and Production Limited (Nigeria)
‘‘EEU’’ . . . . . . . . . . . . . . . . . . . . . . Essar East Unawa
‘‘EITL’’ . . . . . . . . . . . . . . . . . . . . . . Essar Information Technology Limited
‘‘EOVL’’ . . . . . . . . . . . . . . . . . . . . . Essar Oil Vadinar Limited
‘‘EPC’’ . . . . . . . . . . . . . . . . . . . . . . . engineering, procurement and construction
‘‘EPCG Scheme’’ . . . . . . . . . . . . . . . the Export Promotion Capital Goods Scheme operated by the
Government of India
‘‘EPFMPA’’ . . . . . . . . . . . . . . . . . . . . Employees Provident Funds and Miscellaneous Provisions Act
1952
‘‘EPH’’ . . . . . . . . . . . . . . . . . . . . . . . Essar Power Holdings Ltd
‘‘EPS’’ . . . . . . . . . . . . . . . . . . . . . . . Economic Planning and Scheduling
‘‘ESU’’ . . . . . . . . . . . . . . . . . . . . . . . Essar South Unawa
‘‘Essar Affiliated Companies’’ . . . . . . members of the Essar Group and any other companies which
are not part of the Group which are owned and/or controlled
directly or indirectly by Mr Ravi Ruia, Mr Prashant Ruia or
members of their immediate family (meaning their brothers,
sisters, parents or spouses)
‘‘Essar Bulk Terminal’’ . . . . . . . . . . . Essar Bulk Terminal Limited, an Essar Affiliated Company
‘‘Essar Energy Overseas’’ . . . . . . . . . Essar Energy Overseas Ltd
‘‘Essar Engineering’’ . . . . . . . . . . . . . Essar Engineering Services Limited, an Essar Affiliated
Company
‘‘Essar Global’’ . . . . . . . . . . . . . . . . . Essar Global Limited
‘‘Essar Group’’ . . . . . . . . . . . . . . . . . Essar Global Limited and its subsidiaries that are not part of
Essar Energy plc
‘‘Essar HES’’ . . . . . . . . . . . . . . . . . . Essar Heavy Engineering Services, an Essar Affiliated Company
‘‘Essar House’’ . . . . . . . . . . . . . . . . . Essar House Limited, an Essar Affiliated Company
‘‘Essar Investments’’ . . . . . . . . . . . . . Essar Investments Limited
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‘‘Essar Logistics’’ . . . . . . . . . . . . . . . Essar Logistics Limited, an Essar Affiliated Company

‘‘Essar Oil’’ . . . . . . . . . . . . . . . . . . . Essar Oil Limited or Essar Oil Limited and its subsidiaries, an
Essar Affiliated Company, as the context indicates
‘‘Essar Power’’ . . . . . . . . . . . . . . . . . Essar Power Limited, an Essar Affiliated Company, or Essar
Power and its consolidated subsidiaries, as the context indicates
‘‘Essar Power (Canada)’’ . . . . . . . . . . Essar Power (Canada) LLP (formerly Algoma Energy LLP)
‘‘Essar Power Gujarat’’ . . . . . . . . . . . Essar Power Gujarat Limited
‘‘Essar Power Hazira’’ . . . . . . . . . . . . Essar Power Hazira Limited
‘‘Essar Power Jharkhand’’ . . . . . . . . . Essar Power Jharkhand Limited
‘‘Essar Power MP’’ . . . . . . . . . . . . . . Essar Power M.P. Limited
‘‘Essar Power (Orissa)’’ . . . . . . . . . . . Essar Power (Orissa) Limited
‘‘Essar Power Transco’’ . . . . . . . . . . . Essar Power Transmission Company Limited
‘‘Essar Project Management’’ . . . . . . . Essar Project Management Consultants Limited
‘‘Essar Projects’’ . . . . . . . . . . . . . . . . Essar Projects (India) Limited, formerly Essar Construction
(India) Limited, an Essar Affiliated Company
‘‘Essar Shipping Ports & Logistics’’ . . Essar Shipping Ports & Logistics Limited
‘‘Essar Shipping & Logistics’’ . . . . . . . Essar Shipping & Logistics Limited
‘‘Essar Steel’’ . . . . . . . . . . . . . . . . . . Essar Steel Limited, an Essar Affiliated Company
‘‘Essar Steel Algoma’’ . . . . . . . . . . . . Essar Steel Algoma Inc, an Essar Affiliated Company
‘‘Essar Steel Group’’ . . . . . . . . . . . . . Essar Steel Limited and its subsidiaries
‘‘Essar Steel Hazira’’ . . . . . . . . . . . . . Essar Steel Hazira Limited, an Essar Affiliated Company
‘‘Essar Steel Orissa’’ . . . . . . . . . . . . . Essar Steel Orissa Limited, an Essar Affiliated Company
‘‘Essar Trading’’ . . . . . . . . . . . . . . . . Essar Electric Power Development Corporation Limited
‘‘ETHL’’ . . . . . . . . . . . . . . . . . . . . . . ETHL Global Capital Limited
‘‘EU’’ . . . . . . . . . . . . . . . . . . . . . . . . the European Union
‘‘Euro III’’ . . . . . . . . . . . . . . . . . . . . European emission standards for vehicles applicable since
January 2000
‘‘Euro IV’’ . . . . . . . . . . . . . . . . . . . . European emission standards for vehicles applicable since
January 2005
‘‘Euro V’’ . . . . . . . . . . . . . . . . . . . . . European emission standards for vehicles applicable since
September 2009
‘‘Expansion Projects’’ . . . . . . . . . . . . the Power Plant Projects and the Refinery Expansion Projects
‘‘FCC’’ . . . . . . . . . . . . . . . . . . . . . . . fluid catalytic cracking
‘‘feedstocks’’ . . . . . . . . . . . . . . . . . . . crude oil and other hydrocarbons used as basic materials in a
refining or manufacturing process
‘‘Finance Bill, 2010’’ . . . . . . . . . . . . . the Indian Finance Bill, 2010 announced in February 2010
‘‘fines’’ . . . . . . . . . . . . . . . . . . . . . . . fine particles remaining from fuel burned in certain
manufacturing processes
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‘‘fluid catalytic cracking’’ . . . . . . . . . . the refining process of breaking down the larger, heavier, and
more complex hydrocarbon molecules into simpler and lighter
molecules. Fluid catalytic cracking is accomplished by the use of
a catalytic agent, which is continuously regenerated and is an
effective process for increasing the yield of gasoline from crude
oil. Catalytic cracking processes fresh feedstock as well as
recycled feedstocks
‘‘FO’’ . . . . . . . . . . . . . . . . . . . . . . . . fuel oil
‘‘fob’’ . . . . . . . . . . . . . . . . . . . . . . . . free on board
‘‘Franchisees’’ . . . . . . . . . . . . . . . . . . Petrol Station Operations
‘‘FSA’’ . . . . . . . . . . . . . . . . . . . . . . . the Financial Services Authority
‘‘FSMA’’ . . . . . . . . . . . . . . . . . . . . . . the Financial Services and Markets Act 2000, as amended
‘‘gasoil’’ . . . . . . . . . . . . . . . . . . . . . . a liquid petroleum product with a boiling range temperature of
200 to 370C and an ignition temperature over 55C that is
typically used as a fuel for boilers, furnaces and internal
combustion engines. The type of gasoil suitable for use in
oil-fired heating plants and boilers is called heating oil, while the
type suitable for internal combustion engines is called diesel
‘‘gasoline’’ . . . . . . . . . . . . . . . . . . . . a light liquid petroleum product that is typically used as a fuel
for internal combustion engines
‘‘GDP’’ . . . . . . . . . . . . . . . . . . . . . . gross domestic product, the total value of goods and services
produced by a country
‘‘Global Supplies’’ . . . . . . . . . . . . . . . Global Supplies (UAE) FZE, an Essar Affiliated Company
‘‘GPCB’’ . . . . . . . . . . . . . . . . . . . . . Gujarat Pollution Control Board
‘‘gross refining margin’’ or ‘‘GRM’’ . . the sales value and net of discounts of refined products sold, less
the cost of crude oil consumed, plus benefits of sales tax
incentives, as adjusted for commodity hedging gains and losses
‘‘GUVNL’’ . . . . . . . . . . . . . . . . . . . . Gujarat Urja Vikas Nigam Limited
‘‘GW’’ . . . . . . . . . . . . . . . . . . . . . . . Gigawatt. One gigawatt equals 1,000 megawatts
‘‘Hazira Pipe’’ . . . . . . . . . . . . . . . . . . Hazira Pipe Mill Limited
‘‘Hazira Plate’’ . . . . . . . . . . . . . . . . . Hazira Plate Limited
‘‘HS2’’ . . . . . . . . . . . . . . . . . . . . . . . Hazira Steel 2
‘‘heavy crude oil’’ . . . . . . . . . . . . . . . crude oils with an API gravity between 25 and 30. For the
purpose of the prospectus, Dar and Mangala crudes are
considered ultra-heavy crudes due to having a high wax content
with an abnormally high bottom
‘‘ha’’ . . . . . . . . . . . . . . . . . . . . . . . . hectare
‘‘hectare’’ . . . . . . . . . . . . . . . . . . . . . 10,000 square meters
‘‘High Estimate’’ . . . . . . . . . . . . . . . . prospective resources where there is a 10% probability that the
resources actually covered will equal or exceed the high estimate
‘‘Hindalco’’ . . . . . . . . . . . . . . . . . . . . Hindalco Industries Limited
‘‘HDT VGO’’ . . . . . . . . . . . . . . . . . . hydrotreated vacuum gasoil
‘‘HMRC’’ . . . . . . . . . . . . . . . . . . . . . the UK HM Revenue & Customs
‘‘HPCL’’ . . . . . . . . . . . . . . . . . . . . . . Hindustan Petroleum Corporation Limited
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‘‘HSD’’ . . . . . . . . . . . . . . . . . . . . . . . high-speed diesel

‘‘hydrocarbon’’ . . . . . . . . . . . . . . . . . oil, gas or condensates
‘‘hydrocracking’’ . . . . . . . . . . . . . . . . the conversion and desulfurization process (typically of vacuum
gasoil) into lighter products such as diesel that takes place at
high pressure in the presence of hydrogen and a fixed catalyst
‘‘hydrotreating’’ . . . . . . . . . . . . . . . . a process to remove sulphur from petroleum products
‘‘IFRS’’ . . . . . . . . . . . . . . . . . . . . . . International Financial Reporting Standards, as adopted by the
European Union
‘‘Income Tax Act, 1961’’ . . . . . . . . . . the Income Tax Act, 1961, of India, as amended
‘‘India’’ . . . . . . . . . . . . . . . . . . . . . . Republic of India
‘‘ISL’’ . . . . . . . . . . . . . . . . . . . . . . . . Indian Securities Limited
‘‘Indian Stock Exchanges’’ . . . . . . . . . Bombay Stock Exchange and National Stock Exchange
‘‘Indonesia Block’’ . . . . . . . . . . . . . . the South East Tungkal onshore block in the south Sumatra
basin of Indonesia
‘‘IOCL’’ . . . . . . . . . . . . . . . . . . . . . . Indian Oil Corporation Limited
‘‘ISO’’ . . . . . . . . . . . . . . . . . . . . . . . The International Organization for Standardization
‘‘ISO 9001’’ . . . . . . . . . . . . . . . . . . . an international standard established by the ISO to certify
quality management systems
‘‘ISO 14001’’ . . . . . . . . . . . . . . . . . . an international standard established by the ISO to certify
environmental management systems
‘‘IST’’ . . . . . . . . . . . . . . . . . . . . . . . International Supply and Trading
‘‘Joint Bookrunners’’ . . . . . . . . . . . . . J.P. Morgan Cazenove and Deutsche Bank
‘‘Joint Global Coordinators’’ . . . . . . . J.P. Morgan Cazenove and Deutsche Bank
Joint Ore Reserves Committee . . . . . committee sponsored by the Australian mining industry and its
professional organizations, including the Australasian Institute
of Mining and Metallurgy, the Australian Institute of
Geoscientists and the Minerals Council of Australia, which
published the 2004 ‘‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’’ (the
‘‘JORC Code’’) which is often used as a standard for
professional reporting purposes with respect to the estimation of
mineral resources and ore reserves
‘‘J.P. Morgan Cazenove’’ . . . . . . . . . . J.P. Morgan Securities Ltd. (which conducts its UK investment
banking activities as J.P. Morgan Cazenove)
‘‘KBC’’ . . . . . . . . . . . . . . . . . . . . . . . KBC Process Technology Limited
‘‘kbpd’’ . . . . . . . . . . . . . . . . . . . . . . . thousands of barrels per day
‘‘Kcal/kg’’ . . . . . . . . . . . . . . . . . . . . . kilocalories per kilogram
‘‘KPRL’’ . . . . . . . . . . . . . . . . . . . . . . Kenya Petroleum Refinery Limited
‘‘kg’’ . . . . . . . . . . . . . . . . . . . . . . . . Kilogram
‘‘km’’ . . . . . . . . . . . . . . . . . . . . . . . . kilometres
2
‘‘km ’’ . . . . . . . . . . . . . . . . . . . . . . . square kilometres
‘‘KPMG’’ . . . . . . . . . . . . . . . . . . . . . KPMG India Private Limited
‘‘KTPA’’ . . . . . . . . . . . . . . . . . . . . . . kilo tonnes per annum
374

‘‘kv’’ . . . . . . . . . . . . . . . . . . . . . . . . . kilovolt
‘‘KW’’ . . . . . . . . . . . . . . . . . . . . . . . kilowatt
‘‘kWh’’ . . . . . . . . . . . . . . . . . . . . . . . kilowatt hours
‘‘light crude oil’’ . . . . . . . . . . . . . . . . crude oils with a sulphur content between 0.5% and 1.0% and
API gravity less than 30
‘‘light sweet crude oil’’ . . . . . . . . . . . crude oils with a sulphur content less than 0.5% and API gravity
greater than 30
‘‘Listing Rules’’ . . . . . . . . . . . . . . . . . the listing rules and regulations of the UK Listing Authority (as
amended)
‘‘Low Estimate’’ . . . . . . . . . . . . . . . . prospective resources where there is a 90% probability that the
resources actually covered will equal or exceed the low estimate
‘‘LPG’’ . . . . . . . . . . . . . . . . . . . . . . . liquefied petroleum gas. A gas mixture used for fuel purposes,
containing propane, propene, butane, or butane as its main
components that has been liquefied to enable it to be
transported and stored under pressure
‘‘m’’ . . . . . . . . . . . . . . . . . . . . . . . . . metres
3
‘‘m ’’ . . . . . . . . . . . . . . . . . . . . . . . . cubic metres
‘‘Madagascar Blocks’’ . . . . . . . . . . . . the 3103 (Melaky) and 3110 (Morombe) onshore blocks in
Madagascar
‘‘Mahan Coal’’ . . . . . . . . . . . . . . . . . Mahan Coal Limited, a joint venture between Essar Power and
Hindalco
‘‘Matix’’ . . . . . . . . . . . . . . . . . . . . . . Matix fertilisers and Chemicals Ltd.
‘‘MCL JV Agreement’’ . . . . . . . . . . . Mahan Coal Limited Joint Venture Agreement, a joint venture
agreement entered into on 1 February 2006 and subsequently
amended on 15 June 2006 between EPMPL and Hindalco
‘‘medium sour crude oil’’ . . . . . . . . . . crude oils with a sulphur content between 1.0% and 2.5% and
API gravity between 27 to 33
‘‘medium sweet crude oil’’ . . . . . . . . . crude oils with a sulphur content between 0.5% and 1% and API
between 27 to 33
‘‘Mehsana Block’’ . . . . . . . . . . . . . . . the CB-ON/3 block at Mehsana in the Cambay Basin
‘‘Member States’’ . . . . . . . . . . . . . . . member states of the EU
‘‘MIBOR’’ . . . . . . . . . . . . . . . . . . . . Mumbai inter bank offered rate
‘‘MKwH’’ . . . . . . . . . . . . . . . . . . . . . million kilowatt hour
‘‘MLD’’ . . . . . . . . . . . . . . . . . . . . . . million litres per day
‘‘mld’’ . . . . . . . . . . . . . . . . . . . . . . . million litres per day
‘‘mmbbl’’ . . . . . . . . . . . . . . . . . . . . . million barrels of oil and condensate
‘‘mmboe’’ . . . . . . . . . . . . . . . . . . . . . million barrels of oil equivalents
‘‘mmBTU’’ . . . . . . . . . . . . . . . . . . . . million BTU
‘‘mmt’’ . . . . . . . . . . . . . . . . . . . . . . . million metric tonnes
‘‘mmscmd’’ . . . . . . . . . . . . . . . . . . . . million standard cubic meters per day
‘‘mmtpa’’ . . . . . . . . . . . . . . . . . . . . . million metric tonnes per annum
‘‘MoPNG’’ . . . . . . . . . . . . . . . . . . . . Ministry of Petroleum and Natural Gas
375

‘‘MPP’’ . . . . . . . . . . . . . . . . . . . . . . . Merchant Power Plants

‘‘MS’’ or ‘‘motor spirits’’ . . . . . . . . . . non-diesel motor gasoline (used to distinguish automobile
gasoline from aviation fuel)
‘‘MRA’’ . . . . . . . . . . . . . . . . . . . . . . Master Restructuring Agreement
‘‘MTOE’’ . . . . . . . . . . . . . . . . . . . . . million tonne oil equivalent
‘‘mtpd’’ . . . . . . . . . . . . . . . . . . . . . . metric tonnes per day
‘‘MU’’ . . . . . . . . . . . . . . . . . . . . . . . million units. 1 unit = 1 kilowatt hour
‘‘Mumbai Offshore Block’’ . . . . . . . . the MB-OSN-2005/3 offshore block located in the Mumbai
basin
‘‘NIOC’’ . . . . . . . . . . . . . . . . . . . . . . National Iranian Oil Company
‘‘naphtha’’ . . . . . . . . . . . . . . . . . . . . a liquid petroleum product that is typically used as a feedstock
for other petrochemical processes, generally in a reformer,
producing high octane gasoline and hydrogen or other
petrochemical products. Naphtha is also used as a chemical
feedstock
‘‘naphtha hydrotreater’’ . . . . . . . . . . . refinery unit in which naphtha is processed to produce low
sulphur naphtha which then goes to Reformer Unit which
produces a high octane blending component to boost the octane
of the gasoline pool
‘‘National Stock Exchange’’ . . . . . . . . National Stock Exchange of India Limited
‘‘NELP’’ . . . . . . . . . . . . . . . . . . . . . . New Exploration Licensing Policy
‘‘Nelson Complexity Index’’ . . . . . . . . the Nelson Complexity Index assigns a complexity factor to each
major piece of refinery equipment based on its complexity and
cost in comparison to crude distillation, which is assigned a
complexity factor of 1.0. The complexity of each piece of
refinery equipment is then calculated by multiplying its
complexity factor by its throughput ratio as a percentage of
crude distillation capacity. Adding up the complexity values
assigned to each piece of equipment, including crude distillation,
determines a refinery’s complexity on the Nelson Complexity
Index. For a further description of the methodology adopted by
the Company in calculating the Nelson Complexity Index ratings
used in this document, please refer to Part 2 ‘‘Presentation of
Information’’
‘‘Neptune/Neptune I and II/ code name which, due to confidentiality considerations, the
Neptune Limited’’ . . . . . . . . . . . . . . Company has given to its Phase I Power Projects and Phase II
Power Projects in Orissa, India (as described in more detail in
Part 6 ‘‘The Business—Power—Phase II Power Projects—
Neptune I and II—Orissa (2,250 MW)’’) and which includes the
coal blocks allocated to Neptune Limited
‘‘New Shares’’ . . . . . . . . . . . . . . . . . . new shares in the capital of Essar Energy plc to be allotted and
issued under the Offer
‘‘Nigeria Block’’ . . . . . . . . . . . . . . . . the OPL 226 offshore oil and gas block on the Nigerian
continental shelf
‘‘Niko’’ . . . . . . . . . . . . . . . . . . . . . . . Niko (NECO) Limited
‘‘NO’’ . . . . . . . . . . . . . . . . . . . . . . . nitrogen oxides, which are compounds that are produced in the
combustion process and contribute to ground-level air pollution
such as smog
376

‘‘Noble’’ . . . . . . . . . . . . . . . . . . . . . . Noble Asset Company Limited

‘‘Noble Energy’’ . . . . . . . . . . . . . . . . Noble Energy International Limited
‘‘Nomura’’ . . . . . . . . . . . . . . . . . . . . Nomura International plc
‘‘Non-Executive Directors’’ . . . . . . . . The non-executive directors of Essar Energy plc
‘‘NSAI’’ . . . . . . . . . . . . . . . . . . . . . . Netherland, Sewell & Associates, Inc.
‘‘NTP’’ . . . . . . . . . . . . . . . . . . . . . . . National Tariff Policy
‘‘NTPC’’ . . . . . . . . . . . . . . . . . . . . . National Thermal Power Corporation
‘‘OFAC’’ . . . . . . . . . . . . . . . . . . . . . US Office of Foreign Assets Control
‘‘Offer’’ . . . . . . . . . . . . . . . . . . . . . . the offer of New Shares by Essar Energy plc to institutional
investors in the United Kingdom and elsewhere described in
Part 13 ‘‘The Offer’’
‘‘Offer Price’’ . . . . . . . . . . . . . . . . . . The price at which each Share is to be issued or sold under the
Offer
‘‘Official List’’ . . . . . . . . . . . . . . . . . The Official List of the FSA
‘‘OHSAS 18001’’ . . . . . . . . . . . . . . . . international standards used to certify occupational health and
safety management systems
‘‘OIL’’ . . . . . . . . . . . . . . . . . . . . . . . Oil India Limited
‘‘OMCs’’ . . . . . . . . . . . . . . . . . . . . . oil marketing companies
‘‘ONGC’’ . . . . . . . . . . . . . . . . . . . . . Oil and Natural Gas Corporation Limited
‘‘Over-allotment Option’’ . . . . . . . . . . the option granted to the Stabilising Manager by Essar
Energy plc to subscribe for, or procure subscribers for, up to
30,303,029 additional Shares as more particularly described in
Part 13 ‘‘The Offer’’
‘‘Over-allotment Shares’’ . . . . . . . . . . shares to be offered pursuant to the Over-allotment Option
‘‘P&NG Rules’’ . . . . . . . . . . . . . . . . Petroleum and Natural Gas Rules, 1959
‘‘PCAOB’’ . . . . . . . . . . . . . . . . . . . . Public Company Accounting Oversight Board (United States)
‘‘PELs’’ . . . . . . . . . . . . . . . . . . . . . . petroleum exploration licenses
‘‘per complexity barrel’’ . . . . . . . . . . . a measurement of the efficiency of the refinery expansion
calculated as the total capital cost of expansion divided by the
product of the expected throughput capacity (in barrels per
calendar day) and the expected complexity of the refinery (based
on the Company’s complexity calculation methodology)
‘‘petrochemicals’’ . . . . . . . . . . . . . . . mainly products derived from crude oil refining, such as
ethylene, propylene, butylenes and isobutylene, primarily
intended for use as petrochemical feedstock in the production of
plastics, synthetic fibres, synthetic rubbers and other products. A
variety of products are produced for use as solvents, including
benzene, toluene and xylene
‘‘PGCIL’’ . . . . . . . . . . . . . . . . . . . . . Power Grid Corporation of India Limited
‘‘Phase I Power Projects’’ . . . . . . . . . the power plant projects described under ‘‘Power—Phase I
Power Projects’’ in Part 6 ‘‘The Business’’
‘‘Phase II Power Projects’’ . . . . . . . . . the power plant projects described under ‘‘Power—Phase II
Power Projects’’ in Part 6 ‘‘The Business’’
377

‘‘Phase I Refinery Project’’ . . . . . . . . project to upgrade the Vadinar refinery processing capacity to
18 mmtpa and increase its average Nelson Complexity Index
from 6.1 to 11.8 through debottlenecking and the addition of
new process units
‘‘Phase II Refinery Project’’ . . . . . . . . project to add a new refinery stream to the Vadinar refinery,
increasing its total processing capacity to 36.0 mmtpa and its
average Nelson Complexity Index from 11.8 to 12.8
‘‘PLR’’ . . . . . . . . . . . . . . . . . . . . . . . Prime lending rate
‘‘PMLs’’ . . . . . . . . . . . . . . . . . . . . . . Petroleum Mining Licenses
‘‘PNGRB’’ . . . . . . . . . . . . . . . . . . . . Petroleum and Natural Gas Regulatory Board
‘‘Power Finance Corporation’’ . . . . . . Power Finance Corporation Limited, a PSU under the Indian
Ministry of Power
‘‘Power Plant Projects’’ . . . . . . . . . . . the Phase I Power Projects and the Phase II Power Projects
‘‘PPA’’ . . . . . . . . . . . . . . . . . . . . . . . Power Purchase Agreement
‘‘PPAC’’ . . . . . . . . . . . . . . . . . . . . . . Petroleum Planning Analysis Cell
‘‘Premier Oil’’ . . . . . . . . . . . . . . . . . . Premier Oil Pacific Limited
‘‘PRMS’’ . . . . . . . . . . . . . . . . . . . . . Petroleum Resources Management System
‘‘prospect’’ . . . . . . . . . . . . . . . . . . . . an oil and gas asset that has been technically evaluated to a state
where it is ready to be drilled
‘‘Prospectus Directive’’ . . . . . . . . . . . EU Prospectus Directive (2003/71/EC)
‘‘Prospectus Rules’’ . . . . . . . . . . . . . . the rules for the purposes of Part VI of FSMA in relation to
offers of securities to the public and the admission of securities
to trading n a regulated market
‘‘PSC’’ . . . . . . . . . . . . . . . . . . . . . . . production sharing contract
‘‘PSU’’ . . . . . . . . . . . . . . . . . . . . . . . Public Sector Undertaking
‘‘qualified institutional buyer’’ or
‘‘QIBs’’ . . . . . . . . . . . . . . . . . . . . . . has the meaning given by Rule 144A under the US Securities
Act
‘‘Qualified Investors’’ . . . . . . . . . . . . persons who are ‘‘qualified investors’’ within the meaning of
Article 2(1)(e) of the Prospectus Directive
‘‘Rajmahal Block’’ . . . . . . . . . . . . . . . the RM(E)-CBM-2008/IV block in Jharkhand, India
‘‘Raniganj Block’’ . . . . . . . . . . . . . . . the RG (East)-CBM-2001/1 block in West Bengal, India
‘‘Ratna Fields’’ . . . . . . . . . . . . . . . . . the Ratna & R-Series Fields
‘‘refinery’’ . . . . . . . . . . . . . . . . . . . . . a facility used to process crude oil. The basic process unit in a
refinery is a crude oil distillation unit, which splits crude oil into
various fractions through a process of heating and condensing.
Simple, or hydroskimming, refineries normally have crude oil
distillation, catalytic reforming, and hydrotreating units. The
demand for lighter petroleum products, such as motor gasoline
and diesel fuel, has increased the need for more sophisticated
processing. Complex refineries have vacuum distillation,
catalytic cracking, or hydrocracking units. Cracking units process
vacuum oil into gasoline, gasoil, and heavy fuel oil
‘‘Refinery Expansion Projects’’ . . . . . . collectively, the Phase I Refinery Project and Phase II Refinery
Project
378

‘‘refining margin’’ . . . . . . . . . . . . . . . the difference, for any particular quantity of crude oil, between
the value of all the refined petroleum products a refinery is able
to produce from such crude oil minus the cost of the crude oil
(including associated costs such as transport, insurance, etc.)
‘‘Registrars’’ . . . . . . . . . . . . . . . . . . . Computershare Investor Services PLC
‘‘Regulation S’’ . . . . . . . . . . . . . . . . . Regulation S under the US Securities Act
‘‘reserves’’ . . . . . . . . . . . . . . . . . . . . those volumes of discovered hydrocarbons that are either
producing or are subject to a commercially viable development
plan and are almost certain to be developed
‘‘resources’’ . . . . . . . . . . . . . . . . . . . those volumes of hydrocarbons either yet to be found
(prospective) or if found the development of which depends
upon a number of factors being resolved (contingent)
‘‘RON’’ . . . . . . . . . . . . . . . . . . . . . . research octane number, a way of measuring octane of gasoline
‘‘RPS’’ . . . . . . . . . . . . . . . . . . . . . . . RPS Energy
‘‘S’’ . . . . . . . . . . . . . . . . . . . . . . . . . sulphur
‘‘SEBs’’ . . . . . . . . . . . . . . . . . . . . . . State Electricity Boards
‘‘SEC’’ . . . . . . . . . . . . . . . . . . . . . . . US Securities and Exchange Commission
‘‘Senior Management’’ . . . . . . . . . . . members of Essar Energy’s management team, details of whom
are set out in Part 8 ‘‘Directors, Senior Management and
Corporate Governance’’
‘‘Shareholders’’ . . . . . . . . . . . . . . . . . the holders of Shares in the capital of Essar Energy plc
‘‘Shares’’ . . . . . . . . . . . . . . . . . . . . . the ordinary shares of Essar Energy plc
‘‘Shell International’’ . . . . . . . . . . . . . Shell International Petroleum Company Limited
‘‘Shell Refineries’’ . . . . . . . . . . . . . . . Shell’s oil refinery in Stanlow, United Kingdom, and Shell’s
refineries in Hamburg and Heide, Germany
‘‘SERCs’’ . . . . . . . . . . . . . . . . . . . . . State Electricity Regulatory Commissions
‘‘SEZ Act’’ . . . . . . . . . . . . . . . . . . . . Special Economic Zone Act 2005
‘‘SEZ Rules’’ . . . . . . . . . . . . . . . . . . Special Economic Zone Rules 2006
‘‘SDRT’’ . . . . . . . . . . . . . . . . . . . . . . UK stamp duty reserve tax
‘‘SKO’’ . . . . . . . . . . . . . . . . . . . . . . . superior kerosene oil
‘‘SO2’’ . . . . . . . . . . . . . . . . . . . . . . . sulphur dioxide, the combustion product of sulphur, which is
formed from the use of fuels containing sulphur
‘‘Sponsor’’ . . . . . . . . . . . . . . . . . . . . J.P. Morgan Cazenove
‘‘spot market’’ . . . . . . . . . . . . . . . . . a term used to describe the international trade in one-off
cargoes or shipments of commodities, such as crude oil, in which
prices closely follow demand and availability
‘‘sq. ft.’’ . . . . . . . . . . . . . . . . . . . . . . square feet
‘‘Stabilising Manager’’ . . . . . . . . . . . . J.P. Morgan Cazenove
‘‘Standard Chartered’’ . . . . . . . . . . . . Standard Chartered Securities (Hong Kong) Limited
‘‘Subsidiary’’ . . . . . . . . . . . . . . . . . . . has the meaning given to it in section 1159 of the UK
Companies Act 2006
379

‘‘sulphur recovery unit’’ . . . . . . . . . . . unit used to process hydrogen sulphide gas from the sour water
stripper and amine regeneration units and convert it to
elemental sulphur, thereby avoiding pollution of the
environment
‘‘tcf’’ . . . . . . . . . . . . . . . . . . . . . . . . trillion cubic feet
‘‘Teletech Investments’’ . . . . . . . . . . . Teletech Investments (I) Limited
‘‘tough’’ . . . . . . . . . . . . . . . . . . . . . . crude oils having an API gravity of less than 25
‘‘tph’’ . . . . . . . . . . . . . . . . . . . . . . . . tonnes per hour
‘‘TWh’’ . . . . . . . . . . . . . . . . . . . . . . tera watt hour
‘‘UK’’ . . . . . . . . . . . . . . . . . . . . . . . . the United Kingdom of Great Britain and Northern Ireland
‘‘ultra heavy crude oil’’ . . . . . . . . . . . crude oils with an API gravity of less than 25. For the purposes
of this prospectus, Dar and Managala crudes are considered
ultra-heavy crudes due to heavy a high wax content with an
abnormally high bottom
‘‘UMPPs’’ . . . . . . . . . . . . . . . . . . . . . Ultra Mega Power Projects
‘‘UNFCCC’’ . . . . . . . . . . . . . . . . . . . United Nations Framework Convention on Climate Change
‘‘Underwriters’’ . . . . . . . . . . . . . . . . . J.P. Morgan Cazenove, Deutsche Bank, BNP Paribas, Nomura
and Standard Chartered
‘‘Underwriting Agreement’’ . . . . . . . . the underwriting agreement entered into on 30 April 2010
between Essar Energy plc, the Directors and the Underwriters
described in paragraph 13 of Part 16 ‘‘Additional Information’’
‘‘United States’’ or ‘‘US’’ . . . . . . . . . . the United States of America, its territories and possessions, any
State of the United States of America, and the District of
Columbia
‘‘UOP’’ . . . . . . . . . . . . . . . . . . . . . . Universal Oil Products, LLC
‘‘US Exchange Act’’ . . . . . . . . . . . . . United States Securities Exchange Act of 1934, as amended
‘‘US GAAP’’ . . . . . . . . . . . . . . . . . . accounting principles generally accepted in the United States
‘‘US GAAS’’ . . . . . . . . . . . . . . . . . . . auditing standards generally accepted in the United States
‘‘US Securities Act’’ . . . . . . . . . . . . . United States Securities Act of 1933, as amended
‘‘vacuum distillation unit’’ . . . . . . . . . a process that follows atmospheric distillation (when the latter is
no longer feasible because of the high temperatures) that takes
place in vacuum-conditions, made to obtain vacuum gasoil and a
heavy vacuum residues
‘‘Vadinar Oil’’ . . . . . . . . . . . . . . . . . . Vadinar Oil
‘‘Vadinar Properties’’ . . . . . . . . . . . . . Vadinar Properties Limited, an Essar Affiliated Company
‘‘VAT’’ . . . . . . . . . . . . . . . . . . . . . . . value added tax
‘‘VGO hydrotreater’’ . . . . . . . . . . . . . vacuum gasoil hydrotreater
‘‘Vietnam Block’’ . . . . . . . . . . . . . . . the 114 offshore oil and gas block off the coast of Vietnam
‘‘visbreaking’’ . . . . . . . . . . . . . . . . . . a mild thermal cracking to further upgrade the vacuum residue
received from the distillation unit. The thermal cracking takes
place in the furnace and distillates are obtained through two
stage distillation in atmospheric and vacuum distillation columns
‘‘VOTL’’ . . . . . . . . . . . . . . . . . . . . . Vadinar Oil Terminal Limited
‘‘VPCL’’ . . . . . . . . . . . . . . . . . . . . . . Vadinar Power Company Limited, an Essar Affiliated Company
‘‘VPTL’’ . . . . . . . . . . . . . . . . . . . . . . Vadinar Ports & Terminal Limited, an Essar Affiliated Company
380

MERRILL CORPORATION JDICKSO//30-APR-10 12:37 DISK116:[10ZAU1.10ZAU70801]FM70801A.;44
PART 18
EXPERT REPORTS
RPS Ratna & R-Series Fields Report (Ratna), prepared by RPS Energy . . . . . . . . . . . . . . . . . . . 382
ARI RM(E)-CBM-2008/IV Block Report (Rajmahal), prepared by Advance Resources
International, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498
NSAI OPL 226 Block Report (Nigeria), prepared by Netherland, Sewell & Associates, Inc. . . . . . 536
NSAI RG (East)-CBM-2001/1 Block Report (Raniganj), prepared by Netherland, Sewell &
Associates, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 585
381

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: FM70801A.;44
MERRILL CORPORATION JDICKSO//30-APR-10 12:36 DISK116:[10ZAU1.10ZAU70801]SB70801A.;41
309 Reading Road, Henley-on-Thames, Oxfordshire, RG9 1EL, United Kingdom

29MAR201020513485
T +44 (0)1491 415400 F +44 (0)1491 415415 E rpshen@rpsgroup.com W www.rpsgroup.com
Essar Oil Limited

Essar Technopark,
Old Swan Mill Compound,
LBS Marg, Kurla (W),
Mumbai – 400070
India
Essar Energy Holdings Limited
Rogers House, Ground Floor,
5, President John Kennedy Street,
Port Louis,
Mauritius.
Essar Energy plc
3rd Floor, Lansdowne House
57 Berkeley Square
London W1J 6ER
UK
J.P. Morgan Securities Ltd. (JPMSL)
125 London Wall
London
EC2Y 5AJ
UK
Deutsche Bank AG, London Branch (DB)
Winchester House
London
EC2N 2DB
30th April 2010
Project ECV1577
COMPETENT PERSON’S REPORT FOR THE RATNA & R-SERIES FIELDS, OFFSHORE INDIA
In response to your request and subsequent Letter of Engagement dated 4th January 2010 (and amended
by a side letter dated 28th January), RPS Energy (‘‘RPS’’) has completed an independent evaluation of
certain oil and gas properties in the Ratna area offshore India in which Essar Oil Limited (‘‘EOL’’) has an
interest. This report fulfils the requirements of a Mineral Expert’s Report (or Competent Person’s Report
‘‘CPR’’) and has been prepared for inclusion in the prospectus to be published in relation with the Initial
Public Offering (IPO) of Essar Energy plc (‘‘Essar Energy’’) on the London Stock Exchange (the
‘‘Prospectus’’).
RPS has estimated a range of recoverable resources as at December 31st 2009, based on data and
information available up to that date. RPS has also estimated the value of these resources. In estimating
resources we have used standard petroleum engineering techniques, which combine geological and
production data with information concerning fluid characteristics and reservoir pressure, where available.
We have estimated the degree of uncertainty inherent in the measurements and interpretation of the data
and have calculated a range of resources and risk factors in accordance with the 2007 SPE/WPC/AAPG/
SPEE Petroleum Resource Management System (See Section 2.2).
We have taken the working interest that EOL has in the Ratna and R-Series Fields, offshore India (the
‘‘Properties’’), as presented by EOL, and we have not investigated nor do we make any warranty as to
EOL’s interest in the Properties.
382

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The data set included geological, geophysical and engineering data, together with reports and
presentations pertaining to the contractual and fiscal terms applicable to the assets. In carrying out this
review RPS has relied solely upon this information.
Summary of Resources
RPS has classified these recoverable volumes as Contingent Resources—Development Pending which is
the highest category of Contingent Resources prior to classification as Reserves. RPS considers that the
volumes could be classified as Reserves on execution of a Production Sharing Contract (‘‘PSC’’) and
finalisation of a detailed field development plan. RPS has written assurance from EOL that the PSC will be
signed in May 2010 and that development of Ratna and the R Series fields is a priority for EOL
management. As a result RPS estimate a Chance of Development to be 90%. The gross, net and net
working interest Contingent Resources for the Ratna Field and R Series Fields are given in Table 1.
Net Entitlement
Gross Resources Net WI Resources Resources
Oil Gas Oil Gas Oil Gas
(MMstb) (Bscf) (MMstb) (Bscf) (MMstb) (Bscf)
1C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123.56 62.32 61.78 31.16 43.31 22.04

2C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148.81 79.65 74.41 39.82 50.15 26.88
3C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174.84 97.59 87.42 48.79 57.76 32.23
Table 1: Summary of Total Contingent Resources for the Ratna Field and R Series Fields
The total net entitlement oil and gas resources relates to the PSC as a whole and as such it is not possible
to determine the exact resources applicable to each field. The allocation in Table 2 has used the total mean
oil and gas entitlement resources as calculated and has allocated this total back to each field based on the
mean ratio of oil and gas in each field for the gross input cases.
Net Entitlement
Resources
Oil Gas
Field Formation (MMstb) (Bscf)
R12 North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RPIII Lst 2.32 2.34

R12 South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RPIII Lst 5.88 5.39
R7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 11.31 2.19
R7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 4.08 0.79
R9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 6.39 2.88
R10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 3.90 3.52
R13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 6.43 4.60
R13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 2.67 1.42
R71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 0.60 0.32
R12 North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 4.35 2.29
R12 Central . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 1.35 0.71
R12 South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 1.06 0.57
Total (Mean) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.34 27.03
Table 2: Summary of Contingent Resources Reviewed
Valuation
Economic valuation of reserves and resources are linked to a long term price forecast for Brent. The Base
Case price used for all valuations presented in this report, is given in Table 2. The Base Case forecast was
383

supplied by EOL to be consistent with other reports in the Prospectus and is not an independent RPS
forecast.
Oil Price
Brent Ratna price Gas Price
US$/stb US$/stb US$/MMBTu
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.80 84.80 5.25

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89.60 89.60 5.25
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91.60 91.60 5.25
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.10 93.10 5.25
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.80 94.80 5.25
2015+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.00 85.00 5.25
Table 3: EOL Price Forecasts
RPS has assumed project sanction on 1st January 2011 and first oil on 1st December 2013 in its valuation.
Fabrication of the CPP is on the critical path of the schedule. EOL believes that project sanction could be
earlier than assumed by RPS and yards could complete the CPP fabrication in less time than RPS has
estimated. Should this be the case first oil would be brought forward accordingly and the resulting expected
post-tax net present value of the project would increase.
The post-tax Net Present Values (NPV) of EOL’s Resources at various discount rates, applying the Base
Case price forecasts, are tabulated in Table 4.
Post-Tax Net Present Value NPV10

(US$ Million, Money of the Day)
1C 2C 3C
762 909 1,061

st
Table 4: Post-Tax Valuation (Net EOL Share) of EOL’s Resources as of 31 December 2009
Qualifications
RPS is an independent consultancy specialising in petroleum reservoir evaluation and economic analysis.
Except for the provision of professional services on a fee basis, RPS does not have a commercial
arrangement with any other person or company involved in the interests that are the subject of this report.
Mr Gordon Taylor, Director, Geoscience for RPS Energy, has supervised the evaluation. Mr Taylor is a
Chartered Geologist and Chartered Engineer with over 30 years experience in upstream oil and gas. Other
RPS Energy employees involved in this work hold at least a Masters degree in geology, geophysics,
petroleum engineering or a related subject or have at least five years of relevant experience in the practice
of geology, geophysics or petroleum engineering.
Basis of Opinion
The evaluation presented herein reflects our informed judgement based on accepted standards of
professional investigation, but is subject to generally recognised uncertainties associated with the
interpretation of geological, geophysical and engineering data. The evaluation has been conducted within
our understanding of petroleum legislation, taxation and other regulations that currently apply to these
interests. However, RPS is not in a position to attest to the property title, financial interest relationships or
encumbrances related to the properties. Our estimates of resources and value are based on the data set
available to, and provided by EOL. We have accepted, without independent verification, the accuracy and
completeness of these data.
As the existing platform and facilities at Ratna Field will not be reused and the remaining facilities are yet
to be fabricated no site visit was deemed necessary.
The report represents RPS’ best professional judgement and should not be considered a guarantee or
prediction of results. It should be understood that any evaluation, particularly one involving exploration
and future petroleum developments, may be subject to significant variations over short periods of time as
new information becomes available. This report relates specifically and solely to the subject assets and is
conditional upon various assumptions that are described herein. The report, of which this letter forms part,
must therefore be read in its entirety. Except with permission from RPS, this report may not be
reproduced or redistributed, in whole or in part, to any other person or published, in whole or in part, for
384

any purpose without the express written consent of RPS. However in instances where excerpts only are to
be reproduced or published, other than in relation to the circular and prospectus in connection with the
IPO, this cannot be done without the express permission of RPS. RPS has given and not withdrawn its
written consent to the issue of this Prospectus, with its name included within it, and to the inclusion of this
report and references to this report in the Prospectus.
For the purposes if Prospectus Rule 5.5.3R(2)(f) RPS accepts responsibility for the information contained
in the RPS report set out in this part of the Prospectus and those parts of the Prospectus which include
references to this report and declares that to the best knowledge and belief of RPS, having taken all
reasonable care to ensure that such is the case, the information contained herein is in accordance with the
facts and does not omit anything likely to affect the import of such information.
Yours faithfully,
RPS Energy
28APR201017121927
Gordon R Taylor, CEng, CGeol
Director, Geoscience
385

MERRILL CORPORATION JDICKSO//30-APR-10 12:36 DISK116:[10ZAU1.10ZAU70801]SC70801A.;33
Table of Contents
1. Description of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391

1.1 Licence Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392
2. Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
2.2 Reserves and Resource Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
2.3 Risk Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
2.3.1 Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
2.4 Uncertainty Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393
3. Database . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395
4. Regional Setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
4.1 Bombay Basin Geological History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
4.1.1 Mesozoic to Early Eocene (Basement and Basal Clastics) . . . . . . . . . . . . . . . . 397
4.1.2 Early Eocene to Early Oligocene (Bassein) . . . . . . . . . . . . . . . . . . . . . . . . . . 398
4.1.3 Early Oligocene to Miocene . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399
5. Reservoir Geology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
5.1 Stratigraphic Nomenclature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
5.2 Bassein Limestone Reservoirs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
5.2.1 RPIII Limestone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400
5.2.2 A Limestone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
5.2.3 Reservoir Core Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404
5.3 Basal Clastics Reservoir Characterisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405
5.4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406
5.5 Structural Mapping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406
5.6 Stochastic Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408
5.7 Field Specific In-Place Volumes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408
5.7.1 R12 Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408
5.7.2 STOIIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410
5.7.3 R12 Northern Area RPIII Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410
5.7.4 R12 Southern Area RPIII Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411
5.7.5 R12 Central Area Basal Clastics Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . 413
5.7.6 R12 Southern Area Basal Clastics Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . 413
5.7.7 R12 Northern Area Basal Clastics Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . 414
5.7.8 R7 and R7A Fields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416
5.7.9 R8 Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419
5.7.10 R9 Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420
5.7.11 R10 Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423
5.7.12 R13 Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424
5.7.13 R71 Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429
5.7.14 Other Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429
6. Ultimate Technical Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430
6.1 Engineering Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430
6.2 Reservoir Engineering Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430
6.2.1 Routine Core analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430
6.2.2 Special Core Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431
6.2.3 Production data (R12-RPIII) analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432
6.2.4 Well Performance Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434
6.2.5 Field Recovery Factor Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435
6.3 Production Forecasts and Ultimate Technical Recovery . . . . . . . . . . . . . . . . . . . . . . . . 435
6.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435
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6.3.2 Field R7A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438

6.3.3 Field R7AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439
6.3.4 Field R9A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440
6.3.5 Field R10A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441
6.3.6 Field R12RPIII North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442
6.3.7 Field R12RPIII South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443
6.3.8 Field R13A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444
6.3.9 Field R71BC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445
6.3.10 Field R12BC North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446
6.3.11 Field R12BC Central . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447
6.3.12 Field R12BC South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448
6.3.13 Field R13BC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449
7. Development Plan Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450
7.1 Fluid Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450
7.2 Development Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450
7.2.1 Wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450
7.2.2 Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453
7.2.3 Capex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454
7.2.4 Opex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462
7.2.5 Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462
8. Economomic Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464
8.1 Valuation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464
8.1.1 Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464
8.1.2 Crude oil price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464
8.1.3 Natural gas price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464
8.2 PSC Commercial Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
8.2.1 Participating Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
8.2.2 License Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
8.2.3 Bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
8.2.4 Other Special Amounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
8.2.5 Royalty and Cess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
8.2.6 Distribution of revenue under the PSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466
8.2.7 Cost Recovery Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466
8.2.8 Recoverable Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466
8.2.9 Profit Petroleum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466
8.2.10 Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467
8.2.11 Conventional Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467
8.2.12 Minimum Alternative Tax (MAT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467
8.2.13 Abandonment Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468
8.3 Valuation Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468
8.4 Valuation Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472
387

List of Tables
Table 2-1: Ratna and R Series fields Block Location Map . . . . . . . . . . . . . . . . . . . . . . . . . 391
Table 4-1: Bombay Basin Structural Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
Table 4-2: Bombay Basin Regional geological cross section . . . . . . . . . . . . . . . . . . . . . . . . . 397
Table 4-3: Ratna Area Stratigraphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398
Table 5-1: Typical RPIII Limestone log . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401
Table 5-2: Bassein Limestone RPIII Reservoir Parameter Summary . . . . . . . . . . . . . . . . . . . 402
Table 5-3: Typical Bassein A Limestone log . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403
Table 5-4: Bassein A Limestone Reservoir Parameter Summary . . . . . . . . . . . . . . . . . . . . . 404
Table 5-5: Bassein Limestone Core Porosity and Permeability Crossplot . . . . . . . . . . . . . . . . 405
Table 5-6: Bassein Limestone Core Porosity and Permeability Crossplot by reservoir and field . 405
Table 5-7: Summary of In-place Volume Estimates (100% Basis) . . . . . . . . . . . . . . . . . . . . . 406
Table 5-8: Ratna Block Bassein A Limestone Depth Structure Map . . . . . . . . . . . . . . . . . . 407
Table 5-9: R12 Well field—Existing Wells Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409
Table 5-10: R12 Central Area RPIII Limestone, STOIIP Estimates (100% Basis) . . . . . . . . . 410
Table 5-11: R12 Northern Area RPIII Limestone, STOIIP Estimates (100% Basis) . . . . . . . . 411
Table 5-12: R12 Southern Area RPIII Limestone, STOIIP Estimates (100% Basis) . . . . . . . . 411
Table 5-13: R12 RPIII Depth Structure Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412
Table 5-14: R12 Central Area Basal Clastic Reservoir STOIIP Estimates (100% Basis) . . . . . 413
Table 5-15: R12 Southern Area Basal Clastic Reservoir STOIIP Estimates (100% Basis) . . . . 413
Table 5-16: R12 Northern Area Basal Clastic Reservoir STOIIP Estimates (100% Basis) . . . . 414
Table 5-17: R12 Basal Clastics Depth Structure Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415
Table 5-18: R7 and R7A fields—Existing Wells Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 416
Table 5-19: R7 A Reservoir, STOIIP Estimates (100% Basis) . . . . . . . . . . . . . . . . . . . . . . . . 417
Table 5-20: R7A A Limestone, STOIIP Estimates (100% Basis) . . . . . . . . . . . . . . . . . . . . . . 417
Table 5-21: R7 and 7A A limestone Depth Structure Map . . . . . . . . . . . . . . . . . . . . . . . . . . 418
Table 5-22: R8 Miocene Limestone STOIIP Estimates (100% Basis) . . . . . . . . . . . . . . . . . . . 419
Table 5-23: R8 Miocene Limestone Depth Structure Map . . . . . . . . . . . . . . . . . . . . . . . . . . 420
Table 5-24: R9 field—Existing Wells Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421
Table 5-25: R9 A-Limestone, STOIIP Estimates (100% Basis) . . . . . . . . . . . . . . . . . . . . . . . 421
Table 5-26: R9 field—A limestone depth structure map . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422
Table 5-27: R10 field—Existing Wells Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423
Table 5-28: R10 A-Limestone, STOIIP Estimates (100% Basis) . . . . . . . . . . . . . . . . . . . . . . 423
Table 5-29: R10 A Limestone Depth Structure Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424
Table 5-30: R13 field—Existing Wells Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425
Table 5-31: R13 A and B Limestone, STOIIP Estimates (100% Basis) . . . . . . . . . . . . . . . . . 426
Table 5-32: R13 Basal Clastics STOIIP Estimates (100% Basis) . . . . . . . . . . . . . . . . . . . . . . 426
Table 5-33: R13 A Limestone Depth Structure Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
Table 5-34: R13 Basal Clastics Depth Structure Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428
Table 5-35: R71 Basal Clastic Reservoir, STOIIP Estimates (100% Basis) . . . . . . . . . . . . . . . 429
Table 6-1: Core Measurements of Permeability vs. Porosity . . . . . . . . . . . . . . . . . . . . . . . . . 430
Table 6-2: SCAL Analyses of R12-2 Well Samples (RPIII limestone) . . . . . . . . . . . . . . . . . . 431
Table 6-3: Estimates of Carbonate Recovery Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432
Table 6-4: R-12 RPIII Limestone, Central Segment—Production and Decline Curve Fit . . . . 432
Table 6-5: R12 RPIII Limestone, Central Segment—Estimated Ultimately Recoverable Oil . 433
Table 6-6: R-12 RPIII MBAL Multi-tank Modelling: Analytical Method—Tank 01 . . . . . . . . 433
Table 6-7: RPIII Production Well Tests vs. Well Cumulative Production . . . . . . . . . . . . . . . . 434
Table 6-8: Estimated Well Cumulative Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434
Table 6-9: Summary of Oil Recovery Factor Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435
Table 6-10: Expected Ultimate Recovery from Individual Reservoir Pools . . . . . . . . . . . . . . . 436
388

Table 6-11: Well Drilling Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436

Table 6-12: Full Field Annual Average Oil Production Profiles . . . . . . . . . . . . . . . . . . . . . . . 437
Table 6-13: Full Field Annual Average Gas Production Profiles . . . . . . . . . . . . . . . . . . . . . . 437
Table 6-14: R7A Field Annual Average Oil Production Forecast . . . . . . . . . . . . . . . . . . . . . . 438
Table 6-15: R7AA Field Annual Average Oil Production Forecast . . . . . . . . . . . . . . . . . . . . 439
Table 6-16: R9A Field Annual Average Oil Production Forecast . . . . . . . . . . . . . . . . . . . . . . 440
Table 6-17: R10A Field Annual Average Oil Production Forecast . . . . . . . . . . . . . . . . . . . . . 441
Table 6-18: R12 RPIII Limestone North Segment Annual Average Oil Production Forecast . . 442
Table 6-19: R12 RPIII Limestone South Segment Annual Average Oil Production Forecast . . 443
Table 6-20: R13A Field Annual Average Oil Production Forecast . . . . . . . . . . . . . . . . . . . . . 444
Table 6-21: R71 Basal Clastics, Annual Average Oil Production Forecast . . . . . . . . . . . . . . . 445
Table 6-22: R12 Basal Clastics, North Segment—Annual Average Oil Production Forecast . . . 446
Table 6-23: R12 Basal Clastics, Central Segment—Annual Average Oil Production Forecast . . 447
Table 6-24: R12 Basal Clastics, South Segment—Annual Average Oil Production Forecast . . . 448
Table 6-25: R13 Basal Clastics—Annual Average Oil Production Forecast . . . . . . . . . . . . . . . 449
Table 7-1: RPS Well Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451
Table 7-2: R12 RPIII South and R12 BC Central & South Well Details . . . . . . . . . . . . . . . 451
Table 7-3: R12 RPIII North and R12 BC North Well Details . . . . . . . . . . . . . . . . . . . . . . . 451
Table 7-4: R7 A and AA Well Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452
Table 7-5: R9A Well Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452
Table 7-6: R71 BC and R10 A Well Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452
Table 7-7: R13 A and R13 BC Well Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453
Table 7-8: Development Plan Schematic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454
Table 7-9: Total Capex Summary (US$ MM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455
Table 7-10: Well Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456
Table 7-11: Breakdown of Rig Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457
Table 7-12: Equipment Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457
Table 7-13: Wellhead Platform Topsides . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458
Table 7-14: Wellhead Jackets Capex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458
Table 7-15: CPP Topsides Capex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458
Table 7-16: CPP Topsides Capacities and Manifolding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459
Table 7-17: PS Oil Processing Flow scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459
Table 7-18: EOL Oil Processing Flow scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460
Table 7-19: Pipeline Installation Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460
Table 7-20: Flowline Capex Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461
Table 7-21: Flowline Unit Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461
Table 7-22: Flowline Installation Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462
Table 7-23: RPS Project Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463
Table 8-1: EOL Oil and Gas Price Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464
Table 8-2: Participants in PSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
Table 8-3: Production Bonuses Payable by Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465
Table 8-4: Table of Input Resources used in the Economic Valuation . . . . . . . . . . . . . . . . . . 468
Table 8-5: Distribution of Gross Oil Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469
Table 8-6: Distribution of Gross Gas Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 469
Table 8-7: Summary of input Gross field resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470
Table 8-8: Distribution of Gross Capex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471
Table 8-9: Distribution of Gross OPEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471
Table 8-10: CAPEX and OPEX Per Barrel Oil Equivalent for Mean Case . . . . . . . . . . . . . . . 472
Table 8-11: Summary of Total Consolidated Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472
Table 8-12: Distribution of EOL Net Entitlement Oil Resources . . . . . . . . . . . . . . . . . . . . . . 473
389

Table 8-13: Distribution of EOL Net Entitlement Gas Resources . . . . . . . . . . . . . . . . . . . . . 473

Table 8-14: Net Entitlement Resources by Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474
Table 8-15: EOL Net Present Value Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474
Appendices
Appendix A: Description of Contract Area

Appendix B: Glossary of Terms and Abbreviations
Appendix C: SPE/WPC/SPEE/AAPG Petroleum Resource management System Definitions
Appendix D: Intera Core Fracture Occurrence Descriptions
Appendix E: Input Parameters for In-place Volume Calculations
Appendix F: RPS Production Profiles
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MERRILL CORPORATION JDICKSO//30-APR-10 12:36 DISK116:[10ZAU1.10ZAU70801]SD70801A.;27
1. DESCRIPTION OF ASSETS
The Ratna and R-Series fields comprise a group of fields located about 90km south-west of Bombay and to
the south of the producing Heera and Neelam fields (see Figure 1). Water depths are in the range 40 to
50 m.
26MAR201019253614
Table 2-1: Ratna and R Series fields Block Location Map
Exploration in the area began in 1976, since when about 30 exploration and appraisal wells have been
drilled by the Oil and Natural Gas Corporation Limited (ONGC). Several oil discoveries have been made
and one, the R-12 or Ratna Field, was on production from 1983 until 1994. During this period
approximately 10 MMstb of oil was recovered. Production ceased due to the lack of adequate pressure
maintenance.
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1.1 Licence Status

In 1994 the Government of India offered the fields for development to the private sector during the second
round offering of discovered fields. The fields were awarded to a consortium consisting of Essar Oil
Limited (‘‘EOL’’) which has 50% equity and Premier Oil Pacific Ltd (‘‘POPL’’) which has 10% under a
Production Sharing Contract (‘‘PSC’’). ONGC has the remaining 40% interest as dictated by government
policy. The consortium will jointly operate the fields as ‘‘Joint Operator’’.
The PSC has yet to be signed but EOL has stated in a letter to RPS dated 22nd January 2010 that the
‘‘PSC and all other related agreements (including the Joint Operating Agreement) shall be signed
before the end of May 2010. Past delays in signing were caused by our awaiting resolution of certain
issues, which have now been finally resolved’’.
392

2. METHODOLOGY
2.1 General
The evaluation presented in this Competent Persons Report (‘‘CPR’’) has been conducted within our
understanding of petroleum legislation, taxation and other regulations that currently apply to these
interests. RPS is not in a position to attest to the property title, financial interest relationships or
encumbrances related to the properties.
Our estimates of potential resources and risks are based on the data set available to, and provided by,
EOL. We have accepted, without independent verification, the accuracy and completeness of these data.
Volumes and risk factors are presented in accordance with the 2007 SPE/WPC/AAPG/SPEE Petroleum
Resource Management System (PRMS).
2.2 Reserves and Resource Classification

Volumes and risk factors are presented in accordance with the 2007 SPE/WPC/AAPG/SPEE Petroleum
Resource Management System (PRMS). The PRMS Definitions are summarised in Appendix B.
In estimating reserves and resources we have used standard petroleum engineering techniques. These
techniques combine geological and production data with detailed information concerning fluid
characteristics and reservoir pressure. RPS has estimated the degree of uncertainty inherent in the
measurements and interpretation of the data and has calculated a range of recoverable resources. RPS has
assumed that the working interest in the assets advised by EOL is correct and RPS has not investigated nor
does it make any warranty as to the EOL interest in these properties.
Hydrocarbon resource and reserve estimates are expressions of judgement based on knowledge,
experience and industry practice and are restricted to the data made available. They are, therefore,
imprecise and depend to some extent on interpretations, which may prove to be inaccurate. Estimates that
were reasonable when made may change significantly when new information from additional exploration
or appraisal activity becomes available.
2.3 Risk Assessment

For all prospects and appraisal assets estimates of the commercial chance of success for Contingent
Resources, and estimates of geological chance of success for Prospective Resources, have been made. In
PRMS the former is called Chance of Development (CoD) and the latter Chance of Discovery (also CoD)
in the PRMS system. To avoid confusion with acronyms we have used the term Geological Probability of
Success (GPoS) in this document synonymously with Chance of Discovery.
2.3.1 Contingent Resources

The chance of success in this context means the estimated chance, or probability, that the volumes will be
commercially extracted.
A Contingent Resource includes both proved hydrocarbon accumulations for which there is currently no
development plan or sales contract and proved hydrocarbon accumulations that are too small or are in
reservoirs that are of insufficient quality to allow commercial development at current prices. As a result the
estimation of the chance that the volumes will be commercially extracted may have to address both
commercial (i.e. contractual or oil price considerations) and technical (i.e. technology to address low
deliverability reservoirs) issues.
2.4 Uncertainty Estimation

The estimation of expected hydrocarbon volumes is an integral part of the evaluation process. It is normal
practice to assign a range to the volume estimates because of the uncertainty over exactly how large the
discovery or prospect will be. Estimating the range is normally undertaken in a probabilistic way (i.e. using
Monte Carlo simulation), using a range for each input parameter to derive a range for the output volumes.
Key contributing factors to the overall uncertainty are data uncertainty, interpretation uncertainty and
model uncertainty.
393

Volumetric input parameters, gross rock volume (GRV), porosity, net-to-gross ratio (N:G), water
saturation (Sw), fluid expansion factor (Bo or Bg) and recovery factor, are considered separately. RPS has
internal guidelines on the best practice in characterising appropriate input distributions for these
parameters.
Systematic bias in volumetric assessment is a well-established phenomenon. There is a tendency to
estimate parameters to a greater degree of precision than is warranted(1) and to bias pre-drill estimates to
the high side(2). Rose and Edwards observe the tendency towards assessing volumes in too narrow a range
with overly large low-side and mean estimates. RPS uses benchmarked P90/P10 ratios and known field size
distributions to check the reasonableness if estimated volumes.
(1) Rose, P.R., 1987. Dealing with Risk and Uncertainty in Exploration: How Can We Improve? AAPG Bulletin, 71 (1), pp. 1-16.
(2) Rose, R.P. and Edwards, B., 2001. Could this prospect turn out to be a mediocre little one-well field? Abstract, AAPG Bulletin,
84(13)
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3. DATABASE
Legacy companies now owned by RPS has previously reviewed this property; Intera in 1997 and Scott
Pickford in 2005. Data were supplied by client for these studies and these data were reviewed as
appropriate. The data available for this review were:
• Previous Reports—The Final Intera 1997 Report and extensive work files plus the final 2005 Scott
Pickford report, several preceding drafts of this report and work files.
• Geophysics—as no new seismic data were available since the 2005 study the agreed scope of work for
this project was to adopt the previous seismic structural interpretations. The geophysical mapping
grids and horizon files were available and, when loaded to Petrosys mapping package, were used to
reconstruct the maps provided in the previous reports. RPS is aware that ONGC has acquired a 3D
seismic survey over the R-7 field but EOL is not in possession of the 3D data. These data were
therefore not available to RPS for the current study.
• Wireline Log Data—Well logs and Wellsite core descriptions were available. Also ASCII files of
Wireline logs and petrophysical analysis results were available over parts of the wells, apparently the
reservoir intervals where petrophysical analysis was performed.
• Stratigraphic information—The only stratigraphic information available to RPS were summary
tabulations of stratigraphic tops, comments of the zone tested in the well-test summaries and depth
annotations at wells on depth structure maps. Whilst beyond the scope of this project RPS undertook
a quick-look log correlation of the log data supplied and it appears that in the Bassein limestone
(i) better, more horizon consistent correlations can be made within the fields and that (ii) inter-field
correlations are possible within the Bassein limestone, which when allied with seismic data and block
structural history, may present a tool to understand reservoir development and predict or delineate
zones of better reservoir development.
• Well samples and tests—Summaries of Core analysis results, Well drill-stem or production test, PVT
and pressure data summaries but no original contractor reports were available
• Infrastructure—RPS has received descriptions of the existing infrastructure, the R12 platform and
associated production pipelines and wells, but as the infrastructure will not be reused RPS has not
made a site visit to verify the existence or mechanical state of this infrastructure.
• Legal and commercial Documentation—a number of official documents including the unsigned
intended PSC contract and various correspondence were provided to RPS
No new well or seismic data has been provided to RPS since the previous evaluation of the Ratna and R
Series Fields undertaken by Intera (October 1997) and Scott Pickford (2005). The Intera study included a
fully integrated technical reservoir study (September 1997) which the Scott Pickford and this study have
drawn on.
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MERRILL CORPORATION JDICKSO//30-APR-10 12:38 DISK116:[10ZAU1.10ZAU70801]SF70801A.;25
4. REGIONAL SETTING
4.1 Bombay Basin Geological History
The Ratna license lies in the southern part of the Bombay basin, a broad peri-cratonic basin dissected by
grabens which lies on the western passive margin of the Indian plate (Table 4-1). The Bombay Basin was a
carbonate-dominated basin from the middle Cretaceous to Late Miocene becoming clastic-dominated in
the Late Tertiary (Table 4-3). It is a prolific hydrocarbon province with over 12.5Bbbl(3) oil equivalent oil
and gas discovered. The majority of this oil and gas is contained in Tertiary carbonate reservoirs. The
Ratna oilfields are the product of a Tertiary petroleum system with Eocene limestone reservoir and shale
source rocks with trap formation in the Oligocene and Charge in the Pliocene to Recent.
26MAR201019142752
Table 4-1: Bombay Basin Structural Elements
(3) From USGS Bombay Geologic Province Eocene to Miocene Composite Total Petroleum System, India By C.J. Wandrey U.S.
Geological Survey Bulletin 2208-F Posted online May 2004, version 1.0. NB statistics quoted are from Petroconsultants, dated
1996.
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26MAR201019143561
Table 4-2: Bombay Basin Regional geological cross section
4.1.1 Mesozoic to Early Eocene (Basement and Basal Clastics)

The Indian Plate was formed in the Early Cretaceous when it separated from the Gondwanan continent.
During this and subsequent Campanian rifting, when Madagascar separated from India, a suit of major
north-south normal faults was formed in the Bombay Basin which are thought to have exploited and
reactivated a pre-existing Archaean basement fabric. By the middle Cretaceous failed rifts had formed the
Surat and Cambay Basins and several major north-south faults defined the boundaries of the Panna and
Ratna basins or depressions.
In the Late Maastrichtian doming over the incipient Réunion hotspot imparted further extensional stresses
to the north-western Indian plate, resulting in the formation of the fault block that became the Bombay
High and massive basaltic lava outpourings of the Deccan flood basalts.
Extension continued into the Early Tertiary which resulted in reactivation of normal faults enabling
syn-depositional subsidence of the basin areas, leaving the Bombay High as an emergent horst surrounded
by the deepening basins of the Surat, Panna and Ratna Depressions.
397

26MAR201019144539
Table 4-3: Ratna Area Stratigraphy
Initially this rift terrain landscape evolved as a continental environment but as regional thermal subsidence
continued so eventually it was flooded by the sea, with the rifts becoming restricted deep-water depressions
and the intervening high blocks upstanding islands, the largest of which was the Bombay platform. The
basins were infilled by the Panna Formation, also termed the Basal Clastic formation. Its thickness varies
from almost nil to hundreds of meters in basin axial areas due to syn-sedimentary activity of the graben-
bounding faults. Where fully developed it usually has a stratigraphy of basal Trap derived sandstone or
Trap-wash overlain by grey to dark grey shales and interbedded siltstones from fluvial to transitional
environments with locally developed carbonaceous shales and coals indicating shallow marine, restricted
and deltaic environments. In contrast the horst blocks remained emergent with only a few localised
depressions receiving clastic sediments.
Full marine conditions were developed in the western part of the basin where claystones and carbonates
were deposited. On the southern part of the Mumbai High an isolated carbonate bank developed
accumulating a muddy foraminiferal-algal packstone and further offshore a small number of isolated
off-shelf carbonate build-ups have been identified.
4.1.2 Early Eocene to Early Oligocene (Bassein)

In the Lower to middle Eocene the Indian subcontinent began to contact the Eurasian continent and this
resulted in tilting, uplift and the generation of a significant unconformity across much of the Bombay basin.
The tilted Eocene rocks were peneplained and Lower to middle Eocene rocks are absent from most of the
area, producing an angular unconformity with the overlying Bassein limestone.
Following the compressive event during the early Eocene thermal subsidence became the dominant
influence on basin development, with continued differential subsidence of the grabens relative to the high
blocks. Shales accumulated in the troughs whilst initially the high blocks were sub-aerially exposed and
acted as local clastic sources but as subsidence continued they were drowned, terminating the supply of
398

clastics and resulting in them becoming the locations for the growth of shallow-water carbonates of the
Bassein formation, the primary reservoir target in the Ratna block.
Overlying the Bassein Limestone is a succession of interbedded carbonates and shales, commonly referred
to as the ‘‘Alternations’’ in ONGC reports. The Alternations are non-reservoir beds which were deposited
in a mid- to outer-shelf environment. Towards the end of this period clastic material began to be
introduced into the Surat depression with shale interbeds being deposited throughout the area.
4.1.3 Early Oligocene to Miocene

At this time a westerly tilting of the basin was initiated, resulting from regional cooling combined with a
reduced isostatic response from the western part of the basin overlying the thinned edge of the continental
crust, compared to the eastern part of the basin. At the same time the collision of the Indian and Eurasian
plates resulted in a reorganisation of the stress regime of the area and the input of large quantities of
clastic sediment. These events combined to reduce the areas of carbonate deposition to the high blocks.
Over these areas the carbonate deposition was highly influenced by eustatic changes, resulting in periods of
where low-energy micritic carbonates accumulated interbedded with periods where higher energy
bio-clastic grainstones accumulated. As sea-level continued to rise through the Miocene so carbonate
production was only able to keep pace over the Mumbai and Ratnagiri blocks.
The Upper Miocene witnessed a major transgression covering the entire basin coupled with major increase
in clastic supply resulted in a significant progradation of the Miocene shelf. The earlier initiated westerly
tilt of the basin also became more pronounced. All these events brought the carbonate sedimentation to a
total halt as fine-grained sediments infilled the basin and buried the high blocks, and this sedimentation
continues to the present day.
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5. RESERVOIR GEOLOGY
5.1 Stratigraphic Nomenclature
As noted above two formations, the Basal Clastics and the Bassein limestones form the primary reservoir
targets in the Ratna area (Table 4-3).
The Basal Clastics are highly interbedded fluvial to shallow marine interbedded sandstones and shales.
There have only been a few penetrations of this interval in the block and this limited dataset makes it very
difficult to correlate these sediments and know how laterally continuous the reservoir intervals are.
The Bassein limestone has been subdivided into multiple reservoir zones. The Limestone has been
subdivided into two units, the A and B units. The top of the A unit coincides with seismic reflector H3A
and is also known as the RI horizon. RPS does not know how the Top of the B unit is identified but this
horizon is also known as the RII horizon. The Bassein B zone is subdivided into the RII, RIII and RIV
zones. The base of the B zone coincides with the Eocene unconformity, identified by seismic reflector H4
(Table 4-2).
5.2 Bassein Limestone Reservoirs

As noted above, the Bassein A limestones were deposited during the Late Eocene. During this period
there was limited clastic input into the basin and the majority of the coarse material was retained in the
coastal zone. Local tectonic and sea-level oscillations introduced substantial amounts of facies variation
into these carbonates.
Within the block there are three intervals within the Bassein limestone where better quality reservoir facies
appears to have been developed, the RPIII (Table 5-1), the top of the B zone and the top of the A zone
(Table 5-3).
On the upstanding Bombay and Ratnagiri blocks in the open shelf in the central part of the basin this
resulted in the development of a carbonate platform and the accumulation of a substantial thickness of
limestone interbedded with occasional argillaceous carbonates, micrites and shales. The limestones are
typical of mid-shelf facies sediments with poor reservoir quality. The rock fabrics are generally
wackestones and packstones occasionally giving way to foraminiferal and bioclastic grainstones with locally
developed dolomitic intervals.
It has been observed in other fields in the Bombay Basin that reservoir quality often is best over the crest
of the structure, usually because these structures formed local sea-floor high blocks at Bassein time and
through a combination of higher energy which resulted in less fine-grained material being incorporated in
the limestone and emergent vadose zone leaching layers of better porosity have been developed. In the
RPIII in the central part of Ratna R12 field there a significant zone of high quality carbonate reservoir.
Here, foraminiferal and bioclastic grainstones formed as a bioclastic sand bar with high primary porosity
are developed.
5.2.1 RPIII Limestone

Table 5-1 shows a typical log in the RPIII limestone of the R12 field (well R12-A1). The Top and Base
RPIII limestone picks were supplied by Intera and do not have any particularly distinct log signatures. The
gamma ray and porosity logs appears to indicate that the RPIII zone is more massive in its upper part,
becoming shaly in the lower half. The neutron log appears to identify a zone of dolomitisation near the
base of the A zone and a second dolomitised zone in the top RPIV zone. In the RPIV zone this dolomitise
interval appears to have reasonably high hydrocarbon saturations and it was tested but did not flow.
The upper part of the RPIII zone was cored and the cores contained fractures and some vuggy porosity.
The uppermost 15 m of the zone appears to develop a zone of higher porosity (>10%) and also good oil
saturations but overall the upper RPIII appears to be a fair to low porosity (<10%) sequence. Apart from
the core the sonic and calliper logs suggest zones of fracturing and enhanced porosity from 1,950-1,962 m
and 1,998-2,000 m. The lower zone was tested but did not flow. The upper one was tested and flowed at
2,237 stb/d.
It can be seen from this log that identifying pay is not straightforward; the top RPIII zone that flowed oil is
a clean limestone with well developed porosity and high hydrocarbon saturation and clearly pay. However
the Top RPIV interval (2,100-2,110 m TVDSS) would probably also be called pay based on petrophysics
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cut-offs and appears to have been so by operator ONGC as they attempted a production test of this
interval.
26MAR201020202293
Track 1—measured depth (MD): Track 2—true vertical depth subsea (TVDSS): Track 3—Gamma ray (black), Calliper curves: Track
4—lithology and fluids: Shading from left to right- Water shaded in light blue, Hydrocarbon shaded in green, bound water shaded in
dark blue, Limestone shaded in cream with blue brick ornament, Dolomite shaded in lilac with purple inclined brick ornament, other,
mostly shale, unshaded: Track 5—position of cores and level of fracturing: Track 6: resistivity logs: Track 7—porosity logs (neutron,
density and sonic):
Table 5-1: Typical RPIII Limestone log
Petrophysical analysis was undertaken by Intera and this interpretation has been reviewed for this study.
Interpreted data have been summed and tabulated below (Table 5-2). Tops were taken by previous studies.
These depths are used to define the interval and from this interval Gross interval, Gross Reservoir and Net
reservoir thickness, Average porosity and net reservoir percentage within the gross interval (N:G) are
extracted.
Average hydrocarbon saturations were calculated within the interval. No OWC was applied but the Sw
cut-off removed unrealistic values. Averages were calculated for all wells on the field and also by area of
the field (see 5.7.1). Data were extracted from this table to populate the stochastic inputs for Zone
thickness, porosity and N:G and Sw.
401

Tops Gross Interval Values Pay Values

Zone Gross Net Av Ave
Top Base Thickness Reservoir Reservoir N:G Ave Phi Net Pay Sw pay Phi Pay
Well (m TVDSS) (m TVDSS) (m) (m) (m) (%) (%) (m) (%) (%)
R12-1 . . . . . . . . . . . 1877.0 2076.0 199.0 187.9 84.0 42.2 14.4 58.7 36.5 14.9
R12-2 . . . . . . . . . . . 1905.0 2087.0 133.5 123.4 29.6 22.1 13.5 2.9 38.8 17.0
R12-3 . . . . . . . . . . . 1945.0 2158.6 205.1 180.6 58.5 28.5 12.9 4.0 47.4 15.6
R12-4 . . . . . . . . . . . NA
R12-5 . . . . . . . . . . . 1932.0 2095.0 163.1 162.6 78.3 48.0 16.5 7.8 51.3 18.0
R12-A1 . . . . . . . . . . 1935.7 2102.7 167.0 153.5 65.1 39.0 14.0 22.4 44.6 18.4
R12-A2 . . . . . . . . . . 1956.3 2166.0 209.6 116.5 29.9 14.3 12.4 1.7 40.7 14.5
R12-A3 . . . . . . . . . . 1863.2 2070.3 207.0 164.0 52.2 25.2 13.4 48.0 35.7 14.1
R12-A4 . . . . . . . . . . NA
R12-A5 . . . . . . . . . . 1925.3 2139.3 214.0 188.5 82.3 38.5 14.0 28.4 41.3 19.9
R12-A6 . . . . . . . . . . 1960.2 2065.1 104.8 100.1 14.2 13.5 13.6 3.5 42.6 16.5
R12-A7 . . . . . . . . . . 1910.4 2130.2 212.8 201.7 35.7 16.8 13.4 22.2 30.4 14.9
R12-A8 . . . . . . . . . . 2026.7 2211.2 87.6 86.2 5.3 6.1 16.0 0.0
R12-A9 . . . . . . . . . . 1999.6 2194.2 107.4 60.4 20.0 18.7 14.8 0.0
R12-A10 . . . . . . . . . NA
Averages . . . . . . . . 167.6 143.8 46.3 26.1 14.1 16.6 40.9 16.4
Central . . . . . . . . . 167.7 139.9 43.2 23.8 14.0 20.5 38.8 16.2
North . . . . . . . . . . . 205.1 180.6 58.5 28.5 12.9 4.0
South . . . . . . . . . . . 148.3 143.0 53.9 35.1 15.0 5.3 45.0 17.5
Cut offs used : Net reservoir :Vsh<40%, porosity>10%, Net pay :Sw <60%
Table 5-2: Bassein Limestone RPIII Reservoir Parameter Summary
5.2.2 A Limestone
The A limestone lies above the RPIII limestone and was deposited in a very similar environment, resulting
in a very similar reservoir rock, essentially a low porosity low permeability carbonate with zones of
enhanced porosity. The A unit is thinner than the RPIII interval and has similar zones of enhanced
porosity development. Coring has shown that this porosity is often due to vuggy secondary porosity and
fractures.
As with the RPIII limestone a substantial improvement in reservoir quality is found where these
low-energy carbonates are fractured, although fractures in many cores have been filled by calcite cement
and could play no role in production. In some wells, the fractures as well as associated vugs appear to have
been solution-enlarged. The extent of fracturing and solution-enlargement as described in core and in the
Log Evaluation Reports of ONGC is detailed below (Appendix D). Intera proposed that fractures will be
best developed adjacent to and along the length of faults, in crestal areas of folds and may also have
formed due to differential compaction of brittle carbonates that are encased in finer-grained shaly
deposits. RPS agree with this, thus as the dominant regional fault direction tends to be North-South.
Fracture studies were not available in the data provided but in any development the preferred orientation
for inclined production wells would be orthogonal to the open fracture sets which would suggest a
preferred east-west trend.
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26MAR201020200035
Track 1—measured depth (MD): Track 2—true vertical depth subsea (TVDSS): Track 3—Gamma ray (black), Calliper curves: Track
4—lithology and fluids: Shading from left to right- Water shaded in light blue, Hydrocarbon shaded in green, bound water shaded in
dark blue, Limestone shaded in cream with blue brick ornament, Dolomite shaded in lilac with purple inclined brick ornament, other,
mostly shale, unshaded: Track 5—position of cores and level of fracturing: Track 6: resistivity logs: Track 7—porosity logs (neutron,
density and sonic): Track 8: Tests and amount of fluid produced.
Table 5-3: Typical Bassein A Limestone log
403

Tops Gross Interval Values Pay Values

Zone Gross Net Ave Ave
Top Base Thickness Reservoir Reservoir N:G Ave Phi Net Pay Sw pay Phi Pay
Well (m TVDSS) (m TVDSS) (m) (m) (m) (%) (%) (m) (%) (%)
R7-1 . . . . 1546.0 1602.0 56.1 32.6 23.2 41 18.7 5.3 50.8 18.5
R7-2 . . . . 1546.6 1605.1 58.4 45.4 27.6 47 17.1 11.3 45.6 20.0
R7-3 . . . . 1580.8 1659.8 78.9 73.9 54.7 69 22.0 0.0
R7-4 . . . . 1574.0 1674.0 100.0 91.3 56.8 57 16.4 0.0
R7-6 . . . . 1581.0 1625.0 43.9 39.6 14.0 32 16.0 0.0
R7 Averages 70.3 62.6 38.3 51% 17.8 2.8 45.6 20.0
R7A-1 . . . 1562.6 1578.0 15.4 12.2 0.3 2% 15.5 0.0
R7A-2 . . . 1563.1 1576.1 13.1 11.7 6.7 51% 20.0 2.7 52.5 19.0
R7A-3 . . . 1546.6 1605.1 n/a
R7A Averages 14.2 12.0 3.5 27% 17.8 1.4 52.5 19.0
R9-1 . . . . 1530.0 1597.0 67.1 54.1 29.3 44% 12.6 11.3 48.2 16.9
R9-2 . . . . 1488.0 1542.0 53.9 47.4 36.6 68% 14.8 12.2 45.0 17.4
R9-3 . . . . 1519.0 1584.0 65.1 54.9 27.4 42% 17.2 6.9 50.5 14.8
R9-4 . . . . 1534.0 1620.0 86.1 76.5 39.8 46% 14.0 1.4 48.3 19.4
R9 Averages 68.0 58.2 33.3 50% 14.6 7.9 48.0 17.1
R10-1 . . . 1643.2 1723.2 79.9 78.9 65.1 81% 17.2 16.8 49.7 19.7
R10 Averages 79.9 78.9 65.1 81% 17.2 16.8 49.7 19.7
R13-1 . . . 1872.0 1960.0 87.9 72.1 48.6 55% 16.4 11.6 50.1 14.3
R13-2 . . . 1803.0 1872.0 68.9 62.0 43.4 63% 18.4 9.8 49.7 19.7
R13-3 . . . 1905.0 1979.0 74.1 72.1 50.0 67% 19.1 1.4 57.7 23.3
R13-4 . . . 1863.0 1927.0 64.0 46.0 36.6 57% 19.1 0.2 59.5 27.4
R13-5 . . . 1841.0 1883.0 42.1 38.6 29.1 69% 19.7 0.5 43.4 27.2
R13 Averages 67.4 58.2 41.5 62% 18.5 4.7 52.1 22.4
Cut offs used : Net reservoir :Vsh<40%, porosity>10%, Net pay : Sw <60%
Table 5-4: Bassein A Limestone Reservoir Parameter Summary
5.2.3 Reservoir Core Data

Core analysis data was compiled and plotted (Table 5-5). These data indicates that effective reservoir must
have a porosity of greater than 10%, and even at this porosity level the reservoir still has limited
permeability, often between 1 and 1 0 Md.
These measurements support the empirical observations from the well testing that the majority of this
limestone sequence has a tight matrix but interspersed within that are zones of fair to good porosity, which,
when combined with fractures, enable high production flow rates.
404

mrll_0909.fmt Free: 0D*/240D Foot: 0D/ 0D VJ Seq: 6 Clr: 0
100
Porosity cut-offs High k rock
10
Permeability-HZ,md
0702COR1
0902COR1
Low k rock 0904COR1
1202COR1
0.1
12A01COR1
12A01COR2
1302COR1
0.01
0 5 10 15 20 25 30 35 40
Porosity-HZ
26MAR201019134811
Table 5-5: Bassein Limestone Core Porosity and Permeability Crossplot
26MAR201020175458
Table 5-6: Bassein Limestone Core Porosity and Permeability Crossplot by reservoir and field
5.3 Basal Clastics Reservoir Characterisation

The Basal Clastics formation has been drilled by 9 wells and successfully tested oil to surface from 4 wells,
R12-2, R13-4 and R71-1. As noted above the Basal Clastics formation is an interval of interbedded
sandstones and shales and hydrocarbons have been tested from single wells on three structures. The tests
405

that have been successful are at differing depths below the top surface of the formation and it is unknown
whether the productive intervals correlate as part of a more favourable target zone.
It has been mentioned(4) that the ‘‘Basal Clastics reservoirs in nearby fields are producing consistently and
are on self flow’’. It would appear therefore, from the limited number of penetrations, that the Basal
Clastics formation presents a limited proven but a significant possible opportunity to add reserves in this
licence.
5.4 Summary
The following section discusses the RPS in-place volume estimates which are summarised in Table 5-7.
STOIIP (MMstb) Associate GIIP (Bcf)
Field Reservoir Segment P90 P50 P10 P90 P50 P10
R7 . . . . . ............ A 87 120 162 11.8 19.2 29.8

R7A . . . ............ A 27 42 61 3.7 6.7 11.2
R9 . . . . . ............ A 35 63 109 10.4 22.1 43.9
R10 . . . . ............ A 33 48 67 18.9 32.4 51.9
R12 . . . . ............ RPIII North 14 23 37 8.9 17.3 31.9
R12 . . . . ............ RPIII Central 27 38 55
R12 . . . . ............ RPIII South 36 60 93 23.0 45.0 80.3
R13 . . . . ............ A 56 79 109 23.8 39.5 62.7
R12 . . . . ............ BC North 37 59 99 11.8 22.1 42.7
R12 . . . . ............ BC Central 12 19 29 3.8 7.1 12.5
R12 . . . . ............ BC South 5 13 29 1.6 4.9 12.5
R13 . . . . ............ BC 15 37 66 5.7 16.7 34.2
R71 . . . . ............ BC 5 8 15 1.6 3.0 6.5
Total (excl R12-RPIII Cent) 362 571 876 125 236 420
Table 5-7: Summary of In-place Volume Estimates (100% Basis)
Summaries of the in-place volume estimates are given in this section for each field. The same technique
has been used to define the STOIIP for each field. The Gross Reservoir rock Volume (GRV) varies
specifically by field and these variations are discussed on a field-by-field basis below. Porosity, reservoir
thickness, reservoir net-to-gross and Shc (1-Sw) are derived from petrophysical analysis results and FVF and
GOR are derived from analysis of oils produced.
To define the stochastic input distribution of GRV the principle inputs are the structural mapping of top
reservoir, well petrophysics and well test results. The input parameters are presented in Appendix D for
each field.
5.5 Structural Mapping

These fields were mapped in 1997 by Intera using 2D seismic data provided by EOL. This mapping and the
associated seismic data was reviewed in 2005 by Scott Pickford, who accepted the 1997 mapping making
minor changes at Basal Clastics level, together with improving the well ties. A regional Top A depth
structure map was generated for the entire area (Table 5-8) and maps were generated at top reservoir
levels for each field as shown below.
In the 1997 report Intera state that ‘‘the seismic data grid which was available for this study is inadequate
both in quality and density to provide an accurate structural representation of the R-Series fields’’. Scott
Pickford shared this opinion but believed that the resulting maps, given the degree of well control, were
adequate to derive resource estimates, albeit with a significant uncertainty.
The scope of the current study was to accept the previous mapping. In order to accommodate the
acknowledged structural uncertainty of the available interpretations and its resultant reservoir GRV
uncertainty an area uncertainty range has been attached to each top reservoir map. This uncertainty is
accommodated by using a variation of approximately +-10% of area applied to the mapped contours. This
uncertainty is modified to respect the well quantity and position on each structure.
Based on the structure maps RPS has determined (i) a distribution of likely oil-water contact for each field
which is combined with distributions of (iii) top depth structure map area-depth curve which has a
distribution of area uncertainty added to it and (iv) a distribution of gross reservoir interval thickness.
(4) Pers Comm: B.N Pandey Essar—email 13feb2010
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Table 5-8: Ratna Block Bassein A Limestone Depth Structure Map
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5.6 Stochastic Estimates

To define the stochastic input distribution of (i) porosity, (ii) reservoir thickness, (iii) reservoir N:G, (iv) ,
(v) FVF and (vi) GOR are derived in the same manner for each field. The data used to generate
distributions for porosity, reservoir thickness, reservoir net-to-gross, (iv) Sw were discussed above.
Reservoir porosity, thickness and net is to gross distributions are based on all the petrophysical results for
the particular reservoir horizon, conditioned by wells in the field being evaluated.
The input variable of Sw for all fields is defined from a ‘type’ curve based on RPS’ Global experience of
tight limestone reservoirs. This approach was adopted as hydrocarbon saturations calculated by
petrophysical analysis show substantial variation both vertically and laterally, often appearing misleadingly
high in dolomitic zones and have no clear relationship to test results. This is typical of tight fractured
carbonate reservoirs. However for most fields the average Sw values of individual wells lie within this
distribution.
Oil shrinkage (FVF) and Gas-Oil ratio’s (GOR) are based on well tests, production history from R12 field
and PVT analysis results.
5.7 Field Specific In-Place Volumes

5.7.1 R12 Field
5.7.1.1 Field Review
The R12 Central area has by far the most complete dataset, having not only exploration but also
development drilling results and production history and this field has been used as an analogue to evaluate
the other fields.
The R12 Field was discovered by well R12-1 and appraised by four wells. Oil was discovered and flowed
from the Bassein RPIII and RPIV limestones and from Basal Clastic sandstones. Development was
undertaken from one fixed platform, R12-A, and the field produced 10.3 m MB of oil from the RPIII
limestones in the period 1983-1994. Production ceased when water and gas rates became unmanageable
and we understand the field was shut-in. In total fifteen wells are now drilled on the R12 structure, 5
exploration and appraisal wells drilled as straight holes, and 10 deviated development wells drilled from
the R12-A production platform (Table 5-9).
Mapping at both RP111 and Basal Clastics levels indicate that at both levels the R12 accumulation has
three culminations, named North, Central and South in this evaluation. At Basal Clastics level the
culminations are cut and offset by several north-south trending faults, suggesting that the ridge has been
subjected to minor compression leading to lateral fault movements. The faulting extends upwards to
RP111 level but with decreased fault throw. These offsets have been utilised as segment boundaries in
order to subdivide the structure into three areas for resource calculation.
In order to evaluate the STOIIP of the R12 structure it has been evaluated as 6 accumulations, three at
RPIII level, the Central, North and South, and three at Basal Clastic reservoir level, again the Central,
North and South,
The Basal Clastics have been penetrated by several wells but only proven oil productive in one, R12-3, on
the Northern culmination of the field. The RPIII limestones have been penetrated by all 15 wells and has
successfully produced oil from the Central and Southern culminations of the field. It is unknown whether,
at both reservoir horizons, the three culminations are in hydraulic communication. The Northern
culmination has been drilled by two wells, R12-3 and R12-4 and is undeveloped. Both penetrated the
Bassein limestone and reached the Basal Clastics sediments. Both were tested. Well R12-3 flowed oil from
the Basal Clastics. Well R12-4 flowed water from basement. Both were tested in the RPIII limestone but
neither flowed despite acid and fracture stimulation.
The Southern culmination has also been drilled by two appraisal wells, R12-2 and R12-5, and also is
undeveloped. Both wells tested oil from the RPIII limestone
The Central culmination was drilled and proven oil productive by well R12-1. Following appraisal of the
R12 structure the central part of the field was developed by ONGC with the A platform from where ten
development wells have been drilled. Five were successfully completed as oil producers but with widely
varying productivity, and five did not flow when tested (Table 5-9). Oil was treated on the platform and
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then piped to the Heera field and onwards to the coastal markets. No sales of gas are known so it is
assumed that gas was used for power and excess gas was flared.
Well Type Well result
R12-1 Exploration Conducted 3 tests. Flowed oil from 2 intervals in RPIII limestone with best
flow rate 2,560 stb/d. Indicated LPI 1972 m TVDSS. Upper part of RPIII
limestone was cored and found to have vuggy porosity but no fractures were
noted.
R12-2 Appraisal Conducted 4 tests. Flowed oil from 2 intervals in RPIII limestone with best
flowrate 1,866 stb/d. Indicated LPI 2,035 m TVDSS. Upper part of RPIII
limestone was cored and found to be moderately fractured.
R12-3 Appraisal Conducted 6tests. Flowed oil from 2 intervals in Basal Clastics with best
flowrate 816 stb/d. Indicated LPI 2,411 m TVDSS. Top if interval tested was
2,330 m TVDSS. Cores were taken from the upper and lower RPIII limestone
and no fractures were seen in either interval.
R12-4 Appraisal Conducted 5 tests in Basement, Basal Clastics and RPIII limestone but only
flowed water from basement. Tests attempted in Basal Clastics and RPIII
limestone did not flow.
R12-5 Appraisal Conducted 4 tests in RPIII limestone. 3 did not flow and top test flowed at
550 stb/d after acidizing and fracturing. Cores were taken in the RPIII
limestone but not over the tested intervals. Cores were tight. Fracturing was
seen in the RPIV interval core.
R12-A1 Development Conducted 3 tests. Lower 2 did not flow and uppermost in RPIII limestone
flowed 2,237 stb/d. Produced 0.438 MMstb from RPIII limestone. Cores in
tested interval showed moderate fracturing.
R12-A2 Development Conducted 1 test from RPIII limestone and flowed 916 stb/d. Produced 0.103
MMstb from RPIII limestone. No cores cut.
R12-A3 Development Conducted 2 tests in the RPIII limestone. Best flowed 5,202 stb/d. Produced
5.570 MMstb from RPIII limestone.
R12-A4 Development Junked
R12-A5 Development Conducted 2 tests in the RPIII limestone. Best flowed 3,230 stb/d. Produced
1.016 MMstb from RPIII limestone.
R12-A6 Development Attempted 3 tests in the RPIII limestone including acid stimulation. No flow
R12-A7 Development Conducted 2 tests in the RPIII limestone. Lower one did not flow. Upper one
flowed oil and gas but flowrate not available in data set. Produced 3.192
MMstb from RPIII limestone.
R12-A8 Development Attempted one test in RPIII limestone. No flow
Table 5-9: R12 Well field—Existing Wells Summary
5.7.1.2 STOIIP Calculation

The R12 Central area has by far the most complete dataset, having not only exploration but also
development drilling results and production history.
5.7.1.3 Structure
At RPIII level the Central area is a faulted anticline trending north-south and cut by several north-south
trending faults (Table 5-13). There are saddles to the north and south of the Central culmination but no
faults are mapped in these saddles. However, from a review of the seismic basemaps it appears that seismic
data available was inadequate to confidently map these areas.
409

5.7.1.4 Contacts
No clear OWC’s were recognised on this field. Petrophysical analysis identified apparently producible
hydrocarbon saturations down to 1,982 m TVDSS in well R12-A5 and the lowest productive interval (LPI),
that is the deepest perforations of the deepest successful test were 1,972 m TVDSS in well R12-1. The
confirmed LPI depth for this field is 1,972 m TVDSS.
Four dry production wells have been drilled into these saddle areas, two in each saddle. Three of them
(R12-A8, -A9 and A10) intersected the RPIII limestone at 2,000 to 2,026 m TVDSS, deeper than both
the LPI and the deepest apparent oil from petrophysics, and appear to confirm that the base of producible
oil is shallower in this culmination than in the southern RPIII culmination where the LPI is 2,035 m
TVDSS
5.7.1.5 Reservoir quality

The RPIII limestone appears to be a generally cleaning upwards limestone with argillaceous partings. The
majority of the net reservoir appears to be in the upper half of the interval although even here it is
intermittently developed.
RPS used the available log analysis and stratigraphic tops to derive sums and averages to describe reservoir
quality. These data, combined with the core information, test rates and production history indicate a
reservoir of variable quality, with the most productive interval being near the crest of the structure. One
well, R12-A3 has produced half the total oil recovered from this field. It is likely that fractures highly
influence production but from core data it appears that fractures provide high permeability but low volume
pathways and the matrix provides the storage for the produced oil.
5.7.2 STOIIP
Based on the input data (Appendix E) RPS have calculated the range of STOIIP contained in this
structure is given below (Table 5-10)
STOIIP (MMstb)
P90 P50 P10 Mean
27.1 37.7 54.8 39.8

Table 5-10: R12 Central Area RPIII Limestone, STOIIP Estimates (100% Basis)
5.7.3 R12 Northern Area RPIII Reservoir

5.7.3.1 Structure
The northern closure is NNW-SSE elongated faulted anticline with four-way dip closure and a spillpoint
via the saddle separating it to the Central area of the R12 structure (Table 5-13). Two wells are drilled on
the structure, R12-3 on its crest and the R12-4 downdip on the northern flank. The position of these wells
is believed to give reasonable control on the structure of the field.
5.7.3.2 Contacts
Neither of the wells drilled on this closure were successfully tested. In well R12-3 log analysis indicated pay
down to 2,190 m TVDSS. However 4 tests were attempted over these zones and none flowed. Given the
lack of successful test results the OWC range found on the Central structure is applied to the northern
structure.
5.7.3.3 Reservoir
Petrophysics and core data from R12-3 indicate that these wells have been drilled in positions which failed
to intersect open fractures. It is unknown whether this culmination was a high area during the deposition
of the RPIII reservoir, and hence developed favourable reservoir porosity. Faulting is indicated on maps
but the density of seismic data is believed to be insufficient to clearly understand the extent of faulting and
therefore fracturing over this feature. However given the high level of variability found in the reservoir of
the Central part of R12 it is believed that over the Northern structure reservoir quality will be similar to
that of the Central closure and that the two wells were simply drilled between good quality reservoir areas.
Accordingly therefore this closure is assessed using the same variables developed from the Central closure
dataset.
410

5.7.3.4 STOIIP
structure is given below (Table 5-11).
STOIIP (MMstb)
P90 P50 P10 Mean
14.2 22.7 36.7 24.3

Table 5-11: R12 Northern Area RPIII Limestone, STOIIP Estimates (100% Basis)
5.7.4 R12 Southern Area RPIII Reservoir

5.7.4.1 Structure
The southern closure is NNW-SSE elongated faulted anticline (Table 5-13) with four-way dip closure and
two almost equal depth spillpoints; one northwards via the saddle separating it to the Central area of the
R12 structure and a second southwards via a saddle into the R9 structure. Two wells are drilled on the
structure, R12-2 on its crest and the R12-5 downdip on the southern flank. The position of these wells is
believed to give reasonable control on the structure of the central part of the field. However the southern
part of this closure is unconstrained by well data.
5.7.4.2 Contacts
Both wells drilled on this closure were successfully tested. In well R12-2 log analysis indicated very limited
pay down to 2,120 m TVDSS in the upper RPIV. However this zone was tested and did not flow. The LPI
was test #3 which recovered oil from 2,035 m TVDSS. In well R12-5 log analysis indicated intermittent pay
down to 2,100 m TVDSS. Four tests were attempted but only the fourth flowed oil from the top of the
RPIII interval.
5.7.4.3 Reservoir
Both wells were cored but with the exception of the uppermost core in R12-2 the cores did not find
fractures. It is unknown whether this culmination was a high area during the deposition of the RPIII
reservoir, and hence developed favourable reservoir porosity. Faulting is indicated on maps but the density
of seismic data is believed to be insufficient to clearly understand the extent of faulting and therefore
fracturing over this feature. However given the high level of variability found in the reservoir of the Central
part of R12 it is believed that over the Northern structure reservoir quality will be similar to that of the
Central closure and that the two wells were simply drilled between good quality reservoir areas.
Accordingly therefore this closure is assessed using the same variables developed from the Central closure
dataset.
5.7.4.4 STOIIP
STOIIP (MMstb)
P90 P50 P10 Mean
35.8 59.7 92.9 62.5

Table 5-12: R12 Southern Area RPIII Limestone, STOIIP Estimates (100% Basis)
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26MAR201020183026
Table 5-13: R12 RPIII Depth Structure Map
412

5.7.5 R12 Central Area Basal Clastics Reservoir

5.7.5.1 Structure
The Central area is mapped as a faulted anticline (Table 5-17) with saddles to the north and south
separating it from the Northern and Southern closures. Several wells penetrated into the basal Clastics but
none were tested
5.7.5.2 Contacts
No hydrocarbons are seen in any of the wells so a spillpoint was selected coincident with the spillpoint to
the southern part of the structure.
5.7.5.3 Reservoir
It is assumed that within the sedimentary column there will be interbedded water and oil filled sandstones.
To estimate the resources present a thickness of net reservoir varying from 12 to 25 m is assumed to be
present across the structure based on comments from tested intervals and log data.
5.7.5.4 STOIIP
STOIIP (MMstb)
P90 P50 P10 Mean
11.5 18.5 29.4 19.7

Table 5-14: R12 Central Area Basal Clastic Reservoir STOIIP Estimates (100% Basis)
5.7.6 R12 Southern Area Basal Clastics Reservoir

5.7.6.1 Structure
The Southern area is mapped as a tilted fault block (Table 5-17) with a faulted western boundary No wells
penetrated into the Basal Clastics to confirm this structural interpretation.
5.7.6.2 Contacts
No hydrocarbons are seen in any of the wells so a spillpoint was selected coincident with the spillpoint to
the rest of the structure.
5.7.6.3 Reservoir
5.7.6.4 STOIIP
STOIIP (MMstb)
P90 P50 P10 Mean
4.9 13.1 28.5 15.3

Table 5-15: R12 Southern Area Basal Clastic Reservoir STOIIP Estimates (100% Basis)
413

5.7.7 R12 Northern Area Basal Clastics Reservoir

5.7.7.1 Structure
The Northern area is mapped as an anticline (Table 5-17) with a saddle to the south and plunging to the
north. The saddle to the south separates the Northern and Central closures. Well R12-3 successfully
produced oil from a Basal Clastic sandstone on test.
5.7.7.2 Contacts
At the well the top of the tested interval is 2,330 m TVDSS, 160 m below the top of the formation. The LPI
was approximately 85m deeper. Thus to estimate the area of closure contours have been selected between
40 and 80 m downdip of the well-location. The southerly extent of the field is determined by the Northern-
Central segment boundary.
5.7.7.3 Reservoir
5.7.7.4 STOIIP
STOIIP (MMstb)
P90 P50 P10 Mean
36.9 59.3 98.5 64.3

Table 5-16: R12 Northern Area Basal Clastic Reservoir STOIIP Estimates (100% Basis)
414

26MAR201020181765
Table 5-17: R12 Basal Clastics Depth Structure Map
415

5.7.8 R7 and R7A Fields

5.7.8.1 Field Summary
The R7 and R7A Structures are two low-relief fault-bounded hanging wall anticlines, separated by a low
saddle and delineated by seven wells (Table 5-21). Well R7-3 was drilled in the saddle between the two
culminations and when tested failed to flow. Based on this result these culminations are treated as separate
pools, with R7-3 defining the OWC of the R7 pool.
Oil was successfully produced from the A limestones in both fields. Coring and well completion reports
indicate that the productive intervals are associated with secondary porosity and fracture zones, assisted by
reservoir facies improvement from poor quality micritic limestones to packstone and occasional grainstone
intercalations. It appears that favourable reservoir facies are developed over the crest of this structure
indicating that it was a high block at Bassein time.
R-7-1 Exploration 1 test, flowed 1,730 stb/d from Bassein A limestone, confirming ODT—1,574 m
TVDSS. The test was aborted because of H2S concentrations above the safety
limit.
R-7-2 Appraisal Conducted 5 tests. The lower 4 were in the Bassein A limestone and the 5th in the
Upper Miocene, which did not flow. The upper three tests in the A limestone
flowed with the top A limestone test recording the best flowrate of 1,796 stb/d.
The deepest oil test proved ODT 1,582.6 m TVDSS in the A limestone but with
poorer flowrates than the upper tests.
R-7-3 Appraisal Conducted 3 tests in Bassein Top B and A limestones None flowed, even after
acidisation.
R-7-4 Appraisal Conducted 4 tests in Bassein Top B and A limestones None flowed, even after
acidisation.
R-7-6 Appraisal Deviated well. Conducted 4 tests. The lower 3 were in the B limestone and did not
flow. The uppermost test was in the A limestone and flowed 2 126 stb/d. Up to
6,000 ppm H2S was recorded and the test was aborted for safety reasons.
RBC-1 Exploration Conducted 7 tests. The lowest 3 tests were in the B limestone and the uppermost
one, at the top of the B limestone, flowed 2,177 stb/d. Four intervals in the A
limestone were tested but only one flowed oil and gas with 70% water cut and
19,000ppm H2S.
RBC-2 Exploration Conducted 2 tests. Test 1 was from the A limestone. After acidisation the well
flowed high pour point oil and gas in surges before dying, No rates were
measured. Test 2 was in the overlying Alternations interval and also produced
some oil and gas in surging flow. Again no measurements were made.
R-7A-1 Exploration Conducted 6 tests. The lower three were in the B limestone and did not flow. Test
4 was in the A limestone and also did not flow. Tests 5 and 6 were in the top of the
A limestone and both flowed oil confirming ODT 1,611 m TVDSS. Test 6 was the
best and flowed at 2864 stb/d.
R-7A-2 Appraisal No data
R-7A-3 Exploration Drilled on a separate culmination to R7 or R7A. 4 tests. 1 flowed oil but not at
sustainable rates from Bassein A limestone 1 flowed oil but not at sustainable
rates. Upper 3 tests are shallower than 95⁄8’’shoe so either predate 7’’ section or
are perforated through 2 strings of casing—are these valid tests?
Table 5-18: R7 and R7A fields—Existing Wells Summary
5.7.8.2 Structure
The structural spillpoint of the R7 closure is 1,580 m TVDSS (Table 5-23) at which depth the field connects
both to the south into the R7A field and to the west into the R8 structure and then away to the south
(Table 5-21). Field R7A has the same structural spillpoint, 1,580 m TVDSS, spilling northwards into the R7
field although well R7A-1 appears to have confirmed ODT 1,611 m TVDSS.
416

From the mapped structure of the two anticlines is it can be seen that the boundary fault appears to be
offset. It follows largely a north-south trend but has a NW-SE offset from the southern part of the R7
structure to the northern part of the R7A structure. The R7A field has a substantially thinner Bassein A
interval than R7. Whilst no SW-NE trending fault is mapped between the R7 and R7A structures their
structural disposition and the offset of the easterly bounding fault suggests the possibility that a wrench
fault may offset the two closures. If this is the case then R7A field may indeed have a deeper OWC than
that of R7 field.
Area uncertainty associated with the structure map is believed to be relatively low as the field is delineated
by 6 wells and the OWC is constrained by 3 wells (R7-3,
5.7.8.3 Contacts
No clear OWC’s were recognised in these fields. Petrophysical analysis appears to be unable to identify the
OWC as in several wells, for example R7-1 and R7A-1 hydrocarbon saturation’s typically associated with
hydrocarbon accumulations are calculated over a thickness of several hundred meters. However when
tested only the upper parts of these intervals flowed oil. In the R7 and R7A fields the only successful oil
production tests were conducted in the Upper part of the Bassein A limestone interval, with those
attempted in the Lower part of the A zone failing to flow and interpreted as tight. In total on the two
culminations 20 tests were attempted, 6 flowed and 14 were tight with no flow. Based on the test results the
R7 field ODT is 1,582.6 m TVDSS based on test results from well R7-2 and in R7A field the ODT is
1,585 m TVDSS based on test results from well R7A-1.
5.7.8.4 STOIIP
Based on the input data (Appendix E) the range of STOIIP RPS has calculated is given below for the R7
field (Table 5-19) and the R7A field (Table 5-20).
STOIIP (MMstb)
P90 P50 P10 Mean
87.4 120 162 123

Table 5-19: R7 A Reservoir, STOIIP Estimates (100% Basis)
STOIIP (MMstb)
P90 P50 P10 Mean
27 42 61.3 43.3
Table 5-20: R7A A Limestone, STOIIP Estimates (100% Basis)
417

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Table 5-21: R7 and 7A A limestone Depth Structure Map
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MERRILL CORPORATION JDICKSO//30-APR-10 12:35 DISK116:[10ZAU1.10ZAU70801]SI70801A.;24
5.7.9 R8 Field
5.7.9.1 Structure
This field is a small prospect to the west of the R7 structure that consists of a small dome that is cut by a
fault at its eastern margin (Table 5-23). The reservoir in this field is found in the Miocene dolomitic
limestones that overlie the Oligocene Bassein limestone and Alternations. Porosity is secondary, possibly
related to the formation of dolomite and varies from 18 to 33% in the best reservoir sections according to
the ONGC Log Evaluation Report.
5.7.9.2 Contacts
No OWC was seen in the well. The lowest closing contour on the structure is 890 m TVDSS. The well
indicated LPI to 875 m TVDSS. In order o estimate the range of oil volume contained in this structure a
spillpoint was estimated to be from 890 to 900 m TVDSS.
5.7.9.3 Reservoir
Very little information is available for this reservoir. RSP adopted the range of values derived by Scott
Pickford in 2005.
5.7.9.4 STOIIP Calculation

STOIIP (MMstb)
P90 P50 P10 Mean
0.09 0.24 0.5 0.28

Table 5-22: R8 Miocene Limestone STOIIP Estimates (100% Basis)
419

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: SI70801A.;24
26MAR201020192013
Table 5-23: R8 Miocene Limestone Depth Structure Map
5.7.10 R9 Field
The R9 field is a structural dome with faulted eastern and western margins and a fault-dissected crest
(Table 5-26). Hydrocarbons have been produced from the A and uppermost B zones of the Bassein
Limestone. In the four wells drilled on the structure all were tested, with a total of 13 tests attempted. Two,
R9-3 and R9-4, did not flow whilst in the other two, R9-1 and R9-2, 4 tests flowed oil at rates likely to be
commercial. The distribution vertically of successful and failed tests suggest that production is fracture
dependent but that fracture and reservoir facies developments are variable. Well R9-2 flowed oil from the
420

uppermost B limestone but given the location of the successful B test it is believed that fractures connect
hydrocarbons stored in both A and B layers as one pool
R-9-1 Exploration Conducted 2 tests in the A limestone. First test flowed 866 stb/d. Second test added
in new perforations and flowed 1,724 stb/d proving ODT 1,558 m TVDSS
R-9-2 Appraisal Conducted 7 tests. The lower 6 were in the B limestone. Two flowed water and the
uppermost flowed 1,264 stb/d after acidisation. The 7th test was in the A limestone
and flowed 980stb/d. This well proved ODT 1,555 m TVDSS
R-9-3 Appraisal Conducted 2 tests. The lower test was in the B limestone which flowed and died
after 1hr. The upper test was in the A limestone which flowed oil at minor rates
with nitrogen lift. This well indicated possible oil down to 1,563 m in the A
limestone and 1,603 m in the B limestone.
R-9-4 Appraisal Conducted 2 tests. Both were acidized but did not flow. The lower test was in the B
limestone and the upper test was in the A limestone. This well indicated possible oil
down to 1,578 m in the A limestone.
Table 5-24: R9 field—Existing Wells Summary
5.7.10.2 Structure
This appears to be a relatively simple anticlinal field modified by some lateral bounding faults. On the
regional A limestone depth structure map the structural spillpoint of the R9 closure is 1,575 m TVDSS
(Table 5-26) at which depth the field appears to spill to the east via a saddle onto a monoclinal slope.
Area uncertainty associated with the structure map is believed to be moderately low as the field is
delineated by 4 wells although most of them are on the crest of the structure.
5.7.10.3 Contacts
No clear OWC’s were recognised in this field. Petrophysical analysis appears to be unable to identify the
OWC. Successful test flows have indicated a maximum ODT of 1,555 m TVDSS although the depth of
flowing zone within the perforated interval cannot be established. Tests were attempted in the deeper B
zone but only one found permeable reservoir and although petrophysical analysis indicated oil saturations
of ~30% this test flowed 961bwpd.
5.7.10.4 STOIIP
Based on the input data (Appendix E) RPS has calculated the range of STOIIP contained in this structure
is given below (Table 5-25).
STOIIP (MMstb)
P90 P50 P10 Mean
34.8 62.9 109 68.7

Table 5-25: R9 A-Limestone, STOIIP Estimates (100% Basis)
421

26MAR201020193228
Table 5-26: R9 field—A limestone depth structure map
422

5.7.11 R10 Field

The R10 field is a structural dome which is fault-bounded on its eastern flank and is cut by a N-S trending
fault along its axis (Table 5-29). The reservoir interval lies within the A Zone. Only two wells have been
drilled on the structure, R10-1 and R10-3, both of which flowed oil on testing.
The distribution vertically of successful and failed tests suggest that production is fracture dependent but
that fracture and reservoir facies developments are variable.
R10-1 Exploration Conducted 5 tests. The lower 4 appear to be in the B zone and did not flow. The
upper 2 tests are in the A limestone but only the uppermost test flowed 3,763 stb/d.
ODT 1,671 m TVDSS
R10-3 Appraisal Conducted 3 tests. The deepest was in the B limestone and flowed water. The
upper 2 were in the A limestone and flowed 790 and 563 stb/d. ODT 1,697 m
TVDSS
5.7.11.2 Structure
The structure as mapped has a spillpoint of 1,725 m TVDSS across the eastern bounding fault towards the
R9 field.
Area uncertainty associated with the structure map is believed to be moderately low as the field is
delineated by 2 wells.
5.7.11.3 Contacts
No clear OWC’s were recognised in this field. Petrophysical analysis appears to be unable to identify the
OWC. Successful test flows have indicated a maximum ODT of 1,671 m TVDSS in the western part of the
field and 1,697 m in the eastern part of the field although the depth of flowing zone within the perforated
interval cannot be established. As noted above the structural spillpoint appears to be 1,725 m TVDSS.
Accordingly a range for the spillpoint is selected between the LKO from test and the structural spillpoint of
the field.
5.7.11.4 STOIIP
Based on the input data (Appendix E) RPS has calculated the range of STOIIP contained in this structure
is given below (Table 5-28).
STOIIP (MMstb)
P90 P50 P10 Mean
33.3 47.8 66.7 49.2

Table 5-28: R10 A-Limestone, STOIIP Estimates (100% Basis)
423

26MAR201020180846
Table 5-29: R10 A Limestone Depth Structure Map
5.7.12 R13 Field

The R13 field structure is a tilted fault block structure that plunges to the north, has a bounding fault on its
north-eastern side, and dip to the west (Table 5-33). Good hydrocarbon shows and positive tests have been
found in one well each in the Basal Clastics and in the Bassein Limestone A and B Zones. Structure
appears more complex than most of the other fields assessed in this block with the possibility that further
424

faulting and compartmentalisation are present at the B and A horizons in the southern part of the
structure similar to that seen at Basal Clastics level.
R13-1 Exploration Identified 10 intervals for testing and tested 7, abandoning 3 intervals untested as
they had log analysis characteristics similar to zones that had been tested but
failed to flow. Of the seven zones tested 3 were in the Basal Clastics and failed to
flow, one flowed 2,417 stb/d from the Top B limestone (ODT 1,942 m TVDSS)
and one flowed at an estimated rate of 480 stb/d from the A limestone. (ODT
1,874 TVDSS)
R13-2 Appraisal Conducted 6 tests, 4 in the B limestone that failed to flow and two in the A
limestone that flowed 1,119 and 1,914 stb/d (ODT 1,817 m TVDSS)
R13-3 Appraisal Conducted 1 test over three intervals and flowed only water.
R13-4 Appraisal Conducted 9 tests. The lowest 5 were in the Basal Clastics interval and the upper
three flowed oil at 1,728, 2,131 and 190 stb/d. No log data was available to RPS to
determine whether these tests were from the same or stacked sandstones. Four
further tests were conducted in the Bassein limestone, 2 in the B and 2 in the A
but none of them flowed.
R13-5 Appraisal Conducted 6 tests, 4 in the Basal clastics where one test reversed out 28 stb , one
in the A limestone and one in the Alternations sequence, neither of which flowed.
RBC-1 Exploration Conducted 7 tests. The lowest 3 tests were in the B limestone and the uppermost
one, at the top of the B limestone, flowed 2,177 stb/d (ODT 1,967 m TVDSS) .
Four intervals in the A limestone were tested but only one flowed oil and gas with
70% water cut and 19,000ppm H2S.
5.7.12.2 Structure
The R13 basal Clastics structure shows a substantial sized tilted fault block with structural closure to 2,370
m TVDSS (Table 5-34).
Well R13-4 successfully tested oil and proved ODT 2,467 m TVDSS. However it is unclear how far above
or below the mapping horizon the tested sandstone lies. Assuming the sandstone was 10 m thick and the
well penetrated the mapping horizon at 2,240 m TVDSS then this well indicates that the area of closure
would be down to 2,250 m TVDSS on the mapped horizon. The two other penetrations at this level were
less successful.
R13-1 penetrated the Basal Clastics. It is plotted on the map at approximately the 2,270 m TVDSS contour
although it is annotated to tie the map at 2,283 m. It was tested but no flow was achieved. RPS do not have
log data for the Basal Clastics in this well. Tabulated test information indicates that six zones varying in
depth from 3,067 m TVDSS to 2,757 m TVDSS and ranging in thickness from 2 to 22 m were initially
selected for testing but due to lack of flow from the first two tests three of the zones were not tested.
R13-4 penetrated the Basal Clastics. Basal Clastics tests were conducted from 3,023 m TVDSS to 2,429 m
TVDSS and three zones between 2,467 m and 2,429 m TVDSS were productive. From the data available to
RPS it is unclear whether these three tested intervals are different levels of one oil pool or are three
different clastic intervals that may represent stacked pools.
R13-5 penetrated the Basal Clastics. It is plotted on the map at approximately the 2,530 m TVDSS contour
although it is annotated to tie the map at 2,564 m. Basal Clastics tests were planned from 3,051 m TVDSS
to 2,494 m TVDSS and from one zone between 2,731 m and 2,733 m TVDSS did not flow but 28bbl oil
were reversed out of the well at the end of the test fluids.
The R13 B limestone structure was productive from two wells, R13-1 and RBC-1, both of which are
located on the northern flank of the R13 structure. The tests resulted in ODT measurements of 1,942 and
1,967 m TVDSS. The B limestone shows independent closure to 1,860 m TVDSS at the crest of the
structure as mapped, 4km to the south of the wells productive at B level. The productive wells lie on the
northerly plunging nose of the R13 structure and no clear structural reason can be see to explain the
entrapment of oil at this level. It is therefore concluded that the oil seen is either stratigraphically trapped
425

in enhanced porosity reservoir rocks on the northern flank of the structure or the seismic data available to
map the structure was inadequate to enable a true structural map to be generated.
The R13 A limestone structure shows a better developed anticlinal closure than at B limestone level. Two
wells tested oil from this level, R13-1 and R13-2, resulting in ODT measurements of 1,874 m TVDSS and
1,817 m TVDSS. As mapped the closure has a spillpoint to the south at 1,830 m TVDSS at A limestone
level, so, as with the B limestone, the deeper ODT seen in the R13-1 well indicates either stratigraphic
trapping or inadequate structural mapping.
5.7.12.3 Contacts
No OWC’s are found in this field
5.7.12.4 STOIIP
Discovered hydrocarbon distribution does not appear to bear a clear relationship to mapped reservoir
structure. The location and depth of the available well data makes understanding of the southern half of
the field difficult. The distribution of hydrocarbons within the structure is unusual.
At Basal Clastics level, from the data available to RPS, it is known that three wells have penetrated into
the basal Clastics. The Basal Clastics depth structure map shows the structure to be a tilted fault bounded
anticline. R13-1 appears to have encountered potential reservoir formations between 500and 800 m below
the mapped surface. R13-4 tested oil from sandstones between 150 and 300 m below the mapped surface
and R13-5 recovered minor oil from a zone 160 m below the mapped surface. It is unknown how
continuous the sandstones are at this level. Thus to calculate STOIIP it was assumed that at any location
across the structure at least one oil filled sandstone would be present although it is not expected to be the
same aged sandstone at each location. Thus a range of trap area was selected based on the mapping and a
range of pay thicknesses and reservoir quality was selected based on the limited log data available.
At A limestone level there is a dry hole, R13-4, sitting within the productive closure, at B limestone level
there are two dry-holes, R13-2 and 4, sitting updip of productive wells. No obvious relationship between
hydrocarbon presence and mapped structure can be determined. Accordingly RPS has assigned a range of
likely productive areas to the structure, assuming that either the A or B limestone will be productive within
that area, and have then calculated the STOIIP based on available petrophysical results.
Based on the input data (Appendix E) given below are the ranges of STOIIP RPS has calculated contained
in this structure for the A limestone (Table 5-31) and Basal Clastics (Table 5-32).
STOIIP (MMstb)
P90 P50 P10 Mean
46.4 64.1 87.4 65.8

Table 5-31: R13 A and B Limestone, STOIIP Estimates (100% Basis)
STOIIP (MMstb)
P90 P50 P10 Mean
15.1 37.2 66.4 39.6

Table 5-32: R13 Basal Clastics STOIIP Estimates (100% Basis)
426

26MAR201020184196
Table 5-33: R13 A Limestone Depth Structure Map
427

26MAR201020185510
Table 5-34: R13 Basal Clastics Depth Structure Map
428

5.7.13 R71 Discovery

5.7.13.1 Structure
At Top A limestone, regional mapping shows the R71-1 well to be located on a northerly plunging nose
from the R7 field area. The area is bounded by regional north-south faults. RPS has no information about
reservoir structure at Basal Clastics level. No separate depth structure map was made at top reservoir level.
5.7.13.2 Contacts
Oil was produced from a test which had 4 m of perforations only. No information about the thickness of
the tested sandstone is available to RPS and with no structure map it is not possible to know the area of
the closure. Accordingly therefore an area of 1 to 5 km2 was used to estimate the possible range of
resources found by this well.
5.7.13.3 Reservoir
5.7.13.4 STOIIP
STOIIP (MMstb)
P90 P50 P10 Mean
4.5 8.3 15.2 9.27

Table 5-35: R71 Basal Clastic Reservoir, STOIIP Estimates (100% Basis)
5.7.14 Other Structures

5.7.14.1 R7A-3
Well R7A-3 was drilled on a separate culmination to the proven culminations of R7 ad R7A. The R7A-3
culmination is the most southerly of three culminations on a north south trending ridge, the northernmost
of which culminations was drilled and found to be oil bearing by well R8-1.The R7A-3 culmination appears
to extends south out of the block mapped area.
No log analysis data is available to RPS. Test summary information for well R7A-3 indicate that this well
was comprehensively tested in the Bassein limestone B and A zones, suggesting that shows and or positive
log analysis results were obtained indicating the presence of oil. Examination of the well diagram indicates
that the upper, A zone tests are shallower than the 95⁄8’’ casing shoe and appear to have been conducted
after 7’’ liner was run, requiring perforations to be through two strings of casing.
RPS recommend that the available technical data of this well and area be reviewed to determine whether
R7A-3 was a valid test of the southerly culmination. No resources are calculated for this structure.
429

MERRILL CORPORATION JDICKSO//30-APR-10 12:37 DISK116:[10ZAU1.10ZAU70801]SJ70801A.;31
6. ULTIMATE TECHNICAL RECOVERY

6.1 Engineering Review
RPS has reviewed the previous reports prepared by Intera in 1997 and by Scott Pickford in 2005.
Intera’s study, estimated the volumes of oil recoverable from the concession area by constructing a
reservoir simulation model of each individual oil bearing structure identified within the concession area
and using these models to predict the future production performance of each reservoir. The details of the
simulation models are not available. The overall development plan for the area is to simultaneously
produce from the R-7, R-9, R-10, R-12 and R-13 structures. Production will be brought back to the existing
platform facilities at R-12 via multiphase flowlines. Injection water will be conveyed to all structures via
infield injection lines and all production wells will be installed with electric submersible pumps (ESP’s).
Export of oil will be via a new 10’’ pipeline to Heera and export of gas will be via a new 8’’ pipeline of 40km
length.
EOL has provided a conceptual design based on building a new platform rather than in using the exiting
R-12 platform. RPS has reviewed the field data supplied by EOL and made production forecasts based on
this conceptual development plan.
6.2 Reservoir Engineering Analysis

6.2.1 Routine Core analysis
The data set consisted of measurements of horizontal/vertical plug porosities, permeabilities and grain
densities. A typical plot shows all the measured permeability (k) against porosity (Ø) in various carbonate
rocks (Table 6-1). The results shown here were horizontal measurements. The data (not plotted here)
indicate a fair uniform kv/kh ratio similarly to typical carbonate rocks. The plot highlights that
• The core permeabilities are generally very low compared to those calculated from the transient well
test data (not reported here). The test permeability enhancements are believed to be due to natural
fracturing, and the core permeabilities generally represent the matrix permeabilities only;
• With the rock porosity < 0.10, the permeability is largely within the 0.01 to 1 mD; a geological cutoff
of porosity <0.10 on the oil zone has effectively reduced the uncertainty of unrecoverable oil volumes;
• A dual porosity/permeability system could be established in the recoverable oil area with low k rock
area (~ 1 mD) and high k rock area (~ 10 mD + open fractures), which will be discussed in detail in
the other session in the report.
100
Porosity cut-offs High k rock
10
Permeability-HZ, md
0702COR1
0902COR1
Low k rock 0904COR1
1202COR1
0.1
12A01COR1
12A01COR2
1302COR1
0.01
0 5 10 15 20 25 30 35 40
Porosity-HZ 26MAR201021044973
Table 6-1: Core Measurements of Permeability vs. Porosity
430

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: SJ70801A.;31
6.2.2 Special Core Analysis

A limited amount of Special Core Analysis (SCAL) data were available for the study. A standard pair of
curves of oil/water relative permeability is created by Corey exponent functions as shown in Table 6-2, from
which the water-flooding effective recovery factor is established.
1
0.9
Kro
0.8 Krw
2007.9m
0.7 2007.9m
Kro & Krw, Fw, RF
2012.4m
0.6 2012.4m
2014.75m
0.5 2014.75m
2015.15m
0.4 2015.15m
2019.05m
0.3 2019.05m
Fw, water fractional flow
0.2 RF (low k , sweep eff 15%)
RF (high k, sweep eff 70%)
0.1
0
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
Water saturation, Sw 26MAR201023481586

Table 6-2: SCAL Analyses of R12-2 Well Samples (RPIII limestone)
The reservoir rock effective recovery factors are estimated as following:

• Two rock types are defined—the lower quality rock (low k) and the higher quality rock (high k + open
fractures).
• The maximum water saturation Sw at the end of the oil flow in porous mediums varies depending on
the reservoir quality in a range of 0.500.60 (low k) to 0.750.85 (high k).;
• The minimum values of oil relative permeability to water in a oil/water multiphase flow system are
given from 0.28 (P50 low k) down to 0.02 (P50 high k); these differences in the relative (or the
effective) permeability of oil are consistent with the core measurements of permeability.
• The Buckley-Leverett fractional flow (Fw) as a function of the oil/water mobility ratio (Fw =
1/(1+Mo/Mw)), is calculated as shown in Table 6-2, which gives a fairly low watercut ~16% for the low
k (P50) and very high watercut ~97% for the high k (P50) implying most of the water would pass
through the high permeability/fracture zones.
• Water macro sweeping efficiency Ew is estimated based on the fact that the carbonate rock is generally
believed by RPS to be weakly-oil-wet. The capillary pressure in the low-k zone would largely reduce
the water sweep efficiency during water flooding. This model has Ew = 0.15 for a low-k zone and 0.70
for a high-k zone calibrated according to the R12-RPIII production analysis as discussed below;.
• The effective oil recovery factors are estimated based on the reservoir initial water saturation, Swi,
residual/remaining oil saturation, Sor and the water sweep efficiency, Ew; it suggests that the P50 RF is
approx. 5% for low k and approx. 50%for high k rocks.
431

The parameters used in the recovery factor estimates are summarised in Table 6-3.
Low K rock High K rock

(~1 mD) (~10 mD + fracture)
Parameter P90 P50 P10 P90 P50 P10
Sw . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50 0.55 0.60 0.75 0.80 0.85

Kro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.36 0.28 0.20 0.05 0.02 0.007
Water fractional flow, Fw . . . . . . . . . . . . . . . . . . . . . . . 0.06 0.16 0.34 0.90 0.97 0.99
Water sweep efficiency, Ew . . . . . . . . . . . . . . . . . . . . . 0.15 0.15 0.15 0.70 0.70 0.70
Effective oil recovery factor, RF . . . . . . . . . . . . . . . . . . 0.043 0.054 0.065 0.451 0.501 0.551
Table 6-3: Estimates of Carbonate Recovery Factors
6.2.3 Production data (R12-RPIII) analysis

The crestal area of R-12 RPIII field (central) was put on production in 1982. Production profile and the
decline curve fit of the R-12 RPIII central are shown in Table 6-4 and Table 6-5. The production ceased
from these wells in 1994 due to lack of pressure support and excessive water production. The production
GOR rose from the initial ~800 scf/stb to over 8,000 scf/stb at the end of field life implying the reservoir
pressure was much below the oil bubble point in late of field life. From the production decline curve
analysis (Table 6-9), it represents about exponential decline (hyperbolic exponential constant b=0.1) with a
significant decline rate (initial effective-annual decline rate De=0.37). The field production behaviour
suggests that oil was mainly produced from high permeability-fractured corridors and reservoir pressure
was poorly maintained. The expected ultimate recovery (EUR) oil is established to be ~10.5 MMstb from
the extension of the production rate vs. cumulative production as shown in Table 6-6.
26MAR201021055400
Table 6-4: R-12 RPIII Limestone, Central Segment—Production and Decline Curve Fit
432

26MAR201021072594
Table 6-5: R12 RPIII Limestone, Central Segment—Estimated Ultimately Recoverable Oil
The initial water reservoir pressure was around 2,917 psia and by 1994 the average pressure had declined
to around 1,138 psia. The cumulative production from the field by 1994 was reported to be 10.3 MMstb.
The available pressure data averaged using production weighted method was used to perform detailed
material balance calculations using the MBALTM modelling software. A typical analytical result is shown in
Table 6-6. From this analytical model, it is clearly identified a dual porosity/ permeability system in which a
good match of reservoir pressure data from a two-tank model was observed compared to a single-tank
model.
26MAR201021064402
Table 6-6: R-12 RPIII MBAL Multi-tank Modelling: Analytical Method—Tank 01
433

6.2.4 Well Performance Analysis

The individual well performances from the R12 field are evaluated and plotted in Table 6-7, which shows a
good fit of log relationship between the well test rates and their cumulative productions.
26MAR201021082477
Table 6-7: RPIII Production Well Tests vs. Well Cumulative Production
It is noted that there were some 10 development wells drilled and only 5 wells were completed in the field,
but most of the production came from just two wells, namely well R12A-3 and R12A-7. The average
production well test rate was about 3,200 stb/d. Average cumulative production per well was approx.
2 MMstb.
The best well test rates for all other fields are listed below with predicted cumulative production per well is
about 0.4 MMstb (using the expression derived from a Log fit to the data in Table 6-7). It is clear that the
well flowing tests from other fields demonstrated reasonable hydrocarbon flowing rates, but significantly
less than the average test rates as shown from the R-12 field.
Well Test Cumulative Production

(STB/d) (MMstb)
R-7A-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2864 0.69

R-7-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1730 0.24
R-7-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1796 0.26
R-7-6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2126 0.35
R-9-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1724 0.24
R-9-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1264 0.16
R-10-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3763 1.58
R-10-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 790 0.10
R-13-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2417 0.46
R-13-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1914 0.29
R-13-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2131 0.35
RBC-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2177 0.37
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2047 0.43
Table 6-8: Estimated Well Cumulative Production
Geological studies indicate that the A zone limestone has general good features similarly to those shown in
the RPIII zone for the R-12 field. The less than expected test rates from the A zone may result from the
differences in natural fracturing because fracturing is considered to be important for reservoir
performance. In Intera’s study in 1997, core data were reviewed to ascertain the location of fracture zones,
434

the density of fracturing and the diagenetic history of the fracture networks by well. Of critical importance
is the diagenetic history, which will determine whether the fractures have been sealed by cement, or remain
as open channels. In addition, some fractures have been solution-enlarged in particular areas. All of the
data have been taken from core reports supplemented by log evaluation report descriptions where core is
lacking. In summary from Intera’s study, R-12 has the largest amount of core data showing good fracturing;
the R-7 and R-9 identified somewhat fractured core; R-13 has reasonable test results seem to be due to
good primary porosity in the reservoir interval rather than due to fractures, as suggested by the core
description; and there were no core data available from the R-10.
6.2.5 Field Recovery Factor Estimates

Oil recovery factors RF from each field are estimated based on the rules as following:
• RFs used for P90, P50 and P10 are summarised in Table 6-9;
• The field historical production in R12-RIII Central (RPS P50 STOIIP 38 MMstb, EUR 10.5 MMstb,
RF 0.28) is used as a calibration factor;
• Two-tank models with the low k rock and high k rock respectively are defined;
• Carbonate reservoir fracture systems refer the to Intera 1997 study (Report 1.2.5 Fracturing);
• 3 groups of reservoirs are identified as below:
• Limestone carbonates with general fracture network: R7A, R7AA, R9A & R12RPIII
• Limestone carbonates with uncertain fracture network: R10A & R13A
• Basal clastics being locally cemented by carbonate leading to reduce the sweeping efficiency:
R71BC, R12BC & R13BC.
The field oil recovery factors estimated are summarised in Table 6-9.
Effective Reservoir Volume Average recovery factor

Field Low k High k P90 P50 P10
R7A, R7AA . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 0.25 0.28 0.31

R9A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 0.25 0.28 0.31
R10A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 1 0.21 0.23 0.26
R12RIII North & South . . . . . . . . . . . . . . . . . . . 1 1 0.25 0.28 0.31
R13A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 1 0.21 0.23 0.26
R12BC North, Central & South . . . . . . . . . . . . . 0.18 0.20 0.22
R13BC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.18 0.20 0.22
R71BC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.18 0.20 0.22
Table 6-9: Summary of Oil Recovery Factor Estimates
6.3 Production Forecasts and Ultimate Technical Recovery

6.3.1 General
RPS field production profiles and EUR (i.e. before economic cut off), are generated based on the
following assumptions:
• Total field life 30 years;
• No recovery from R8-Miocene due to the marginal volumes;
• No further recovery from R12RPIII Central;
• No separate A and B limestone horizons;
• Annual average oil production rate are estimated with exponential/hyperbolic declines;
• Field gas/water production rates are derived based on the GOR and watercut factors from Intera 1997
simulations (which was then used by Scott Pickford in 2005);
• Well count and performance has been estimated based on the R12 RPIII Central production, field
tests, reservoir quality, and production constraints (H2S handling etc) ;
435

• The well production profiles are based on the assumptions that reservoir pressures will be maintained
and horizontal wells will significantly improve well productivity;
• All production wells will be horizontal wells installed with electric submersible pumps (ESP) and all
water injection wells will be conventional (deviated or vertical) wells;
• In the absence of a detailed development plan the field production profiles assume that production
starts at the beginning of the year after the wells had been drilled.
Expected Ultimate Recovery

Oil (MMstb) Gas (Bscf)
Field Reservoir Segment P90 P50 P10 P90 P50 P10
R7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A 21 32 48 3.3 5.9 10.1

R7A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A 6 12 18 1.0 2.1 3.8
R9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A 8 17 33 3.2 7.3 15.6
R10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A 7 11 17 5.1 9.7 16.5
R12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RPIII North 3 6 11 2.7 6.3 11.9
R12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RPIII South 9 16 28 7.6 14.5 27.1
R13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A 11 18 27 7.0 12.7 21.6
R12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC North 7 11 21 2.8 5.7 12.1
R12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC Central 2 3 6 0.9 1.7 3.6
R12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC South 1 2 6 0.4 1.2 3.5
R13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 3 7 14 1.1 3.6 8.0
R71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 1 1 3 0.4 0.7 1.8
Total (excl R12-RPIII Cent)(1) . . . . . . . . . . . . 78 139 233 35 71 136
(1) Totals are arithmetic totals and not the probabilistic P90, P50, P10 values
Table 6-10: Expected Ultimate Recovery from Individual Reservoir Pools
The total development wells of the Ratna and R-Series fields required and the well drilling schedules are
listed in Table 6-11.
Producers Injectors
Year P90 P50 P10 P90 P50 P10 Field
1 ... . . . . . . . . . . . . . . . . . . . . . . . . . . 4 6 8 3 3 5 R12
2 ... . . . . . . . . . . . . . . . . . . . . . . . . . . 11 14 18 6 8 9 R7,R7A, R9A
3 ... . . . . . . . . . . . . . . . . . . . . . . . . . . 8 11 14 4 6 8 R10,R13, R71BC, R13BC
4 ... . . . . . . . . . . . . . . . . . . . . . . . . . . 5 6 9 3 4 5 R12BC
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 28 37 49 16 21 27
Table 6-11: Well Drilling Plan
436

The gross oil and gas production profiles for the Ratna & R-Series fields are shown in Table 6-12 and
Table 6-13. Production forecasts for the fields, the Limestone Carbonates and the Basal Clastics are
tabulated in Appendix F.
60000 240
3C rate
2C rate
1C rate
50000 3C Cumulative 200
2C Cumulative
Cumulative production, MMstb

1C Cumulative
Production rate, bopd
40000 160
30000 120
20000 80
10000 40
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Production year 26MAR201021045994
Table 6-12: Full Field Annual Average Oil Production Profiles
50 150
3C rate
2C rate
1C rate
2C Cumulative
Cumulative production, Bcf
1C Cumulative
Production rate, MMscf/d
30 90
20 60
10 30
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-13: Full Field Annual Average Gas Production Profiles
437

MERRILL CORPORATION JDICKSO//30-APR-10 12:34 DISK116:[10ZAU1.10ZAU70801]SK70801A.;24
6.3.2 Field R7A

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R7 A-zone
limestone carbonate reservoir. The development wells will be drilled in the year 2 of scheduled full field
development plan and production will be starting on the beginning of the year 3.
The production profiles are shown in Table 6-14. The input parameters and EUR are summarised below.
Production forecasts are tabulated in Appendix F.
R7A 1C 2C 3C
Production wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7 8
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 4
Well initial rate, bopd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300 1,350 1,350
Field initial rate, bopd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,800 9,450 10,800
Hyperbolic exponent, b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.3 0.5
(Initial) Effective-annual decline rate, De . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.135 0.116 0.113
Oil initial in place volume (STOIIP), MMstb . . . . . . . . . . . . . . . . . . . . . . . . . 87 120 162
Estimated ultimately recoverable (EUR) oil, MMstb . . . . . . . . . . . . . . . . . . . . 20.8 32.4 48.0
Oil recovery factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.24 0.27 0.30
Cumulative gas production, Bcf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 5.9 10.1
12000 60
1C rate
2C rate
3C rate
2C Cumulative

3C Cumulative
8000 40
6000 30
4000 20
2000 10
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-14: R7A Field Annual Average Oil Production Forecast
438

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: SK70801A.;24
6.3.3 Field R7AA

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R7A A-zone
The oil production profiles are shown in Table 6-15. The input parameters and EUR are summarised
below. Production forecasts are tabulated in Appendix F.
R7AA 1C 2C 3C
Production wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 4
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 2
Well initial rate, bopd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300 1,300 1,350
Field initial rate, bopd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,600 3,900 5,400
Hyperbolic exponent, b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.3 0.5
Oil initial in place volume (STOIIP), MMstb . . . . . . . . . . . . . . . . . . . . . . . . . . 27 42 61
Oil recovery factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.24 0.27 0.30
Cumulative gas production, Bcf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0 2.1 3.8
6000 24
1C rate
2C rate
3C rate
2C Cumulative

3C Cumulative
4000 16
3000 12
2000 8
1000 4
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-15: R7AA Field Annual Average Oil Production Forecast
439

6.3.4 Field R9A

The field oil production profiles are shown in Table 6-16. The input parameters and EUR are summarised
R9A 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 3
8000 40
1C rate
2C rate
7000 3C rate 35
1C Cumulative
2C Cumulative

6000 30
3C Cumulative
5000 25
4000 20
3000 15
2000 10
1000 5
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
440

6.3.5 Field R10A

R10A 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 2
5000 20
1C rate
2C rate
3C rate
1C Cumulative
4000 16
2C Cumulative

3C Cumulative
3000 12
2000 8
1000 4
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
441

6.3.6 Field R12RPIII North

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R12 North
RPIII-zone limestone carbonate reservoir. The development wells will be drilled in the year 1 of scheduled
full field development plan and production will be starting on the beginning of the year 2.
R12RPIII North 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 2
4000 12
1C rate
2C rate
3C rate
1C Cumulative

3C Cumulative
2000 6
1000 3
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-18: R12 RPIII Limestone North Segment Annual Average Oil Production Forecast
442

6.3.7 Field R12RPIII South

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R12 North
RPIII-zone limestone carbonate reservoir. The development wells will be drilled in the year 1 of scheduled
full field development plan and production will be starting on the beginning of the year 2.
R12RPIII South 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 3
7000 35
1C rate
2C rate
6000 3C rate 30
1C Cumulative

2C Cumulative
4000 20
3000 15
2000 10
1000 5
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-19: R12 RPIII Limestone South Segment Annual Average Oil Production Forecast
443

6.3.8 Field R13A

R13A 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 3
8000 32
1C rate
2C rate
7000 3C rate 28
1C Cumulative
2C Cumulative

6000 24
3C Cumulative
5000 20
4000 16
3000 12
2000 8
1000 4
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
444

6.3.9 Field R71BC

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R71 Basal Clastics
reservoir. The development wells will be drilled in the year 3 of scheduled full field development plan and
production will be starting on the beginning of the year 4.
R71BC 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 1 1
Well initial rate, bopd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 1,000 1,200
Field initial rate, bopd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 1,000 1,200
1200 4
1C rate
2C rate
3C rate
1C Cumulative
2C Cumulative

900 3
3C Cumulative
600 2
300 1
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-21: R71 Basal Clastics, Annual Average Oil Production Forecast
445

6.3.10 Field R12BC North

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R12 North Basal
Clastics reservoir. The development wells will be drilled in the year 4 of scheduled full field development
plan and production will be starting on the beginning of the year 5.
R12BC North 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 3
6000 24
1C rate
2C rate
3C rate
2C Cumulative

3C Cumulative
4000 16
3000 12
2000 8
1000 4
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-22: R12 Basal Clastics, North Segment—Annual Average Oil Production Forecast
446

6.3.11 Field R12BC Central

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R12 Central Basal
R12BC Central 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1
2500 10
1C rate
2C rate
3C rate
1C Cumulative
2000 8
2C Cumulative

3C Cumulative
1500 6
1000 4
500 2
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-23: R12 Basal Clastics, Central Segment—Annual Average Oil Production Forecast
447

6.3.12 Field R12BC South

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R12 South Basal
R12BC South 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 1 1
Well initial rate, bopd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 1,000 1,050
Field initial rate, bopd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 1,000 2,100
2000 8
1C rate
2C rate
3C rate
1C Cumulative
2C Cumulative

1500 6
3C Cumulative
1000 4
500 2
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-24: R12 Basal Clastics, South Segment—Annual Average Oil Production Forecast
448

6.3.13 Field R13BC

The 1C, 2C and 3C cases are based on decline analysis of P90, P50 and P10 cases for the R13 Basal Clastics
reservoir. The development wells will be drilled in the year 3 of scheduled full field development plan and
production will be starting on the beginning of the year 4.
R13BC 1C 2C 3C
Injection wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 2
4000 16
1C rate
2C rate
3C rate
1C Cumulative
2C Cumulative

3000 12
3C Cumulative
2000 8
1000 4
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Table 6-25: R13 Basal Clastics—Annual Average Oil Production Forecast
449

MERRILL CORPORATION JDICKSO//30-APR-10 12:34 DISK116:[10ZAU1.10ZAU70801]SL70801A.;40
7. DEVELOPMENT PLAN REVIEW

This review has been undertaken based on the notional development and EOL’s Que$tor cost estimate(5),
associated quotes provided by EOL and the RPS estimates of resources and associated production profiles.
Plateau oil production rates, 4 years after first production, are estimated at:
• Low Case: 23,700 stb/d
• Base Case: 35,000 stb/d
• High Case: 54,700 stb/d
The Base Case peak rate of each field is estimated to be about 5,000 stb/d. Field life is likely to be around
29 years.
7.1 Fluid Characteristics

The Ratna and R series fields are expected to have an oil quality of about 32 to 45 API gravity with an
associated gas rate of about 1,000 scf/bbl. The produced fluids in the R7 and R13 are thought to contain
about 2,000ppm H2S, which will require the use of both exotic materials and a sulphur removal process.
• High Case: 54,700 stb/d
4 years after first production. The Base Case peak rate of each field is estimated to be about 5,000 stb/d.
7.2 Development Plan

The base case development plan is based on simultaneously producing from 8 structures via 6 platforms:
• Ratna (R12), developed via the CPP (R12 RPIII South wells) and R12 BC wellhead platform (R12
RPIII North wells)
• R12 BC developed via the CPP (R12 BC Central and South Wells) and R12 BC wellhead platform
(R12 BC North Wells)
• R7 developed via the R7 wellhead platform (R7A wells)
• R7A developed via the R7 wellhead platform (R7AA wells)
• R9 developed via the R9 wellhead platforms (R9A wells)
• R10 developed via the R10 wellhead platform (R10A wells)
• R13 developed via the R13 wellhead platform (R13A and R13BC wells)
• R71BC developed via the R10 wellhead platform (R71BC wells)
7.2.1 Wells
The number of wells required for the Low, Base and High Cases, estimated by RPS, is illustrated in
Table 7-1. In summary:
• Low Case:
• 28 Horizontal Oil Producers
• 16 Vertical Water Injectors
• Base Case:
(5) Essar Que$tor Cost Estimate: Ratna146.85 Rev25#3, Monday January 25, 2010—4.38PM.
450

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: SL70801A.;40
• High Case:
28MAR201012494733
Table 7-1: RPS Well Summary.
The producers will each have horizontal sections of about 500 m and employ ESPs. The wells will be drilled
using a jack-up rig to an average TVD of approximately 1800 m. Well details are summarised below.
7.2.1.1 R12 RPIII South and R12 BC Central & South Wells Developed via the CPP
Well types are detailed below.
26MAR201023571447
Table 7-2: R12 RPIII South and R12 BC Central & South Well Details.
A total of 425 jack-up days are required with a total measured depth of 27,530 m
7.2.1.2 R12 RPIII North & R12 BC North Wells Developed via the R12 North Wellhead Platform
26MAR201023570007
Table 7-3: R12 RPIII North and R12 BC North Well Details.
A total of 383 jack-up days are required with a total measured depth of 24,290 m
451

7.2.1.3 R7 A and AA Wells developed via the R7 Wellhead Platform

26MAR201023580214
Table 7-4: R7 A and AA Well Details.
A total of 754 jack-up days are required with a total measured depth of 53,330 m.
7.2.1.4 R9 A Wells Developed via the R9 Wellhead Platform

26MAR201023582190
Table 7-5: R9A Well Details.
7.2.1.5 R71 BC and R10 A Wells Developed via the R10 Wellhead Platform
26MAR201023574725
Table 7-6: R71 BC and R10 A Well Details.
452

7.2.1.6 R13 A and R13 BC Wells Developed via the R13 Wellhead Platform
26MAR201023573004
Table 7-7: R13 A and R13 BC Well Details.
7.2.2 Facilities
The fields will each be produced via a wellhead platform and tied back via production flowlines to a
Central Processing Platform (CPP), approximately 15 km distant from each field. Power lines will run
alongside the production flowlines from the CPP to each field, as illustrated in Table 7-8.
Oil will be exported from the CPP by pipeline to an existing facility 40 km distant. The associated gas
produced will be used for fuel, with the remainder being exported by pipeline.
The current is to build a new platform as a central processing platform (CPP) on R-12. Production will be
brought back to this platform via multiphase flowlines. Wellhead platforms will be installed on the R-7,
R-9, R-10, R-12BC and R-13 structures that will not normally be manned.
The facilities will include oil processing, two stage gas compression, water injection facilities, power
generation and sour gas treatment. Injection water will be conveyed to all structures via infield injection
lines and all production wells will be installed with electric submersible pumps (ESP’s).
Export of oil will be via a new 10’’ pipeline to Heera and export of gas will be via a new 8’’ pipeline of 40km
length.
It should be noted that a new oil pipeline has been assumed in the RPS estimate in the absence of any
details about whether the existing pipeline is suitable for use or repair costs.
Based on 93% uptime and a design factor of 1.1, design flowrates will be:
• Oil Production: 38,300 stb/d.
• Gas Production: 38.3 MMscf/d
• Gross Liquids Production: 42,100 stb/d
• Water Injection: 42,100 stb/d
453

26MAR201023554047
Table 7-8: Development Plan Schematic.
7.2.3 Capex
RPS has prepared a cost estimate for the Capex using IHS’ Que$tor software and database, changing
some of the data based on local cost information provided by EOL but using the development plan
described above as a basis. RPS Estimates total Capex at US $1,127 million.
454

The details of the cost estimates outlined below and summarised in Table 7-9.
R7 Wells R9 Wells R10 Wells R12S Wells R12N Wells R13 Wells Total Wells
Equipment . . . . . . . . . . . . . . . . . 15.042 5.766 6.392 9.276 8.649 9.777 54.902

Materials . . . . . . . . . . . . . . . . . . 41.370 15.987 21.953 22.238 20.009 21.233 142.790
Fabrication . . . . . . . . . . . . . . . . . 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Installation . . . . . . . . . . . . . . . . . 92.719 40.508 53.511 52.839 47.677 51.058 338.312
Hook-Up and Commissioning . . . . 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Design & Project Management . . . 0.795 0.475 0.535 0.615 0.565 0.600 3.585
Insurance & Certification . . . . . . . 0.750 0.314 0.541 0.425 0.385 0.413 2.699
Contingency . . . . . . . . . . . . . . . . 30.135 12.610 16.561 17.079 15.457 16.616 108.458
TOTAL . . . . . . . . . . . . . . . . . . . . 180.811 75.660 99.493 102.472 92.742 99.697 650.746
R7 WHJ R9 WHJ R10 WHJ R12N WHJ R13 WHJ Total WHJ CPP
Topsides Topsides Topsides Topsides Topsides Topsides Topsides
Equipment . . . . . . . . . . . . . . . . . 4.556 3.109 2.911 3.566 3.837 17.979 64.729

Materials . . . . . . . . . . . . . . . . . . 1.896 1.478 1.368 1.558 1.640 7.940 25.091
Fabrication . . . . . . . . . . . . . . . . . 2.340 1.678 1.573 1.853 1.973 9.417 25.073
Installation . . . . . . . . . . . . . . . . . 0.282 0.282 0.282 0.282 0.282 1.410 16.366
Hook-Up and
Commissioning . . . . . . . . . . . . . . 0.471 0.318 0.294 0.360 0.387 1.830 12.287
Contingency . . . . . . . . . . . . . . . . 2.070 1.486 1.397 1.649 1.757 8.359 30.683
TOTAL . . . . . . . . . . . . . . . . . . . . 12.419 8.915 8.384 9.894 10.543 50.155 184.100
R7 R9 R10 R12N R13 Total

Wellhead Wellhead Wellhead Wellhead Wellhead Wellhead CPP
Jacket Jacket Jacket Jacket Jacket Jacket Jacket
Materials . . . . . . . . . . . . . . . . . . 1.732 2.913 2.823 2.920 2.972 13.360 4.314

Fabrication . . . . . . . . . . . . . . . . . 2.032 3.046 2.957 3.057 3.108 14.200 5.249
Installation . . . . . . . . . . . . . . . . . 6.330 3.566 3.566 3.566 3.566 20.594 14.792
Contingency . . . . . . . . . . . . . . . . 2.097 2.001 1.962 2.005 2.026 10.091 5.036
TOTAL . . . . . . . . . . . . . . . . . . . . 12.583 12.106 11.772 12.028 12.157 60.546 30.216
R7-R9 R9-CPP R10-R9 R12N-CPP R13-CPP Total Oil

Production Production Production Production Production Production Export
Flowline Flowline Flowline Flowline Flowline Flowlines Pipeline
Materials . . . . . . . . . . . . . . . . . . 9.797 11.818 4.558 4.227 6.896 37.296 8.214

Installation . . . . . . . . . . . . . . . . . 5.570 5.711 4.788 4.773 5.172 26.014 9.201
Contingency . . . . . . . . . . . . . . . . 3.214 3.649 1.989 1.918 2.546 13.316 3.699
TOTAL . . . . . . . . . . . . . . . . . . . . 19.286 21.894 11.934 11.506 15.277 79.897 22.196
R7-R9 R9-CPP R10-R9 R12N-CPP Total

Water Water Water Water R13-CPP Water Gas
Injection Injection Injection Injection Water Injection Export
Flowline Flowline Flowline Flowline Injection Flowlines Pipeline
Materials . . . . . . . . . . . . . . . . . . 9.797 11.818 4.558 4.227 6.896 37.296 8.214

Installation . . . . . . . . . . . . . . . . . 5.570 5.711 4.788 4.773 5.172 26.014 9.201
Contingency . . . . . . . . . . . . . . . . 3.214 3.649 1.989 1.918 2.546 13.316 3.699
TOTAL . . . . . . . . . . . . . . . . . . . . 19.286 21.894 11.934 11.506 15.277 79.897 22.196
GRAND TOTAL . . . . . . . . . . . . . 1126.642
Table 7-9: Total Capex Summary (US$ MM)
455

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7.2.3.1 Procurement Strategy

EOL has selected a procurement strategy based on procuring all services in the Indian Ocean. The
recommended procurement strategy for this project would involve using Indian Ocean norms, with western
equipment supply.
7.2.3.2 Design and Project Management

EOL has adjusted the design rates throughout their estimate from US $103/hr to US $50/hr and project
management rates from US $152/hr to US $50/hr based on a recent quote (2009) from Jacobs Engineering
for FEED and detailed engineering services. This quote was based on an average rate of $17/hr. EOL’s
estimate of US $50/hr therefore seems reasonable, and RPS has adopted the same rate in their estimate.
7.2.3.3 Insurance Rates

EOL has assumed much lower insurance rates, at 0.5% of total costs, than Que$tor norms of 4% based on
prevalent rates in India. This would seem reasonable, and RPS has adjusted insurance rates in the counter-
estimate accordingly.
7.2.3.4 Contingency
This project would appear to be in ‘Phase 1’ i.e. at a screening level, with costs at the +40/-25% level of
accuracy. No engineering work appears to have been undertaken, no FDP is in place and no PSC has been
signed. At this stage of a project, a contingency level of 20% would be appropriate, and RPS has applied
this to the estimate.
7.2.3.5 Well Capex

Total well Capex for 37 producers and 21 water injectors is estimated by RPS at US $651 million.
It should be noted that all of the RPS production wells are horizontals, which cost more compared to
vertical or deviated production wells. RPS has assumed that horizontals have 500 m horizontal sections.
Capex per well reflects these assumptions and the other factors described below, with the RPS wells
costing US $11.2 million each on average.
Table 7-10 summarises well number and design by drill centre.
R13 R12 North R9 R7 CPP R10 Total

# Producers . . . . . . . . . . . . . . . 7 6 4 10 6 4 37
# Water Injectors . . . . . . . . . . . . 3 3 2 6 4 3 21
Total # Wells . . . . . . . . . . . . . . . 10 9 6 16 10 7 58
Producer Well Type . . . . . . . . . . . horizontal horizontal horizontal horizontal horizontal horizontal horizontal
Injector Well Type . . . . . . . . . . . vertical / vertical / vertical / vertical / vertical / vertical / vertical /
deviated deviated deviated deviated deviated deviated deviated
Total Measured Depth (m) . . . . . 26010 24290 20080 53330 27530 27730 178970
Total # Rig Days . . . . . . . . . . . . 409 383 326 754 425 434 2731
Sub-Total CAPEX (US$MM) . . . . 83.081 77.285 63.05 150.676 85.393 82.803 542.288
Contingency (US$MM) . . . . . . . . 16.616 15.457 12.610 30.135 17.079 16.561 108.458
CAPEX (US$MM) . . . . . . . . . . . 99.697 92.742 75.660 180.811 102.472 99.364 650.746
CAPEX/m (US$MM) . . . . . . . . . 3833 3818 3768 3390 3722 3583 3636
CAPEX/Day (US$MM) . . . . . . . . 0.24 0.24 0.23 0.24 0.24 0.23 0.24
CAPEX/Well (US$MM) . . . . . . . 9.97 10.30 12.61 11.30 10.25 14.19 11.22
Table 7-10: Well Costs
7.2.3.6 Rig Rates

Predicted rig rates are one of the most important factors in determining drilling cost. Que$tor estimates
that jack-up drilling rates in the Bombay Basin are in the order of US $88,000 /day (bare rig) or
US $140,000/day (all-in). This is at the high end of international jack-up contract rates reported by Rigzone
in their 2009 year-end review(6). Based on this, RPS would recommend using an all-in rig rate of
US $90,000 to $120,000/day going forward. EOL point out that ONGC has recently contracted a jack-up
(6) ‘‘Auld Lang Syne ’09’’, Rigzone 2009 Jackup Review, Q4 2009.
456

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: SM70801A.;32
rig at US $78,000/day. Consequently, EOL are basing their cost estimate on an all-in rate of
US $118,800/day (Table 7-11):
Item Cost (US $/day)

Jack-up bare rig charter and drill crew: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
Jack-up marine crew: . . . . . ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Jack-up consumables: . . . . . ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
Jack-up helicopter services: . ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,800
Jack-up supply base: . . . . . . ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Jack-up supply boats: . . . . . ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,500
TOTAL: . . . . . . . . . . . . . . ........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,800
Table 7-11: Breakdown of Rig Rates
This rate is at the conservative end of RPS’ expectations and RPS has consequently used the same rate in
their Que$tor estimate.
7.2.3.7 Equipment Cost

Give the complexity of these wells, with long horizontal sections and ESPs, RPS recommends buying
high-quality equipment for this project, likely from the Gulf of Mexico. EOL has assumed that all
equipment will be procured in the Indian Ocean area.
EOL’s well Capex estimate was adjusted from Que$tor norms based on a recent purchase order for a
production wellhead and Xmas tree for US $189,000. EOL has assumed that each production wellhead
and Xmas tree will cost between US $558,700 and $683,700, depending on size. This seems reasonable,
even accounting for Gulf of Mexico procurement and the potential need for H2S resistant materials, which
RPS has assumed will be required (EOL has only accounted for these at R-7 and R-13). RPS can support
these costs and have used them in their estimate. Similar adjustments have been made for water injection
Xmas trees, however, in the absence of back-up material, RPS has not adjusted ESP and bit costs. A
summary of the equipment costs used is provided in Table 7-12.
Cost (US $)
Que$tor
Component Gulf of Mexico Indian Ocean RPS
Production Xmas Tree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,367,700 1,363,600 500,000

Production Downhole ESP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326,900 324,900 326,900
Water Injection Xmas Tree . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,152,700 1,180,000 500,000
Bits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 175 175
Table 7-12: Equipment Cost
7.2.3.8 Wellhead Platform Topsides Capex

The RPS design for the wellhead platforms is based on a minimum facilities concept consisting of
manifolding (for production and water injection) and test facilities, along with basic local controls. Remote
monitoring and control will be done at the CPP. Power will be supplied from the CPP, although an
emergency power supply will be available on the wellhead platform. The wellhead platforms will mostly be
unmanned, but will have a helideck, 4 man emergency shelter and lifeboats. Utilities will include a flare/
vent system, a small crane and simple drain systems.
RPS estimates the total Capex for 5 wellhead platform topsides at US $50 million. Based on the following
assumptions:—
• The number of wells gathered on each platform.
• Flow going through wellhead platforms to correctly size manifolding and other equipment.
• Test separation at the wellhead platforms and CPP. Well testing will be required and the costs for this
are added to the estimate. It is recommended that well testing is done at the platforms as test lines are
usually more expensive to install than local well test separators.
457

• Some of the Ratna and R fields are known to be sour, others need confirmation well tests, therefore
RPS has included costs acid gas design until this confirmatory work is complete.
The Capex is illustrated in Table 7-13.
R13 R12N R10 R7 R9 Total

Oil/Condensate Capacity (Mstb/d) . . . . . . . . . . . . . . 7.44 6.38 4.25 10.6 4.25 32.92
Water Injection Capacity (Mstb/d) . . . . . . . . . . . . . . 6.02 6.02 6.02 12 4.01 34.07
Gas Export/Flre Capacity (MMscf/d) . . . . . . . . . . . . 7.44 6.38 4.25 10.6 4.25 32.92
Production Wells . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6 4 10 4 31
Water Injection Wells . . . . . . . . . . . . . . . . . . . . . . . 3 3 3 6 2 17
Test Separation . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes Yes Yes Yes Yes Yes
H2S (ppm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2000 2000 2000 2000 2000 2000
Topsides Weight (te) . . . . . . . . . . . . . . . . . . . . . . . . 366 347 300 434 321 1768
Sub-Total CAPEX ($MM) . . . . . . . . . . . . . . . . . . . . 8.786 8.245 6.987 10.349 7.429 41.796
Contingency ($MM) . . . . . . . . . . . . . . . . . . . . . . . . 1.757 1.649 1.397 2.07 1.486 8.359
CAPEX ($MM) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.543 9.894 8.384 12.419 8.915 50.155
Table 7-13: Wellhead Platform Topsides
7.2.3.9 Wellhead Jacket Capex

The RPS design for the 5 wellhead jackets is based on a lightweight design (with the exception of R7,
which is a 3-leg jacket due to the larger number of wells), installed by an offshore lift vessel. Details of each
the jackets are illustrated in Table 7-14.
RPS estimates the total Capex for 5 wellhead jackets at US $59 million.
R13 R12N R10 R7 R9 Total
# Conductors . . . . . . . . . . . . . . . . . . . . . . . . . . 10 9 7 16 6 48
# Risers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 3 3 2 12
Topsides Weight (te) . . . . . . . . . . . . . . . . . . . . . 388 347 263 434 254 1664
Sub-Total CAPEX ($MM) . . . . . . . . . . . . . . . . . 10.004 9.902 9.688 9.701 9.916 49.211
Contingency ($MM) . . . . . . . . . . . . . . . . . . . . . . 2.001 1.980 1.938 1.940 1.983 9.842
CAPEX ($MM) . . . . . . . . . . . . . . . . . . . . . . . . . 12.005 11.882 11.626 11.641 11.899 59.053
Table 7-14: Wellhead Jackets Capex
7.2.3.10 CPP Topsides Capex

RPS estimates the total Capex for the CPP Topsides at US $184 million as outlined in Table 7-1 and below.
CPP Topsides
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64.729
Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.091
Fabrication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.073
Installation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.366
Hook-Up and Commissioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.287
Design & Project Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.108
Insurance & Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.763
Contingency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.683
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184.1
Table 7-15: CPP Topsides Capex
458

7.2.3.11 Design Capacities and Manifold

The RPS CPP Topsides Capex estimate is based on the design capacities and well numbers detailed in
Table 7-16.
CPP Capacity
Oil Production (Mstb/d) . . ................................................... 38.3

Gas Production (MMscf/d) ................................................... 38.3
Water Injection (Mstb/d) . . ................................................... 42.1
CPP Manifold
Platform Production Wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Remote Production Wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Remote Production Risers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Platform WI Wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Remote WI Wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Remote WI Risers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes
Table 7-16: CPP Topsides Capacities and Manifolding
7.2.3.12 Oil Processing

Given that the production is to go by pipeline to another facility, RPS has assumed that the oil processing
specification is that of a partially stabilised crude, and that further stabilisation will be done at the other
platform or onshore. The result is that RPS has costed a much simpler oil process than EOL, as illustrated
in Table 7-18. However, RPS has included a test separator on the CPP for the CPP wells.
7.2.3.13 Gas Compression

RPS assumes gas will be exported by pipeline to an existing facility, and must be compressed to achieve
this. RPS estimates that it will require approximately 4 mW of compression power to export the gas
volumes 40 km, and two 100% compressors will be required.
Installation
EOL has adjusted the CPP installation (heavy lift) rates in their estimate from US $850,000/day to
US $500,000/day based on a quote of US $431,000/day for a similar project. This seems reasonable, and
RPS has adopted the same rate in their estimate.
26MAR201023564038
Table 7-17: PS Oil Processing Flow scheme.
459

26MAR201023560923
Table 7-18: EOL Oil Processing Flow scheme.
7.2.3.14 CPP Jacket Capex

RPS estimates the total Capex for the CPP Jacket at US $30. The RPS CPP Jacket design is based on a
4-leg jacket design, supporting a topsides weight of around 5,000 tonnes, installed by an offshore lift vessel.
The jacket is designed with 10 conductors and 25 risers, to accommodate the CPP and remote production
and water injection wells.
7.2.3.15 Oil Export Pipeline Capex

RPS estimates the total Capex for the Oil Export Pipeline at US $22 million.
RPS has assumed that emergency shutdown valves are required for safety reasons at both ends of the
pipeline, adding US $1.8 million to the materials cost. EOL has reduced the rates (compared to Que$tor
norms) on the various vessels required for pipeline installation based on recent quotes for pipelay, dive
support and survey vessels. Although RPS supports the majority of the rate reductions based on the
quotes, EOL has used lower rates than RPS would recommend for the pipelay support vessel. RPS has
therefore further adjusted the rates as illustrated in Table 7-19. Where no quotes have been made
available, RPS has adjusted the rates for those vessels by a factor of 0.59 based on the other reductions.
(US$/day)
Que$tor Quote RPS
Pipelay Spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,000 229,050 230,000

Pipelay Spread Mob/Demob . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420,000 229,050 230,000
Diving Support Vessel Tie-ins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,400 68,734 69,000
DSV Test & Commissioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 68,734 69,000
DSV Mob/Demob . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 31,550 32,000
Testing & Commissioning Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 20,500 — 20,500
Trenching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000 — 72,000
Trenching Mob/Demob . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000 — 72,000
Surveying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000 14,085 15,000
Surveying Sail & Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000 11,775 12,000
Table 7-19: Pipeline Installation Rates.
RPS has assumed that the oil and gas export pipelines will be installed together. Consequently, for
estimating purposes, mobilisation and demobilisation times have been cut in half for each pipeline.
Installation, tie-in, testing and commissioning times have also been reduced by one-third for each pipeline
to account for the economies of scale in doing them together. Trenching and surveying will only be done
once, so costs have been split equally between the two pipelines.
7.2.3.16 Gas Export Pipeline Capex

The Gas Export Pipeline Capex has been estimated on the same basis as the oil export pipeline Capex
described above. RPS estimates the total Capex for the Gas Export Pipeline at US $16 million.
460

7.2.3.17 Flowline Capex Estimates

RPS estimates the total Capex for the Flowlines at US $113 million as summarised in Table 7-20.
Total CAPEX ($MM)

Production Flowlines RPS/Que$tor Water Injection Flowlines RPS/Que$tor
R9-CPP . . . . . . . . . . . . . . . . . . 21.894 R9-CPP . . . . . . . . . . . . . . . . . . 8.114
R13-CPP . . . . . . . . . . . . . . . . . 15.277 R13-CPP . . . . . . . . . . . . . . . . . 6.372
R12N-CPP . . . . . . . . . . . . . . . . 11.506 R12N-CPP . . . . . . . . . . . . . . . . 5.365
R10-R9 . . . . . . . . . . . . . . . . . . . 11.934 R10-R9 . . . . . . . . . . . . . . . . . . . 5.46
R7-R9 . . . . . . . . . . . . . . . . . . . 19.286 R7-R9 . . . . . . . . . . . . . . . . . . . 7.472
TOTAL/AV . . . . . . . . . . . . . . . . 79.897 TOTAL/AV . . . . . . . . . . . . . . . . 32.783
Table 7-20: Flowline Capex Summary.
Materials
It should be noted that, based on the H2S content of the crude, that RPS anticipates that Duplex materials
will be required for the production flowlines. In contrast, EOL has assumed that carbon steel can be used
for all flowlines with the exception of the production lines from R13 to the CPP and R7 to R9. On this
basis, the flowline from R9 to the CPP would also have to be duplex, as well as the manifold at R9 as there
are no H2S removal facilities at R9. The water injection flowline from the CPP to R12 North has also been
costed as duplex in the EOL estimate. This is assumed to be an error.
RPS has therefore decided to use the $6,625/inch/km quote for all carbon steel pipe and to reduce the
duplex cost by a factor of 1.43 on the basis that the Que$tor rates for carbon steel pipe were reduced by
about this level following receipt of the quote. This is obviously imperfect, but is a good approximation to
take into account the fact that Que$tor may be over-estimating line pipe costs (see Table 7-21).
Production
Flowline Diameter () Material Linepipe CAPEX ($/km) Linepipe CAPEX ($//km)
Length
(km) Que$tor Que$tor Que$tor RPS Que$tor Quote RPS
R9-CPP . . . . . . . . . . 16 10 Duplex 667,210 399,252 66,721 — 39,925

R13-CPP . . . . . . . . . 13 6 Duplex 328,053 239,550 54,676 — 39,925
R12N-CPP . . . . . . . 5 6 Duplex 328,053 239,550 54,676 — 39,925
R10-R9 . . . . . . . . . . 6 6 Duplex 328,053 239,550 54,676 — 39,925
R7-R9 . . . . . . . . . . . 16 8 Duplex 486,845 319,400 60,856 — 39,925
TOTAL/AV . . . . . . . 56 427,643 287,460 58,321
Water Injection
Flowline Diameter () Material Linepipe CAPEX ($/km) Linepipe CAPEX ($//km)
Length
(km) Que$tor Que$tor Que$tor RPS Que$tor Quote RPS
R9-CPP . . . . . . . . . . 16 8 CS 84,477 53,000 10,560 6,625 6,625

R13-CPP . . . . . . . . . 13 4 CS 37,787 26,500 9,447 6,625 6,625
R12N-CPP . . . . . . . 5 4 CS 37,787 26,500 9,447 6,625 6,625
R10-R9 . . . . . . . . . . 6 4 CS 37,787 26,500 9,447 6,625 6,625
R7-R9 . . . . . . . . . . . 16 6 CS 56,924 39,750 9,487 6,625 6,625
TOTAL/AV . . . . . . . 56 50,952 34,450 9,678
Table 7-21: Flowline Unit Costs
EOL has reduced subsea emergency shutdown valve costs to US $1 million each, presumably based on
similar quotes/purchases. Although these quotes have not been presented to RPS, this reduction seems
reasonable and is supported by RPS given the other major equipment quotes provided. RPS has
consequently adopted the same cost in their estimate.
EOL has also assumed the onshore fabrication costs are 25% of equipment costs.
Installation
RPS has assumed that the production flowline and water injection flowlines from the wellhead platforms
to the CPP will be laid together. Consequently, for estimating purposes, mobilisation and demobilisation
461

times have been cut in half for each pipeline. Installation, tie-in, testing and commissioning times have also
been reduced by one-third for each pipeline to account for the economies of scale in doing them together.
Trenching and surveying will only be done once, so costs have been split equally between the two pipelines.
EOL has reduced the rates (compared to Que$tor norms) on the various vessels required for flowline
installation based on recent quotes for pipelay, dive support, trenching and survey vessels. The quotes for
the pipelay vessel (which is presumably a smaller vessel than that required for the oil and gas export lines)
and trenching vessel have not been made available to RPS. RPS has therefore assumed that the Que$tor
rates can be adjusted by a factor of 0.59 for the pipelay and trenching vessels on the same basis as the
export pipelines.
RPS has assumed that the dive support and survey vessel quotes used for the export pipelines are also valid
for the in-field flowlines.
RPS flowline lay rates are illustrated in Table 7-22.
(US$/day)
Que$tor Quote
Pipelay Spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265,000 — 156,000

Pipelay Spread Mob/Demob . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265,000 — 156,000
Diving Support Vessel Tie-ins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 68,734 69,000
DSV Test & Commissioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 68,734 69,000
DSV Mob/Demob . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 31,550 32,000
Testing & Commissioning Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 20,500 — 20,500
Trenching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000 — 72,000
Trenching Mob/Demob . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000 — 72,000
Surveying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000 14,085 15,000
Surveying Sail & Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000 11,775 12,000
Table 7-22: Flowline Installation Rates.
7.2.4 Opex
A good rule of thumb is that facilities Opex should be around 5% of facilities Capex plus workover. RPS
has assumed approximately US $24 million per annum plus costs of well workovers of US$7.5 MM every
3 years. In addition a US$1/bbl variable Opex has been assumed. We cannot adopt a fully variable Opex as
the majority of the Opex is fixed and related to operation of the CPP and the WHP’s (i.e. independent of
how much oil is produced).
7.2.5 Schedule
Based on Que$tor estimates it would take approximately 32 months from sanction to first oil as illustrated
in Table 7-23. However, RPS has assumed project sanction on 1st January 2011 and first oil on
1st December 2013 in its economic valuation. Fabrication of the CPP is on the critical path of the schedule.
EOL believes that project sanction could be earlier than assumed by RPS and yards could complete the
CPP fabrication in less time than RPS has estimated. Should this be the case first oil would be brought
forward accordingly and the resulting expected post-tax net present value (ENPV) of the project would
increase. Conversely, should sanction or first oil be delayed the ENPV would decrease.
462

27MAR201000003784
Table 7-23: RPS Project Schedule.
463

MERRILL CORPORATION JDICKSO//30-APR-10 12:35 DISK116:[10ZAU1.10ZAU70801]SN70801A.;38
8. ECONOMOMIC VALUATION
As already discussed earlier in this report, the PSC has not yet been signed. As a consequence all the fiscal
terms discussed below are taken from the draft PSC except where specified otherwise.
The economic evaluation described below has been based on a financial model provided by EOL. Rather,
we have used RPS estimates of future production volumes and costs as inputs in EOL’s economic model.
Our audit of EOL’s model revealed that this model—after a few adjustments made by RPS Energy, in
consultation with EOL—appears to implement accurately the PSC terms in all material respects. We would
point out that we have audited only the portions of the model relevant to calculating net entitlement
resource volumes and net present values (NPVs) of future cashflows,
8.1 Valuation Assumptions

8.1.1 Inflation
At EOL’s request, we have assumed cost and price inflation rates of 0% p.a. Thus all monetary amounts
used in and results from the model are denominated in Real 2010 US$.
8.1.2 Crude oil price

At EOL’s request we have used their assumptions for future crude oil price prices. Specifically, EOL
assumes that
• the forecast price for all oil from the PSC assumes parity with Brent;
• the forecast Brent price for 2010-2014 is based on the current Brent forward curve, which EOL has
provided (see below);
• the forecast Brent price for all years starting 2015 equals 2010 Real US$85.00/bbl.
The oil prices which we have used in EOL’s economic model are shown in Table 8-1
8.1.3 Natural gas price

The base case gas price are shown in Table 8-1, below.
It should be noted that gas price is materially lower than the price that would be calculated using the
contract price formula in the draft PSC. This contract price formula was applicable in the mid-1990s when
the draft PSC was written and would not be relevant in today’s market. For this reason we have only
evaluated the gas based on the gas price provided by EOL, which are all significantly less than the draft
PSC contract price.
Oil Price Gas Price
Brent Ratna price Base case
(US$/stb) (US$/stb) US$/MMBTu
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.80 84.80 5.25

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.84 87.84 5.25
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88.04 88.04 5.25
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.73 87.73 5.25
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87.58 87.58 5.25
2015+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.00 85.00 5.25
Table 8-1: EOL Oil and Gas Price Forecasts
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Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: SN70801A.;38
8.2 PSC Commercial Terms

8.2.1 Participating Interests
The parties to the draft PSC (hereafter, ‘‘the PSC’’) are the Government of India (hereafter, ‘‘the
Government’’) and the Contractor, which comprises three entities with the following Participating
Interests (Table 8-2).
Party Participating Interest
EOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.00%
POPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00%
ONGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.00%
Table 8-2: Participants in PSC
Note that certain provisions of the PSC, discussed below, apply only to an entity known as ‘‘the
Companies’’, which comprise only EOL and POPL.
8.2.2 License Term

The license period is for an initial period of 25 years, extendable by agreement between the Contractor and
Government if warranted by perceived field economics at that time. The economic model assumes that the
license term will be extended to allow production to continue so long as it is economic.
We consider the field to be economic until the first year in the production phase when Gross Operating
Field Cashflow turns negative. We define Gross Operating Field Cashflow as Gross sales revenue minus
the sum of Royalty, Cess (both discussed below) and operating costs.
8.2.3 Bonuses
Within 10 days of the Effective Date, a signature bonus of US$ 3.0 MM is payable by the Companies. In
addition the following production bonuses are payable by the Companies when cumulative production
within the PSC first reaches each of the following thresholds (Table 8-3)
Bonus
Cumulative Oil production (MMstb) (US$ MM)
25.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.00
50.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.00
75.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00
Table 8-3: Production Bonuses Payable by Companies
Neither signature nor production bonuses are cost recoverable (see discussion below).
8.2.4 Other Special Amounts payable

To compensate ONGC for past costs the following additional payments are required,
• On the Effective Date of the PSC, US$ 2.0 MM is payable to ONGC;
• ONGC is allowed to recover—from oil and gas revenues net of Royalty and Cess (discussed below)—
US$3.0 MM per year for the 10 years starting the second year from the Effective Date
8.2.5 Royalty and Cess

Royalty and Cess are levies payable to the Government out of gross sales revenue.
Royalty and Cess for crude oil are levied at the respective rates of Rs 580 and Rs 900 per tonne. The
economic model assumes that one tonne of oil equals 7.33 barrels of oil, and that one US$ equals Rs.48.00
for all years.
Royalty for sales gas equals 10% of the wellhead value of the gas. Following EOL’s guidance, we assume
that the wellhead value equals 90% of the sales price (discussed below). Cess is not levied on sales gas.
465

8.2.6 Distribution of revenue under the PSC

Revenue under the PSC is distributed amongst the relevant entities as follows:
• Sales Revenue is earned from the sale of oil and gas
• Royalty, Cess and the Other Special Amounts Payable (cited above) are deducted from Sales Revenue
to equal Funds available for the recovery of the Contractor’s Recoverable Costs
• Funds taken by the Contractor for such cost recovery is known as Cost Petroleum
• Funds available for the recovery of the Contractor’s eligible costs, minus Cost Petroleum, equals Gross
Profit Petroleum
• Gross Profit Petroleum is shared between the Government and Contractor according to an
Investment Multiple (discussed below).
8.2.7 Cost Recovery Cap

It should be noted that Article 15.4 of the draft PSC, drafted in the mid-1990s, imposes a limit of on the
amount of costs which may be recovered by the Contractor.
The article caps this amount at US$298.17 MM, but points out that the cap
• excludes the cost of developing the R12 resources in the basal clastics;
• excludes abandonment costs; and
• is based on the cost of oilfield services materials in Real 1995 US$.
In its economic model EOL has not imposed this or any cap on recoverable costs. We believe this is
acceptable, as
• We believe the intent of the Draft PSC was to permit the Contractor to recover the estimated cost of
the total development and to cap the cost recovery to this figure. The cap of US$298.17 MM would
have been applicable to the project in 1995. This cap needs to be updated to reflect the current costs
of development when the Government and Contractor finally sign the PSC; and
• We believe that the cost estimates made by RPS and used in EOL’s economic model—reflect the
current cost of development and any new cost recovery cap would be based around this new estimate.
8.2.8 Recoverable Costs

The Contractor’s Recoverable Costs consist of development costs, exploration costs, production costs and
abandonment costs (discussed below).
These costs are recoverable when incurred—i.e. tangible Capex is not depreciated for cost recovery
purposes. Should funds available for Cost Recovery in any given year be insufficient to allow the recovery
of Recoverable Costs, the Recoverable Costs may be carried forward to future years until recovered.
8.2.9 Profit Petroleum

Funds available for the recovery of the Contractor’s eligible costs, minus Cost Petroleum, equals Gross
Profit Petroleum. Gross Profit Petroleum is shared between the Government and Contractor according to
an Investment Multiple.
The investment Multiple for a given year is based on the previous year’s ratio of the Companies’ combined
Cumulative Cash Income to the Companies’ Cumulative Investment, where
• Cash Income equals the Companies’ combined, Participating Interest share of
Cost Petroleum + Profit Petroleum Royalty Cess Production Costs Notional Income Tax
(see below)
and
• Investment equals the Companies’ combined, Participating Interest share of
Exploration Costs + Development Costs
466

The resultant Investment Multiple is used to distribute Gross Profit Petroleum as follows:
Profit sharing:
Investment Multiple % of Gross profit oil
>= < Govt. Contractor
0.0 1.5 10.0% 90.0%

1.5 2.0 15.0% 85.0%
2.0 2.5 25.0% 75.0%
2.5 3.0 30.0% 70.0%
3.0 3.5 40.0% 60.0%
3.5 No limit 50.0% 50.0%
8.2.10 Income Tax

Each Company calculates its Income Tax liability separately. It is calculated on a basis which is ring-fenced
from activities outside the PSC area.
Each Company’s Income Tax Liability is the greater of its conventional Income Tax liability and its
Minimum Alternative Tax Liability.
8.2.11 Conventional Income Tax

Each Company’s Taxable Income equals its Participating Interest Share of:
Sales Revenue
Less
Royalty
Cess
Bonuses
Exploration Costs (as incurred)
Intangible Development Costs (as incurred)
Amortised Tangible Development Costs (depreciated using the declining balance method at an
annual rate of 15%)—
Production Costs
Abandonment Provisions
Costs not allowed for Cost Recovery.
There is an Income Tax holiday of seven years beginning the first year of commercial production.
Tax losses may be carried forward for eight years.
EOL’s Taxable Income is taxed at an Income Tax rate of 34.0% .
8.2.12 Minimum Alternative Tax (MAT)

Each Company’s Taxable Income for MAT purposes equals its Participating Interest Share of
Sales Revenue
Less
Royalty
Cess
Bonuses
Depletion of Exploration and Development Costs
Production Costs
Abandonment Provisions.
The MAT tax rate is 11.33%.
467

8.2.13 Abandonment Provision

Once commercial production has started, annual abandonment provisions are payable. Each year’s
provision equals the total cost of abandonment times a depletion coefficient, which in a given year equals
present year production / present year total remaining producible reserves.
8.3 Valuation Methodology

The technical (i.e. pre economic cut off) recoverable resource potential of Ratna and each of the R fields is
subject to uncertainty and their resource range has been expressed a continuous probability distribution
from which the P90, P50 and P10 values have been extracted (Table 8-4 below).
Oil Gas
P90 P50 P10 P90 P50 P10
Field Formation (MMstb) (MMstb) (MMstb) (Bscf) (Bscf) (Bscf)
R12 North . . . . . . . . . . . . . . . . . . . . RPIII Lst 3.12 6.24 11.19 2.66 6.25 11.93
R12 South . . . . . . . . . . . . . . . . . . . . RPIII Lst 8.59 16.17 28.02 7.60 14.50 27.13
R7 . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 20.81 32.43 47.95 3.26 5.93 10.06
R7A . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 6.36 11.54 18.23 1.00 2.12 3.83
R9 . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 8.24 17.14 32.79 3.25 7.27 15.64
R10 . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 6.57 10.94 16.98 5.10 9.69 16.50
R13 . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 11.38 18.24 27.37 6.96 12.67 21.57
R13 . . . . . . . . . . . . . . . . . . . . . . . . . BC 2.58 7.24 14.08 1.09 3.58 8.00
R71 . . . . . . . . . . . . . . . . . . . . . . . . . BC 0.83 1.46 3.09 0.36 0.73 1.77
R12 North . . . . . . . . . . . . . . . . . . . . BC 6.55 11.44 20.99 2.79 5.72 12.06
R12 Central . . . . . . . . . . . . . . . . . . . BC 2.18 3.49 6.34 0.93 1.74 3.64
R12 South . . . . . . . . . . . . . . . . . . . . BC 0.92 2.47 6.11 0.39 1.24 3.51
Arithmetic Total . . . . . . . . . . . . . . . . 78.15 138.81 233.13 35.38 71.44 135.65
The arithmetic total of the P90 or P50 or P10 does not represent the P90, P50 or P10 of the total resource potential. The true P90,
P50 and P10 can only be determined by a process of consolidation or probabilistic addition.
Table 8-4: Table of Input Resources used in the Economic Valuation
Since the resource ranges have been extracted from continuous probability distributions, the arithmetic
total of the P90 or P50 or P10 (as shown in the table above) does not represent the P90, P50 or P10 of the
total resource potential. The true P90, P50 and P10 can only be determined by a process of consolidation
or probabilistic addition.
The nature of the PSC fiscal arrangements and the integrated development plan assumptions (common
processing facility and export pipelines) also means that the value can only be correctly determined by a
consolidation of all the resources. Table 8-7 below shows diagrammatically the distribution of the various
fields and their resource ranges. We have therefore constructed a Monte Carlo simulation model using the
Gross P90, P50 and P10 resource numbers above and our forecast production profiles derived from these
volumes to undertake a probabilistic consolidation. The resulting consolidated oil and gas resources are
shown in Table 8-5 and Table 8-6 below. We have not used the continuous probability distributions
resource distribution in the consolidation but have combined the P90, P50 and P10 values using Swanson’s
Rule(7) which uses a 30%, 40% and 30% relative weighting to approximate the distribution. The advantage
of using this rule is that we can combine the forecast production profiles for the P90, P50 and P10 cases for
each field in the simulation model and use this to derive a distribution of net present value.
(7) A Hurst, G C Brown and R I Swanson (2000). Swanson’s 30-40-30 Rule. AAPG Bulletin, v84, no. 12 p. 1883-1891; DOI:
10.1306/8626C70D-173B-11D7-8645000102C1865D.
468

The process of consolidation shows a narrowing of the resource range as expected compared to the simple
but statistically incorrect arithmetic summation of the P90, P50 and P10 values.
100%
90% 122.87
Cumulative Exceedance Probability (%)
80%
70%
60%
50% 148.47
40%
Mean = 148.81
30%
MMstb
20%
10% 175.71
0%
- 50.00 100.00 150.00 200.00 250.00
Gross Oil Resources (MMstb) 26MAR201023563153
Table 8-5: Distribution of Gross Oil Resources
100%
90% 62.67
80%
70%
60%
50% 79.07
40%
30% Mean = 79.84

Bscf
20%
97.83
10%
0%
- 20.00 40.00 60.00 80.00 100.00 120.00 140.00
Gross Gas Resources (Bscf) 26MAR201023563002
Table 8-6: Distribution of Gross Gas Resources
The simulation model is able to combine the range of resources in each field by sampling the forecast P90,
P50 and P10 oil and gas production profiles as described and then for every realisation constructing a
development cost profile that matches the total Resources under development. However a number of
constraints have been placed on the model since development activity is planned to commence
immediately and before the uncertainty in resource potential has been reduced. In each case RPS has
assumed project sanction on 1st January 2011 and first oil on 1st December 2013 in this valuation.
469

MERRILL CORPORATION JDICKSO//30-APR-10 12:35 DISK116:[10ZAU1.10ZAU70801]SO70801A.;23
29MAR201006115573
Summary of input Gross field resources
InProduction 1983-1994 Produced
R9
R12 or Ratna Field
R7a
R10
~10MMSTBO
R7
R8
R71
R1
Table 8-7:
470

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The model has assumed that the development plan is based on the mid case scenario as described in
Section 8 above with regard the processing capacity of the CPP and the number of conductors on each well
head platform. Within the model, should the resources in any field and therefore in total be less than the
P50 level then the development CAPEX (excluding drilling) cannot be reduced and there is a small
amount of over investment. Should the opposite situation occur and the resources exceed the P50 level
then some additional CAPEX is added to install the necessary extra conductors but the total production
rate is constrained to the assumed design capacity of the CPP.
Since the total CAPEX and OPEX are a function of the Resources under development, the simulation
model produces a range of costs which can be displayed as a distribution. Table 8-8 and Table 8-9 below
show the CAPEX and OPEX produced by the simulation. The range in total CAPEX is not as wide as
might be expected for the reasons described above. Since the OPEX is based on a percentage of CAPEX
the range in OPEX is similarly tight.
100%
90% 1,087
80%
70%
60%
50% 1,144
40%
30%
Mean = MM$1146
20%
10% 1,205
0%
800 900 1,000 1,100 1,200 1,300 1,400
Gross Capex (US$ MM, 2010) 27MAR201000442524
Table 8-8: Distribution of Gross Capex
100%
90% 831
80%
70%
60%
50% 860
40%
30%
Mean = MM$860
20%
10% 891
0%
750 800 850 900 950 1,000
Gross Opex (US$ MM, 2010) 26MAR201023563298
Table 8-9: Distribution of Gross OPEX
471

The $/bbl CAXPEX and OPEX is shown in Table 8-10 below and is based on the mean values of the
various input distributions based on mean volume of 162 MMboe.
CAPEX OPEX
Total Expenditure (Mean)—US$ MM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,146 860

Cost$/bbl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.07 5.31
Table 8-10: CAPEX and OPEX Per Barrel Oil Equivalent for Mean Case
The simulation model used to generate the resource cases and then the corresponding CAPEX and OPEX
was linked directly to the EOL cashflow model so that for every case generated by the Monte Carlo
simulation the EOL net present value and entitlement resource volume can be computed. The final output
of the simulation therefore is a distribution of EOL net present value the mean of which represents the
Expected Net Present Value. The expected value being the risk weighted average net present value of all
possible outcomes.
8.4 Valuation Results

The table below is a summary of the total consolidated oil and gas resources (the Gross numbers
correspond to the distribution plots Table 8-5 and Table 8-6 above). The net entitlement resources are
generated by the cashflow model from the total EOL share of Cost Oil and Profit Oil.
Net Entitlement
Gross Resources Net WI Resources Resources
Oil Gas Oil Gas Oil Gas
(MMstb) (Bscf) (MMstb) (Bscf) (MMstb) (Bscf)
P90(1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122.9 62.7 61.4 31.3 43.3 22.0

P80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131.0 68.1 65.5 34.1 45.7 23.6
P70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137.2 71.7 68.6 35.9 47.3 24.7
P60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.7 75.6 71.4 37.8 48.7 25.8
P50(2C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148.5 79.1 74.2 39.5 50.2 26.9
P40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.8 83.1 76.9 41.6 51.7 28.0
P30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160.1 87.2 80.0 43.6 53.5 29.2
P20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.1 91.7 83.0 45.8 55.2 30.6
P10(3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175.7 97.8 87.9 48.9 57.8 32.2
Mean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148.8 79.8 74.4 39.9 50.4 27.0
Table 8-11: Summary of Total Consolidated Resources
472

The full distribution of Net Entitlement Resources for oil and gas are shown in Table 8-12 and Table 8-13
below.
100%
90% 43.31
80%
70%
60%
50% 50.15
40%
30% Mean = 50.40 MMstb
20%
10% 57.76
0%
- 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00
Entitlement Oil Resources (MMstb) 26MAR201023560086
Table 8-12: Distribution of EOL Net Entitlement Oil Resources
100%
90% 22.04
80%
70%
60%
50% 26.88
40%
30% Mean = 27.64 Bscf
20%
32.23
10%
0%
- 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00
Entitlement Gas Resources (Bscf) 27MAR201000442383
Table 8-13: Distribution of EOL Net Entitlement Gas Resources
473

The total net entitlement oil and gas resources relates to the PSC as a whole and as such is impossible to
determine the exact resources applicable to each field. The allocation shown below in Table 8-14 has used
the total mean oil and gas entitlement resources as calculated and has allocated this total back to each field
based on the mean ratio of oil and gas in each field for the Gross input cases.
Net Entitlement
Resources
Oil Gas
Field Formation (MMstb) (Bscf)
R12 North . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RPIII Lst 2.32 2.34

R12 South . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RPIII Lst 5.88 5.39
R7 . . . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 11.33 2.19
R7A . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 4.08 0.79
R9 . . . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 6.39 2.88
R10 . . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 3.91 3.52
R13 . . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A Lst 6.44 4.61
R13 . . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 2.67 1.42
R71 . . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 0.61 0.32
R12 North . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 4.35 2.29
R12 Central ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 1.36 0.71
R12 South . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BC 1.06 0.57
Total (Mean value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.15 27.04
Table 8-14: Net Entitlement Resources by Field
Using the EOL oil price forecast and the Base EOL gas price the expected value of the Ratna and R Fields
is US$ 907 MM but this ranges from a P90 value of US$759 MM and a P10 value of US$1,062 MM (see
Table 8-15).
100%
90% 759
80%
70%
60%
50% 903
40%
30%
Expected Net Present Value (Mean) = MM$907
20%
10% 1,062
0%
- 200 400 600 800 1,000 1,200 1,400
EOL Net Present Value @ 10% discount rate (US$ MM) 26MAR201023560228
Table 8-15: EOL Net Present Value Distribution
474

MERRILL CORPORATION JDICKSO//30-APR-10 12:36 DISK116:[10ZAU1.10ZAU70801]SP70801A.;26
APPENDIX A:
DESCRIPTION OF CONTRACT AREA
The Ratna and R-Series Field is located in the northern part of Ratnagiri shelf, about 65 km. west of the
coastline.
The area comprising approximately about 1000 sq. km. (offshore) identified as ‘‘Ratna and R-Series Field’’
described as herein and shown on the map attached as Appendix-B.
Points Latitude Longitude
A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 22 28 N 72 23 20 E

B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 19 00 N 72 12 00 E
C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 00 00 N 72 17 00 E
D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 52 00 N 72 21 00 E
E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 54 00 N 72 27 00 E
F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 12 00 N 72 27 00 E
475

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MERRILL CORPORATION JDICKSO//30-APR-10 12:34 DISK116:[10ZAU1.10ZAU70801]SQ70801A.;26
APPENDIX B:
GLOSSARY OF TERMS AND ABBREVIATIONS
API . . . . . . . . . . . . . . . . . . . . . . . . . American Petroleum Institute

asl . . . . . . . . . . . . . . . . . . . . . . . . . . above sea level
B. . . . . . . . . . . . . . . . . . . . . . . . . . . billion
bbl(s) . . . . . . . . . . . . . . . . . . . . . . . . barrels
bbls/d . . . . . . . . . . . . . . . . . . . . . . . . barrels per day
Bcm . . . . . . . . . . . . . . . . . . . . . . . . . billion cubic metres
Bg . . . . . . . . . . . . . . . . . . . . . . . . . . gas formation volume factor
Bgi . . . . . . . . . . . . . . . . . . . . . . . . . . gas formation volume factor (initial)
Bo . . . . . . . . . . . . . . . . . . . . . . . . . . oil formation volume factor
Boi . . . . . . . . . . . . . . . . . . . . . . . . . . oil formation volume factor (initial)
Bw . . . . . . . . . . . . . . . . . . . . . . . . . . water volume factor
stb/d . . . . . . . . . . . . . . . . . . . . . . . . barrels of oil per day
BTU . . . . . . . . . . . . . . . . . . . . . . . . British Thermal Unit
Bscf . . . . . . . . . . . . . . . . . . . . . . . . . billions of standard cubic feet
bwpd . . . . . . . . . . . . . . . . . . . . . . . . barrels of water per day
CO2 . . . . . . . . . . . . . . . . . . . . . . . . . Carbon dioxide
condensate . . . . . . . . . . . . . . . . . . . . liquid hydrocarbons which are sometimes produced with
natural gas and liquids derived from natural gas
cP . . . . . . . . . . . . . . . . . . . . . . . . . . centipoise
CROCK . . . . . . . . . . . . . . . . . . . . . . . rock compressibility
Cw . . . . . . . . . . . . . . . . . . . . . . . . . . water compressibility
DBA . . . . . . . . . . . . . . . . . . . . . . . . decibels
Ea . . . . . . . . . . . . . . . . . . . . . . . . . . areal sweep efficiency
EMV . . . . . . . . . . . . . . . . . . . . . . . . Expected Monetary Value
EPSA . . . . . . . . . . . . . . . . . . . . . . . Exploration and Production Sharing Agreement
ESD . . . . . . . . . . . . . . . . . . . . . . . . emergency shut down
Evert . . . . . . . . . . . . . . . . . . . . . . . . . vertical sweep efficiency
FBHP . . . . . . . . . . . . . . . . . . . . . . . flowing bottom hole pressure
FTHP . . . . . . . . . . . . . . . . . . . . . . . flowing tubing head pressure
ft . . . . . . . . . . . . . . . . . . . . . . . . . . . feet
ftSS . . . . . . . . . . . . . . . . . . . . . . . . . depth in feet below sea level
GDT . . . . . . . . . . . . . . . . . . . . . . . . Gas Down To
GIP . . . . . . . . . . . . . . . . . . . . . . . . . Gas in Place
GIIP . . . . . . . . . . . . . . . . . . . . . . . . Gas Initially in Place
GOR . . . . . . . . . . . . . . . . . . . . . . . . gas/oil ratio
GRV . . . . . . . . . . . . . . . . . . . . . . . . gross rock volume
GWC . . . . . . . . . . . . . . . . . . . . . . . . gas water contact
476

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H2S . . . . . . . . . . . . . . . . . . . . . . . . . Hydrogen sulphide

HIC . . . . . . . . . . . . . . . . . . . . . . . . . hydrogen induced cracking
IRR . . . . . . . . . . . . . . . . . . . . . . . . . internal rate of return
KB . . . . . . . . . . . . . . . . . . . . . . . . . Kelly Bushing
ka . . . . . . . . . . . . . . . . . . . . . . . . . . absolute permeability
kh . . . . . . . . . . . . . . . . . . . . . . . . . . horizontal permeability
km . . . . . . . . . . . . . . . . . . . . . . . . . . kilometres
km2 . . . . . . . . . . . . . . . . . . . . . . . . . square kilometres
kPa . . . . . . . . . . . . . . . . . . . . . . . . . kilopascals
kr . . . . . . . . . . . . . . . . . . . . . . . . . . . relative permeability
krg . . . . . . . . . . . . . . . . . . . . . . . . . . relative permeability of gas
krgcl . . . . . . . . . . . . . . . . . . . . . . . . . relative permeability of gas @ connate liquid saturation
krog . . . . . . . . . . . . . . . . . . . . . . . . . relative permeability of oil-gas
kroso . . . . . . . . . . . . . . . . . . . . . . . . . relative permeability at residual oil saturation
kroswi . . . . . . . . . . . . . . . . . . . . . . . . relative permeability to oil @ connate water saturation
kv . . . . . . . . . . . . . . . . . . . . . . . . . . vertical permeability
LNG . . . . . . . . . . . . . . . . . . . . . . . . Liquefied Natural Gases
LPG . . . . . . . . . . . . . . . . . . . . . . . . Liquefied Petroleum Gases
M .......................... thousand
MM . . . . . . . . . . . . . . . . . . . . . . . . . million
M$ . . . . . . . . . . . . . . . . . . . . . . . . . thousand US dollars
US$ MM . . . . . . . . . . . . . . . . . . . . . million US dollars
MD . . . . . . . . . . . . . . . . . . . . . . . . . measured depth
mD . . . . . . . . . . . . . . . . . . . . . . . . . permeability in millidarcies
3
m .......................... cubic metres
m3/d . . . . . . . . . . . . . . . . . . . . . . . . . cubic metres per day
MMscf/d . . . . . . . . . . . . . . . . . . . . . millions of standard cubic feet per day
m/s . . . . . . . . . . . . . . . . . . . . . . . . . metres per second
msec . . . . . . . . . . . . . . . . . . . . . . . . milliseconds
mV . . . . . . . . . . . . . . . . . . . . . . . . . millivolts
Mt . . . . . . . . . . . . . . . . . . . . . . . . . . thousands of tonnes
MMt . . . . . . . . . . . . . . . . . . . . . . . . millions of tonnes
MPa . . . . . . . . . . . . . . . . . . . . . . . . mega pascals
N:G . . . . . . . . . . . . . . . . . . . . . . . . . net to gross ratio
NGL . . . . . . . . . . . . . . . . . . . . . . . . Natural Gas Liquids
NPV . . . . . . . . . . . . . . . . . . . . . . . . Net Present Value
OWC . . . . . . . . . . . . . . . . . . . . . . . . oil water contact
Pb . . . . . . . . . . . . . . . . . . . . . . . . . . bubble point pressure
Pc . . . . . . . . . . . . . . . . . . . . . . . . . . capillary pressure
477

petroleum . . . . . . . . . . . . . . . . . . . . deposits of oil and/or gas

phi . . . . . . . . . . . . . . . . . . . . . . . . . . porosity fraction
pi . . . . . . . . . . . . . . . . . . . . . . . . . . . initial reservoir pressure
PI . . . . . . . . . . . . . . . . . . . . . . . . . . productivity index
ppm . . . . . . . . . . . . . . . . . . . . . . . . . parts per million
psi . . . . . . . . . . . . . . . . . . . . . . . . . . pounds per square inch
psia . . . . . . . . . . . . . . . . . . . . . . . . . pounds per square inch absolute
psig . . . . . . . . . . . . . . . . . . . . . . . . . pounds per square inch gauge
pwf . . . . . . . . . . . . . . . . . . . . . . . . . . flowing bottom hole pressure
PVT . . . . . . . . . . . . . . . . . . . . . . . . pressure volume temperature
rb . . . . . . . . . . . . . . . . . . . . . . . . . . barrel(s) of oil at reservoir conditions
rcf . . . . . . . . . . . . . . . . . . . . . . . . . . reservoir cubic feet
RFT . . . . . . . . . . . . . . . . . . . . . . . . repeat formation tester
RKB . . . . . . . . . . . . . . . . . . . . . . . . relative to kelly bushing
3
rm . . . . . . . . . . . . . . . . . . . . . . . . . reservoir cubic metres
SCADA . . . . . . . . . . . . . . . . . . . . . . supervisory control and data acquisition
SCAL . . . . . . . . . . . . . . . . . . . . . . . Special Core Analysis
scf . . . . . . . . . . . . . . . . . . . . . . . . . . standard cubic feet measured at 14.7 pounds per square inch
and 60F
scf/d . . . . . . . . . . . . . . . . . . . . . . . . . standard cubic feet per day
scf/stb . . . . . . . . . . . . . . . . . . . . . . . standard cubic feet per stock tank barrel
SGS . . . . . . . . . . . . . . . . . . . . . . . . . Sequential Gaussion Simulation
SIS . . . . . . . . . . . . . . . . . . . . . . . . . Sequential Indicator Simulation
3
sm . . . . . . . . . . . . . . . . . . . . . . . . . standard cubic metres
So . . . . . . . . . . . . . . . . . . . . . . . . . . oil saturation
Sor . . . . . . . . . . . . . . . . . . . . . . . . . . residual oil saturation
Sorw . . . . . . . . . . . . . . . . . . . . . . . . . residual oil saturation (waterflood)
Swc . . . . . . . . . . . . . . . . . . . . . . . . . . connate water saturation
Soi . . . . . . . . . . . . . . . . . . . . . . . . . . irreducible oil saturation
SSCC . . . . . . . . . . . . . . . . . . . . . . . . sulphur stress corrosion cracking
stb . . . . . . . . . . . . . . . . . . . . . . . . . . stock tank barrels measured at 14.7 pounds per square inch
and 60F
stb/d . . . . . . . . . . . . . . . . . . . . . . . . stock tank barrels per day
STOIIP . . . . . . . . . . . . . . . . . . . . . . stock tank oil initially in place
Sw . . . . . . . . . . . . . . . . . . . . . . . . . . water saturation
$ ........................... United States Dollars
t ........................... tonnes
THP . . . . . . . . . . . . . . . . . . . . . . . . tubing head pressure
Tscf . . . . . . . . . . . . . . . . . . . . . . . . . trillion standard cubic feet
TVDSS . . . . . . . . . . . . . . . . . . . . . . true vertical depth (sub-sea)
478

TVT . . . . . . . . . . . . . . . . . . . . . . . . true vertical thickness

TWT . . . . . . . . . . . . . . . . . . . . . . . . two-way time
US$ . . . . . . . . . . . . . . . . . . . . . . . . . United States Dollar
Vsh . . . . . . . . . . . . . . . . . . . . . . . . . . shale volume
W/m/K . . . . . . . . . . . . . . . . . . . . . . . watts/metre/ K
WC . . . . . . . . . . . . . . . . . . . . . . . . . water cut
WUT . . . . . . . . . . . . . . . . . . . . . . . . Water Up To
Ƞ........................... porosity
Ȗ........................... viscosity
Ȗgb . . . . . . . . . . . . . . . . . . . . . . . . . . viscosity of gas
Ȗob . . . . . . . . . . . . . . . . . . . . . . . . . . viscosity of oil
Ȗw . . . . . . . . . . . . . . . . . . . . . . . . . . viscosity of water
479

MERRILL CORPORATION JDICKSO//30-APR-10 12:36 DISK116:[10ZAU1.10ZAU70801]SR70801A.;26
APPENDIX C:
SPE/WPC/AAPG/SPEE RESERVE/RESOURCE DEFINITIONS
The following is extracted from the SPE/WPC/AAPG/SPEE PRMS 2007 using the section numbering and
spelling from PRMS.
1.0 Basic Principles and Definitions

The estimation of petroleum resource quantities involves the interpretation of volumes and values that
have an inherent degree of uncertainty. These quantities are associated with development projects at
various stages of design and implementation. Use of a consistent classification system enhances
comparisons between projects, groups of projects, and total company portfolios according to forecast
production profiles and recoveries. Such a system must consider both technical and commercial factors
that impact the project’s economic feasibility, its productive life, and its related cash flows.
1.1 Petroleum Resources Classification Framework

Petroleum is defined as a naturally occurring mixture consisting of hydrocarbons in the gaseous, liquid, or
solid phase. Petroleum may also contain non-hydrocarbons, common examples of which are carbon
dioxide, nitrogen, hydrogen sulphide and sulphur. In rare cases, non-hydrocarbon content could be greater
than 50%.
The term ‘‘resources’’ as used herein is intended to encompass all quantities of petroleum naturally
occurring on or within the Earth’s crust, discovered and undiscovered (recoverable and unrecoverable),
plus those quantities already produced. Further, it includes all types of petroleum whether currently
considered ‘‘conventional’’ or ‘‘unconventional.’’
Figure 1-1 is a graphical representation of the SPE/WPC/AAPG/SPEE resources classification system. The
system defines the major recoverable resources classes: Production, Reserves, Contingent Resources, and
Prospective Resources, as well as Unrecoverable petroleum.
26MAR201021050328
Figure 1-1: Resources Classification Framework.
The ‘‘Range of Uncertainty’’ reflects a range of estimated quantities potentially recoverable from an
accumulation by a project, while the vertical axis represents the ‘‘Chance of Commerciality, that is, the
480

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chance that the project that will be developed and reach commercial producing status. The following
definitions apply to the major subdivisions within the resources classification:
TOTAL PETROLEUM INITIALLY-IN-PLACE is that quantity of petroleum that is estimated to exist
originally in naturally occurring accumulations. It includes that quantity of petroleum that is
estimated, as of a given date, to be contained in known accumulations prior to production plus those
estimated quantities in accumulations yet to be discovered (equivalent to ‘‘total resources’’).
DISCOVERED PETROLEUM INITIALLY-IN-PLACE is that quantity of petroleum that is estimated,
as of a given date, to be contained in known accumulations prior to production.
PRODUCTION is the cumulative quantity of petroleum that has been recovered at a given date.
While all recoverable resources are estimated and production is measured in terms of the sales
product specifications, raw production (sales plus non-sales) quantities are also measured and
required to support engineering analyses based on reservoir voidage.
Multiple development projects may be applied to each known accumulation, and each project will recover
an estimated portion of the initially-in-place quantities. The projects shall be subdivided into Commercial
and Sub-Commercial, with the estimated recoverable quantities being classified as Reserves and
Contingent Resources respectively, as defined below.
RESERVES are those quantities of petroleum anticipated to be commercially recoverable by
application of development projects to known accumulations from a given date forward under
defined conditions. Reserves must further satisfy four criteria: they must be discovered,
recoverable, commercial, and remaining (as of the evaluation date) based on the development
project(s) applied. Reserves are further categorized in accordance with the level of certainty
associated with the estimates and may be sub-classified based on project maturity and/or
characterized by development and production status.
CONTINGENT RESOURCES are those quantities of petroleum estimated, as of a given date, to
be potentially recoverable from known accumulations, but the applied project(s) are not yet
considered mature enough for commercial development due to one or more contingencies.
Contingent Resources may include, for example, projects for which there are currently no viable
markets, or where commercial recovery is dependent on technology under development, or where
evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent
Resources are further categorized in accordance with the level of certainty associated with the
estimates and may be subclassified based on project maturity and/or characterized by their
economic status.
UNDISCOVERED PETROLEUM INITIALLY-IN-PLACE is that quantity of petroleum estimated, as
of a given date, to be contained within accumulations yet to be discovered.
PROSPECTIVE RESOURCES are those quantities of petroleum estimated, as of a given date, to
be potentially recoverable from undiscovered accumulations by application of future
development projects. Prospective Resources have both an associated chance of discovery and a
chance of development. Prospective Resources are further subdivided in accordance with the
level of certainty associated with recoverable estimates assuming their discovery and development
and may be sub-classified based on project maturity.
UNRECOVERABLE is that portion of Discovered or Undiscovered Petroleum Initially-in-Place
quantities which is estimated, as of a given date, not to be recoverable by future development projects.
A portion of these quantities may become recoverable in the future as commercial circumstances
change or technological developments occur; the remaining portion may never be recovered due to
physical/chemical constraints represented by subsurface interaction of fluids and reservoir rocks.
Estimated Ultimate Recovery (EUR) is not a resources category, but a term that may be applied to
any accumulation or group of accumulations (discovered or undiscovered) to define those quantities
of petroleum estimated, as of a given date, to be potentially recoverable under defined technical and
commercial conditions plus those quantities already produced (total of recoverable resources).
1.2 Project-Based Resources Evaluations

The resources evaluation process consists of identifying a recovery project, or projects, associated with a
petroleum accumulation(s), estimating the quantities of Petroleum Initially-in-Place, estimating that
481

portion of those in-place quantities that can be recovered by each project, and classifying the project(s)
based on its maturity status or chance of commerciality.
This concept of a project-based classification system is further clarified by examining the primary data
sources contributing to an evaluation of net recoverable resources (see Figure 1-2) that may be described
as follows:
Net
RESERVOIR Recoverable PROJECT
(in-place volumes) (production/cash flow)
Resources
Entitlement
PROPERTY
(ownership/contract terms)
27MAR201009581974
Figure 1-2: Resources Evaluation Data Sources
• The Reservoir (accumulation): Key attributes include the types and quantities of Petroleum
Initially-in-Place and the fluid and rock properties that affect petroleum recovery.
• The Project: Each project applied to a specific reservoir development generates a unique production
and cash flow schedule. The time integration of these schedules taken to the project’s technical,
economic, or contractual limit defines the estimated recoverable resources and associated future net
cash flow projections for each project. The ratio of EUR to Total Initially-in-Place quantities defines
the ultimate recovery efficiency for the development project(s). A project may be defined at various
levels and stages of maturity; it may include one or many wells and associated production and
processing facilities. One project may develop many reservoirs, or many projects may be applied to
one reservoir.
• The Property (lease or license area): Each property may have unique associated contractual rights and
obligations including the fiscal terms. Such information allows definition of each participant’s share of
produced quantities (entitlement) and share of investments, expenses, and revenues for each recovery
project and the reservoir to which it is applied. One property may encompass many reservoirs, or one
reservoir may span several different properties. A property may contain both discovered and
undiscovered accumulations.
In context of this data relationship, ‘‘project’’ is the primary element considered in this resources
classification, and net recoverable resources are the incremental quantities derived from each project.
Project represents the link between the petroleum accumulation and the decision-making process. A
project may, for example, constitute the development of a single reservoir or field, or an incremental
development for a producing field, or the integrated development of several fields and associated facilities
with a common ownership. In general, an individual project will represent the level at which a decision is
made whether or not to proceed (i.e., spend more money) and there should be an associated range of
estimated recoverable quantities for that project.
An accumulation or potential accumulation of petroleum may be subject to several separate and distinct
projects that are at different stages of exploration or development. Thus, an accumulation may have
recoverable quantities in several resource classes simultaneously.
In order to assign recoverable resources of any class, a development plan needs to be defined consisting of
one or more projects. Even for Prospective Resources, the estimates of recoverable quantities must be
stated in terms of the sales products derived from a development program assuming successful discovery
and commercial development. Given the major uncertainties involved at this early stage, the development
program will not be of the detail expected in later stages of maturity. In most cases, recovery efficiency may
be largely based on analogous projects. In-place quantities for which a feasible project cannot be defined
using current, or reasonably forecast improvements in, technology are classified as Unrecoverable.
Not all technically feasible development plans will be commercial. The commercial viability of a
development project is dependent on a forecast of the conditions that will exist during the time period
encompassed by the project’s activities. ‘‘Conditions’’ include technological, economic, legal,
environmental, social, and governmental factors. While economic factors can be summarized as forecast
482

costs and product prices, the underlying influences include, but are not limited to, market conditions,
transportation and processing infrastructure, fiscal terms, and taxes.
The resource quantities being estimated are those volumes producible from a project as measured
according to delivery specifications at the point of sale or custody transfer. The cumulative production
from the evaluation date forward to cessation of production is the remaining recoverable quantity. The
sum of the associated annual net cash flows yields the estimated future net revenue. When the cash flows
are discounted according to a defined discount rate and time period, the summation of the discounted cash
flows is termed net present value (NPV) of the project.
483

MERRILL CORPORATION JDICKSO//30-APR-10 12:35 DISK116:[10ZAU1.10ZAU70801]SS70801A.;26
APPENDIX D:
INTERA CORE FRACTURE OCCURRENCE DESCRIPTIONS
Because fracturing is considered to be important for reservoir performance, core data has been reviewed
to ascertain the location of fracture zones, the density of fracturing and the diagenetic history of the
fracture networks by well. Of critical importance is the diagenetic history, which will determine whether
the fractures have been sealed by cement or remain as open channels. In addition, some fractures have
been solution-enlarged in particular areas.
All of the following data has been taken from core reports supplemented by log evaluation report
descriptions where core is lacking.
Volume 1—Static Reservoir Description and Volumetrics (essa1067.doc) Page 9
R7-1: Test rates of 1730stb/d coincide with heavily fractured limestone with solution-enlarged channels in
core.
R7-2: Leached fossils, fractures and channels are evident in core, especially in the lower part of the cored
interval. The Log Evaluation Report identifies the intervals 1580-1660 and 1678-1695 as fracture zones.
R7-3: Some fracturing in core at the top of the A-Zone, but these are mostly filled by calcite. The same is
true for the core taken from the base of the A-Zone.
R7-4: There is limited fracturing in core, but some intervals are moderately fractured.
R7-6: There is no core report available, but a 2000stb/d test at the top of Zone A and excessive mud loss in
Zone B may suggest fracturing.
R7-A1: No core was taken in this well. Reservoir lithology is very poor quality, but the test rate suggests
fracturing.
R7-A2: For zone A, the same comments apply as for well R7-A1.
R7-A3: No core taken, but no fracturing mentioned in any report.
R9-1: The core is fractured, especially over the upper part of the cored interval.
R9-2: Core is fractured, but many of the fractures are calcite-filled.
R9-3: No core was taken, but the Log Evaluation Report indicates that no fracturing is suspected.
R9-4: There is no mention of fractures or of good porosity in the core description.
R12-1: Cored 1552-1558, not fractured,
1558-1570.5, not fractured,
1775-1793, fractured,
1915-1931.5, vuggy core, but no fractures mentioned.
No fracturing was mentioned in the Log Evaluation Report.
R12-2: Cored 1990-2008, core fractured,
Volume 1—Static Reservoir Description and Volumetrics (essa1067.doc) Page 10
2008-2026, not fractured,
2026-2035, not fractured.
The interval 1987-2125 appears to be moderately fractured as suggested in the Log Evaluation Report.
R12-3: Cored 2008-2026 and in pay zone from 2125-2150. Fractured, but fractures filled by calcite.
(Log Evaluation Report indicates fractured intervals are 2075-2125 and 2175-2195).
R12-4: Not cored, and no mention of fracturing in the Log Evaluation Report.
R12-5: Cored 1988-2006.3, core not fractured,
2053-2058, no fractures,
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MERRILL CORPORATION JDICKSO//30-APR-10 12:35 DISK116:[10ZAU1.10ZAU70801]SS70801A.;26
2117-2130.5, scarce though prominent vertical fractures in upper part, more fractured in lower part of this
cored interval.
Log Evaluation Report states that RIII interval shows poor porosity and is generally tight. There is no
mention of fracturing in this report, although portions of the core are clearly fractured.
R12-A1: Some fracturing is noted in zone RI. In the upper part of Zone RIII, fractures and channels have
been observed in core. In the middle part of the RIII core, large fractures and channels are present.
1916-1920, some fractures,
1988-2025, core fractured, sometimes highly.
R12-A2: Not cored.
R12-A3: Not cored. There is no mention of fracturing in reports, although reservoir quality is good, with
high porosities.
R12-A5: Not cored. No mention of fractures in reports, although there is some intergranular and mouldic
porosity.
R12-A6: Not cored. No mention of fractures in reports and reservoir quality is not good.
R12-A7: No core, but this is part of the good reservoir in the central area of the field.
R12-A8: Poor reservoir, no fractures mentioned in reports, no core.
R12-A9: Poor reservoir, not cored and no fractures mentioned in reports.
R13-1: Reasonable test results seem to be due to good porosity in the reservoir interval rather than due to
fractures, as suggested by the core description.
R13-2: There is no core report available, and fractures are not mentioned in the Log Evaluation Report.
R13-3: Was cored 1887-1983, but no core report is available. The Log Evaluation Report does not mention
fractures.
R13-4: Was cored 1863-1872, 1937-1948, 2456-2464 and 2471-2480 but no core reports are available. No
fracturing is mentioned in the Log Evaluation Report.
R13-5: Was cored 2620-2625.5, 2758-2768 and 2808-2816.5, but no core reports are available. No fracturing
is mentioned in the Log Evaluation Report.
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MERRILL CORPORATION JDICKSO//30-APR-10 12:34 DISK116:[10ZAU1.10ZAU70801]ST70801A.;30
APPENDIX E:
INPUT PARAMETERS FOR IN-PLACE VOLUME CALCULATIONS
R12-RPIII-Central Crest m 1862

Name Unit Shape P90 P50 P10
Thickness . . . . . . . . . . . . . . . . . . m Lognor 140 170 206

Spill point . . . . . . . . . . . . . . . . . m User-r 1975 1986 2002
Area uncertainty . . . . . . . . . . . . . % Single 100 100 100
Deg. of fill . . . . . . . . . . . . . . . . . % Single 100 100 100
Net-to-gross . . . . . . . . . . . . . . . . % Lognor 22.5 26 30
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 13.1 14 15
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 35 40 45
FVF (Bo) . . . . . . . . . . . . . . . . . . vol/vol Normal 1.2 1.25 1.3
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 120 134 147
Oil rec fac . . . . . . . . . . . . . . . . . % Single 100 100 100
R12 Central Area—RPIII Reservoir
R12-RPIII-North Crest m 1900


Spill point . . . . . . . . . . . . . . . . . m Triang 1972 1984 2000
Area uncertainty . . . . . . . . . . . . . % Triang 98 101 105
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 13.1 14 15
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 120 134 147
R12 Northern Area—RPIII Reservoir
R12-RPIII-South Crest m 1890


Spill point . . . . . . . . . . . . . . . . . m Lognor 1988 2005 2021
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 13.1 14 15
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 120 134 147
R12 Southern Area—RPIII Reservoir
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R12-BC-Central Crest m 2080

Thickness . . . . . . . . . . . . . . . . . . m Lognor 12.8 17.3 23.4

Stacking Fac fr Lognor 1.17 1.41 1.71
Net-to-gross . . . . . . . . . . . . . . . . % Normal 36.7 45 53.3
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 15 16.9 19
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 60.1 66.8 73.5
R12 Central Area—Basal Clastic Reservoir
R12-BC-South Crest m 2074


Stacking Fac fr Lognor 1.17 1.41 1.71
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 15 16.9 19
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 60.1 66.8 73.5
R12 Southern Area—Basal Clastic Reservoir
R12-BC-North Crest m 2180


Spill point . . . . . . . . . . . . . . . . . m User-c 2220 2231 2260
Stacking Fac fr Single 2 2 2
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 15 16.9 19
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 60.1 66.8 73.5
R12 Northern Area—Basal Clastic Reservoir
487

R7-A Crest m 1530

Thickness . . . . . . . . . . . . . . . . . . M Normal 70 80 90
Spill point . . . . . . . . . . . . . . . . . M Triang 1575 1580 1585
Net-to-gross . . . . . . . . . . . . . . . . % Normal 40 45 50
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 14.2 16 18
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 25.7 28.5 31.3
GRV 0 0 291 393 496
R7—A Limestone Reservoir
R7A-A Crest m 1520

Thickness . . . . . . . . . . . . . . . . . . M Lognor 15 24.5 40

Spill point . . . . . . . . . . . . . . . . . M Triang 1575 1580 1585
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 14.2 16 18
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
FVF (Bo) . . . . . . . . . . . . . . . . . . rb/stb Normal 1.15 1.25 1.35
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 25.7 28.5 31.3
R7A-A—A Limestone Reservoir
R8-Miocene Crest m 0
Spill point . . . . . . . . . . . . . . . . . M Lognor 892 895 898
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 28.1 30 32
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
FVF (Bo) . . . . . . . . . . . . . . . . . . vol/vol Normal 1 1.05 1.1
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 9 10 11
R8 Miocene Limestone
488

R9-A Crest m 1476

Thickness . . . . . . . . . . . . . . . . . . M Lognor 36.3 45.8 57.9

5150.8 Spill point . . . . . . . . . . . . . . . . . M User-c 1522 1536 1550
5300 Area uncertainty . . . . . . . . . . . . . % Triang 95 101 107
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 12 13.9 16
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 56 62.3 68.6
R10-A Crest m 1632

5657.5 Spill point . . . . . . . . . . . . . . . . . M Lognor 1707 1715 1723
5833.5 Area uncertainty . . . . . . . . . . . . . % Triang 95 100 105
Net-to-gross . . . . . . . . . . . . . . . . % Normal 40 47.5 55
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 14.2 16 18
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 108 120 132
R13-A Crest m 1764

Thickness . . . . . . . . . . . . . . . . . . M Normal 46.7 55 63.3

Spill point . . . . . . . . . . . . . . . . . M Lognor 1869 1875 1880
Net-to-gross . . . . . . . . . . . . . . . . % Normal 35 42.5 50
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 14.2 16 18
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 80.2 89.1 98
R13 A and B Limestone Reservoirs
R13-BC Crest m 2131

Thickness . . . . . . . . . . . . . . . . . . M Lognor 12.8 17.3 23.4

Spill point . . . . . . . . . . . . . . . . . M Normal 2342 2370 2398
Area uncertainty . . . . . . . . . . . . . % Triang 33 79.4 110
Porosity . . . . . . . . . . . . . . . . . . . % Lognor 15 16.9 19
Sw . . . . . . . . . . . . . . . . . . . . . . . % Normal 30 40 50
GOR . . . . . . . . . . . . . . . . . . . . . m3/m3 Normal 72 80.1 88.2
R13—Basal Clastic Reservoir
489

MERRILL CORPORATION JDICKSO//30-APR-10 12:35 DISK116:[10ZAU1.10ZAU70801]SU70801A.;31
APPENDIX F:
PRODUCTION PROFILES
Combined Production Profile for All Fields
1C 2C 3C
Oil Gas Water Oil Gas Water Oil Gas Water
Year Mstb MMscf Mstb Mstb MMscf Mstb Mstb MMscf Mstb
1 137 242 3 214 443 4 310 737 6
2 1,600 2,804 69 2,497 5,145 108 3,633 8,609 164
3 6,150 3,654 709 8,538 6,481 1,097 12,086 11,509 1,748
4 8,290 5,077 1,664 12,010 9,027 2,642 17,849 15,755 4,466
5 8,663 4,234 2,247 12,783 7,534 3,697 19,953 13,473 6,322
6 7,361 3,330 2,726 11,223 6,052 4,614 17,914 11,019 7,803
7 6,281 2,899 3,348 9,895 5,403 5,774 16,042 9,924 9,655
8 5,379 2,251 4,485 8,760 4,328 7,798 14,312 8,083 12,841
9 4,622 1,731 4,957 7,784 3,455 8,809 12,831 6,583 14,610
10 3,984 1,396 5,035 6,942 2,893 9,161 11,555 5,600 15,345
11 3,444 1,160 4,914 6,212 2,490 9,182 10,448 4,886 15,573
12 2,985 966 4,630 5,576 2,151 8,922 9,483 4,282 15,362
13 2,594 807 4,312 5,021 1,866 8,585 8,638 3,769 15,016
14 2,260 687 3,955 4,534 1,646 8,127 7,895 3,372 14,426
15 1,973 590 3,592 4,106 1,467 7,648 7,237 3,045 13,791
16 1,726 513 2,942 3,727 1,323 6,789 6,654 2,785 12,626
17 1,514 446 2,698 3,392 1,195 6,520 6,134 2,550 12,285
18 1,330 392 2,706 3,094 1,089 6,829 5,669 2,356 13,034
19 1,170 343 2,683 2,829 991 7,068 5,252 2,171 13,668
20 1,032 292 2,607 2,592 871 7,193 4,877 1,930 14,106
21 911 257 2,358 2,380 798 6,808 4,538 1,792 13,490
22 806 227 2,298 2,189 732 6,957 4,231 1,666 13,991
23 715 201 2,205 2,017 673 6,994 3,953 1,553 14,269
24 634 178 2,013 1,863 619 6,712 3,700 1,446 13,863
25 564 159 1,998 1,723 574 6,929 3,469 1,358 14,530
26 502 136 1,999 1,596 512 7,109 3,257 1,235 15,026
27 447 123 1,944 1,480 483 7,157 3,064 1,177 15,364
28 399 110 1,847 1,376 447 7,128 2,886 1,105 15,490
29 357 98 1,845 1,280 415 7,346 2,723 1,039 16,216
30 318 82 1,706 1,182 349 7,029 2,543 854 15,458
Cum. 78.1 35.4 80.5 138.8 71.5 190.7 233.1 135.7 360.5
Prod. MMstb Bcf MMstb MMstb Bcf MMstb MMstb Bcf MMstb
490

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: SU70801A.;31
Production Profile for Individual Fields

R7A Production Profiles
1C 2C 3C
1
2
3 2,653 426 0 3,250 614 0 3,945 856 0
4 2,300 386 0 2,886 570 0 3,945 896 0
5 1,997 325 0 2,574 493 0 3,721 820 0
6 1,738 277 1 2,304 432 1 3,323 717 2
7 1,515 236 24 2,070 380 33 2,985 630 47
8 1,324 203 37 1,865 337 53 2,696 560 76
9 1,158 176 44 1,687 302 64 2,447 504 94
10 1,016 154 65 1,530 273 98 2,231 458 143
11 892 135 92 1,391 249 144 2,043 420 212
12 784 119 103 1,268 227 167 1,877 386 248
13 691 105 112 1,159 207 189 1,731 355 281
14 610 92 123 1,062 189 214 1,601 327 322
15 539 81 133 975 172 240 1,485 302 366
16 477 71 146 897 156 274 1,382 276 423
17 423 63 208 827 145 407 1,288 260 634
18 375 56 263 764 135 536 1,204 245 844
19 334 50 295 708 126 626 1,128 231 999
20 297 45 309 656 117 683 1,059 217 1,103
21 265 40 313 609 108 720 996 204 1,177
22 236 36 313 567 100 751 939 191 1,243
23 211 32 307 528 93 767 886 180 1,287
24 189 28 299 493 87 780 838 170 1,327
25 169 25 292 460 81 794 793 161 1,369
26 152 23 282 431 76 800 752 153 1,397
27 136 20 277 404 71 819 714 145 1,450
28 123 18 273 379 67 842 679 138 1,512
29 110 17 270 355 63 870 647 131 1,583
30 99 15 269 334 59 904 616 125 1,666
Cum. 20.8 3.3 4.9 32.4 5.9 11.8 48.0 10.1 19.8
491

R7AA Production Profiles
1C 2C 3C
1
2
3 878 141 0 1,324 250 0 1,839 399 0
4 750 126 0 1,147 227 0 1,606 365 0
5 642 105 0 999 192 0 1,415 312 0
6 551 88 0 876 164 0 1,256 271 1
7 474 74 7 771 142 12 1,122 237 18
8 409 63 12 682 123 19 1,009 210 28
9 353 54 14 606 109 23 912 188 35
10 306 46 20 541 97 35 828 170 53
11 266 40 28 484 87 50 755 155 78
12 231 35 30 435 78 57 692 142 91
13 201 31 33 392 70 64 636 131 103
14 176 27 35 355 63 71 587 120 118
15 153 23 38 322 57 79 543 110 134
16 134 20 41 293 51 90 504 101 154
17 118 18 58 267 47 131 469 95 231
18 104 16 73 244 43 171 437 89 307
19 91 14 81 224 40 198 409 84 362
20 80 12 84 206 37 214 383 78 399
21 71 11 84 189 34 224 360 74 425
22 63 9 83 175 31 231 339 69 448
23 56 8 81 161 29 234 319 65 463
24 49 7 78 149 26 236 301 61 477
25 44 7 76 138 24 239 285 58 492
26 39 6 73 129 23 239 270 55 501
27 35 5 71 120 21 243 256 52 520
28 31 5 69 112 20 248 243 49 541
29 28 4 68 104 18 255 231 47 566
30 25 4 67 97 17 263 220 45 595
Cum. 6.4 1.0 1.3 11.5 2.1 3.6 18.2 3.8 7.1

1C 2C 3C
1
2
3 1,254 859 215 1,782 1,434 305 2,849 2,640 487
4 1,051 568 556 1,573 998 833 2,849 2,082 1,508
5 883 334 644 1,394 619 1,017 2,681 1,371 1,955
6 744 249 609 1,241 488 1,014 2,380 1,077 1,945
7 629 197 579 1,109 407 1,019 2,124 898 1,952
8 534 164 560 994 358 1,043 1,905 790 1,998
9 454 137 531 895 318 1,048 1,716 703 2,010
10 387 113 479 808 277 1,001 1,553 613 1,923
11 330 92 424 732 239 940 1,410 530 1,812
12 283 75 371 665 208 871 1,286 463 1,686
13 243 62 328 605 182 817 1,176 408 1,588
14 209 53 309 553 163 817 1,079 367 1,594
15 180 46 332 506 151 931 992 341 1,826
16 156 41 372 464 143 1,110 915 325 2,190
17 135 36 407 426 135 1,287 847 308 2,555
18 117 33 424 393 129 1,422 785 296 2,841
19 102 29 432 363 119 1,538 729 276 3,093
20 89 25 434 335 112 1,643 679 261 3,326
21 77 22 436 311 106 1,751 633 248 3,570
22 68 20 432 288 100 1,842 592 236 3,781
23 59 17 415 268 92 1,876 554 220 3,880
24 52 15 393 250 85 1,887 520 205 3,932
25 46 13 370 233 79 1,882 488 190 3,950
26 40 12 362 217 73 1,955 459 179 4,135
27 36 10 320 203 69 1,828 433 168 3,896
28 31 9 317 190 64 1,923 408 159 4,130
29 28 8 280 178 60 1,803 386 150 3,902
30 25 7 283 167 57 1,925 365 142 4,198
Cum. 8.2 3.2 11.6 17.1 7.3 37.3 32.8 15.6 75.7
492

1C 2C 3C
1
2
3
4 818 1,129 75 1,279 2,076 117 1,782 3,327 164
5 713 838 181 1,116 1,543 284 1,573 2,500 400
6 622 637 383 977 1,178 601 1,394 1,931 858
7 544 695 800 859 1,292 1,263 1,241 2,146 1,825
8 476 430 1,692 757 804 2,691 1,109 1,354 3,940
9 418 258 1,898 670 487 3,042 994 831 4,516
10 367 191 1,911 594 364 3,093 895 631 4,659
11 323 148 1,794 528 284 2,933 808 499 4,485
12 285 112 1,576 471 218 2,606 732 390 4,045
13 252 86 1,351 421 170 2,263 665 308 3,568
14 223 74 1,193 378 148 2,025 605 273 3,244
15 197 64 1,037 339 130 1,786 553 243 2,907
16 175 58 382 306 120 667 506 229 1,104
17 155 51 261 276 107 463 464 207 778
18 138 46 207 249 97 374 426 190 640
19 123 41 176 226 88 323 393 177 561
20 110 37 129 205 81 241 363 164 426
21 98 33 113 187 73 216 335 151 388
22 88 29 87 170 65 168 311 137 307
23 78 26 63 155 60 125 288 127 233
24 70 23 24 142 54 49 268 118 93
25 63 21 28 130 50 58 250 111 111
26 57 19 105 119 46 221 233 104 432
27 51 17 104 109 42 222 217 97 441
28 46 15 102 101 39 224 203 90 452
29 41 14 101 93 36 227 190 85 466
30 37 12 101 85 33 231 178 79 482
Cum. 6.6 5.1 15.9 10.9 9.7 26.5 17.0 16.5 41.5
R12RPIII North Production Profiles

1C 2C 3C
1 35 61 1 69 143 1 108 257 2
2 402 705 17 805 1,658 35 1,259 2,985 54
3 347 567 126 694 1,332 252 1,091 2,408 396
4 300 382 265 600 897 531 951 1,634 841
5 260 208 365 520 490 729 834 903 1,169
6 226 133 434 452 312 868 734 583 1,411
7 196 94 481 393 222 962 650 422 1,592
8 171 77 536 342 181 1,072 578 351 1,808
9 149 65 593 299 154 1,186 515 305 2,045
10 131 56 603 262 131 1,206 462 267 2,129
11 115 48 598 229 113 1,196 415 235 2,166
12 101 41 585 201 97 1,169 374 207 2,177
13 88 35 562 177 83 1,124 339 183 2,152
14 78 30 507 156 71 1,014 307 160 2,001
15 69 25 439 137 60 877 280 140 1,785
16 61 22 425 121 52 850 255 125 1,784
17 54 19 360 107 45 721 233 112 1,565
18 48 17 357 95 39 715 214 101 1,605
19 42 14 350 84 34 700 196 90 1,627
20 38 9 340 75 22 680 181 61 1,637
21 33 8 276 67 20 551 167 56 1,376
22 30 7 273 60 17 546 154 52 1,415
23 27 7 267 53 16 533 143 48 1,432
24 24 6 235 47 14 470 132 44 1,312
25 21 5 244 42 12 488 123 41 1,414
26 19 5 221 38 11 442 114 38 1,332
27 17 4 226 34 10 453 107 35 1,417
28 15 4 206 31 9 412 100 33 1,341
29 14 3 215 28 8 431 93 31 1,457
30 12 3 180 23 7 360 81 28 1,260
Cum. 3.1 2.7 10.3 6.2 6.3 20.6 11.2 11.9 43.7
493

R12RPIII South Production Profiles
1C 2C 3C
1 103 181 2 145 300 3 202 480 4
2 1,198 2,099 51 1,692 3,487 73 2,374 5,625 110
3 1,018 1,662 369 1,487 2,851 540 2,362 5,206 864
4 868 1,104 767 1,313 1,960 1,161 2,208 3,793 1,953
5 742 594 1,039 1,164 1,096 1,632 1,955 2,117 2,741
6 636 373 1,221 1,037 715 1,993 1,743 1,383 3,351
7 546 262 1,336 927 523 2,270 1,564 1,015 3,832
8 470 211 1,470 832 439 2,604 1,411 857 4,419
9 405 177 1,607 749 385 2,971 1,279 758 5,078
10 350 150 1,615 676 340 3,119 1,166 674 5,376
11 303 127 1,583 613 301 3,198 1,066 603 5,566
12 263 108 1,531 557 268 3,237 979 542 5,693
13 229 92 1,456 507 239 3,222 902 489 5,733
14 200 77 1,300 463 210 3,015 834 434 5,430
15 174 65 1,112 424 185 2,707 773 388 4,937
16 152 55 1,067 389 166 2,722 719 354 5,029
17 134 47 896 358 149 2,401 670 321 4,497
18 117 41 880 330 135 2,476 626 295 4,702
19 103 35 854 304 121 2,522 586 268 4,858
20 91 23 822 282 83 2,549 550 186 4,980
21 80 20 661 261 76 2,153 517 174 4,269
22 71 18 649 242 71 2,224 487 163 4,474
23 63 16 628 225 66 2,259 460 155 4,613
24 55 14 550 210 61 2,079 435 144 4,310
25 49 12 566 196 56 2,248 411 137 4,730
26 44 11 509 183 53 2,125 390 130 4,539
27 39 10 517 171 49 2,269 370 123 4,918
28 35 9 467 160 46 2,154 352 117 4,742
29 31 8 485 150 43 2,349 335 111 5,247
30 26 7 403 131 39 2,037 296 100 4,611
Cum. 8.6 7.6 26.4 16.2 14.5 66.3 28.0 27.1 125.6

1C 2C 3C
1
2
3
4 1,617 1,134 0 2,132 1,758 0 2,849 2,703 0
5 1,375 958 0 1,860 1,524 0 2,667 2,514 0
6 1,172 862 0 1,629 1,410 0 2,343 2,332 0
7 1,001 755 0 1,432 1,270 0 2,067 2,110 0
8 858 620 28 1,262 1,073 42 1,833 1,792 61
9 736 459 100 1,116 819 152 1,632 1,377 222
10 634 348 159 990 640 249 1,458 1,084 367
11 546 286 205 881 541 330 1,308 925 490
12 472 235 240 785 459 400 1,177 791 599
13 409 191 276 702 387 474 1,063 673 717
14 355 160 295 630 334 524 963 588 801
15 309 136 312 566 294 572 875 523 884
16 269 117 323 509 260 611 797 468 956
17 235 101 326 460 232 638 728 423 1,010
18 205 88 325 416 210 658 666 387 1,055
19 180 78 325 377 191 680 611 356 1,104
20 158 69 323 342 175 700 562 330 1,150
21 139 60 316 311 159 707 518 304 1,177
22 122 53 306 283 145 708 478 281 1,194
23 108 47 296 259 134 710 442 262 1,214
24 95 42 290 236 123 719 409 246 1,246
25 84 39 284 216 117 730 380 236 1,281
26 75 29 314 198 90 836 353 184 1,487
27 66 28 302 182 91 830 329 189 1,498
28 59 25 287 168 84 818 307 176 1,497
29 52 22 297 154 77 875 286 165 1,623
30 47 20 312 142 71 953 268 154 1,792
Cum. 11.4 7.0 6.2 18.2 12.7 13.9 27.4 21.6 23.4
494

R12BC North Production Profiles
1C 2C 3C
1
2
3
4
5 1,003 427 0 1,486 743 0 2,100 1,207 0
6 841 358 32 1,273 636 48 2,100 1,207 80
7 707 301 56 1,095 547 86 1,957 1,125 154
8 596 253 73 946 473 115 1,703 979 208
9 504 214 85 821 410 138 1,490 856 251
10 427 182 93 715 358 156 1,311 753 286
11 363 154 98 625 313 170 1,158 666 314
12 309 132 102 549 274 180 1,028 591 337
13 264 112 103 483 242 188 916 527 357
14 226 96 103 427 213 194 820 471 372
15 194 83 102 378 189 198 736 423 386
16 167 71 100 336 168 201 663 381 397
17 144 61 98 299 150 203 600 345 406
18 125 53 95 267 134 204 544 312 415
19 108 46 92 239 120 204 494 284 422
20 94 40 89 215 107 204 450 259 428
21 81 35 86 193 97 204 412 237 434
22 71 30 83 174 87 203 377 217 440
23 62 26 80 157 79 202 346 199 445
24 54 23 76 142 71 201 318 183 450
25 47 20 73 129 65 200 294 169 455
26 42 18 71 117 59 199 271 156 460
27 37 16 68 107 53 198 251 144 464
28 32 14 65 97 49 198 233 134 472
29 28 12 66 89 44 208 216 124 504
30 25 11 68 81 41 220 201 115 543
Cum. 6.6 2.8 2.1 11.4 5.7 4.5 21.0 12.1 9.5
R71BC Production Profiles

1C 2C 3C
1
2
3
4 247 105 0 323 162 0 407 234 0
5 174 74 7 252 126 10 351 202 13
6 122 52 10 196 98 15 304 174 24
7 86 37 11 153 76 19 263 151 32
8 61 26 10 119 59 20 228 131 38
9 43 18 9 93 46 20 199 114 43
10 30 13 8 72 36 20 173 99 47
11 21 9 7 56 28 18 151 87 50
12 15 6 6 44 22 17 132 76 51
13 11 4 5 34 17 15 116 67 53
14 7 3 4 27 13 14 102 58 53
15 5 2 3 21 10 12 89 51 53
16 4 2 3 16 8 11 79 45 53
17 3 1 2 13 6 10 69 40 53
18 2 1 2 10 5 8 61 35 52
19 1 1 1 8 4 7 54 31 52
20 1 0 1 6 3 6 48 28 51
21 1 0 1 5 2 5 43 24 50
22 0 0 1 4 2 5 38 22 49
23 0 0 0 3 1 4 34 19 48
24 0 0 0 2 1 3 30 17 47
25 0 0 0 2 1 3 27 15 45
26 0 0 0 1 1 2 24 14 44
27 0 0 0 1 1 2 21 12 43
28 0 0 0 1 0 2 19 11 45
29 0 0 0 1 0 2 17 10 46
30 0 0 0 0 0 0 15 0 0
Cum. 0.8 0.4 0.1 1.5 0.7 0.3 3.1 1.8 1.1
495

R12BC Central Production Profiles
1C 2C 3C
1
2
3
4
5 334 142 0 407 204 0 807 464 0
6 280 119 11 353 176 13 687 395 26
7 236 100 19 308 154 24 588 338 46
8 199 84 24 269 135 33 508 292 62
9 168 71 28 237 119 40 441 253 74
10 142 61 31 210 105 46 385 221 84
11 121 51 33 186 93 51 338 194 92
12 103 44 34 166 83 55 298 171 98
13 88 37 34 149 74 58 264 152 103
14 75 32 34 134 67 61 235 135 107
15 65 28 34 121 60 63 210 121 110
16 56 24 33 109 55 65 188 108 113
17 48 20 33 99 50 67 169 97 115
18 42 18 32 90 45 69 153 88 117
19 36 15 31 82 41 70 139 80 118
20 31 13 30 75 38 71 126 72 120
21 27 12 29 69 34 73 115 66 121
22 24 10 28 63 32 74 105 60 122
23 21 9 27 58 29 75 96 55 123
24 18 8 25 54 27 76 88 50 124
25 16 7 24 50 25 77 81 46 125
26 14 6 24 46 23 78 74 43 126
27 12 5 23 43 21 79 69 39 127
28 11 5 22 40 20 80 63 36 129
29 9 4 22 37 18 86 59 34 137
30 8 4 23 34 17 93 55 31 148
Cum. 2.2 0.9 0.7 3.5 1.7 1.6 6.3 3.6 2.7
R12BC South Production Profiles

1C 2C 3C
1
2
3
4
5 247 105 0 336 168 0 713 410 0
6 176 75 7 285 143 11 618 355 23
7 127 54 10 243 122 19 538 309 42
8 92 39 11 208 104 25 471 271 58
9 68 29 11 179 90 30 415 239 70
10 50 21 11 155 78 34 367 211 80
11 38 16 10 135 67 37 326 188 89
12 29 12 9 117 59 39 291 167 96
13 22 9 8 103 51 40 261 150 101
14 17 7 8 90 45 41 234 135 106
15 13 5 7 79 40 42 211 121 111
16 10 4 6 70 35 42 191 110 114
17 8 3 5 62 31 42 173 100 117
18 6 3 5 55 28 42 158 91 120
19 5 2 4 49 25 42 144 83 123
20 4 2 4 44 22 42 132 76 125
21 3 1 3 39 20 42 121 69 127
22 2 1 3 35 18 41 111 64 129
23 2 1 3 32 16 41 102 59 131
24 2 1 2 29 14 41 94 54 133
25 1 1 2 26 13 40 87 50 135
26 1 0 2 24 12 40 80 46 136
27 1 0 2 21 11 39 75 43 138
28 1 0 1 19 10 39 69 40 141
29 1 0 1 18 9 41 64 37 150
30 0 0 1 16 8 44 60 35 162
Cum. 0.9 0.4 0.1 2.5 1.2 0.9 6.1 3.5 2.8
496

R13BC Production Profiles
1C 2C 3C
1
2
3
4 339 144 0 758 379 0 1,252 721 0
5 293 125 11 674 337 26 1,136 654 43
6 253 108 20 601 300 47 1,034 595 81
7 219 93 27 537 269 66 943 543 115
8 190 81 32 481 241 81 862 496 145
9 165 70 36 433 216 94 791 455 173
10 144 61 39 389 195 106 726 418 197
11 126 54 41 351 176 115 669 385 220
12 110 47 43 318 159 124 617 355 240
13 96 41 44 288 144 131 570 328 259
14 85 36 44 261 131 137 528 304 276
15 74 32 45 238 119 142 490 282 293
16 66 28 44 217 108 147 455 262 308
17 58 25 44 198 99 151 423 244 323
18 51 22 44 181 90 154 395 227 337
19 45 19 43 165 83 157 368 212 350
20 40 17 42 152 76 160 344 198 363
21 36 15 41 139 70 162 322 185 376
22 32 13 41 128 64 165 302 174 388
23 28 12 40 118 59 167 283 163 400
24 25 11 39 109 54 168 266 153 412
25 22 10 38 100 50 170 250 144 424
26 20 8 37 93 46 172 236 136 436
27 18 8 36 86 43 174 222 128 451
28 16 7 37 80 40 186 210 121 489
29 14 6 39 74 37 200 198 114 535
30 13 0 0 69 0 0 187 0 0
Cum. 2.6 1.1 0.9 7.2 3.6 3.4 14.1 8.0 7.6
497

MERRILL CORPORATION JDICKSO//30-APR-10 12:34 DISK116:[10ZAU1.10ZAU70801]TA70801A.;41
29MAR201020503001 4501 Fairfax Drive, Suite 910 • Arlington, Virginia 22203 • Phone: (703) 528-8420 • Fax: (703) 528-0439
30 April 2010
Essar Oil Limited (EOL) J.P. Morgan Securities Ltd. (JPMSL)

Essar Technopark, 125 London Wall
Old Swan Mills Compound London
LBS Marg, EC2Y 5AJ
Kurla (W)
Mumbai – 400 070 Deutsche Bank AG, London Branch (DB)
INDIA Winchester House
Essar Energy Holdings Limited (EEHL) London
Rogers House, Ground Floor, EC2N 2DB
Port Louis, Mauritius
Essar Energy plc (Essar Energy)

57 Berkeley Square
London
W1J 6ER
England
United Kingdom
Reference: Competent Person Report for the Assessment of Coal Seam Gas Resources on the Rajmahal
CSG Block RM(E)-CBM-2008/IV, Jharkhand, India
Dear Sirs:
Per your request, Advanced Resources International, Inc. (ARI) has prepared and submitted a
comprehensive report titled, ‘‘Competent Person Report for the Assessment of Coal Seam Gas Resources
on the Rajmahal CSG Block RM(E)-CBM-2008/IV, Jharkhand, India’’ (the ‘‘Rajmahal CPR’’). This
Rajmahal CPR details the geologic and reservoir studies that were undertaken in order to describe the coal
seam gas (CSG) resources on the Rajmahal (RM(E)-CBM-2008/IV) Block. For the Rajmahal block,
probabilistic methodologies were used to estimate CSG and water production forecast for each
classification of resource based on the geologic analysis and reservoir engineering evaluation described in
the Rajmahal CPR.
In generating the Rajmahal CPR, ARI has utilized the Petroleum Resources Management System (PRMS)
as of March 2007. The definitions of the resource classifications that have been applied are presented in
the Rajmahal CPR. The PRMS as of March 2007 can be found at the following address on the internet:
http://www.spe.org/industry/reserves/prms.php.
The compilation of the Rajmahal CPR was supervised by Mr. Jonathan R. Kelafant, who also performed
the technical geologic analysis and review. Mr. Kelafant is a Senior Vice President with ARI with over
22 years of experience in coalbed/coal mine methane development, as well as the management of large,
multi-year, multitask projects. For these contracts, he provides budget control and analysis, manpower
planning, management of subcontractors, oversight of technical work and deliverables, quality control, and
report preparation. His project experience ranges from short-term reserve assessments for domestic and
overseas production companies (ChevronTexaco, Shell, BP Amoco, etc.) to multi-year, multi-million dollar
field and research contracts for the U.S. Environmental Protection Agency, U.S. Department of Energy,
European Investment Bank and others. He has over 22 years of experience in CMM/CSG resource
recovery and assessment in 14 countries including China, India, South Africa, Ukraine, Australia and the
Unconventional Resources • Enhanced Recovery • Carbon Sequestration
498

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: TA70801A.;41
MERRILL CORPORATION JDICKSO//30-APR-10 12:34 DISK116:[10ZAU1.10ZAU70801]TA70801A.;41
Czech Republic. Mr. Kelafant holds a M.Sc. in Geology from The George Washington University and a
B.Sc. in Geology from Washington and Lee University.
The reservoir engineering evaluation was carried out by Mr. James S. Caballero. Mr. Caballero is a Vice
President with ARI and has over 30 years of experience in petroleum engineering, management, and
business. At ARI, he is responsible for management of CSG and unconventional gas projects in Alaska,
southern Africa, India, and the United States. Prior to joining ARI, Mr. Caballero was V.P.—Engineering,
Planning and Analysis for Equitable Production Company and V.P.—Engineering, Acquisitions, and
Divestitures for Statoil Energy, Inc., and was responsible for oversight of all reserve, resource, and
engineering activities for more than 12,000 coal seam gas, Devonian shale, and tight gas wells.
Mr. Caballero holds a B.S. in Petroleum Engineering from Texas Tech University.
ARI is an independent oil and gas consulting firm. ARI will receive a fee for the preparation of the
Rajmahal CPR in accordance with normal professional consulting practice. This fee is not contingent on
the results obtained and reported and ARI will receive no other benefit for the preparation of the
Rajmahal CPR. ARI has not performed any other work that might affect its objectivity.
Neither ARI nor any of its directors, officers, employees or sub-consultants have any pecuniary or other
interests in the Rajmahal (RM(E)-CBM-2008/IV) block or Essar Energy or any group companies.
Production of the Rajmahal CPR was supervised by Jonathan R. Kelafant, an officer of ARI who has more
than 22 years of relevant experience in the estimation, assessment, and evaluation of oil and gas resources
and/or reserves. In conducting this review, ARI relied upon geological data supplied by EOL. The opinions
expressed in this report reflect our informed judgments based on accepted engineering and geologic
standards and are subject to those generally recognized uncertainties associated with interpretation of
geological, geophysical, and engineering information.
ARI understands that the Rajmahal CPR will be included as part of the prospectus (the Prospectus) to be
published in connection with a global offering of shares and the admission of the ordinary shares of Essar
Energy plc (Essar Energy) to the Official List of the Financial Services Authority and the admission of the
ordinary shares to trading on the London Stock Exchange plc’s main market for listed securities.
ARI has given and not withdrawn its written consent to the issue of the Prospectus with its name included
within it and to the inclusion of the Rajmahal CPR and references to the Rajmahal CPR in the Prospectus.
For the purposes of Prospectus Rule 5.5.3R(2)(f) ARI accepts responsibility for the information contained
in the Rajmahal CPR set out in this section of the Prospectus and those parts of the Prospectus which
include references to the Rajmahal CPR and declares that it has taken all reasonable care to ensure that
the information contained in the Rajmahal CPR is, to the best of its knowledge, in accordance with the
facts and contains no omission likely to affect its import.
Any use of the material in the Rajmahal CPR should be based on independent assessment of the
engineering and geologic data by professionally qualified personnel. Those making use of or relying upon
this material assume all risks and liability arising from such use or reliance.
Yours truly,
28APR201016271523
Jonathan R. Kelafant
Senior Vice President
499

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COMPETENT PERSON REPORT

FOR THE ASSESSMENT OF COAL SEAM GAS RESOURCES
ON THE RAJMAHAL CSG BLOCK RM(E)-CBM-2008/IV,
JHARKHAND, INDIA
Prepared for:
Essar Oil Limited (EOL) J.P. Morgan Securities Ltd. (JPMSL)

Essar Technopark, 125 London Wall
Old Swan Mills Compound London
LBS Marg, EC2Y 5AJ
Kurla (W)
Mumbai – 400 070 Deutsche Bank AG, London Branch (DB)
INDIA Winchester House
Essar Energy Holdings Limited (EEHL) London
Rogers House, Ground Floor, EC2N 2DB
Port Louis, Mauritius
Essar Energy plc (Essar Energy)

57 Berkeley Square
London
W1J 6ER
England
United Kingdom
Prepared by:
Advanced Resources International, Inc. (ARI)

4501 Fairfax Drive
Suite 910
Arlington
VA 22203
USA
30 April 2010
500

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TABLE OF CONTENTS
1.0 OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505

1.1 GENERAL OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505
1.2 SUMMARY OF THE PETROLEUM RESOURCES MANAGEMENT SYSTEM . . . . . . . . . . . . . . . . 507
2.0 ASSET OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509
2.1 OWNERSHIP POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509
2.2 FIELD HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
2.3 GEOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
2.3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
2.3.1.1 Barakar Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
2.3.1.2 Rajmahal Traps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517
2.3.2 Structure and Tectonics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517
2.3.3 Depositional History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517
2.3.4 Coal Seams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518
2.3.4.1 Hura Basin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518
2.3.4.2 Chuperbhita Basin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520
2.3.4.3 Pachawara Basin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521
2.3.4.4 Mahuagarhi Basin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521
2.3.4.5 Brahmani Basin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522
2.3.5 Chemical and Petrological Character of Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522
2.3.6 Coal Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524
3.0 PROSPECTIVE RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526
3.1 EVALUATION METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526
3.1.1 Reservoir Simulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526
3.1.2 Model Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526
3.1.3 Discussion of Input Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
3.1.3.1 Permeability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
3.1.3.2 Methane Isotherm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
3.1.3.3 Gas Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528
3.1.3.4 Seam Thickness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528
3.1.3.5 Porosity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
3.1.3.6 Initial Water Saturation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
3.1.3.7 Well Spacing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
3.1.3.8 Bottom-hole Pressure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
3.1.3.9 Initial Reservoir Pressure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
3.1.3.10 Sorption Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
3.1.3.11 Desorption Pressure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
3.1.3.12 Relative Permeability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
3.1.3.13 Summary Parameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532
3.1.4 Development of Type Curves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532
3.2 PROSPECTIVE RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535
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LIST OF EXHIBITS
EXHIBIT 1: SUMMARY OF THE PETROLEUM RESOURCE MANAGEMENT SYSTEM . . . . . . . . . . . . . . 506

EXHIBIT 2: PROSPECTIVE RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507
EXHIBIT 3: RAJMAHAL COALFIELD, TOPOGRAPHIC AND INFRASTRUCTURE MAP CBM BLOCK . . . 510
EXHIBIT 4: RAJMAHAL COALFIELD, GEOLOGICAL MAP OF CBM BLOCK . . . . . . . . . . . . . . . . . . . 512
EXHIBIT 5: GENERALIZED STRATIGRAPHIC SEQUENCE IN RAJMAHAL COALFIELD . . . . . . . . . . . . 514
EXHIBIT 6: RAJMAHAL COALFIELD, REGIONAL CORRELATION OF COALSEAMS IN DIFFERENT
BASINS, CBM BLOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515
EXHIBIT 7: RAJMAHAL COALFIELD, GRAPHIC LITHOLOG OF SELECTED BOREHOLES, CBM BLOCK 516
EXHIBIT 8: COAL SEAM SEQUENCE IN HURA BASIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 518
EXHIBIT 9: REGIONAL COALSEAMS IN NORTHERN EXTENSION AREA OF HURA BASIN . . . . . . . . . 519
EXHIBIT 10: COALSEAM SEQUENCE IN CHUPERBHITA BASIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520
EXHIBIT 11: COALSEAM SEQUENCE IN PACHAWARA BASIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521
EXHIBIT 12: COALSEAM SEQUENCE IN MAHUAGARHI BASIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521
EXHIBIT 13: COALSEAM SEQUENCE IN BRAHMANI BASIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522
EXHIBIT 14: QUALITY PARAMETERS OF COALSEAM OF DIFFERENT SUB BASINS, RAJMAHAL
COALFIELD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522
EXHIBIT 15: ULTIMATE ANALYSIS OF COALSEAM OF PACHWARASUB BASIN . . . . . . . . . . . . . . . . . 523
EXHIBIT 16: COAL RESERVES OF RAJMAHAL COALFIELD (GSI-1.1.08) . . . . . . . . . . . . . . . . . . . . . 524
EXHIBIT 17: IN SITU GAS CONTENT OF BOREHOLE NO. BRS-2 (DRILLED ADJOINING TO THE
SOUTHWESTERN LIMITS OF THE CBM BLOCK IN BIRBHUM COALFIELD) . . . . . . . . . . . 524
EXHIBIT 18: ADSORPTION ISOTHERM OF SEAMS OF HARIPUR CHAPRIA, KULKULIDANGAL-SITASAL
AND SALBDNA-GUMANPAHRI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524
EXHIBIT 19: ADSORPTION ISOTHERM OF SEAM ZONE ‘‘A’’ (DEPTH—515.65M) RAJMAHAL
COALFIELD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525
EXHIBIT 20: RELATIONSHIP BETWEEN THE GAS CONTENT OF COAL AND MACERAL COMPOSITION
AND RANK IN BOREHOLE BRS-2, BIRBHUM COALFIELD . . . . . . . . . . . . . . . . . . . . . . 525
EXHIBIT 21: RAJMAHAL RESERVOIR SIMULATION CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . 526
EXHIBIT 22: PROBABILISTIC PARAMETERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
EXHIBIT 23: RAJMAHAL ISOTHERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528
EXHIBIT 24: RAJMAHAL COALFIELD, ISOPACH MAP OF CUMULATIVE COAL THICKNESS . . . . . . . . . 529
EXHIBIT 25: DEPTH AND THICKNESS FOR RESERVOIR SIMULATION . . . . . . . . . . . . . . . . . . . . . . . 530
EXHIBIT 26: RELATIVE PERMEABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531
EXHIBIT 27: RESERVOIR AND OPERATIONAL PARAMETERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532
EXHIBIT 28: RAJMAHAL GAS PRODUCTION RATE (THOUSAND STANDARD CUBIC FEET PER DAY,
MSCFD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533
EXHIBIT 29: RAJMAHAL WATER PRODUCTION RATE (BARRELS PER DAY, BPD) . . . . . . . . . . . . . . 533
EXHIBIT 30: RAJMAHAL GAS CUMULATIVE PRODUCTION (THOUSAND STANDARD CUBIC FEET,
MSCF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
EXHIBIT 31: RAJMAHAL WATER CUMULATIVE PRODUCTION (BARRELS, BBLS) . . . . . . . . . . . . . . 534
EXHIBIT 32: PROSPECTIVE RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535
502

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LIST OF ABBREVIATIONS
Ȗm . . . . . . . . . . . . . . . . . . . . . . . . . micrometer
ARI . . . . . . . . . . . . . . . . . . . . . . . . . Advanced Resources International, Inc.
atm . . . . . . . . . . . . . . . . . . . . . . . . . atmosphere(s)
bbl(s) . . . . . . . . . . . . . . . . . . . . . . . . barrel(s)
Bcf . . . . . . . . . . . . . . . . . . . . . . . . . billion cubic feet
bpd . . . . . . . . . . . . . . . . . . . . . . . . . barrels per day
CBM . . . . . . . . . . . . . . . . . . . . . . . . Coalbed methane
CBM-IV . . . . . . . . . . . . . . . . . . . . . fourth round of coal bedmethane bidding
cc . . . . . . . . . . . . . . . . . . . . . . . . . . cubic centimeter
cc/g . . . . . . . . . . . . . . . . . . . . . . . . . cubic centimeters per gram
cf . . . . . . . . . . . . . . . . . . . . . . . . . . . cubic feet/foot
CH4 . . . . . . . . . . . . . . . . . . . . . . . . . methane
CMPDI . . . . . . . . . . . . . . . . . . . . . . Central Mine Planning &Design Institute
CO2 . . . . . . . . . . . . . . . . . . . . . . . . . carbon dioxide
cP . . . . . . . . . . . . . . . . . . . . . . . . . . centipoise
CPR . . . . . . . . . . . . . . . . . . . . . . . . competent person report
CSG . . . . . . . . . . . . . . . . . . . . . . . . Coal Seam Gas
daf . . . . . . . . . . . . . . . . . . . . . . . . . . dry ash free
ENE–WSW . . . . . . . . . . . . . . . . . . . east-northeast–west-southwest
EOL . . . . . . . . . . . . . . . . . . . . . . . . Essar Oil Limited
E–W . . . . . . . . . . . . . . . . . . . . . . . . east–west
ft . . . . . . . . . . . . . . . . . . . . . . . . . . . foot/feet
g ........................... gram
gm/cc . . . . . . . . . . . . . . . . . . . . . . . . gram(s) per cubic centimeter
GSI . . . . . . . . . . . . . . . . . . . . . . . . . Geological Survey of India
kg/cm2 . . . . . . . . . . . . . . . . . . . . . . . kilogram(s) per square centimeter
2
km . . . . . . . . . . . . . . . . . . . . . . . . . square kilometers
kPa . . . . . . . . . . . . . . . . . . . . . . . . . kilopascal
kPaa . . . . . . . . . . . . . . . . . . . . . . . . kilopascal absolute
m .......................... meter(s)
3
m /tonne . . . . . . . . . . . . . . . . . . . . . cubic meter(s) per tonne (metric ton)
mD . . . . . . . . . . . . . . . . . . . . . . . . . millidarcy
MECL . . . . . . . . . . . . . . . . . . . . . . . Mineral Exploration Corporation Ltd.
MOP&NG . . . . . . . . . . . . . . . . . . . . Ministry of Petroleum and Natural Gas
mscf . . . . . . . . . . . . . . . . . . . . . . . . . thousand standard cubic feet
mscfd . . . . . . . . . . . . . . . . . . . . . . . . thousand standard cubic feet per day
mt . . . . . . . . . . . . . . . . . . . . . . . . . . million tons
NNW–SSE . . . . . . . . . . . . . . . . . . . . north-northwest–south-southeast
503

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N–S . . . . . . . . . . . . . . . . . . . . . . . . . north–south
NW–SE . . . . . . . . . . . . . . . . . . . . . . northwest–southeast
PL . . . . . . . . . . . . . . . . . . . . . . . . . . Langmuir pressure
PRMS . . . . . . . . . . . . . . . . . . . . . . . Petroleum Resources Management System
psi . . . . . . . . . . . . . . . . . . . . . . . . . . pounds per square inch
psi/ft . . . . . . . . . . . . . . . . . . . . . . . . pounds per square inch per foot
psia . . . . . . . . . . . . . . . . . . . . . . . . . pounds per square inch absolute
RB/STB . . . . . . . . . . . . . . . . . . . . . . reservoir barrels per stocktank barrel
Ro . . . . . . . . . . . . . . . . . . . . . . . . . . vitrinite reflectance
scf/cf . . . . . . . . . . . . . . . . . . . . . . . . standard cubic feet per cubic foot
scf/ton . . . . . . . . . . . . . . . . . . . . . . . standard cubic feet per short ton
STBW . . . . . . . . . . . . . . . . . . . . . . . stock tank barrels of water
STP . . . . . . . . . . . . . . . . . . . . . . . . . standard temperature and pressure
VL . . . . . . . . . . . . . . . . . . . . . . . . . . Langmuir volume
504

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1.0 OVERVIEW
1.1 General Overview
Advanced Resources International (ARI) uses the Petroleum Resources Management System (PRMS)
which is sponsored by the Society of Petroleum Engineers, the American Association of Petroleum
Geologists, the World Petroleum Council, and the Society of Petroleum Evaluation Engineers. The PRMS
system, which is discussed in more detail below, is summarized graphically in Exhibit 1.
ARI has classified the coal seam gas (CSG) resource of the Rajmahal CSG Block as Prospective
Resources. Prospective resources are defined as ‘‘Those quantities of petroleum which are estimated, as of
a given date, to be potentially recoverable from undiscovered accumulations.’’ From the PRMS, ‘‘Potential
accumulations are evaluated according to their chance of discovery and, assuming a discovery, the
estimated quantities that would be recoverable under defined development projects. It is recognized that
the development programs will be of significantly less detail and depend more heavily on analog
developments in the earlier phases of exploration.’’
Prospective resources can be described in terms of certainty and in terms of maturity. The certainty of
prospective resources are classified into Low Estimate, Best Estimate, and High Estimate, which is
consistent with, and corresponds to the meaning of P90, P50 and P10, respectively, i.e. Low Estimate
means that 90% of the possible outcomes are greater than the Low Estimate, and so on. Using the
probabilistic methodology, ARI has assigned Low, Best, and High prospective resources.
The Prospective classification is appropriate for several reasons. Presence of CSG gas has not been
established by canister desorption and isotherm testing of core, and the depth and thickness of the coal has
not been confirmed through drilling. Additionally, commercial production levels have not been
demonstrated by pilot or development production. The drilling of core holes and pilot or development
production will allow further evaluation, which will indicate the likelihood of commercial production
potential. Appraisal and evaluation activities are essential to quantify commercial production potential.
These activities will give a clearer picture as to the potential for eventual commercial development pending
further appraisal and evaluation activities.
As mentioned above, prospective resources can be classified according to certainty as well as maturity.
From the PRMS, ‘‘Lead’’ prospective resources can be defined as ‘‘A project associated with a potential
accumulation that is currently poorly defined and requires more data acquisition and/or evaluation in
order to be classified as a prospect.’’ and ‘‘Prospect’’ prospective resources can be defined as ‘‘A project
associated with a potential accumulation that is sufficiently well defined to represent a viable drilling
target.’’ As a result, the Prospective resources have been classified as having a maturity level range of
‘‘Lead’’ to ‘‘Prospect’’ (the lower level of maturity being ‘‘Play’’).
ARI has quantified the Prospective resources, as of 31 December 2009, using probabilistic methodologies.
Probability distributions were assumed for critical reservoir parameters such as permeability, gas content
and pressure gradient. An assumed probability distribution for porosity utilizes a range of reasonable
values based on ARI’s knowledge of other known values.
Using the probabilistic methodology, Low Estimate, Best Estimate, and High Estimate resources were
assigned. The maturity level range assigned to these resources is ‘‘Lead’’ to ‘‘Prospect’’.
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27MAR201000011785
Exhibit 1: Summary of the Petroleum Resource Management System
506

Utilizing the economic parameters provided by Essar Oil Limited (EOL) and described later in this report
in conjunction with the type curves that were developed according to the methodologies described in the
Evaluation Methodologies section of this report, volumes and net present values of prospective resources
have been assigned as shown in Exhibit 2.
Prospective Resources
Lead to Prospect Maturity Level
Probabilistic Calculation
Classification Original Gas In Place Recoverable Volume
(billion cubic feet, bcf) (billion cubic feet, bcf)
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,480 3,830.0
Best . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,480 4,722.8
High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,480 5,564.0
Exhibit 2: Prospective Resources
1.2 Summary of the Petroleum Resources Management System

The Petroleum Resources Management System (PRMS) is an internationally recognized system that has
evolved over time to provide standardized definitions of petroleum resources and guidance as to how
petroleum resources may be estimated. The PRMS resource definitions and guidelines allow for the
estimation of quantities of naturally occurring hydrocarbons that are known and/or are yet-to-be
discovered which can potentially be recovered and marketed by commercial projects. The PRMS is
endorsed by the Society of Petroleum Engineers (SPE), the World Petroleum Council (WPC), the
American Association of Petroleum Geologists (AAPG), and the Society of Petroleum Evaluation
Engineers (SPEE).
The following summary of the PRMS is intended to provide a brief overview. A graphic summary of the
PRMS can be seen in Exhibit 1: Summary of the Petroleum Resources Management System. For more
detailed information, the reader is encouraged to consult the most recent (March 2007) PRMS which can
be found online at: http://www.spe.org/industry/reserves/prms.php.
The term ‘‘resources’’ includes all quantities of naturally occurring petroleum, discovered and
undiscovered, as well as recoverable and unrecoverable. The estimation of quantities of petroleum
resources involves a degree of uncertainty and subjectivity. Estimates of resources attempt to quantify the
degree of certainty and maturity.
Broad classifications of resources, listed in the order of the likelihood of commerciality, include
‘‘Reserves’’, ‘‘Contingent Resources’’, and ‘‘Prospective Resources’’. According to the PRMS: reserves
include ‘‘those quantities of petroleum anticipated to be commercially recoverable by application of
development projects to known accumulations from a given date forward under defined conditions’’;
contingent resources are ‘‘those quantities of petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations by application of development projects, but which are not currently
considered to be commercially recoverable due to one or more contingencies’’; and prospective resources
are ‘‘those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable
from undiscovered accumulations.’’
Other classifications utilized within the PRMS are ‘‘Total Petroleum Initially-In-Place’’, ‘‘Discovered
Petroleum Initially-In-Place’’, and ‘‘Undiscovered Petroleum Initially-In-Place’’. Initially-In-Place refers to
‘‘that quantity of petroleum that is estimated, as of a given date, to be contained in . . . accumulations prior
to production.’’ Total is comprised of discovered plus undiscovered. Discovered refers to known
accumulations, and undiscovered refers to accumulations ‘‘yet to be discovered’’.
The degree of certainty associated with resource estimates—listed in the order of decreasing certainty—
may be stated as ‘‘Proved, Probable, and Possible’’ or ‘‘1P, 2P, and 3P’’ for reserves, ‘‘1C, 2C, and 3C’’ for
contingent resources, and ‘‘Low, Best, and High’’ for prospective resources. The certainty of resource
estimates may be quantified by either deterministic or probabilistic methods. The basic criteria for
quantifying certainty for reserves is that Proved, 1P, 1C, and Low Estimate (for reserves, contingent
resources, and prospective resources, respectively) should have a 90% probability of actually being
recovered; Probable, 2P, 2C, and Best Estimate should have a 50% probability of actually being recovered;
507

and Possible, 3P, 3C, and High Estimate should have a 10% probability of actually being recovered. These
same criteria are also applied for quantifying the certainty of initially-in-place estimates.
Broad maturity levels have also been defined in the PRMS, and can be briefly summarized—listed from
low to high maturity—as ‘‘Play’’, ‘‘Lead’’, and ‘‘Prospect’’ for prospective resources; ‘‘Development Not
Viable’’, ‘‘Development Not Clarified or On Hold’’, and ‘‘Development Pending’’ for contingent resources;
and ‘‘Justified For Development’’, ‘‘Approved For Development’’, and ‘‘On Production’’ for reserves.
The PRMS sets out the acceptable methodologies for estimating resources, such as analog, volumetric,
material balance, and production performance. Additionally, the PRMS specifies that economic and
ownership parameters must be clearly documented along with the resource estimates.
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2.0 ASSET OVERVIEW

2.1 Ownership Position
On August 8, 2009 the Indian Ministry of Petroleum and Natural Gas (MOP&NG) launched the fourth
round of Coal Bed Methane (CBM-IV) bidding. The RM(E)-CBM-2008/IV Block was offered in CBM-IV
along with nine other blocks in different coal/lignite fields. EOL was declared provisional winner of the
RM(E)-CBM-2008/IV Block at the close of the bidding round on October 12, 2009. MOP&NG is in the
process of formally awarding these blocks and upon award, a contract for exploration and production of
CSG for this block will be entered with the Government of India. The block covers an area of 1,128 square
kilometers (km2) and has a coal thickness of up to 40 meters (m). There are 8-10 coal seams at a depth
range of 600-1000 m. The coal has moderate permeability and a gas content of 3 cubic meters per tonne
(m3/tonne). Exhibit 3 shows a topographic and infrastructure map of the CSG block.
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26MAR201023583482
Exhibit 3: Rajmahal Coalfield, Topographic and Infrastructure Map CSG Block
510

2.2 Field History

The Rajmahal coalfield was first systematically mapped by V. Ball in 1877. He established the stratigraphy
and structure of different coal basins of Rajmahal hills. G.V. Hobson (1930) mapped the area falling in the
Bansloi Valley and G.C. Chatterjee (1947) made a reconnoitre traverse in the area. Later the Rajmahal
coalfield was systematically resurveyed by C.S. Raja Rao and S.K. Ramaswamy (1952-55), N.D. Mitra
(1963-64) and gave an outline of the coal potentiality of this virgin coal belt. Regional exploration was
carried out by the Geological Survey of India (GSI) since 1969 in Hura, Chuperbhita, Pachwara and
Mahuagarhi basins (Saha etc 1973-75, Roy and Mukherjee 1978 & Das and Mukherjee–1994). The
exploration in Brahmani basin by GSI is still continuing. The Central Mine Plannign & Design Institute
(CMPDI) carried out detailed exploration in Hura and in and around Chuperbhita basin through the
Mineral Exploration Corporation Ltd. (MECL). Birbal Sahni Institute of Palaeobotany carried out
palaeobotanical studies of Barakar and Rajmahal intertrappean flora. Scientists of Banaras Hindu
University carried out coal petrological studies of Hura and Chuperbhita basins. Significant data have been
generated on the coal basins of Rajmahal coal belt.
2.3 Geology
2.3.1 Introduction
Several detached coal basins along the western flank of the Rajmahal Hills in Jharkhand State constitute
the Rajmahal coal belt (Exhibit 4). This coal belt forms an integral part of a larger sedimentary basin,
which extends from Purnea in North Bihar to the Bengal basin in the east and southeast. It is visualized
that coal measures of Lower Gondwana sequence, which have been intersected at depth in the deep
boreholes drilled in this master basin, have cropped out along the basin margin in the Rajmahal Hills. As
such, the subsurface limit of this coal basin beneath the cover of Rajmahal Trap, Tertiary and alluvium is
yet to be defined.
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26MAR201023584945
Exhibit 4: Rajmahal Coalfield, Geological Map of CSG Block
512

In Rajmahal coal belt, the coal measures crops out as isolated patches often along the course of the
easterly flowing rivers, which have cut deep gorges into the Rajmahal trap covered areas and have exposed
the coal measures due to denudation of trap. The Rajmahal coal basin has a north-south alignment parallel
to the trend of the Rajmahal hills. This belt extends in the north up to the river Ganges, where the Hura
basin and its extension areas are located. Further south, the coal measures again crop out in the
Chuperbhita basin along the drainage of the Gumani River. In the central part of this belt, the coal
measures are found to be exposed in the Pachwara basin along the drainage of the Bansloi River. Further
south, isolated exposures of the coal measures are recorded in the Mahuagarhi basin. The southern most
coal basin of the Rajmahal coalfield is located in the drainage area of the Brahmani River and has been
named as Brahmani basin (Exhibit 4). This Rajmahal coal belt extends further south to Birbhum coalfield
in West Bengal, where a major depocentre of coal has been located below Rajmahal traps. A
reconstruction of paleo-geographic setting of these isolated coal basins of the Rajmahal hills suggest that
many of these basins are interconnected and are concealed further east, below a variable cover of
Rajmahal trap.
Based on a broad overview, it is observed that Rajmahal master basin hosts a large resource of coal in
Barakar Formation, which have been covered by a varying pile of Rajmahal volcanics. Evidently, the coal
seams have been soaked to a higher thermal regime in varying degree during periods of basalt flows. As a
sequel to this thermal event, several coal seams are likely to be within the gas generation window. Keeping
the basin history in view, it is postulated that Rajmahal coals below a cover of more than 300 m may
become gas saturated and store sizable resource of methane. Accordingly, a coal seam gas block located to
the east of allotted CSG block RM-CBM-2005/III has been designated in the trap covered areas.
The Rajmahal Gondwana belt is regarded as a classic thoeleiitic volcanic province of eastern India.
Beneath the cover of Rajmahal trap of Lower Cretaceous age, occurs the Triassic Gondwana rocks, which
in turn is underlain by Barakar coal measures and Talchir Formation of Lower Gondwana sequence
(Exhibit 3).
The Rajmahal Gondwana belt forms a part of large master basin stretching from Purnea basin in North
Bihar to Bengal basin in the south and east. To the east of the Rajmahal hills in Malda area of West
Bengal, deep boreholes drilled by GSI proved the extension of Rajmahal traps and Triassic Gondwana
below the alluvium and Tertiary sediments. The boreholes could not be drilled deeper to prove Barakar
coal measures at greater depth. The available subsurface data from Rajmahal, Purnea, Malda and
adjoining areas of Bengal basin show a more or less unified history of basin infilling during the Gondwana
period. The Rajmahal coal basins along the western flank of the Rajmahal hills denote exposures of coal
bearing rocks near the basin periphery due to the denudation of Triassic sediments and Rajmahal trap.
In Rajmahal coalfield area, the Lower Gondwana sediment usually rest on the Precambrian basement with
a pronounced unconformity. The Gondwana sedimentation in this area commenced with the deposition of
glacier derived Talchir sediments. The Talchir Formation occurs in isolated patches along the western
periphery of the basin. Over a major part of the area, the Barakar Formation rests directly on the
Precambrian basement. Following the deposition of Barakar coal measures, the Rajmahal basin witnessed
a major hiatus in deposition as no unequivocal upper Permian Gondwanas were found to be preserved in
the coal basins.
In the Triassic period, the Lower Triassic Panchet Formation was deposited in the vicinity of the northern
part of Rajmahal belt. But elsewhere in the coalfield area, no record of deposition of Panchet formation is
preserved. In the hills adjacent to coalfields a younger Mesozoic succession denoted as Dubrajpur
Formation is often exposed. Locally the formation is generally eroded and younger basalt flow rest directly
on Lower Gondwana Barakar sequence. In early Cretaceous period, this area witnessed a paroxysm of
basic volcanic activity, which is referred to as Rajmahal volcanics because Rajmahal hills form the type
513

area of its exposures. The generalized sequence of Gondwana rocks in Rajmahal belt is as presented in
Exhibit 5.
Thickness
Age Formation Lithotype (m)
Recent/Quaternary Soil/Alluvium Loose soil and clay

Lower Cretaceous Rajmahal Traps & Basic volcanics with 200 +
intertrappean sedimentary intertrappean
Unconformity
Upper Triassic to Jurassic Dubrajpur Formation Medium to coarse grained 40 to 150
ferruginous sandstone,
pebble beds & chocolate
shale
Lower Triassic- Panchet formation (in Fine Grained greenish 80 to +600
northern part) sandstone, shale
Unconformity
Lower Permian Barakar Formation Conglomerate, sandstone, 330 to 600
shale and coal seams
Early Permian Talchir Formation Diamictite, fine grained 5 to 70
sandstone, red and green
shale
Precambrian Chotanagpur Gneissic Granite Gneiss with Quartz
complex vein
Exhibit 5: Generalized Stratigraphic Sequence in Rajmahal Coalfield
2.3.1.1 Barakar Formation

The Barakar Formation is exposed in five disconnected patches in the Rajmahal hills, which have been
designated as Hura, Chuperbhita, Pachwara, Mahuagarhi and Brahmani Sub basins by Ball (1877). It is,
however, of interest to note that Barakar sediments of different coalfields display significant variations in
thickness, facies organization and pattern of coal development. Limited surface data indicates that the
basement (hidden) high between different coal basins had dominant control on the pattern of deposition in
different basins of the large Gondwana belt. Similar observation has been made by Ball (1877) in course of
his pioneering survey in the Rajmahal coalfield. He records ‘‘In some places this surface was hollowed into
basins, in other hills, ranges and small plateau rose above the general level. Against the sloping faces so
formed, the sedimentary rocks were successively deposited. As the area of deposition widened, overlap
became an inevitable result not only behind different groups but also behind individual members of the
same group.’’ This observation of Ball gives an insight into the pattern of regional variations in facies
organization of Barakar coal measures.
The Barakar Formation attains a higher thickness of about 450-600 m in the stretch between Chuperbhita
and Hura and its northern extension area. This formation shows a much reduced thickness of 330-425 m in
the eastern part of Pachwara basin. Further south in Mahuagarhi- Brahmani basins this formation attains a
thickness of about 330-450 m. The Barakar formation comprises predominantly of coarse, arkosic
sandstones with pebble beds, fine to medium grained sandstones, carbonaceous shale and several coal
seams. Generally the basal member (50-150 m) is composed of coarse grained sandstone which is
succeeded by main coal bearing unit (150-250 m) containing a number of coal seams (Exhibit 6 and
Exhibit 7). This coal bearing unit is followed upwards by a barren zone of predominantly coarse
sandstones, siltstones and shale. Vertical organization of Barakar lithic pile exhibits a repetitive systematic
fining upward cycles.
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Exhibit 6: Rajmahal Coalfield, Regional Correlation of Coal Seams in Different Basins, CSG Block
515

26MAR201023590468
Exhibit 7: Rajmahal Coalfield, Graphic Litholog of Selected Boreholes, CSG Block
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2.3.1.2 Rajmahal Traps

In Rajmahal hills, the Rajmahal volcanic suite includes thick sequence of basalt and intertrappean
sediments. The basaltic flows rest either on the Dubrajpur Formation or the Barakar Formation. The
maximum thickness of Rajmahal trap is reported to be over 200 m in the hilly areas. In the coalfield area,
however, shallow cover of traps is recorded.
2.3.2 Structure and Tectonics

The Gondwana sediments in the Rajmahal belt have a regional north-south (N–S) trend with gentle
3-5 dip towards east. Below the Basalt flows, the Lower Gondwana and Dhubrajpur beds show a gentle
dip and often assume a sub-horizontal attitude. Frequent rolls in dip are noted in Brahmani basin as a
result, local sub-basinal structures are formed. The Gondwanas rest over an uneven basement topography.
As a result, several basement highs, such as the areas between the Mahuagarhi and Brahmani basins and
between Mahuagarhi and Pachwara basins have segmented the depositional area into different coal
forming depo centers.
The southern part of the Rajmahal coal belt displays a half graben configuration. In Brahmani-
Mahuagarhi basin, the western boundary of the N–S coal belt is defined by a northwest–southeast
(NW–SE) boundary fault. There is stretch between Dudhajor and Barbhuibanga, where the boundary fault
has varying amount of throw. The maximum throw is recorded near Nijhor Pahar where younger
Dubrajpur Formation is found to be faulted against the basement metamorphites. The throw of the fault
decreases towards the north near Barabhuibanga where the Talchir formation is juxtaposed against the
boundary fault. This fault passes further north in the gneissic terrain. As a result, the Gondwana sediments
of Pachwara, Chuperbhita and Hura basins rest on the gneissic basement with a pronounced unconformity
and these coalfields are not bounded by western border fault.
The Gondwanas of the Rajmahal hills is truncated in the north by a major east–west fault running along
the course of the river Ganges. Along this fault the Gondwanas are downthrown in the north and
preserved at greater depth in Purnea trough. To the east, the Rajmahal basin merges with Malda trough,
which has similar geological succession.
The Rajmahal Gondwana belt displays an interesting structural peculiarity. The belt has regional
N–S elongation whereas the border fault in the south has north-northwest–south-southeast (NNW–SSE)
trend. As a result large part of this Gondwana belt is not fault bounded like most other Gondwana basins
of India. This probably accounts for several well pronounced stratigraphic unconformities in the upper
Permian and Triassic periods when basinal areas witnessed a break in sedimentation and sub aerial erosion,
during a prolonged period of quiescence.
Other than the NNW–SSE trending border fault and several sympathetic sub parallel faults, the
Gondwanas are dissected by east-northeast–west-southwest (ENE–WSW) and east–west (E–W) faults.
One such fault is noted north of Lalmatia hill in Hura basin. A very prominent E–W fault dissects the
coalfield in its central part near Chuperbhita basin. This fault is found to have about southerly 250 m throw
in the CSG block.
The faults are of several generations. Some of the faults are Pretrappean in age having no effect on trap
cover whereas the other faults have offset the traps and are evidently younger in age.
2.3.3 Depositional History

The palaeogeographic reconstruction of the Gondwana belt displays that Rajmahal area was a mosaic of
several palaeotopographic lows flanking the Precambrian upland to the west. The Talchir glaciers radiated
from these high gathering grounds of ice at the beginning of Gondwana period. This ice advance resulted
in scouring of the basement and formation of embryonic discrete basins.
During the initial period of deposition of Barakar Formation, the Gondwana landscape was characterized
by several basement depressions or flanked by basement protuberances. As a result, there was no unified
history of lithic infilling across the entire stretch of Rajmahal hills. With passage of time as greater
subsidence took place during later phase of Barakar sedimentation, several depo centers integrated to
form a larger Rajmahal master basin.
Barakar deposition in different basins shows repetitive asymmetric fining upward cycles. A standard cycle
shows a sequence of pebbly and/or coarse sandstones with shale and coal, chert pebbles at its base and
followed upwards by sandstone and shale and often coal seams at the top. More often than not, such cycles
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are found to be repeated in abbreviated forms. Sometimes 32 cycles have been recognized in the Barakar
sequence. Such architecture in the sediment sequence reflects a meandering fluvial environment. It
appears that the paleoslope of the basin continued to be towards north east. The Barakar drainage,
originating from the highlands to the west flowed down the regional paleoslope and meandered across the
depositional basin. Peat accretion process in the back swamp areas was periodically interrupted by
aggrading fluvial fronts depositing channel load sediments. A characteristic feature of some coal belts
reveals progressive thinning and splitting of seams to the east of the basin, where channel evulsions was
more active in Barakar period.
Following the deposition of Barakar sediments, the basin area witnessed a prolonged break in
sedimentation and sub-aerial exposure. A major tectonic event in Upper Triassic period ushered in a fresh
spell of sedimentation. A number of turbulent streams originating from western highlands deposited the
coarse clastics of Dubrajpur Formation. These sediments often overlapped the Barakar Formation and
rested on Precambrian basement.
After the deposition of Dubrajpur Formation, there was a fresh spell of sub aerial exposure of basinal
sequence. The Dubrajpur beds were often denuded and the Rajmahal traps rested directly on Barakar
rocks. The Rajmahal eruption marked a major distinction in the west when the fragmentation of the
Gondwana took place in Aptian period.
2.3.4 Coal Seams

Several coal basins occur as detached patches along the western fringe of the Rajmahal hills, which have
been designated as Hura, Chuperbhita, Pachwara, Mahuagarhi and Brahmani basins from north to south.
In the intervening area the cover of the Dubrajpur Formation and Rajmahal traps conceal the coal
measures. The total spread of Barakar coal measures in the surface is about 200 km2. But, it no way reflects
the total extent of Barakar coal basin, as it continues underneath the basaltic pile on the east, where the
CSG block is located. A few boreholes drilled in the trap covered areas indicate the eastward extension of
the coal basin below the Rajmahal trap. However, in the absence of adequate borehole data, the eastern
limit of the coal basin cannot be delineated.
As discussed earlier, the different coal basins of the Rajmahal hills show different styles of coal formation.
The coal seam sequence of different basins cannot be fitted in any regional scheme of correlation. Thus,
the different depocentres of coal display their individual pattern of coal formation and therefore, the
nomenclature followed for different basins are different.
2.3.4.1 Hura Basin

The coal measures in Hura basin crop out in a north south stretch between Bhalgora in the south and the
Ganges valley in the north. The eastern limit of this coalfield is not known as the coal measures are
covered by Rajmahal trap and alluvium. In Hura basin the following sequence of coal seams is recorded
(Exhibit 8).
Thickness Range
Seam (m)
Paharpur-Khijuri No. IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4-6.0

Pharpur-Khijuri No.IIIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1-3.0
Pharpur-Khijuri No. III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1-9.6
Pharpur-Khijuri No. IIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0-2.3
Pharpur-Khijuri No. II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9-4.9
Pharpur-Khijuri No. I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5-3.3
Lalmatia Top . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4-14.6
Lalmatia Bottom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0-37.0
Hajukita . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6-11.6
Exhibit 8: Coal Seam Sequence in Hura Basin
518

In the northern extension area of Hura basin, sixteen regional seams have been intersected in various
boreholes, which have been numbered I to XVI from bottom to top. The sequence is shown in Exhibit 9.
Thickness Range
Seams (m)
Seam XVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25-1.37

Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.45-43.77
Seam XV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.86-4.65
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.85-59.53
Seam XIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8-16.0
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6-21.18
Seam XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.42-6.16
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.36-94.41
Seam XII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.86-4.74
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.98-44.09
Seam XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05-5.54
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05-38.11
Seam X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.16-8.95
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.96-22.65
Seam IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.67-8.35
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.87-31.11
Seam VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.82-6.80
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.68-18.85
Seam VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.85-6.85
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.40-47.70
Seam VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5-6.50
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.15-80.36
Seam V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.90-6.55
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.85-51.06
Seam IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5-4.8
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.94-80.30
Seam III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.87-9.37
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11-25.70
Seam II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.34-28.60
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.81-23.00
Seam I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.34-34.03
Parting Basement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.75-71.75
Exhibit 9: Regional Coal Seams in Northern Extension Area of Hura Basin
The lower Seams III, II and I correspond to Lalmatia Top, Lalmatia Bottom and Hajukita Seams of
operating Rajmahal opencast project. The coal seams of Hura basin usually have high moisture (3.6-8.4%)
and high ash content (18-45%).
519

2.3.4.2 Chuperbhita Basin

South of Hura basin, the coal measures are covered by Rajmahal traps. The coal measures are exposed
along the valley of the Gumani river in the Chuperbhita basin. To the south and east, the Barakar measures
are covered by the Rajmahal traps. The Barakar Formation has attained a maximum thickness of 600 m.
It is broadly divided into a lower and upper coal bearing unit separated by a barren zone of about 100 m.
The sequence of coal seams in Chuperbhita is as depicted in Exhibit 10.
Thickness Range
Seam (m)
Seam XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.86

Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.80
Seam XII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02-6.82
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.76-32.38
Seam XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.82-6.48
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.78-66.22
Seam X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.61-9.50
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.72-9.70
Seam IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.79-4.60
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.88-4.86
Seam/VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07-4.18
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.76-112.48
SeamVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04-6.86
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.49-44.0
SeamVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.48-6.10
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.82-50.00
SeamV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34-5.05
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.64-13.75
Seam IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.71-8.92
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.84-62.68
Seam III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.62-3.89
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.44-101.75
Seam II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.26-12.73
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.42-65.79
Seam I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09-4.28
Exhibit 10: Coal Seam Sequence in Chuperbhita Basin
To the east of the basin, a few boreholes have shown splitting and thinning tendency of seams. The lower
seams IV to VII are of better quality with less than 30% ash. The upper seams are invariably inter banded
and are of inferior quality.
520

2.3.4.3 Pachawara Basin

In this coalfield the coal measures are exposed over an area of about 40 km2 in the valley of the Bansloi
River. Towards north and east, the coal measures are covered by Rajmahal trap. It is surmised that Barakar
coal measures continues beneath the cover of trap. This is well documented by the presence of a big
Barakar inlier within the trap near Chet Pokker. A borehole drilled near Chet Pokker also confirms the
presence of Barakar coal seams beneath the Rajmahal trap. The Barakar Formation hosts 13 coal seams
which are represented by more than one split sections. The sequence of coal seams is as shown in
Exhibit 11.
Thickness Range
Seam (m)
Upper Unit
Seam XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
Seam XII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0-6.8
Seam XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8-6.5
Seam X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6-9.5
Seam IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8-4.6
Seam VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0-4.2
Lower Unit
Seam VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0-6.8
Seam VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5-6.1
Seam V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3-5.0
Seam IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7-8.9
Seam III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6-3.9
Seam II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3-12.7
Seam I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1-4.3
Exhibit 11: Coal Seam Sequence in Pachawara Basin
The most important seam is Seam II, which is exposed over a considerable area in the western part of the
coalfield. In the north, the seam coalesces with Seam I to form a very thick seam. In the eastern part of the
basin near the CSG block, seam II shows a reduction in the thickness and splitting tendency. The seam V
and VI however, maintain good thickness near the CSG block. Coals from this basin are high in moisture
(5.2-11.8%) and moderate to high in ash content (12.6-46.6%).
2.3.4.4 Mahuagarhi Basin

The Mahuagarhi basin has NW–SE elongation. Its western boundary with the metamorphics is delineated
by a prominent boundary fault. Towards east, the coal measures are covered by Dubrajpur Formation and
Rajmahal trap. Due to undulation in the basement topography, a prominent Precambrian inlier around
Kathaldih is exposed in the central part of the Mahuagarhi basin. Because of the undulation in basement
topography, several depocenter of coal is noted in Mahuagarhi area. Significant development of coal is
reported from Gandharap area in the west and Keyada Gariapari area in the east. Frequent splitting and
coalescence of seam in this coalfield pose problems for correlation of seams; however, the following
Sequence of seams has been worked out by GSI with 450 m of Barakar Formation (Exhibit 12).
Thickness Range
Seam (m)
Seam X .......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1-3.4

Seam IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8-4.5
Seam VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 4.3
Seam VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1-9.3
Seam VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2-5.8
Seam V .......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0-8.2
Seam IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2-3.6
Seam III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2-5.0
Seam II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9-23.4
Seam II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3-15.4
Seam I+II Combined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.1-39.0
Exhibit 12: Coal Seam Sequence in Mahuagarhi Basin
521

Coal seams are usually inter-banded in nature. The moisture and ash content of coal varies widely from
1.2-14.0% and 20.9-52.0%, respectively. Some sections of Seam I, II and III indicate better quality coal.
2.3.4.5 Brahmani Basin

Brahmani basin forms the southern most part of the Rajmahal coal belt. This extends southward to the
Birbhum coalfield in West Bengal. Here the coal measures occur in two sub basins—the main sub basin in
the north and a sub basin in the southern extension area. Most of the coal seams of this coalfield exhibit
significant variation in seam thickness, parting thickness and erratic splitting tendency. Accordingly, the
precise correlation of the seams could not be established. Several distinct zones of coal seams within the
Barakar coal measures could be delineated.
The sequence of coal seams in the main basin and the southern extension is as shown in Exhibit 13.
Thickness Range
Seam (m)
Seam Zone F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-17

Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-39
Seam Zone E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5.9
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-22.5
Seam Zone D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.40-12.45
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.30-89.26
Seam Zone C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.11-24.81
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0-11.85
Seam Zone B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05-17.20
Parting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.67-83.80
Seam Zone A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.04-32.58
Exhibit 13: Coal Seam Sequence in Brahmani Basin
The coal seams are generally interbanded in nature. Moisture and ash content of coal vary between
6.0-12.0% and 20.3-47.5% respectively.
2.3.5 Chemical and Petrological Character of Coal

Rajmahal coal exhibits wide variations in quality not only from coal basin to basin but even within the same
basin. Overall, the coals contain high moisture, variable ash and high volatile matter. The moisture
percentages usually vary between 6 to 9% with a few exceptions of 5 to 6% in the lower seams and above
10% in upper seams. The ash content also shows wide variation. Normal range of ash is 20 to 35% but
some lower seams contain 15 to 20% ash whereas high value of 38 to 45% is recorded from inter-banded
seams. The analysis of coal indicates that the coals are high volatile in nature which usually varies between
37 and 45% on dry mineral matter free basis. This suggests that these coals by and large correspond to high
volatile bituminous B to C in rank. The carbon percentage varying between 77 to 81% also corroborate the
above rank of coal. The details are given in Exhibit 14 and Exhibit 15 below.
Unit Volatile
Basin Moisture % Ash % Matter % Carbon %
Chuperbhita . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1-10.7 20.8-41.9 39.8-45.1 76.4-78.9

Pachwara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6-10.4 18.3-46.3 37.2-44.8 77.8-81.2
Mahuagarhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9-10.6 20.9-52.0 38.2-43.3 79.3-81.2
Brahmani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5-9.1 20.3-48.8 34.7-37.8 80.2-81.8
Exhibit 14: Quality Parameters Of Coal Seam Of Different Sub Basins, Rajmahal Coalfield
522

MERRILL CORPORATION JDICKSO//30-APR-10 12:38 DISK116:[10ZAU1.10ZAU70801]TL70801A.;40
A general idea of chemical character of coal can be obtained from data of Ultimate Analysis in respect of
Pachwara coal.
Ultimate Analysis (dmf)

Thick Carbon Hydrogen Nitrogen Sulfur Oxygen Phosphorus
Seam Depth (m) % % % % % %
VI . . . . . . . . . . . . . . . . . . . 30.15 4.10 78.2 4.5 1.83 0.7 14.77 0.70

V(T) . . . . . . . . . . . . . . . . . 51.51 3.26 78.5 4.4 1.89 0.54 14.66 0.02
III . . . . . . . . . . . . . . . . . . . 101.25 4.90 78.8 4.8 1.75 0.7 13.95 0.10
II (T) . . . . . . . . . . . . . . . . . 139.50 15.66 78.9 4.8 1.63 0.67 14.0 0.13
Exhibit 15: Ultimate Analysis of Coal Seam of Pachwara Sub Basin
The coals show wide variation in vitrinite reflectance (Ro). The Hura coals show Ro mean values ranging
from 0.39 to 0.76%. A few samples have high reflectance value of 0.81 to 1.31% which is considered to be
due to effects of Rajmahal trap intrusive bodies. The Pachwara coals have vitrinite reflectance of 0.45-51%.
The reflectance values of a few studied samples of Brahmani coal is 0.54%. Based on vitrinite reflectance
data alone the Rajmahal coals can be classified by and large as high volatile Bituminous C to B in rank.
The data shows that Rajmahal coals are hydrogen rich and oxygen poor and corresponds to Kerogen
type III. The probable depth of burial of Rajmahal Coals has been extrapolated based on the data of
vitrinite reflectance. The method adopted is the linear extrapolation using depth verses Ro M%. This
graph shows that depth of burial for Hura coal is between 1890 and 2320 m and for Chuperbhita coal it
ranges between 2780 and 2970 meters. Evidently, the probable loss of cover ranges between 1440 m to
1720 m. The coalification temperature of Chuperbhita and Hura coals varies between 52 to 128 C.
Limited information is available on the cleat pattern of Rajmahal coal belt. Both field and laboratory
studies revealed that Rajmahal coal is well cleated with good cleat aperture. Microscopic studies reveal the
presence of cleats/micro cleats not only in bright vitrain bands but also in dull durain bands. Generally
3-4 cleats are present per cm of coal and the aperture width is 10-20 micrometers (Ȗm) and locally it is
little wider.
The formation of cleat is related to both endogenic process involving soft sediment deformation due to
differential compaction and shrinkage during coalification as well as exogenic process related to tectonic
stress, imposed during burial or uplift. Interestingly, the face cleats are usually aligned parallel to
maximum horizontal stress axis i.e. have a preferred E–W trend. In short the cleat formation in Rajmahal
may have good correlation with tectonics stress. Besides the cleats, the networks of NNW–SSE and E–W
faults have contributed to good fracture density in coal.
Petrographic studies on Rajmahal coals however reveal that the cleats are often filled with secondary
carbonate and clay minerals. Possibly the mineralizing fluids from Rajmahal volcanics have permeated
through the coal cleats. This precipitation of authigenic minerals in cleats may affect to some extent
regional fluid migration and reduced permeability.
Though no quantitative data on coal seam permeability of Rajmahal coal is available but a scrutiny of the
tectonic setting, depth of occurrence of seams and cleat frequency of seam show the following features.
• The Rajmahal coalfield is located in a relaxed stress regime as it is free from folding and other
compressive structures. The coal seams have a flat unidirectional dip to the east pointing to the low
stress regime.
• The initial stress on coal seams is difficult to estimate. It is the horizontal stresses that are important
because they act across the sub vertical cleats that connect gas and thereby affect the coal seam
permeability. Since the cleat aperture even at a depth of 515 m is found to be 30 Ȗm in Brahmani
basin, it can be stated that horizontal stress was much less to attract the coal cleats.
• The coal seams lie mainly in the depth range of 300-600 m. In such depth range, there will not be
significant reduction in permeability due to increased stress. The studies on permeability in a few
Gondwana coalfields have revealed that coals in fault bounded Gondwana basins have good
permeability up to 600 m depth.
523

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2.3.6 Coal Resources

In Rajmahal coalfield, the coal seams are exposed in several isolated basins covering an area of about
208 km2. Exploration has primarily been carried out in the area where the coal seams are exposed. Very
few boreholes were drilled in the trap covered areas to the east of the coalfields, which is where the license
area lies. Based on exploration in coalfield areas, the GSI has indicated the coal reserves as shown in
Exhibit 16.
Proved Indicated Inferred Total
Depth (m) (m) (metric tons, mt) (metric tons, mt) (metric tons, mt)
0-300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2077.97 77760.86 682.96 10521.79

300-600 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.0 2835.83 918.29 3754.12
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2077.97 10596.69 1601.25 14275.91
Exhibit 16: Coal Reserves of Rajmahal Coalfield (GSI-1.1.08)
This estimate does not take into consideration the resource of coal occurring below the trap covered area
of the CSG block and areas in its northern part, lying to the east of coalfield areas.
No gas content data are available for the Rajmahal CSG block. However, based on gas content data from
neighboring coalfields with similar coal characteristics, it appears gas contents are likely in the range of
4-7 m3/tonne (Exhibit 17). In recent years, some adsorption isotherm data and desorption results are
available from Brahmani and adjacent Birbhum coalfield (Exhibit 18 and Exhibit 19). The desorption data
shows a average gas content of 2.88 m3/tonne. This data when viewed in conjunction with adsorption
isotherm results of the same sample indicate saturation of seams with methane beyond 300 m depth.
Desorbed Wt. of Lost Gas Desorbed Gas Residual Gas Total Gas
Interval sample (cubic (cubic (cubic at STP (cubic Gas Content
Core Interval (m) (m) (gram, g) centimeter, cc) centimeter, cc) centimeter, cc) centimeter, cc) (STP) (m3/t)
184.70-186.50 . . . . . . . . 184.70-186.50 940 145.6 1185.5 254.5 1583.6 1.69

198.90-201.90 . . . . . . . . 199.80-200.40 1200 211.0 1758.4 309.6 2279.0 1.90
204.90-207.95 . . . . . . . . 205.85-206.35 1020 137.4 1047.6 234.0 1419.0 1.39
220.40-223.45 . . . . . . . . 221.20-221.80 800 241.1 1310.0 342.3 1893.4 2.37
241.20-244.30 . . . . . . . . 243.80-244.30 850 246.4 1643.4 298.5 2188.3 2.57
262.10-265.15 . . . . . . . . 262.10-262.60 1040 201.9 1719.4 320.2 2241.5 2.16
280.15-283.15 . . . . . . . . 281.55-282.15 1160 169.9 2358.3 464.5 2992.7 2.58
292.45295.55 . . . . . . . . 292.45-292.95 830 318.3 2179.5 216.3 2714.7 3.27
319.60-322.10 . . . . . . . . 320.20-320.62 1020 358.5 2485.5 255.7 3099.7 3.14
322.10-325.20 . . . . . . . . 322.70-323.20 1100 251.4 1809.4 312.5 2373.3 2.16
325.20-328.20 . . . . . . . . 329.60-330.26 1440 372.2 2603.3 414.2 3389.7 2.35
328.20-331.20 . . . . . . . . 330.10-330.60 1150 438.7 2700.8 467.2 3606.7 3.04
331.20-334.35 . . . . . . . . 332.52-333.19 1350 686.6 4468.5 663.3 5818.4 4.31
334.35-337.45 . . . . . . . . 336.29-336.79 1000 432.3 2841.2 510.2 3784.0 3.78
374.55-376.55 . . . . . . . . 376.05-376.55 1000 493.6 3067.3 559.7 4120.6 4.12
438.40-441.40 . . . . . . . . 440.90-441.40 870 273.4 2448.3 505.2 3226.9 3.71
444.40-447.40 . . . . . . . . 444.90-445.40 1350 271.7 2675.4 536.5 3483.6 2.58
458.90-462.00 . . . . . . . . 459.25-459.75 1275 394.2 3920.0 489.5 4803.7 3.77
462.00-465.10 . . . . . . . . 463.70-464.20 1350 514.6 3822.7 913.7 5251.0 3.89
2.88
Exhibit 17: In situ Gas content of Borehole No. BRS-2 (Drilled adjoining to the southwestern limits
of the CBM Block in Birbhum coalfield)
Pressure Moisture equilibrated gas content

Block (atmosphere, atm) (cubic centimeters per gram, cc/g)
Haripur Chapria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.66 7.1

Haripur Chapria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.19 7.6
Kulkulidangal-Sitasal . . . . . . . . . . . . . . . . . . . . . . . . . . 47.04 7.9
Kulkulidangal-Sitasal . . . . . . . . . . . . . . . . . . . . . . . . . . 56.41 8.4
Salbdna-Gumanpahri . . . . . . . . . . . . . . . . . . . . . . . . . . 46.68 8.6
Salbdna-Gumanpahri . . . . . . . . . . . . . . . . . . . . . . . . . . 56.51 9.5
Exhibit 18: Adsorption isotherm of seams of Haripur Chapria, Kulkulidangal-Sitasal
and Salbdna-Gumanpahri
524

Input Sample Details:

Sample: Rajmahal/Haripur-chapria1
Date: 18 June, 2005
Vessel Number: 2
Temperature (C): 30
Proximate Analysis (air dried basis)

Moist (%) . . . . . . . . . . . . . . . . . . . . 6.1 Ash (dry) . . . . . . . . . . . . . . . . . . . . . 24.7
Ash (%) . . . . . . . . . . . . . . . . . . . . . . 23.2 VM (dry) . . . . . . . . . . . . . . . . . . . . . 28.3
VM (%) . . . . . . . . . . . . . . . . . . . . . . 26.6 FC (dry) . . . . . . . . . . . . . . . . . . . . . . 47
FC (%) . . . . . . . . . . . . . . . . . . . . . . 44.1 VM (daf) . . . . . . . . . . . . . . . . . . . . . 37.6
Eq. Moist (%) . . . . . . . . . . . . . . . . . 6.9 FC (daf) . . . . . . . . . . . . . . . . . . . . . . 62.4
Input CH4 Pressures Output Adsorbed Gas Content

Pressure Pressure Moisture Equilibrated daf
(kilopascal absolute, kPaa) (atm) cc/g (at std. Reporting) cc/g (at std. Reporting)
0 0 0 0
407 4.02 1.1 1.6
948 9.36 2.4 3.5
1842 18.18 4.3 6.1
2748 27.12 5.3 7.5
3722 36.73 6.4 9.1
4728 46.66 7.1 10.2
5795 57.19 7.6 10.9
6722 66.34 8.1 11.5
7643 75.43 8.4 12.0
Output results As analyzed daf
Langmuir Volume (VL) (cc/g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.0 18.5

Langmuir Pressure (PL) (kPa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4021 4021
Langmuir Pressure (PL) (atm) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.7 39.7
Exhibit 19: Adsorption Isotherm of Seam Zone ‘‘A’’ (Depth—515.65M) Rajmahal Coalfield.
The desorption studies carried out on the samples of borehole no. BRS-2 show that the seams are heat
affected but no increase in gas content was noticed. The following table is self explanatory (Exhibit 20):
Maceral (Volume)%
Gas
Content Semi- Heat Mineral Mean
Desorbed Interval (m) (STP)(m3/t) Vitrinite vitrinite Liptinite Inertinite affected Matter Ro %
184.70-186.50 . . . . . . . . . . 1.69 14.1 0.4 84.4 1.1 25.7 1.86

198.90-201.90 . . . . . . . . . . 1.90 10.8 0.2 0.9 88.1 24.3 1.78
204.90-207.95 . . . . . . . . . . 1.39 29.5 0.9 0.9 64.5 4.2 11.4 1.87
220.40-223.45 . . . . . . . . . . 2.37 21.1 78.1 0.8 17.6 1.81
241.20-244.30 . . . . . . . . . . 2.57 5.9 0.5 88.7 4.9 31.4 2.22
262.10-265.15 . . . . . . . . . . 2.16 33.2 1.3 7.4 58.1 16.2 1.10
Exhibit 20: Relationship Between the Gas Content of Coal and Maceral Composition and Rank in
Borehole BRS-2, Birbhum Coalfield
525

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3.0 PROSPECTIVE RESOURCES

3.1 Evaluation Methodology
3.1.1 Reservoir Simulation
In order to evaluate the potential producibility of the CSG resources of the Rajmahal CSG Block, ARI
constructed a reservoir model designed to simulate the development of the Rajmahal Project Area. The
reservoir model was constructed using ARI’s proprietary CSG reservoir simulator, Comet3.
Comet3 is a triple porosity, dual permeability, three dimensional, finite difference computer reservoir
simulator with a fully implicit well bore algorithm. Comet3 is designed to handle complex coal seam gas
(and other unconventional) reservoir problems involving two-phase flow from fractured reservoirs. For this
project Comet3 was run in dual porosity, single permeability, two phase, single component (methane)
mode.
3.1.2 Model Construction

One individual well model was constructed with a coal thickness of 30 meters, 80 acre spacing and four
layers. This model was used to make one probabilistic run comprised of 500 iterations, which allowed for
the calculation of P10, P50 and P90 values (High Estimate, Best Estimate and Low Estimate, respectively)
for gas and water production rate and cumulative production. The model consists of 324 grid blocks, 9 in
the x-direction, 9 blocks in the y-direction, and 4 layers in the z direction. Exhibit 21 depicts the gridded
area used in the simulation of the Rajmahal Project Area described above.
26MAR201023591772
Exhibit 21: Rajmahal Reservoir Simulation Construction
The model simulates a 32 hectare (80 acre) well spacing. For the probabilistic (Monte Carlo) model
simulations, permeability, porosity and gas content were allowed to vary by layer according to input
probability distributions. Allowing these reservoir parameters to vary by layer according to the input
probability distributions is thought to more closely mirror in-situ conditions, and represents the chief
advantage that Monte Carlo simulation has over a deterministic approach.
526

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Depth was also allowed to vary according to an input probability distribution, and all layers were allowed
to shift together between depths ranging from 500 meters to 750 meters. A pressure gradient of
0.433 pounds per square inch per foot (psi/ft) (normal pressure gradient) was multiplied by depth to arrive
at reservoir pressure for that iteration.
The probability distributions discussed above are described in Exhibit 22 and in more detail in the
appropriate section of this report. For each of the 500 iterations, a different value of permeability, porosity,
and gas content was chosen from each probability distribution for each layer. Also, for each iteration, one
value was chosen for depth which was applied to each layer uniformly.
Probabilistic Parameters
Type Minimun Most Likely Maximum
Gas Content . . . . . . . . . . . . . . . (scf/cf) Triangular 7.65 11.89 14.37

Permeability . . . . . . . . . . . . . . . (md) Triangular 0.5 5 10
Porosity . . . . . . . . . . . . . . . . . . . (%) Triangular 2.5% 2.0% 1.5%
Minimim Maximum
Depth to . . . . . . . . . . . . . . . . . . (feet) Uniform 1566.2 2386.2

Exhibit 22: Probabilistic Parameters
3.1.3 Discussion of Input Parameters

The input data are derived directly from the geologic analysis conducted as part of this study. Data from
analysis of core retrieved from drilled core holes and from injection fall off test derived permeability data
is not available for this analysis. For those variables not available through the geologic data provided, ARI
used properties thought to be most analogous to the coal seams of the Chuperbhta and Brahmani basins.
The input parameters used to simulate the development of the Rajmahal Project Area are presented in
Exhibit 27. A brief discussion of the source of each of the parameters, listed in their relative order of
importance in terms of their impact on production, is provided below.
3.1.3.1 Permeability
Because no permeability data exists for the Rajmahal CSG block, ARI has assumed reasonable
permeability figures based on our experience in India. For the Monte Carlo simulations, a triangular
permeability distribution having a minimum value of 0.5 millidarcy (mD), a most likely value of 5.0 mD,
and a maximum value of 10.0 mD was used.
This probability distribution was input into the Comet3 model and used in the probabilistic determination
of recoverable resources. For each of 500 iterations, Comet3 selected a value of permeability from this
probability distribution for each layer of the model.
3.1.3.2 Methane Isotherm

The isotherm used in this simulation study was provided by EOL. A Langmuir volume of 13.0 cubic meters
per tonne (m3/tonne) (505.7 standard cubic feet per ton, scf/ton) and a Langmuir pressures of
4021 kilopascal (kPa) (583 pounds per square inch absolute, psia) were used in the simulations. Exhibit 23
is a graphical representation of the isotherm used in the reservoir simulations.
527

EOL Rajmahal Isotherm

Coal: VL = 505.7 scf/ton, PL = 583.2 psia
500
450
400
Gas Concentration (scf/ton)
350
300
250
200
150
100
50
-
- 500 1,000 1,500 2,000 2,500 3,000 3,500
Pressure (psia) 26MAR201023562689

Exhibit 23: Rajmahal Isotherm
An average coal density of 1.4 grams per cubic centimeter (gm/cc) was used to convert Langmuir volume
expressed as unit volume per mass to units of standard volume to reservoir volume for use in the Comet3
reservoir simulator.
3.1.3.3 Gas Content

As previously mentioned, no gas content data are available for the Rajmahal CSG block. However, data
available from the nearby Birbhum coalfield suggests that values of approximately 4 to 5 m3/tonne should
be reasonable values. These data compared to the desorption isotherm shown in Exhibit 23 suggest that
the coals of the Rajmahal CSG block may be undersaturated, however, this is not certain. Therefore, the
Monte Carlo reservoir simulations utilize a triangular gas content distribution having a minimum value of
7.65 standard cubic feet per cubic foot (scf/cf) (4.5 m3/tonne, 175.1 scf/ton), a most likely value of
11.89 scf/cf (7.0 m3/tonne, 272.3 scf/ton), and a maximum value of 14.37 scf/cf (8.46 m3/tonne,
329.1 scf/ton).
This probability distribution was allowed to vary by layer, and as a result, the possibility of under-saturation
of a layer is accounted for in the simulation. This is accomplished by the fact that when Comet3 selects a
gas content that falls below the isotherm, the selected gas content is used, whereas, when the selected gas
content lies above the isotherm, the isotherm calculated value is used. In other words, in any particular
Monte Carlo iteration, if the selected gas content predict a value higher than the desorption isotherm, the
desorption isotherm calculated value will be utilized.
3.1.3.4 Seam Thickness

The seam thicknesses were derived from the map of the RM-E CSG-2008/IV CBM Block showing the
estimated total coal isopach of cumulative coal thickness as shown in Exhibit 24. As mentioned previously,
the model was constructed in 4 layers. Exhibit 25 shows the depth and thickness that was used for each
model representing each contour interval.
528

26MAR201023593570
Exhibit 24: Rajmahal Coalfield, Isopach Map of Cumulative Coal Thickness
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3.1.3.5 Porosity
For purposes of Monte Carlo simulation, ARI has assumed a triangular probability distribution for
porosity with a minimum value of 1.5%, a most likely value of 2.0%, and a maximum value of 2.5%. In this
case, 1.5% is the most optimistic case, and 2.5% is the most pessimistic case. Porosity is allowed to vary for
according to this probability distribution by layer for each iteration.
EOL Rajmahal CBM Block

Depth and Thicknesses for Reservoir Simulation
30M Total
Depth (ft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1566.2 1615.4 1664.6 1713.8

Thickness (ft) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.6 24.6 24.6 24.6 98
Exhibit 25: Depth and Thickness for Reservoir Simulation
3.1.3.6 Initial Water Saturation

Coal seams were assumed to be 100% water saturated as there is no evidence seen to date that free gas
exists in the coal seams of the Rajmahal CSG Block.
3.1.3.7 Well Spacing

A developmental well spacing of 32 hectares (80 acres) was used for the simulation of the project. This is
consistent with the range of permeability assumed for the simulations. The 32 hectare (80-acre) spacing
used reflects the majority of coal seam gas projects in the U.S.
3.1.3.8 Bottom-hole Pressure

A bottom-hole minimum pressure constraint of 2.1 kilograms per cubic centimeter (kg/cm2) (30 pounds
per square inch, psi) was used in the model. In coal seam gas operations, low bottom-hole pressure is
required to achieve maximum gas production.
3.1.3.9 Initial Reservoir Pressure

The pressure gradient was assumed to be 0.433 psi/ft (normal pressure gradient). This pressure gradient is
multiplied by the depth in order to calculate initial reservoir pressure. As previously mentioned, the depth
is allowed to vary according to a uniform probability distribution ranging from 500 meters to 750 meters.
This probability distribution has been utilized in the Monte Carlo simulations, and this single pressure
gradient has been utilized in each iteration for all layers.
3.1.3.10 Sorption Time

Sorption time is defined as the length of time required for 63% of the gas in a sample to be desorbed. In
this study we have used a sorption time of 10 days.
3.1.3.11 Desorption Pressure

The desorption pressure is determined in Comet3 by the point of intersection of the gas content and the
isotherm (both described previously).
3.1.3.12 Relative Permeability

Data sufficient to determine relative permeability by the production history matching technique is not
available from the Rajmahal CSG Block. As a result, ARI used a relative permeability curve thought to be
representative for this region. This relative permeability curve is presented in Exhibit 26.
530

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EOL Rajmahal Relative Permeability

100%
CH4 Water
90%
80%
Relative Permeability (frac.)
70%
60%
50%
40%
30%
20%
10%
0%
0% 20% 40% 60% 80% 100%
Water Saturation (frac.) 26MAR201023562512
Exhibit 26: Relative Permeability
531

3.1.3.13 Summary Parameters

Exhibit 27 is a summary of reservoir and operational parameters utilized in this study.
Target Coal Seam Barakar Coal Measures Comments
Depth, feet . . . . . . . . . . . . . . . . . . . . . . . . . . . Prob. Distribution Uniform: 500-750 meters

Net Coal Thickness, feet . . . . . . . . . . . . . . . . . 30 meters assumed
Pressure Gradient, psi/ft . . . . . . . . . . . . . . . . . 0.433 psi/ft assumed
Initial Water Saturation, % . . . . . . . . . . . . . . . 100% assumed
In Situ Langmuir Volume, scf/ton . . . . . . . . . . . 505.7 Provided by EOL
Langmuir Pressure, psia . . . . . . . . . . . . . . . . . . 583.2 Provided by EOL
In Situ Gas Content, scf/ton . . . . . . . . . . . . . . . Prob. Distribution Tri. 7.65 x 11.89 x 14.37
Gas Saturation, % . . . . . . . . . . . . . . . . . . . . . . See gas content Desorption Results/Isotherm
Sorption Time, days . . . . . . . . . . . . . . . . . . . . . 10 Desorption Data
Absolute Cleat Permeability, md . . . . . . . . . . . Prob. Distribution See Exhibit 16
Cleat Porosity, % . . . . . . . . . . . . . . . . . . . . . . Prob. Distribution Tri. 1.5 x 2.0 x 2.5
Pore Volume Compressibility, 10-6 psi-1 . . . . . . 200 Assumed
Gas Gravity . . . . . . . . . . . . . . . . . . . . . . . . . . 0.60 Assumed
Water Viscosity at Reservoir Conditions,
centipoise (cP) . . . . . . . . . . . . . . . . . . . . . . . 0.44 Assumed
Water Formation Volume Factor, reservoir
barrels per stock tank barrels (RB/STB) . . . . 1.00 Calculation
Completion and Stimulation . . . . . . . . . . . . . . . Wells are hydraulically fractured, achieving a skin
factor of 4.3.
Well Operation . . . . . . . . . . . . . . . . . . . . . . . . Wells are pumped off at a maximum pump rate of
800 stock tank barrels of water (STBW) per day to a
minimum bottom-hole pressure of 30 psia.
Well Spacing, acres/well . . . . . . . . . . . . . . . . . . 80 acres per well
Exhibit 27: Reservoir and Operational Parameters
3.1.4 Development of Type Curves

The development area was limited to 70% of the total Rajmahal CSG block area to account for forested
areas as well as other topographic, cultural and geologic features that would be undrillable. Due to the lack
of data, a single model was used to simulate the entire area comprising 189,800 acres (768 km2). The yearly
production for gas and for water for the P90, P50, and P10 probability levels were generated by Comet3,
and these type curves were used in calculating the economics. These type curves are shown in Exhibit 28
through Exhibit 31.
Please note that in the curves generated by Comet3, P10 has the meaning that 10% of cases have a value
equal to or lower than the P10 value, P90 has the meaning that 90% of cases have a value equal to or lower
than the P90 value. This is the convention that is used by reservoir simulation, which is the opposite of the
convention of that used in the PRMS, namely that P10 has the meaning that the likelihood of occurrence is
10% or less.
532

FIELD
600
P10
P50
P90
500
Gas Production Rate, MSCFD
400
300
200
100
2000
4000
6000
8000
10000
Days 26MAR201023595083
Exhibit 28: Rajmahal gas production rate (thousand standard cubic feet per day, mscfd)
FIELD
P10
P50
P90
700
600
H2O Production Rate, BPD
500
400
300
200
100
2000
4000
6000
8000
10000
Days 27MAR201000001059
Exhibit 29: Rajmahal water production rate (barrels per day, bpd)
533

FIELD
2400000
P10
P50
P90
2100000
1800000
Cum Gas Production, MSCF
1500000
1200000
900000
600000
300000
2000
4000
6000
8000
10000
Days 26MAR201023594832
Exhibit 30: Rajmahal gas cumulative production (thousand standard cubic feet, mscf)
FIELD
720000
P10
P50
P90
640000
560000
480000
Cum H2O Production, BBLS
400000
320000
240000
160000
80000
2000
4000
6000
8000
10000
Days 27MAR201000000743
Exhibit 31: Rajmahal water cumulative production (barrels, bbls)
534

3.2 Prospective Resources

Exhibit 32 shows the estimate of Prospective Resources as determined by the methodology detailed above.
Prospective Resources
Lead to Prospect Maturity Level
Probabilistic Calculation
Original Gas Recoverable
Classification In Place Volume
(bcf) (bcf)
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,480 3,830.0
Best . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,480 4,722.8
High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,480 5,564.0
Exhibit 32: Prospective Resources
535

MERRILL CORPORATION JDICKSO//30-APR-10 12:29 DISK116:[10ZAU1.10ZAU70801]UA70801A.;27
RESOURCES ASSESSMENT
Assessment of
Contingent Resources and Cash Flow
and Unrisked Prospective Resources
to the Essar Exploration and Production
Limited Interest
in Oil Prospecting License 226
Located Offshore Nigeria
As of December 31, 2009
536

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MERRILL CORPORATION JDICKSO//30-APR-10 12:37 DISK116:[10ZAU1.10ZAU70801]UB70801A.;32
April 30, 2010
Essar Exploration and Production Limited Essar Energy Holdings Limited

Rogers House Rogers House
5, President John Kennedy Street 5, President John Kennedy Street
Port Louis Port Louis
Mauritius Mauritius
Essar Energy plc J.P. Morgan Securities Ltd.

3rd Floor, Lansdowne House 125 London Wall
57 Berkeley Square London EC2Y 5AJ
London W1J 6ER England
England
Deutsche Bank AG, London Branch

Winchester House
London EC2N 2DB
England
Ladies and Gentlemen:

In accordance with your request, we have conducted an assessment of the contingent resources and cash
flow and unrisked prospective resources, as of December 31, 2009, to the Essar Exploration and
Production Limited (EEPL) interest in Oil Prospecting License (OPL) 226 located offshore Nigeria. OPL
226 will be part of a production sharing contract (PSC); terms of the PSC were provided by EEPL. It is our
understanding that this report will be included as part of a document (the Prospectus) to be published in
connection with a global offering of shares and the admission of the ordinary shares of Essar Energy PLC
(Essar Energy) to the Official List of the Financial Services Authority and the admission of the ordinary
shares to trading on the London Stock Exchange PLC’s main market for listed securities. This report has
been prepared using price and cost parameters specified by EEPL, as discussed in subsequent paragraphs
of this letter. Economic analysis has not been performed for the contingent gas and associated gas
condensate resources or the prospective resources. The estimates in this report have been prepared in
accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management
System (PRMS) approved by the Society of Petroleum Engineers; definitions are presented immediately
following this letter. Following the definitions is a list of abbreviations used in this report.
CONTINGENT RESOURCES
Contingent resources are those quantities of petroleum that are estimated, as of a given date, to be
potentially recoverable from known accumulations, but for which the applied project or projects are not
yet considered mature enough for commercial development because of one or more contingencies.
Because of the difference in maturity between the oil and gas markets in Nigeria, the oil and gas resources
within the contingent resources category are further divided by subclass, as described in the 2007 PRMS.
The contingent resources shown in this report have been estimated using deterministic methods. Once all
contingencies have been successfully addressed, the probability that the quantities of contingent resources
actually recovered will equal or exceed the estimated amounts is at least 90 percent for the low estimate, at
least 50 percent for the best estimate, and at least 10 percent for the high estimate. For the purposes of this
report, the volumes and parameters associated with the low, best, and high estimate scenarios of
contingent resources are referred to as 1C, 2C, and 3C, respectively. The estimates of contingent resources
included herein have not been adjusted for commercial risk.
Development Pending
The contingent oil resources estimated in this report have been subclassified as development pending.
Contingent resources subclassified as development pending are those resources from a discovered
accumulation where project activities are ongoing to justify commercial development in the foreseeable
future. The estimates of contingent oil resources in this report are for the 6100 Sand discovered in 2001 by
the Noa 1 well in the Noa West Discovery. The oil resources shown in this report are contingent upon
(1) approval of contract terms by all parties, (2) finalization and approval of development plans,
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(3) demonstration of economic viability of the project, and (4) commitment of the operator to develop the
resources. The costs required to resolve these contingencies have not been included in this report;
estimates of cash flow are based on the assumption that all contingencies will be resolved. If these issues
are resolved, some portion of the contingent oil resources estimated in this report may then be reclassified
as reserves. The actual volumes reclassified will depend on the final approved development plan.
We estimate the contingent oil resources, subclass development pending, and net contingent cash flow to
the EEPL interest in OPL 226, as of December 31, 2009, to be:
Contingent Subclass: Development Pending

Contingent Oil Net Contingent
Resources (MBBL) Cash Flow (M$)
Gross Discounted
Category (100 Percent) Net Total at 10%
Low Estimate (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,497.4 4,640.7 83,803.6 34,694.0

Best Estimate (2C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,072.9 5,437.3 120,512.2 56,874.5
High Estimate (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,653.3 6,109.6 147,727.5 68,824.4
The oil resources shown include crude oil only. Oil volumes are expressed in thousands of barrels (MBBL);
a barrel is equivalent to 42 United States gallons. Cash flow estimates are expressed in thousands of United
States dollars (M$).
Gross contingent revenue to the EEPL interest is prior to deducting royalty and taxes. Net contingent cash
flow is composed of revenue from cost recovery (Cost Oil) and a specified percentage of net profits (Profit
Oil) after all royalties, taxes, operating expenses, and capital costs have been deducted. The net contingent
cash flow has been discounted at an annual rate of 10 percent to indicate the effect of time on the value of
money; the discounted contingent cash flow should not be construed as being the fair market value of the
properties.
As requested, this report has been prepared using oil price parameters specified by EEPL. Oil prices used
are Brent crude futures prices and have not been adjusted for quality, transportation, or marketing fees.
No gas revenues have been estimated. Oil prices used are shown in the following table:
Period Ending Oil Price ($/Barrel)
12-31-2010 84.80
12-31-2011 89.60
12-31-2012 91.60
12-31-2013 93.10
12-31-2014 94.80
Thereafter 85.00
Lease and well operating cost estimates used in this report were provided by EEPL. These are estimates of
costs to be incurred at and below the district and field levels. Headquarters general and administrative
overhead expenses of EEPL are included for personnel involved in project design and execution only.
Other EEPL overhead expenses have not been included. Additional operating costs are included for
production bonuses and abandonment cost accrual. Lease and well operating costs are held constant
throughout the lives of the properties. Capital cost estimates were provided by EEPL and are included as
required for new development wells and production equipment. The future capital costs are held constant
throughout the lives of the properties.
Development Not Viable

The discovered gas and associated gas condensate resources have been classified as development not
viable. Contingent resources subclassified as development not viable are those resources from a discovered
accumulation for which there are no current plans to develop or to acquire additional data at this time
because of limited production potential. The estimates of contingent gas and associated gas condensate
resources in this report are for the Dubagbene, Nduri, Noa West, and Oyama Discoveries. At the time of
reporting, the contingent gas and associated gas condensate resources for these discoveries are not found
to have potential for eventual commercial development. However, the theoretically recoverable quantities
are recorded so that the potential opportunity will be recognized in the event of a major change in
technology or commercial conditions. This report does not include any economic analysis of these
properties. The gas and associated gas condensate resources shown in this report have contingencies that
538

include, but are not limited to, (1) establishment of a gas development agreement with the Nigerian
National Petroleum Corporation, (2) approval of contract terms by all parties, (3) finalization and approval
of development plans, (4) demonstration of economic viability of the project, and (5) commitment of the
operator to develop the resources. If these issues are resolved, some portion of the contingent gas
resources estimated in this report may be reclassified as reserves.
We estimate the gross (100 percent) contingent gas and associated gas condensate resources, subclass
development not viable, to the EEPL interest in OPL 226, as of December 31, 2009, to be:
Gross (100 Percent) Contingent Resources

Contingent Subclass: Development Not Viable
Low Estimate (1C) Best Estimate (2C) High Estimate (3C)
Gas Condensate Gas Condensate Gas Condensate
Discovery (MMCF) (MBBL) (MMCF) (MBBL) (MMCF) (MBBL)
Dubagbene . . . . . . . . . . . . . . . 6,021.1 18.1 9,411.5 28.2 13,212.7 39.6

Nduri . . . . . . . . . . . . . . . . . . . 13,386.7 40.2 45,843.6 137.5 126,686.8 380.1
Noa West . . . . . . . . . . . . . . . . 70,907.2 212.7 84,379.8 253.1 115,730.1 347.2
Oyoma . . . . . . . . . . . . . . . . . . 49,240.3 147.7 76,185.8 228.6 106,497.8 319.5
Total . . . . . . . . . . . . . . . . . . 139,555.3 418.7 215,820.7 647.5 362,127.4 1,086.4
Totals may not add because of rounding.
Gas volumes are expressed in millions of cubic feet (MMCF) at standard temperature and pressure bases.
PROSPECTIVE RESOURCES
The prospective resources included in this report indicate exploration opportunities and development
potential in the event a petroleum discovery is made and should not be construed as reserves or contingent
resources. Prospective resources are those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from undiscovered accumulations by application of future development projects.
Upon discovery of oil, some portion of the oil volumes may be produced under the PSC terms provided by
EEPL. Gas volumes will require EEPL and the Nigerian government to enter into a gas development
agreement before any production can take place. A geologic risk assessment was performed for these
prospects, as discussed in subsequent paragraphs. This report does not include economic analysis for these
properties. Based on analogous field developments, it appears that, assuming a discovery is made, the
unrisked best estimate prospective oil resources in this report have a reasonable chance of being
commercial.
We estimate the unrisked gross (100 percent) prospective resources for these prospects, as of
December 31, 2009, to be:
Unrisked Gross (100 Percent) Prospective Resources

Geologic
Low Estimate Best Estimate High Estimate Risk
Oil(2) Gas Oil(2) Gas Oil(2) Gas Factor
Prospect(1) (MBBL) (MMCF) (MBBL) (MMCF) (MBBL) (MMCF) (decimal)
Nduri West . . . . . . . . . . . . . . . . . 148.4 85,388.1 418.8 144,048.0 899.4 241,705.5 0.48

Noa East . . . . . . . . . . . . . . . . . . 12,096.4 32,680.1 24,789.1 68,868.0 49,764.9 153,483.1 0.35
Noa North (East) . . . . . . . . . . . . 2,068.0 19,208.2 3,520.8 30,697.4 5,852.5 51,581.8 0.40
Noa North (West) . . . . . . . . . . . . 3,014.4 5,814.3 5,040.7 10,838.5 8,183.9 20,284.4 0.26
Noa Northeast . . . . . . . . . . . . . . 14,439.8 74,073.1 25,692.4 152,304.3 44,577.5 354,519.2 0.30
Noa West Deep . . . . . . . . . . . . . 9,540.2 6,232.6 17,702.2 12,927.0 31,812.8 25,254.9 0.33
Total(3) . . . . . . . . . . . . . . . . . . 41,307.1 223,396.4 77,164.0 419,683.1 141,091.1 846,829.8
(1) Each prospect is the arithmetic sum of probability distributions for each reservoir.
(2) Greater than 97 percent of oil resources are crude oil; the remainder is associated gas condensate.
(3) Totals are the arithmetic sum of multiple probability distributions.
The prospective resources shown in this report have been estimated using probabilistic methods and are
dependent on a petroleum discovery being made. If a discovery is made, the probability that the unrisked
539

quantities of oil and gas discovered will equal or exceed the estimated amounts is at least 90 percent for the
low estimate, at least 50 percent for the best estimate, and at least 10 percent for the high estimate. This
assessment does not address commercial or contractual risks associated with these prospects. As
recommended in the 2007 PRMS, the low, best, and high estimate prospective resources have been
aggregated beyond the reservoir level by arithmetic summation; therefore, these totals do not include the
portfolio effect that might result from statistical aggregation.
A geologic risk assessment was conducted for each prospect. Geologic risking of prospective resources
addresses the probability of success for the discovery of petroleum; this risk analysis is conducted
independently of probabilistic estimations of petroleum volumes and without regard to the chance of
development. Principal risk elements of the petroleum system include (1) trap and seal characteristics;
(2) reservoir presence and quality; (3) source rock capacity, quality, and maturity; and (4) timing,
migration, and preservation of petroleum in relation to trap and seal formation. Geologic risk assessment
is a highly subjective process dependent upon the experience and judgment of the evaluators and is subject
to revisions with further data acquisition or interpretation. Included in this report is a discussion of the
primary risk elements for each prospect. Unrisked prospective resources are estimated ranges of
recoverable oil and gas volumes assuming a petroleum discovery is made and are based on estimated
ranges of undiscovered in-place volumes.
Each prospect was evaluated to determine probabilistic ranges of in-place and recoverable petroleum and
was risked as an independent entity without dependency between potential prospect drilling outcomes. If
petroleum discoveries are made, smaller-volume prospects may not be commercial to independently
develop although they may become candidates for satellite developments and tie-backs to existing
infrastructure at some future date. The development infrastructure and data obtained from early
discoveries will alter both prospect risk and future economics of subsequent discoveries and developments.
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SUMMARY
As shown in the Table of Contents, the Technical Discussion section of this report includes an overview of
the license area, a discussion of the technical approach used in our assessments, and discussions of
contingent and prospective resources. Also included are a summary of the license terms and a review of the
data available for this evaluation. Included in the Figures section are pertinent maps, a stratigraphic
column, and a type log. The Appendix section of this report contains additional tables.
For the purposes of this report, we did not perform any field inspection of the properties, nor did we
examine the mechanical operation or condition of the wells and facilities. We have not investigated
possible environmental liability related to the properties; therefore, our estimates do not include any costs
due to such possible liability. Future revenue estimates include EEPL’s estimates of the costs to abandon
the wells, platforms, and production facilities, net of any salvage value. Abandonment costs are included as
capital costs.
The resources shown in this report are estimates only and should not be construed as exact quantities. If
the resources are recovered, the revenues therefrom and the costs related thereto could be more or less
than the estimated amounts. Because of governmental policies and uncertainties of supply and demand,
the sales rates, prices received for the resources, and costs incurred in recovering such resources may vary
from assumptions made while preparing this report. Estimates of resources may increase or decrease as a
result of future operations, market conditions, and changes in regulations.
For the purposes of this report, we used technical and economic data including, but not limited to, well
logs, geologic maps, seismic data, well test data, price and cost information, and ownership interests based
on PSC terms. The resources in this report have been estimated using a combination of deterministic and
probabilistic methods; these estimates have been prepared in accordance with generally accepted
petroleum engineering and evaluation principles. We used standard engineering and geoscience methods,
or a combination of methods, such as volumetric analysis and analogy, that we considered to be
appropriate and necessary to establish resources quantities and resources categorization that conform to
the 2007 PRMS definitions and guidelines. These resources are for undeveloped locations and are based
on estimates of reservoir volumes and recovery efficiencies along with analogy to properties with similar
geologic and reservoir characteristics; it may be necessary to revise these estimates as additional data
become available. In evaluating the information at our disposal concerning this report, we have excluded
from our consideration all matters as to which the controlling interpretation may be political,
socioeconomic, legal or accounting, rather than engineering and geoscience. As in all aspects of oil and gas
evaluation, there are uncertainties inherent in the interpretation of engineering and geoscience data;
therefore, our conclusions necessarily represent only informed professional judgment. We hereby assert
that there has been no material change in any of the data used in this evaluation that would cause us to
materially alter the estimates set forth herein.
Netherland, Sewell & Associates, Inc. (NSAI) was established in 1961 and has offices in Dallas and
Houston, Texas. Our company has conducted technical reserves and deliverability studies for financial
institutions, private and government companies, and government agencies throughout the world. Our staff
and associates work as a team to provide the integrated expertise required for complex field studies and
reserves evaluations. We are independent petroleum engineers, geologists, geophysicists, and
petrophysicists; with the exception of the provision of professional services on a fee basis, NSAI has no
commercial arrangement with any person or company involved in OPL 226 that is the subject of this
report. This fee is not contingent on the results obtained and reported, and NSAI will receive no other
benefit for the preparation of this report. We have not performed any other work that might affect our
objectivity. Neither NSAI nor any of its directors, officers, employees or sub-consultants have any
pecuniary or other interests in OPL 226 or Essar Energy or any group companies.
This evaluation has been supervised by Mr. J. Carter Henson, Jr. Mr. Henson is a Senior Vice President in
the firm’s Houston office. He has over 28 years of experience in the petroleum industry, with over 19 years
at NSAI. He is a registered Professional Engineer in the state of Texas and is a member of the Society of
Petroleum Engineers. The geoscience analysis for this report was performed by Mr. Edward C. Roy, III.
Mr. Roy is a Geologist in the firm’s Houston office. He has over 12 years of experience in the petroleum
industry. He is a licensed Professional Geologist in the state of Texas and is a member of the American
Association of Petroleum Geologists.
NSAI has given and not withdrawn our written consent to the issue of the Prospectus with our name
included within and to the inclusion of this report and references to this report in the Prospectus. For the
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purposes of Prospectus Rule 5.5.3R(2)(f), NSAI accepts responsibility for the information contained in this
report set out in this section of the Prospectus and those parts of the Prospectus which include references
to this report and declares that we have taken all reasonable care to ensure that the information contained
in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely
to affect its import.
The contractual rights to the properties have not been examined by NSAI, nor has the actual degree or
type of interest owned been independently confirmed. the data used in our estimates were obtained from
EEPL and the nonconfidential files of NSAI and were accepted as accurate. Supporting geoscience, field
performance, and work data are on file in our office. The technical persons responsible for preparing the
resources estimates presented herein meet the requirements regarding qualifications, independence,
objectivity, and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil
and Gas Reserves Information promulgated by the Society of Petroleum Engineers.
Sincerely,
NETHERLAND, SEWELL & ASSOCIATES, INC.
Texas Registered Engineering Firm F-002699
By: 29APR201005262529
C.H. (Scott) Rees III, P.E.
Chairman and Chief Executive Officer
29APR201005264153 29APR201005263681
Date Signed: April 30, 2010 Date Signed: April 30, 2010
WKB:JJL
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PETROLEUM RESERVES AND RESOURCES CLASSIFICATION AND DEFINITIONS

Excerpted from the Petroleum Resources Management System
Approved by the Society of Petroleum Engineers (SPE) Board of Directors, March 2007
This document contains information excerpted from definitions and guidelines prepared by the Oil and
Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored
by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG), and
the Society of Petroleum Evaluation Engineers (SPEE).
Preamble
Petroleum resources are the estimated quantities of hydrocarbons naturally occurring on or within the
Earth’s crust. Resource assessments estimate total quantities in known and yet-to-be-discovered
accumulations; resources evaluations are focused on those quantities that can potentially be recovered and
marketed by commercial projects. A petroleum resources management system provides a consistent
approach to estimating petroleum quantities, evaluating development projects, and presenting results
within a comprehensive classification framework.
These definitions and guidelines are designed to provide a common reference for the international
petroleum industry, including national reporting and regulatory disclosure agencies, and to support
petroleum project and portfolio management requirements. They are intended to improve clarity in global
communications regarding petroleum resources. It is expected that this document will be supplemented
with industry education programs and application guides addressing their implementation in a wide
spectrum of technical and/or commercial settings.
It is understood that these definitions and guidelines allow flexibility for users and agencies to tailor
application for their particular needs; however, any modifications to the guidance contained herein should
be clearly identified. The definitions and guidelines contained in this document must not be construed as
modifying the interpretation or application of any existing regulatory reporting requirements.
1.0 BASIC PRINCIPLES AND DEFINITIONS


dioxide, nitrogen, hydrogen sulfide and sulfur. In rare cases, non-hydrocarbon content could be greater
than 50%.
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PRODUCTION
COMMERCIAL
RESERVES
1P
TOTAL PETROLEUM INITIALLY-IN-PLACE (PIIP)
2P 3P
DISCOVERED PIIP
Increasing Chance of Commerciality

Proved Probable Possible
SUB-COMMERCIAL
CONTINGENT
RESOURCES
1C 2C 3C
UNRECOVERABLE
UNDISCOVERED PIIP
PROSPECTIVE
RESOURCES
Low Best High

Estimate Estimate Estimate
UNRECOVERABLE
Range of Uncertainty
Not to scale
28MAR201010122251
plus those quantities already produced. Further, it includes all types of petroleum Whether currently
accumulation by a project, while the vertical axis represents the ‘‘Chance of Commerciality’’, that is, the
originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as
of a given date, to be contained in known accumulations prior to production plus those estimated
quantities in accumulations yet to be discovered (equivalent to ‘‘total resources’’).
DISCOVERED PETROLEUM INITIALLY-IN-PLACE is that quantity of petroleum that is estimated, as of
a given date, to be contained in known accumulations prior to production.
PRODUCTION is the cumulative quantity of petroleum that has been recovered at a given date. While all
recoverable resources are estimated and production is measured in terms of the sales product
specifications, raw production (sales plus non-sales) quantities are also measured and required to support
engineering analyses based on reservoir voidage (see Production Measurement, section 3.2) .
RESERVES are those quantities of petroleum anticipated to be commercially recoverable by application of
development projects to known accumulations from a given date forward under defined conditions.
Reserves must further satisfy four criteria: they must be discovered, recoverable, commercial, and
remaining (as of the evaluation date) based on the development project(s) applied. Reserves are further
categorized in accordance with the level of certainty associated with the estimates and may be
sub-classified based on project maturity and/or characterized by development and production status.
CONTINGENT RESOURCES are those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from known accumulations, but the applied project(s) are not yet considered
544

mature enough for commercial development due to one or more contingencies. Contingent Resources may
include, for example, projects for which there are currently no viable markets, or where commercial
recovery is dependent on technology under development, or where evaluation of the accumulation is
insufficient to clearly assess commerciality. Contingent Resources are further categorized in accordance
with the level of certainty associated with the estimates and may be subclassified based on project maturity
and/or characterized by their economic status.
UNDISCOVERED PETROLEUM INITIALLY-IN-PLACE is that quantity of petroleum estimated, as of a
given date, to be contained within accumulations yet to be discovered.
PROSPECTIVE RESOURCES are those quantities of petroleum estimated, as of a given date, to be
Prospective Resources have both an associated chance of discovery and a chance of development.
Prospective Resources are further subdivided in accordance with the level of certainty associated with
recoverable estimates assuming their discovery and development and may be sub-classified based on
project maturity.
UNRECOVERABLE is that portion of Discovered or Undiscovered Petroleum Initially-in-Place quantities
which is estimated, as of a given date, not to be recoverable by future development projects. portion of
these quantities may become recoverable in the future as commercial circumstances change or
technological developments occur; the remaining portion may never be recovered due to physical/chemical
constraints represented by subsurface interaction of fluids and reservoir rocks.
Estimated Ultimate Recovery (EUR) is not a resources category, but a term that may be applied to any
accumulation or group of accumulations (discovered or undiscovered) to define those quantities of
petroleum estimated, as of a given date, to be potentially recoverable under defined technical and

as follows:
Net
Resources
Entitlement
PROPERTY
27MAR201009581974
and cash flow schedule. The time integration of these schedules taken to the project’s technical,
cash flow projections for each project. The ratio of EU to Total Initially-in-Place quantities defines the
ultimate recovery efficiency for the development project(s). A project may be defined at various levels
and stages of maturity; it may include one or many wells and associated production and processing
facilities. One project may develop many reservoirs, or many projects may be applied to one reservoir.
545

encompassed by the project’s activities (see Commercial Evaluations, section 3.1). ‘‘Conditions’’ include
technological, economic, legal, environmental, social, and governmental factors. While economic factors
can be summarized as forecast costs and product prices, the underlying influences include, but are not
limited to, market conditions, transportation and processing infrastructure, fiscal terms, and taxes.
according to delivery specifications at the point of sale or custody transfer (see Reference Point,
section 3.2.1). The cumulative production from the evaluation date forward to cessation of production is
the remaining recoverable quantity. The sum of the associated annual net cash flows yields the estimated
future net revenue. When the cash flows are discounted according to a defined discount rate and time
period, the summation of the discounted cash flows is termed net present value (NPV) of the project (see
Evaluation and Reporting Guidelines, section 3.0).
The supporting data, analytical processes, and assumptions used in an evaluation should be documented in
sufficient detail to allow an independent evaluator or auditor to clearly understand the basis for estimation
and categorization of recoverable quantities and their classification.
2.0 CLASSIFICATION AND CATEGORIZATION GUIDELINES

2.1 Resources Classification
The basic classification requires establishment of criteria for a petroleum discovery and thereafter the
distinction between commercial and sub-commercial projects in known accumulations (and hence between
Reserves and Contingent Resources).
2.1.1 Determination of Discovery Status

A discovery is one petroleum accumulation, or several petroleum accumulations collectively, for which one
or several exploratory wells have established through testing, sampling, and/or logging the existence of a
significant quantity of potentially moveable hydrocarbons.
In this context, ‘‘significant’’ implies that there is evidence of a sufficient quantity of petroleum to justify
estimating the in-place volume demonstrated by the well(s) and for evaluating the potential for economic
recovery. Estimated recoverable quantities within such a discovered (known) accumulation(s) shall initially
be classified as Contingent Resources pending definition of projects with sufficient chance of commercial
development to reclassify all, or a portion, as Reserves. Where in-place hydrocarbons are identified but are
546

not considered currently recoverable, such quantities may be classified as Discovered Unrecoverable, if
considered appropriate for resource management purposes; a portion of these quantities may become
recoverable resources in the future as commercial circumstances change or technological developments
occur.
2.1.2 Determination of Commerciality

Discovered recoverable volumes (Contingent Resources) may be considered commercially producible, and
thus Reserves, if the entity claiming commerciality has demonstrated firm intention to proceed with
development and such intention is based upon all of the following criteria:
• Evidence to support a reasonable timetable for development.
• A reasonable assessment of the future economics of such development projects meeting defined
investment and operating criteria.
• A reasonable expectation that there will be a market for all or at least the expected sales quantities of
production required to justify development.
• Evidence that the necessary production and transportation facilities are available or can be made
available.
• Evidence that legal, contractual, environmental and other social and economic concerns will allow for
the actual implementation of the recovery project being evaluated.
To be included in the Reserves class, a project must be sufficiently defined to establish its commercial
viability. There must be a reasonable expectation that all required internal and external approvals will be
forthcoming, and there is evidence of firm intention to proceed with development within a reasonable time
frame. A reasonable time frame for the initiation of development depends on the specific circumstances
and varies according to the scope of the project. While 5 years is recommended as a benchmark, a longer
time frame could be applied where, for example, development of economic projects are deferred at the
option of the producer for, among other things, market-related reasons, or to meet contractual or strategic
objectives. In all cases, the justification for classification as Reserves should be clearly documented.
To be included in the Reserves class, there must be a high confidence in the commercial producibility of
the reservoir as supported by actual production or formation tests. In certain cases, Reserves may be
assigned on the basis of well logs and/or core analysis that indicate that the subject reservoir is
hydrocarbon-bearing and is analogous to reservoirs in the same area that are producing or have
demonstrated the ability to produce on formation tests.
2.2 Resources Categorization

The horizontal axis in the Resources Classification (Figure 1.1) defines the range of uncertainty in
estimates of the quantities of recoverable, or potentially recoverable, petroleum associated with a project.
These estimates include both technical and commercial uncertainty components as follows:
• The total petroleum remaining within the accumulation (in-place resources).
• That portion of the in-place petroleum that can be recovered by applying a defined development
project or projects.
• Variations in the commercial conditions that may impact the quantities recovered and sold
(e.g., market availability, contractual changes).
Where commercial uncertainties are such that there is significant risk that the complete project (as initially
defined) will not proceed, it is advised to create a separate project classified as Contingent Resources with
an appropriate chance of commerciality.
2.2.1 Range of Uncertainty

The range of uncertainty of the recoverable and/or potentially recoverable volumes may be represented by
either deterministic scenarios or by a probability distribution (see Deterministic and Probabilistic Methods,
section 4.2).
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When the range of uncertainty is represented by a probability distribution, a low, best, and high estimate
shall be provided such that:
• There should be at least a 90% probability (P90) that the quantities actually recovered will equal or
exceed the low estimate.
exceed the best estimate.
exceed the high estimate.
When using the deterministic scenario method, typically there should also be low, best, and high estimates,
where such estimates are based on qualitative assessments of relative uncertainty using consistent
interpretation guidelines. Under the deterministic incremental (risk-based) approach, quantities at each
level of uncertainty are estimated discretely and separately (see Category Definitions and Guidelines,
section 2.2.2).
These same approaches to describing uncertainty may be applied to Reserves, Contingent Resources, and
Prospective Resources. While there may be significant risk that sub-commercial and undiscovered
accumulations will not achieve commercial production, it is useful to consider the range of potentially
recoverable quantities independently of such a risk or consideration of the resource class to which the
quantities will be assigned.
2.2.2 Category Definitions and Guidelines

Evaluators may assess recoverable quantities and categorize results by uncertainty using the deterministic
incremental (risk-based) approach, the deterministic scenario (cumulative) approach, or probabilistic
methods (see ‘‘2001 Supplemental Guidelines,’’ Chapter 2.5). In many cases, a combination of approaches
is used.
Use of consistent terminology (Figure 1.1) promotes clarity in communication of evaluation results. For
Reserves, the general cumulative terms low/best/high estimates are denoted as 1P/2P/3P, respectively. The
associated incremental quantities are termed Proved, Probable and Possible. Reserves are a subset of, and
must be viewed within context of, the complete resources classification system. While the categorization
criteria are proposed specifically for Reserves, in most cases, they can be equally applied to Contingent and
Prospective Resources conditional upon their satisfying the criteria for discovery and/or development.
For Contingent Resources, the general cumulative terms low/best/high estimates are denoted as 1C/2C/3C
respectively. For Prospective Resources, the general cumulative terms low/best/high estimates still apply.
No specific terms are defined for incremental quantities within Contingent and Prospective Resources.
Without new technical information, there should be no change in the distribution of technically
recoverable volumes and their categorization boundaries when conditions are satisfied sufficiently to
reclassify a project from Contingent Resources to Reserves. All evaluations require application of a
consistent set of forecast conditions, including assumed future costs and prices, for both classification of
projects and categorization of estimated quantities recovered by each project (see Commercial
Evaluations, section 3.1).
Based on additional data and updated interpretations that indicate increased certainty, portions of Possible
and Probable Reserves may be re-categorized as Probable and Proved Reserves.
Uncertainty in resource estimates is best communicated by reporting a range of potential results. However,
if it is required to report a single representative result, the ‘‘best estimate’’ is considered the most realistic
assessment of recoverable quantities. It is generally considered to represent the sum of Proved and
Probable estimates (2P) when using the deterministic scenario or the probabilistic assessment methods. It
should be noted that under the deterministic incremental (risk-based) approach, discrete estimates are
made for each category, and they should not be aggregated without due consideration of their associated
risk (see ‘‘2001 Supplemental Guidelines,’’ Chapter 2.5).
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Table 1: Recoverable Resources Classes and Sub-Classes
Class/Sub-Class Definition Guidelines

Reserves Reserves are those quantities of Reserves must satisfy four criteria: they must be
petroleum anticipated to be discovered, recoverable, commercial, and remaining
commercially recoverable by based on the development project(s) applied. Reserves
application of development projects are further subdivided in accordance with the level of
to known accumulations from a certainty associated with the estimates and may be
given date forward under defined sub-classified based on project maturity and/or
conditions. characterized by their development and production
status.
To be included in the Reserves class, a project must
be sufficiently defined to establish its commercial
viability. There must be a reasonable expectation that
all required internal and external approvals will be
forthcoming, and there is evidence of firm intention to
proceed with development within a reasonable time
frame.
A reasonable time frame for the initiation of
development depends on the specific circumstances
and varies according to the scope of the project.
While 5 years is recommended as a benchmark, a
longer time frame could be applied where, for
example, development of economic projects are
deferred at the option of the producer for, among
other things, market-related reasons, or to meet
contractual or strategic objectives. In all cases, the
justification for classification as Reserves should be
clearly documented.
To be included in the Reserves class, there must be a
high confidence in the commercial producibility of the
reservoir as supported by actual production or
formation tests. In certain cases, Reserves may be
assigned on the basis of well logs and/or core analysis
that indicate that the subject reservoir is hydrocarbon-
bearing and is analogous to reservoirs in the same
area that are producing or have demonstrated the
ability to produce on formation tests.
On Production The development project is The key criterion is that the project is receiving
currently producing and selling income from sales, rather than the approved
petroleum to market. development project necessarily being complete. This
is the point at which the project ‘‘chance of
commerciality’’ can be said to be 100%.
The project ‘‘decision gate’’ is the decision to initiate
commercial production from the project.
Approved for All necessary approvals have been At this point, it must be certain that the development
Development obtained, capital funds have been project is going ahead. The project must not be
committed, and implementation of subject to any contingencies such as outstanding
the development project is under regulatory approvals or sales contracts. Forecast
way. capital expenditures should be included in the
reporting entity’s current or following year’s approved
budget.
The project ‘‘decision gate’’ is the decision to start
investing capital in the construction of production
facilities and/or drilling development wells.
549


Justified for Implementation of the development In order to move to this level of project maturity, and
Development project is justified on the basis of hence have reserves associated with it, the
reasonable forecast commercial development project must be commercially viable at
conditions at the time of reporting, the time of reporting, based on the reporting entity’s
and there are reasonable assumptions of future prices, costs, etc. (‘‘forecast
expectations that all necessary case’’) and the specific circumstances of the project.
approvals/contracts will be obtained. Evidence of a firm intention to proceed with
development within a reasonable time frame will be
sufficient to demonstrate commerciality. There should
be a development plan in sufficient detail to support
the assessment of commerciality and a reasonable
expectation that any regulatory approvals or sales
contracts required prior to project implementation will
be forthcoming. Other than such approvals/contracts,
there should be no known contingencies that could
preclude the development from proceeding within a
reasonable timeframe (see Reserves class).
The project ‘‘decision gate’’ is the decision by the
reporting entity and its partners, if any, that the
project has reached a level of technical and
commercial maturity sufficient to justify proceeding
with development at that point in time.
Contingent Those quantities of petroleum Contingent Resources may include, for example,
Resources estimated, as of a given date, to be projects for which there are currently no viable
potentially recoverable from known markets, or where commercial recovery is dependent
accumulations by application of on technology under development, or where
development projects, but which are evaluation of the accumulation is insufficient to clearly
not currently considered to be assess commerciality. Contingent Resources are
commercially recoverable due to further categorized in accordance with the level of
one or more contingencies. certainty associated with the estimates and may be
sub-classified based on project maturity and/or
characterized by their economic status.
Development A discovered accumulation where The project is seen to have reasonable potential for
Pending project activities are ongoing to eventual commercial development, to the extent that
justify commercial development in further data acquisition (e.g. drilling, seismic data)
the foreseeable future. and/or evaluations are currently ongoing with a view
to confirming that the project is commercially viable
and providing the basis for selection of an appropriate
development plan. The critical contingencies have
been identified and are reasonably expected to be
resolved within a reasonable time frame. Note that
disappointing appraisal/evaluation results could lead to
a re-classification of the project to ‘‘On Hold’’ or
‘‘Not Viable’’ status.
The project ‘‘decision gate’’ is the decision to
undertake further data acquisition and/or studies
designed to move the project to a level of technical
and commercial maturity at which a decision can be
made to proceed with development and production.
550


Development A discovered accumulation where The project is seen to have potential for eventual
Unclarified or on project activities are on hold and/or commercial development, but further appraisal/
Hold where justification as a commercial evaluation activities are on hold pending the removal
development may be subject to of significant contingencies external to the project, or
significant delay. substantial further appraisal/evaluation activities are
required to clarify the potential for eventual
commercial development. Development may be
subject to a significant time delay. Note that a change
in circumstances, such that there is no longer a
reasonable expectation that a critical contingency can
be removed in the foreseeable future, for example,
could lead to a reclassification of the project to ‘‘Not
Viable’’ status.
The project ‘‘decision gate’’ is the decision to either
proceed with additional evaluation designed to clarify
the potential for eventual commercial development or
to temporarily suspend or delay further activities
pending resolution of external contingencies.
Development Not A discovered accumulation for The project is not seen to have potential for eventual
Viable which there are no current plans to commercial development at the time of reporting, but
develop or to acquire additional the theoretically recoverable quantities are recorded
data at the time due to limited so that the potential opportunity will be recognized in
production potential. the event of a major change in technology or
commercial conditions.
The project ‘‘decision gate’’ is the decision not to
undertake any further data acquisition or studies on
the project for the foreseeable future.
Prospective Those quantities of petroleum Potential accumulations are evaluated according to
Resources which are estimated, as of a given their chance of discovery and, assuming a discovery,
date, to be potentially recoverable the estimated quantities that would be recoverable
from undiscovered accumulations. under defined development projects. It is recognized
that the development programs will be of significantly
less detail and depend more heavily on analog
developments in the earlier phases of exploration.
Prospect A project associated with a Project activities are focused on assessing the chance
potential accumulation that is of discovery and, assuming discovery, the range of
sufficiently well defined to represent potential recoverable quantities under a commercial
a viable drilling target. development program.
Lead A project associated with a Project activities are focused on acquiring additional
potential accumulation that is data and/or undertaking further evaluation designed
currently poorly defined and to confirm whether or not the lead can be matured
requires more data acquisition into a prospect. Such evaluation includes the
and/or evaluation in order to be assessment of the chance of discovery and, assuming
classified as a prospect. discovery, the range of potential recovery under
feasible development scenarios.
Play A project associated with a Project activities are focused on acquiring additional
prospective trend of potential data and/or undertaking further evaluation designed
prospects, but which requires more to define specific leads or prospects for more detailed
data acquisition and/or evaluation in analysis of their chance of discovery and, assuming
order to define specific leads or discovery, the range of potential recovery under
prospects. hypothetical development scenarios.
551

Table 2: Reserves Status Definitions and Guidelines
Status Definition Guidelines

Developed Developed Reserves are expected Reserves are considered developed only after the
Reserves quantities to be recovered from necessary equipment has been installed, or when the
existing wells and facilities. costs to do so are relatively minor compared to the
cost of a well. Where required facilities become
unavailable, it may be necessary to reclassify
Developed Reserves as Undeveloped. Developed
Reserves may be further sub-classified as Producing or
Non-Producing.
Developed Developed Producing Reserves are Improved recovery reserves are considered producing
Producing expected to be recovered from only after the improved recovery project is in
Reserves completion intervals that are open operation.
and producing at the time of the
estimate.
Developed Developed Non-Producing Reserves Shut-in Reserves are expected to be recovered from
Non-Producing include shut-in and behind-pipe (1) completion intervals which are open at the time of
Reserves Reserves. the estimate but which have not yet started producing,
(2) wells which were shut-in for market conditions or
pipeline connections, or (3) wells not capable of
production for mechanical reasons. Behind-pipe
Reserves are expected to be recovered from zones in
existing wells which will require additional completion
work or future re-completion prior to start of
production.
In all cases, production can be initiated or restored
with relatively low expenditure compared to the cost
of drilling a new well.
Undeveloped Undeveloped Reserves are (1) from new wells on undrilled acreage in known
Reserves quantities expected to be recovered accumulations, (2) from deepening existing wells to a
through future investments: different (but known) reservoir, (3) from infill wells
that will increase recovery, or (4) where a relatively
large expenditure (e.g. when compared to the cost of
drilling a new well) is required to (a) recomplete an
existing well or (b) install production or transportation
facilities for primary or improved recovery projects.
Table 3: Reserves Category Definitions and Guidelines
Category Definition Guidelines

Proved Reserves Proved Reserves are those If deterministic methods are used, the term
quantities of petroleum, which by reasonable certainty is intended to express a high
analysis of geoscience and degree of confidence that the quantities will be
engineering data, can be estimated recovered. If probabilistic methods are used, there
with reasonable certainty to be should be at least a 90% probability that the
commercially recoverable, from a quantities actually recovered will equal or exceed the
given date forward, from known estimate.
reservoirs and under defined
The area of the reservoir considered as Proved
economic conditions, operating
includes (1) the area delineated by drilling and
methods, and government
defined by fluid contacts, if any, and (2) adjacent
regulations.
undrilled portions of the reservoir that can reasonably
be judged as continuous with it and commercially
productive on the basis of available geoscience and
engineering data.
552


In the absence of data on fluid contacts, Proved
quantities in a reservoir are limited by the lowest
known hydrocarbon (LKH) as seen in a well
penetration unless otherwise indicated by definitive
geoscience, engineering, or performance data. Such
definitive information may include pressure gradient
analysis and seismic indicators. Seismic data alone
may not be sufficient to define fluid contacts for
Proved reserves (see ‘‘2001 Supplemental Guidelines,’’
Chapter 8).
Reserves in undeveloped locations may be classified as
Proved provided that:
• The locations are in undrilled areas of the
reservoir that can be judged with reasonable
certainty to be commercially productive.
• Interpretations of available geoscience and
engineering data indicate with reasonable
certainty that the objective formation is laterally
continuous with drilled Proved locations.
For Proved Reserves, the recovery efficiency applied
to these reservoirs should be defined based on a range
of possibilities supported by analogs and sound
engineering judgment considering the characteristics
of the Proved area and the applied development
program.
Probable Probable Reserves are those It is equally likely that actual remaining quantities
Reserves additional Reserves which analysis recovered will be greater than or less than the sum of
of geoscience and engineering data the estimated Proved plus Probable Reserves (2P). In
indicate are less likely to be this context, when probabilistic methods are used,
recovered than Proved Reserves but there should be at least a 50% probability that the
more certain to be recovered than actual quantities recovered will equal or exceed the 2P
Possible Reserves. estimate.
Probable Reserves may be assigned to areas of a
reservoir adjacent to Proved where data control or
interpretations of available data are less certain. The
interpreted reservoir continuity may not meet the
reasonable certainty criteria.
Probable estimates also include incremental recoveries
associated with project recovery efficiencies beyond
that assumed for Proved.
Possible Reserves Possible Reserves are those The total quantities ultimately recovered from the
additional reserves which analysis of project have a low probability to exceed the sum of
geoscience and engineering data Proved plus Probable plus Possible (3P), which is
indicate are less likely to be equivalent to the high estimate scenario. When
recoverable than Probable Reserves. probabilistic methods are used, there should be at
least a 10% probability that the actual quantities
recovered will equal or exceed the 3P estimate.
Possible Reserves may be assigned to areas of a
reservoir adjacent to Probable where data control and
interpretations of available data are progressively less
certain. Frequently, this may be in areas where
geoscience and engineering data are unable to clearly
define the area and vertical reservoir limits of
commercial production from the reservoir by a
defined project.
553


Possible estimates also include incremental quantities
that assumed for Probable.
Probable and (See above for separate criteria for The 2P and 3P estimates may be based on reasonable
Possible Reserves Probable Reserves and Possible alternative technical and commercial interpretations
Reserves.) within the reservoir and/or subject project that are
clearly documented, including comparisons to results
in successful similar projects.
In conventional accumulations, Probable and/or
Possible Reserves may be assigned where geoscience
and engineering data identify directly adjacent portions
of a reservoir within the same accumulation that may
be separated from Proved areas by minor faulting or
other geological discontinuities and have not been
penetrated by a wellbore but are interpreted to be in
communication with the known (Proved) reservoir
Probable or Possible Reserves may be assigned to areas
that are structurally higher than the Proved area.
Possible (and in some cases, Probable) Reserves may
be assigned to areas that are structurally lower than the
adjacent Proved or 2P area.
Caution should be exercised in assigning Reserves to
adjacent reservoirs isolated by major, potentially
sealing, faults until this reservoir is penetrated and
evaluated as commercially productive. Justification for
assigning Reserves in such cases should be clearly
documented Reserves should not be assigned to areas
that are clearly separated from a known accumulation
by non-productive reservoir (i.e., absence of reservoir,
structurally low reservoir, or negative test results);
such areas may contain Prospective Resources.
In conventional accumulations, where drilling has
defined a highest known oil (HKO) elevation and
there exists the potential for an associated gas cap,
Proved oil Reserves should only be assigned in the
structurally higher portions of the reservoir if there is
reasonable certainty that such portions are initially
above bubble point pressure based on documented
engineering analyses. Reservoir portions that do not
meet this certainty may be assigned as Probable and
Possible oil and/or gas based on reservoir fluid
properties and pressure gradient interpretations.
The 2007 Petroleum Resources Management System can be viewed in its entirety at
http://www.spe.org/spe-app/spe/industry/reserves/prms.htm.
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ABBREVIATIONS
$ United States dollars

1C low estimate scenario of contingent resources
2C best estimate scenario of contingent resources
3C high estimate scenario of contingent resources
EEPL Essar Exploration and Production Limited
Essar Energy Essar Energy PLC
FPSO floating production, storage, and offloading vessel
M$ thousands of United States dollars
MBBL thousands of barrels
MMBBL millions of barrels
MMCF millions of standard cubic feet
NSAI Netherland, Sewell & Associates, Inc.
OML Oil Mining Lease
OPL Oil Prospecting License
PPT petroleum profits tax
PRMS Petroleum Resources Management System
PSC production sharing contract
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TABLE OF CONTENTS
Page
Number
TECHNICAL DISCUSSION
1.0 General Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
2.0 Asset Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560
2.1 Ownership Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560
2.2 License Area History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560
2.3 Geology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560
3.0 Evaluation Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561
4.0 Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562
4.1 Development Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562
4.1.1 Noa West Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 562
4.1.1.1 Estimation of Production Forecasts . . . . . . . . . . . . . . . . . . . . . . 563
4.1.1.2 Economic Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563
4.1.1.2.1 Working Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563
4.1.1.2.2 Effective Date and PSC Term . . . . . . . . . . . . . . . . . . 563
4.1.1.2.3 Minimum Work Program . . . . . . . . . . . . . . . . . . . . . . 563
4.1.1.2.4 Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563
4.1.1.2.5 Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564
4.1.1.2.6 Royalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564
4.1.1.2.7 Cost Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564
4.1.1.2.8 Petroleum Profits Tax . . . . . . . . . . . . . . . . . . . . . . . . 564
4.1.1.2.9 Sharing of Profit Oil . . . . . . . . . . . . . . . . . . . . . . . . . 564
4.1.1.2.10 Signature and Production Bonus . . . . . . . . . . . . . . . . 564
4.1.1.2.11 Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565
4.2 Development Not Viable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565
4.2.1 Dubagbene Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565
4.2.2 Nduri Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566
4.2.3 Noa West Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566
4.2.4 Oyama Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566
5.0 Prospective Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567
5.1 Nduri West Prospect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568
5.2 Noa East Prospect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568
5.3 Noa North (East) Prospect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568
5.4 Noa North (West) Prospect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568
5.5 Noa Northeast Prospect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568
5.6 Noa West Deep Prospect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568
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TABLE OF CONTENTS
Figure/Table
Number
FIGURES
Regional Location Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 570
Discovery/Prospect Location Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571
Stratigraphic Column . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 572
Type Log . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573
Deterministic Volumetric Parameters by Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574
Probabilistic Volumetric Parameters by Reservoir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574
Summary Projections of Resources and Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575
Depth Structure—Top 6100 Sand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577
APPENDIX
Summary of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 579
Summary of Estimated Contingent Oil Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580
Summary of Estimated Contingent Gas Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581
Summary of Estimated Contingent Condensate Resources . . . . . . . . . . . . . . . . . . . . . . . 582
Summary of Estimated Prospective Gas Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 583
Summary of Estimated Prospective Oil Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584
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MERRILL CORPORATION JDICKSO//30-APR-10 12:36 DISK116:[10ZAU1.10ZAU70801]UL70801A.;36
ESSAR EXPLORATION AND PRODUCTION LIMITED
REPORT ON OPL 226 INTEREST
AS OF DECEMBER 31, 2009
1.0 GENERAL OVERVIEW
flow and unrisked prospective resources, as of December 31, 2009, to the Essar Exploration and
Production Limited (EEPL) interest in Oil Prospecting License (OPL) 226 located offshore Nigeria. The
estimates in this report have been prepared in accordance with the definitions and guidelines set forth in
the 2007 Petroleum Resources Management System (PRMS) approved by the Society of Petroleum
Engineers. Contingent and prospective resources shown in this report should not be construed as reserves.
potentially recoverable from known accumulations but for which the applied project or projects are not yet
considered mature enough for commercial development because of one or more contingencies. The
contingent resources shown in this report have been estimated using deterministic methods. Because of the
difference in maturity between the oil and gas markets in Nigeria, the oil and gas resources within the
contingent resources category are further divided by subclass, as described in the 2007 PRMS.
future. Production profiles and cash flows were estimated for the contingent oil resources.
because of limited production potential. At the time of reporting, the contingent gas and associated gas
condensate resources for these discoveries are not found to have potential for eventual commercial
development. However, the theoretically recoverable quantities are recorded so that the potential
opportunity will be recognized in the event of a major change in technology or commercial conditions. This
report does not include any economic analysis of these properties.
Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially
recoverable from undiscovered accumulations by application of future development projects. Economic
analysis has not been performed for the prospective resources because of the inherent uncertainty. The
unrisked prospective resources shown in this report have been estimated using probabilistic methods and
are dependent on a petroleum discovery being made. The geologic chance of discovery is discussed and a
geologic risk factor for each prospect is included.
During the course of our evaluation, EEPL provided access to its engineering and geologic data. A
meeting was held at EEPL’s Mumbai office in September 2009. The discoveries and prospects were
initially reviewed during this meeting. Data provided by EEPL included price and cost information,
ownership interests based on production sharing contract (PSC) terms, reservoir pressure measurements,
production tests, well logs, and core analysis. In addition, EEPL provided 3-D seismic data, well log cross
sections, and its interpreted seismic time, velocity, and depth structure maps. In order to gain more
confidence in the seismic data and interpretations and to verify that those interpretations are sound, we
spent time reviewing the seismic data for OPL 226. All data sources were used, as appropriate, for the
assessment of the resources.
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2.0 ASSET OVERVIEW

OPL 226 covers 383,762 acres or 1,553 square kilometers and is located in the central offshore Niger Delta,
as shown in Figure 1. The concession is located approximately 40 kilometers from the coast in water depths
ranging from 40 to 180 meters. OPL 226 surrounds Oil Mining Lease (OML) 83, operated by Chevron
Texaco Nigeria Ltd, in which the undeveloped Anyala Field is situated. OPL 226 will be part of a PSC;
terms of the PSC were provided by EEPL. Key terms of this PSC are described in Section 4.1.1.2 of this
Technical Discussion.
2.2 License Area History

The location map in Figure 2 shows six wells that have been drilled on OPL 226. The Anyala 1 well was
drilled by exaco Overseas Nigeria Petrol in 1972 on a large, four-way structural closure. The well found a
total of 88 meters of net gas pay and 13 meters of net oil pay in five different sands. It is the discovery well
for Anyala Field. The area surrounding this well was carved out of the original OPL 226 to create what is
now OML 83.
In 1972 two additional wells were drilled by Deminex Nigeria Ltd in the license area. The Dubagbene 1
well was drilled to a total depth of 3,150 meters on a four-way structural complex on the northwest end of
Anyala Field. It found 8 meters of net gas pay. The Oyoma 1 well was drilled on a downthrown fault block
on the southwest flank of the Anyala Field structure and found 27 meters of net gas pay.
The Nduri 1 well was drilled by Occidental Petroleum of Nigeria in 1973 on a small footwall closure with a
direct hydrocarbon-indicating amplitude and found 9 meters of net gas pay. In 1987 Shell Petroleum
Development Company of Nigeria Limited drilled the HJ-South 1 well at a location southeast of the
Anyala Field structure to a total depth of 2,020 meters. his well was reported to have encountered 51
meters of net gas pay.
Most recently the Noa 1 well was drilled by Nexen Petroleum in 2001 to a total depth of 2,958 meters on
the southern flank of the Anyala Field structure. A total of 54 meters of net oil and gas pay was found in
four sands. Two of the sands encountered hydrocarbon-water contacts.
2.3 Geology
OPL 226 is located in the Niger Delta region. The stratigraphy of the Niger Delta is well documented and
illustrated in the stratigraphic column shown in Figure 3. The base of the section is identified by the
Eocene to early Miocene Akata Formation. The Akata Formation is dominated by basin floor fan and
slope mudstones and is considered the source rock for most of the Niger Delta.
Conformably overlying the Akata Formation is the Upper Miocene-Pliocene Agbada Formation. The
Agbada Formation is an upward-shallowing sequence of sands and shales. The lowermost sands represent
fining-upward slope turbidites and intervening mudstones of prodelta and basin floor origin.
These deeper water sediments prograde upward into marginal marine barrier bar sands, to distributary
deltaic sands, and finally to paralic deltaic channel complexes. Intervening shales represent minor
deepening events in an overall shallowing-upward sequence. The sequence is capped by a major
downcutting event and a later transgressive event of the Qua Iboe member of the Agbada Formation. The
Qua Iboe is most likely a regional seal for hydrocarbons.
Sediments in the OPL 226 area are presumed to be Pleistocene in age based on regional correlation. The
stratigraphy is essentially an alternation of sand and shale, typical of the paralic sequence of the Niger
Delta. The deep section of the sequence is believed to be the massive, undercompacted and overpressured
shales generally known as the Akata Formation.
A type log showing the Noa 1 well is included as Figure 4. Since the Noa 1 well was not drilled to its
projected total depth because of a hole problem, it is not believed that the well encountered the Akata
shales. The sands encountered in the Noa 1 well are fine to medium grained and moderately to well sorted.
Reservoir qualities are generally good, with porosity averaging 30 percent and permeability in excess of
one darcy. The shales are dark gray, soft to firm, subfissile and non-calcareous, with good sealing potential.
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3.0 EVALUATION METHODOLOGY

The resources assessment presented herein is based on data provided by EEPL. Deterministic methods
were used for estimating the contingent resources at the Dubagbene, Nduri, Noa West, and Oyoma
Discoveries. The available seismic data were integrated, where available, with on-trend formation tests and
reservoir data to derive our estimates of in-place and recoverable hydrocarbon volumes. Seismic travel
time was converted to depth in order to estimate the closure areas and gross rock volume of the reservoirs.
Deterministic reservoir interpretations were constructed on the basis of well logs, production tests, and 3-
Dseismic data.
Probabilistic methods were used to derive volumes for the prospective resources on OPL 226. Volumetric
estimates of original in-place hydrocarbons and recoverable volumes were calculated using a Monte Carlo
simulation of input variables. The Monte Carlo input variables were estimated from information derived
from the available seismic data, analogy to similar depositional environments and play types, and known
well log data, production data, and field developments. The low, best, and high estimate prospective
resources have been aggregated beyond the reservoir level by arithmetic summation; therefore, these totals
do not include portfolio effect that might result from statistical aggregation.
We have generally estimated for each objective reservoir in each discovery and prospect a range of values
for (1) net rock volume (based on area of closure, net reservoir thickness or gross reservoir thickness, and
net-to-gross ratio), (2) hydrocarbon yield (based on porosity, hydrocarbon saturations, and formation
volume factors), (3) gas cap to oil leg ratios, and (4) recovery factor. Recovery factors have been estimated
based on the expected reservoir drive mechanisms and analogy to known fields with similar geology and
potential development scenarios. A summary table showing deterministic volumetric input parameters for
the contingent resources is included in Figure 5. Figure 6 shows probabilistic volumetric input parameters
used in the Monte Carlo simulation for the prospective resources.
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4.0 CONTINGENT RESOURCES

We have conducted an assessment of the contingent oil resources and cash flow and contingent gas and
associated gas condensate resources, as of December 31, 2009, to the EEPL interest in OPL 226 located
offshore Nigeria. Contingent resources are those quantities of petroleum that are estimated, as of a given
date, to be potentially recoverable from known accumulations, but for which the applied project or projects
are not yet considered mature enough for commercial development because of one or more contingencies.
Because of the difference in maturity between the oil and gas markets in Nigeria, the oil and gas resources
within the contingent resources category are further divided by subclass as described in the 2007 PRMS.
actually recovered will equal or exceed the estimated amounts is at least 90 percent for the low estimate, at
least 50 percent for the best estimate, and at least 10 percent for the high estimate. For the purposes of this
report, the volumes and parameters associated with the low, best, and high estimate scenarios of
contingent resources are referred to as 1C, 2C, and 3C, respectively. The estimates of contingent resources
included herein have not been adjusted for commercial risk.
4.1 Development Pending

future. The estimates of contingent oil resources in this report are for the 6100 Sand discovered by the Noa
1 well in the Noa West Discovery (Figure 2). The oil resources shown in this report are contingent upon
resources. The costs required to resolve these contingencies have not been included in this report;
estimates of cash flow are based on the assumption that all contingencies will be resolved. If these issues
are resolved, some portion of the contingent oil resources estimated in this report may then be reclassified
as reserves. The actual volumes reclassified will depend on the final approved development plan.
As presented in Figure 7, we estimate the contingent oil resources, subclass development pending, and net
contingent cash flow to the EEPL interest in OPL 226, as of December 31, 2009, to be:
Contingent Subclass: Development Pending
Contingent Oil Net Contingent Cash
Resources (MBBL) Flow (M$)
Gross Discounted
Category (100 Percent) Net Total at 10%
Low Estimate (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,497.4 4,640.7 83,803.6 34,694.0

Best Estimate (2C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,072.9 5,437.3 120,512.2 56,874.5
High Estimate (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,653.3 6,109.6 147,727.5 68,824.4
The oil resources shown include crude oil only. Oil volumes are expressed in thousands of barrels (MBBL);
a barrel is equivalent to 42 United States gallons. Cash flow estimates are expressed in thousands of United
States dollars (M$).
Gross contingent revenue to the EEPL interest is prior to deducting royalty and taxes. Net contingent cash
flow is composed of revenue from cost recovery (Cost Oil) and a specified percentage of net profits (Profit
Oil) after all royalties, taxes, operating expenses, and capital costs have been deducted. The net contingent
cash flow has been discounted at an annual rate of 10 percent to indicate the effect of time on the value of
money; the discounted contingent cash flow should not be construed as being the fair market value of the
properties.
4.1.1 Noa West Discovery

Nexen Petroleum drilled the Noa 1 discovery well in 2001. The Noa 1 well is located in a water depth of 98
meters and is situated south of Anyala Field located in neighboring OML 83. It was drilled directionally to
a total depth of 2,958 meters (2,642 meters subsea) along hole before encountering hole problems.
The structure of the Noa West Discovery is a faulted anticline situated at the southeast corner of Anyala
Field. It represents the southernmost limit of anticlinal structural development before a regional syncline
separates the Anyala Field structural complex from a series of shale diapirs to the south. The Noa West
Discovery is located in the footwall of a northwest-southeast-trending, down-to-the-south fault.
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Four hydrocarbon-bearing sands were found; the deepest of them is oil-bearing. This oil-bearing sand, the
6100 Sand, has a gross oil column of 19 meters. Adepth structure map of the 6100 Sand is included as
Figure 8. The resources for this sand are subclassified as development pending. The other hydrocarbon
sands encountered by the Noa 1 well are subclassified as development not viable and are discussed in
Section 4.2.
4.1.1.1 Estimation of Production Forecasts

The total recoverable volumes in the Noa West 6100 Sand oil zone were estimated volumetrically. The Noa
1 well penetrated both the gas-oil and oil-water contacts, so the primary uncertainty modeled in resources
sizing is the recovery factor. Varying recovery factors produced deterministic recoverable oil estimates for
the 1C, 2C, and 3C scenarios. The associated 1C, 2C, and 3C flowstreams assume that oil production will
ramp up over the first two years of development, then plateau at a rate that is constrained by facility
processing capacity before declining to capture the volumes estimated volumetrically.
4.1.1.2 Economic Considerations

EEPL provided a development plan for the 6100 Sand oil reservoir of the Noa West Discovery. This plan
assumes three producing oil wells and one gas injection well. Production would flow through a single
pipeline to a floating production, storage and offloading vessel (FPSO). Lease and well operating cost
estimates used in this report were provided by EEPL. These are estimates of costs to be incurred at and
below the district and field levels. Headquarters general and administrative overhead expenses of EEPL
are included for personnel involved in project design and execution only. Other EEPL overhead expenses
have not been included. Additional operating costs are included for production bonuses and abandonment
cost accrual. Lease and well operating costs are held constant throughout the lives of the properties.
Capital cost estimates were provided by EEPL and are included as required for new development wells
and production equipment. The future capital costs are held constant throughout the lives of the
properties. The economic model used to generate the cash flows shown in this report incorporates the PSC
terms provided by EEPL. Key economic inputs and PSC terms are described below.
4.1.1.2.1 Working Interest

EEPL’s working interest in OPL 226 is 100 percent.
4.1.1.2.2 Effective Date and PSC Term

The term of the PSC is 25 years from 10 March 2010, which NSAI understands to be the effective date of
the contract. The term includes a 5-year Exploration Period and a 20-year Exploitation (Oil Mining Lease)
Period. The Exploration Period is divided into two phases. Phase I includes years 1 through 3 of the
contract, and Phase II includes years 4 and 5 of the contract. The actual duration of these Exploration
Phases may be shorter if all parties agree that EEPL has fulfilled the minimum work program in less than
5 years.
4.1.1.2.3 Minimum Work Program

The PSC specifies that Phase I of the Exploration Period requires at least 1 well and the acquisition of
500 square kilometers of 3-D seismic data, with a Minimum Financial Commitment of US$25 million.
Phase II of the Exploration Period requires an additional 2 wells and 500 square kilometers of 3-D seismic
data, with a Minimum Financial Commitment of US$60 million. The costs of these exploration activities
have not been included in the cash flow analysis of the contingent oil resources.
4.1.1.2.4 Capital Costs

Capital costs for drilling the three production wells and one injection well total $68.7 million. Of the
$68.7 million, $24.9 million is tangible, and $43.8 million is intangible. A platform jacket for these wells has
an estimated capital cost of $26.4 million; the wellhead facilities are estimated to cost $16.7 million; and
the offshore pipeline is estimated to cost $11.1 million. Decommissioning of these items has been
estimated by EEPL to cost $50.0 million and can be expensed during the productive life of the asset. For
the purposes of this report, the $50.0 million for decommissioning these items will be expensed in equal
amounts over the final three years of production.
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4.1.1.2.5 Operating Costs

Operating costs for this development include costs of $20.0 million per year for FPSO contracting,
$1.8 million per year for asset overhead, $1.4 million per year for inspections and maintenance, and
$5.8 million per year for logistics, consumables, fuel, and chemicals. Well work expenses are estimated at
$1.0 million per year, and insurance is estimated at $0.6 million per year (0.5 percent of the total capital
investment). In addition, the preliminary PSC terms specify a bookkeeping overhead charge that is a
sliding-scale percentage of capital expended (0 to 1 percent).
4.1.1.2.6 Royalty
A royalty payment to the State is a fixed 18.5 percent of the gross oil sales.
4.1.1.2.7 Cost Recovery

Operating costs are recovered as Cost Oil. The cost recovery limit is 70 percent of gross crude oil income
before deduction of royalty. All operating expense items, exploratory costs, and intangible development
drilling costs can be added to the cost recovery account in the year in which the costs are incurred, while
tangible capital is recovered in equal amounts each year over five years. Lease and production bonuses are
not cost recoverable.
4.1.1.2.8 Petroleum Profits Tax (PPT)

The PPT tax rate on taxable income is 65.7 percent for the first five years of the contract and then
85.0 percent thereafter. Taxable net income has been calculated as revenue less royalty, operating costs,
yearly depreciated portion of capital costs, and loss carryforward of expenses incurred before production
startup. For tax purposes all operating expenses and intangible drilling costs are deducted from net income
in the year in which they are spent. The PSC includes a 10 percent Investment Tax Allowance, which allows
10 percent of tangible capital expenditures to be deducted from taxable income the year it is spent and the
remaining 90 percent to be deducted over five years on a straight-line depreciation schedule. Taxes are
paid by the contractor (EEPL) by Tax Oil.
4.1.1.2.9 Sharing of Profit Oil

Profit Oil is calculated as the total gross crude oil less Royalty Oil, Cost Oil, and Tax Oil. The Profit Oil is
then split between the contractor and the Nigerian National Petroleum Corporation according to the
following schedule:
R Factor Contractor Share Corporation Share
R < 1.2 70 percent 30 percent

1.2 < R < 2.5 25 percent + [(2.5-R)/(2.5-1.2) * 100 percent—Contractor Share
(70 percent–25 percent)]
R > 2.5 25 percent 75 percent
R is calculated as the contractor’s total Cost Oil plus Profit Oil revenues to date divided by the total capital
and non-capital costs.
4.1.1.2.10 Signature and Production Bonus

A signature bonus of $37 million has been paid by EEPL prior to the as-of date of this report.
Non-recoverable production bonuses must be paid when cumulative production from the block reaches
specific thresholds. Production bonuses of 0.1 million barrels (MMBBL), 1 MMBBL, and 1 MMBBL must
be paid as block cumulative production reaches 1 MMBBL, 220 MMBBL, and 500 MMBBL, respectively.
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4.1.1.2.11 Prices
As requested, this report has been prepared using oil price parameters specified by EEPL. Oil prices used
are Brent crude futures prices and have not been adjusted for quality, transportation, or marketing fees.
Oil prices used are shown in the following table:
Oil Price
($/
Period Ending Barrel)
12-31-2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.80
12-31-2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89.60
12-31-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91.60
12-31-2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.10
12-31-2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.80
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.00
4.2 Development Not Viable

because of limited production potential. The estimates of contingent gas and associated gas condensate
resources in this report are for the Dubagbene, Nduri, Noa West, and Oyama Discoveries (Figure 2). At
the time of reporting, the contingent gas and associated gas condensate resources for these discoveries are
not found to have potential for eventual commercial development. However, the theoretically recoverable
quantities are recorded so that the potential opportunity will be recognized in the event of a major change
in technology or commercial conditions. These resources are calculated using deterministic volumetric
methods. This report does not include any economic analysis of these properties. The gas and associated
gas condensate resources shown in this report have contingencies that include, but are not limited to,
(1) establishment of a gas development agreement with the Nigerian National Petroleum Corporation,
resources. If these issues are resolved, some portion of the contingent gas resources estimated in this
report may be reclassified as reserves.
We estimate the gross (100 percent) contingent gas and associated gas condensate resources, subclass
development not viable, as of December 31, 2009, to be:
Gross (100 Percent) Contingent Resources
Contingent Subclass: Development Not Viable
Gas Condensate Gas Condensate Gas Condensate
Discovery (MMCF) (MBBL) (MMCF) (MBBL) (MMCF) (MBBL)
Dubagbene . . . . . . . . . . . . . . . 6,021.1 18.1 9,411.5 28.2 13,212.7 39.6

Nduri . . . . . . . . . . . . . . . . . . . 13,386.7 40.2 45,843.6 137.5 126,686.8 380.1
Noa West . . . . . . . . . . . . . . . . 70,907.2 212.7 84,379.8 253.1 115,730.1 347.2
Oyoma . . . . . . . . . . . . . . . . . . 49,240.3 147.7 76,185.8 228.6 106,497.8 319.5
Total . . . . . . . . . . . . . . . . . . 139,555.3 418.7 215,820.7 647.5 362,127.4 1,086.4
Gas volumes are expressed in millions of cubic feet (MMCF) at standard temperature and pressure basis.
Condensate volumes are expressed in thousands of barrels (MBBL); a barrel is equivalent to 42
United States gallons.
4.2.1 Dubagbene Discovery

The Dubagbene 1 discovery well was drilled by Deminex Nigeria Ltd in 1972 in approximately 60 meters of
water. The location of the Dubagbene 1 was chosen using 2- Dseismic data. The well tested a four-way
closure on the northwestern end of Anyala Field and was drilled to a total depth of 3,150 meters. It
encountered an 8-meter-thick reservoir sand interval at 2,200 meters. The pay zone was interpreted to be
gas based on density log data. The well was sidetracked at 1,946 meters.
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4.2.2 Nduri Discovery

The Nduri 1 well was drilled southwest of the Anyala Field structure by Occidental Petroleum of Nigeria in
1973. It was drilled on a small footwall closure with a direct hydrocarbon-indicating amplitude and found a
gas-bearing sand with 9 meters of pay.
4.2.3 Noa West Discovery

Three gas-bearing sands were discovered in the Noa 1 well, the 3600, 4900, and 5500 Sands. The 3600 Sand
found five meters of gas-filled sand full to base. The 4900 Sand found 23 meters of gas-filled sand on water,
and the 5500 Sand found 8 meters of gas-filled sand full to base. There are good hydrocarbon-indicating
amplitudes that conform well to structure in these sands. These sands have very good porosity.
4.2.4 Oyama Discovery

The Oyoma 1 well was drilled by Deminex Nigeria Ltd in 1972 on a downthrown fault block on the
southwest flank of the Anyala collapsed crest anticlinal complex. The well found two gas sands. The first
sand is found at approximately 1,500 meters with a calculated pay of 6.6 meters; the second sand is found
at approximately 1,600 meters with a calculated pay of 20.5 meters of gas on water.
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Upon discovery of oil, some portion of the oil volumes may be produced under the PSC terms provided by
EEPL. Gas volumes will require EEPL and the Nigerian government to enter a gas development
agreement before any production can take place. A geologic risk assessment was performed for these
prospects, as discussed in subsequent paragraphs. This report does not include economic analysis for these
properties. Based on analogous field developments, it appears that, assuming a discovery is made, the
unrisked best estimate prospective oil resources in this report have a reasonable chance of being
commercial.
We estimate the unrisked gross (100 percent) prospective resources for these prospects, as of
December 31, 2009, to be:
Unrisked Gross (100 Percent) Prospective Resources

Geologic
Low Estimate Best Estimate High Estimate Risk
Oil(2) Gas Oil(2) Gas Oil(2) Gas Factor
Prospect(1) (MBBL) (MMCF) (MBBL) (MMCF) (MBBL) (MMCF) (decimal)
Nduri West . . . . . . . . . . . . . . . . . 148.4 85,388.1 418.8 144,048.0 899.4 241,705.5 0.48

Noa East . . . . . . . . . . . . . . . . . . 12,096.4 32,680.1 24,789.1 68,868.0 49,764.9 153,483.1 0.35
Noa North (East) . . . . . . . . . . . . 2,068.0 19,208.2 3,520.8 30,697.4 5,852.5 51,581.8 0.40
Noa North (West) . . . . . . . . . . . . 3,014.4 5,814.3 5,040.7 10,838.5 8,183.9 20,284.4 0.26
Noa Northeast . . . . . . . . . . . . . . 14,439.8 74,073.1 25,692.4 152,304.3 44,577.5 354,519.2 0.30
Noa West Deep . . . . . . . . . . . . . 9,540.2 6,232.6 17,702.2 12,927.0 31,812.8 25,254.9 0.33
Total(3) . . . . . . . . . . . . . . . . . . 41,307.1 223,396.4 77,164.0 419,683.1 141,091.1 846,829.8
(1) Each prospect is the arithmetic sum of probability distributions for each reservoir.
(2) Greater than 97 percent of oil resources are crude oil; the remainder is associated gas condensate.
(3) Totals are the arithmetic sum of multiple probability distributions.
The prospective resources shown in this report have been estimated using probabilistic methods and are
dependent on a petroleum discovery being made. If a discovery is made, the probability that the unrisked
quantities of oil and gas discovered will equal or exceed the estimated amounts is at least 90 percent for the
low estimate, at least 50 percent for the best estimate, and at least 10 percent for the high estimate. The
estimates for risked resources are derived directly from the estimates for unrisked resources, incorporating
a geologic risk assessment, as described in subsequent paragraphs. This assessment does not address
commercial or contractual risks associated with these prospects. As recommended in the 2007 PRMS, the
low, best, and high estimate prospective resources have been aggregated beyond the prospect level by
arithmetic summation; therefore, these totals do not include portfolio effect that might result from
statistical aggregation.
A geologic risk assessment was conducted for each prospect. Geologic risking of prospective resources
addresses the probability of success for the discovery of petroleum; this risk analysis is conducted
independently of probabilistic estimations of petroleum volumes and without regard to the chance of
development. Principal risk elements of the petroleum system include (1) trap and seal characteristics;
(2) reservoir presence and quality; (3) source rock capacity, quality, and maturity; and (4) timing,
migration, and preservation of petroleum in relation to trap and seal formation. Geologic risk assessment
is a highly subjective process dependent upon the experience and judgment of the evaluators and is subject
to revisions with further data acquisition or interpretation. Unrisked prospective resources are estimated
ranges of recoverable oil and gas volumes assuming a petroleum discovery is made and are based on
estimated ranges of undiscovered in-place volumes.
Each prospect was evaluated to determine probabilistic ranges of in-place and recoverable petroleum and
was risked as an independent entity without dependency between potential prospect drilling outcomes. If
petroleum discoveries are made, smaller-volume prospects may not be commercial to independently
develop although they may become candidates for satellite developments and tie-backs to existing
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infrastructure at some future date. The development infrastructure and data obtained from early
discoveries will alter both prospect risk and future economics of subsequent discoveries and developments.
5.1 Nduri West Prospect

The Nduri West Prospect is on the west side of two small faults that separate this prospect from the Nduri
gas discovery. There are possible hydrocarbon-indicating amplitudes associated with this prospect that are
at the same stratigraphic interval as the gas encountered in the Nduri 1 well. The trap is stratigraphic
without any structural closure. The primary risk element for the Nduri West Prospect is the lack of
structural trap.
5.2 Noa East Prospect

The Noa East fault block is a fault dependent closure culminating in combination of a synthetic and an
antithetic fault. There is a three-way fault closure, similar to that found at the Noa West Discovery.
However, this prospect does not have structurally-conforming amplitudes like those of the Noa West fault
block. The primary risk associated with this prospect is reservoir quality.
5.3 Noa North (East) Prospect

The Noa North (East) Prospect is an extension of the Anyala structural complex. It is a stratigraphic trap
with no structural closure. There are distinct amplitude anomalies, which are similar to anomalies seen at
the Noa 1 well discovery. The primary risk element for this prospect is the lack of structural closure.
5.4 Noa North (West) Prospect

The Noa North (West) Prospect lies on the southeast flank of the Anyala structural complex. It is a small
fault closure that is separate from the main Anyala Field. The prospect sands are hydrocarbon-bearing in
the Noa 1 well to the south. The primary risk associated with this prospect is the absence of a sealing trap
due to the lack of hydrocarbon-indicating amplitudes.
5.5 Noa Northeast Prospect

The Noa Northeast Prospect is the southeast extension of the Anyala Field. It is within the Anyala
four-way closure, but it is fault separated from the Anyala Field. There are numerous prospective sands
within the closure, the shallowest of which have possible hydrocarbon-indicating amplitudes. The primary
risk elements for this prospect are hydrocarbon presence and reservoir quality.
5.6 Noa West Deep Prospect

The Noa West Deep Prospect lies below sands encountered in the Noa 1 well. This deeper sand was
originally a target of the Noa 1 well, but difficulties were encountered while drilling the well, and the well
did not penetrate this interval. This prospect is within the same structural closure as the Noa 1 discovery
well. Sands were seen at this stratigraphic level in the Anyala Field to the north. There are not amplitude-
indicating hydrocarbons associated with this prospect. Reservoir quality is the primary risk for this
prospect.
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FIGURES
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28MAR201011371787
All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions.
Figure 1
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28MAR201011354512
Figure 2
571

Stratigraphic Column
Oil Prospecting License 226 Area
Offshore Nigeria
28MAR201012390451
Figure 3
572

28MAR201011383202
Figure 4
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DETERMINISTIC VOLUMETRIC PARAMETERS BY RESERVOIR
LOCATED IN OPL 226, OFFSHORE NIGERIA
Oil/Gas
Oil Gas Recovery
Formation Expansion Factor
Hydrocarbon Volume Factor
Net Rock Volume (Decimal)
Porosity Saturation Factor (RCF/
(Acre-feet) Lognormal Normal
(Decimal) (Decimal) (RB/SCF) MCF)
Subclass/Reservoir 1C 2C 3C Normal Normal Normal Normal 1C 2C 3C
Development Pending
Noa West 6100 . . . . . . . . . . . . . 29,294 29,294 29,294 0.31 0.87 1.34 — 0.25 0.35 0.45
Development Not Viable
Dubagbene 2200 . . . . . . . . . . . . 4,679 6,790 8,901 0.29 0.70 — 0.79 0.65 0.70 0.75
Nduri 4900 . . . . . . . . . . . . . . . 12,445 39,606 102,046 0.29 0.70 — 0.94 0.65 0.70 0.75
Noa West 3600 . . . . . . . . . . . . . 2,257 6,716 10,502 0.34 0.80 — 1.09 0.65 0.70 0.75
Noa West 4900 . . . . . . . . . . . . . 42,912 42,912 42,912 0.29 0.72 — 0.79 0.65 0.70 0.75
Noa West 5500 . . . . . . . . . . . . . 12,253 13,910 28,849 0.28 0.64 — 0.78 0.65 0.70 0.75
Oyoma 1500 . . . . . . . . . . . . . . 12,321 17,431 22,540 0.29 0.70 — 1.13 0.65 0.70 0.75
Oyoma 1600 . . . . . . . . . . . . . . 39,748 57,374 75,000 0.29 0.70 — 1.06 0.65 0.70 0.75
Figure 5
PROBABILISTIC VOLUMETRIC PARAMETERS BY RESERVOIR
LOCATED IN OPL 226, OFFSHORE NIGERIA
Oil Gas
Hydro- Formation Expansion Oil/Gas
Net Rock carbon Volume Factor Recovery
Volume Porosity Saturation Factor (RCF/ Factor
(Acre-feet) (Decimal) (Decimal) (RB/SCF) MCF) (Decimal)
Lognormal Normal Normal Normal Normal Normal
Reservoir Low High Low High Low High Low High Low High Low High
Nduri West 4900 . . . . . . . . . . . . . . . . . . . . . . 61,565 141,279 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Nduri West 5500 . . . . . . . . . . . . . . . . . . . . . . 6,941 30,835 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa East 4900 . . . . . . . . . . . . . . . . . . . . . . . 5,828 50,405 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa East 5500 . . . . . . . . . . . . . . . . . . . . . . . 13,927 31,972 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa East Oil 6100 . . . . . . . . . . . . . . . . . . . . . 34,629 114,847 0.24 0.33 0.68 0.82 1.30 1.60 — — 0.25 0.45
Noa North (East) 4900 . . . . . . . . . . . . . . . . . . 13,511 21,839 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa North (East) 5500 . . . . . . . . . . . . . . . . . . 1,406 10,918 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa North (East) Oil 6100 . . . . . . . . . . . . . . . 6,147 12,563 0.24 0.33 0.68 0.82 1.30 1.60 — — 0.25 0.45
Noa North (West) 4900 . . . . . . . . . . . . . . . . . 1,841 7,741 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa North (West) 5500 . . . . . . . . . . . . . . . . . 1,282 2,061 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa North (West) Oil 6100 . . . . . . . . . . . . . . . 9,151 17,927 0.24 0.33 0.68 0.82 1.30 1.60 — — 0.25 0.45
Noa Northeast 990 . . . . . . . . . . . . . . . . . . . . 6,023 19,868 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa Northeast 1230 . . . . . . . . . . . . . . . . . . . . 32,524 68,795 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa Northeast 4900 . . . . . . . . . . . . . . . . . . . . 12,400 139,800 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa Northeast 5500 . . . . . . . . . . . . . . . . . . . . 14,960 36,288 0.24 0.33 0.68 0.82 — — 0.75 1.00 0.65 0.75
Noa Northeast Oil 6100 . . . . . . . . . . . . . . . . . 42,678 97,941 0.24 0.33 0.68 0.82 1.30 1.60 — — 0.25 0.45
Figure 6
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SUMMARY PROJECTION OF RESOURCES AND CASH FLOW

OPL 226, OFFSHORE NIGERIA
ESSAR EXPLORATION AND PRODUCTION LIMITED INTEREST
LOW ESTIMATE (1C) CONTINGENT RESOURCES

CONTINGENT SUBCLASS: DEVELOPMENT PENDING
Average
Oil Petroleum Net Net(2) Future
Oil Resources Price Gross Profits Capital Operating Net Cash Cum P.W.
Gross Net(1) ($/ Revenue Taxes Cost Expense Flow 10.0%
Period Ending (MBBL) (MBBL) BBL) (M$) (M$) (M$) (M$) (M$) (M$)
12-31-2010 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 8,430.0 84.3 (8,514.3) (7,740.3)
12-31-2011 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 62,746.4 627.5 (63,373.9) (60,115.4)
12-31-2012 . . . . . . . . . . . . 697.4 544.3 91.60 63,880.0 0.0 51,668.6 31,113.0 (32,923.3) (84,851.1)
12-31-2013 . . . . . . . . . . . . 2,757.0 1,382.0 93.10 256,676.7 70,623.8 0.0 39,906.4 88,753.8 (24,231.1)
12-31-2014 . . . . . . . . . . . . 3,150.0 1,114.3 94.80 298,620.0 119,498.4 0.0 47,263.0 58,372.2 12,013.4
12-31-2015 . . . . . . . . . . . . 2,793.0 874.7 85.00 237,405.0 113,485.3 0.0 47,263.0 27,089.5 27,304.8
12-31-2016 . . . . . . . . . . . . 2,100.0 725.4 85.00 178,500.0 79,598.2 0.0 47,263.0 14,399.6 34,694.0
12-31-2017 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 34,694.0
12-31-2018 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 34,694.0
12-31-2019 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 34,694.0
12-31-2020 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 34,694.0
Total . . . . . . . . . . . . . . 11,497.4 4,640.7 1,035,081.7 383,205.7 122,845.0 213,520.2 83,803.6 34,694.0
(1) Net Resources are composed of Profit Oil and Cost Oil
(2) The net operating expenses include a non-recoverable production bonus as specified by the terms of the PSC and accrued
decomissioning costs over the last 3 years of production
BEST ESTIMATE (2C) CONTINGENT RESOURCES

Average
12-31-2010 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 8,430.0 84.3 (8,514.3) (7,740.3)
12-31-2011 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 62,746.4 627.5 (63,373.9) (60,115.4)
12-31-2012 . . . . . . . . . . . . 960.4 749.6 91.60 87,970.4 0.0 51,668.6 31,113.0 (14,120.8) (70,724.5)
12-31-2013 . . . . . . . . . . . . 2,986.8 1,275.6 93.10 278,066.4 94,976.3 0.0 39,906.4 78,850.9 (16,868.3)
12-31-2014 . . . . . . . . . . . . 3,412.5 1,023.2 94.80 323,505.0 143,773.2 0.0 30,596.4 66,407.1 24,365.3
12-31-2015 . . . . . . . . . . . . 3,412.5 915.8 85.00 290,062.5 149,963.8 0.0 47,263.0 30,584.0 41,629.2
12-31-2016 . . . . . . . . . . . . 3,025.8 791.4 85.00 257,188.8 134,109.9 0.0 47,263.0 20,004.5 51,894.7
12-31-2017 . . . . . . . . . . . . 2,275.0 681.6 85.00 193,375.0 93,787.0 0.0 47,263.0 10,674.6 56,874.5
12-31-2018 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 56,874.5
12-31-2019 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 56,874.5
12-31-2020 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 56,874.5
Total . . . . . . . . . . . . . . 16,072.9 5,437.3 1,430,168.0 616,610.1 122,845.0 244,116.6 120,512.2 56,874.5
575

HIGH ESTIMATE (3C) CONTINGENT RESOURCES

Average
12-31-2010 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 8,430.0 84.3 (8,514.3) (7,740.3)
12-31-2011 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 62,746.4 627.5 (63,373.9) (60,115.4)
12-31-2012 . . . . . . . . . . . . 703.3 548.9 91.60 64,421.4 0.0 51,668.6 31,113.0 (32,500.8) (84,533.7)
12-31-2013 . . . . . . . . . . . . 3,216.5 1,468.5 93.10 299,456.2 93,820.2 0.0 39,906.4 96,808.4 (18,412.3)
12-31-2014 . . . . . . . . . . . . 3,675.0 1,066.7 94.80 348,390.0 157,098.0 0.0 30,596.4 70,522.8 25,376.8
12-31-2015 . . . . . . . . . . . . 3,675.0 753.0 85.00 312,375.0 179,587.4 0.0 30,596.4 33,411.4 44,236.7
12-31-2016 . . . . . . . . . . . . 3,675.0 833.8 85.00 312,375.0 172,340.1 0.0 47,263.0 23,612.4 56,353.6
12-31-2017 . . . . . . . . . . . . 3,258.5 749.4 85.00 276,972.5 151,699.1 0.0 47,263.0 16,439.9 64,022.9
12-31-2018 . . . . . . . . . . . . 2,450.0 689.2 85.00 208,250.0 104,091.6 0.0 47,263.0 11,321.7 68,824.4
12-31-2019 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 68,824.4
12-31-2020 . . . . . . . . . . . . 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.0 68,824.4
Total . . . . . . . . . . . . . . 20,653.3 6,109.6 1,822,240.0 858,636.4 122,845.0 274,712.9 147,727.5 68,824.4
Figure 7
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15APR201020111308
Figure 8
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APPENDIX
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mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:36 DISK116:[10ZAU1.10ZAU70801]UT70801A.;35
7080DM/0D Foot:
SUMMARY OF ASSETS
HOLDINGS OF ESSAR EXPLORATION AND PRODUCTION LIMITED
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

0D/
Essar
Working License License
Interest Expiration Area
Country/Block Operator Name (percent) Status Date (km2) Comments
Nigeria
OPL 226 . . Essar Exploration and Production Limited 100 Exploration/ March 2035 1,553 Several hydrocarbon accumulations have been
Development discovered (Contingent Resources). Multiple
File: UT70801A.;35
prospect locations have been identified for

579
exploration (Prospective Resources).

Preliminary terms specify an exploration
period of 10 years comprised of two phases
beginning at the effective date (March 10,
2010). An exploitation period of 20 years is
specified to go into effect upon conversion of
the OPL block to an oil mining lease. If
sufficient volumes of gas are discovered to
justify development, PSC terms specify that a
gas development agreement must be
negotiated before gas development can take
place.
Source: Netherland, Sewell & Associates, Inc.
Table A-1
SUMMARY OF ESTIMATED CONTINGENT OIL RESOURCES

Gross Contingent Resources (MBBL)

Low Estimate Best Estimate High Estimate
Discovery/Reservoir Operator Name (1C) (2C) (3C)
Noa West
6100 . . . . . . . . . Essar Exploration and Production 11,497.4 16,072.9 20,653.3
Limited
Table A-2
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SUMMARY OF ESTIMATED CONTINGENT GAS RESOURCES

CONTINGENT SUBCLASS: DEVELOPMENT NOT VIABLE
Gross (100 Percent) Contingent

Gas Resources (MMCF)
Dubagbene
2200 . . . . . . . . . Essar Exploration and Production
Limited 6,021.1 9,411.5 13,212.7
Subtotal . . . . . . . 6,021.1 9,411.5 13,212.7
Nduri
Limited 13,386.7 45,843.6 126,686.8
Subtotal . . . . . . . 13,386.7 45,843.6 126,686.8
Noa West
Limited 2,815.1 9,028.8 15,116.8
Limited 53,962.9 58,094.5 62,231.4
Limited 14,129.3 17,256.5 38,382.0
Subtotal . . . . . . . 70,907.2 84,379.8 115,730.1
Oyoma
Limited 11,077.3 16,895.4 23,403.8
Limited 38,163.0 59,290.4 83,094.0
Subtotal . . . . . . . 49,240.3 76,185.8 106,497.8
Total . . . . . . . . . . . 139,555.3 215,820.7 362,127.4
Table A-3
581

SUMMARY OF ESTIMATED CONTINGENT CONDENSATE RESOURCES

CONTINGENT SUBCLASS: DEVELOPMENT NOT VIABLE
Gross (100 Percent) Contingent

Condensate Resources (MBBL)
Dubagbene
Limited 18.1 28.2 39.6
Subtotal . . . . . 18.1 28.2 39.6
Nduri
Limited 40.2 137.5 380.1
Subtotal . . . . . 40.2 137.5 380.1
Noa West
Limited 8.4 27.1 45.4
Limited 161.9 174.3 186.7
Limited 42.4 51.8 115.1
Subtotal . . . . . 212.7 253.1 347.2
Oyoma
Limited 33.2 50.7 70.2
Limited 114.5 177.9 249.3
Subtotal . . . . . 147.7 228.6 319.5
Total . . . . . . . . . . . 418.7 647.5 1,086.4
Table A-4
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SUMMARY OF ESTIMATED GROSS UNRISKED

PROSPECTIVE GAS RESOURCES
Gross (100 Percent) Unrisked Prospective Geologic

Gas Resources (MMCF) Risk Factor
Prospect/Reservoir Operator Name Low Estimate Best Estimate High Estimate (Decimal)
Nduri West
4900 . . . . . . . . Essar Exploration and Production Limited 76,427.6 124,583.3 198,955.0
Subtotal . ... 85,388.1 144,048.0 241,705.5 0.48
Noa East
Oil 6100 . . . . . Essar Exploration and Production Limited 7,895.4 17,998.4 38,753.3
Subtotal . . . . 32,680.1 68,868.0 153,483.1 0.35
Noa North (East)
Subtotal . . . . 19,208.2 30,697.4 51,581.8 0.40
Noa North (West)
Subtotal . . .. 5,814.3 10,838.5 20,284.4 0.26
Noa Northeast
Subtotal . . . . 74,073.1 152,304.3 354,519.2 0.30
Noa West
Oil Deep . . . . Essar Exploration and Production Limited 6,232.6 12,927.0 25,254.9
Subtotal . . . . 6,232.6 12,927.0 25,254.9 0.33
Total . . . . . . . . . 223,396.4 419,683.1 846,828.8
Note: As recommended in the 2007 PRMS, the low, best, and high estimate prospective resources have been aggregated beyond the
reservoir level by arithmetic summation; therefore these totals do not include the portfolio effect that might result from
Table A-5
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SUMMARY OF ESTIMATED GROSS UNRISKED

PROSPECTIVE OIL RESOURCES
Gross (100 Percent) Unrisked Prospective Geologic

Oil Resources (MBBL) Risk Factor
Prospect/Reservoir Operator Name Low Estimate Best Estimate High Estimate (Decimal)
Nduri West
4900 . . . . . . . . Essar Exploration and Production Limited 131.5 364.1 752.2
Subtotal . ... 148.4 418.8 899.4 0.48
Noa East
Subtotal . . . . 12,096.4 24,789.1 49,764.9 0.35
Noa North (East)
Subtotal . . . . 2,068.0 3,520.8 5,852.5 0.40
Noa North (West)
Subtotal . . .. 3,014.4 5,040.7 8,183.9 0.26
Noa Northeast
Subtotal . . . . 14,439.8 25,692.4 44,577.5 0.30
Noa West
Oil Deep . . . . Essar Exploration and Production Limited 9,540.2 17,702.2 31,812.8
Subtotal . . . . 9,540.2 17,702.2 31,812.8 0.33
Total . . . . . . . . . 41,307.1 77,164.0 141,091.1
Note: As recommended in the 2007 PRMS, the low, best, and high estimate prospective resources have been aggregated beyond the
reservoir level by arithmetic summation; therefore these totals do not include the portfolio effect that might result from
Table A-6
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MERRILL CORPORATION JDICKSO//30-APR-10 12:29 DISK116:[10ZAU1.10ZAU70801]VA70801A.;27
RESOURCES ASSESSMENT
Assessment of
Contingent Resources and Cash Flow
and Unrisked Prospective Resources
to the Essar Oil Limited Interest
in Certain Coal Seam Gas Properties
Located in the RG (East)-CBM-2001/1 Block
West Bengal, India
As of December 31, 2009
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MERRILL CORPORATION JDICKSO//30-APR-10 12:35 DISK116:[10ZAU1.10ZAU70801]VB70801A.;35
April 30, 2010
Essar Oil Limited Essar Energy Holdings Limited

Essar Technopark Rogers House, Ground Floor
Old Swan Mills Compound 5, President John Kennedy Street
L.B.S. Marg Port Louis
Kurla (W), Mumbai 400 070 Mauritius
India
Essar Energy plc J.P. Morgan Securities Ltd.

3rd Floor, Lansdowne House 125 London Wall
57 Berkeley Square London EC2Y 5AJ
London W1J 6ER England
England
Deutsche Bank AG, London Branch

Winchester House
London EC2N 2DB
England
Ladies and Gentlemen:

flow and unrisked prospective resources, as of December 31, 2009, to the Essar Oil Limited (EOL) interest
in certain coal seam gas (CSG) properties located in the RG (East)-CBM-2001/1 (Raniganj East) Block,
West Bengal, India. It is our understanding that EOL owns 100 percent working interest in this block. It is
our understanding that this report will be included as part of a document (the Prospectus) to be published
in connection with a global offering of shares and the admission of the ordinary shares of Essar
Energy PLC (Essar Energy) to the Official List of the Financial Services Authority and the admission of
the ordinary shares to trading on the London Stock Exchange PLC’s main market for listed securities. This
report has been prepared using constant price and cost parameters specified by EOL, as discussed in
subsequent paragraphs of this letter. The estimates in this report have been prepared in accordance with
the definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS)
approved by the Society of Petroleum Engineers; definitions are presented immediately following this
letter. Following the definitions is a list of abbreviations used in this report.
yet considered mature enough for commercial development because of one or more contingencies. The
resources shown in this report are contingent upon (1) increasing the gas production rates from existing
pilot wells to a sufficient level on a per-well basis to demonstrate commerciality of the project and (2) EOL
providing documentation showing approval of project funding for full development. The costs required to
resolve these contingencies have not been included in this report; estimates of cash flow are based on the
assumption that all contingencies will be resolved. If these issues are resolved, some portion of the
contingent resources estimated in this report may be reclassified as reserves. Securing additional marketing
and transportation agreements to satisfy the projected volumes for the full development project and final
approval by all government entities for Phase II and Phase III development stages are required before the
project can be fully implemented, but these are not considered contingencies for the purposes of this
evaluation.
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As presented in the accompanying summary projections, Tables I through III, we estimate the contingent
gas resources and net contingent cash flow to the EOL interest in these properties, as of December 31,
2009, to be:
Contingent Gas Net Contingent Cash Flow

Resources (M$)
Gross Net Discounted
Category (MMCF) (MMCF) Total at 10%
Low Estimate (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . 83,276.3 79,112.5 170,018.1 51,100.7

Best Estimate (2C) . . . . . . . . . . . . . . . . . . . . . . . . . . 200,843.9 190,801.7 579,937.3 236,393.0
High Estimate (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . 377,219.5 358,358.5 1,190,386.5 511,253.6
Gas volumes are expressed in millions of cubic feet (MMCF) at standard temperature and pressure bases.
Cash flow estimates are expressed in thousands of United States dollars (M$).
actually recovered will equal or exceed the estimated amounts is generally inferred to be at least 90 percent
for the low estimate, at least 50 percent for the best estimate, and at least 10 percent for the high estimate.
For the purposes of this report, the volumes and parameters associated with the low, best, and high
estimate scenarios of contingent resources are referred to as 1C, 2C, and 3C, respectively.
The contingent resources included herein have not been adjusted for commercial risk. The risks associated
with these contingent resources include (1) the risk that commercial quantities of gas will not be achieved
because of the inability of the coals to dewater in a reasonable time period and (2) the risk that commercial
factors, such as gas prices and development costs, will not be favorable once the full-scale project area has
been appraised. Risk assessment is a highly subjective process dependent upon the experience and the
judgment of the evaluators and is subject to revisions with further data acquisition or interpretation.
Gross contingent revenue to the EOL interest is prior to deducting royalty revenue and production level
payments. Net contingent cash flow is after deductions for royalty revenue, production level payments,
future capital costs, and operating expenses but before consideration of income taxes imposed at the
corporate level in India. The net contingent cash flow has been discounted at an annual rate of 10 percent
to indicate the effect of time on the value of money; the discounted contingent cash flow should not be
construed as being the fair market value of the properties.
As requested, this report has been prepared using gas price parameters specified by EOL. The gas price
used for this evaluation is based on EOL’s application to the Ministry of Petroleum & Natural Gas in
India, dated September 15, 2009, in which a minimum wellhead price of $5.25 per MMBTU is requested to
be set. This gas price is adjusted for projected transportation fees, compression charges, and a regional
price differential. The gas price is further adjusted for energy content based on a gas chromatograph
analysis provided by EOL showing a value of 850 MMBTU per thousand standard cubic feet (MCF) of gas
produced. The gas price is held constant throughout the lives of the properties.
Based on our knowledge of similar CSG developments in India and the United States and supported by
the estimates provided by EOL, we estimate lease and well operating costs at $1,400 per completion per
month and $0.05 per MCF of gas produced. These costs are intended to include direct lease- and field-
level costs and EOL’s estimate of the portion of its headquarters general and administrative overhead
expenses necessary to operate the properties. As requested, lease and well operating costs are held
constant throughout the lives of the properties. Capital costs are included as required for new development
wells, transmission pipelines, and production equipment. The future capital costs are held constant to the
date of expenditure.
potentially recoverable from undiscovered accumulations by application of future development projects. It
is our understanding that EOL’s current development plan includes at least 500 total well locations within
the current block, which will extend far beyond the current pilot area. This report does not include
economic analysis for prospective resources because of the indeterminate nature of prospective resources
and the high risk associated with recovering them; however, the commerciality of the prospective resources
587

was tested with the same parameters used in the analysis of contingent resources to determine the net
prospective resources.
We estimate the unrisked prospective gas resources for these prospects, as of December 31, 2009, to be:
Unrisked Prospective Gas

Resources
Category Gross (MMCF) Net (MMCF)
Low Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412,838.3 392,196.4

Best Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 791,997.0 752,397.1
High Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,631,882.9 1,550,288.7
The prospective resources shown in this report have been estimated using deterministic methods and are
dependent on a petroleum discovery being made beyond the two existing pilot areas in the field. If a
discovery is made, the probability that the unrisked quantities of gas discovered will equal or exceed the
estimated amounts is generally inferred to be at least 90 percent for the low estimate, at least 50 percent
for the best estimate, and at least 10 percent for the high estimate.
Unrisked prospective gas resources are estimated ranges of recoverable gas volumes assuming a petroleum
discovery is made and are based on estimated ranges of undiscovered in-place gas volumes. No geologic
risk assessment was conducted for this prospect. Geologic risking of prospective resources addresses the
probability of success for the discovery of petroleum; such risk analysis is conducted independently of
probabilistic estimations of petroleum volumes and without regard to the chance of development. For CSG
assessments, principal risk elements include coal quantity, gas content, and coal permeability. Prospect risk
assessment is a highly subjective process dependent upon the experience and judgment of the evaluators.
Each coal seam and planned drillsite was evaluated to determine deterministic ranges of in-place and
recoverable petroleum. If petroleum discoveries are made, smaller-volume prospects may not be
commercial to independently develop although they may become candidates for satellite developments and
tie-backs to existing infrastructure at some future date. The development infrastructure and data obtained
from early discoveries will alter both prospect risk and future economics of subsequent discoveries and
developments.
It should be understood that the prospective resources discussed and shown herein are those undiscovered,
highly speculative resources estimated beyond reserves or contingent resources where geological and
geophysical data suggest the potential for discovery of petroleum but where the level of proof is
insufficient for classification as reserves or contingent resources. The unrisked prospective resources are
those volumes that could reasonably be expected to be recovered in the event of the successful exploration
and development of these prospects.
SUMMARY
As shown in the Table of Contents, the Technical Discussion section of this report includes an overview of
the license area, a summary of the license terms, a review of the data available for this evaluation, and a
discussion of the technical approach used in our assessments. Included in the Figures section are pertinent
maps and exhibits. The Appendix section of this report contains additional tables.
For the purposes of this report, we did not perform any field inspection of the properties, nor did we
examine the mechanical operation or condition of the wells and facilities. We have not investigated
possible environmental liability related to the properties; therefore, our estimates do not include any costs
due to such possible liability. Also, our estimates do not include any salvage value for the lease and well
equipment or the cost of abandoning the properties.
The resources shown in this report are estimates only and should not be construed as exact quantities. If
the resources are recovered, the revenues therefrom and the costs related thereto could be more or less
than the estimated amounts. Because of governmental policies and uncertainties of supply and demand,
the sales rates, prices received for the resources, and costs incurred in recovering such resources may vary
from assumptions made while preparing this report. Estimates of resources may increase or decrease as a
result of future operations, market conditions, or changes in regulations.
For the purposes of this report, we used technical and economic data including, but not limited to, well
logs, geologic maps, seismic data, well test data, production data, historical price and cost information, and
property ownership interests. The resources in this report have been estimated using deterministic
588

methods; these estimates have been prepared in accordance with generally accepted petroleum
engineering and evaluation principles. We used standard engineering and geoscience methods, or a
combination of methods, such as performance analysis, volumetric analysis, analogy, and reservoir
modeling, that we considered to be appropriate and necessary to establish resources quantities and
resources categorization that conform to the 2007 PRMS definitions and guidelines. The contingent
resources are for the pilot area wells and undeveloped locations; prospective resources are for
undeveloped locations. Therefore, these resources are based on estimates of reservoir volumes and
recovery efficiencies along with analogy to properties with similar geologic and reservoir characteristics; it
may be necessary to revise these estimates as additional data become available. In evaluating the
information at our disposal concerning this report, we have excluded from our consideration all matters as
to which the controlling interpretation may be political, socioeconomic, legal, or accounting, rather than
engineering and geoscience. As in all aspects of oil and gas evaluation, there are uncertainties inherent in
the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent
only informed professional judgment. We hereby assert that there has been no material change in any of
the data used in this evaluation that would cause us to materially alter the estimates set forth herein.
Netherland, Sewell & Associates, Inc. (NSAI) was established in 1961 and has offices in Dallas and
Houston, Texas. Our company has conducted technical reserves and deliverability studies for financial
institutions, private and government companies, and government agencies throughout the world. Our staff
and associates work as a team to provide the integrated expertise required for complex field studies and
reserves and resources evaluations. We are independent petroleum engineers, geologists, geophysicists,
and petrophysicists; with the exception of the provision of professional services on a fee basis, NSAI has no
commercial arrangement with any person or company involved in the Raniganj East Block that is the
subject of this report. This fee is not contingent on the results obtained and reported, and NSAI will
receive no other benefit for the preparation of this report. We have not performed any other work that
might affect our objectivity. Neither NSAI nor any of its directors, officers, employees or sub-consultants
have any pecuniary or other interests in the Raniganj East Block or Essar Energy or any group companies.
This evaluation has been supervised by Mr. J. Carter Henson, Jr. Mr. Henson is a Senior Vice President in
the firm’s Houston office. He has over 28 years of experience in the petroleum industry, with over 19 years
at NSAI. He is a registered Professional Engineer in the state of Texas and is a member of the Society of
Petroleum Engineers. The geoscience analysis was performed by Mr. David E. Nice. Mr. Nice is a
Geologist in the firm’s Houston office. He has over 25 years of experience in the petroleum industry, with
over 12 years at NSAI. He is a licensed Professional Geologist in the state of Texas and is a member of the
American Association of Petroleum Geologists.
NSAI has given and not withdrawn our written consent to the issue of the Prospectus with our name
included within and to the inclusion of this report and references to this report in the Prospectus. For the
purposes of Prospectus Rule 5.5.3R(2)(f), NSAI accepts responsibility for the information contained in this
report set out in this section of the Prospectus and those parts of the Prospectus which include references
to this report and declares that we have taken all reasonable care to ensure that the information contained
in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely
to affect its import.
589

The contractual rights to the properties have not been examined by NSAI, nor has the actual degree or
type of interest owned been independently confirmed. The data used in our estimates were obtained from
EOL and the nonconfidential files of NSAI and were accepted as accurate. Supporting geoscience, field
performance, and work data are on file in our office. The technical persons responsible for preparing the
resources estimates presented herein meet the requirements regarding qualifications, independence,
objectivity, and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil
and Gas Reserves Information promulgated by the Society of Petroleum Engineers.
Sincerely,
NETHERLAND, SEWELL & ASSOCIATES, INC.
Texas Registered Engineering Firm F-002699
By: 29APR201005262529
C.H. (Scott) Rees III, P.E.
Chairman and Chief Executive Officer
29APR201005264153 29APR201005305348
Date Signed: April 30, 2010 Date Signed: April 30, 2010
WKB:JJL
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PETROLEUM RESERVES AND RESOURCES CLASSIFICATION AND DEFINITIONS

Excerpted from the Petroleum Resources Management System Approved by the Society of Petroleum Engineers (SPE)
Board of Directors, March 2007
This document contains information excerpted from definitions and guidelines prepared by the Oil and
Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored
by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG), and
the Society of Petroleum Evaluation Engineers (SPEE).
Preamble
Petroleum resources are the estimated quantities of hydrocarbons naturally occurring on or within the
Earth’s crust. Resource assessments estimate total quantities in known and yet-to-be-discovered
accumulations; resources evaluations are focused on those quantities that can potentially be recovered and
marketed by commercial projects. A petroleum resources management system provides a consistent
approach to estimating petroleum quantities, evaluating development projects, and presenting results
within a comprehensive classification framework.
These definitions and guidelines are designed to provide a common reference for the international
petroleum industry, including national reporting and regulatory disclosure agencies, and to support
petroleum project and portfolio management requirements. They are intended to improve clarity in global
communications regarding petroleum resources. It is expected that this document will be supplemented
with industry education programs and application guides addressing their implementation in a wide
spectrum of technical and/or commercial settings.
It is understood that these definitions and guidelines allow flexibility for users and agencies to tailor
application for their particular needs; however, any modifications to the guidance contained herein should
be clearly identified. The definitions and guidelines contained in this document must not be construed as
modifying the interpretation or application of any existing regulatory reporting requirements.
1.0 BASIC PRINCIPLES AND DEFINITIONS


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dioxide, nitrogen, hydrogen sulfide and sulfur. In rare cases, non-hydrocarbon content could be greater
than 50%.
26MAR201021050328
plus those quantities already produced. Further, it includes all types of petroleum whether currently
accumulation by a project, while the vertical axis represents the ‘‘Chance of Commerciality’’, that is, the
originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as
of a given date, to be contained in known accumulations prior to production plus those estimated
quantities in accumulations yet to be discovered (equivalent to ‘‘total resources’’).
DISCOVERED PETROLEUM INITIALLY-IN-PLACE is that quantity of petroleum that is estimated, as of
a given date, to be contained in known accumulations prior to production.
PRODUCTION is the cumulative quantity of petroleum that has been recovered at a given date. While all
recoverable resources are estimated and production is measured in terms of the sales product
specifications, raw production (sales plus non-sales) quantities are also measured and required to support
engineering analyses based on reservoir voidage (see Production Measurement, section 3.2).
592

RESERVES are those quantities of petroleum anticipated to be commercially recoverable by application of

development projects to known accumulations from a given date forward under defined conditions.
Reserves must further satisfy four criteria: they must be discovered, recoverable, commercial, and
remaining (as of the evaluation date) based on the development project(s) applied. Reserves are further
categorized in accordance with the level of certainty associated with the estimates and may be
sub-classified based on project maturity and/or characterized by development and production status.
CONTINGENT RESOURCES are those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from known accumulations, but the applied project(s) are not yet considered
mature enough for commercial development due to one or more contingencies. Contingent Resources may
include, for example, projects for which there are currently no viable markets, or where commercial
recovery is dependent on technology under development, or where evaluation of the accumulation is
insufficient to clearly assess commerciality. Contingent Resources are further categorized in accordance
with the level of certainty associated with the estimates and may be subclassified based on project maturity
and/or characterized by their economic status.
UNDISCOVERED PETROLEUM INITIALLY-IN-PLACE is that quantity of petroleum estimated, as of a
given date, to be contained within accumulations yet to be discovered.
PROSPECTIVE RESOURCES are those quantities of petroleum estimated, as of a given date, to be
Prospective Resources have both an associated chance of discovery and a chance of development.
Prospective Resources are further subdivided in accordance with the level of certainty associated with
recoverable estimates assuming their discovery and development and may be sub-classified based on
project maturity.
UNRECOVERABLE is that portion of Discovered or Undiscovered Petroleum Initially-in-Place quantities
which is estimated, as of a given date, not to be recoverable by future development projects. A portion of
these quantities may become recoverable in the future as commercial circumstances change or
technological developments occur; the remaining portion may never be recovered due to physical/chemical
constraints represented by subsurface interaction of fluids and reservoir rocks.
Estimated Ultimate Recovery (EUR) is not a resources category, but a term that may be applied to any
accumulation or group of accumulations (discovered or undiscovered) to define those quantities of
petroleum estimated, as of a given date, to be potentially recoverable under defined technical and

as follows:
Net
Resources
Entitlement
PROPERTY
27MAR201009581974
593

and cash flow schedule. the time integration of these schedules taken to the project’s technical,
cash flow projections for each project. he ratio of EUR to Total Initially-in-Place quantities defines
the ultimate recovery efficiency for the development project(s). A project may be defined at various
levels and stages of maturity; it may include one or many wells and associated production and
processing facilities. One project may develop many reservoirs, or many projects may be applied to
one reservoir.
encompassed by the project’s activities (see Commercial Evaluations, section 3.1). ‘‘Conditions’’ include
technological, economic, legal, environmental, social, and governmental factors. While economic factors
can be summarized as forecast costs and product prices, the underlying influences include, but are not
limited to, market conditions, transportation and processing infrastructure, fiscal terms, and taxes.
according to delivery specifications at the point of sale or custody transfer (see Reference Point,
section 3.2.1). The cumulative production from the evaluation date forward to cessation of production is
the remaining recoverable quantity. The sum of the associated annual net cash flows yields the estimated
future net revenue. When the cash flows are discounted according to a defined discount rate and time
period, the summation of the discounted cash flows is termed net present value (NPV) of the project (see
Evaluation and Reporting Guidelines, section 3.0).
The supporting data, analytical processes, and assumptions used in an evaluation should be documented in
sufficient detail to allow an independent evaluator or auditor to clearly understand the basis for estimation
and categorization of recoverable quantities and their classification.
2.0 CLASSIFICATION AND CATEGORIZATION GUIDELINES

2.1 Resources Classification
The basic classification requires establishment of criteria for a petroleum discovery and thereafter the
distinction between commercial and sub-commercial projects in known accumulations (and hence between
Reserves and Contingent Resources).
594

2.1.1 Determination of Discovery Status

A discovery is one petroleum accumulation, or several petroleum accumulations collectively, for which one
or several exploratory wells have established through testing, sampling, and/or logging the existence of a
significant quantity of potentially moveable hydrocarbons.
In this context, ‘‘significant’’ implies that there is evidence of a sufficient quantity of petroleum to justify
estimating the in-place volume demonstrated by the well(s) and for evaluating the potential for economic
recovery. Estimated recoverable quantities within such a discovered (known) accumulation(s) shall initially
be classified as Contingent Resources pending definition of projects with sufficient chance of commercial
development to reclassify all, or a portion, as Reserves. Where in-place hydrocarbons are identified but are
not considered currently recoverable, such quantities may be classified as Discovered Unrecoverable, if
considered appropriate for resource management purposes; a portion of these quantities may become
recoverable resources in the future as commercial circumstances change or technological developments
occur.
2.1.2 Determination of Commerciality

Discovered recoverable volumes (Contingent Resources) may be considered commercially producible, and
thus Reserves, if the entity claiming commerciality has demonstrated firm intention to proceed with
development and such intention is based upon all of the following criteria:
• Evidence to support a reasonable timetable for development.
• A reasonable assessment of the future economics of such development projects meeting defined
investment and operating criteria.
• A reasonable expectation that there will be a market for all or at least the expected sales quantities of
production required to justify development.
• Evidence that the necessary production and transportation facilities are available or can be made
available.
• Evidence that legal, contractual, environmental and other social and economic concerns will allow for
the actual implementation of the recovery project being evaluated.
To be included in the Reserves class, a project must be sufficiently defined to establish its commercial
viability. There must be a reasonable expectation that all required internal and external approvals will be
forthcoming, and there is evidence of firm intention to proceed with development within a reasonable time
frame. A reasonable time frame for the initiation of development depends on the specific circumstances
and varies according to the scope of the project. While 5 years is recommended as a benchmark, a longer
time frame could be applied where, for example, development of economic projects are deferred at the
option of the producer for, among other things, market-related reasons, or to meet contractual or strategic
objectives. In all cases, the justification for classification as Reserves should be clearly documented.
To be included in the Reserves class, there must be a high confidence in the commercial producibility of
the reservoir as supported by actual production or formation tests. In certain cases, Reserves may be
assigned on the basis of well logs and/or core analysis that indicate that the subject reservoir is
hydrocarbon-bearing and is analogous to reservoirs in the same area that are producing or have
demonstrated the ability to produce on formation tests.
2.2 Resources Categorization

The horizontal axis in the Resources Classification (Figure 1.1) defines the range of uncertainty in
estimates of the quantities of recoverable, or potentially recoverable, petroleum associated with a project.
These estimates include both technical and commercial uncertainty components as follows:
• The total petroleum remaining within the accumulation (in-place resources).
• That portion of the in-place petroleum that can be recovered by applying a defined development
project or projects.
• Variations in the commercial conditions that may impact the quantities recovered and sold
(e.g., market availability, contractual changes).
595

Where commercial uncertainties are such that there is significant risk that the complete project (as initially
defined) will not proceed, it is advised to create a separate project classified as Contingent Resources with
an appropriate chance of commerciality.
2.2.1 Range of Uncertainty

The range of uncertainty of the recoverable and/or potentially recoverable volumes may be represented by
either deterministic scenarios or by a probability distribution (see Deterministic and Probabilistic Methods,
section 4.2).
When the range of uncertainty is represented by a probability distribution, a low, best, and high estimate
shall be provided such that:
exceed the low estimate.
exceed the best estimate.
exceed the high estimate.
When using the deterministic scenario method, typically there should also be low, best, and high estimates,
where such estimates are based on qualitative assessments of relative uncertainty using consistent
interpretation guidelines. Under the deterministic incremental (risk-based) approach, quantities at each
level of uncertainty are estimated discretely and separately (see Category Definitions and Guidelines,
section 2.2.2).
These same approaches to describing uncertainty may be applied to Reserves, Contingent Resources, and
Prospective Resources. While there may be significant risk that sub-commercial and undiscovered
accumulations will not achieve commercial production, it is useful to consider the range of potentially
recoverable quantities independently of such a risk or consideration of the resource class to which the
quantities will be assigned.
2.2.2 Category Definitions and Guidelines

Evaluators may assess recoverable quantities and categorize results by uncertainty using the deterministic
incremental (risk-based) approach, the deterministic scenario (cumulative) approach, or probabilistic
methods (see ‘‘2001 Supplemental Guidelines,’’ Chapter 2.5). In many cases, a combination of approaches
is used.
Use of consistent terminology (Figure 1.1) promotes clarity in communication of evaluation results. For
Reserves, the general cumulative terms low/best/high estimates are denoted as 1P/2P/3P, respectively. The
associated incremental quantities are termed Proved, Probable and Possible. Reserves are a subset of, and
must be viewed within context of, the complete resources classification system. While the categorization
criteria are proposed specifically for Reserves, in most cases, they can be equally applied to Contingent and
Prospective Resources conditional upon their satisfying the criteria for discovery and/or development.
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For Contingent Resources, the general cumulative terms low/best/high estimates are denoted as 1C/2C/3C
respectively. For Prospective Resources, the general cumulative terms low/best/high estimates still apply.
No specific terms are defined for incremental quantities within Contingent and Prospective Resources.
Without new technical information, there should be no change in the distribution of technically
recoverable volumes and their categorization boundaries when conditions are satisfied sufficiently to
reclassify a project from Contingent Resources to Reserves. All evaluations require application of a
consistent set of forecast conditions, including assumed future costs and prices, for both classification of
projects and categorization of estimated quantities recovered by each project (see Commercial
Evaluations, section 3.1).
Based on additional data and updated interpretations that indicate increased certainty, portions of Possible
and Probable Reserves may be re-categorized as Probable and Proved Reserves.
Uncertainty in resource estimates is best communicated by reporting a range of potential results. However,
if it is required to report a single representative result, the ‘‘best estimate’’ is considered the most realistic
assessment of recoverable quantities. It is generally considered to represent the sum of Proved and
Probable estimates (2P) when using the deterministic scenario or the probabilistic assessment methods. It
should be noted that under the deterministic incremental (risk-based) approach, discrete estimates are
made for each category, and they should not be aggregated without due consideration of their associated
risk (see ‘‘2001 Supplemental Guidelines,’’ Chapter 2.5).
Table 1: Recoverable Resources Classes and Sub-Classes

Reserves Reserves are those quantities of Reserves must satisfy four criteria: they must be
petroleum anticipated to be discovered, recoverable, commercial, and remaining
commercially recoverable by based on the development project(s) applied. Reserves
application of development projects are further subdivided in accordance with the level of
to known accumulations from a certainty associated with the estimates and may be
given date forward under defined sub-classified based on project maturity and/or
conditions. characterized by their development and production
status.
To be included in the Reserves class, a project must
be sufficiently defined to establish its commercial
viability. There must be a reasonable expectation that
all required internal and external approvals will be
forthcoming, and there is evidence of firm intention to
proceed with development within a reasonable time
frame.
A reasonable time frame for the initiation of
development depends on the specific circumstances
and varies according to the scope of the project.
While 5 years is recommended as a benchmark, a
longer time frame could be applied where, for
example, development of economic projects are
deferred at the option of the producer for, among
other things, market related reasons, or to meet
contractual or strategic objectives. In all cases, the
justification for classification as Reserves should be
clearly documented.
To be included in the Reserves class, there must be a
high confidence in the commercial producibility of the
reservoir as supported by actual production or
formation tests. In certain cases, Reserves may be
assigned on the basis of well logs and/or core analysis
that indicate that the subject reservoir is hydrocarbon-
bearing and is analogous to reservoirs in the same
area that are producing or have demonstrated the
ability to produce on formation tests.
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On Production The development project is The key criterion is that the project is receiving
currently producing and selling income from sales, rather than the approved
petroleum to market. development project necessarily being complete. This
is the point at which the project ‘‘chance of
commerciality’’ can be said to be 100%.
The project ‘‘decision gate’’ is the decision to initiate
commercial production from the project.
Approved for All necessary approvals have been At this point, it must be certain that the development
Development obtained, capital funds have been project is going ahead. The project must not be
committed, and implementation of subject to any contingencies such as outstanding
the development project is under regulatory approvals or sales contracts. Forecast
way. capital expenditures should be included in the
reporting entity’s current or following year’s approved
budget.
The project ‘‘decision gate’’ is the decision to start
investing capital in the construction of production
facilities and/or drilling development wells.
Justified for Implementation of the development In order to move to this level of project maturity, and
Development project is justified on the basis of hence have reserves associated with it, the
reasonable forecast commercial development project must be commercially viable at
conditions at the time of reporting, the time of reporting, based on the reporting entity’s
and there are reasonable assumptions of future prices, costs, etc. (‘‘forecast
expectations that all necessary case’’) and the specific circumstances of the project.
approvals/contracts will be obtained. Evidence of a firm intention to proceed with
development within a reasonable time frame will be
sufficient to demonstrate commerciality. There should
be a development plan in sufficient detail to support
the assessment of commerciality and a reasonable
expectation that any regulatory approvals or sales
contracts required prior to project implementation will
be forthcoming. Other than such approvals/contracts,
there should be no known contingencies that could
preclude the development from proceeding within a
reasonable timeframe (see Reserves class).
The project ‘‘decision gate’’ is the decision by the
reporting entity and its partners, if any, that the
project has reached a level of technical and
commercial maturity sufficient to justify proceeding
with development at that point in time.
Contingent Those quantities of petroleum Contingent Resources may include, for example,
Resources estimated, as of a given date, to be projects for which there are currently no viable
potentially recoverable from known markets, or where commercial recovery is dependent
accumulations by application of on technology under development, or where
development projects, but which are evaluation of the accumulation is insufficient to clearly
not currently considered to be assess commerciality. Contingent Resources are
commercially recoverable due to further categorized in accordance with the level of
one or more contingencies. certainty associated with the estimates and may be
sub-classified based on project maturity and/or
characterized by their economic status.
598


Development A discovered accumulation where The project is seen to have reasonable potential for
Pending project activities are ongoing to eventual commercial development, to the extent that
justify commercial development in further data acquisition (e.g. drilling, seismic data)
the foreseeable future. and/or evaluations are currently ongoing with a view
to confirming that the project is commercially viable
and providing the basis for selection of an appropriate
development plan. The critical contingencies have
been identified and are reasonably expected to be
resolved within a reasonable time frame. Note that
disappointing appraisal/evaluation results could lead to
a re-classification of the project to ‘‘On Hold’’ or
‘‘Not Viable’’ status.
The project ‘‘decision gate’’ is the decision to
undertake further data acquisition and/or studies
designed to move the project to a level of technical
and commercial maturity at which a decision can be
made to proceed with development and production.
Development A discovered accumulation where The project is seen to have potential for eventual
Unclarified or on project activities are on hold and/or commercial development, but further appraisal/
Hold where justification as a commercial evaluation activities are on hold pending the removal
development may be subject to of significant contingencies external to the project, or
significant delay. substantial further appraisal/evaluation activities are
required to clarify the potential for eventual
commercial development. Development may be
subject to a significant time delay. Note that a change
in circumstances, such that there is no longer a
reasonable expectation that a critical contingency can
be removed in the foreseeable future, for example,
could lead to a reclassification of the project to ‘‘Not
Viable’’ status.
The project ‘‘decision gate’’ is the decision to either
proceed with additional evaluation designed to clarify
the potential for eventual commercial development or
to temporarily suspend or delay further activities
pending resolution of external contingencies.
Development Not A discovered accumulation for The project is not seen to have potential for eventual
Viable which there are no current plans to commercial development at the time of reporting, but
develop or to acquire additional the theoretically recoverable quantities are recorded
data at the time due to limited so that the potential opportunity will be recognized in
production potential. the event of a major change in technology or
commercial conditions.
The project ‘‘decision gate’’ is the decision not to
undertake any further data acquisition or studies on
the project for the foreseeable future.
Prospective Those quantities of petroleum Potential accumulations are evaluated according to
Resources which are estimated, as of a given their chance of discovery and, assuming a discovery,
date, to be potentially recoverable the estimated quantities that would be recoverable
from undiscovered accumulations. under defined development projects. It is recognized
that the development programs will be of significantly
less detail and depend more heavily on analog
developments in the earlier phases of exploration.
Prospect A project associated with a Project activities are focused on assessing the chance
potential accumulation that is of discovery and, assuming discovery, the range of
sufficiently well defined to represent potential recoverable quantities under a commercial
a viable drilling target. development program.
599


Lead A project associated with a Project activities are focused on acquiring additional
potential accumulation that is data and/or undertaking further evaluation designed
currently poorly defined and to confirm whether or not the lead can be matured
requires more data acquisition into a prospect. Such evaluation includes the
and/or evaluation in order to be assessment of the chance of discovery and, assuming
classified as a prospect. discovery, the range of potential recovery under
feasible development scenarios.
Play A project associated with a Project activities are focused on acquiring additional
prospective trend of potential data and/or undertaking further evaluation designed
prospects, but which requires more to define specific leads or prospects for more detailed
data acquisition and/or evaluation in analysis of their chance of discovery and, assuming
order to define specific leads or discovery, the range of potential recovery under
prospects. hypothetical development scenarios.
Table 2: Reserves Status Definitions and Guidelines
Status Definition Guidelines

Developed Developed Reserves are expected Reserves are considered developed only after the
Reserves quantities to be recovered from necessary equipment has been installed, or when the
existing wells and facilities. costs to do so are relatively minor compared to the
cost of a well. Where required facilities become
unavailable, it may be necessary to reclassify
Developed Reserves as Undeveloped. Developed
Reserves may be further sub-classified as Producing or
Non-Producing.
Developed Developed Producing Reserves are Improved recovery reserves are considered producing
Producing expected to be recovered from only after the improved recovery project is in
Reserves completion intervals that are open operation.
and producing at the time of the
estimate.
Developed Developed Non-Producing Reserves Shut-in Reserves are expected to be recovered from
Non-Producing include shut-in and behind-pipe (1) completion intervals which are open at the time of
Reserves Reserves. the estimate but which have not yet started producing,
(2) wells which were shut-in for market conditions or
pipeline connections, or (3) wells not capable of
production for mechanical reasons. Behind-pipe
Reserves are expected to be recovered from zones in
existing wells which will require additional completion
work or future re-completion prior to start of
production.
In all cases, production can be initiated or restored
with relatively low expenditure compared to the cost
of drilling a new well.
Undeveloped Undeveloped Reserves are (1) from new wells on undrilled acreage in known
Reserves quantities expected to be recovered accumulations, (2) from deepening existing wells to a
through future investments: different (but known) reservoir, (3) from infill wells
that will increase recovery, or (4) where a relatively
large expenditure (e.g. when compared to the cost of
drilling a new well) is required to (a) recomplete an
existing well or (b) install production or transportation
facilities for primary or improved recovery projects.
600

Table 3: Reserves Category Definitions and Guidelines

Proved Reserves Proved Reserves are those If deterministic methods are used, the term
quantities of petroleum, which by reasonable certainty is intended to express a high
analysis of geoscience and degree of confidence that the quantities will be
engineering data, can be estimated recovered. If probabilistic methods are used, there
with reasonable certainty to be should be at least a 90% probability that the
commercially recoverable, from a quantities actually recovered will equal or exceed the
given date forward, from known estimate.
reservoirs and under defined
The area of the reservoir considered as Proved
economic conditions, operating
includes (1) the area delineated by drilling and
methods, and government
defined by fluid contacts, if any, and (2) adjacent
regulations.
undrilled portions of the reservoir that can reasonably
be judged as continuous with it and commercially
productive on the basis of available geoscience and
engineering data.
In the absence of data on fluid contacts, Proved
quantities in a reservoir are limited by the lowest
known hydrocarbon (LKH) as seen in a well
penetration unless otherwise indicated by definitive
geoscience, engineering, or performance data. Such
definitive information may include pressure gradient
analysis and seismic indicators. Seismic data alone
may not be sufficient to define fluid contacts for
Proved reserves (see ‘‘2001 Supplemental Guidelines,’’
Chapter 8).
Reserves in undeveloped locations may be classified as
Proved provided that:
• The locations are in undrilled areas of the
reservoir that can be judged with reasonable
certainty to be commercially productive.
• Interpretations of available geoscience and
engineering data indicate with reasonable
certainty that the objective formation is laterally
continuous with drilled Proved locations.
For Proved Reserves, the recovery efficiency applied
to these reservoirs should be defined based on a range
of possibilities supported by analogs and sound
engineering judgment considering the characteristics
of the Proved area and the applied development
program.
Probable Probable Reserves are those It is equally likely that actual remaining quantities
Reserves additional Reserves which analysis recovered will be greater than or less than the sum of
of geoscience and engineering data the estimated Proved plus Probable Reserves (2P). In
indicate are less likely to be this context, when probabilistic methods are used,
recovered than Proved Reserves but there should be at least a 50% probability that the
more certain to be recovered than actual quantities recovered will equal or exceed the 2P
Possible Reserves. estimate.
Probable Reserves may be assigned to areas of a
reservoir adjacent to Proved where data control or
interpretations of available data are less certain. The
interpreted reservoir continuity may not meet the
reasonable certainty criteria.
Probable estimates also include incremental recoveries
that assumed for Proved.
601

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Possible Reserves Possible Reserves are those The total quantities ultimately recovered from the
additional reserves which analysis of project have a low probability to exceed the sum of
geoscience and engineering data Proved plus Probable plus Possible (3P), which is
indicate are less likely to be equivalent to the high estimate scenario. When
recoverable than Probable Reserves. probabilistic methods are used, there should be at
least a 10% probability that the actual quantities
recovered will equal or exceed the 3P estimate.
Possible Reserves may be assigned to areas of a
reservoir adjacent to Probable where data control and
interpretations of available data are progressively less
certain. Frequently, this may be in areas where
geoscience and engineering data are unable to clearly
define the area and vertical reservoir limits of
commercial production from the reservoir by a
defined project.
Possible estimates also include incremental quantities
that assumed for Probable.
Probable and (See above for separate criteria for The 2P and 3P estimates may be based on reasonable
Possible Reserves Probable Reserves and Possible alternative technical and commercial interpretations
Reserves.) within the reservoir and/or subject project that are
clearly documented, including comparisons to results
in successful similar projects.
In conventional accumulations, Probable and/or
Possible Reserves may be assigned where geoscience
and engineering data identify directly adjacent
portions of a reservoir within the same accumulation
that may be separated from Proved areas by minor
faulting or other geological discontinuities and have
not been penetrated by a wellbore but are interpreted
to be in communication with the known (Proved)
reservoir. Probable or Possible Reserves may be
assigned to areas that are structurally higher than the
Proved area. Possible (and in some cases, Probable)
eserves may be assigned to areas that are structurally
lower than the adjacent Proved or 2P area.
Caution should be exercised in assigning Reserves to
adjacent reservoirs isolated by major, potentially
sealing, faults until this reservoir is penetrated and
evaluated as commercially productive. Justification for
assigning Reserves in such cases should be clearly
documented. Reserves should not be assigned to areas
that are clearly separated from a known accumulation
by non-productive reservoir (i.e., absence of reservoir,
structurally low reservoir, or negative test results);
such areas may contain Prospective Resources.
In conventional accumulations, where drilling has
defined a highest known oil (HKO) elevation and
there exists the potential for an associated gas cap,
Proved oil Reserves should only be assigned in the
structurally higher portions of the reservoir if there is
reasonable certainty that such portions are initially
above bubble point pressure based on documented
engineering analyses. eservoir portions that do not
meet this certainty may be assigned as Probable and
Possible oil and/or gas based on reservoir fluid
properties and pressure gradient interpretations.
The 2007 Petroleum Resources Management System can be viewed in its entirety at
http://www.spe.org/spe-app/spe/industry/reserves/prms.htm.
602

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ABBREVIATIONS
$ United States dollars

1C low estimate scenario of contingent resources
2C best estimate scenario of contingent resources
3C high estimate scenario of contingent resources
BCF billions of cubic feet
BCM billions of cubic meters
Cga gas storage capacity at abandonment pressure
Cgi initial gas content
CSG coal seam gas
D density of coal
EOL Essar Oil Limited
Essar Energy Essar Energy plc
EUR estimated ultimate recovery
h formation thickness
LAS Log ASCII Standard
M$ thousands of United States dollars
MCF thousands of cubic feet
MMBTU millions of British thermal units
MMCF millions of cubic feet
NSAI Netherland, Sewell & Associates, Inc.
OGIP original gas-in-place
OGIP/m2 original gas-in-place per square meter
PRMS Petroleum Resources Management System
Raniganj East RG (East)-CBM-2001/1
Rf gas recovery factor
RGIP/m2 recoverable gas-in-place per square meter
Z-MAP Plus Landmark’s Z-MAP Plus
603

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TABLE OF CONTENTS
Table/Page
Number
SUMMARY PROJECTIONS OF RESOURCES AND CASH FLOW . . . . . . . . . . . . . . . . 605

Low (1C) Estimate Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606
Best (2C) Estimate Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 607
High (3C) Estimate Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
TECHNICAL DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 611
1.0 General Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
2.0 Asset Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
2.1 Ownership Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
2.2 Field History and Work Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
2.3 Geology and Reservoir Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612
3.0 Evaluation Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
3.1 Original Gas-in-Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
3.2 Recoverable Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614
3.3 Production Profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614
4.0 Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
4.1 Development Timing and Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 615
4.2 Gas Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
4.3 Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
4.4 Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
5.0 Prospective Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616
FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618
Location Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619
Stratigraphic Column . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620
R3 Coal Seam Desorption Isotherm Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621
Original Gas-in-Place Maps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622
Low Estimate Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622
Best Estimate Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623
High Estimate Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624
Gross Projected Gas and Water Production—EDT-10 Well . . . . . . . . . . . . . . . . . . . . . . . 625
Summary Graph of Gross Projected Gas Production—Contingent Resources . . . . . . . . . . 626
Base Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627
Summary Projections of Resources and Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628
Basic Data, Resources, and Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628
Low Estimate (1C) Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629
Best Estimate (2C) Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638
High Estimate (3C) Contingent Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648
Summary Graph of Gross Projected Gas Production—Prospective Resources . . . . . . . . . . 658
APPENDIX
Summary of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660
Summary of Estimated Contingent Gas Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 661
Summary of Estimated Unrisked Prospective Gas Resources . . . . . . . . . . . . . . . . . . . . . . 662
604

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SUMMARY—CERTAIN COAL SEAM GAS PROPERTIES LOCATED IN THE RG (EAST)-CBM-2001/1 BLOCK

WEST BENGAL, INDIA
0D/
Gross Resources Net Resources Average Prices Gross Cash Flow
Oil NGL Gas Oil NGL Gas Oil NGL Gas Oil NGL Gas Total
Period Ending m-d-y BBL BBL MCF BBL BBL MCF $/BBL $/BBL $/MCF M$ M$ M$ M$
12-31-2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 925,689 0 0 879,405 0.000 0.000 4.462 0.0 0.0 3,924.3 3,924.3
12-31-2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,972,011 0 0 2,823,413 0.000 0.000 4.463 0.0 0.0 12,599.3 12,599.3
File: VG70801A.;51
12-31-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5,024,092 0 0 4,772,888 0.000 0.000 4.463 0.0 0.0 21,299.1 21,299.1
605
12-31-2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 7,300,347 0 0 6,935,330 0.000 0.000 4.462 0.0 0.0 30,949.0 30,949.0
12-31-2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 8,017,274 0 0 7,616,411 0.000 0.000 4.463 0.0 0.0 33,987.9 33,987.9
12-31-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 7,536,491 0 0 7,159,664 0.000 0.000 4.463 0.0 0.0 31,949.7 31,949.7
12-31-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 6,651,051 0 0 6,318,498 0.000 0.000 4.463 0.0 0.0 28,196.1 28,196.1
12-31-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5,740,459 0 0 5,453,440 0.000 0.000 4.463 0.0 0.0 24,336.1 24,336.1
12-31-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 4,932,800 0 0 4,686,167 0.000 0.000 4.462 0.0 0.0 20,912.1 20,912.1
12-31-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 4,250,542 0 0 4,038,011 0.000 0.000 4.462 0.0 0.0 18,019.9 18,019.9
12-31-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 3,681,733 0 0 3,497,649 0.000 0.000 4.463 0.0 0.0 15,608.4 15,608.4
12-31-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 3,209,636 0 0 3,049,158 0.000 0.000 4.463 0.0 0.0 13,607.2 13,607.2
12-31-2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,814,433 0 0 2,673,717 0.000 0.000 4.462 0.0 0.0 11,931.5 11,931.5
12-31-2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,481,291 0 0 2,357,224 0.000 0.000 4.463 0.0 0.0 10,519.0 10,519.0
12-31-2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,199,083 0 0 2,089,131 0.000 0.000 4.463 0.0 0.0 9,322.4 9,322.4
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 67,736,932 0 0 64,350,106 0.000 0.000 4.463 0.0 0.0 287,162.0 287,162.0
Remaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 15,539,386 0 0 14,762,398 0.000 0.000 4.463 0.0 0.0 65,877.4 65,877.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 83,276,318 0 0 79,112,504 0.000 0.000 4.463 0.0 0.0 353,039.4 353,039.4
Cum Prod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 78,184
Ultimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 83,354,502
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Net Deductions/Expenditures Future Net Cash Flow

Number of Discounted Cash Flow
0D/
active Taxes Undiscounted Discounted at 10.000% Profile
Capital Operating
completions Production Ad Valorem Cost Expense Period Cum Period Cum Disc Rate Cash Flow
Period Ending m-d-y Gross Net M$ M$ M$ M$ M$ M$ M$ M$ % M$
12-31-2010 . . . . . . . . . . . . . . . 72 72.00 394.2 0.0 59,951.7 810.6 (57,232.2) (57,232.2) (55,049.2) (55,049.2) 8.000 66,064.0
12-31-2011 . . . . . . . . . . . . . . . 129 129.00 1,295.8 0.0 21,583.2 2,272.6 (12,552.3) (69,784.5) (11,645.7) (66,694.9) 12.000 38,659.3
12-31-2012 . . . . . . . . . . . . . . . 129 129.00 2,187.2 0.0 0.0 2,471.0 16,640.9 (53,143.6) 13,049.7 (53,645.2) 15.000 23,605.0
12-31-2013 . . . . . . . . . . . . . . . 129 129.00 3,196.0 0.0 0.0 2,564.8 25,188.2 (27,955.4) 18,014.1 (35,631.1) 20.000 5,326.3
12-31-2014 . . . . . . . . . . . . . . . 129 129.00 3,520.8 0.0 0.0 2,588.4 27,878.7 (76.7) 18,163.8 (17,467.3) 25.000 (7,344.6)
File: VG70801A.;51
12-31-2015 . . . . . . . . . . . . . . . 129 129.00 3,313.8 0.0 0.0 2,559.0 26,076.9 26,000.2 15,460.3 (2,007.0) 30.000 (16,411.2)
606
12-31-2016 . . . . . . . . . . . . . . . 129 129.00 2,925.9 0.0 0.0 2,511.0 22,759.2 48,759.4 12,271.7 10,264.7 35.000 (23,056.6)
12-31-2017 . . . . . . . . . . . . . . . 129 129.00 2,525.8 0.0 0.0 2,463.2 19,347.1 68,106.5 9,484.6 19,749.3 40.000 (28,016.8)
12-31-2018 . . . . . . . . . . . . . . . 129 129.00 2,170.4 0.0 0.0 2,418.4 16,323.3 84,429.8 7,273.8 27,023.1 45.000 (31,777.8)
12-31-2019 . . . . . . . . . . . . . . . 129 129.00 1,870.1 0.0 0.0 2,381.9 13,767.9 98,197.7 5,576.8 32,599.9 50.000 (34,658.8)
12-31-2020 . . . . . . . . . . . . . . . 129 129.00 1,619.7 0.0 0.0 2,351.9 11,636.8 109,834.5 4,284.6 36,884.5
12-31-2021 . . . . . . . . . . . . . . . 129 129.00 1,411.9 0.0 0.0 2,327.9 9,867.4 119,701.9 3,302.7 40,187.2
12-31-2022 . . . . . . . . . . . . . . . 129 129.00 1,237.9 0.0 0.0 2,308.3 8,385.3 128,087.2 2,551.1 42,738.3
12-31-2023 . . . . . . . . . . . . . . . 129 129.00 1,091.3 0.0 0.0 2,291.5 7,136.2 135,223.4 1,973.8 44,712.1
12-31-2024 . . . . . . . . . . . . . . . 129 129.00 967.0 0.0 0.0 2,277.4 6,078.0 141,301.4 1,528.3 46,240.4
Subtotal . . . . . . . . . . . . . . . . 29,727.8 0.0 81,534.9 34,597.9 141,301.4 141,301.4 46,240.4 46,240.4
Remaining . . . . . . . . . . . . . . . 7,206.4 0.0 0.0 29,954.3 28,716.7 170,018.1 4,860.3 51,100.7
Total of 32.0 yrs . . . . . . . . . . . 36,934.2 0.0 81,534.9 64,552.2 170,018.1 170,018.1 51,100.7 51,100.7
Based on EOL Price and Cost Parameters
Table I
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0D/
12-31-2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,124,810 0 0 2,018,587 0.000 0.000 4.463 0.0 0.0 9,008.3 9,008.3
12-31-2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 7,028,197 0 0 6,676,790 0.000 0.000 4.463 0.0 0.0 29,795.1 29,795.1
12-31-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 11,886,714 0 0 11,292,371 0.000 0.000 4.463 0.0 0.0 50,392.1 50,392.1
12-31-2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 17,397,420 0 0 16,527,549 0.000 0.000 4.463 0.0 0.0 73,754.3 73,754.3
12-31-2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 19,178,982 0 0 18,220,036 0.000 0.000 4.463 0.0 0.0 81,306.6 81,306.6
12-31-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 18,055,530 0 0 17,152,752 0.000 0.000 4.463 0.0 0.0 76,544.2 76,544.2
File: VG70801A.;51
12-31-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 15,942,931 0 0 15,145,786 0.000 0.000 4.463 0.0 0.0 67,587.4 67,587.4
607
12-31-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 13,762,218 0 0 13,074,114 0.000 0.000 4.462 0.0 0.0 58,343.1 58,343.1
12-31-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 11,825,671 0 0 11,234,385 0.000 0.000 4.463 0.0 0.0 50,133.6 50,133.6
12-31-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 10,189,265 0 0 9,679,796 0.000 0.000 4.463 0.0 0.0 43,195.8 43,195.8
12-31-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 8,824,735 0 0 8,383,501 0.000 0.000 4.463 0.0 0.0 37,411.5 37,411.5
12-31-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 7,692,331 0 0 7,307,724 0.000 0.000 4.463 0.0 0.0 32,610.9 32,610.9
12-31-2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 6,744,488 0 0 6,407,255 0.000 0.000 4.463 0.0 0.0 28,592.7 28,592.7
12-31-2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5,945,508 0 0 5,648,231 0.000 0.000 4.463 0.0 0.0 25,205.4 25,205.4
12-31-2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5,268,751 0 0 5,005,316 0.000 0.000 4.463 0.0 0.0 22,336.2 22,336.2
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 161,867,551 0 0 153,774,173 0.000 0.000 4.463 0.0 0.0 686,217.2 686,217.2
Remaining . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 38,976,349 0 0 37,027,534 0.000 0.000 4.463 0.0 0.0 165,235.6 165,235.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 200,843,900 0 0 190,801,707 0.000 0.000 4.463 0.0 0.0 851,452.8 851,452.8
Cum Prod . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 78,184
Ultimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 200,922,084
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0D/
Capital Operating
12-31-2010 . . . . . . . . . . . . . . 81 81.00 860.0 0.0 70,216.1 922.4 (62,990.2) (62,990.2) (60,547.5) (60,547.5) 8.000 277,834.9
12-31-2011 . . . . . . . . . . . . . . 143 143.00 2,868.3 0.0 23,487.6 2,800.7 638.5 (62,351.7) (342.4) (60,889.9) 12.000 202,248.0
12-31-2012 . . . . . . . . . . . . . . 143 143.00 4,970.9 0.0 5,886.0 3,126.5 36,408.7 (25,943.0) 28,742.7 (32,147.2) 15.000 161,237.0
12-31-2013 . . . . . . . . . . . . . . 143 143.00 8,600.3 0.0 0.0 3,351.6 61,802.4 35,859.4 44,201.8 12,054.6 20.000 111,672.0
12-31-2014 . . . . . . . . . . . . . . 143 143.00 9,983.9 0.0 0.0 3,410.6 67,912.1 103,771.5 44,245.6 56,300.2 25.000 77,246.4
File: VG70801A.;51
12-31-2015 . . . . . . . . . . . . . . 143 143.00 9,164.9 0.0 0.0 3,339.2 64,040.1 167,811.6 37,964.7 94,264.9 30.000 52,379.4
608
12-31-2016 . . . . . . . . . . . . . . 143 143.00 7,592.6 0.0 0.0 3,224.4 56,770.4 224,582.0 30,606.6 124,871.5 35.000 33,882.0
12-31-2017 . . . . . . . . . . . . . . 143 143.00 5,964.2 0.0 0.0 3,107.7 49,271.2 273,853.2 24,150.2 149,021.7 40.000 19,781.3
12-31-2018 . . . . . . . . . . . . . . 143 143.00 5,046.4 0.0 0.0 3,008.3 42,078.9 315,932.1 18,750.2 167,771.9 45.000 8,829.8
12-31-2019 . . . . . . . . . . . . . . 143 143.00 4,347.2 0.0 0.0 2,923.7 35,924.9 351,857.0 14,552.2 182,324.1 50.000 185.1
12-31-2020 . . . . . . . . . . . . . . 143 143.00 3,764.4 0.0 0.0 2,854.5 30,792.6 382,649.6 11,339.0 193,663.1
12-31-2021 . . . . . . . . . . . . . . 143 143.00 3,280.8 0.0 0.0 2,796.6 26,533.5 409,183.1 8,882.6 202,545.7
12-31-2022 . . . . . . . . . . . . . . 143 143.00 2,876.1 0.0 0.0 2,746.3 22,970.3 432,153.4 6,989.6 209,535.3
12-31-2023 . . . . . . . . . . . . . . 143 143.00 2,535.0 0.0 0.0 2,704.3 19,966.1 452,119.5 5,522.5 215,057.8
12-31-2024 . . . . . . . . . . . . . . 143 143.00 2,246.0 0.0 0.0 2,668.7 17,421.5 469,541.0 4,380.8 219,438.6
Subtototal . . . . . . . . . . . . . . 74,101.0 0.0 99,589.7 42,985.5 469,541.0 469,541.0 219,438.6 219,438.6
Remaining . . . . . . . . . . . . . . 16,749.9 0.0 0.0 38,089.4 110,396.3 579,937.3 16,954.4 236,393.0
Total of 32.0 yrs . . . . . . . . . . 90,850.9 0.0 99,589.7 81,074.9 579,937.3 579,937.3 236,393.0 236,393.0
Table II
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Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
12-31-2010 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 3,746,139 0 0 3,558,834 0.000 0.000 4.463 0.0 0.0 15,881.5 15,881.5
12-31-2011 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 13,064,491 0 0 12,411,266 0.000 0.000 4.462 0.0 0.0 55,385.3 55,385.3
12-31-2012 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 21,898,155 0 0 20,803,247 0.000 0.000 4.462 0.0 0.0 92,834.4 92,834.4
12-31-2013 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 32,433,838 0 0 30,812,148 0.000 0.000 4.462 0.0 0.0 137,498.8 137,498.8
12-31-2014 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 35,975,319 0 0 34,176,554 0.000 0.000 4.462 0.0 0.0 152,512.9 152,512.9
12-31-2015 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 33,950,744 0 0 32,253,206 0.000 0.000 4.463 0.0 0.0 143,929.9 143,929.9
File: VG70801A.;51
12-31-2016 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 30,011,786 0 0 28,511,195 0.000 0.000 4.463 0.0 0.0 127,231.0 127,231.0
609
12-31-2017 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 25,918,954 0 0 24,623,009 0.000 0.000 4.463 0.0 0.0 109,880.1 109,880.1
12-31-2018 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 22,275,085 0 0 21,161,329 0.000 0.000 4.463 0.0 0.0 94,432.3 94,432.3
12-31-2019 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 19,193,365 0 0 18,233,693 0.000 0.000 4.462 0.0 0.0 81,368.8 81,368.8
12-31-2020 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 16,621,330 0 0 15,790,262 0.000 0.000 4.463 0.0 0.0 70,464.3 70,464.3
12-31-2021 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 14,486,618 0 0 13,762,285 0.000 0.000 4.462 0.0 0.0 61,414.6 61,414.6
12-31-2022 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 12,699,411 0 0 12,064,444 0.000 0.000 4.463 0.0 0.0 53,837.4 53,837.4
12-31-2023 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 11,192,677 0 0 10,633,033 0.000 0.000 4.463 0.0 0.0 47,449.5 47,449.5
12-31-2024 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 9,916,326 0 0 9,420,519 0.000 0.000 4.463 0.0 0.0 42,038.5 42,038.5
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 303,384,238 0 0 288,215,024 0.000 0.000 4.463 0.0 0.0 1,286,159.3 1,286,159.3
Remaining . . . . . . . . . . . . . . . . . . . . . . . . 0 0 73,835,259 0 0 70,143,494 0.000 0.000 4.463 0.0 0.0 313,015.3 313,015.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 377,219,497 0 0 358,358,518 0.000 0.000 4.463 0.0 0.0 1,599,174.6 1,599,174.6
Cum Prod . . . . . . . . . . . . . . . . . . . . . . . . . 0 78,184
Ultimate . . . . . . . . . . . . . . . . . . . . . . . . . . 0 377,297,681
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0D/
Capital Operating
12-31-2010 . . . . . . . . . . . 81 81.00 1,510.3 0.0 79,383.8 1,056.7 (66,069.3) (66,069.3) (63,495.0) (63,495.0) 8.000 591,697.8
12-31-2011 . . . . . . . . . . . 144 144.00 5,321.1 0.0 30,008.4 3,275.6 16,780.2 (49,289.1) 13,743.7 (49,751.3) 12.000 445,247.1
12-31-2012 . . . . . . . . . . . 144 144.00 11,819.0 0.0 0.0 3,759.9 77,255.5 27,966.4 60,622.2 10,870.9 15.000 366,296.0
12-31-2013 . . . . . . . . . . . 144 144.00 21,575.7 0.0 0.0 4,192.4 111,730.7 139,697.1 79,917.6 90,788.5 20.000 271,194.9
12-31-2014 . . . . . . . . . . . 144 144.00 25,330.7 0.0 0.0 4,312.2 122,870.0 262,567.1 80,050.7 170,839.2 25.000 205,184.3
File: VG70801A.;51
12-31-2015 . . . . . . . . . . . 144 144.00 23,225.0 0.0 0.0 4,180.9 116,524.0 379,091.1 69,076.7 239,915.9 30.000 157,414.1
610
12-31-2016 . . . . . . . . . . . 144 144.00 19,438.0 0.0 0.0 3,966.2 103,826.8 482,917.9 55,972.6 295,888.5 35.000 121,713.2
12-31-2017 . . . . . . . . . . . 144 144.00 15,626.5 0.0 0.0 3,749.3 90,504.3 573,422.2 44,358.1 340,246.6 40.000 94,345.4
12-31-2018 . . . . . . . . . . . 144 144.00 12,517.9 0.0 0.0 3,561.4 78,353.0 651,775.2 34,912.4 375,159.0 45.000 72,921.2
12-31-2019 . . . . . . . . . . . 144 144.00 10,000.1 0.0 0.0 3,399.8 67,968.9 719,744.1 27,529.2 402,688.2 50.000 55,863.4
12-31-2020 . . . . . . . . . . . 144 144.00 8,079.6 0.0 0.0 3,267.9 59,116.8 778,860.9 21,765.9 424,454.1
12-31-2021 . . . . . . . . . . . 144 144.00 6,486.1 0.0 0.0 3,158.5 51,770.0 830,630.9 17,327.0 441,781.1
12-31-2022 . . . . . . . . . . . 144 144.00 5,409.2 0.0 0.0 3,067.9 45,360.3 875,991.2 13,801.5 455,582.6
12-31-2023 . . . . . . . . . . . 144 144.00 4,766.6 0.0 0.0 2,991.9 39,691.0 915,682.2 10,978.2 466,560.8
12-31-2024 . . . . . . . . . . . 144 144.00 4,222.3 0.0 0.0 2,927.2 34,889.0 950,571.2 8,772.6 475,333.4
Subtotal . . . . . . . . . . . . 175,328.1 0.0 109,392.2 50,867.8 950,571.2 950,571.2 475,333.4 475,333.4
Remaining . . . . . . . . . . . 31,453.2 0.0 0.0 41,746.8 239,815.3 1,190,386.5 35,920.2 511,253.6
Total of 32.0 yrs . . . . . . . 206,781.3 0.0 109,392.2 92,614.6 1,190,386.5 1,190,386.5 511,253.6 511,253.6
Table III
MERRILL CORPORATION JDICKSO//30-APR-10 12:30 DISK116:[10ZAU1.10ZAU70801]VH70801A.;27
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MERRILL CORPORATION JDICKSO//30-APR-10 12:29 DISK116:[10ZAU1.10ZAU70801]VJ70801A.;30
ESSAR OIL LIMITED
COAL SEAM GAS PROPERTIES
RG (EAST)-CBM-2001/1 (RANIGANJ EAST) BLOCK, WEST BENGAL, INDIA
1.0 GENERAL OVERVIEW
flow and unrisked prospective resources, as of December 31, 2009, to the Essar Oil Limited (EOL) interest
in certain coal seam gas (CSG) properties located in the RG (East)-CBM-2001/1 (Raniganj East) Block,
West Bengal, India. It is our understanding that EOL owns 100 percent working interest in this block. the
resources presented in this report have been prepared in accordance with internationally recognized
standards. Estimates of resources have been prepared in accordance with the definitions and guidelines set
forth in the 2007 Petroleum Resources Management System approved by the Society of Petroleum
Engineers.
During the course of our evaluation, EOL provided access to its engineering and geologic data. A meeting
was held with EOL personnel in Mumbai, India during September 2009. During the meeting EOL
personnel reviewed the results of the first phase of drilling and the future development plans for the
project. Data provided by EOL included various reports, geologic maps, inter-well seismic data, well logs,
core data, production volumes, injection fall-off test results for existing pilot wells, and gas content data.
All data sources were used, as appropriate, for the assessment of the properties.
2.0 ASSET OVERVIEW

The Raniganj East Block is located in the eastern part of Raniganj Coal Field in the state of West Bengal,
India, as shown in Figure 1. The block covers an area of 470 square kilometers and was awarded to EOL
on July 26, 2002. It is our understanding that EOL owns 100 percent working interest in the block. The
Petroleum Exploration License was executed with the government of West Bengal on March 29, 2005.
2.2 Field History and Work Plan

Phase I of exploration started in September 2006 with the drilling of the EDC-1A core hole. Phase I was
successfully completed on May 1, 2009, after the drilling of 17 core holes and 15 production test wells. It is
our understanding that EOL is currently pursuing approvals and implementation of Phase II. Phase II
includes at least 60 additional locations and by the contract terms must be commenced within three years
of contract execution. Phase III of the contract involves full development of the block and consists of
several hundred wells and is required to be commenced within five years of contract execution.
2.3 Geology and Reservoir Characterization

Raniganj Coal Field is located in the Raniganj Basin, and the Raniganj East Block is located in the Ichapur
Sub-basin, also known as the Durgapur Depression, of the Raniganj Basin. The basin is floored by
Precambrian metamorphics and filled with Permian through recent sediments. A stratigraphic column is
shown in Figure 2. The earliest Phanerozoic record of sedimentation in the basin is the Early Permian
Talchir Formation, which is of a glacial origin and is deposited unconformably on the Precambrian gneisses
and schists. The Barakar Formation of Lower Permian age is located above the Talchir Formation. The
Barakar Formation is composed of coarse- to medium-grained arkosic sandstone with carbonaceous shale,
fine-grained sandstone, and coal. The Ironstone Shale is above the Barakar Formation and is a dark grey
to black fissile shale with bands of clay ironstone. The Upper Permian Raniganj Formation is above the
Ironstone Shale and is composed of a succession of coal seams, carbonaceous shale, and shale alternating
with bands of medium- and coarse-grained sandstone. The Raniganj Formation is the target for CSG
production in the Raniganj East Block. Above the Raniganj Formation is the Triassic Panchet Formation, a
predominantly fine- to medium-grained sandstone with intercalations of green shale and brown clay and
silt. The Cretaceous Rajmahal volcanics rest unconformably on the Panchet Formation, and above the
volcanics lie Tertiary sandstones, clays, marls, and lignites. Above these rocks are recent and Quaternary
soils and alluvium.
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The Raniganj Basin is a tectonically-controlled basin bounded by a fault in the south. The basin gradually
shallows towards the north, west, and east. Higher dips are found near the boundary fault and decrease
toward the edges of the basin. The basin is cut by a series of northwest-southeast-trending normal faults
that have been identified by surface mapping in the area. Other faults of different orientations are known
to occur but have not been mapped because of the lack of subsurface control and high quality seismic data.
There are six regionally correlatable coals of the Raniganj Formation. The coals are named sequentially,
RN-1 to RN-6, from bottom to top. Coals that are not as correlatable are also seen at various levels. These
coals are named by the correlatable coal above them and labeled ‘‘Local’’. The coals are high-volatile
bituminous B to C and have a high moisture content, average of 4 percent, and a high to medium-high ash
content, average of 28 percent. Coal thickness varies from 0 meters in the north part of the block to just
over 60 meters in the east. Average total thickness for all coals over 0.5 meters is approximately 40 meters.
Permeability calculated by injection fall-off tests performed by EOL averages 15.7 millidarcies. The
desorbed gas composition from these coals is 97 percent methane, 1.2 percent carbon dioxide, 1.6 percent
nitrogen, and the remainder ethane and higher hydrocarbons. The average gas content is 5.3 cubic meters
per tonne on an as-received basis, and the average coal density is 1.64 grams per cubic centimeter.
3.0 EVALUATION METHODOLOGY

3.1 Original Gas-in-Place
In estimating the contingent and prospective resources in the Raniganj East Block, we relied on various
reports, logs, core data, production volumes, injection fall-off test results for the existing pilot wells, and
gas content data supplied by EOL. From this data, we netted the coals, mapped the coal thicknesses,
calculated pressures at the midpoint of the individual coals, determined the gas content for a low, best, and
high estimate case for each coal, and calculated the original gas-in-place (OGIP) for a low, best, and high
estimate case on the Raniganj East Block.
Logs received from EOL in LAS format were input into Schlumberger’s Petrel modeling software. Facies
representing sands, shales, carbonaceous shales, and coals were determined from the density and gamma
log curves for each well. A cutoff of 2 grams per cubic centimeter on the density log was used to calculate
the coal thicknesses. The thickness of the carbonaceous shale facies for each well was also determined and
used in the high estimate case. The depth and thickness of each coal body in each core hole and test well
were input into a Microsoft Excel spreadsheet. Pressures were calculated at each coal in each well by
determining the amount of overburden from the groundwater level to the midpoint of the coal and
multiplying that thickness by the water gradient.
Gas contents were evaluated on a coal-by-coal basis. The desorbed gas content data provided by EOL were
corrected to a dry ash-free basis and were plotted relative to the pressure at which the sample was taken.
Isotherms were calculated that fit the data describing low, best, and high estimate cases for the gas content.
An example isotherm for the R3 Coal Seam is shown in Figure 3. OGIP per square meter (OGIP/m2) of
area was then calculated by reservoir by well using the following formula:
OGIP/m2 = h * Cgi * D * (1 percent of ash content)
Where:
OGIP/m2 = original gas-in-place per square meter, standard cubic meters
h = thickness, meters
Cgi = initial gas content, standard cubic meters per tonne
D = density of coal, tonnes per cubic meter
The OGIP/m2 for each reservoir was totaled for each well, and the OGIP/m2 for each well was mapped
using Landmark’s Z-MAP Plus (Z-MAP Plus) software. The OGIP/m2 was then back interpolated for each
development well supplied by EOL. The OGIP/m2 determined for the carbonaceous shales was also
calculated using the same methodology. The carbonaceous shale volumes are included in the high estimate
case only. The resulting low, best, and high estimate case OGIP/m2 maps are shown in Figures 4, 5, and 6,
613

respectively. Estimates of values for OGIP for the low, best, and high estimate cases across EOL’s entire
concession, Raniganj East Block, are included in the following table.
Original
Gas-in-Place
Category BCM BCF
Low Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.3 3,612.7

Best Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131.2 4,634.3
High Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267.8 9,455.5
OGIP volumes are expressed in billions of cubic meters (BCM) and billions of cubic feet (BCF) at
standard temperature and pressure bases.
3.2 Recoverable Gas

A range of abandonment pressures was considered in order to account for the variation in both depth and
potential late-life well lifting issues. From this range of pressures, the gas content both at the abandonment
and original conditions were used to determine the recovery factors by individual coal seam using the
following formula:
Rf = (Cgi Cga)/Cgi)/Cgi
Where:
Rf = gas recovery factor, fraction
Cgi = initial gas content, standard cubic meters per tonne (dry ash-free)
Cga = gas storage capacity at abandonment pressure, standard cubic meters
per tonne (dry ash-free)
Although the values vary over the group of well data analyzed, resulting recovery factors were calculated to
be on average approximately 35, 55, and 70 percent for the coal portion low, best, and high estimates,
respectively. The carbonaceous shales were included only in the high estimate case, applying a recovery
factor of 20 percent.
Using the same well data and method as in the OGIP evaluation, the values of recoverable gas-in-place per
square meter (RGIP/m2) for each coal were determined and totaled for each well. Total RGIP/m2 for each
well was mapped using Z-MAP Plus for the low, best, and high estimate cases. The RGIP/m2 values were
then back interpolated for each development well supplied by EOL.
The gas estimated ultimate recovery (EUR) was determined by applying an 80-acre drainage area to the
interpolated value of recoverable gas-in-place. Based on the development plan presented by EOL, the
average spacing for each location will be between 80 and 120 acres.
3.3 Production Profiles

Early and limited gas and water production volumes from the wells completed in the pilot areas suggest
that dewatering time on average can be achieved in 8 to 18 months. Local geologic features, such as
faulting observed in several wells provided by EOL, appear to be contributing to early gas production from
at least one well, the EDT-04A.
EOL provided eight gas and water production rate prediction models addressing variability in coal quality
across the Raniganj East Block. Each of the models has the same general shape consisting of initially high
water rates relative to gas rates as the pressure is drawn down followed by a rapid increase in gas rate. This
rapid gas rate increase in the models, representing the desorption of gas from the coals once critical
desorption pressure is reached, builds to a peak and then declines in a hyperbolic-shaped
gas-rate-versus-time curve to the end of life of the model. Inputs to the models include petrophysical data
from the available core holes, expected pressures and permeabilities from the injection fall-off test results,
and gas content data from the desorption study. Each model’s predicted gas and water rates were scaled up
or down to account for the predicted EUR values in the low, best, and high estimate cases at each planned
location in the block. An example showing the low, best, and high estimate case gas and water rate profiles
is shown in Figure 7 for the EDT-10 pilot area producing well.
614

4.0 CONTINGENT RESOURCES

yet considered mature enough for commercial development because of one or more contingencies. The
resources shown in this report are contingent upon (1) increasing the gas production rates from existing
pilot wells to a sufficient level on a per-well basis to demonstrate commerciality of the project and (2) EOL
providing documentation showing approval of project funding for full development. The costs required to
resolve these contingencies have not been included in this report; estimates of cash flow are based on the
assumption that all contingencies will be resolved. If these issues are resolved, some portion of the
contingent resources estimated in this report may be reclassified as reserves. Securing additional marketing
and transportation agreements to satisfy the projected volumes for the full development project and final
approval by all government entities for Phase II and Phase III development stages are required before the
project can be fully implemented, but these are not considered contingencies for the purposes of this
evaluation.
actually recovered will equal or exceed the estimated amounts is generally inferred to be at least 90 percent
for the low estimate, at least 50 percent for the best estimate, and at least 10 percent for the high estimate.
For the purposes of this report, the volumes and parameters associated with the low, best, and high
estimate scenarios of contingent resources are referred to as 1C, 2C, and 3C, respectively.
Contingent resources for the Raniganj East Block are limited to those locations expected to encounter the
coal seams at a similar depth, permeability, and gas content as that of the 15 pilot area wells in Phase I. In
general, the locations included in contingent resources are confined to 5 offset locations on 80-acre spacing
or less from the pilot area wells or 5 offset locations on 80-acre spacing from the core hole test wells
(EDC-05 and EDC-06). A total of 144 locations is included in the estimates of contingent resources. A
graph showing the total gas forecast for all contingent resources locations for low, best, and high estimate
cases using the development plan timing provided by EOL is shown in Figure 8. A map showing the block
boundaries and contingent locations is shown in Figure 9.
We estimate the contingent gas resources and net contingent cash flow to the EOL interest in these
properties, as of December 31, 2009, to be:
Contingent Gas Net Contingent

Resources Cash Flow (M$)
Gross Net Discounted
Category (MMCF) (MMCF) Total at 10%
Low Estimate (1C) . . . . . . . . . . . . . . . . . . . . . . . . . . 83,276.3 79,112.5 170,018.1 51,100.7

Best Estimate (2C) . . . . . . . . . . . . . . . . . . . . . . . . . . 200,843.9 190,801.7 579,937.3 236,393.0
High Estimate (3C) . . . . . . . . . . . . . . . . . . . . . . . . . . 377,219.5 358,358.5 1,190,386.5 511,253.6
Gas valumes are expressed in millions of cubic feet (MMCF) at standard temperature and pressure bases.
Cash flow estimates are expressed in thousands of United States dollars (M$).
Although this project is in the early stages of exploration and appraisal, an economic assessment of the
contingent resources has been prepared. The economics of the project area are expected to change as
additional data are obtained and analyzed from the continued appraisal of the acreage. The primary input
variables for our economic model are the overall timing of development, the per-well gas production
profiles, the capital costs for development wells and infrastructure, the operating costs, the revenue
payments to the government of India including royalty and production level payments, and the estimated
gas prices.
4.1 Development Timing and Capital Costs

EOL provided estimates of the development timing for the Raniganj East Block, with further drilling
commencing in January 2010. The locations closest to the existing wells in the pilot area are forecasted to
be drilled first followed by the prospective locations farther away. All 648 locations are estimated to be
drilled, completed, and on production by July 2024.
Capital costs have been included for each well for drilling, completion, and surface equipment specific to
the well. These costs are based on estimates provided by EOL and our knowledge of similar CSG
615

operations in India and the United States. Individual well capital costs include $330,000 for drilling and
completions, $44,000 for land and site development, $31,000 for logging and geologic services, $69,000 for
completion stimulation, and $103,000 for well-site facilities and water disposal. An additional $58,000 is
included for each well to address site management and contingencies, resulting in total per-well costs of
$635,000. Compression, gathering system, and pipeline capital costs have been included based on expected
field gas rates using $9,168,000 for every 26 million standard cubic feet of gas per day of incremental field
capacity. These costs include the compressors, dehydration units, a flare package, firefighting system,
power generation, miscellaneous process equipment, pipe costs, right-of-way, inspection costs, and
construction costs. The future capital costs are held constant to the date of expenditure. Development
timing and capital costs for all contingent resources locations in the low, best, and high estimate cases are
shown in the following table:
Contingent Resources(1)
Gross Gross Gross
Wells Capital Wells Capital Wells Capital
Year Drilled (M$) Drilled (M$) Drilled (M$)
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 59,951.7 81 70,216.1 81 79,383.8

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 21,583.2 62 23,487.6 63 30,008.4
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0.0 0 5,886.0 0 0.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 81,534.9 143 99,589.7 144 109,392.2
(1) A total of 144 locations are included in the estimates of contingent resources; however, some locations are uneconomic in the
low estimate (1C) and best estimate (2C) cases.
4.2 Gas Price

As requested, this report has been prepared using gas price parameters specified by EOL. the gas price
used for this evaluation is based on EOL’s application to the Ministry of Petroleum & Natural Gas in
India, dated September 15, 2009, in which a minimum wellhead price of $5.25 per MMBTU is requested to
be set. This gas price is adjusted for projected transportation fees, compression charges, and a regional
price differential. The gas price is further adjusted for energy content based on a gas chromatograph
analysis provided by EOL showing a value of 850 MMBTU per thousand standard cubic feet (MCF) of gas
produced. The gas price is held constant throughout the lives of the properties.
4.3 Operating Costs

Based on our knowledge of similar CSG developments in India and the United States and supported by
the estimates provided by EOL, we estimate lease and well operating costs at $1,400 per completion per
month and $0.05 per MCF of gas produced. These costs are intended to include direct lease- and field-
level costs and EOL’s estimate of the portion of its headquarters general and administrative overhead
expenses necessary to operate the properties. As requested, lease and well operating costs are held
constant throughout the lives of the properties.
4.4 Cash Flow

Gross contingent revenue to the EOL interest is prior to deducting royalty revenue and production level
payments. Net contingent cash flow is after deductions for royalty revenue, production level payments,
future capital costs, and operating expenses but before consideration of income taxes imposed at the
corporate level in India. The net contingent cash flow has been discounted at an annual rate of 10 percent
to indicate the effect of time on the value of money; the discounted contingent cash flow should not be
construed as being the fair market value of the properties.
A summary projection of resources and cash flow along with one-line summaries of basic data, resources,
and economics by lease for the low estimate (1C), best estimate (2C), and high estimate (3C) contingent
resources categories are shown in Figures 10, 11, and 12, respectively.

616

potentially recoverable from undiscovered accumulations by application of future development projects. It
is our understanding that EOL’s current development plan calls for at least 500 total well locations within
the current block, which will extend far beyond the current pilot area. This report does not include
economic analysis for prospective resources because of the indeterminate nature of prospective resources
and the high risk associated with recovering them; however, the commerciality of the prospective resources
was tested with the same parameters used in the analysis of contingent resources to determine the net
prospective resources.
Prospective resources are included for a total of 505 locations. Of these locations, 356 are the remaining
locations presented by EOL beyond the 144 contingent locations. An additional 149 locations on 80-acre
spacing are included in areas beyond the acreage EOL has slated for development but that are on the
Raniganj East Block and do not currently have surface constraints to drilling. graph showing the total gas
forecast for all prospective resources locations for low, best, and high estimate cases using the development
plan timing provided by EOL is shown in Figure 13. A map showing the block boundaries and prospective
locations is shown in Figure 9.
We estimate the unrisked prospective gas resources for these prospects, as of December 31, 2009, to be:
Unrisked Prospective
Gas Resources
Category Gross (MMCF) Net (MMCF)
Low Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412,838.3 392,196.4
Best Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 791,997.0 752,397.1
High Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,631,882.9 1,550,288.7
The prospective resources shown in this report have been estimated using deterministic methods and are
dependent on a petroleum discovery being made beyond the two existing pilot areas in the field. If a
discovery is made, the probability that the unrisked quantities of gas discovered will equal or exceed the
estimated amounts is generally inferred to be at least 90 percent for the low estimate, at least 50 percent
for the best estimate, and at least 10 percent for the high estimate.
Unrisked prospective gas resources are estimated ranges of recoverable gas volumes assuming a petroleum
discovery is made and are based on estimated ranges of undiscovered in-place gas volumes. No geologic
risk assessment was conducted for this prospect. Geologic risking of prospective resources addresses the
probability of success for the discovery of petroleum; such risk analysis is conducted independently of
probabilistic estimations of petroleum volumes and without regard to the chance of development. For CSG
assessments, principal risk elements include coal quantity, gas content, and coal permeability. Prospect risk
assessment is a highly subjective process dependent upon the experience and judgment of the evaluators.
Each coal seam and planned drillsite was evaluated to determine deterministic ranges of in-place and
recoverable petroleum. If petroleum discoveries are made, smaller-volume prospects may not be
commercial to independently develop although they may become candidates for satellite developments and
tie-backs to existing infrastructure at some future date. The development infrastructure and data obtained
from early discoveries will alter both prospect risk and future economics of subsequent discoveries and
developments.
It should be understood that the prospective resources discussed and shown herein are those undiscovered,
highly speculative resources estimated beyond reserves or contingent resources where geological and
geophysical data suggest the potential for discovery of petroleum but where the level of proof is
insufficient for classification as reserves or contingent resources. The unrisked prospective resources are
those volumes that could reasonably be expected to be recovered in the event of the successful exploration
and development of these prospects.
617

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Stratigraphic Column
Raniganj Coal Field
West Bengal, India
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Modified from a figure provided by Essar Oil Limited
Figure 2
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R3 COAL SEAM DESORPTION ISOTHERM GRAPH
RG (EAST)-CBM-2001/1 BLOCK, WEST BENGAL, INDIA
18
16
14
Dry ash-free gas content (m3/t)
12
10
0
0 2000 4000 6000 8000 10000 12000 14000
Pressure (kPa)
Desorbed Gas Contents Adsorption Isotherm High Estimate Case Best Estimate Case
27MAR201013190842
Low Estimate Case
Figure 3
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1. LOW ESTIMATE CASE
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3. HIGH ESTIMATE CASE 27MAR201013190720
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
1. LOW ESTIMATE (1C) CONTINGENT RESOURCES
2. BEST ESTIMATE (2C) CONTINGENT RESOURCES
3. HIGH ESTIMATE (3C) CONTINGENT RESOURCES 27MAR201013190591
Figure 8
28MAR201012225957
All estimates and exhibits herein are part of this NASAI report and are subject to its parameters and conditions.
Figure 9
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WEST BENGAL, INDIA
0D/
12-31-2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 925,689 0 0 879,405 0.000 0.000 4.462 0.0 0.0 3,924.3 3,924.3
12-31-2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,972,011 0 0 2,823,413 0.000 0.000 4.463 0.0 0.0 12,599.3 12,599.3
12-31-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5,024,092 0 0 4,772,888 0.000 0.000 4.463 0.0 0.0 21,299.1 21,299.1
File: VP70801A.;57
12-31-2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 7,300,347 0 0 6,935,330 0.000 0.000 4.462 0.0 0.0 30,949.0 30,949.0
628
12-31-2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 8,017,274 0 0 7,616,411 0.000 0.000 4.463 0.0 0.0 33,987.9 33,987.9
12-31-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 7,536,491 0 0 7,159,664 0.000 0.000 4.463 0.0 0.0 31,949.7 31,949.7
12-31-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 6,651,051 0 0 6,318,498 0.000 0.000 4.463 0.0 0.0 28,196.1 28,196.1
12-31-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5,740,459 0 0 5,453,440 0.000 0.000 4.463 0.0 0.0 24,336.1 24,336.1
12-31-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 4,932,800 0 0 4,686,167 0.000 0.000 4.462 0.0 0.0 20,912.1 20,912.1
12-31-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 4,250,542 0 0 4,038,011 0.000 0.000 4.462 0.0 0.0 18,019.9 18,019.9
12-31-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 3,681,733 0 0 3,497,649 0.000 0.000 4.463 0.0 0.0 15,608.4 15,608.4
12-31-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 3,209,636 0 0 3,049,158 0.000 0.000 4.463 0.0 0.0 13,607.2 13,607.2
12-31-2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,814,433 0 0 2,673,717 0.000 0.000 4.462 0.0 0.0 11,931.5 11,931.5
12-31-2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,481,291 0 0 2,357,224 0.000 0.000 4.463 0.0 0.0 10,519.0 10,519.0
12-31-2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,199,083 0 0 2,089,131 0.000 0.000 4.463 0.0 0.0 9,322.4 9,322.4
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 67,736,932 0 0 64,350,106 0.000 0.000 4.463 0.0 0.0 287,162.0 287,162.0
Remaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 15,539,386 0 0 14,762,398 0.000 0.000 4.463 0.0 0.0 65,877.4 65,877.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 83,276,318 0 0 79,112,504 0.000 0.000 4.463 0.0 0.0 353,039.4 353,039.4
Cum Prod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 78,184
Ultimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 83,354,502
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Active Taxes Undiscounted Discounted at 10.000% Profile
Capital Operating
0D/
Completions Production Ad Valorem Cost Expense Period CUM Period CUM Disc Rate Cash Flow
12-31-2010 . . . . . . . . . . 72 72.00 394.2 0.0 59,951.7 810.6 (57,232.2) (57,232.2) (55,049.2) (55,049.2) 8.000 66,064.0
12-31-2011 . . . . . . . . . . 129 129.00 1,295.8 0.0 21,583.2 2,272.6 (12,552.3) (69,784.5) (11,645.7) (66,694.9) 12.000 38,659.3
12-31-2012 . . . . . . . . . . 129 129.00 2,187.2 0.0 0.0 2,471.0 16,640.9 (53,143.6) 13,049.7 (53,645.2) 15.000 23,605.0
12-31-2013 . . . . . . . . . . 129 129.00 3,196.0 0.0 0.0 2,564.8 25,188.2 (27,955.4) 18,014.1 (35,631.1) 20.000 5,326.3
12-31-2014 . . . . . . . . . . 129 129.00 3,520.8 0.0 0.0 2,588.4 27,878.7 (76.7) 18,163.8 (17,467.3) 25.000 (7,344.6)
12-31-2015 . . . . . . . . . . 129 129.00 3,313.8 0.0 0.0 2,559.0 26,076.9 26,000.2 15,460.3 (2,007.0) 30.000 (16,411.2)
File: VP70801A.;57
12-31-2016 . . . . . . . . . . 129 129.00 2,925.9 0.0 0.0 2,511.0 22,759.2 48,759.4 12,271.7 10,264.7 35.000 (23,056.6)
629
12-31-2017 . . . . . . . . . . 129 129.00 2,525.8 0.0 0.0 2,463.2 19,347.1 68,106.5 9,484.6 19,749.3 40.000 (28,016.8)
12-31-2018 . . . . . . . . . . 129 129.00 2,170.4 0.0 0.0 2,418.4 16,323.3 84,429.8 7,273.8 27,023.1 45.000 (31,777.8)
12-31-2019 . . . . . . . . . . 129 129.00 1,870.1 0.0 0.0 2,381.9 13,767.9 98,197.7 5,576.8 32,599.9 50.000 (34,658.8)
12-31-2020 . . . . . . . . . . 129 129.00 1,619.7 0.0 0.0 2,351.9 11,636.8 109,834.5 4,284.6 36,884.5
12-31-2021 . . . . . . . . . . 129 129.00 1,411.9 0.0 0.0 2,327.9 9,867.4 119,701.9 3,302.7 40,187.2
12-31-2022 . . . . . . . . . . 129 129.00 1,237.9 0.0 0.0 2,308.3 8,385.3 128,087.2 2,551.1 42,738.3
12-31-2023 . . . . . . . . . . 129 129.00 1,091.3 0.0 0.0 2,291.5 7,136.2 135,223.4 1,973.8 44,712.1
12-31-2024 . . . . . . . . . . 129 129.00 967.0 0.0 0.0 2,277.4 6,078.0 141,301.4 1,528.3 46,240.4
Subtotal . . . . . . . . . . . . 29,727.8 0.0 81,534.9 34,597.9 141,301.4 141,301.4 46,240.4 46,240.4
Remaining . . . . . . . . . . 7,206.4 0.0 0.0 29,954.3 28,716.7 170,018.1 4,860.3 51,100.7
Total of 32.0 yrs . . . . . . 36,934.2 0.0 81,534.9 64,552.2 170,018.1 170,018.1 51,100.7 51,100.7
Figure 10
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BASIC DATA
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Gross
0D/
Operating
Active Gross Ultimate Working Revenue Oil/Cond NGL Gas Expense
Compltns Interest Interest $/BBL $/BBL $/MCF M$/M
Oil/Cond Gas Life
Lease Number Lease Name Oil Gas BBL MCF Start End Start End Start End Start End Start End Start End Yrs
RANIGANJ COAL FIELD
100001 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 01 0 1 0 579,035 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 27.7
100002 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 02 0 1 0 454,845 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 24.7
100003 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 03 0 1 0 782,029 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
100004 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 04A 0 1 0 665,993 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.7
100005 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 05 0 1 0 449,584 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 24.7
100006 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 06 0 1 0 599,785 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 27.7
100007 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 07 0 1 0 700,946 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
File: VP70801A.;57
100008 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 08 0 1 0 754,548 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
100009 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 09 0 1 0 748,176 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
630
100010 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 10 0 1 0 675,587 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.7
100011 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 11 0 1 0 166,912 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 15.7
100012 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 12 0 1 0 549,961 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 26.7
100013 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 13 0 1 0 439,197 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 24.7
100014 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 14 0 1 0 735,858 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
100015 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 15 0 1 0 833,956 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
400082 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-1 0 1 0 672,627 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.6
400097 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-2 0 1 0 640,060 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.9
400115 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-3 0 1 0 524,347 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.0
400123 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-4 0 1 0 421,960 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 25.1
400128 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-5 0 1 0 845,886 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
400130 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-6 0 1 0 757,985 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
400131 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-7 0 1 0 703,285 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
400132 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-8 0 1 0 582,189 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.1
400133 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-9 0 1 0 413,893 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 25.1
400001 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-10 0 1 0 799,620 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
400083 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-11 0 1 0 832,248 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
400085 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-12 0 1 0 820,185 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
400086 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-13 0 1 0 456,517 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 25.6
400087 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-14 0 1 0 882,118 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
400088 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-15 0 1 0 763,739 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
400089 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-16 0 1 0 474,213 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 26.9
400090 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-17 0 1 0 699,518 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
400091 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-18 0 1 0 591,673 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.9
400092 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-19 0 1 0 454,438 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 25.9
400098 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-20 0 1 0 376,561 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 23.9
400106 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-21 0 1 0 538,415 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.0
400107 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-22 0 1 0 440,384 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 26.0
400108 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-23 0 1 0 333,903 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 23.0
400109 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-24 0 1 0 537,329 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.0
400110 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-25 0 1 0 410,138 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 25.0
400111 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-26 0 1 0 337,190 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 23.0
400112 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-27 0 1 0 360,408 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 24.0
400113 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-28 0 1 0 298,477 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 22.0

mrll_0909.fmt Free:
28MAR201011030852
RESOURCES AND ECONOMICS
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
Gross Resources Net Resources Gross Cash Flow Total Net Cap Operating Net Cash Flow
Oil NGL Gas Oil NGL Gas Oil NGL Gas Total Taxes Cost Expense Cash Flow 10.000%
Account Number Lease Name BBL BBL MCF BBL BBL MCF M$ M$ M$ M$ M$ M$ M$ M$ M$
RANIGANJ COAL FIELD
100001 . . . . . . . . . . . . . . . . . . . . . . . . EDT 01 0 0 571,790 0 0 543,200 0.0 0.0 2,424.0 2,424.0 0.0 0.0 493.4 1,930.6 1,065.1
100002 . . . . . . . . . . . . . . . . . . . . . . . . EDT 02 0 0 447,645 0 0 425,263 0.0 0.0 1,897.9 1,897.9 0.0 0.0 436.5 1,461.4 822.3
100003 . . . . . . . . . . . . . . . . . . . . . . . . EDT 03 0 0 776,853 0 0 738,010 0.0 0.0 3,293.2 3,293.2 0.0 0.0 537.8 2,755.4 1,485.3
100004 . . . . . . . . . . . . . . . . . . . . . . . . EDT 04A 0 0 658,134 0 0 625,228 0.0 0.0 2,790.0 2,790.0 0.0 0.0 515.2 2,274.8 1,241.3
100005 . . . . . . . . . . . . . . . . . . . . . . . . EDT 05 0 0 442,933 0 0 420,787 0.0 0.0 1,877.9 1,877.9 0.0 0.0 436.4 1,441.5 811.7
100006 . . . . . . . . . . . . . . . . . . . . . . . . EDT 06 0 0 593,503 0 0 563,828 0.0 0.0 2,516.0 2,516.0 0.0 0.0 494.7 2,021.3 1,111.9
100007 . . . . . . . . . . . . . . . . . . . . . . . . EDT 07 0 0 696,236 0 0 661,424 0.0 0.0 2,951.5 2,951.5 0.0 0.0 533.9 2,417.6 1,314.2
100008 . . . . . . . . . . . . . . . . . . . . . . . . EDT 08 0 0 749,981 0 0 712,482 0.0 0.0 3,179.7 3,179.7 0.0 0.0 536.6 2,643.1 1,428.1
File: VP70801A.;57
100009 . . . . . . . . . . . . . . . . . . . . . . . . EDT 09 0 0 742,652 0 0 705,519 0.0 0.0 3,148.5 3,148.5 0.0 0.0 536.3 2,612.2 1,412.7
100010 . . . . . . . . . . . . . . . . . . . . . . . . EDT 10 0 0 670,277 0 0 636,763 0.0 0.0 2,841.7 2,841.7 0.0 0.0 515.9 2,325.8 1,267.3
631
100011 . . . . . . . . . . . . . . . . . . . . . . . . EDT 11 0 0 160,266 0 0 152,253 0.0 0.0 679.7 679.7 0.0 0.0 270.2 409.5 251.5
100012 . . . . . . . . . . . . . . . . . . . . . . . . EDT 12 0 0 548,528 0 0 521,102 0.0 0.0 2,325.6 2,325.6 0.0 0.0 475.8 1,849.8 1,023.8
100013 . . . . . . . . . . . . . . . . . . . . . . . . EDT 13 0 0 433,509 0 0 411,834 0.0 0.0 1,837.9 1,837.9 0.0 0.0 436.1 1,401.8 791.2
100014 . . . . . . . . . . . . . . . . . . . . . . . . EDT 14 0 0 735,323 0 0 698,557 0.0 0.0 3,117.3 3,117.3 0.0 0.0 536.2 2,581.1 1,397.0
100015 . . . . . . . . . . . . . . . . . . . . . . . . EDT 15 0 0 830,598 0 0 789,068 0.0 0.0 3,521.1 3,521.1 0.0 0.0 540.9 2,980.2 1,599.5
400082 . . . . . . . . . . . . . . . . . . . . . . . . EDP-1 0 0 672,627 0 0 638,996 0.0 0.0 2,851.3 2,851.3 0.0 634.8 522.9 1,693.6 567.5
400097 . . . . . . . . . . . . . . . . . . . . . . . . EDP-2 0 0 640,060 0 0 608,057 0.0 0.0 2,713.6 2,713.6 0.0 634.8 521.6 1,557.2 487.1
400115 . . . . . . . . . . . . . . . . . . . . . . . . EDP-3 0 0 524,347 0 0 498,130 0.0 0.0 2,222.8 2,222.8 0.0 634.8 481.4 1,106.6 281.6
400123 . . . . . . . . . . . . . . . . . . . . . . . . EDP-4 0 0 421,960 0 0 400,862 0.0 0.0 1,788.7 1,788.7 0.0 634.8 425.6 728.3 100.5
400128 . . . . . . . . . . . . . . . . . . . . . . . . EDP-5 0 0 845,886 0 0 803,591 0.0 0.0 3,585.9 3,585.9 0.0 634.8 549.3 2,401.8 858.7
400130 . . . . . . . . . . . . . . . . . . . . . . . . EDP-6 0 0 757,985 0 0 720,086 0.0 0.0 3,213.2 3,213.2 0.0 634.8 544.7 2,033.7 698.6
400131 . . . . . . . . . . . . . . . . . . . . . . . . EDP-7 0 0 703,285 0 0 668,120 0.0 0.0 2,981.5 2,981.5 0.0 634.8 541.4 1,805.3 595.7
400132 . . . . . . . . . . . . . . . . . . . . . . . . EDP-8 0 0 582,189 0 0 553,080 0.0 0.0 2,468.0 2,468.0 0.0 634.8 501.7 1,331.5 382.4
400133 . . . . . . . . . . . . . . . . . . . . . . . . EDP-9 0 0 413,893 0 0 393,199 0.0 0.0 1,754.7 1,754.7 0.0 634.8 425.3 694.6 89.6
400001 . . . . . . . . . . . . . . . . . . . . . . . . EDP-10 0 0 799,620 0 0 759,639 0.0 0.0 3,389.8 3,389.8 0.0 634.8 546.3 2,208.7 863.1
400083 . . . . . . . . . . . . . . . . . . . . . . . . EDP-11 0 0 832,248 0 0 790,636 0.0 0.0 3,528.2 3,528.2 0.0 634.8 548.2 2,345.2 874.1
400085 . . . . . . . . . . . . . . . . . . . . . . . . EDP-12 0 0 820,185 0 0 779,176 0.0 0.0 3,477.2 3,477.2 0.0 634.8 547.8 2,294.6 850.1
400086 . . . . . . . . . . . . . . . . . . . . . . . . EDP-13 0 0 456,517 0 0 433,691 0.0 0.0 1,935.3 1,935.3 0.0 634.8 444.3 856.2 167.6
400087 . . . . . . . . . . . . . . . . . . . . . . . . EDP-14 0 0 882,118 0 0 838,012 0.0 0.0 3,739.6 3,739.6 0.0 634.8 551.0 2,553.8 972.2
400088 . . . . . . . . . . . . . . . . . . . . . . . . EDP-15 0 0 763,739 0 0 725,552 0.0 0.0 3,237.8 3,237.8 0.0 634.8 544.5 2,058.5 739.2
400089 . . . . . . . . . . . . . . . . . . . . . . . . EDP-16 0 0 474,213 0 0 450,502 0.0 0.0 2,010.3 2,010.3 0.0 634.8 462.0 913.5 189.5
400090 . . . . . . . . . . . . . . . . . . . . . . . . EDP-17 0 0 699,518 0 0 664,542 0.0 0.0 2,965.6 2,965.6 0.0 634.8 541.4 1,789.4 593.2
400091 . . . . . . . . . . . . . . . . . . . . . . . . EDP-18 0 0 591,673 0 0 562,090 0.0 0.0 2,508.4 2,508.4 0.0 634.8 501.9 1,371.7 401.9
400092 . . . . . . . . . . . . . . . . . . . . . . . . EDP-19 0 0 454,438 0 0 431,716 0.0 0.0 1,926.6 1,926.6 0.0 634.8 444.1 847.7 158.5
400098 . . . . . . . . . . . . . . . . . . . . . . . . EDP-20 0 0 376,561 0 0 357,733 0.0 0.0 1,596.3 1,596.3 0.0 634.8 406.2 555.3 20.2
400106 . . . . . . . . . . . . . . . . . . . . . . . . EDP-21 0 0 538,415 0 0 511,494 0.0 0.0 2,282.3 2,282.3 0.0 634.8 482.6 1,164.9 304.2
400107 . . . . . . . . . . . . . . . . . . . . . . . . EDP-22 0 0 440,384 0 0 418,365 0.0 0.0 1,867.1 1,867.1 0.0 634.8 443.3 789.0 129.6
400108 . . . . . . . . . . . . . . . . . . . . . . . . EDP-23 0 0 333,903 0 0 317,208 0.0 0.0 1,415.6 1,415.6 0.0 634.8 387.4 393.4 (56.8)
400109 . . . . . . . . . . . . . . . . . . . . . . . . EDP-24 0 0 537,329 0 0 510,462 0.0 0.0 2,278.0 2,278.0 0.0 634.8 482.5 1,160.7 302.2
400110 . . . . . . . . . . . . . . . . . . . . . . . . EDP-25 0 0 410,138 0 0 389,631 0.0 0.0 1,738.8 1,738.8 0.0 634.8 425.2 678.8 78.2
400111 . . . . . . . . . . . . . . . . . . . . . . . . EDP-26 0 0 337,190 0 0 320,330 0.0 0.0 1,429.4 1,429.4 0.0 634.8 387.4 407.2 (50.3)
400112 . . . . . . . . . . . . . . . . . . . . . . . . EDP-27 0 0 360,408 0 0 342,388 0.0 0.0 1,527.9 1,527.9 0.0 634.8 405.7 487.4 (11.9)
400113 . . . . . . . . . . . . . . . . . . . . . . . . EDP-28 0 0 298,477 0 0 283,553 0.0 0.0 1,265.2 1,265.2 0.0 634.8 368.8 261.6 (119.8)

mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:30 DISK116:[10ZAU1.10ZAU70801]VR70801A.;42
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
Gross Operating
Active Gross Ultimate Oil/Cond NGL Gas Expense
Compltns Working Interest Revenue Interest $/BBL $/BBL $/MCF M$/M
Oil/Cond Gas Life
(CONTINUED)
RANIGANJ COAL FIELD (CONTINUED)
400114 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-29 0 1 0 309,401 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 22.0
400116 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-30 0 1 0 362,293 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 24.0
400117 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-31 0 1 0 447,561 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 26.0
400022 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-32 0 1 0 844,609 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400023 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-33 0 1 0 807,417 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400024 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-34 0 1 0 803,320 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400025 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-35 0 1 0 801,347 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
File: VR70801A.;42
400026 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-36 0 1 0 808,475 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400027 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-37 0 1 0 834,922 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
632
400271 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-38 0 1 0 855,960 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400122 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-39 0 1 0 878,601 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
400124 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-40 0 1 0 855,307 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
400125 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-41 0 1 0 792,040 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
400126 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-42 0 1 0 682,817 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.1
400127 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-43 0 1 0 553,372 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.1
400475 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-44 0 1 0 411,387 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 25.2
400028 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-45 0 1 0 750,220 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400029 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-46 0 1 0 761,533 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400030 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-47 0 1 0 754,782 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400031 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-48 0 1 0 764,012 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400032 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-49 0 1 0 790,896 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400272 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-50 0 1 0 834,975 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400273 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-51 0 1 0 889,329 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400274 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-52 0 1 0 906,395 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400275 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-53 0 1 0 891,322 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400129 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-54 0 1 0 780,709 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
400276 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-55 0 1 0 937,015 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400277 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-56 0 1 0 866,179 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400278 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-57 0 1 0 779,091 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400476 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-58 0 1 0 667,233 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
400477 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-59 0 1 0 543,886 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.2
400478 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-60 0 1 0 454,438 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 26.2
400033 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-63 0 1 0 732,166 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
400034 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-64 0 1 0 745,948 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5
400035 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-65 0 1 0 769,072 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5
400279 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-66 0 1 0 817,546 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400280 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-67 0 1 0 874,967 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400281 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-68 0 1 0 929,286 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400282 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-69 0 1 0 952,250 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400284 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-71 0 1 0 867,625 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400285 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-72 0 1 0 790,164 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400286 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-73 0 1 0 701,906 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400036 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-77 0 1 0 742,549 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
Gross Resources Net Resources Gross Cash Flow
Total Net Cap Operating Net Cash Cash Flow
Oil NGL Gas Oil NGL Gas Oil NGL Gas Total Taxes Cost Expense Flow 10.000%
(CONTINUED)
400114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-29 0 0 309,401 0 0 293,931 0.0 0.0 1,311.6 1,311.6 0.0 634.8 369.3 307.5 (97.8)
400116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-30 0 0 362,293 0 0 344,178 0.0 0.0 1,536.0 1,536.0 0.0 634.8 405.8 495.4 (3.5)
400117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-31 0 0 447,561 0 0 425,183 0.0 0.0 1,897.6 1,897.6 0.0 634.8 443.7 819.1 148.5
400022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-32 0 0 844,609 0 0 802,379 0.0 0.0 3,580.7 3,580.7 0.0 634.8 548.8 2,397.1 936.4
400023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-33 0 0 807,417 0 0 767,046 0.0 0.0 3,422.8 3,422.8 0.0 634.8 547.0 2,241.0 861.3
400024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-34 0 0 803,320 0 0 763,154 0.0 0.0 3,405.5 3,405.5 0.0 634.8 546.8 2,223.9 852.7
400025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-35 0 0 801,347 0 0 761,280 0.0 0.0 3,397.3 3,397.3 0.0 634.8 546.6 2,215.9 848.8
400026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-36 0 0 808,475 0 0 768,051 0.0 0.0 3,427.3 3,427.3 0.0 634.8 547.0 2,245.5 863.0
File: VR70801A.;42
400027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-37 0 0 834,922 0 0 793,175 0.0 0.0 3,539.7 3,539.7 0.0 634.8 548.4 2,356.5 916.8
400271 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-38 0 0 855,960 0 0 813,162 0.0 0.0 3,628.8 3,628.8 0.0 634.8 549.5 2,444.5 871.3
633
400122 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-39 0 0 878,601 0 0 834,671 0.0 0.0 3,724.7 3,724.7 0.0 634.8 551.1 2,538.8 920.5
400124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-40 0 0 855,307 0 0 812,541 0.0 0.0 3,625.8 3,625.8 0.0 634.8 549.6 2,441.4 876.4
400125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-41 0 0 792,040 0 0 752,438 0.0 0.0 3,357.9 3,357.9 0.0 634.8 546.4 2,176.7 757.7
400126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-42 0 0 682,817 0 0 648,677 0.0 0.0 2,894.9 2,894.9 0.0 634.8 523.6 1,736.5 560.2
400127 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-43 0 0 553,372 0 0 525,703 0.0 0.0 2,346.3 2,346.3 0.0 634.8 483.3 1,228.2 330.4
400475 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-44 0 0 411,387 0 0 390,817 0.0 0.0 1,744.1 1,744.1 0.0 634.8 425.2 684.1 92.4
400028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-45 0 0 750,220 0 0 712,709 0.0 0.0 3,180.5 3,180.5 0.0 634.8 544.0 2,001.7 745.1
400029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-46 0 0 761,533 0 0 723,456 0.0 0.0 3,228.4 3,228.4 0.0 634.8 544.6 2,049.0 767.7
400030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-47 0 0 754,782 0 0 717,042 0.0 0.0 3,200.0 3,200.0 0.0 634.8 544.1 2,021.1 754.3
400031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-48 0 0 764,012 0 0 725,811 0.0 0.0 3,238.8 3,238.8 0.0 634.8 544.7 2,059.3 773.1
400032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-49 0 0 790,896 0 0 751,351 0.0 0.0 3,352.9 3,352.9 0.0 634.8 546.1 2,172.0 832.4
400272 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-50 0 0 834,975 0 0 793,227 0.0 0.0 3,539.9 3,539.9 0.0 634.8 548.5 2,356.6 832.3
400273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-51 0 0 889,329 0 0 844,862 0.0 0.0 3,770.3 3,770.3 0.0 634.8 551.4 2,584.1 933.4
400274 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-52 0 0 906,395 0 0 861,075 0.0 0.0 3,842.4 3,842.4 0.0 634.8 552.2 2,655.4 965.3
400275 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-53 0 0 891,322 0 0 846,756 0.0 0.0 3,778.5 3,778.5 0.0 634.8 551.5 2,592.2 937.3
400129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-54 0 0 780,709 0 0 741,674 0.0 0.0 3,309.6 3,309.6 0.0 634.8 545.8 2,129.0 736.3
400276 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-55 0 0 937,015 0 0 890,164 0.0 0.0 3,972.5 3,972.5 0.0 634.8 554.0 2,783.7 1,022.5
400277 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-56 0 0 866,179 0 0 822,870 0.0 0.0 3,672.0 3,672.0 0.0 634.8 550.0 2,487.2 890.1
400278 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-57 0 0 779,091 0 0 740,137 0.0 0.0 3,302.9 3,302.9 0.0 634.8 545.4 2,122.7 732.7
400476 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-58 0 0 667,233 0 0 633,871 0.0 0.0 2,828.6 2,828.6 0.0 634.8 522.5 1,671.3 542.1
400477 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-59 0 0 543,886 0 0 516,691 0.0 0.0 2,305.6 2,305.6 0.0 634.8 482.7 1,188.1 324.1
400478 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-60 0 0 454,438 0 0 431,716 0.0 0.0 1,926.4 1,926.4 0.0 634.8 444.1 847.5 168.1
400033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-63 0 0 732,166 0 0 695,558 0.0 0.0 3,103.8 3,103.8 0.0 634.8 542.8 1,926.2 713.2
400034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-64 0 0 745,948 0 0 708,650 0.0 0.0 3,162.3 3,162.3 0.0 634.8 543.9 1,983.6 730.4
400035 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-65 0 0 769,072 0 0 730,619 0.0 0.0 3,260.3 3,260.3 0.0 634.8 544.9 2,080.6 776.9
400279 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-66 0 0 817,546 0 0 776,668 0.0 0.0 3,465.8 3,465.8 0.0 634.8 547.5 2,283.5 804.3
400280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-67 0 0 874,967 0 0 831,219 0.0 0.0 3,709.2 3,709.2 0.0 634.8 550.8 2,523.6 911.1
400281 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-68 0 0 929,286 0 0 882,822 0.0 0.0 3,939.7 3,939.7 0.0 634.8 553.6 2,751.3 1,012.4
400282 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-69 0 0 952,250 0 0 904,638 0.0 0.0 4,037.0 4,037.0 0.0 634.8 554.6 2,847.6 1,055.2
400284 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-71 0 0 867,625 0 0 824,244 0.0 0.0 3,678.3 3,678.3 0.0 634.8 550.0 2,493.5 897.6
400285 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-72 0 0 790,164 0 0 750,656 0.0 0.0 3,350.0 3,350.0 0.0 634.8 546.0 2,169.2 753.4
400286 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-73 0 0 701,906 0 0 666,811 0.0 0.0 2,975.7 2,975.7 0.0 634.8 541.0 1,799.9 588.8
400036 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-77 0 0 742,549 0 0 705,422 0.0 0.0 3,148.1 3,148.1 0.0 634.8 543.7 1,969.6 723.6

mrll_0909.fmt Free:
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
Gross Operating
Oil/Cond Gas Life
(CONTINUED)
400037 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-78 0 1 0 787,239 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5
400287 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-79 0 1 0 847,777 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400485 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-89 0 1 0 813,765 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400084 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-110 0 1 0 331,832 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 22.6
400325 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-111 0 1 0 298,252 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 22.2
400326 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-112 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400327 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-113 0 1 0 286,834 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 21.2
File: VR70801A.;42
400002 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-175 0 1 0 672,784 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.2
400003 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-176 0 1 0 670,523 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.2
634
400004 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-177 0 1 0 641,912 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.2
400005 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-178 0 1 0 667,625 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.2
400006 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-179 0 1 0 707,592 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
400093 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-196 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400094 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-197 0 1 0 287,209 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 21.9
400095 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-198 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400096 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-199 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400099 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-200 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400100 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-201 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400101 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-202 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400102 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-203 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400103 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-204 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400104 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-205 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400105 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-206 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400008 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-207 0 1 0 638,317 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.2
400009 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-208 0 1 0 692,472 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
400010 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-209 0 1 0 620,477 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.2
400011 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-210 0 1 0 660,110 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.2
400012 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-211 0 1 0 723,779 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
400013 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-212 0 1 0 611,098 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.3
400014 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-213 0 1 0 636,489 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.3
400015 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-214 0 1 0 695,276 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
400016 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-215 0 1 0 625,525 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.3
400017 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-216 0 1 0 665,625 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.3
400018 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-217 0 1 0 735,989 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
400019 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-218 0 1 0 649,124 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.3
400020 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-219 0 1 0 708,302 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
400262 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-220 0 1 0 790,603 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400021 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-221 0 1 0 685,157 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
400395 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-222 0 1 0 751,982 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
400353 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-346 0 1 0 490,567 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 27.2
400118 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-384 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400119 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-385 0 1 0 255,377 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 21.0
400120 . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-386 0 1 0 229,309 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 20.0

mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:30 DISK116:[10ZAU1.10ZAU70801]VS70801A.;40
28MAR201011030852
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
(CONTINUED)
400037 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-78 0 0 787,239 0 0 747,877 0.0 0.0 3,337.2 3,337.2 0.0 634.8 545.9 2,156.5 813.6
400287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-79 0 0 847,777 0 0 805,388 0.0 0.0 3,594.1 3,594.1 0.0 634.8 549.3 2,410.0 849.3
400485 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-89 0 0 813,765 0 0 773,076 0.0 0.0 3,449.9 3,449.9 0.0 634.8 547.1 2,268.0 790.7
400084 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-110 0 0 331,832 0 0 315,241 0.0 0.0 1,406.8 1,406.8 0.0 634.8 387.1 384.9 (63.3)
400325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-111 0 0 298,252 0 0 283,339 0.0 0.0 1,264.5 1,264.5 0.0 634.8 368.7 261.0 (111.2)
400326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-112 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-113 0 0 286,834 0 0 272,492 0.0 0.0 1,215.9 1,215.9 0.0 634.8 351.3 229.8 (125.8)
File: VS70801A.;40
400002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-175 0 0 672,784 0 0 639,145 0.0 0.0 2,852.2 2,852.2 0.0 634.8 522.9 1,694.5 607.8
400003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-176 0 0 670,523 0 0 636,997 0.0 0.0 2,842.6 2,842.6 0.0 634.8 522.7 1,685.1 593.3
635
400004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-177 0 0 641,912 0 0 609,816 0.0 0.0 2,721.2 2,721.2 0.0 634.8 521.2 1,565.2 534.0
400005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-178 0 0 667,625 0 0 634,243 0.0 0.0 2,830.3 2,830.3 0.0 634.8 522.6 1,672.9 587.2
400006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-179 0 0 707,592 0 0 672,212 0.0 0.0 2,999.9 2,999.9 0.0 634.8 541.8 1,823.3 661.5
400093 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-196 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400094 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-197 0 0 287,209 0 0 272,849 0.0 0.0 1,217.5 1,217.5 0.0 634.8 367.8 214.9 (143.8)
400095 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-198 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-199 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400099 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-200 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-201 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-202 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-203 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-204 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-205 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-206 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-207 0 0 638,317 0 0 606,402 0.0 0.0 2,706.1 2,706.1 0.0 634.8 520.9 1,550.4 526.6
400009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-208 0 0 692,472 0 0 657,849 0.0 0.0 2,935.6 2,935.6 0.0 634.8 540.9 1,759.9 637.8
400010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-209 0 0 620,477 0 0 589,453 0.0 0.0 2,630.3 2,630.3 0.0 634.8 520.4 1,475.1 497.1
400011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-210 0 0 660,110 0 0 627,105 0.0 0.0 2,798.6 2,798.6 0.0 634.8 522.0 1,641.8 579.1
400012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-211 0 0 723,779 0 0 687,590 0.0 0.0 3,068.4 3,068.4 0.0 634.8 542.4 1,891.2 691.8
400013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-212 0 0 611,098 0 0 580,543 0.0 0.0 2,590.6 2,590.6 0.0 634.8 503.0 1,452.8 477.3
400014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-213 0 0 636,489 0 0 604,664 0.0 0.0 2,698.4 2,698.4 0.0 634.8 521.0 1,542.6 521.0
400015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-214 0 0 695,276 0 0 660,512 0.0 0.0 2,947.6 2,947.6 0.0 634.8 540.9 1,771.9 638.5
400016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-215 0 0 625,525 0 0 594,249 0.0 0.0 2,651.7 2,651.7 0.0 634.8 520.2 1,496.7 503.3
400017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-216 0 0 665,625 0 0 632,344 0.0 0.0 2,822.0 2,822.0 0.0 634.8 522.6 1,664.6 585.9
400018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-217 0 0 735,989 0 0 699,190 0.0 0.0 3,119.9 3,119.9 0.0 634.8 542.9 1,942.2 721.7
400019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-218 0 0 649,124 0 0 616,667 0.0 0.0 2,751.7 2,751.7 0.0 634.8 521.4 1,595.5 552.0
400020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-219 0 0 708,302 0 0 672,887 0.0 0.0 3,002.6 3,002.6 0.0 634.8 541.7 1,826.1 670.1
400262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-220 0 0 790,603 0 0 751,073 0.0 0.0 3,351.5 3,351.5 0.0 634.8 546.0 2,170.7 749.6
400021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-221 0 0 685,157 0 0 650,899 0.0 0.0 2,904.5 2,904.5 0.0 634.8 539.3 1,730.4 623.6
400395 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-222 0 0 751,982 0 0 714,383 0.0 0.0 3,188.0 3,188.0 0.0 634.8 544.3 2,008.9 657.5
400353 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-346 0 0 490,567 0 0 466,039 0.0 0.0 2,079.8 2,079.8 0.0 634.8 463.1 981.9 225.4
400118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-384 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-385 0 0 255,377 0 0 242,608 0.0 0.0 1,082.6 1,082.6 0.0 634.8 349.7 98.1 (194.7)
400120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-386 0 0 229,309 0 0 217,844 0.0 0.0 972.1 972.1 0.0 634.8 331.5 5.8 (240.1)

mrll_0909.fmt Free:
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
WEST BENGAL, INDIA

0D/
Gross
Operating
Oil/Cond Gas Life
(CONTINUED)
400121 . . . . . . . . . EDP-387 0 1 0 298,250 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 22.1
File: VS70801A.;40
400356 . . . . . . . . . EDP-388 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
636
400357 . . . . . . . . . EDP-389 0 1 0 239,904 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 20.2
400359 . . . . . . . . . EDP-391 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400473 . . . . . . . . . EDP-405 0 1 0 345,454 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 23.2
400075 . . . . . . . . . EDP-U75 0 1 0 618,634 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.5
400076 . . . . . . . . . EDP-U76 0 1 0 627,167 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.5
400077 . . . . . . . . . EDP-U77 0 1 0 643,276 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.6
400078 . . . . . . . . . EDP-U79 0 1 0 803,709 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
400079 . . . . . . . . . EDP-U80 0 1 0 779,505 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
400080 . . . . . . . . . EDP-U81 0 1 0 781,377 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
400081 . . . . . . . . . EDP-U82 0 1 0 828,547 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
400171 . . . . . . . . . EDP-U83 0 1 0 829,946 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
400172 . . . . . . . . . EDP-U85 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
400173 . . . . . . . . . EDP-U86 0 1 0 229,770 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 20.1
101000 . . . . . . . . . FAC CAP 1C 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 10.0
102000 . . . . . . . . . PLP & Royalty 1C 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 32.0
Field Total . . . . . . . . . . . . . . . . . . . . 0 129 0 83,354,502
Total . . . . . . . . . . . . . . . . . . . . . . . . 0 129 0 83,354,502
Total All Leases . . . . . . . . . . . . . . . . . 0 129 0 83,354,502

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
WEST BENGAL, INDIA
0D/
(CONTINUED)
400121 . . . . . . . . EDP-387 0 0 298,250 0 0 283,337 0.0 0.0 1,264.5 1,264.5 0.0 634.8 368.7 261.0 (119.4)
400356 . . . . . . . . EDP-388 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
File: VS70801A.;40
400357 . . . . . . . . EDP-389 0 0 239,904 0 0 227,909 0.0 0.0 1,017.0 1,017.0 0.0 634.8 331.9 50.3 (212.5)
637
400359 . . . . . . . . EDP-391 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400473 . . . . . . . . EDP-405 0 0 345,454 0 0 328,182 0.0 0.0 1,464.5 1,464.5 0.0 634.8 388.2 441.5 (20.8)
400075 . . . . . . . . EDP-U75 0 0 618,634 0 0 587,703 0.0 0.0 2,622.5 2,622.5 0.0 634.8 520.0 1,467.7 481.6
400076 . . . . . . . . EDP-U76 0 0 627,167 0 0 595,808 0.0 0.0 2,658.9 2,658.9 0.0 634.8 520.6 1,503.5 499.1
400077 . . . . . . . . EDP-U77 0 0 643,276 0 0 611,113 0.0 0.0 2,727.0 2,727.0 0.0 634.8 521.3 1,570.9 522.5
400078 . . . . . . . . EDP-U79 0 0 803,709 0 0 763,524 0.0 0.0 3,407.2 3,407.2 0.0 634.8 546.8 2,225.6 835.1
400079 . . . . . . . . EDP-U80 0 0 779,505 0 0 740,530 0.0 0.0 3,304.7 3,304.7 0.0 634.8 545.5 2,124.4 786.9
400080 . . . . . . . . EDP-U81 0 0 781,377 0 0 742,308 0.0 0.0 3,312.7 3,312.7 0.0 634.8 545.5 2,132.4 790.6
400081 . . . . . . . . EDP-U82 0 0 828,547 0 0 787,120 0.0 0.0 3,512.5 3,512.5 0.0 634.8 548.2 2,329.5 889.5
400171 . . . . . . . . EDP-U83 0 0 829,946 0 0 788,448 0.0 0.0 3,518.2 3,518.2 0.0 634.8 548.6 2,334.8 833.5
400172 . . . . . . . . EDP-U85 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
400173 . . . . . . . . EDP-U86 0 0 229,770 0 0 218,282 0.0 0.0 974.0 974.0 0.0 634.8 331.4 7.8 (237.4)
101000 . . . . . . . . FAC CAP 1C 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 9,167.7 0.0 (9,167.7) (9,167.7)
102000 . . . . . . . . PLP & Royalty 1C 0 0 0 0 0 0 0.0 0.0 0.0 0.0 36,934.2 0.0 0.0 (36,934.2) (17,345.5)
Field Total . . . . . . . . . . . . . . . . . . . 0 0 83,276,318 0 0 79,112,504 0.0 0.0 353,039.4 353,039.4 36,934.2 81,534.9 64,552.2 170,018.1 51,100.7
Total . . . . . . . . . . . . . . . . . . . . . . . 0 0 83,276,318 0 0 79,112,504 0.0 0.0 353,039.4 353,039.4 36,934.2 81,534.9 64,552.2 170,018.1 51,100.7
Total All Leases . . . . . . . . . . . . . . . . 0 0 83,276,318 0 0 79,112,504 0.0 0.0 353,039.4 353,039.4 36,934.2 81,534.9 64,552.2 170,018.1 51,100.7

mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:28 DISK116:[10ZAU1.10ZAU70801]VT70801A.;32
28MAR201011030852
7080DM/0D Foot:
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

WEST BENGAL, INDIA
0D/
12-31-2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 2,124,810 0 0 2,018,567 0.000 0.000 4.463 0.0 0.0 9,008.3 9,008.3
12-31-2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 7,028,197 0 0 6,676,790 0.000 0.000 4.463 0.0 0.0 29,795.1 29,795.1
File: VT70801A.;32
12-31-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 11,886,714 0 0 11,292,371 0.000 0.000 4.463 0.0 0.0 50,392.1 50,392.1
638
12-31-2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 17,397,420 0 0 16,527,549 0.000 0.000 4.463 0.0 0.0 73,754.3 73,754.3
12-31-2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 19,178,982 0 0 18,220,036 0.000 0.000 4.463 0.0 0.0 81,306.6 81,306.6
12-31-2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 18,055,530 0 0 17,152,752 0.000 0.000 4.463 0.0 0.0 76,544.2 76,544.2
12-31-2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 15,942,931 0 0 15,145,786 0.000 0.000 4.463 0.0 0.0 67,587.4 67,587.4
12-31-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 13,762,218 0 0 13,074,114 0.000 0.000 4.462 0.0 0.0 58,343.1 58,343.1
12-31-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 11,825,671 0 0 11,234,385 0.000 0.000 4.463 0.0 0.0 50,133.6 50,133.6
12-31-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 10,189,265 0 0 9,679,796 0.000 0.000 4.463 0.0 0.0 43,195.8 43,195.8
12-31-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 8,824,735 0 0 8,383,501 0.000 0.000 4.463 0.0 0.0 37,411.5 37,411.5
12-31-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 7,692,331 0 0 7,307,724 0.000 0.000 4.463 0.0 0.0 32,610.9 32,610.9
12-31-2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 6,744,488 0 0 6,407,255 0.000 0.000 4.463 0.0 0.0 28,592.7 28,592.7
12-31-2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5,945,508 0 0 5,648,231 0.000 0.000 4.463 0.0 0.0 25,205.4 25,205.4
12-31-2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 5,268,751 0 0 5,005,316 0.000 0.000 4.463 0.0 0.0 22,336.2 22,336.2
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 161,867,551 0 0 153,774,173 0.000 0.000 4.463 0.0 0.0 686,217.2 686,217.2
Remaining . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 38,976,349 0 0 37,027,534 0.000 0.000 4.463 0.0 0.0 165,235.6 165,235.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 200,843,900 0 0 190,801,707 0.000 0.000 4.463 0.0 0.0 851,452.8 851,452.8
Cum Prod . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 78,184
Ultimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 200,922,084
mrll_0909.fmt Free:
7080DM/0D Foot:
28MAR201011030852
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

0D/
Capital Operating
completions Production Ad Valorem Cost Expense Period CUM Period CUM Disc Rate Cash Flow
12-31-2010 . . . . . . . . . . . . . . 81 81.00 860.0 0.0 70,216.1 922.4 (62,990.2) (62,990.2) (60,547.5) (60,547.5) 8.000 277,834.9
12-31-2011 . . . . . . . . . . . . . . 143 143.00 2,868.3 0.0 23,487.6 2,800.7 638.5 (62,351.7) (342.4) (60,889.9) 12.000 202,248.0
12-31-2012 . . . . . . . . . . . . . . 143 143.00 4,970.9 0.0 5,886.0 3,126.5 36,408.7 (25,943.0) 28,742.7 (32,147.2) 15.000 161,237.0
12-31-2013 . . . . . . . . . . . . . . 143 143.00 8,600.3 0.0 0.0 3,351.6 61,802.4 35,859.4 44,201.8 12,054.6 20.000 111,672.0
12-31-2014 . . . . . . . . . . . . . . 143 143.00 9,983.9 0.0 0.0 3,410.6 67,912.1 103,771.5 44,245.6 56,300.2 25.000 77,246.4
File: VT70801A.;32
12-31-2015 . . . . . . . . . . . . . . 143 143.00 9,164.9 0.0 0.0 3,339.2 64,040.1 167,811.6 37,964.7 94,264.9 30.000 52,379.4
639
12-31-2016 . . . . . . . . . . . . . . 143 143.00 7,592.6 0.0 0.0 3,224.4 56,770.4 224,582.0 30,606.6 124,871.5 35.000 33,882.0
12-31-2017 . . . . . . . . . . . . . . 143 143.00 5,964.2 0.0 0.0 3,107.7 49,271.2 273,853.2 24,150.2 149,021.7 40.000 19,781.3
12-31-2018 . . . . . . . . . . . . . . 143 143.00 5,046.4 0.0 0.0 3,008.3 42,078.9 315,932.1 18,750.2 167,771.9 45.000 8,829.8
12-31-2019 . . . . . . . . . . . . . . 143 143.00 4,347.2 0.0 0.0 2,923.7 35,924.9 351,857.0 14,552.2 182,324.1 50.000 185.1
12-31-2020 . . . . . . . . . . . . . . 143 143.00 3,764.4 0.0 0.0 2,854.5 30,792.6 382,649.6 11,339.0 193,663.1
12-31-2021 . . . . . . . . . . . . . . 143 143.00 3,280.8 0.0 0.0 2,796.6 26,533.5 409,183.1 8,882.6 202,545.7
12-31-2022 . . . . . . . . . . . . . . 143 143.00 2,876.1 0.0 0.0 2,746.3 22,970.3 432,153.4 6,989.6 209,535.3
12-31-2023 . . . . . . . . . . . . . . 143 143.00 2,535.0 0.0 0.0 2,704.3 19,966.1 452,119.5 5,522.5 215,057.8
12-31-2024 . . . . . . . . . . . . . . 143 143.00 2,246.0 0.0 0.0 2,668.7 17,421.5 469,541.0 4,380.8 219,438.6
Subtotal . . . . . . . . . . . . . . . . 74,101.0 0.0 99,589.7 42,985.5 469,541.0 469,541.0 219,438.6 219,438.6
Remaining . . . . . . . . . . . . . . 16,749.9 0.0 0.0 38,089.4 110,396.3 579,937.3 16,954.4 236,393.0
Total of 32.0 yrs . . . . . . . . . . 90,850.9 0.0 99,589.7 81,074.9 579,937.3 579,937.3 236,393.0 236,393.0
Figure 11
mrll_0909.fmt Free:
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Gross
0D/
Operating
Oil/Cond Gas Life
RANIGANJ COAL FIELD
200001 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 01 IB 0 1 0 1,328,872 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200002 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 02 IB 0 1 0 1,069,876 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200003 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 03 IB 0 1 0 1,788,518 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200004 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 04A IB 0 1 0 1,243,984 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200005 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 05 IB 0 1 0 1,066,884 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200006 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 06 IB 0 1 0 1,391,426 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200007 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 07 IB 0 1 0 1,612,161 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
File: VT70801A.;32
200008 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 08 IB 0 1 0 1,729,278 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200009 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 09 IB 0 1 0 1,700,920 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
640
200010 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 10 IB 0 1 0 1,559,016 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200011 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 11 IB 0 1 0 410,374 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 23.7
200012 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 12 IB 0 1 0 1,029,908 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200013 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 13 IB 0 1 0 1,041,492 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200014 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 14 IB 0 1 0 1,390,564 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
200015 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 15 IB 0 1 0 1,559,507 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
500082 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-1 IB 0 1 0 1,561,499 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500097 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-2 IB 0 1 0 1,483,179 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
500115 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-3 IB 0 1 0 1,227,052 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500123 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-4 IB 0 1 0 1,009,211 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500128 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-5 IB 0 1 0 1,939,990 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500130 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-6 IB 0 1 0 1,744,818 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500131 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-7 IB 0 1 0 1,617,030 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500132 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-8 IB 0 1 0 1,353,326 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500133 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-9 IB 0 1 0 985,080 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500001 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-10 IB 0 1 0 1,843,112 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500083 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-11 IB 0 1 0 1,922,366 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500085 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-12 IB 0 1 0 1,887,597 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500086 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-13 IB 0 1 0 1,070,945 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500087 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-14 IB 0 1 0 2,041,404 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
500088 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-15 IB 0 1 0 1,763,619 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500089 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-16 IB 0 1 0 1,105,933 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
500090 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-17 IB 0 1 0 1,617,946 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
500091 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-18 IB 0 1 0 1,378,852 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
500092 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-19 IB 0 1 0 1,065,477 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
500098 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-20 IB 0 1 0 895,347 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
500106 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-21 IB 0 1 0 1,251,517 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500107 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-22 IB 0 1 0 1,036,359 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500108 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-23 IB 0 1 0 803,636 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500109 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-24 IB 0 1 0 1,257,285 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500110 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-25 IB 0 1 0 978,272 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500111 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-26 IB 0 1 0 814,970 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500112 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-27 IB 0 1 0 861,005 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500113 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-28 IB 0 1 0 720,197 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
RANIGANJ COAL FIELD
200001 . . . . . . . . . . . . . . . . . . . . . . . EDT 01 IB 0 0 1,321,627 0 0 1,255,546 0.0 0.0 5,603.0 5,603.0 0.0 0.0 567.1 5,035.9 2,642.0
200002 . . . . . . . . . . . . . . . . . . . . . . . EDT 02 IB 0 0 1,062,676 0 0 1,009,542 0.0 0.0 4,505.1 4,505.1 0.0 0.0 553.3 3,951.8 2,092.2
200003 . . . . . . . . . . . . . . . . . . . . . . . EDT 03 IB 0 0 1,783,342 0 0 1,694,175 0.0 0.0 7,560.2 7,560.2 0.0 0.0 591.7 6,968.5 3,622.4
200004 . . . . . . . . . . . . . . . . . . . . . . . EDT 04A IB 0 0 1,236,125 0 0 1,174,318 0.0 0.0 5,240.3 5,240.3 0.0 0.0 562.7 4,677.6 2,460.4
200005 . . . . . . . . . . . . . . . . . . . . . . . EDT 05 IB 0 0 1,060,233 0 0 1,007,222 0.0 0.0 4,494.7 4,494.7 0.0 0.0 553.2 3,941.5 2,087.0
200006 . . . . . . . . . . . . . . . . . . . . . . . EDT 06 IB 0 0 1,385,144 0 0 1,315,886 0.0 0.0 5,872.2 5,872.2 0.0 0.0 570.6 5,301.6 2,777.0
200007 . . . . . . . . . . . . . . . . . . . . . . . EDT 07 IB 0 0 1,607,451 0 0 1,527,078 0.0 0.0 6,814.6 6,814.6 0.0 0.0 582.7 6,231.9 3,248.8
200008 . . . . . . . . . . . . . . . . . . . . . . . EDT 08 IB 0 0 1,724,711 0 0 1,638,476 0.0 0.0 7,311.9 7,311.9 0.0 0.0 588.8 6,723.1 3,497.9
File: VT70801A.;32
200009 . . . . . . . . . . . . . . . . . . . . . . . EDT 09 IB 0 0 1,695,396 0 0 1,610,626 0.0 0.0 7,187.3 7,187.3 0.0 0.0 587.0 6,600.3 3,435.4
200010 . . . . . . . . . . . . . . . . . . . . . . . EDT 10 IB 0 0 1,553,706 0 0 1,476,021 0.0 0.0 6,586.9 6,586.9 0.0 0.0 579.5 6,007.4 3,135.0
641
200011 . . . . . . . . . . . . . . . . . . . . . . . EDT 11 IB 0 0 403,728 0 0 383,542 0.0 0.0 1,711.6 1,711.6 0.0 0.0 417.6 1,294.0 734.7
200012 . . . . . . . . . . . . . . . . . . . . . . . EDT 12 IB 0 0 1,028,475 0 0 977,051 0.0 0.0 4,359.9 4,359.9 0.0 0.0 551.7 3,808.2 2,019.6
200013 . . . . . . . . . . . . . . . . . . . . . . . EDT 13 IB 0 0 1,035,804 0 0 984,014 0.0 0.0 4,391.2 4,391.2 0.0 0.0 551.9 3,839.3 2,035.0
200014 . . . . . . . . . . . . . . . . . . . . . . . EDT 14 IB 0 0 1,390,029 0 0 1,320,528 0.0 0.0 5,892.8 5,892.8 0.0 0.0 570.8 5,322.0 2,787.3
200015 . . . . . . . . . . . . . . . . . . . . . . . EDT 15 IB 0 0 1,556,149 0 0 1,478,342 0.0 0.0 6,597.2 6,597.2 0.0 0.0 579.8 6,017.4 3,140.1
500082 . . . . . . . . . . . . . . . . . . . . . . . EDP-1 IB 0 0 1,561,499 0 0 1,483,424 0.0 0.0 6,619.6 6,619.6 0.0 634.8 587.7 5,397.1 2,310.0
500097 . . . . . . . . . . . . . . . . . . . . . . . EDP-2 IB 0 0 1,483,179 0 0 1,409,020 0.0 0.0 6,287.8 6,287.8 0.0 634.8 583.3 5,069.7 2,088.4
500115 . . . . . . . . . . . . . . . . . . . . . . . EDP-3 IB 0 0 1,227,052 0 0 1,165,700 0.0 0.0 5,202.0 5,202.0 0.0 634.8 569.7 3,997.5 1,591.8
500123 . . . . . . . . . . . . . . . . . . . . . . . EDP-4 IB 0 0 1,009,211 0 0 958,750 0.0 0.0 4,278.3 4,278.3 0.0 634.8 558.0 3,085.5 1,165.5
500128 . . . . . . . . . . . . . . . . . . . . . . . EDP-5 IB 0 0 1,939,990 0 0 1,842,991 0.0 0.0 8,224.2 8,224.2 0.0 634.8 608.0 6,981.4 2,913.0
500130 . . . . . . . . . . . . . . . . . . . . . . . EDP-6 IB 0 0 1,744,818 0 0 1,657,577 0.0 0.0 7,396.9 7,396.9 0.0 634.8 597.2 6,164.9 2,551.2
500131 . . . . . . . . . . . . . . . . . . . . . . . EDP-7 IB 0 0 1,617,030 0 0 1,536,178 0.0 0.0 6,855.3 6,855.3 0.0 634.8 590.4 5,630.1 2,311.4
500132 . . . . . . . . . . . . . . . . . . . . . . . EDP-8 IB 0 0 1,353,326 0 0 1,285,659 0.0 0.0 5,737.3 5,737.3 0.0 634.8 576.6 4,525.9 1,816.1
500133 . . . . . . . . . . . . . . . . . . . . . . . EDP-9 IB 0 0 985,080 0 0 935,826 0.0 0.0 4,176.2 4,176.2 0.0 634.8 556.8 2,984.6 1,124.8
500001 . . . . . . . . . . . . . . . . . . . . . . . EDP-10 IB 0 0 1,843,112 0 0 1,750,957 0.0 0.0 7,813.6 7,813.6 0.0 634.8 602.0 6,576.8 3,031.3
500083 . . . . . . . . . . . . . . . . . . . . . . . EDP-11 IB 0 0 1,922,366 0 0 1,826,247 0.0 0.0 8,149.7 8,149.7 0.0 634.8 607.3 6,907.6 3,020.3
500085 . . . . . . . . . . . . . . . . . . . . . . . EDP-12 IB 0 0 1,887,597 0 0 1,793,217 0.0 0.0 8,002.1 8,002.1 0.0 634.8 605.4 6,761.9 2,952.0
500086 . . . . . . . . . . . . . . . . . . . . . . . EDP-13 IB 0 0 1,070,945 0 0 1,017,397 0.0 0.0 4,540.2 4,540.2 0.0 634.8 561.5 3,343.9 1,344.0
500087 . . . . . . . . . . . . . . . . . . . . . . . EDP-14 IB 0 0 2,041,404 0 0 1,939,334 0.0 0.0 8,654.3 8,654.3 0.0 634.8 613.4 7,406.1 3,254.9
500088 . . . . . . . . . . . . . . . . . . . . . . . EDP-15 IB 0 0 1,763,619 0 0 1,675,438 0.0 0.0 7,476.7 7,476.7 0.0 634.8 598.6 6,243.3 2,707.9
500089 . . . . . . . . . . . . . . . . . . . . . . . EDP-16 IB 0 0 1,105,933 0 0 1,050,636 0.0 0.0 4,688.5 4,688.5 0.0 634.8 562.9 3,490.8 1,368.8
500090 . . . . . . . . . . . . . . . . . . . . . . . EDP-17 IB 0 0 1,617,946 0 0 1,537,049 0.0 0.0 6,859.1 6,859.1 0.0 634.8 590.7 5,633.6 2,345.4
500091 . . . . . . . . . . . . . . . . . . . . . . . EDP-18 IB 0 0 1,378,852 0 0 1,309,910 0.0 0.0 5,845.5 5,845.5 0.0 634.8 577.9 4,632.8 1,889.4
500092 . . . . . . . . . . . . . . . . . . . . . . . EDP-19 IB 0 0 1,065,477 0 0 1,012,203 0.0 0.0 4,517.0 4,517.0 0.0 634.8 560.8 3,321.4 1,291.4
500098 . . . . . . . . . . . . . . . . . . . . . . . EDP-20 IB 0 0 895,347 0 0 850,580 0.0 0.0 3,795.7 3,795.7 0.0 634.8 552.1 2,608.8 967.0
500106 . . . . . . . . . . . . . . . . . . . . . . . EDP-21 IB 0 0 1,251,517 0 0 1,188,941 0.0 0.0 5,305.7 5,305.7 0.0 634.8 570.7 4,100.2 1,633.3
500107 . . . . . . . . . . . . . . . . . . . . . . . EDP-22 IB 0 0 1,036,359 0 0 984,541 0.0 0.0 4,393.5 4,393.5 0.0 634.8 559.4 3,199.3 1,226.3
500108 . . . . . . . . . . . . . . . . . . . . . . . EDP-23 IB 0 0 803,636 0 0 763,454 0.0 0.0 3,406.8 3,406.8 0.0 634.8 547.3 2,224.7 785.8
500109 . . . . . . . . . . . . . . . . . . . . . . . EDP-24 IB 0 0 1,257,285 0 0 1,194,421 0.0 0.0 5,329.9 5,329.9 0.0 634.8 571.2 4,123.9 1,644.3
500110 . . . . . . . . . . . . . . . . . . . . . . . EDP-25 IB 0 0 978,272 0 0 929,358 0.0 0.0 4,147.3 4,147.3 0.0 634.8 556.2 2,956.3 1,116.2
500111 . . . . . . . . . . . . . . . . . . . . . . . EDP-26 IB 0 0 814,970 0 0 774,221 0.0 0.0 3,455.0 3,455.0 0.0 634.8 547.6 2,272.6 807.2
500112 . . . . . . . . . . . . . . . . . . . . . . . EDP-27 IB 0 0 861,005 0 0 817,955 0.0 0.0 3,650.3 3,650.3 0.0 634.8 550.0 2,465.5 894.5
500113 . . . . . . . . . . . . . . . . . . . . . . . EDP-28 IB 0 0 720,197 0 0 684,187 0.0 0.0 3,053.2 3,053.2 0.0 634.8 542.4 1,876.0 627.7

mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:30 DISK116:[10ZAU1.10ZAU70801]VU70801A.;38
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
Gross Operating
Oil/Cond Gas Life
(CONTINUED)
500114 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-29 IB 0 1 0 746,364 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500116 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-30 IB 0 1 0 858,252 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500117 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-31 IB 0 1 0 1,058,929 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
500022 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-32 IB 0 1 0 1,936,930 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500023 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-33 IB 0 1 0 1,854,207 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500024 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-34 IB 0 1 0 1,846,784 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500025 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-35 IB 0 1 0 1,852,063 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
File: VU70801A.;38
500026 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-36 IB 0 1 0 1,878,978 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500027 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-37 IB 0 1 0 1,937,962 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
642
500271 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-38 IB 0 1 0 1,995,325 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500122 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-39 IB 0 1 0 2,058,809 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
500124 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-40 IB 0 1 0 1,993,809 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500125 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-41 IB 0 1 0 1,854,854 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500126 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-42 IB 0 1 0 1,603,758 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500127 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-43 IB 0 1 0 1,309,180 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500475 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-44 IB 0 1 0 988,503 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500028 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-45 IB 0 1 0 1,730,569 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500029 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-46 IB 0 1 0 1,757,189 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500030 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-47 IB 0 1 0 1,750,588 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500031 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-48 IB 0 1 0 1,783,840 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500032 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-49 IB 0 1 0 1,861,075 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500272 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-50 IB 0 1 0 1,980,110 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500273 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-51 IB 0 1 0 2,120,810 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500274 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-52 IB 0 1 0 2,162,591 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500275 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-53 IB 0 1 0 2,127,521 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500129 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-54 IB 0 1 0 1,849,417 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500276 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-55 IB 0 1 0 2,257,210 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500277 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-56 IB 0 1 0 2,073,537 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500278 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-57 IB 0 1 0 1,853,319 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500476 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-58 IB 0 1 0 1,587,014 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500477 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-59 IB 0 1 0 1,303,800 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500478 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-60 IB 0 1 0 1,102,255 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500033 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-63 IB 0 1 0 1,701,156 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.4
500034 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-64 IB 0 1 0 1,744,806 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5
500035 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-65 IB 0 1 0 1,810,965 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5
500279 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-66 IB 0 1 0 1,939,814 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500280 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-67 IB 0 1 0 2,093,112 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500281 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-68 IB 0 1 0 2,238,768 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500282 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-69 IB 0 1 0 2,300,926 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500284 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-71 IB 0 1 0 2,079,518 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500285 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-72 IB 0 1 0 1,883,511 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500286 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-73 IB 0 1 0 1,665,430 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500036 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-77 IB 0 1 0 1,749,317 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
(CONTINUED)
500114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-29 IB 0 0 746,364 0 0 709,046 0.0 0.0 3,164.2 3,164.2 0.0 634.8 543.6 1,985.8 677.4
500116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-30 IB 0 0 858,252 0 0 815,339 0.0 0.0 3,638.4 3,638.4 0.0 634.8 549.8 2,453.8 894.0
500117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-31 IB 0 0 1,058,929 0 0 1,005,983 0.0 0.0 4,489.2 4,489.2 0.0 634.8 560.5 3,293.9 1,273.4
500022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-32 IB 0 0 1,936,930 0 0 1,840,084 0.0 0.0 8,211.2 8,211.2 0.0 634.8 607.5 6,968.9 3,152.6
500023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-33 IB 0 0 1,854,207 0 0 1,761,497 0.0 0.0 7,860.8 7,860.8 0.0 634.8 602.9 6,623.1 2,984.7
500024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-34 IB 0 0 1,846,784 0 0 1,754,445 0.0 0.0 7,829.2 7,829.2 0.0 634.8 602.5 6,591.9 2,969.7
500025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-35 IB 0 0 1,852,063 0 0 1,759,460 0.0 0.0 7,851.6 7,851.6 0.0 634.8 602.7 6,614.1 2,980.3
500026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-36 IB 0 0 1,878,978 0 0 1,785,029 0.0 0.0 7,965.9 7,965.9 0.0 634.8 604.2 6,726.9 3,035.0
File: VU70801A.;38
500027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-37 IB 0 0 1,937,962 0 0 1,841,064 0.0 0.0 8,215.9 8,215.9 0.0 634.8 607.5 6,973.6 3,154.7
500271 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-38 IB 0 0 1,995,325 0 0 1,895,558 0.0 0.0 8,458.9 8,458.9 0.0 634.8 610.4 7,213.7 2,994.2
643
500122 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-39 IB 0 0 2,058,809 0 0 1,955,869 0.0 0.0 8,728.3 8,728.3 0.0 634.8 614.3 7,479.2 3,136.2
500124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-40 IB 0 0 1,993,809 0 0 1,894,119 0.0 0.0 8,452.5 8,452.5 0.0 634.8 610.9 7,206.8 3,014.0
500125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-41 IB 0 0 1,854,854 0 0 1,762,111 0.0 0.0 7,863.5 7,863.5 0.0 634.8 603.7 6,625.0 2,753.4
500126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-42 IB 0 0 1,603,758 0 0 1,523,570 0.0 0.0 6,798.8 6,798.8 0.0 634.8 590.1 5,573.9 2,281.6
500127 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-43 IB 0 0 1,309,180 0 0 1,243,721 0.0 0.0 5,550.1 5,550.1 0.0 634.8 574.0 4,341.3 1,728.6
500475 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-44 IB 0 0 988,503 0 0 939,078 0.0 0.0 4,190.8 4,190.8 0.0 634.8 556.7 2,999.3 1,135.9
500028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-45 IB 0 0 1,730,569 0 0 1,644,040 0.0 0.0 7,336.5 7,336.5 0.0 634.8 596.2 6,105.5 2,733.8
500029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-46 IB 0 0 1,757,189 0 0 1,669,329 0.0 0.0 7,449.3 7,449.3 0.0 634.8 597.9 6,216.6 2,788.2
500030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-47 IB 0 0 1,750,588 0 0 1,663,059 0.0 0.0 7,421.3 7,421.3 0.0 634.8 597.6 6,188.9 2,774.5
500031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-48 IB 0 0 1,783,840 0 0 1,694,648 0.0 0.0 7,562.5 7,562.5 0.0 634.8 599.2 6,328.5 2,842.0
500032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-49 IB 0 0 1,861,075 0 0 1,768,022 0.0 0.0 7,889.8 7,889.8 0.0 634.8 603.4 6,651.6 3,003.6
500272 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-50 IB 0 0 1,980,110 0 0 1,881,105 0.0 0.0 8,394.3 8,394.3 0.0 634.8 609.8 7,149.7 2,965.6
500273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-51 IB 0 0 2,120,810 0 0 2,014,770 0.0 0.0 8,990.8 8,990.8 0.0 634.8 617.2 7,738.8 3,228.1
500274 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-52 IB 0 0 2,162,591 0 0 2,054,461 0.0 0.0 9,168.1 9,168.1 0.0 634.8 619.1 7,914.2 3,305.7
500275 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-53 IB 0 0 2,127,521 0 0 2,021,145 0.0 0.0 9,019.6 9,019.6 0.0 634.8 617.4 7,767.4 3,240.4
500129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-54 IB 0 0 1,849,417 0 0 1,756,947 0.0 0.0 7,840.3 7,840.3 0.0 634.8 603.4 6,602.1 2,742.9
500276 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-55 IB 0 0 2,257,210 0 0 2,144,350 0.0 0.0 9,568.9 9,568.9 0.0 634.8 624.0 8,310.1 3,482.1
500277 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-56 IB 0 0 2,073,537 0 0 1,969,861 0.0 0.0 8,790.4 8,790.4 0.0 634.8 614.9 7,540.7 3,139.7
500278 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-57 IB 0 0 1,853,319 0 0 1,760,653 0.0 0.0 7,856.9 7,856.9 0.0 634.8 602.8 6,619.3 2,734.1
500476 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-58 IB 0 0 1,587,014 0 0 1,507,663 0.0 0.0 6,728.0 6,728.0 0.0 634.8 588.8 5,504.4 2,255.4
500477 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-59 IB 0 0 1,303,800 0 0 1,238,610 0.0 0.0 5,527.5 5,527.5 0.0 634.8 573.6 4,319.1 1,725.8
500478 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-60 IB 0 0 1,102,255 0 0 1,047,142 0.0 0.0 4,672.9 4,672.9 0.0 634.8 562.8 3,475.3 1,348.8
500033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-63 IB 0 0 1,701,156 0 0 1,616,098 0.0 0.0 7,211.7 7,211.7 0.0 634.8 594.8 5,982.1 2,679.1
500034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-64 IB 0 0 1,744,806 0 0 1,657,566 0.0 0.0 7,396.9 7,396.9 0.0 634.8 597.1 6,165.0 2,740.8
500035 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-65 IB 0 0 1,810,965 0 0 1,720,417 0.0 0.0 7,677.4 7,677.4 0.0 634.8 600.6 6,442.0 2,874.0
500279 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-66 IB 0 0 1,939,814 0 0 1,842,823 0.0 0.0 8,223.6 8,223.6 0.0 634.8 607.4 6,981.4 2,895.1
500280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-67 IB 0 0 2,093,112 0 0 1,988,456 0.0 0.0 8,873.6 8,873.6 0.0 634.8 615.8 7,623.0 3,180.8
500281 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-68 IB 0 0 2,238,768 0 0 2,126,830 0.0 0.0 9,490.9 9,490.9 0.0 634.8 623.2 8,232.9 3,452.4
500282 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-69 IB 0 0 2,300,926 0 0 2,185,880 0.0 0.0 9,754.6 9,754.6 0.0 634.8 626.7 8,493.1 3,568.1
500284 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-71 IB 0 0 2,079,518 0 0 1,975,542 0.0 0.0 8,815.8 8,815.8 0.0 634.8 615.0 7,566.0 3,155.4
500285 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-72 IB 0 0 1,883,511 0 0 1,789,336 0.0 0.0 7,985.0 7,985.0 0.0 634.8 604.4 6,745.8 2,790.3
500286 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-73 IB 0 0 1,665,430 0 0 1,582,158 0.0 0.0 7,060.2 7,060.2 0.0 634.8 592.9 5,832.5 2,384.0
500036 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-77 IB 0 0 1,749,317 0 0 1,661,851 0.0 0.0 7,416.1 7,416.1 0.0 634.8 597.2 6,184.1 2,750.2

mrll_0909.fmt Free:
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
Gross Operating
Oil/Cond Gas Life
(CONTINUED)
500037 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-78 IB 0 1 0 1,866,920 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5
500287 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-79 IB 0 1 0 2,024,727 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500485 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-89 IB 0 1 0 1,939,141 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500084 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-110 IB 0 1 0 796,347 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500325 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-111 IB 0 1 0 726,747 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500326 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-112 IB 0 1 0 542,194 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.2
500327 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-113 IB 0 1 0 718,019 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
File: VU70801A.;38
500002 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-175 IB 0 1 0 1,584,059 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500003 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-176 IB 0 1 0 1,584,637 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
644
500004 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-177 IB 0 1 0 1,539,054 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500005 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-178 IB 0 1 0 1,601,558 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500006 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-179 IB 0 1 0 1,686,759 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500093 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-196 IB 0 1 0 431,863 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 25.9
500094 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-197 IB 0 1 0 691,919 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
500095 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-198 IB 0 1 0 433,200 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 25.9
500096 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-199 IB 0 1 0 260,233 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 20.9
500099 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-200 IB 0 1 0 310,032 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 21.9
500100 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-201 IB 0 1 0 531,279 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 27.9
500101 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-202 IB 0 1 0 269,916 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 20.9
500102 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-203 IB 0 1 0 368,592 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 23.9
500103 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-204 IB 0 1 0 403,130 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 24.9
500104 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-205 IB 0 1 0 473,684 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 26.9
500105 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-206 IB 0 1 0 491,554 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 27.0
500008 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-207 IB 0 1 0 1,517,552 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500009 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-208 IB 0 1 0 1,631,211 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500010 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-209 IB 0 1 0 1,480,701 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500011 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-210 IB 0 1 0 1,570,208 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.2
500012 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-211 IB 0 1 0 1,707,595 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500013 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-212 IB 0 1 0 1,470,420 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500014 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-213 IB 0 1 0 1,520,571 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500015 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-214 IB 0 1 0 1,645,867 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500016 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-215 IB 0 1 0 1,497,603 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500017 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-216 IB 0 1 0 1,590,291 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500018 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-217 IB 0 1 0 1,746,312 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500019 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-218 IB 0 1 0 1,554,766 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500020 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-219 IB 0 1 0 1,683,561 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500262 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-220 IB 0 1 0 1,883,624 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
500021 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-221 IB 0 1 0 1,632,428 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.3
500395 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-222 IB 0 1 0 1,790,978 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500353 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-346 IB 0 1 0 1,175,339 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500118 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-384 IB 0 1 0 490,484 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 27.0
500119 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-385 IB 0 1 0 609,237 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.0
500120 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-386 IB 0 1 0 545,891 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.0

mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:35 DISK116:[10ZAU1.10ZAU70801]VV70801A.;31
28MAR201011030852
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
(CONTINUED)
500037 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-78 IB 0 0 1,866,920 0 0 1,773,574 0.0 0.0 7,914.4 7,914.4 0.0 634.8 603.5 6,676.1 2,986.8
500287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-79 IB 0 0 2,024,727 0 0 1,923,491 0.0 0.0 8,583.5 8,583.5 0.0 634.8 612.1 7,336.6 3,024.6
500485 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-89 IB 0 0 1,939,141 0 0 1,842,184 0.0 0.0 8,220.8 8,220.8 0.0 634.8 607.6 6,978.4 2,871.0
500084 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-110 IB 0 0 796,347 0 0 756,529 0.0 0.0 3,376.2 3,376.2 0.0 634.8 546.3 2,195.1 803.4
500325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-111 IB 0 0 726,747 0 0 690,410 0.0 0.0 3,080.9 3,080.9 0.0 634.8 542.5 1,903.6 641.9
500326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-112 IB 0 0 542,194 0 0 515,085 0.0 0.0 2,298.4 2,298.4 0.0 634.8 482.4 1,181.2 316.3
500327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-113 IB 0 0 718,019 0 0 682,118 0.0 0.0 3,044.0 3,044.0 0.0 634.8 542.2 1,867.0 625.4
File: VV70801A.;31
500002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-175 IB 0 0 1,584,059 0 0 1,504,856 0.0 0.0 6,715.2 6,715.2 0.0 634.8 588.4 5,492.0 2,492.8
500003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-176 IB 0 0 1,584,637 0 0 1,505,405 0.0 0.0 6,717.8 6,717.8 0.0 634.8 588.7 5,494.3 2,469.4
645
500004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-177 IB 0 0 1,539,054 0 0 1,462,102 0.0 0.0 6,524.6 6,524.6 0.0 634.8 586.2 5,303.6 2,375.3
500005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-178 IB 0 0 1,601,558 0 0 1,521,480 0.0 0.0 6,789.5 6,789.5 0.0 634.8 589.4 5,565.3 2,504.2
500006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-179 IB 0 0 1,686,759 0 0 1,602,421 0.0 0.0 7,150.8 7,150.8 0.0 634.8 593.9 5,922.1 2,679.9
500093 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-196 IB 0 0 431,863 0 0 410,270 0.0 0.0 1,830.8 1,830.8 0.0 634.8 443.1 752.9 113.7
500094 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-197 IB 0 0 691,919 0 0 657,323 0.0 0.0 2,933.3 2,933.3 0.0 634.8 540.9 1,757.6 579.0
500095 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-198 IB 0 0 433,200 0 0 411,540 0.0 0.0 1,836.7 1,836.7 0.0 634.8 443.1 758.8 116.7
500096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-199 IB 0 0 260,233 0 0 247,221 0.0 0.0 1,103.3 1,103.3 0.0 634.8 349.9 118.6 (190.9)
500099 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-200 IB 0 0 310,032 0 0 294,531 0.0 0.0 1,314.3 1,314.3 0.0 634.8 369.3 310.2 (97.2)
500100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-201 IB 0 0 531,279 0 0 504,715 0.0 0.0 2,252.5 2,252.5 0.0 634.8 481.7 1,136.0 297.7
500101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-202 IB 0 0 269,916 0 0 256,420 0.0 0.0 1,144.2 1,144.2 0.0 634.8 350.4 159.0 (166.5)
500102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-203 IB 0 0 368,592 0 0 350,162 0.0 0.0 1,562.6 1,562.6 0.0 634.8 406.1 521.7 9.0
500103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-204 IB 0 0 403,130 0 0 382,974 0.0 0.0 1,709.0 1,709.0 0.0 634.8 424.5 649.7 69.8
500104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-205 IB 0 0 473,684 0 0 450,000 0.0 0.0 2,007.8 2,007.8 0.0 634.8 462.0 911.0 192.8
500105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-206 IB 0 0 491,554 0 0 466,976 0.0 0.0 2,083.9 2,083.9 0.0 634.8 463.0 986.1 221.4
500008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-207 IB 0 0 1,517,552 0 0 1,441,674 0.0 0.0 6,433.5 6,433.5 0.0 634.8 585.1 5,213.6 2,330.9
500009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-208 IB 0 0 1,631,211 0 0 1,549,650 0.0 0.0 6,915.1 6,915.1 0.0 634.8 590.9 5,689.4 2,572.9
500010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-209 IB 0 0 1,480,701 0 0 1,406,666 0.0 0.0 6,277.4 6,277.4 0.0 634.8 583.1 5,059.5 2,262.7
500011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-210 IB 0 0 1,570,208 0 0 1,491,697 0.0 0.0 6,656.5 6,656.5 0.0 634.8 587.9 5,433.8 2,447.3
500012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-211 IB 0 0 1,707,595 0 0 1,622,215 0.0 0.0 7,239.0 7,239.0 0.0 634.8 595.2 6,009.0 2,703.8
500013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-212 IB 0 0 1,470,420 0 0 1,396,899 0.0 0.0 6,233.4 6,233.4 0.0 634.8 582.3 5,016.3 2,218.9
500014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-213 IB 0 0 1,520,571 0 0 1,444,543 0.0 0.0 6,446.4 6,446.4 0.0 634.8 585.4 5,226.2 2,321.4
500015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-214 IB 0 0 1,645,867 0 0 1,563,574 0.0 0.0 6,977.4 6,977.4 0.0 634.8 591.7 5,750.9 2,582.7
500016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-215 IB 0 0 1,497,603 0 0 1,422,723 0.0 0.0 6,349.0 6,349.0 0.0 634.8 584.1 5,130.1 2,279.5
500017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-216 IB 0 0 1,590,291 0 0 1,510,776 0.0 0.0 6,742.0 6,742.0 0.0 634.8 588.8 5,518.4 2,468.9
500018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-217 IB 0 0 1,746,312 0 0 1,658,997 0.0 0.0 7,403.3 7,403.3 0.0 634.8 596.9 6,171.6 2,787.6
500019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-218 IB 0 0 1,554,766 0 0 1,477,027 0.0 0.0 6,591.1 6,591.1 0.0 634.8 587.0 5,369.3 2,396.2
500020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-219 IB 0 0 1,683,561 0 0 1,599,383 0.0 0.0 7,137.3 7,137.3 0.0 634.8 593.9 5,908.6 2,664.5
500262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-220 IB 0 0 1,883,624 0 0 1,789,442 0.0 0.0 7,985.5 7,985.5 0.0 634.8 604.4 6,746.3 2,785.9
500021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-221 IB 0 0 1,632,428 0 0 1,550,806 0.0 0.0 6,920.6 6,920.6 0.0 634.8 591.1 5,694.7 2,560.1
500395 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-222 IB 0 0 1,790,978 0 0 1,701,429 0.0 0.0 7,592.6 7,592.6 0.0 634.8 600.1 6,357.7 2,552.0
500353 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-346 IB 0 0 1,175,339 0 0 1,116,572 0.0 0.0 4,982.7 4,982.7 0.0 634.8 566.6 3,781.3 1,481.0
500118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-384 IB 0 0 490,484 0 0 465,959 0.0 0.0 2,079.3 2,079.3 0.0 634.8 462.9 981.6 224.0
500119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-385 IB 0 0 609,237 0 0 578,775 0.0 0.0 2,582.8 2,582.8 0.0 634.8 502.9 1,445.1 437.0
500120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-386 IB 0 0 545,891 0 0 518,596 0.0 0.0 2,314.2 2,314.2 0.0 634.8 482.7 1,196.7 323.2

mrll_0909.fmt Free:
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
WEST BENGAL, INDIA

0D/
Gross
Operating
Oil/Cond Gas Life
(CONTINUED)
500121 . . . . . . . . EDP-387 IB 0 1 0 716,930 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
File: VV70801A.;31
500356 . . . . . . . . EDP-388 IB 0 1 0 475,742 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 26.2
646
500357 . . . . . . . . EDP-389 IB 0 1 0 573,511 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.2
500359 . . . . . . . . EDP-391 IB 0 1 0 491,641 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 27.2
500473 . . . . . . . . EDP-405 IB 0 1 0 853,700 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
500075 . . . . . . . . EDP-U75 IB 0 1 0 1,481,016 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5
500076 . . . . . . . . EDP-U76 IB 0 1 0 1,502,774 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.5
500077 . . . . . . . . EDP-U77 IB 0 1 0 1,542,653 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500078 . . . . . . . . EDP-U79 IB 0 1 0 1,842,056 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500079 . . . . . . . . EDP-U80 IB 0 1 0 1,798,183 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500080 . . . . . . . . EDP-U81 IB 0 1 0 1,815,446 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500081 . . . . . . . . EDP-U82 IB 0 1 0 1,898,816 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
500171 . . . . . . . . EDP-U83 IB 0 1 0 1,914,537 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
500172 . . . . . . . . EDP-U85 IB 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 0.0
500173 . . . . . . . . EDP-U86 IB 0 1 0 552,197 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 28.1
201000 . . . . . . . . FAC CAP 2C 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 10.0
202000 . . . . . . . . PLP & Royalty 2C 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 32.0
Field Total . . . . . . . . . . . . . . . . . . . . 0 143 0 200,922,084
Total . . . . . . . . . . . . . . . . . . . . . . . . 0 143 0 200,922,084
Total All Leases . . . . . . . . . . . . . . . . 0 143 0 200,922,084

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
WEST BENGAL, INDIA
0D/
(CONTINUED)
500121 . . . . . . EDP-387 IB 0 0 716,930 0 0 681,084 0.0 0.0 3,039.6 3,039.6 0.0 634.8 542.4 1,862.4 616.8
500356 . . . . . . EDP-388 IB 0 0 475,742 0 0 451,955 0.0 0.0 2,016.9 2,016.9 0.0 634.8 445.8 936.3 204.6
File: VV70801A.;31
500357 . . . . . . EDP-389 IB 0 0 573,511 0 0 544,836 0.0 0.0 2,431.3 2,431.3 0.0 634.8 484.2 1,312.3 375.8
647
500359 . . . . . . EDP-391 IB 0 0 491,641 0 0 467,059 0.0 0.0 2,084.2 2,084.2 0.0 634.8 463.1 986.3 231.9
500473 . . . . . . EDP-405 IB 0 0 853,700 0 0 811,015 0.0 0.0 3,619.1 3,619.1 0.0 634.8 549.5 2,434.8 883.7
500075 . . . . . . EDP-U75 IB 0 0 1,481,016 0 0 1,406,966 0.0 0.0 6,278.6 6,278.6 0.0 634.8 583.0 5,060.8 2,210.1
500076 . . . . . . EDP-U76 IB 0 0 1,502,774 0 0 1,427,635 0.0 0.0 6,370.8 6,370.8 0.0 634.8 584.0 5,152.0 2,253.7
500077 . . . . . . EDP-U77 IB 0 0 1,542,653 0 0 1,465,521 0.0 0.0 6,539.9 6,539.9 0.0 634.8 586.3 5,318.8 2,310.7
500078 . . . . . . EDP-U79 IB 0 0 1,842,056 0 0 1,749,953 0.0 0.0 7,809.1 7,809.1 0.0 634.8 602.3 6,572.0 2,908.6
500079 . . . . . . EDP-U80 IB 0 0 1,798,183 0 0 1,708,274 0.0 0.0 7,623.4 7,623.4 0.0 634.8 600.0 6,388.6 2,821.0
500080 . . . . . . EDP-U81 IB 0 0 1,815,446 0 0 1,724,674 0.0 0.0 7,696.2 7,696.2 0.0 634.8 600.8 6,460.6 2,855.6
500081 . . . . . . EDP-U82 IB 0 0 1,898,816 0 0 1,803,875 0.0 0.0 8,049.8 8,049.8 0.0 634.8 605.4 6,809.6 3,026.6
500171 . . . . . . EDP-U83 IB 0 0 1,914,537 0 0 1,818,810 0.0 0.0 8,116.5 8,116.5 0.0 634.8 606.8 6,874.9 2,869.9
500172 . . . . . . EDP-U85 IB 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
500173 . . . . . . EDP-U86 IB 0 0 552,197 0 0 524,587 0.0 0.0 2,341.0 2,341.0 0.0 634.8 483.1 1,223.1 332.9
201000 . . . . . . FAC CAP 2C 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 18,335.3 0.0 (18,335.3) (16,889.1)
202000 . . . . . . PLP & Royalty 2C 0 0 0 0 0 0 0.0 0.0 0.0 0.0 90,850.9 0.0 0.0 (90,850.9) (43,398.1)
Field Total . . . . . . . . . . . . . . . . . . 0 0 200,843,900 0 0 190,801,707 0.0 0.0 851,452.8 851,452.8 90,850.9 90,850.9 81,074.9 579,937.3 236,393.0
Total . . . . . . . . . . . . . . . . . . . . . . 0 0 200,843,900 0 0 190,801,707 0.0 0.0 851,452.8 851,452.8 90,850.9 90,850.9 81,074.9 579,937.3 236,393.0
Total All Leases . . . . . . . . . . . . . . 0 0 200,843,900 0 0 190,801,707 0.0 0.0 851,452.8 851,452.8 90,850.9 90,850.9 81,074.9 579,937.3 236,393.0

mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:30 DISK116:[10ZAU1.10ZAU70801]VW70801A.;32
28MAR201011030852
7080DM/0D Foot:
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

WEST BENGAL, INDIA
0D/
12-31-2010 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 3,746,139 0 0 3,558,834 0.000 0.000 4.463 0.0 0.0 15,881.5 15,881.5
12-31-2011 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 13,064,491 0 0 12,411,266 0.000 0.000 4.462 0.0 0.0 55,385.3 55,385.3
File: VW70801A.;32
12-31-2012 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 21,898,155 0 0 20,803,247 0.000 0.000 4.462 0.0 0.0 92,834.4 92,834.4
648
12-31-2013 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 32,433,838 0 0 30,812,148 0.000 0.000 4.462 0.0 0.0 137,498.8 137,498.8
12-31-2014 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 35,975,319 0 0 34,176,554 0.000 0.000 4.462 0.0 0.0 152,512.9 152,512.9
12-31-2015 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 33,950,744 0 0 32,253,206 0.000 0.000 4.463 0.0 0.0 143,929.9 143,929.9
12-31-2016 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 30,011,786 0 0 28,511,195 0.000 0.000 4.463 0.0 0.0 127,231.0 127,231.0
12-31-2017 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 25,918,954 0 0 24,623,009 0.000 0.000 4.463 0.0 0.0 109,880.1 109,880.1
12-31-2018 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 22,275,085 0 0 21,161,329 0.000 0.000 4.463 0.0 0.0 94,432.3 94,432.3
12-31-2019 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 19,193,365 0 0 18,233,693 0.000 0.000 4.462 0.0 0.0 81,368.8 81,368.8
12-31-2020 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 16,621,330 0 0 15,790,262 0.000 0.000 4.463 0.0 0.0 70,464.3 70,464.3
12-31-2021 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 14,486,618 0 0 13,762,285 0.000 0.000 4.462 0.0 0.0 61,414.6 61,414.6
12-31-2022 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 12,699,411 0 0 12,064,444 0.000 0.000 4.463 0.0 0.0 53,837.4 53,837.4
12-31-2023 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 11,192,677 0 0 10,633,033 0.000 0.000 4.463 0.0 0.0 47,449.5 47,449.5
12-31-2024 . . . . . . . . . . . . . . . . . . . . . . . . 0 0 9,916,326 0 0 9,420,519 0.000 0.000 4.463 0.0 0.0 42,038.5 42,038.5
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 303,384,238 0 0 288,215,024 0.000 0.000 4.463 0.0 0.0 1,286,159.3 1,286,159.3
Remaining . . . . . . . . . . . . . . . . . . . . . . . . 0 0 73,835,259 0 0 70,143,494 0.000 0.000 4.463 0.0 0.0 313,015.3 313,015.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 377,219,497 0 0 358,358,518 0.000 0.000 4.463 0.0 0.0 1,599,174.6 1,599,174.6
Cum Prod . . . . . . . . . . . . . . . . . . . . . . . . . 0 78,184
Ultimate . . . . . . . . . . . . . . . . . . . . . . . . . . 0 377,297,681
mrll_0909.fmt Free:
7080DM/0D Foot:
28MAR201011030852
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

0D/
Capital Operating
completions Production Ad Valorem Cost Expense Period CUM Period CUM Disc Rate Cash Flow
12-31-2010 . . . . . . . . . . . 81 81.00 1,510.3 0.0 79,383.8 1,056.7 (66,069.3) (66,069.3) (63,495.0) (63,495.0) 8.000 591,697.8
12-31-2011 . . . . . . . . . . . 144 144.00 5,321.1 0.0 30,008.4 3,275.6 16,780.2 (49,289.1) 13,743.7 (49,751.3) 12.000 445,247.1
12-31-2012 . . . . . . . . . . . 144 144.00 11,819.0 0.0 0.0 3,759.9 77,255.5 27,966.4 60,622.2 10,870.9 15.000 366,296.0
12-31-2013 . . . . . . . . . . . 144 144.00 21,575.7 0.0 0.0 4,192.4 111,730.7 139,697.1 79,917.6 90,788.5 20.000 271,194.9
12-31-2014 . . . . . . . . . . . 144 144.00 25,330.7 0.0 0.0 4,312.2 122,870.0 262,567.1 80,050.7 170,839.2 25.000 205,184.3
File: VW70801A.;32
12-31-2015 . . . . . . . . . . . 144 144.00 23,225.0 0.0 0.0 4,180.9 116,524.0 379,091.1 69,076.7 239,915.9 30.000 157,414.1
649
12-31-2016 . . . . . . . . . . . 144 144.00 19,438.0 0.0 0.0 3,966.2 103,826.8 482,917.9 55,972.6 295,888.5 35.000 121,713.2
12-31-2017 . . . . . . . . . . . 144 144.00 15,626.5 0.0 0.0 3,749.3 90,504.3 573,422.2 44,358.1 340,246.6 40.000 94,345.4
12-31-2018 . . . . . . . . . . . 144 144.00 12,517.9 0.0 0.0 3,561.4 78,353.0 651,775.2 34,912.4 375,159.0 45.000 72,921.2
12-31-2019 . . . . . . . . . . . 144 144.00 10,000.1 0.0 0.0 3,399.8 67,968.9 719,744.1 27,529.2 402,688.2 50.000 55,863.4
12-31-2020 . . . . . . . . . . . 144 144.00 8,079.6 0.0 0.0 3,267.9 59,116.8 778,860.9 21,765.9 424,454.1
12-31-2021 . . . . . . . . . . . 144 144.00 6,486.1 0.0 0.0 3,158.5 51,770.0 830,630.9 17,327.0 441,781.1
12-31-2022 . . . . . . . . . . . 144 144.00 5,409.2 0.0 0.0 3,067.9 45,360.3 875,991.2 13,801.5 455,582.6
12-31-2023 . . . . . . . . . . . 144 144.00 4,766.6 0.0 0.0 2,991.9 39,691.0 915,682.2 10,978.2 466,560.8
12-31-2024 . . . . . . . . . . . 144 144.00 4,222.3 0.0 0.0 2,927.2 34,889.0 950,571.2 8,772.6 475,333.4
Subtotal . . . . . . . . . . . . 175,328.1 0.0 109,392.2 50,867.8 950,571.2 950,571.2 475,333.4 475,333.4
Remaining . . . . . . . . . . . 31,453.2 0.0 0.0 41,746.8 239,815.3 1,190,386.5 35,920.2 511,253.6
Total of 32.0 yrs . . . . . . . 206,781.3 0.0 109,392.2 92,614.6 1,190,386.5 1,190,386.5 511,253.6 511,253.6
Figure 12
mrll_0909.fmt Free:
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Gross
0D/
Operating
Oil/Cond Gas Life
RANIGANJ COAL FIELD
300001 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 01 IH 0 1 0 3,036,483 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300002 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 02 IH 0 1 0 2,474,563 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300003 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 03 IH 0 1 0 3,303,137 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300004 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 04A IH 0 1 0 3,061,527 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300005 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 05 IH 0 1 0 2,498,444 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300006 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 06 IH 0 1 0 2,437,001 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300007 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 07 IH 0 1 0 2,985,089 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
File: VW70801A.;32
300008 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 08 IH 0 1 0 2,765,082 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300009 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 09 IH 0 1 0 3,034,762 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
650
300010 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 10 IH 0 1 0 2,357,855 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300011 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 11 IH 0 1 0 724,869 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
300012 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 12 IH 0 1 0 2,190,302 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300013 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 13 IH 0 1 0 1,683,984 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 29.7
300014 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 14 IH 0 1 0 2,541,186 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
300015 . . . . . . . . . . . . . . . . . . . . . . . . . . EDT 15 IH 0 1 0 2,910,449 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 29.7
600082 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-1 IH 0 1 0 2,998,748 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600097 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-2 IH 0 1 0 2,837,388 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.9
600115 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-3 IH 0 1 0 2,136,875 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600123 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-4 IH 0 1 0 1,899,843 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
600128 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-5 IH 0 1 0 3,084,663 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600130 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-6 IH 0 1 0 3,326,649 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600131 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-7 IH 0 1 0 2,806,307 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600132 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-8 IH 0 1 0 2,049,939 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600133 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-9 IH 0 1 0 2,735,933 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600001 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-10 IH 0 1 0 2,977,880 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600083 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-11 IH 0 1 0 3,437,766 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600085 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-12 IH 0 1 0 3,273,458 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600086 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-13 IH 0 1 0 2,804,053 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600087 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-14 IH 0 1 0 3,639,467 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600088 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-15 IH 0 1 0 3,222,825 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600089 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-16 IH 0 1 0 2,600,225 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.9
600090 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-17 IH 0 1 0 3,195,795 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.9
600091 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-18 IH 0 1 0 2,840,937 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.9
600092 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-19 IH 0 1 0 2,439,858 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.9
600098 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-20 IH 0 1 0 2,261,281 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.9
600106 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-21 IH 0 1 0 2,611,888 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600107 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-22 IH 0 1 0 2,323,696 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600108 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-23 IH 0 1 0 2,049,168 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600109 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-24 IH 0 1 0 2,509,808 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600110 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-25 IH 0 1 0 1,992,199 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
600111 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-26 IH 0 1 0 2,020,375 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
600112 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-27 IH 0 1 0 2,431,875 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600113 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-28 IH 0 1 0 2,435,540 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
RANIGANJ COAL FIELD
300001 . . . . . . . . . . . . . . . . . . . . . EDT 01 IH 0 0 3,029,238 0 0 2,877,776 0.0 0.0 12,842.0 12,842.0 0.0 0.0 658.1 12,183.9 6,268.0
300002 . . . . . . . . . . . . . . . . . . . . . EDT 02 IH 0 0 2,467,363 0 0 2,343,995 0.0 0.0 10,460.0 10,460.0 0.0 0.0 628.0 9,832.0 5,074.8
300003 . . . . . . . . . . . . . . . . . . . . . EDT 03 IH 0 0 3,297,961 0 0 3,133,063 0.0 0.0 13,981.2 13,981.2 0.0 0.0 672.4 13,308.8 6,838.8
300004 . . . . . . . . . . . . . . . . . . . . . EDT 04A IH 0 0 3,053,668 0 0 2,900,984 0.0 0.0 12,945.8 12,945.8 0.0 0.0 659.3 12,286.5 6,320.2
300005 . . . . . . . . . . . . . . . . . . . . . EDT 05 IH 0 0 2,491,793 0 0 2,367,203 0.0 0.0 10,563.7 10,563.7 0.0 0.0 629.4 9,934.3 5,126.9
300006 . . . . . . . . . . . . . . . . . . . . . EDT 06 IH 0 0 2,430,719 0 0 2,309,183 0.0 0.0 10,304.7 10,304.7 0.0 0.0 626.2 9,678.5 4,997.3
300007 . . . . . . . . . . . . . . . . . . . . . EDT 07 IH 0 0 2,980,379 0 0 2,831,361 0.0 0.0 12,635.0 12,635.0 0.0 0.0 655.3 11,979.7 6,164.3
300008 . . . . . . . . . . . . . . . . . . . . . EDT 08 IH 0 0 2,760,515 0 0 2,622,490 0.0 0.0 11,703.0 11,703.0 0.0 0.0 643.9 11,059.1 5,697.7
File: VW70801A.;32
300009 . . . . . . . . . . . . . . . . . . . . . EDT 09 IH 0 0 3,029,238 0 0 2,877,776 0.0 0.0 12,842.0 12,842.0 0.0 0.0 658.1 12,183.9 6,268.0
300010 . . . . . . . . . . . . . . . . . . . . . EDT 10 IH 0 0 2,352,545 0 0 2,234,918 0.0 0.0 9,973.3 9,973.3 0.0 0.0 622.1 9,351.2 4,831.1
651
300011 . . . . . . . . . . . . . . . . . . . . . EDT 11 IH 0 0 718,223 0 0 682,311 0.0 0.0 3,044.8 3,044.8 0.0 0.0 535.1 2,509.7 1,360.7
300012 . . . . . . . . . . . . . . . . . . . . . EDT 12 IH 0 0 2,188,869 0 0 2,079,425 0.0 0.0 9,279.3 9,279.3 0.0 0.0 613.6 8,665.7 4,483.6
300013 . . . . . . . . . . . . . . . . . . . . . EDT 13 IH 0 0 1,678,296 0 0 1,594,381 0.0 0.0 7,115.1 7,115.1 0.0 0.0 586.3 6,528.8 3,399.6
300014 . . . . . . . . . . . . . . . . . . . . . EDT 14 IH 0 0 2,540,651 0 0 2,413,619 0.0 0.0 10,770.8 10,770.8 0.0 0.0 632.1 10,138.7 5,230.7
300015 . . . . . . . . . . . . . . . . . . . . . EDT 15 IH 0 0 2,907,091 0 0 2,761,737 0.0 0.0 12,324.4 12,324.4 0.0 0.0 651.7 11,672.7 6,008.9
600082 . . . . . . . . . . . . . . . . . . . . . EDP-1 IH 0 0 2,998,748 0 0 2,848,810 0.0 0.0 12,712.8 12,712.8 0.0 634.8 664.2 11,413.8 5,140.2
600097 . . . . . . . . . . . . . . . . . . . . . EDP-2 IH 0 0 2,837,388 0 0 2,695,518 0.0 0.0 12,028.7 12,028.7 0.0 634.8 656.1 10,737.8 4,671.4
600115 . . . . . . . . . . . . . . . . . . . . . EDP-3 IH 0 0 2,136,875 0 0 2,030,031 0.0 0.0 9,059.0 9,059.0 0.0 634.8 618.4 7,805.8 3,313.5
600123 . . . . . . . . . . . . . . . . . . . . . EDP-4 IH 0 0 1,899,843 0 0 1,804,851 0.0 0.0 8,054.0 8,054.0 0.0 634.8 605.9 6,813.3 2,837.7
600128 . . . . . . . . . . . . . . . . . . . . . EDP-5 IH 0 0 3,084,663 0 0 2,930,430 0.0 0.0 13,077.0 13,077.0 0.0 634.8 669.1 11,773.1 5,062.2
600130 . . . . . . . . . . . . . . . . . . . . . EDP-6 IH 0 0 3,326,649 0 0 3,160,316 0.0 0.0 14,102.8 14,102.8 0.0 634.8 682.1 12,785.9 5,521.0
600131 . . . . . . . . . . . . . . . . . . . . . EDP-7 IH 0 0 2,806,307 0 0 2,665,991 0.0 0.0 11,897.0 11,897.0 0.0 634.8 654.3 10,607.9 4,544.0
600132 . . . . . . . . . . . . . . . . . . . . . EDP-8 IH 0 0 2,049,939 0 0 1,947,442 0.0 0.0 8,690.2 8,690.2 0.0 634.8 613.9 7,441.5 3,124.2
600133 . . . . . . . . . . . . . . . . . . . . . EDP-9 IH 0 0 2,735,933 0 0 2,599,136 0.0 0.0 11,598.6 11,598.6 0.0 634.8 650.4 10,313.4 4,412.0
600001 . . . . . . . . . . . . . . . . . . . . . EDP-10 IH 0 0 2,977,880 0 0 2,828,986 0.0 0.0 12,624.4 12,624.4 0.0 634.8 663.1 11,326.5 5,388.9
600083 . . . . . . . . . . . . . . . . . . . . . EDP-11 IH 0 0 3,437,766 0 0 3,265,878 0.0 0.0 14,573.9 14,573.9 0.0 634.8 688.1 13,251.0 6,004.4
600085 . . . . . . . . . . . . . . . . . . . . . EDP-12 IH 0 0 3,273,458 0 0 3,109,785 0.0 0.0 13,877.5 13,877.5 0.0 634.8 679.3 12,563.4 5,681.0
600086 . . . . . . . . . . . . . . . . . . . . . EDP-13 IH 0 0 2,804,053 0 0 2,663,850 0.0 0.0 11,887.6 11,887.6 0.0 634.8 654.2 10,598.6 4,756.7
600087 . . . . . . . . . . . . . . . . . . . . . EDP-14 IH 0 0 3,639,467 0 0 3,457,494 0.0 0.0 15,428.9 15,428.9 0.0 634.8 698.6 14,095.5 6,401.6
600088 . . . . . . . . . . . . . . . . . . . . . EDP-15 IH 0 0 3,222,825 0 0 3,061,684 0.0 0.0 13,662.6 13,662.6 0.0 634.8 676.6 12,351.2 5,581.3
600089 . . . . . . . . . . . . . . . . . . . . . EDP-16 IH 0 0 2,600,225 0 0 2,470,214 0.0 0.0 11,023.4 11,023.4 0.0 634.8 643.3 9,745.3 4,219.0
600090 . . . . . . . . . . . . . . . . . . . . . EDP-17 IH 0 0 3,195,795 0 0 3,036,005 0.0 0.0 13,548.1 13,548.1 0.0 634.8 675.1 12,238.2 5,355.3
600091 . . . . . . . . . . . . . . . . . . . . . EDP-18 IH 0 0 2,840,937 0 0 2,698,890 0.0 0.0 12,043.8 12,043.8 0.0 634.8 656.4 10,752.6 4,678.0
600092 . . . . . . . . . . . . . . . . . . . . . EDP-19 IH 0 0 2,439,858 0 0 2,317,865 0.0 0.0 10,343.7 10,343.7 0.0 634.8 634.6 9,074.3 3,913.1
600098 . . . . . . . . . . . . . . . . . . . . . EDP-20 IH 0 0 2,261,281 0 0 2,148,217 0.0 0.0 9,586.6 9,586.6 0.0 634.8 625.1 8,326.7 3,572.7
600106 . . . . . . . . . . . . . . . . . . . . . EDP-21 IH 0 0 2,611,888 0 0 2,481,294 0.0 0.0 11,072.7 11,072.7 0.0 634.8 644.0 9,793.9 4,207.8
600107 . . . . . . . . . . . . . . . . . . . . . EDP-22 IH 0 0 2,323,696 0 0 2,207,511 0.0 0.0 9,851.0 9,851.0 0.0 634.8 628.4 8,587.8 3,662.4
600108 . . . . . . . . . . . . . . . . . . . . . EDP-23 IH 0 0 2,049,168 0 0 1,946,709 0.0 0.0 8,687.1 8,687.1 0.0 634.8 613.9 7,438.4 3,143.0
600109 . . . . . . . . . . . . . . . . . . . . . EDP-24 IH 0 0 2,509,808 0 0 2,384,318 0.0 0.0 10,639.9 10,639.9 0.0 634.8 638.5 9,366.6 4,014.6
600110 . . . . . . . . . . . . . . . . . . . . . EDP-25 IH 0 0 1,992,199 0 0 1,892,589 0.0 0.0 8,445.7 8,445.7 0.0 634.8 610.5 7,200.4 3,035.0
600111 . . . . . . . . . . . . . . . . . . . . . EDP-26 IH 0 0 2,020,375 0 0 1,919,356 0.0 0.0 8,565.1 8,565.1 0.0 634.8 612.4 7,317.9 3,088.5
600112 . . . . . . . . . . . . . . . . . . . . . EDP-27 IH 0 0 2,431,875 0 0 2,310,281 0.0 0.0 10,309.5 10,309.5 0.0 634.8 634.3 9,040.4 3,867.0
600113 . . . . . . . . . . . . . . . . . . . . . EDP-28 IH 0 0 2,435,540 0 0 2,313,763 0.0 0.0 10,325.2 10,325.2 0.0 634.8 634.5 9,055.9 3,874.1

mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:29 DISK116:[10ZAU1.10ZAU70801]VX70801A.;32
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
Gross Operating
Oil/Cond Gas Life
(CONTINUED)
600114 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-29 IH 0 1 0 2,386,601 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600116 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-30 IH 0 1 0 2,347,893 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600117 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-31 IH 0 1 0 2,210,513 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600022 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-32 IH 0 1 0 3,003,197 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600023 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-33 IH 0 1 0 2,824,981 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600024 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-34 IH 0 1 0 2,947,182 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600025 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-35 IH 0 1 0 2,891,128 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
File: VX70801A.;32
600026 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-36 IH 0 1 0 3,019,650 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600027 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-37 IH 0 1 0 3,289,903 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
652
600271 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-38 IH 0 1 0 3,507,534 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600122 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-39 IH 0 1 0 3,640,262 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600124 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-40 IH 0 1 0 3,601,487 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600125 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-41 IH 0 1 0 3,401,432 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600126 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-42 IH 0 1 0 3,010,604 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600127 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-43 IH 0 1 0 2,471,958 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600475 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-44 IH 0 1 0 1,814,964 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
600028 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-45 IH 0 1 0 2,877,212 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600029 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-46 IH 0 1 0 2,937,834 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600030 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-47 IH 0 1 0 2,924,975 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600031 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-48 IH 0 1 0 2,964,816 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600032 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-49 IH 0 1 0 3,096,697 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600272 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-50 IH 0 1 0 3,319,039 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600273 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-51 IH 0 1 0 3,613,567 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600274 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-52 IH 0 1 0 3,722,005 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600275 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-53 IH 0 1 0 3,684,809 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600129 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-54 IH 0 1 0 3,262,124 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600276 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-55 IH 0 1 0 3,815,474 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600277 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-56 IH 0 1 0 3,542,467 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600278 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-57 IH 0 1 0 3,176,405 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600476 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-58 IH 0 1 0 2,694,680 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600477 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-59 IH 0 1 0 2,155,922 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600478 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-60 IH 0 1 0 1,789,073 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
600033 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-63 IH 0 1 0 2,847,743 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.4
600034 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-64 IH 0 1 0 2,920,521 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.5
600035 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-65 IH 0 1 0 3,026,294 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.5
600279 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-66 IH 0 1 0 3,238,495 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600280 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-67 IH 0 1 0 3,495,520 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600281 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-68 IH 0 1 0 3,736,750 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600282 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-69 IH 0 1 0 3,845,667 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600284 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-71 IH 0 1 0 3,495,594 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600285 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-72 IH 0 1 0 3,161,112 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600286 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-73 IH 0 1 0 2,773,451 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600036 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-77 IH 0 1 0 2,929,020 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.5

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
(CONTINUED)
600114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-29 IH 0 0 2,386,601 0 0 2,267,271 0.0 0.0 10,117.8 10,117.8 0.0 634.8 631.7 8,851.3 3,781.4
600116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-30 IH 0 0 2,347,893 0 0 2,230,498 0.0 0.0 9,953.7 9,953.7 0.0 634.8 629.8 8,689.1 3,712.7
600117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-31 IH 0 0 2,210,513 0 0 2,099,988 0.0 0.0 9,371.1 9,371.1 0.0 634.8 622.3 8,114.0 3,452.8
600022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-32 IH 0 0 3,003,197 0 0 2,853,037 0.0 0.0 12,731.6 12,731.6 0.0 634.8 663.9 11,432.9 5,316.1
600023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-33 IH 0 0 2,824,981 0 0 2,683,732 0.0 0.0 11,976.1 11,976.1 0.0 634.8 654.6 10,686.7 4,954.5
600024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-34 IH 0 0 2,947,182 0 0 2,799,823 0.0 0.0 12,494.2 12,494.2 0.0 634.8 661.3 11,198.1 5,202.1
600025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-35 IH 0 0 2,891,128 0 0 2,746,571 0.0 0.0 12,256.5 12,256.5 0.0 634.8 658.2 10,963.5 5,088.5
600026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-36 IH 0 0 3,019,650 0 0 2,868,667 0.0 0.0 12,801.5 12,801.5 0.0 634.8 665.0 11,501.7 5,349.3
File: VX70801A.;32
600027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-37 IH 0 0 3,289,903 0 0 3,125,408 0.0 0.0 13,947.1 13,947.1 0.0 634.8 679.6 12,632.7 5,897.5
600271 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-38 IH 0 0 3,507,534 0 0 3,332,157 0.0 0.0 14,869.8 14,869.8 0.0 634.8 691.1 13,543.9 5,811.7
653
600122 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-39 IH 0 0 3,640,262 0 0 3,458,249 0.0 0.0 15,432.5 15,432.5 0.0 634.8 698.9 14,098.8 6,105.2
600124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-40 IH 0 0 3,601,487 0 0 3,421,413 0.0 0.0 15,268.1 15,268.1 0.0 634.8 696.6 13,936.7 6,032.5
600125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-41 IH 0 0 3,401,432 0 0 3,231,360 0.0 0.0 14,420.0 14,420.0 0.0 634.8 686.4 13,098.8 5,656.8
600126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-42 IH 0 0 3,010,604 0 0 2,860,073 0.0 0.0 12,763.0 12,763.0 0.0 634.8 665.0 11,463.2 4,923.1
600127 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-43 IH 0 0 2,471,958 0 0 2,348,360 0.0 0.0 10,479.6 10,479.6 0.0 634.8 636.2 9,208.6 3,911.8
600475 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-44 IH 0 0 1,814,964 0 0 1,724,215 0.0 0.0 7,694.3 7,694.3 0.0 634.8 601.0 6,458.5 2,682.1
600028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-45 IH 0 0 2,877,212 0 0 2,733,351 0.0 0.0 12,197.5 12,197.5 0.0 634.8 657.7 10,905.0 5,060.5
600029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-46 IH 0 0 2,937,834 0 0 2,790,943 0.0 0.0 12,454.4 12,454.4 0.0 634.8 660.7 11,158.9 5,183.5
600030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-47 IH 0 0 2,924,975 0 0 2,778,726 0.0 0.0 12,400.0 12,400.0 0.0 634.8 660.0 11,105.2 5,157.0
600031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-48 IH 0 0 2,964,816 0 0 2,816,575 0.0 0.0 12,569.1 12,569.1 0.0 634.8 662.0 11,272.3 5,238.0
600032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-49 IH 0 0 3,096,697 0 0 2,941,862 0.0 0.0 13,128.3 13,128.3 0.0 634.8 668.9 11,824.6 5,510.3
600272 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-50 IH 0 0 3,319,039 0 0 3,153,087 0.0 0.0 14,070.7 14,070.7 0.0 634.8 680.7 12,755.2 5,460.4
600273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-51 IH 0 0 3,613,567 0 0 3,432,888 0.0 0.0 15,319.1 15,319.1 0.0 634.8 696.7 13,987.6 6,009.2
600274 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-52 IH 0 0 3,722,005 0 0 3,535,905 0.0 0.0 15,779.0 15,779.0 0.0 634.8 702.4 14,441.8 6,211.3
600275 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-53 IH 0 0 3,684,809 0 0 3,500,569 0.0 0.0 15,621.4 15,621.4 0.0 634.8 700.7 14,285.9 6,141.8
600129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-54 IH 0 0 3,262,124 0 0 3,099,018 0.0 0.0 13,829.4 13,829.4 0.0 634.8 678.6 12,516.0 5,395.3
600276 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-55 IH 0 0 3,815,474 0 0 3,624,700 0.0 0.0 16,175.3 16,175.3 0.0 634.8 707.3 14,833.2 6,385.3
600277 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-56 IH 0 0 3,542,467 0 0 3,365,343 0.0 0.0 15,017.7 15,017.7 0.0 634.8 692.6 13,690.3 5,876.6
600278 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-57 IH 0 0 3,176,405 0 0 3,017,585 0.0 0.0 13,466.0 13,466.0 0.0 634.8 673.1 12,158.1 5,199.2
600476 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-58 IH 0 0 2,694,680 0 0 2,559,946 0.0 0.0 11,423.7 11,423.7 0.0 634.8 647.9 10,141.0 4,327.9
600477 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-59 IH 0 0 2,155,922 0 0 2,048,126 0.0 0.0 9,139.6 9,139.6 0.0 634.8 619.1 7,885.7 3,320.0
600478 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-60 IH 0 0 1,789,073 0 0 1,699,619 0.0 0.0 7,584.5 7,584.5 0.0 634.8 599.7 6,350.0 2,633.6
600033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-63 IH 0 0 2,847,743 0 0 2,705,356 0.0 0.0 12,072.7 12,072.7 0.0 634.8 655.7 10,782.2 5,005.5
600034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-64 IH 0 0 2,920,521 0 0 2,774,495 0.0 0.0 12,381.2 12,381.2 0.0 634.8 659.7 11,086.7 5,107.4
600035 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-65 IH 0 0 3,026,294 0 0 2,874,979 0.0 0.0 12,829.6 12,829.6 0.0 634.8 665.2 11,529.6 5,320.3
600279 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-66 IH 0 0 3,238,495 0 0 3,076,570 0.0 0.0 13,729.2 13,729.2 0.0 634.8 676.4 12,418.0 5,314.9
600280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-67 IH 0 0 3,495,520 0 0 3,320,744 0.0 0.0 14,818.8 14,818.8 0.0 634.8 690.3 13,493.7 5,793.9
600281 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-68 IH 0 0 3,736,750 0 0 3,549,913 0.0 0.0 15,841.5 15,841.5 0.0 634.8 703.1 14,503.6 6,243.4
600282 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-69 IH 0 0 3,845,667 0 0 3,653,384 0.0 0.0 16,303.5 16,303.5 0.0 634.8 708.7 14,960.0 6,446.1
600284 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-71 IH 0 0 3,495,594 0 0 3,320,814 0.0 0.0 14,819.2 14,819.2 0.0 634.8 690.3 13,494.1 5,794.0
600285 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-72 IH 0 0 3,161,112 0 0 3,003,057 0.0 0.0 13,401.2 13,401.2 0.0 634.8 672.5 12,093.9 5,170.7
600286 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-73 IH 0 0 2,773,451 0 0 2,634,779 0.0 0.0 11,757.7 11,757.7 0.0 634.8 651.8 10,471.1 4,448.4
600036 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-77 IH 0 0 2,929,020 0 0 2,782,569 0.0 0.0 12,417.3 12,417.3 0.0 634.8 660.1 11,122.4 5,124.5

mrll_0909.fmt Free:
28MAR201011030852
BASIC DATA
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
Gross Operating
Oil/Cond Gas Life
(CONTINUED)
600037 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-78 IH 0 1 0 3,117,069 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.5
600287 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-79 IH 0 1 0 3,370,739 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600485 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-89 IH 0 1 0 3,228,809 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600084 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-110 IH 0 1 0 1,769,548 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.6
600325 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-111 IH 0 1 0 1,375,753 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
600326 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-112 IH 0 1 0 1,037,200 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
600327 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-113 IH 0 1 0 1,155,815 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
File: VX70801A.;32
600002 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-175 IH 0 1 0 2,628,225 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600003 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-176 IH 0 1 0 2,643,248 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
654
600004 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-177 IH 0 1 0 2,566,671 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600005 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-178 IH 0 1 0 2,664,988 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600006 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-179 IH 0 1 0 2,801,590 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600093 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-196 IH 0 1 0 1,859,724 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600094 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-197 IH 0 1 0 2,076,840 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.9
600095 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-198 IH 0 1 0 1,871,148 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600096 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-199 IH 0 1 0 1,652,705 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600099 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-200 IH 0 1 0 1,765,306 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600100 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-201 IH 0 1 0 2,011,892 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600101 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-202 IH 0 1 0 1,639,266 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600102 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-203 IH 0 1 0 1,708,766 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600103 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-204 IH 0 1 0 1,927,901 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600104 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-205 IH 0 1 0 1,865,542 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 30.9
600105 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-206 IH 0 1 0 1,541,063 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
600008 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-207 IH 0 1 0 2,528,723 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600009 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-208 IH 0 1 0 2,729,935 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600010 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-209 IH 0 1 0 2,467,872 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600011 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-210 IH 0 1 0 2,623,744 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.2
600012 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-211 IH 0 1 0 2,858,707 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600013 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-212 IH 0 1 0 2,454,493 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600014 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-213 IH 0 1 0 2,538,936 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600015 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-214 IH 0 1 0 2,751,187 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600016 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-215 IH 0 1 0 2,500,392 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600017 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-216 IH 0 1 0 2,654,120 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600018 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-217 IH 0 1 0 2,914,701 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600019 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-218 IH 0 1 0 2,592,632 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600020 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-219 IH 0 1 0 2,805,753 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600262 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-220 IH 0 1 0 3,134,268 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600021 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-221 IH 0 1 0 2,717,131 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.3
600395 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-222 IH 0 1 0 2,978,058 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.2
600353 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-346 IH 0 1 0 2,011,446 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
600118 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-384 IH 0 1 0 1,893,385 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0
600119 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-385 IH 0 1 0 2,055,440 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.0
600120 . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-386 IH 0 1 0 1,688,748 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.0

mrll_0909.fmt Free:
MERRILL CORPORATION JDICKSO//30-APR-10 12:28 DISK116:[10ZAU1.10ZAU70801]VY70801A.;33
28MAR201011030852
7080DM/0D Foot:
WEST BENGAL, INDIA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
0D/
(CONTINUED)
600037 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-78 IH 0 0 3,117,069 0 0 2,961,215 0.0 0.0 13,214.5 13,214.5 0.0 634.8 670.1 11,909.6 5,502.9
600287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-79 IH 0 0 3,370,739 0 0 3,202,202 0.0 0.0 14,289.7 14,289.7 0.0 634.8 683.4 12,971.5 5,512.5
600485 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-89 IH 0 0 3,228,809 0 0 3,067,368 0.0 0.0 13,688.2 13,688.2 0.0 634.8 676.0 12,377.4 5,255.0
600084 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-110 IH 0 0 1,769,548 0 0 1,681,070 0.0 0.0 7,501.9 7,501.9 0.0 634.8 598.7 6,268.4 2,719.7
600325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-111 IH 0 0 1,375,753 0 0 1,306,966 0.0 0.0 5,832.4 5,832.4 0.0 634.8 577.6 4,620.0 1,856.0
600326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-112 IH 0 0 1,037,200 0 0 985,340 0.0 0.0 4,396.9 4,396.9 0.0 634.8 559.2 3,202.9 1,222.6
600327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-113 IH 0 0 1,155,815 0 0 1,098,024 0.0 0.0 4,899.8 4,899.8 0.0 634.8 565.6 3,699.4 1,444.7
File: VY70801A.;33
600002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-175 IH 0 0 2,628,225 0 0 2,496,813 0.0 0.0 11,142.1 11,142.1 0.0 634.8 644.4 9,862.9 4,662.3
600003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-176 IH 0 0 2,643,248 0 0 2,511,086 0.0 0.0 11,205.7 11,205.7 0.0 634.8 645.0 9,925.9 4,651.7
655
600004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-177 IH 0 0 2,566,671 0 0 2,438,338 0.0 0.0 10,880.9 10,880.9 0.0 634.8 641.0 9,605.1 4,493.6
600005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-178 IH 0 0 2,664,988 0 0 2,531,739 0.0 0.0 11,298.2 11,298.2 0.0 634.8 646.2 10,017.2 4,696.4
600006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-179 IH 0 0 2,801,590 0 0 2,661,510 0.0 0.0 11,877.0 11,877.0 0.0 634.8 653.5 10,588.7 4,977.9
600093 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-196 IH 0 0 1,859,724 0 0 1,766,738 0.0 0.0 7,884.0 7,884.0 0.0 634.8 603.5 6,645.7 2,806.7
600094 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-197 IH 0 0 2,076,840 0 0 1,972,998 0.0 0.0 8,804.6 8,804.6 0.0 634.8 615.5 7,554.3 3,220.8
600095 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-198 IH 0 0 1,871,148 0 0 1,777,590 0.0 0.0 7,932.6 7,932.6 0.0 634.8 604.3 6,693.5 2,828.3
600096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-199 IH 0 0 1,652,705 0 0 1,570,070 0.0 0.0 7,006.4 7,006.4 0.0 634.8 592.4 5,779.2 2,411.7
600099 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-200 IH 0 0 1,765,306 0 0 1,677,041 0.0 0.0 7,483.8 7,483.8 0.0 634.8 598.4 6,250.6 2,626.5
600100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-201 IH 0 0 2,011,892 0 0 1,911,298 0.0 0.0 8,529.2 8,529.2 0.0 634.8 611.7 7,282.7 3,101.4
600101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-202 IH 0 0 1,639,266 0 0 1,557,303 0.0 0.0 6,949.4 6,949.4 0.0 634.8 591.9 5,722.7 2,390.5
600102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-203 IH 0 0 1,708,766 0 0 1,623,328 0.0 0.0 7,244.2 7,244.2 0.0 634.8 595.5 6,013.9 2,523.2
600103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-204 IH 0 0 1,927,901 0 0 1,831,506 0.0 0.0 8,173.2 8,173.2 0.0 634.8 607.4 6,931.0 2,941.2
600104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-205 IH 0 0 1,865,542 0 0 1,772,265 0.0 0.0 7,908.6 7,908.6 0.0 634.8 604.1 6,669.7 2,822.2
600105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-206 IH 0 0 1,541,063 0 0 1,464,010 0.0 0.0 6,533.2 6,533.2 0.0 634.8 586.5 5,311.9 2,181.5
600008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-207 IH 0 0 2,528,723 0 0 2,402,287 0.0 0.0 10,720.0 10,720.0 0.0 634.8 639.0 9,446.2 4,415.6
600009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-208 IH 0 0 2,729,935 0 0 2,593,439 0.0 0.0 11,573.2 11,573.2 0.0 634.8 649.5 10,288.9 4,837.6
600010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-209 IH 0 0 2,467,872 0 0 2,344,478 0.0 0.0 10,462.3 10,462.3 0.0 634.8 635.6 9,191.9 4,297.5
600011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-210 IH 0 0 2,623,744 0 0 2,492,557 0.0 0.0 11,123.0 11,123.0 0.0 634.8 644.1 9,844.1 4,618.7
600012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-211 IH 0 0 2,858,707 0 0 2,715,772 0.0 0.0 12,119.0 12,119.0 0.0 634.8 656.6 10,827.6 5,057.9
600013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-212 IH 0 0 2,454,493 0 0 2,331,768 0.0 0.0 10,405.6 10,405.6 0.0 634.8 635.1 9,135.7 4,231.2
600014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-213 IH 0 0 2,538,936 0 0 2,411,989 0.0 0.0 10,763.4 10,763.4 0.0 634.8 639.6 9,489.0 4,404.1
600015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-214 IH 0 0 2,751,187 0 0 2,613,628 0.0 0.0 11,663.3 11,663.3 0.0 634.8 650.8 10,377.7 4,842.8
600016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-215 IH 0 0 2,500,392 0 0 2,375,372 0.0 0.0 10,600.2 10,600.2 0.0 634.8 637.5 9,327.9 4,330.2
600017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-216 IH 0 0 2,654,120 0 0 2,521,414 0.0 0.0 11,251.8 11,251.8 0.0 634.8 645.7 9,971.3 4,644.5
600018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-217 IH 0 0 2,914,701 0 0 2,768,966 0.0 0.0 12,356.5 12,356.5 0.0 634.8 659.6 11,062.1 5,177.3
600019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-218 IH 0 0 2,592,632 0 0 2,463,000 0.0 0.0 10,991.0 10,991.0 0.0 634.8 642.3 9,713.9 4,518.8
600020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-219 IH 0 0 2,805,753 0 0 2,665,465 0.0 0.0 11,894.6 11,894.6 0.0 634.8 653.9 10,605.9 4,959.5
600262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-220 IH 0 0 3,134,268 0 0 2,977,554 0.0 0.0 13,287.3 13,287.3 0.0 634.8 671.1 11,981.4 5,116.3
600021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-221 IH 0 0 2,717,131 0 0 2,581,274 0.0 0.0 11,519.1 11,519.1 0.0 634.8 649.1 10,235.2 4,778.2
600395 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-222 IH 0 0 2,978,058 0 0 2,829,155 0.0 0.0 12,625.1 12,625.1 0.0 634.8 663.8 11,326.5 4,716.3
600353 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-346 IH 0 0 2,011,446 0 0 1,910,874 0.0 0.0 8,527.4 8,527.4 0.0 634.8 611.5 7,281.1 3,045.3
600118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-384 IH 0 0 1,893,385 0 0 1,798,715 0.0 0.0 8,026.9 8,026.9 0.0 634.8 605.5 6,786.6 2,852.7
600119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-385 IH 0 0 2,055,440 0 0 1,952,668 0.0 0.0 8,713.7 8,713.7 0.0 634.8 614.2 7,464.7 3,159.5
600120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EDP-386 IH 0 0 1,688,748 0 0 1,604,310 0.0 0.0 7,159.1 7,159.1 0.0 634.8 594.5 5,929.8 2,465.5

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
BASIC DATA
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
WEST BENGAL, INDIA

0D/
Gross
Operating
Oil/Cond Gas Life
(CONTINUED)
600121 . . . . . . . . EDP-387 IH 0 1 0 1,839,596 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
600356 . . . . . . . . EDP-388 IH 0 1 0 1,341,458 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
File: VY70801A.;33
600357 . . . . . . . . EDP-389 IH 0 1 0 1,367,003 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
656
600359 . . . . . . . . EDP-391 IH 0 1 0 1,103,668 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
600473 . . . . . . . . EDP-405 IH 0 1 0 1,342,774 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.2
600075 . . . . . . . . EDP-U75 IH 0 1 0 2,476,451 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.5
600076 . . . . . . . . EDP-U76 IH 0 1 0 2,512,430 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.5
600077 . . . . . . . . EDP-U77 IH 0 1 0 2,574,494 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600078 . . . . . . . . EDP-U79 IH 0 1 0 3,046,097 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600079 . . . . . . . . EDP-U80 IH 0 1 0 2,962,456 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600080 . . . . . . . . EDP-U81 IH 0 1 0 2,950,672 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600081 . . . . . . . . EDP-U82 IH 0 1 0 3,025,194 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 30.6
600171 . . . . . . . . EDP-U83 IH 0 1 0 3,506,334 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
600172 . . . . . . . . EDP-U85 IH 0 1 0 1,524,217 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.4 31.1
600173 . . . . . . . . EDP-U86 IH 0 1 0 2,179,631 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 4.463 4.463 1.4 1.5 31.1
301000 . . . . . . . . FAC CAP 3C 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 10.0
302000 . . . . . . . . PLP & Royalty 3C 0 0 0 0 100.000 100.000 100.000 100.000 0.000 0.000 0.000 0.000 0.000 0.000 0.0 0.0 32.0
Field Total . . . . . . . . . . . . . . . . . . . . 0 144 0 377,297,681
Total . . . . . . . . . . . . . . . . . . . . . . . . 0 144 0 377,297,681
Total All Leases . . . . . . . . . . . . . . . . 0 144 0 377,297,681

mrll_0909.fmt Free:
28MAR201011030852
7080DM/0D Foot:
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
WEST BENGAL, INDIA
0D/
(CONTINUED)
600121 . . . . . . EDP-387 IH 0 0 1,839,596 0 0 1,747,616 0.0 0.0 7,798.7 7,798.7 0.0 634.8 602.9 6,561.0 2,724.6
600356 . . . . . . EDP-388 IH 0 0 1,341,458 0 0 1,274,385 0.0 0.0 5,686.8 5,686.8 0.0 634.8 575.7 4,476.3 1,791.7
File: VY70801A.;33
600357 . . . . . . EDP-389 IH 0 0 1,367,003 0 0 1,298,653 0.0 0.0 5,795.2 5,795.2 0.0 634.8 576.7 4,583.7 1,839.6
657
600359 . . . . . . EDP-391 IH 0 0 1,103,668 0 0 1,048,484 0.0 0.0 4,678.9 4,678.9 0.0 634.8 562.9 3,481.2 1,351.5
600473 . . . . . . EDP-405 IH 0 0 1,342,774 0 0 1,275,635 0.0 0.0 5,692.6 5,692.6 0.0 634.8 575.9 4,481.9 1,798.8
600075 . . . . . . EDP-U75 IH 0 0 2,476,451 0 0 2,352,629 0.0 0.0 10,498.6 10,498.6 0.0 634.8 636.0 9,227.8 4,214.0
600076 . . . . . . EDP-U76 IH 0 0 2,512,430 0 0 2,386,809 0.0 0.0 10,651.0 10,651.0 0.0 634.8 638.3 9,377.9 4,285.8
600077 . . . . . . EDP-U77 IH 0 0 2,574,494 0 0 2,445,770 0.0 0.0 10,914.2 10,914.2 0.0 634.8 641.5 9,637.9 4,371.3
600078 . . . . . . EDP-U79 IH 0 0 3,046,097 0 0 2,893,792 0.0 0.0 12,913.6 12,913.6 0.0 634.8 666.5 11,612.3 5,313.0
600079 . . . . . . EDP-U80 IH 0 0 2,962,456 0 0 2,814,334 0.0 0.0 12,558.9 12,558.9 0.0 634.8 662.1 11,262.0 5,145.9
600080 . . . . . . EDP-U81 IH 0 0 2,950,672 0 0 2,803,139 0.0 0.0 12,509.0 12,509.0 0.0 634.8 661.5 11,212.7 5,122.5
600081 . . . . . . EDP-U82 IH 0 0 3,025,194 0 0 2,873,934 0.0 0.0 12,825.0 12,825.0 0.0 634.8 665.3 11,524.9 5,276.0
600171 . . . . . . EDP-U83 IH 0 0 3,506,334 0 0 3,331,018 0.0 0.0 14,864.7 14,864.7 0.0 634.8 691.9 13,538.0 5,858.3
600172 . . . . . . EDP-U85 IH 0 0 1,524,217 0 0 1,448,006 0.0 0.0 6,461.8 6,461.8 0.0 634.8 585.6 5,241.4 2,137.0
600173 . . . . . . EDP-U86 IH 0 0 2,179,631 0 0 2,070,650 0.0 0.0 9,240.2 9,240.2 0.0 634.8 620.5 7,984.9 3,367.5
301000 . . . . . . FAC CAP 3C 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 27,503.0 0.0 (27,503.0) (25,987.0)
302000 . . . . . . PLP & Royalty 3C 0 0 0 0 0 0 0.0 0.0 0.0 0.0 206,781.3 0.0 0.0 (206,781.3) (102,574.0)
Field Total . . . . . . . . . . . . . . . . . . 0 0 377,219,497 0 0 358,358,518 0.0 0.0 1,599,174.6 1,599,174.6 206,781.3 109,392.2 92,614.6 1,190,386.5 511,253.6
Total . . . . . . . . . . . . . . . . . . . . . . 0 0 377,219,497 0 0 358,358,518 0.0 0.0 1,599,174.6 1,599,174.6 206,781.3 109,392.2 92,614.6 1,190,386.5 511,253.6
Total All Leases . . . . . . . . . . . . . . 0 0 377,219,497 0 0 358,358,518 0.0 0.0 1,599,174.6 1,599,174.6 206,781.3 109,392.2 92,614.6 1,190,386.5 511,253.6

8
10
9 9
8 8
7 7
GROSS PROJECTED GAS PRODUCTION
6 6
ESSAR OIL LIMITED

4 4
3 3
2 2
107
9 9
8 8
7 7
6 6
GAS - MCF/MO.
3
5 5
4 4
3 3
2
2 2
6
10
9 9
8 8 1
7 7
6 6
5 5
4 4
3 3
2 2
105
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
1. LOW ESTIMATE PROSPECTIVE RESOURCES
2. BEST ESTIMATE PROSPECTIVE RESOURCES
3. HIGH ESTIMATE PROSPECTIVE RESOURCES 27MAR201013190457
Figure 13
658

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: VY70801A.;33
MERRILL CORPORATION JDICKSO//30-APR-10 12:28 DISK116:[10ZAU1.10ZAU70801]WA70801A.;27
APPENDIX
659

Page Dim: 8.250 X 11.750 Copy Dim: 38. X 62. File: WA70801A.;27
mrll_0909.fmt Free:

7080DM/0D Foot: 0D/
SUMMARY OF ASSETS
HOLDINGS OF ESSAR OIL LIMITED
LOCATED IN WEST BENGAL, INDIA

Essar
Working License License
Interest Expiration Area

Country/Block Operator Name (percent) Status Date (km2) Comments
660
India
RG (East)-CBM-2001/1 Block . . . . . . . . . . Essar Oil Limited 100 Production 06/2040 470 Drilling commenced in May 2009, and first
production occurred in October 2009. Current
daily production is 1,890 MCF per day, with
File: WB70801A.;33
estimated peak production of 52,545 MCF
per day to occur in 2014.
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

MERRILL CORPORATION JDICKSO//30-APR-10 12:28 DISK116:[10ZAU1.10ZAU70801]WB70801A.;33
Table A-1
mrll_0909.fmt Free:

7080DM/0D Foot: 0D/
SUMMARY OF ESTIMATED CONTINGENT GAS RESOURCES


Contingent Gas Resources (MMCF)

Gross (100 Percent) Net Attributable
661
Low Best High Low Best High
Estimate Estimate Estimate Estimate Estimate Estimate
Country/Block Operator Name (1C) (2C) (3C) (1C) (2C) (3C)
India
RG (East)-CBM-2001/1 Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Essar Oil Limited 83,276.3 200,843.9 377,219.5 79,112.5 190,801.7 358,358.5
File: WB70801A.;33
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)
Table A-2
mrll_0909.fmt Free:

7080DM/0D Foot: 0D/
SUMMARY OF ESTIMATED UNRISKED PROSPECTIVE GAS RESOURCES


Unrisked Prospective Gas Resources (MMCF)
662
Gross (100 Percent) Net Attributable
Low Best High Low Best High
Country/Block Operator Name Estimate Estimate Estimate Estimate Estimate Estimate
India
RG (East)-CBM-2001/1 Block . . . . . . . . . . . . . . . . . . . . . . . . . Essar Oil Limited 412,838.3 791,997.0 1,631,882.9 392,196.4 752,397.1 1,550,288.7
File: WB70801A.;33
Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Table A-3
Printed by Merrill Corporation Limited

Essar Enegry Prospectus

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PROSPECTUS

MERRILL CORPORATION JDICKSO//30-APR-10 12:37 DISK116:[10ZAU1.10ZAU70801]BA70801A.;39

ESSAR ENERGY plc

Offer of 302,789,825 Shares of 5 pence each

Sponsor and Financial Adviser

J.P. Morgan Cazenove

Joint Global Coordinators and Joint Bookrunners

J.P. Morgan Cazenove Deutsche Bank

ORDINARY SHARE CAPITAL IMMEDIATELY FOLLOWING ADMISSION

Issued and fully paid

(1) Assuming no exercise of the Over-allotment Option described below.

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Notice to Overseas Shareholders

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Summary of financial information

Nine months ended

Summary balance sheet

Summary cash flow statement

Current trading and prospects

Reasons for the Offer and use of proceeds

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Relationship with Essar Global Limited

Ravi Ruia . . . . . . . . . . . . . . . . . . . . Chairman

Prashant Ruia . . . . . . . . . . . . . . . . . Vice-Chairman

Naresh Nayyar . . . . . . . . . . . . . . . . . CEO

Sattar Hajee Abdoula . . . . . . . . . . . . NED

Philip Aiken . . . . . . . . . . . . . . . . . . NED

Subhash C. Lallah . . . . . . . . . . . . . . NED

Simon Murray . . . . . . . . . . . . . . . . . NED

Gerry Bacon . . . . . . . . . . . . . . . . . . CFO

Mark Lidiard . . . . . . . . . . . . . . . . . Head of Investor Relations and Communications

K V B Reddy . . . . . . . . . . . . . . . . . Executive Director, Essar Power—Group

S Shrivastava . . . . . . . . . . . . . . . . . . Head Development and Regulatory, Essar Power-Hazira

V. Suresh . . . . . . . . . . . . . . . . . . . . CFO, Essar Power-Hazira

B.C.P. Singh . . . . . . . . . . . . . . . . . . CEO, Essar Power Gujarat-Salaya and Vadinar Power-Jamnagar

R.K. Narayan . . . . . . . . . . . . . . . . . Head of Transmission

R.P. Gupta . . . . . . . . . . . . . . . . . . . CEO, Essar Power MP-Mahan

A.K. Singh . . . . . . . . . . . . . . . . . . . CEO, Essar Power Jharkhand-Tori

T.S. Bhatt . . . . . . . . . . . . . . . . . . . . MD, Bhander Power-Hazira

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Oil and Gas

C. Manoharan . . . . . . . . . . . . . . . . . Head, Refining

Shishir Agrawal . . . . . . . . . . . . . . . . Head, Exploration and Production

S. Thangapandian . . . . . . . . . . . . . . . Head, Marketing

P. Sampath . . . . . . . . . . . . . . . . . . . CFO, Oil and Gas

Iftikhar Nasir . . . . . . . . . . . . . . . . . Executive Director, Strategy and Business Development

Krishnamurthy Govindarajan . . . . . . . . Head, Refinery Expansion

Narendra Vachharajani . . . . . . . . . . . Head, Operations and IST

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

Risks Relating to the Group

Risks relating to the Company’s Power Business

Risks relating to the Company’s Oil and Gas Business

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)

• ability to find, develop and commercially exploit resources and reserves;

Risks associated with India

Risks relating to the Offer

Project Goliath Prospectus Proj: P7208LON10 Job: 10ZAU70801 (10-7208-1)