September 2006

Reliance Industries Limited

RIL’s Existing Refinery At Jamnagar, Gujarat

2

Contents

Summary

Business Review

Reliance Industries: An Overview

3

RIL – Unique Business Model

World class execution

capabilities to implement large

projects

Financial prudence &

conservatism

Vertically integrated; global scale operations

Steady cash flows; Proven

financial strength &

stability

Benchmarked efficiencies and controlled costs

Strengthening presence in new

growth - Oil & Gas, R&M

India’s only private sector company in Fortune Global 500

4

Reliance Industries – India’s Proxy

Revenues of US$ 19.9 billion

Cash Profit of US$ 2.9 billion

Net Profit of US$ 2 billion

98% of revenues from Refining and

Petrochemicals, 2% from E&P & others

India and Reliance

Revenues equivalent to 2.8% of India’s GDP

8.2% of India’s total exports

Contributing 8% India’s indirect taxes

4.7% of the total market capitalization,

11.5% weightage in Sensex

What is good for India is good for Reliance

Note: All numbers for FY 2005-06

5

Fortune Global 500

India’s only private sector company in Fortune Global 500 list

Amongst the 200 most Profitable Companies in the Fortune Global 500

Among the top 25 Climbers – change of 75 ranks

GlobalRank

Net Sales 342 75

Net Profit 194 11

Net Worth 226 19

Assets 351 6

6

Consistent Growth

4,938

9,30410,549

12,86616,725

19,976

3,000

6,000

9,000

12,000

15,000

18,000

21,000

FY-01 FY-02 FY-03 FY-04 FY-05 FY-06

Turnover (US$ Million)

Turnover CAGR of 32% and Net Profit CAGR at 29% over 5 years

567 664864

1,180

1,731

2,033

-300600900

1,2001,5001,8002,100

FY-01 FY-02 FY-03 FY-04 FY-05 FY-06

Net Profit (US$ Million)

7

Strong Fundamentals

Strong Cash flows

Existing businesses generating cash flows of US$ 2.9 billion per annum

Solid Balance Sheet

Total Assets have grown from US$ 4.3 billion to US$ 20.8 billion over the last 10

years

Conservative gearing

Debt to Equity ratio of 0.47, Net Gearing at 29% as on June 30, 2006

Top end credit ratings

Baa2 Stable Outlook by Moody’s

BBB Stable Outlook by S&P (above Sovereign Rating)

AAA by CRISIL (S&P-India) for the past 12 years

Experience in multi-billion dollar projects on the strength of cash

flows with marginal recourse to external borrowings

8

Plastics(PE, PP, PVC, PET)

Textiles

Petrochemicals(LAB, EO)

Oil and GasExploration

PetroleumRetailing

Oil and GasProduction

Polyester(Fiber, Filament)

FiberIntermediates

(PX, PTA & MEG)

Olefins and Aromatics

PetroleumRefining

Unique level of integration among the global players

Oil to Textiles: Value from Integration

9

Dominant market share in India

Domestic Leadership & Global Rankings

Leading Global PositionLeading Market Shares in India

Leading domestic market shares and global positions

1

3

4

6

Polyester(Fibre & Yarn)

Refining (1)

Paraxylene

Purified Terephthalic Acid

7MEG

Amongst top 10 global players in all its core businesses

Polyester (2) 56%

Fibre Intermediates (2) 87%

Polymers (2) 67%

Refining 28% 7 Polypropylene

(1) At any single location(2) Petrochemicals market share incl. IPCL

10

Tenets of RIL’s Value Creation Journey

Ability to identify and pursue high growth businesses

Superior execution capabilities in setting up world-class projects in record time

Global competitiveness and leadership position in most businesses

Low cost manufacturer and quality service provider

Integration across the value chain

Financial conservatism and prudent financing norms

High standards of Health, Safety and Environment

Consistently Enhancing Stakeholder Value

Exploration & Production (E&P)Exploration & Production (E&P)

12

Upstream Business Approach

Large High-Quality Exploration Portfolio

ExplorationExcellence to add resources

at low finding cost

Create Attractive Project Inventory

Capitalise On Growing Domestic Natural Gas Market

Growth in Shareholders

Value

Superior Project Execution with focus on time

management & costs

13

Large High-Quality Exploration Portfolio

4 Blocks ~ 23,000 Sq.

KM

11 Blocks (including

KGD6)

~ 74,000 Sq. KM

1 Blocks

~ 26,000 Sq. KM

5 Blocks

~ 52,000 Sq. KM

4 Blocks

~ 42,000 Sq. KM

9 Blocks

~ 114,000 Sq. KM

Pre NELP

NELP I

NELP IV

NELP V

NELP III

NELP II

Domestic

41 Blocks (including PMT & 5 CBM)

Acreage Holding: 340,000 Sq. KM

Overseas

2 Blocks – Oman and Yemen

Panna-Mukta & Tapti 2 Blocks ~

2,700 Sq. KM

1994 KG D6 Gas

Discovery

NEC Gas Discovery

KGD6-MA1 Oil

Discovery

World’s largest gas discovery in

2002

RIL is the India’s largest private sector E&P player

5 CBM Blocks

14

International Business

OMAN YEMEN COLOMBIA

21,140 square km, 100% PI 2,464 square km, 25% PI 15,718 square km

Work Program on scheduleFirst well to be spudded next year

Producing around 10,000 bpdEfforts to increase production

TEA signed with Eco-petrolTechnical evaluation under

progress

15

Creating Attractive Project Inventory

'06-07 '07-08 '08-09 '09-10 '10-11

NEC25

Tapti NRPOD

KGD6 & CBM

KG III6

Panna Mukta EPOD

Panna-Mukta EPOD, Tapti NRPOD & KGD6 under implementation

Target to complete projects at globally competitive costs.

Continued focus on exploration to maintain inventory

Development using globally proven technologies

Capitalise on RIL’s project management skills

Significant contribution to RIL cash-flow on project completion

16

Reserves

World largest gas discovery in 2002 - Krishna-Godavari basin (14 TCF OGIP) –

with further potential upside under exploration

Discovery in NEC-25- puts Mahanadi offshore to petroliferous map of India (2.3

TCF OGIP)

CBM Gas – puts Coal Bed Methane in the map of India (3.65 TCF OGIP)

Crude oil discovery notification was made for the MA1 well in KGD6

Signifies a large geological play that could result in future discoveries

Testing done in 2 zones located 3 kms below sea level

FY09 will be a watershed change with E&P contributions

to overall revenue increasing significantly

17

KG D6 – Highlights

Development of KG-D6 project progressing as planned

Successful exploration efforts reduce finding costs

17 exploratory wells drilled, notified 14 discoveries to the DGH

Aker Kvaerner appointed as the engineering consultant

Bechtel is the PMC

Development Plan for discovery of D1 & D3 fields, currently the most prolific

fields in block D6, has been approved

Capex at US$ 2.4 billion for production profile of 40 MMSCMD

High EBITDA potential

18

Gas Transportation

48 inch – 1,400 KM East West Pipeline

across Andhra, Karnataka,

Maharashtra and Gujarat

EWP to provide access to potential gas

markets in its corridor

Leverage deficit gas market in India –

current shortfall>100 MMSCMD

EWPL commissioning synchronized

with KGD6 development

Project implemented by Reliance Gas

Transportation Infrastructure Limited

Work on schedule to ensure first gas delivery in FY09

19

E&P - Summary

Diversified and high-potential exploration portfolio

Successful exploration efforts reduce finding costs

Development of KG-D6 project progressing as planned

NEC25: Six discoveries declared as Commercial – development plan under

preperation

CBM: Commenced drilling in Rajasthan Blocks

Environmental Clearance obtained for Sonhat Block

Opportunistic expansion of international portfolio

E&P likely to contribute 15-20% of revenue by 2010

Refining & Marketing (R&M)Refining & Marketing (R&M)

21

Key Industry Trends

Rapid economic growth : “Fueling” energy demandRapid economic growth : “Fueling” energy demand

Structural changes in demand compositionStructural changes in demand composition

Increase in light-heavy spreadIncrease in light-heavy spread

Shortage of complex refining capacityShortage of complex refining capacity

Stricter environmental regulationsStricter environmental regulations

22

Stretched Global Refining System

Global utilisation rates at its highest in the last 2 decades

0

10

20

30

40

50

60

70

80

90

1965 1970 1975 1980 1985 1990 1995 2000 20050

2

4

6

8

10

12

14

16

18

20

Oil consumption Refining Capacity Surplus Capacity

MMBD

Source: BP Statistical Review of World Energy, June 2005HART’S World Refining and Fuel Services, Dec’05

23

0%5%

10%15%

20%25%30%

% o

f Glo

bal

Ref

inin

g C

apac

ity

0 - 5

5 - 1

0

10 -

15

15 -

20

20 -

25

25 -

30

30 -

35

35 -

40

> 40

Age of Refining Capacity (Years)

Source: Based on data from BP Statistical Review of World Energy, June 2005

72% of global weighted average refining capacity is aging

Insignificant Capacity Additions in recent past

24

Global Crude Oil Availability Trends

Global Crude Oil Availability Trends (2005-2020)

32.3

32.8

32.6

32.5

1.4

1.21.2

1.3

1.05

1.1

1.15

1.2

1.25

1.3

1.35

1.4

2005 2010 2015 2020

Years

Sul

phur

(wt%

)

31.9

32

32.1

32.2

32.3

32.4

32.5

32.6

32.7

32.8

32.9

AP

I Gra

vity

(D

egre

es)

API Gravity Sulphur (%)

Global crude oil basket likely to become heavier and sourer,thus favoring higher complexity refineries

Source: HART’S World Refining and Fuel Services, Dec’05

25

Arab Light and Heavy Differential

Significant differential in Light and heavy over last 5-6 quarters

Light-Heavy Differential

0

1

2

3

4

5

6

7

8Ja

n-00

May

-00

Sep

-00

Jan-

01

May

-01

Sep

-01

Jan-

02

May

-02

Sep

-02

Jan-

03

May

-03

Sep

-03

Jan-

04

May

-04

Sep

-04

Jan-

05

May

-05

Sep

-05

Jan-

06

May

-06

Sep

-06

$ /

Bar

rel

Avg differential of US $ 1.6/bbl

Avg differential of US $ 5.2/bbl

26

Product Specifications Getting Tighter

0

100

200

300

400

500

600

700

800

2005 2010 2015North America Latin AmericaWestern Europe Asia PacificMiddle East

0

500

1,000

1,500

2,000

2,500

3,000

2005 2010 2015North America Latin AmericaWestern Europe Asia PacificMiddle East

Tighter product specs force higher desulphurization requirements

Source:Hart’s Downstream Energy Services, World Fuels and Refining Analysis (2002)

Gasoline Sulphur Specs (ppm) Diesel Sulphur Specs (ppm)

27

Structural Strengthening of GRMs

Increasing Demand for Light & Middle Distillate Products

Increasing Demand for Light & Middle Distillate Products

Expanding US & Global EconomyExpanding US & Global Economy

Significant Demand Growth

in Asia

Significant Demand Growth

in Asia

Clean Fuels Specifications

Clean Fuels Specifications

Increasing Global Heavy, Sour Crude

Slate

Increasing Global Heavy, Sour Crude

Slate

Growth Capex diverted to Clean

Fuels Investments

Growth Capex diverted to Clean

Fuels Investments

Rising Greenfield Project Costs

Rising Greenfield Project Costs

Global Refining Margins

MTBE Phase-outMTBE Phase-out

28

RIL Jamnagar - World-Class Refinery

World’s 3rd largest refinery with capacity of 33 million tonnes per annum

A complex refinery integrated with petrochemicals, captive power & port –

Nelson Complexity Index of 11.3

Proximate to crude supply sources and markets

Consistently earning $2 - $3 / bbl GRMs above the Singapore Complex Margin

Exporting products to the most quality conscious markets such as the US,

Europe and Japan – 51% of refinery volume exported in Q1 FY07

Top quartile performer in productivity, efficiency and technical complexity

29

5.16.1

8.810.3

12.4

2.21.42.3

0

2

4

6

8

10

12

14

2002-03 2003-04 2004-05 2005-06 QI FY07

$ / b

bl

RIL N Y Harbour MediterraneanRotterdam Singapore

Record GRM with RIL outperforming global benchmarks

Source: Reuters / Company Data

Consistently High GRMs

30

R&M – Business Strategies

Cost leadership, Operational excellence

Feedstock flexibility - Increasingly heavier crude basket

Superior product slate

Increasing focus on exports

31

Reliance Petroleum: A snapshot

A refinery for the world, located in India

Investments of US$ 6bn; Being set up in an SEZ at Jamnagar

Refining capacity of 580,000 BPSD – to be 6th largest at a single location

Nelson Complexity of 14.0

Sustainable competitive advantages; shall allow major margin upside under

favorable global industry dynamics

On fast track implementation, to be fully operational by Dec’08

A Reliance value creation initiative

32

Superior Configuration and Product Slate

Sustainable twin benefits:

To process heavier/sourer crude

with avg. API of 24

To meet superior product specs for

European and US markets (Euro

IV)

RPL’s to produce superior spec products to make it a truly global refinery

Product Base Range (MMTPA)

Diesel 12.0 - 13.0Gasoline 8.0 - 10.0Jet 1.0 - 2.0Petcoke 2.0 - 3.0Alkylates* 2.0 - 3.0Polypropylene 0.50 - 0.90Sulphur 0.50 - 0.60

* High Octane gasoline used in the developed markets, trades at a significant premium

33

Feedstock Flexibility

RPL expected to be among the top

5% of refineries with extra heavy

crudes (below 26 API) processing

capabilities

A high light-heavy crude price delta

scenario may lead to significant

margin advantage

High level of flexibility to enable RPL to process opportunistic crudes

Feedstock No. of Refineries

% of Total

Extra heavy crude 31 4.7%Heavy crude 114 17.2%Medium crude 260 39.3%Light crude 135 20.4%Extra light crude 121 18.3%Total 661 100.0%Source: Based on data from Oil & Gas Journal

34

Summary of progress in recent months

Engineering completion on schedule

Basic engineering nearly done

25% of detailed engineering completed

Over 5000 engineers / managers working across locations globally

Major purchase commitments made

Critical and long lead equipments ordered

Steel and piping bulks committed; Deliveries being effected already

Infrastructure and construction activities progressing rapidly

Staffing at Bechtel and others contractor offices saturated

Project expected to be completed on time and within budget

Project on fast track completion : Positive for margins

35

Project cost and timeline risks mitigated

Early commitment of high value and long lead equipments

Benefits of ‘repeat’ approach maximised

Booked shop capacities ahead of the competition

Competitive prices and delivery schedules

De-risking from price volatility of various commodities

Current procurement status highly conducive

Purchase commitments made for over 3/4th of project equipment

All long-lead items of equipment & packages committed

Engineering design work at advanced stage, further minimises the risk

High confidence level for capex & project schedule

Petrochemicals - PolymersPetrochemicals - Polymers

37

Polymer : Demand Supply

0

50

100

150

20020

00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

50%

60%

70%

80%

90%

100%

MMTACapacity Demand Op. Rate

Polymer Demand Supply : Global

0

25

50

75

100

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

50%

60%

70%

80%

90%

100%MMTA Capacity Demand Op. Rate

Polymer Demand Supply : Asia

CAGR % 00 - 05 05-10

Demand 4.6% 4.8%

Capacity 3.6% 5.1%

CAGR % 00 - 05 05-10

Demand 7.0% 6.5%

Capacity 5.6% 5.1%

Asian demand growth outpacing capacity additionSource: CMAI

38

India on a Inflection Point

Polymer Consumption (MMT)

4 5 6 7 910

1114

1617

2023

2527

30

1.0

1.1

1.4

1.7

1.8

1.9 2.4

2.7 3.1

3.3 3.7

3.8

4.1

4.1

30.

9

4.4

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

ChinaIndia

GDP (Billion US $ Constant)

1418

1176

991

601

700898

1910

1654

1271

1081946

816

543406483

746

278 273353

407

437 471

576665

495458409373311280

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

*

China

India

China 6 times India China’s GDP 2.5 times India

India has potential to replicate China but with a time lag

Is India at an inflection

point?

Source :CMAI

Source :Nation Master

China’s Inflection

point

39

India’s Leading Petrochemical Player

Reliance’s global scale, competitiveness and emphasis on specialty products allow for leadership in the industry

Diverse Product Range

Polymers, Polyester, Polyester IntermediariesCracker Products (Ethylene and Propylene)Chemicals (Linear Alkyl Benzene, Normal Paraffin)

Market Dominance

67% of domestic polymers market56% of domestic polyester market

Unrivalled Performance

Capacity utilisation rates 100% plusRecord production of nearly 13.5 million tonnes in FY06Recently added capacity of 1.56 million tonnes

Strategic Acquisition of IPCL

IPCL - India’s 2nd largest petrochemicals companyEnhanced competitive advantages - feedstock integration; infrastructure sharing

40

Polymer Portfolio: Market Trends

Growth Opportunities

Indian per capita consumption 4.5kg Vs 75 Kg in developed countries

8% GDP growth will boost all round consumption

India experiencing retail, automobile and construction boom

Asia and Mid East Emerging as production Hub

75% of Global Ethylene expansion is in Asia and Mid East

India’s participation in export of converted product to West will increase

Emergence of Global markets

Reliance has locational, structural and cost advantages

41

Cash Cost Competitiveness Asia / ME

Base : Crude Dubai @ US$ 60/bbl

Asia/ME Cash Cost compititiveness

0

200

400

600

800

1000

1200

1400

Asian/ME Crackers

Cap

acity

(KTA

)

0

100

200

300

400

500

600

700

800

900

1000

Cas

h C

ost (

$/M

T)

Capacity Ethylene Cash Cost

RIL

Haz

ira

Middle East Gas Crackers Asian Naphtha Crackers

Reliance : Ethylene Cash cost among the lowest in Asian Naphtha crackers

42

Polymers - Priorities and Growth Strategies

Improved cost position in manufacturing

Volume growth and value improvement in ‘basics’

Expansion of speciality portfolio

Enhance customer relationship

Enhance speed to market through R&D and Application development

Petrochemicals - PolyesterPetrochemicals - Polyester

44

Producer KTA

DuPont 841

Celanese 605

Hoechst 395

AKZO 316

Eastman 302

Rhone Poulenc 248

Teijin 219

Toray 172

ICI 155

Monsanto 146

Producer KTA

Nan Ya 1035

Reliance 779KoSa 700

Teijin 698

Sam Yang/SS (Huvis) 658

Hualon 575

Far Eastern 604

DuPont 583

Tuntex 561

Toray 543

Polyester Production: Changing Trends

Producer KTA

Reliance 1700Nan Ya 1080

Sanfangxiang 1050

Yizheng 945

Yuandong 900

Tuntex 885

Far Eastern 781

Huvis 750

Rongsheng 650

Tongkun 6401982: RIL commissioned first polyester plant of 10 KTA

1980 2000 2005

RIL: Leadership in two decades

US, EU, Japan Taiwan, Korea China, India

45

Chain Delta: More Stable

Lower volatility improves investment framework

0

100

200

300

400

500

600

700

800

900

Q1'97

Q3'97

Q1'98

Q3'98

Q1'99

Q3'99

Q1'00

Q3'00

Q1'01

Q3'01

Q1'02

Q3'02

Q1'03

Q3'03

Q1'04

Q3'04

Q1'05

Q3'05

Q1'06

Q3'06

PX delta PTA delta mod PES deltaAverage 3 yr avg

US$/Mt

Average $605

46

India: Textile Vision 2010

Source: CRISIL

MMT

Polyester to drive future growth of textile industry in India

2.9 3.2

1.7

4.10.4

0.8

2004 2010

Cotton Polyester Other MMF

Cotton projected to grow @ 2%, the growth rate recorded in past 10 years.

15% growth required in MMF

production as cotton faces

natural restrictions on supply

2% p.a

15% p.a

47

Strong growth momentum across Polyester sector

Polyester Summary

Rising Cotton prices combined with lower availability to encourage polyester

consumption in India

Consumption to grow substantially from low base

Positive fiscal environment to improve polyester demand

Reliance well positioned to improve its leadership in volume, product portfolio

and earnings

SummarySummary

49

Reliance: Superior Stock Performance

Outperforming most benchmarks in last one year

Relative Stock Performance

0

50

100

150

200

250

Aug-05

Sep-05

Sep-05

Oct-05

Oct-05

Nov-05

Nov-05

Dec-05

Dec-05

Jan-0

6

Jan-0

6

Feb-06

Feb-06

Mar-06

Mar-06

Apr-06

May-06

May-06

Jun-0

6

Jun-0

6Ju

l-06Ju

l-06

Aug-06

Aug-06

Sep-06

RIL Sensex MSCI AXJ S&P 500 Chem

50

Strong growth momentum in all major businesses

Summary

Significant value enhancement of portfolio through investments in Exploration

and Production of oil and gas – on target for first gas production in 2008

Positive outlook on refining margins and volume growth with full capacity

utilisation

Stable margins expected in Polymers business

Volume growth in Polyester with expanded capacity

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