RELIANCE PERTOLIUM LTD UPDATES

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-- Reliance Petroleum Ltd has announced that the Company has successfully completed the second year of implementation of its complex refinery, coming up in a Special Economic Zone at Jamnagar. The Company has achieved 82% overall progress in just 24 months since commencement of the Project. Based on the progress so far, the Company is on course to complete the project ahead of its initial schedule of December 2008.

During the quarter, project implementation gained further momentum and led to achievement
of several significant milestones, including the following:

- Engineering activities are nearing completion.
- Overall procurement progress exceeded 97%.
- More than 75% of equipments and tagged items already received at site.
- Deliveries of over dimensional cargos (ODC) and super ODCs are nearing completion.
- Over 40% of equipments have been erected; Project skyline changed dramatically.
- Overall construction progress crossed the 60% mark for the complex.
- Structural and pipe fabrication activities progressing at an accelerated pace.
- Sufficient site infrastructure mobilised to sustain equipment installation and fabrication activities on the fast track.

During the quarter, the project engineering activities were completed with all drawings for concreting, structural steel, underground piping as well as electrical and instrumentation released for construction. Residual engineering activities to support ongoing construction are continuing. Successful completion of this massive engineering effort in less than two years has set a new global record in the refining sector: It also reflects the success of a team effort that involved over 7,500 engineers, working from several interconnected locations across the world.

The quarter witnessed near completion of procurement activities for the project as well. The procurement and contracting for equipments, tagged items and bulk materials is now complete. Equipment deliveries have gained enhanced momentum with over 3,800 equipments, including several ODCs and super heavy equipments, delivered at site already.

Nearly all the bulk materials, including pipes and fittings as well as substantial part of electrical and instrumentation bulks have also been received at site. Thrust on vendor follow- up for the balance equipments is continuing. Simultaneously, focus is shifting towards procurement close-out during the coming quarter.

The progress on the construction front has been equally impressive. The civil construction activity is nearly complete. Over 2,400 equipments, including several super heavy equipments, have already been installed at site. The underground piping works are mostly complete. Nearly 80% of structural steel fabrication, 95% of tankage fabrication and over 73% of pipe fabrication is completed. The construction activities are at peak and sufficient site infrastructure is mobilised to sustain construction on fast track in the coming quarters. Simultaneously, start-up planning and operations preparedness activities have gained momentum to support the commissioning of the refinery ahead of schedule.

At the industry level, global refining fundamentals remain intact and promise exciting value creation opportunities for large and complex refiners. Despite high and volatile crude prices, the global demand trends have been positive and are expected to remain firm on the back of robust outlook for transportation fuels. With stringent product specifications adding pressure on an already stretched refining system and continuing delays in new capacities, refining margins are expected to stay robust. Complex refiners will gain further from wide light-heavy differentials. In this context, the RPL project that is designed around large scale, higher complexity, lower capital costs and faster schedule, would have a significant competitive advantage in the markets.

Commenting on the project progress Mr. Mukesh Ambani, Chairman of the Company said "I am pleased with the rapid pace of RPL project implementation and the team is now fully geared to sustain the construction on fast track even in the coming quarters. We are well on the way to create history by successfully completing the refinery ahead of its initial schedule. RPL is poised to benefit from emerging opportunities in the sector and create superior value for its shareholders

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