Essar Oil EGM Notice

Essar Oil Ltd has informed that an Extra Ordinary General Meeting (EGM) of the members of the Company will be held on December 18, 2007, inter alia, to transact the following business:

1. To appoint Shri. Naresh Kumar Nayyar as a Director of the Company.

2. To appoint Shri. Naresh Kumar Nayyar as Managing Director of the Company for a period of 5 years with effect from October 15, 2007, on remuneration, terms and conditions.

3. To create, offer issue and allot, in one or more tranches, outside India, with or without premium, denominated in any foreign currency, such number of optionally / compulsorily convertible / redeemable Foreign Currency Convertible Bonds (FCCBs) and / or Global Depository Shares (GDRs) and / or American Depository Receipts (ADRs) and / or Fully / Partially Convertible FCCBs / GDRs / Loans and / or any other instruments / securities in the nature of Shares and / or warrants, naked or otherwise, convertible into Shares or otherwise, either in registered or bearer forms, and / or any such security convertible into equity shares with face value of Rs 10/- each or otherwise ('financial instruments') or any combination of the financial instruments and the equity shares to be issued upon conversion / redemption or cancellation of such financial instruments, in the International Market, aggregating to an amount not exceeding US$ 2,000,000,000/- (United States Dollars Two thousand million only) to Essar Energy Holdings Ltd (formerly Prime Finance Company Ltd), Mauritius, the exciting Promoters and / or its associates / nominees / group Companies / persons acting in concert, whether or not they are members of the Company, on preferential offer basis, to the extent and in the manner as may be decided by the Board in this behalf, subject to necessary provision and approvals.

Essar Oil Preferential allotment at Rs 200

Essar Oil Ltd has announced that the Board of Directors of the Company at its meeting held on November 16, 2007, has approved plans to increase the capacity of the refinery at Vadinar from 10.5 million tonnes (220,000 bbls per day) to 34 million tonnes per annum (700,000 bbls per day). The expansion is being carried out at a cost of approximately US$ 6 billion (Rs 24,000 crore).

In order to meet part of the requirement of funds for the expansion project and other corporate purposes, including refinancing existing debt of the Company, the Board of Directors has approved the issue of GDS to the Promoters / Promoter Group on a Preferential basis, up to a maximum of US$ 2 billion, at an effective price of Rs 200 per share for the underlying equity shares, subject to receipt of Shareholders' and Regulatory approvals as may be required.

The current installed capacity of the refinery is 10.5 million tonnes per annum (220,000 bbls per day) made at an investment of approximately US$ 3 billion (Rs 12,000 crore). The refinery was commissioned in November 2006 and has been operating at approximately 7.5 million tonnes. The Fluid Catalytic Conversion Unit (FCCU) anti Diesel Hydro De-sulphuriser Unit (DHDS), which will be fully operational shortly, will enable the refinery to reach its full capacity i.e., 10.5 million tonnes. These units will enable the Company to process heavier crudes and meet the stricter international emission norms.

The Company will be expanding its capacity progressively to 34 million tonnes per annum by 2010. The first stage of expansion will involve de-bottlenecking and the addition of more sophisticated bottom upgrading units such as delayed coker. The second phase of expansion will see a new set of distillation units, including addition of all secondary units and another coker.

Basic engineering design for the expansion has been completed. The equipment will incorporate the latest in technology from well renowned international suppliers. With the expansion, the refinery will be able to handle a wide range of crudes from light to heavy and take advantage of the market differential between heavy and light crudes.

The Nelson Complexity Index of the refinery after the expansion to 34 million tonnes per annum will be approximately 12.8. (Nelson Complexity Index measures the ability of the refinery to upgrade the crude to best quality and maximum quantity of value added refined products).

On completion of the expansion, the refinery will produce petroleum products of very high quality meeting the most stringent environmental norms i.e. Euro IV and Euro V internationally.

The refinery is supported by dedicated infrastructure that includes utilities, terminals, crude intake and product evacuation facilities.

The promoters have informed the Company that they no longer intend to proceed with the delisting of the equity shares of the Company from the Stock Exchanges.

Essar Oil Promoters to hike stake

With reference to the news items appearing in a leading financial daily titled "Essar Oil Promoters to hike stake" wherein it has been mentioned that "The Essar Group has tried to delist two other listed companies - Essar Shipping and Essar Steel earlier this year without much success", Essar Steel Ltd has clarified about the following facts:

- The reverse book building process under the delisting offer has already been completed and the discovered price is Rs 48/- per equity share.

- The entire process has been carried out in compliance with the relevant SEBI Laws and Stock Exchange Guidelines.

- The Company has already applied for to BSE and NSE for delisting of the equity shares.

- Upon receipt of approval for delisting the shares will not be available for trading on the both the stock exchanges.

- As required under SEBI Delisting Guidelines Promoters of the Company will continue to buy shares from the members for a period of six months at the discovered price of Rs 48 per equity share after the delisting approval.