Reliance Petroleum

I am delighted to share with you the Companys progress in setting up
 its complex refinery in a Special Economic Zone at Jamnagar.
 
 Your Company has accomplished an overall progress of 90% with
 comprehensive advancement on all implementation fronts surpassing
 several significant milestones. The engineering, procurement and
 contracting activities were completed during the year, while the
 construction progress for the complex crossed 80% mark. Deliveries and
 installation of over-dimensional cargos have been completed, while bulk
 materials are nearing completion. I expect that the refinery will
 commence operations ahead of December 08. The likely completion of the
 refinery in less than 36 months is set to create a new record for
 project implementation in the global refining sector. This is a
 significant achievement when viewed in the context of worldwide
 resource crunch that has resulted in extraordinary delays and
 cancellation of several new and expansion projects by refiners across
 the world.
 
 During the last year, the Indian economy remained buoyant and posted a
 growth rate of just under 9%, enough to stimulate demand and growth.  I
 believe that the growth momentum of the last four years is unlikely to
 suffer overtly.  The demand for energy continues unabated, with China
 and India easily taking up any slack that might have resulted from a
 slowdown in the West. The global refining industry fundamentals remain
 strong with robust demand, tight product supplies and slow growth in
 new capacities. The industry has withstood the pressures of high oil
 prices and perceived the threat of slower economic expansion, led by
 the United States.  With global refining system remaining stretched and
 continuing delays in new capacities, the outlook for refining industry
 remains positive.  Complex refiners will gain further from expected
 wide light-heavy differentials even in the medium term. Your Company is
 thus well positioned to reap the benefits of its large-scale, higher
 complexity, lower capital costs and faster schedule to generate
 significant value in the refining sector.  
 
 In order to support commissioning of the project ahead of schedule,
 your Company has already begun the start-up planning for the refinery
 and the operations preparedness. Once commissioned, Jamnagar will be
 the Refining Capital of the World and the RPL refinery will become
 the 6th largest refinery in the world.
 
 Your Company has also completed the long-term debt financing for the
 project and in all, contracted term debt to the tune of Rs. 15,750
 crore at costs much lower than comparable projects anywhere in the
 world.
 
 Your Company is poised to benefit from emerging opportunities in the
 sector to create superior value for its shareholders.
 
 I would like to take this opportunity to express my gratitude to the
 Board of Directors, bankers, employees, suppliers and the shareholders
 for their unstinted support and the confidence reposed on us.
 
 With best wishes
 Sincerely,
 
                                                       Mukesh D. Ambani
                                                       Chairman