CHAIRMAN STATEMENTS ( 24th Annual General Meeting ) 

We have tried to ensure that the Company’s Annual Report should reach you well before the meeting. I trust all of you have received them. Therefore, with your permission, I take the Annual Report as read.

Let me start with the financial results of the Company. Your Company achieved a total income of Rs. 1,036.3 as against Rs. 1,260.7 during the previous year. The income has been lower primarily on account of two factors: (a) decrease in PY-3 production since Operator has temporarily shut in one well PY-3-3 RL due to excessive water cut, and (b) increase in Government share of Profit Petroleum entitlement in PY-3 from 25% to 40%. The impact of lower production and Profit Petroleum entitlement has been partially offset by higher crude oil price realization of USD 77/bbl, up by 24% over previous year.

During the year under review, your Board has considered write off of unsuccessful exploration expenditure amounting to Rs. 166.2 million including the cost of North Ledo-1 well in Assam acreage, consistent with the Company’s accounting policies. The Company reported Profit After Tax in fiscal year 2007-2008 of Rs. 241 million, compared to Rs. 24.7 million in last fiscal. Your Company has generated pre tax cash from operations of Rs. 701.6 million. 

Based on the financial results of the Company, the Board has recommended a dividend of 10%, equivalent to gross payout of Rs. 152.7 million (including dividend tax), which is of course subject to the approval of the shareholders.

On the corporate front, as you are aware of, ENI UK Holding plc (“ENI”), a subsidiary of ENI S.p.A, has taken over the entire shareholding of Burren Energy plc. This global transaction has resulted in ENI acquiring indirect control over our promoters - Burren Shakti Limited and Burren Energy India Limited - holding 27.17% shares in the Company. Following the completion of the mandatory open offer by ENI at a price of Rs. 144.20 per share, ENI along with its subsidiaries now hold in aggregate 47.18% shares in the Company. This is a very welcome development for our Company as this would provide fillip to the key initiatives under way and help in accelerating the growth objectives of the Company given ENI’s track record of excellent upstream performance and expertise as well as its integrated approach in developing business. ENI Group is one of the largest integrated energy companies in the world with operations in 70 countries. ENI Group has a production of approximately 1.74 million barrels of oil equivalent per day. ENI Group, through its subsidiary ENI India Ltd., has three explorations acreages located in frontier basins of Andaman, Mahanadi and Rajasthan respectively.

Mr. Paolo Carmosino, Mr. Franco Conticini, Mr. Luigi Ciarrocchi and Mr. Santo Laganà have been proposed as directors of your Company. Each of these professionals has rich experience in the E&P industry. This demonstrates commitment of ENI to the growth of your Company. Upon appointment of these Directors at this AGM, your Company shall benefit from the valuable guidance of these members on the Board.

Mr. Atul Gupta, the Managing Director, and Mr. Finian O’Sullivan, have resigned from the Board in August 2008. The Board places on record appreciation of the valuable services rendered by them.

I now invite your attention to the business and operational highlights of the Company.

During the year, the Company completed the Rights Issue to part finance by equity capital its various initiatives and made an allotment of 52,180,621 equity shares. The present paid up share capital of your Company comprises of 130,493,289 equity shares of Rs. 10 each. IDBI Bank has been appointed as the monitoring agency to monitor the utilization of proceeds of the aforesaid Rights Issue amounting to Rs.6,105 million. In its first report issued in July, 2008, no deviation in terms of utilization of Rights Issue proceeds have been reported by the monitoring agency.

As on March 31, 2008, management estimate of your Company’s Proved and Probable reserves on working interest basis is 53.4 mmboe as against 50.5 mmboe at the end of the last fiscal year, thereby the Company has been able to more than offset the production during the year.


PY-1 Gas Field Development is one of the key initiatives undertaken by your company. The construction of gas terminal at Pillai Perumal Nallur Village in Tamil Nadu and fabrication of offshore platform at CUEL’s yard in Thailand are in full swing. Your Company has received delivery of 56 kms of gas pipeline and the coating of the same has been completed at PSL yard in Vizag. The offshore installation activities shall commence in the fair weather window and our endeavor is to be ready for production by mid of 2009.

In PY-3 Field, the JV Partners have approved Phase III Development, which envisages drilling of additional producing wells and conversion of one existing well to water injector well. Hardy, the Operator of PY-3 Field, has tendered out for tangibles and drilling rig to implement the Phase III Development. Additionally, Operator has entered into an agreement for securing a drilling unit in Q4 2008 to undertake sidetrack of an existing well, which would help in enhancing production.

During the year, your Company, as Operator, drilled two exploration wells in Assam acreage, one of which namely Dirok-1 well encountered hydrocarbon and has been declared by the JV Consortium as a gas discovery of potential commercial interest. The forward plan of the JV is to appraise the Dirok discovery by acquiring 3D seismic and drilling appraisal delineation wells, in consultation with the DGH / MoPNG.

In the Cambay Basin, the Company has hooked up SPD discovery well for production to the existing infrastructure at Pramoda field located at Palej. Commercial production from SPD shall commence upon ONGC, as Licencee, securing mining lease from the Government of Gujarat. In CB-OS-1, ONGC, the Operator, has submitted Plan of Development for Gulf “A” Discovery to DGH for approval. The plan envisages development of the Gulf “A” Discovery from a land based drilling platform.

The Board and its various Committees including Audit, Shareholders & Investors Grievance, Compensation & Remuneration Committees met regularly during the year. Your Company addresses the Corporate Governance in a proactive manner. Your Company is compliant with the clause 49 of the Listing Agreement with the Stock Exchanges.

Your Company is committed towards Health, Safety, Environment and Social Responsibility. During the year under review, your company crossed one million man-hours mark with no fatalities, lost time incidents (LTI) and environmental incidents. Your Company has participated in “Self Help Programs” in its areas of operations to facilitate development of rural infrastructure and promoting rural employment. We are committed to help communities in our areas of operations by providing education assistance and healthcare.

We, members of the Board, are particularly thankful to all the shareholders and count on your continued support. I would, on behalf of the members and the Board, like to express my gratitude for the support and co-operation received from Ministry of Petroleum & Natural Gas, Directorate General of Hydrocarbons, Government of Gujarat, Government of Tamil Nadu, Government of Assam, Consortium Partners and Bankers. Finally, I would also like to express my gratitude to all employees for their dedication and hard work.

Thank you very much,

R. Vasudevan
Chairman

September 30, 2008