Essar Energy PLC : Increase in gas reserves and resources at Raniganj

Essar Energy announces increase in gas reserves and resources at Raniganj

January 23 2012:Essar Energy plc LSE, the India-focused integrated energy company, today announced that the independently verified proven and probable reserves and best estimate 2C contingent gas resources at its Raniganj coal bed methane exploration block in West Bengal have been significantly increased.

The total proven and probable reserves (2P) at Raniganj, evaluated as at 1 September 2011, are 113 billion cubic feet (bcf) gross, or 18.8 million barrels of oil equivalent (mmboe), while best estimate contingent resources (2C) are 445 bcf gross, or 74.1mmboe.

This compares with the previous evaluation in December 2009 which showed 201bcf gross, or 34mmboe, of 2C resources.

Both evaluations were carried out by international consultants Netherland, Sewell & Associates, Inc. (NSAI).

The latest evaluation also shows that there also remains 297bcf gross, or 49mmboe, of best estimate prospective resources of gas at Raniganj.

Naresh Nayyar, Essar Energy chief executive officer, said: "This revised evaluation of gas resources at Raniganj underlines the potential of this block. Gas is in short supply in India but will be an increasingly important fuel and we are well placed to capitalise on that."

Current production at Raniganj is around 22,000 standard cubic metres of gas per day, reduced to minimise flaring while test sales through a 48 kilometre pipeline to the Durgapur industrial estate are continuing. Progress towards full commercial production is continuing and peak production is expected to be 3.5 million scm/day.

Raniganj is a block covering 500 square kilometres in which Essar Energy has a 100% interest.

Overall, Essar Energy has the largest acreage of coal bed methane blocks in India, with a total of 10 trillion cubic feet of gas resources across five blocks.

Notes to editors:

Reserves:

Category	Gas reserves gross, in millions of cubic feet (MMCF)
Total proved (1P)	22,387.8
Probable	90,737.8
Possible	143,580.8

Unrisked contingent resources:

Category	Gas resources gross, in millions of cubic feet (MMCF)
Low estimate (1C)	160,604.3
Best estimate (2C)	444,704.3
High estimate (3C)	826,343.3

Prospective resources:

Category	Gas resources gross, in millions of cubic feet (MMCF)
Low estimate	114,973.7
Best estimate	296,870.4
High estimate	562,744.2

For further information on Essar Energy, please visit www.essarenergy.com

For further information on the Essar Group, please visit www.essar.com

Alternatively, please contact:

Essar Energy

Mark Lidiard, Director of Investor Relations & Communications [phone] or [phone]

Andrew Turpin, Head of Media Relations [phone] or [phone]

Capital MS&L

Richard Campbell [phone] or [phone]

Nicholas Bastin [phone] or [phone]

About Essar Energy

Essar Energy, through its subsidiaries, owns one of India's largest private power producers with 1,600MW of installed capacity and projects under construction to expand its capacity to 9,670MW.

Essar Energy, through its subsidiaries, owns one of India's fastest growing private sector oil and gas companies with a diverse portfolio of exploration and production assets. The Vadinar refinery, located in Gujarat, is India's second largest private sector oil refinery with throughput capacity currently being expanded from 14.7 million metric tonnes per annum to 18mmtpa by March 2012, and with further plans to expand to 20mmtpa by September 2012.

About Essar Group

The Essar Group (the "Group") is a multinational conglomerate and a leading player in the sectors of Steel, Oil, Gas, Power, Communications, Shipping, Ports, Logistics, Construction and Minerals. With operations in more than 25 countries across five continents, the Group employs over 70,000 people, with annual revenues of US$17 billion.

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This announcement contains certain forward-looking statements, including statements regarding Group's plans, objectives and performance. Such statements relate to events and depend on circumstances that may occur in the future and are subject to risks, uncertainties and assumptions. Although the Group believes that the expectations reflected in such forward looking statements are reasonable, there are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, without limitation, the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the Oil and Gas, Power and Energy industries; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; war and terrorism. Further information on the significant risks and uncertainties associated with the Group's business is set out in the Prospectus published on 4 May 2010. These forward-looking statements speak only as at the date of this document. The Group undertakes no obligation to update any forward looking statements whether as a result of new information, future events or otherwise, except to the extent legally required.

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