Essar Oil aims to have 10% market share in fuel retailing

Firm is looking at expanding its retail network to 5,000 operational outlets over the next two years

Post fuel deregulation, Essar Oil plans to have a 10 per cent market share in the retailing segment, it said on Wednesday.

Essar Oil has a 10 per cent market share in the domestic refining segment and is looking at expanding its retail network to 5,000 operational outlets over the next two years, chairman Prashant S Ruia said on Wednesday in his annual general meeting address. Essar Oil and Reliance Industries, two private retailers, have negligible share in the retailing segment. The segment is dominated by public sector oil marketing companies including Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.

In its exploration and production business, the firm is aiming to produce 1.2 million standard cubic metres of gas per day (mscmd) from its Raniganj asset in the next few months and take it up to 2.5-3 mscmd.

“High quality infrastructure, in-field pipelines and a last-mile pipeline connectivity network is already in place and we anticipate completing our programme ahead of the May deadline,” said Ruia.

In the process of derisking its balance sheet, the company has dollarised about $1.9 billion of rupee-debt through external commercial borrowings (ECBs) and currency swaps among other methods.

"This process will continue as we aim to further lower our interest cost," Ruia added.

The company has signed a Long Term Crude Oil Supply Agreement with OJSC Rosneft Oil Company of Russia for the import of 10 MTPA of crude oil for a period of 10 years.

Rosneft and Essar Oil & Gas Ltd / Essar Energy Holdings Limited, companies incorporated and managed under the laws of Mauritius, have signed a non-binding term sheet with regard to Rosneft's participation in the equity capital of Essar Oil Limited with a share of up to 49 per cent.

"The proposed transaction is conditional upon various factors such as due diligence, determination of the transaction price, execution of definitive transaction documents and receipt of requisite approvals," Ruia said.