Essar Oil posts profit of Rs 273 crore

High refining margins have led Ruia’s promoted Essar Oil post a net profit of Rs 273 crore in the quarter ended December 31 against a loss of Rs 266 crore in the corresponding previous quarter.

During the quarter, Essar Oil earned $7.21 on turning every barrel of crude oil into fuel against a gross refining margin (GRM) of $1.56 per barrel in the corresponding quarter last year.

“Our strong financial and operating performance has been driven by increased refinery throughout and a recovery in global oil demand, which has led to an improvement in refining margins,” said Naresh Nayyar, Managing Director, Essar Oil.

During the quarter, revenues increased 21 per cent to Rs 13,809 crore from Rs 11,420 crore in the corresponding previous period. Essar’s Vadinar refinery in Gujarat processed 3.73 million tonnes of crude oil during the quarter against 3.51 million tonnes during the same period last year. Essar’s 14 million tonnes per annum refinery is being expanded to 18 million tonnes per annum by this June.

“This will enable the conversion of the majority of negative margin fuel oil into high-value products and pet coke. With the complexity being enhanced from 6.1 to 11.8, the expanded refinery will also give higher flexibility between light and middle distillates. After expansion, the refinery will be able to process nearly 90 per cent heavy and ultra-heavy crude. These factors will significantly increase GRMs,” the company said in a press statement.

The company plans a 35-day shutdown in May-June at its 280,000 barrel per day (bpd) Vadinar refinery to add new units for raising the plant’s capacity to 360,000 bpd.

“Essar Oil will also take advantage of the period of shutdown to carry out routine maintenance work at the refinery,” Nayyar said.