Essar Oil gains after signing key terms of oil and oil products supplies with Rosneft

Essar Oil rose 4.91% to Rs 115.45 at 10:00 IST on BSE after the company and Rosneft yesterday, 11 December 2014 signed key terms of oil and oil products supplies to Essar refineries in India.

The announcement was made by the company after trading hours yesterday, 11 December 2014.

Meanwhile, the BSE Sensex was up 78.97 points, or 0.29%, to 27,680.98.

On BSE, so far 51,026 shares were traded in the counter, compared with an average volume of 1.67 lakh shares in the past one quarter.

The stock hit a high of Rs 116 and a low of Rs 112.65 so far during the day. The stock hit a 52-week high of Rs 132.50 on 10 September 2014. The stock hit a 52-week low of Rs 44.50 on 31 January 2014.

The stock had underperformed the market over the past one month till 11 December 2014, falling 8.33% compared with 1.1% decline in the Sensex. The scrip had also underperformed the market in past one quarter, declining 13.24% as against Sensex's 2.25% rise.

The large-cap firm has an equity capital of Rs 1511.44 crore. Face value per share is Rs 10.

Essar Oil made the clarification to media reports titled "Essar Oil to sign 10-year deal with Rosneft today". Supplies may begin in 2015, Essar said. Consequently Rosneft expands its distribution area and builds up deliveries to the region, where the world's economy growth zones are concentrated. This agreement grants Rosneft a secure market outlet of oil and oil products, while Essar gains a reliable and stable partner as a supplier of oil and oil products to its refining facilities.

The document was signed yesterday, 11 December 2014, in New Delhi by the Head of Rosneft, Mr Igor Sechin and the Founder of Essar, Mr Shashi Ruia in the presence of the President of the Russian Federation Mr Vladimir Putin and the Prime-Minister of India Mr Narendra Modi

The reached agreement opens new horizons of cooperation between the two countries, thanks to the synergistic potential of the partnership in Upstream and Downstream areas of two leaders of the oil and gas industry of Russia and India. Thanks to this agreement Rosneft grants itself a secure market outlet of oil and oil products, while Essar gains a reliable and stable partner as a supplier of oil and oil products to its refining facilities.

Commenting on the signing Igor Sechin said: "The strategic potential of reached agreement between Rosneft, a global leader of hydrocarbon production and Essar, a world's leading player in the refining area can hardly be overestimated. The performance of the terms of the agreement will have a substantial impact on the scale of economical cooperation between Russia and India - our Company estimates that the implementation of the contract will fuel significant growth in the goods turnover between two countries. For our Indian partners the signing of this agreement represents a vital element of basic supplies diversification which, at the same time, will ensure energy security for the country. The Russian counterpart, in turn, will get the possibility of production and supplies volume planning to a new region with considerable growth potential".

Talking on the agreement Shashi Ruia said: "We are very happy to partner Rosneft, a global leader in hydrocarbon reserves and production, for long term supply of crude oil and products. This provides good long term raw material security to our refineries".

Essar Oil reported net profit of Rs 226 crore in Q2 September 2014 compared with net loss of Rs 71 crore in Q2 September 2013. Total income fell 12.4% to Rs 22734 crore in Q2 September 2014 over Q2 September 2013.

Essar Oil is a fully integrated oil & gas company of international scale with strong presence across the hydrocarbon value chain from exploration & production to refining and oil retail.

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