Essar Oil to invest $250 mn to expand refining capacity in UK
Essar Oil (UK) Ltd, which owns and operates UK's Stanlow Refinery, today said it will invest USD 250 million in expanding the refining capacity and is targeting 400 petrol pumps in Britain in 5-years.
The investment in revamp of certain units of the refinery would help cut down on crude oil processing cost, improve product slate and lead to marginal increase in capacity, chief executive S Thangapandian said.
Refinery capacity would increase from 9.09 million tonnes per annum to 9.7 million tonnes by March 2018, he said.
Chief Financial Officer P Sampath said the revamp would add USD 1 to refining margin, translating into USD 70-75 million revenue.
"The project will deliver enhanced yields of high value products, reduce crude costs and drive revenue growth," Thangapandian said.
The company reported a 17 per cent drop in March quarter net profit to USD 54 million, mainly because of one-time tax adjustment.
The company earned USD 9.2 on turning every barrel of crude oil into fuel in January-March as compared to USD 6.8 a barrel current price gross refining margin (CP-GRM).
Revenue was up 39.5 per cent to USD 1.32 billion.
For the full year, the company reported a net profit of USD 168 million on a revenue of USD 4.92 billion.
The firm, controlled by Ruia-family of Mumbai that sold Essar Oil to Russia's Rosneft for USD 12.9 billion, now has a net wort of USD 981 million.
He said the company has 39 petrol pumps in UK currently and has permission to set up another 14. "Our long term target is to have 400 outlets in five years," he added.
The company has also entered into the direct aviation fuel supply market, selling the fuel produced at Stanlow to major airlines such as Emirates, Etihad, Jet2.com and Oman Air.
These direct sales presently make up for 10 per cent of the 1.2 million tonnes of jet fuel produced at Stanlow. Going forward, the company is looking to scale up the sales to 40- 50 per cent, he said.
Essar Oil UK non-executive chairman Prashant Ruia said: "The major investment we have confirmed in Stanlow will materially increase throughput and further grow revenues, building on the tremendous progress we have made in turning around the business over the past six years".
Sampath said with a strong financial base and key improvement projects set to be completed this fiscal, the firm is looking to continued growth with an increased commercial focus.
Essar has invested over USD 800 million since acquiring Stanlow in July 2011.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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