Essar Oil Ltd (EOL) has posted a net profit of Rs 273 crore for the third quarter-ended December 31, 2010, on the back of higher crude oil prices and a record throughput at its refinery. It reported a loss of Rs 226 crore in the same quarter of the previous fiscal.

Revenues for the company, which is part of the steel to telecom Essar Group, rose 21 per cent to Rs 13,809 crore. EOL's gross refining margins strengthened to $7.21 a barrel from $1.56. Refinery throughput rose to 3.73 million tonnes from 3.51 mt, while the annualised capacity utilisation was over 135 per cent.

Mr Naresh Nayyar, Managing Director, EOL said, “The performance has been driven by increased refinery throughput and a recovery in global oil demand which led to an improvement in the refining margins. We will take a 35-day shutdown in May-June 2011 to complete the tie-ins for the new units of our 18 MMTPA expansion. The project to further enhance our refinery capacity to 20 MMTPA is on track.”

EOL's parent company, Essar Energy, which is listed on the London Stock Exchange and had raised $1.95 billion through an Initial Public Offer in May 2010, has infused about $500 million through equity or Foreign Currency Convertible Bonds in EOL.

As part of its refinery optimisation initiative, the company decided to enhance the Vadinar refinery's capacity by two million tonnes to 20 MMTPA. “This will be achieved through optimisation of some of the refinery units, which would be completed by September, 2012. This will help EOL capture the growing domestic demand for petro products at a very competitive capital cost of Rs 1,700 crore,” said a company statement.

EOL shares at the BSE rose 1.62 per cent to Rs 128.50 on Monday.

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