CapitalMarket.com - Essar Oil gains on renewal of product pact with BPCL
Hot Pursuit Friday, April 27, 2012 12:22 Hrs IST

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Essar Oil gains on renewal of product pact with BPCL

Essar Oil rose 1.3% to Rs 50.65 at 12:12 IST on BSE after the company said it has renewed a major product sale and purchase agreement with Bharat Petroleum Corporation.

The company made this announcement after market hours on Thursday, 26 April 2012.

Meanwhile, the BSE Sensex was up 21.35 points or 0.12% to 17,152.02.

On BSE, 1.58 lakh shares were traded in the counter as against average daily volume of 12.39 lakh shares in the past one quarter.

The stock hit a high of Rs 51.35 and a low of Rs 48 so far during the day. The stock had hit a 52-week high of Rs 138.40 on 27 April 2011. The stock had hit a 52-week low of Rs 44.80 on 18 January 2012.

The stock had underperformed the market over the past one month till 26 April 2012, falling 6.37% compared with the Sensex's 0.46% gain. The scrip had also underperformed the market in past one quarter, declining 19.74% as against Sensex's 0.31% gain.

The mid-cap company has an equity capital of Rs 1427.59 crore. Face value per share is Rs 10.

Essar Oil said the renewed four year agreement with Bharat Petroleum Corporation (BPCL), running upto 2016, is for supply of diesel, petrol, kerosene and aviation turbine fuel (ATF) to BPCL from the company's Vadinar Refinery. It also entitles Essar Oil to purchase products from BPCL and gives the two companies the option of sharing each other's distribution infrastructure.

Commenting on the agreement with BPCL, Mr S Thangapandian, CEO, Marketing, Essar Oil said, "We are delighted to further cement our long-term relationship with BPCL. Essar Oil has emerged as the biggest supplier for fuels for BPCL. With our expanded capacity coming on stream, we are fully geared to serve the growing demands of high quality fuel for the nation".

Essar Oil said it has similar product sale and purchase agreements with two other leading oil marketing companies from the public sector, namely Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation (HPCL).

Essar recently completed the phase 1 expansion project at its Vadinar refinery at a capex of Rs 8300 crore, which has increased its capacity from 14.7 million tonnes a year to 18 million tonnes, and improved complexity to 11.8. A further optimisation project, currently underway, will increase capacity further to 20 million tonnes by September 2012, the company said.

Vadinar Refinery, amongst the most complex refineries globally, has the flexibility to produce higher value, high-quality products, including Gasoline (petrol) and Gasoil (diesel) conforming to Euro IV and V norms, that have growing acceptance in both domestic and international markets, Essar Oil said in a statement.

Essar Oil reported net loss of Rs 3986 crore in Q3 December 2011, compared with net profit of Rs 273 crore in Q3 December 2010. Net sales rose 5% to Rs 13119 crore in Q3 December 2011 over Q3 December 2010.

Essar Oil is a fully integrated oil & gas company, with strong presence across the hydrocarbon value chain from exploration & production to refining and oil retail. It has a global portfolio of onshore and offshore oil & gas blocks, with about 2.1 billion barrels of oil equivalent in reserves & resources.

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