Essar Oil to raise Rs 8,094 cr for refining, exploration

15-Mar-2008 Intellasia | The Financial Express | 5:01 AM Print This Post

Essar Oil, on Thursday, said that the company will raise Rs 8,094 crore through securities for the proposed expansion of its refining and exploration capacity. The shareholders at the extraordinary general meeting has approved the raising of over Rs 8,000 crore by issuance of foreign currency convertible bonds (FCCBs), global depository receipts and other securities. Further, the total amount borrowed by the board of directors would not exceed Rs 30,000 crore, the company informed the Bombay Stock Exchange (BSE).

It is learned that Essar Oil is mulling various capital raising options to meet the fund requirement for its refining capacity expansion, exploration activities, marketing network and strengthening of working capital.

According to company sources, this is mainly due to recent increase in crude oil prices in last five years which makes attractive for Companies like Essar to buy and develop energy assets overseas.

Essar is looking to bid in Africa, Central Asia, South East Asia and in India in the coming years for the same. It is more likely that the Essar group is focusing on global expansion with projects and investments including countries like Canada, USA, Africa, the Middle East, the Caribbean and South East Asia.

Essar Oil’s Refinery has a capacity of 10.5 million tonne per annum (MTPA) with an investment of close to Rs 1, 000 crore. The refinery is being built with the latest, state-of-the-art technology with technical and project assistance from the world’s leading consultants and equipment suppliers in the field. It is designed to handle a diverse range of crude mixes. Essar’s existing Vadiner refinery is configured to produce euro II and euro III grades of Petrol and Diesel. With mid-stream upgradation of processes and technologies, the refinery will have the capability to process the most sour, acidic and heavy crude.

Similarly, the current E&P portfolio for the company comprises nine onshore and three offshore blocks for oil, gas and CBM in India, Madagascar, Burma and Nigeria with total acreage of about 46,000 sq kilometres in onshore and 4,600 sq kilometres in offshore, held under Essar Exploration & Production Ltd, Mauritius (EEPL), a subsidiary of Essar Energy Holdings Ltd the energy sectoral holding company of Essar Global Ltd

Essar Global Ltd (EGL) is a diversified business corporation with a balanced portfolio of assets straddling the manufacturing and services sectors: steel, energy, power, communication, shipping & logistics, and construction.

EGL, through its six sectoral holding Companies, has an enterprise value of over Rs 2 lakh crore and employs 30,000 people worldwide.


Category: ResourceAsia

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