Refining margins jump at Essar Energy on increased capacity

INDIA-focused Essar Energy yesterday reported a jump in refining margins over the three months to December, thanks to a major expansion in refining capacity at its Vadinar plant.

Refining margins at the Vadinar refinery jumped 246 per cent over the quarter to $9.75 (£6.21) a barrel, up from $2.82 over the same quarter last year, thanks to a major expansion at the plant to 405,000 barrels a day from 300,000 previously.

Throughput at the refinery, in the western state of Gujurat, soared 77 per cent to 36.32m barrels.

At Essar’s UK-based Stanlow refinery, margins were up 128 per cent at $5.59 a barrel, from $2.45 a barrel a year earlier.

The company’s oil refining unit, Essar Oil, said last month that earnings before interest, tax, depreciation and amortisation (Ebitda) grew more than eight times to 12.42bn Indian rupees (£147m) for the quarter.

Additionally, power generation almost doubled over the quarter to 2.86bn units, from 1.48bn units a year earlier, primarily due to three new projects coming up stream over the 12 months.

Investors were cheered by FTSE 250-listed Essar Energy’s update, and shares rallied 2.34 per cent to close at 144.3p.