Essar Oil to sell natural gas from Raniganj coal bed from Jan

Last Updated: Monday, November 2, 2009 - 17:39

New Delhi: Essar Oil said it will begin sale of natural gas it is extracting from below coal seams in West Bengal in January-March quarter.

Reputed international agency, NSAI has certified the in-
place reserves at the company`s Raniganj coal bed methane
(CBM) block in West Bengal at a level of 3.1 Trillion cubic
feet.

Of this, one-third reserves are recoverable, with upside
potential, the company said in a press statement here.
"Gas flow has already started and sales are likely to commence
from Q4 FY2010," it said.

Having won the 3.2 tcf Rajmahal CBM block in Jharkhand in
the just concluded fourth round of bidding for CBM blocks,
Essar has emerged as a leading CBM player.

Essar Oil Managing Director Naresh Nayyar said: "Essar
Oil is fast emerging as a major player in the CBM space in
India, with a potential in-place resource of over 8 Tcf.
Going forward there would be a lot more focus on E&P."

Mumbai-based Essar Oil, the operator of India`s second-
largest non-state, crude-oil refinery, reported a 24 per cent
drop in second-quarter turnover of Rs 11,144 crore from Rs
14,695 crore in same period last year.

"Against the backdrop of volatile oil prices and pressure
on refinery margins, the company has posted a net loss of Rs
94 crore for the same quarter," the statement said.

Profit for the six-months ended September 30 rose 36 per
cent to Rs 76 crore. Turnover was up 25 per cent to Rs 19,039
crore.

On the refining operations, Nayyar said the company`s
Vadinar refinery in Gujarat was "operating well above the
installed capacity and the company is now looking at newer
markets.

We expect to build on our inherent strengths and core
competence to steer the company towards growth during the
current financial year."

Essar`s 10.5 million tonnes a year refinery at Vadinar in
Gujarat achieved highest ever crude output of 3.63 million
tonnes in the July-September quarter and earned a margin of
USD 4 on processing of every barrel of crude.

"The refinery is currently operating at 14 million tonnes
per annum at a capacity utilisation of 133 per cent. Total
crude processed in the 2nd quarter of FY 2010 has been 3.63
million tonnes, its highest ever," the company said.

Production of higher margin light and middle distillates
jumped to 75 per cent during Q2 of FY 2010 from 65 per cent of
all products a year ago.

Essar said it was on track to expand the refinery to 16
million tonnes by December 2010. Debt of Rs 4,600 crore for
the expansion has already been tied up.

The financial closure of Phase-II expansion by 18 million
tonnes is expected by March 2010, the statement said.

Bureau Report



First Published: Monday, November 2, 2009 - 17:39

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