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Essar Oil

Essar Oil Ltd. (EOL) is emerging as a leading integrated oil and gas company spanning the entire value chain, from deep within the earth all the way to the end-consumer. We have exploration and production (E&P) rights in some of India's most valuable oil and gas blocks. EOL is building a state-of-the-art refinery and a countrywide network of modern retail fuel outlets.

Exploration and production

We were one of the first private companies to bid for exploration blocks in 1993. We won two onshore blocks in Rajasthan and one in the Mumbai offshore region, where we have completed the first phase and are moving into test drilling. We were then awarded a block each in the Cambay basin (Gujarat) and Cachar (Assam). We believe that we have lowered the risks and increased the rewards of exploration by carefully selecting the blocks with maximum potential.

We also won the Ratna and R-series oilfields for development and production, in partnership with ONGC and a major international company. The Ratna series, located south of the prolific Bombay High field, holds an estimated 500 million barrels of oil reserves. Independent international engineering firms have certified its high latent value and EOL's share is worth around US$ 230 million.

Our CBM (Coal Bed Methane) division pioneered a project in Mehsana, Gujarat, using innovative technology to establish the presence of methane gas. Although the US is the lone country to exploit CBM commercially, EOL has already drilled three wells and is producing the gas experimentally, the only Indian company to do so. EOL has also won a CBM block in Raniganj, West Bengal.

Global-scale refinery

We were among the first to enter the refining sector when it was opened to private participation. Our US$ 2.14 bn (Rs.99billion) refinery at Vadinar, Gujarat, which has achieved full financial closure, is two-thirds complete and will be commissioned in 24 months.. With a capacity of 10.5 MTPA (that can rise to 12 MTPA after de-bottlenecking), this world-class refinery complex will focus on producing middle distillates like aviation turbine fuel, kerosene oil and high-speed diesel, which form over 60% of India's demand. We will also produce LPG and transport fuels including petrol conforming to Euro III and Euro IV product quality standards for the domestic and export markets.

High automation, the latest technology and an ideal location on India's West Coast will give us significant competitive advantages. We have permission to import crude oil freely in VLCCs, which offers considerable cost savings especially since we are one of the closest refineries to the Middle East, the main supply source for crude oil. With an eye on future value building, we have also created the infrastructure to double our refining capacity at a third of the cost and in half the time of a greenfield project.

Marketing

EOL is one of the few private companies permitted to market petroleum products in India, completing our presence right across the petroleum chain. To serve retail customers under the retail brand ‘Essar Oil', EOL is building a modern, countrywide distribution network of 2,500 filling stations. We are designing them as complete retail outlets, offering the value-added amenities and services that customers look for in individual markets. Looking beyond the saturated larger urban markets, we are reaching out to consumers deep in India's heartland. EOL is also the first private oil company to import high-speed diesel. We are marketing this at competitive rates to bulk industrial consumers. In addition to petrol, diesel and lubricants, we will market a full range of fuels including naphtha, kerosene and fuel oil.

Our pipelines division is putting in place the Central India pipeline network. This 2,260 km long pipeline will connect our refinery to demand centres across the northern, western and central parts of India. Thus, with a presence on every rung of the value chain, EOL is all set to take over the future.