Stock Market

Rosneft says to buy 49% in Essar Oil

Chillicious Team

Russian energy firm Rosneft has confirmed it will pick up 49 percent stake in Ruia-owned Essar Oil.

“During the visit to India, Rosneft Chairman of the Management Board, Igor Sechin has held negotiations with the Management of Essar,” a statement released by the company said.

“Preliminary mutual understanding has been achieved on the timing and structure of a deal to buy into the equity of Essar Oil Limited. The parties intend to sign and close the transaction by the end of June 2016 upon obtaining all necessary permits,” it added.

In addition, an agreement on crude oil deliveries to commence this year has also been achieved.

The capacity of Vadinar refinery currently amounts to 20 MMTPA and this refinery is the second largest in India and is in the list of the world’s top refineries.

The refinery is highly flexible in terms of raw material use and is capable of refining heavy and sour oil grades.

Essar Oil Limited plans to implement the modernization program expanding the refinery’s capacity up to 25 million tonnes per annum including production of 1 million tonnes per annum of propylene/polypropylene, according to the statement.

Essar Oil also owns an operational network of 2,000 fueling stations in India.

The company’s plans include expanding the network up to 5,000 stations. Deregulation of pricing at the Indian retail market opens perspective of retail sales growth.