By SARAH KENT
LONDON -- London-listed Essar Energy said Monday it
continued to see good performance at its two refineries in the
final quarter of last year, thanks to planned upgrades and
improvements as well as better refining margins globally.
In a mangement statement, Essar said gross refining margins
at its Vadinar refinery in India rose to $9.75/bbl for the
quarter ended December 2012, compared with $2.82/bbl for the
same quarter a year earlier, thanks to upgrades to the refinery that allow it to process
larger amounts of oil as well as cheaper grades.
Refining margins at the company's UK Stanlow refinery also improved
substantially, rising by 128% to $5.59/bbl in the final quarter
of the year compared with the same period in 2011.
According to data provided by the International Energy
Agency, refining margins for benchmark Dubai crude in Singapore
-- one of Asia's major refining hubs -- averaged
$5.37/bbl in the third quarter, while refining margins for the global
marker, Brent crude, in Northwest Europe averaged $5.81/bbl in
the same period.
In its half-year results, released in November, the company
said higher refining margins helped boost the group's earnings
before interest, taxation, depreciation and amortization to
$582.6 million in the six months to September 2012, up 193%
from the first half of 2011.
The improved performance at Essar's UK refinery comes despite a fraught
outlook for the broader refining sector in Europe.
The region's refining industry has endured a fraught time
since the start of the economic crisis in 2008; since then
around 10 refineries have closed or sharply reduced output as
profit margins weakened amid lower demand for products and
higher prices for both crude and credit.
The company has a target of adding over $3/bbl to refining margins at Stanlow by 2014
and said Monday it has already succeeded in improving margins
by more than $1/bbl.
A further $2/bbl improvement will be added through various
initiatives, including a plan to replace fuel oil with natural
gas as the principal source of fuel for the boilers that give steam to the site,
the company said.
Dow Jones Newswires