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