Improved oil throughput and increased demand helped Essar Oil register Rs 273 crore profit after tax (PAT) for the quarter ended December 31, 2010, against a loss of Rs 226 crore in the corresponding period last fiscal. Revenue for the quarter rose 20% to Rs 13,809 crore against Rs 11,420 crore the same quarter previous fiscal.

?The profit has been driven by increased refinery throughput and a recovery in global oil demand, which has led to an improvement in refining margins,? Essar Oil MD Naresh Nayyar said.

At Rs 827 crore, Ebitda rose more than 263% over the corresponding quarter last year. This growth can be attributed to increased GRMs (gross refining margins). Essar Oil’s current GRM stood at $7.21 per barrel, boosted by a strengthening of refining margins in the December quarter. Shares of Essar Oil closed at Rs 128.50 up 1.62% on Monday on theBSE.

The operating performance of the Esar Oil refinery at Vadinar was 3.73 million metric tonne (MMT), with an annualised capacity utilisation of above 135%. The refinery expansion project progress was 78% at the end of the December quarter and mechanical completion is expected by end of June 2011. The company has announced a planned 35-day shutdown during May-June 2011 to complete the revamp of its crude distillation unit to 18 mmtpa (million metric tonnes per annum) and FCCU (fluidized catalytic cracking unit) to 3.9 mmtp.

?We will take a 35-day shutdown in May-June 2011 to complete the tie-ins for the new units of our 18 mmpta expansion project. The project to further enhance our refinery capacity to 20 mmtpa is on track,? Nayyar added. With the Phase I expansion, the EOL refinery capacity will go up from 14 mmtpa to 18 mmtpa. ?In addition, post expansion, the refinery will be able to process nearly 90% heavy and ultra-heavy crude. These factors will significantly increase GRMs,? said Nayyar. The company might also look at Latin America to import crude.

EOL has decided to further enhance the refinery?s capacity by 2 million tonnes per year to 20 MMTPA which will be completed by September 2012. This will help the company to capture the growing domestic demand for petro products. ?It has lined up a capex plan of Rs 1,700 crore of which Rs 1133 crore will be funded by debt and the rest will be equity. We have an option to mobilise 30% of our ECBs,? said Suresh Jain, CFO, EOL.