London-listed Essar Energy said it has reduced its dependence on crude imports from Iran for its refinery in Gujarat, amid mounting US pressure to curtail Iranian imports.
?Our imports today from Iran is in very small quantities, as an expansion at our Vadinar refinery enables us process ultra-heavy crude oil sourced from alternative sources, including from Cairn in Rajasthan,? chief executive Naresh Nayyar said at an earnings call. In March, Essar commissioned the first phase of expansion of its Vadinar refinery, enhancing capacity to 375,000 barrels a day from the earlier 300,000.
Vadinar processed 27 varieties of crude in the 15 months to March 2012, including ultra-heavy and tough crudes. Around 11.7 % of the crude slate comprised Mangala crude from Cairn?s Barmer oilfield in Rajasthan.
Since December 2010, Indian refiners have been using Turkey?s Halkbank to pay their annual oil imports over $10 billion, after a previous payment channel was blocked. ??We are doing payments to Iran in consultation with the Reserve Bank of India,? Nayyar said.
Bharat Petroleum Corporation has made its first payment for Iranian oil in rupees, Reuters said last week, becoming the first refiner to use a channel that skirts tightening Western sanctions on Iran?s trade.
Essar Energy said on Monday that for the 15-month period ending March 2012, it made a loss after tax of $764 million. Although not comparable, profit for the period ending December 2010 was $248.3 million. The company had exceptional items of $ 1,276.7 million for the 15-month period, which included losses made after the Supreme Court set aside an earlier Gujarat High Court ruling which enabled its arm Essar Oil to benefit from a sales tax deferment scheme.
The company is in talks with Indian lenders regarding a new debt facility of approximately $1 billion to meet the sales tax liability, it said.
Essar Energy has a debt of $6.2 billion as on March 31. ?Our expansion is not limited to the overall slowdown, since power and oil & gas demand in the country continues to grow. However, we have completed $5 billion worth of projects, so we will have to ensure how they generate value before we do more investments,? Nayyar said and added that the company has no plans to raise international debt.
