By Promit Mukherjee
MUMBAI (Reuters) – Russia’s top oil producer Rosneft is still carrying out due diligence to buy a stake in Essar Oil Ltd, the Indian group which runs India’s second biggest private sector refinery said on Tuesday.
Rosneft signed a preliminary deal in July last year to acquire up to 49 percent in Essar Oil, controlled by the Indian billionaire Ruia brothers.
“Rosneft is in advanced stage to conclude the due diligence process and it will still take some time before the deal is finally closed,” Essar Oil Managing Director L.K. Gupta said on a media conference call after announcing quarterly results.
Gupta said the talks with Rosneft were exclusive, and that the company would not comment on “market rumours” on whether Essar Oil was in talks with other global oil and gas companies about further stake sales.
Last week, Bloomberg reported that the company was in talks with Saudi Arabia’s biggest oil company Saudi Aramco and National Iranian Oil Company to sell a stake in its refinery.
Essar, whose business interests include steel, oil and gas, power and ports, has been forced to consider selling assets to reduce its debt, after expanding in India and overseas.
Essar Oil on Tuesday posted a seven-fold jump in net profit for the December quarter, its last quarter as a listed company on the Indian stock exchanges, to 3.64 billion rupees ($ 54 million) helped by a near doubling of its gross refining margin.
The company, which is officially de-listed from Feb. 10, said its gross refining margin, an important gauge of profitability for an oil refiner, rose to $ 13.25 per barrel.
Essar Oil, the top Indian buyer of Iranian crude, is yet to decide whether it will increase its imports from Tehran, Gupta said. “It depends on economic consideration… and whether the crude fits our basket.”
Essar Oil currently owes $ 2.5 billion to Iran, he said.
The company imported 96 percent more oil from Iran in December compared with the preceding month, tanker arrival data made available to Reuters shows, buoyed by the prospects of a lifting of Western sanctions.
($ 1 = 68.0395 rupees)
(Reporting by Promit Mukherjee; Editing by Sumeet Chatterjee and Alexander Smith)
