Essar Consolidates E&P, Raises Funds

Essar Oil Limited has decided to consolidate the upstream Exploration & Production activities under its proposed subsidiary, Essar Exploration & Production Limited, with an objective of building a strong fully integrated oil company having upstream, refining and downstream marketing activities. On completion of this exercise, Essar Oil will have nine Oil & Gas and Coal Bed Methane blocks namely: three onshore blocks in Madagascar; one offshore block in Nigeria; oil & gas block in Mehsana, Gujarat; Coal Bed Methane block in Raniganj, West Bengal; offshore field Ratna & R Series and two onshore blocks in Assam.

The Board of Directors has considered various capital raising options to meet the funds required for various developmental business activities including expansion of the Refining capacity, exploration and production activities, expanding of marketing network, strengthening of working capital and other business purposes. In order to meet the funds requirements for these purposes, it was decided to raise long term finance by issue of equity shares and/or convertible debentures and/or GDSs/ADRs/FCCBs by way of public and/or private offering in domestic / international market(s) and/or qualified institutional placement for an amount not exceeding US$ 2,000 million (approximately Rs.8,000 crore). The Board decided to seek approval of shareholders for passing an enabling resolution for issue of further securities for an amount not exceeding US$ 2 billion.

Essar Oil Limited is a fully integrated oil company of international size and scale. Its assets include a 10.5 MMTPA refinery which is being scaled up to 34 MMTPA at a project cost of US$ 6 billion, developmental rights in proven exploration blocks in India and abroad and a downstream retail network of over 1,250 fuel stations across India with the supporting infrastructure.