Essar Oil dodges rumours, says Rosneft due diligence still on

Russia's top oil producer Rosneft, which signed a deal in July last year to buy up to 49-per cent in Essar Oil, is in advanced stages of its due diligence on the Indian group, the company informed reporters at a media conference.

A top company official, however, declined to comment on media reports that it was in talks with Saudi Arabian refiner Saudi Aramco and Iran's National Iranian Oil Company for a deal.

Essar Oil, controlled by billionaire Ruia brothers, had last year signed a preliminary deal with the Russian oil giant to sell up to 49 per cent in the company, which runs India's second-biggest private sector refinery said on Tuesday.

"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 LK Gupta said during a media conference call after announcing quarterly results.

However, Gupta said, the talks with Rosneft are 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.

Bloomberg had, last week, reported that Essar Oil was also in talks with Saudi Aramco, Saudi Arabia's biggest oil company, and National Iranian Oil Company to sell a stake in its refinery.

The Essar Group, with interests in 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 Rs364 crore ($54 million) helped by a near doubling of its gross refining margin.

The company, which is officially de-listed from 10 February, said its gross refining margin 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 on oil account, he said.