On-shore and off-shore exploration and production company Essar Oil has decided to raise around $500 million through the QIP route.

The latest move is considered as a part of the company's strategy to raise US$2bn to finance its expansion plans.

It should be noted that last year, the Ruias-owned oil company had received the shareholders' permission to raise the same amount of fund, but did not collect the money due to some reasons.

Hence, it needs to take fresh approval for shareholders for the fund raising exercise.

Reports suggest that, the company might command a high premium for its QIP as the outlook for oil marketing companies appeared strong ahead of government's proposal to de-regulate fuel prices.

Essar Oil will hold its annual general meeting on June 27.

The Company posted a net profit of Rs 660 crore for the quarter ended March 31, 2009 as compared to net loss of Rs 8 crore for the quarter ended March 31, 2008.