Page 13 - EurOil Week 16 2021

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Stanlow refinery owner

Essar in dire straits

UK LAW firms Linklaters and Ashurst have quit as very difficult 12 months and are now seeing
advisers to Essar Oil UK, owner of the UK’s sec- increased demand for road transport fuels and
Essar was hit hard by ond-biggest oil refinery, as concerns grow about improving refining margins, which has resulted
the pandemic’s impact the company’s financial state. in increased throughput at the Stanlow manu-
on fuel demand. Essar Oil UK, a subsidiary of Indian multina- facturing complex.”
tional Essar Group, was hit hard by the collapse The Stanlow refinery, situated near Ellesmere
in UK fuel demand that resulted from the series Port in Cheshire, have a processing capacity of
of lockdowns imposed last year. A number of 300,000 barrels per day (bpd), and supplies 16%
its directors have also resigned, and its manage- of UK road fuel. It delivers jet fuel to Manches-
ment is in discussions with the government and ter Airport via pipeline and employs around 900
lenders to seek a solution. people. The plant generated $300mn in annual
The resignations of Linklaters and Ashurst EBITDA prior to the pandemic, it has said.
was reported by the UK’s Sky News, citing Essar Oil UK has recently signed a memo-
sources. According to one source, a covenant randum with Progressive Energy to produce
waiver from Lloyds Banking Group, Essar Oil blue hydrogen from the Stanlow refinery. CO2
UK’s main lender, expired at the end of March, produced as a by-product will be captured and
forcing the company to seek out other sources transported offshore for storage in reservoirs in
of funding. Liverpool Bay.
Refining margins weakened considerably The parent Essar Oil company, controlled by
during the pandemic, but are now recovering the Ruia family, is also struggling in India and
across Europe. Speaking to India’s Business Canada, with its steel and mining businesses
Today, Essar Oil UK noted that all refiners had having to file for bankruptcy. It bought the Stan-
suffered from the lockdowns. low refinery in 2011 from Royal Dutch Shell, and
“We have successfully traded through a it has since become its main revenue earner. ™

Week 16 22•April•2021 www. NEWSBASE .com P13