Essar to buy Britain’s 2nd-largest oil refinery

Sunday, August 9, 2009

at 8:46 PM

India's Essar group is in the race to acquire Britain's second-largest oil refinery -- Shell's Stanlow complex, a media report said.

Shell hopes to pocket up to 1.5 billion pound from the sale, the Sunday Times said.

Shell's Stanlow complex, near Ellesmere Port, Cheshire, produces a sixth of the UK's petrol and is the oil giant's only refinery in Britain which is being sold along with two German refineries, at Heide and Harburg.

"Among the bidders are Libya's National Oil Corporation and Essar, the mobile phone to shipping conglomerate owned by the billionaire Ruia brothers, Ravi and Shashi," the Sunday Times said.

However, the company officials of Essar were not available for comments.

The daily further said that "American refining giant Valero and an investment vehicle controlled by the Saudi royal family are also expected to make offers."

The auction is being run by Lazard and final bids are due on August 17, the newspaper said.

Shell has put its Stanlow complex up for sale as it tries to rein in its huge cost base and struggles with the effects of an oil price that is half the level of the historic high hit last year.

Shell last month reported a sharp fall in profits and its chief executive Peter Voser has launched a savage efficiency drive that is expected to cost thousands of jobs.

The involvement of Essar and the Libyans reflects a wider interest by developing-world groups that produce oil and want to break into the European market, the report said.

Meanwhile, PetroChina is in talks with chemicals maker Ineos, about taking a stake in its Grangemouth refinery.

"Stanlow, which employs more than 800 people, has seen much controversy recently. Next week, construction engineers will be balloted on strike action over pay, and it has also been targeted by fuel protesters over petrol prices," the Sunday Times added.