Marking the occasion
To mark the the first anniversary of the acquisition of the refinery by Essar Energy, employees (many of whom have come up with entrepreneurial new ideas for business improvements under a new reward scheme) have been interviewed for a celebratory first anniversary video.
Speaking on the occasion, Volker Schultz, the chief executive officer of Essar
Oil UK (which runs Stanlow) said: "We have achieved a huge amount in our
first year at Stanlow. After devising a detailed plan during our first 100 days
of ownership, we are now well underway with putting this plan into practice,
making investments, improvements, efficiency gains and cost savings in all areas."
"The support we have received from employees at Stanlow has been outstanding:
they have come up with a wealth of fantastic ideas to change things in a positive
way and are really proving to be a very entrepreneurial group of people of whom
I am very proud. This refinery will thrive in the UK and European market," he continued.
Since the acquisition, an extensive work program has been put in place at Stanlow following a 100-day exercise at the beginning of Essar's ownership to devise a detailed plan of improvements and changes.
Essar Energy has also invested around $61 million (£40 million) of capital expenditure in Stanlow during the first eight months of ownership to the end of March 2012. The investment will continue at an annual rate of around $100 million (£65 million) per year for the next four years, covering routine maintenance and refurbishment of units and equipment.
Also, as part of the many integration initiatives, Essar has been running the "Out of the Box" scheme through the year, under which employees who come up with viable ideas for improvements are given rewards that can earn them a £50 gift voucher plus 10 per cent of the annual financial benefit up to a maximum of £5,000 when fully implemented.
Stanlow is also investing in an apprenticeship scheme under which young people are taken on each year and given training in various aspects of refinery engineering and management.
A notable year
The Stanlow refinery, since the acquisition, has had quite a notable year. It recorded sales of $6.3 billion in the first eight months of ownership (to March 2012). It processed 51.3 million barrels of crude oil during the same period. In fact, the refinery provides around 15 per cent of UK transport fuels.
In a more recent development, Essar Oil UK, the subsidiary of Essar Energy, entered into new arrangements with Barclays Bank plc in July 2012, covering the supply of crude oil to its Stanlow refinery. Under the new arrangements, Barclays will hold the inventories of crude oil and petroleum products at Stanlow and will supply crude to the refinery in line with its requirements.
The new arrangements allow Essar Oil UK to repay its existing working capital revolving credit facility, provided by 13 banks. In addition, they allow Essar Oil UK to reduce its costs by reducing its crude oil inventory holdings and also permit greater operational flexibility.
"This transaction with Barclays is an important landmark step for Stanlow," says Mr. Schultz. "We have built a strong working relationship with Barclays, allowing us to continue delivering a high level of service to our customers, but in a much more efficient manner. The change is fully in line with our strategy to maximize efficiency, to substantially improve margins and to ensure that the refinery can thrive in all market conditions."
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