Only Indian company to own and start operating an oil refinery in the UK in 2011
The Chester-based Stanlow refinery, which is operated by Essar Oil UK, and is building a rapidly expanding retail presence, is a key component of EGFL’s Energy basket, which also includes multiple conventional oil & gas blocks in the Asian continent, CBM (Coal Bed Methane) blocks in India, as well as multi-fuel power plants in three Indian states.
Stanlow has witnessed a series of investments, amounting to about $1 billion, which were aimed at making the refinery operationally and financially competitive. Essar saw potential in what was a large and complex refinery, and believed it could thrive in the UK/EU/Atlantic Basin refining market where many refiners had decided to shut shop because of margin pressures.
Over the past eight years, incremental investments have been focused towards ensuring the business delivers and remains cash positive even in the worst of industry conditions. These include two site-wide block Turnarounds and the reconfiguration of the refinery to an optimised single train operation that has helped ensure improved economics, with an increased yield of higher margin gasoline and middle distillates and reduced production of lower margin fuel oil and naphtha. Essar has also significantly widened the crude slate to include grades from across the globe and successfully delivered a major refinery upgrade in 2018. These measures have triggered a reduction in crude costs and improved yields across the product slate. The throughput was raised from 68 million barrels per year to 75 million barrels per year, which also led to an increase in revenues.
More recently, Essar Oil UK has augmented its refinery supply strength with its marketing capabilities to achieve value chain integration. The Company has made a successful and award-winning entry into the UK fuel retail market. With over 70 Essar-branded UK retail sites already operational across England and Wales, the company plan to grow this network to 400 retail sites over the next five years. It is also a significant player in the wholesale supply of Jet A-1 to major UK airports, having entered the market for direct supply of aviation fuel and signing agreements with leading international airlines, like Etihad, Emirates and Jet2.
Today, Essar Oil UK is a debt-free company that has posted EBITDA of $300 million or above every year for the last three years, besides delivering an improved safety and environmental performance that is central to its sustenance in the UK market.