Essar Oil U.K. To Invest $250 Million To Expand Refining Capacity
Essar Oil UK targets 400 fuel retail outlets in five years.
Essar Oil U.K. plans to invest $250 million on capex and maintenance at its refinery in Stanlow, Chief Executive Officer S Thangapandian told reporters on Wednesday.
The company is targeting 400 fuel retail outlets in five years through a mix of company-owned and franchise model. The company has 36 outlets as of now and plans to take it to 55-60 by the end of this year, Thangapandian said in a conference call with analysts.
It also intends to expand its aviation fuel business through the Stanlow refinery, Thangapandian said. The refinery produces over 16 percent of the U.K.’s country’s transport fuels, according to its website.
The investment at Stanlow will increase throughput from 68 million barrels to 75 million barrels per year, the company said. It will expand the basket of crude and reduce costs, Thangapandian said. Higher volumes and production of high-yield products like propylene will push up margins by over $1 a barrel, he said.
“With Brexit depreciating the pound, we have benefited. We had about $40-45 million annual cost reduction because of fall in exchange rates,” said Sampath P, chief financial offer at Essar Oil U.K.
The Ruias-run Essar Oil recently announced the completion of sale of its India assets to a consortium led by Russia’s Rosneft for $12.9 billion. The U.K. business, housed under Essar Energy Ltd., wasn’t part of the deal.
