Essar Oil reopens talks with Shell for 3 refineries | business | Hindustan Times
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Essar Oil reopens talks with Shell for 3 refineries

business Updated: Jan 17, 2011 23:39 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Essar Oil Ltd said on Monday that it has "re-engaged" in discussions to buy three of Royal Dutch Shell Plc's European refineries. The company is also eyeing acquisition of refining assets in Eastern Africa.

"We have re-engaged to buy Shell's Stanlow refinery in northwest England and the Heide and Hamburg units in Germany," Essar Oil managing director and CEO Naresh Nayyar said in a conference call.

He, however, refused to put a timeline for conclusion of the deal.

"We are in discussions. Beyond that I cannot give further details on timelines," he said.

Essar had first evinced interest in buying Shell's refineries in 2009 and talks broke down last year.

These refineries have a combined capacity of around 23 million tonnes and the acquisition, if successful, is part of Essar's vision to have one million barrels of refining capacity.

The refinery at Stanlow, Britain's second-largest processing plant, can process 233,000 barrels per day.

Shell's plant at Hamburg in Germany has a capacity of 110,000 bpd and the refinery at Heide can process 91,000 barrels.

Media reports have valued the three refineries at £1-1.5 billion ($2.5 billion).

Shell, based in The Hague, is reducing its involvement in refining, especially in Europe, to invest more money upstream in more lucrative oil and gas production.

Essar had in 2008 acquired 50% stake of Kenya Petroleum Refineries Ltd (KPRL), which operates a four-million tonnes a year refinery at Mombasa.

While confirming that the company was looking at acquiring more assets in Eastern Africa, Nayyar said the proposal to revamp the Mombasa refinery is pending with the board of KPRL.

Essar Oil operates a 14 million-tonnes refinery at Vadinar in Gujarat, which it plans to expand to 20 million-tonnes by September 2012.