Stanlow ups Essar Energy earnings 18%

Nov 26 2012, 19:27 IST
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Power plant operator and oil refiner Essar Energy reported a rise in earnings for H1 (Reuters) Power plant operator and oil refiner Essar Energy reported a rise in earnings for H1 (Reuters)
SummaryPower plant operator and oil refiner Essar Energy reported a rise in earnings for H1.

the six boilers on site, which will be completed in the coming weeks.

Stanlow is the second largest UK refinery, with nameplate capacity of 2,96,000 barrels per day, and an above average Nelson complexity of 8.2.

However, current optimised configuration gives Stanlow a 220,000 bpd operating capacity with an effective complexity above 10. This produces an above average proportion of middle distillates at 55%,--principally diesel and jet fuel - of which there is a significant and growing deficit in the UK and Europe as dieselisation of vehicles continues and weaker refineries shut.

Stanlow produces 15% of UK transport fuels. The company is installing natural gas to fuel the six boilers providing steam to drive the refinery.

Also, it has started to use 11 lower cost crudes from various geographies like Africa, Canada to optimise efficiencies.

Besides, it will close lubricants production once remaining customer obligations have been met.

Essar expect material benefits from the closure as lubricants make up only 1-2 per cent of Stanlow's output but dictate the choice of 25 per cent of the overall crude intake.

Essar expects to add USD 3 per barrel to gross refinery margins over the next two years, which would lift EBITA by USD 225 million.

Essar Oil UK employs 1,035 people directly, plus 500 contractors and 5,000 indirectly employed through the extended value chain.

It brought in a small handful of people from its Vadinar refinery business in India, retained most of the Stanlow senior management team, attracted some experienced new recruits, and ensured the existing workforce remained committed by mirroring the previous owner's conditions and rewards.

A new CEO was appointed to Essar Oil UK - Volker Schultz-after 23 years at BP.

An extensive programme of projects is well under way to make the refinery more sustainably safe, reliable, profitable and growing, the company said.

Essar Energy reports 18 pc rise in core earnings

Essar Energy plc, an India-focused integrated energy company, today reported a 18 per cent rise in core earnings in the six months ended September 30 on back of its British Stanlow refinery turnaround. The London-listed firm said operational earnings before interest, tax, depreciation and amortisation (EBITDA) was USD 383 million in April-September.

The company, which recently changed its accounting period, had USD 324 million EBITDA in first half of previous fiscal.

Essar said Stanlow, the second largest UK refinery which Essar acquired from Royal Dutch Shell last year, had operational EBITDA of USD 197 million in the first half.

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