Amid reports it is seeking financial help from the Government after being hit by the COVID downturn, Essar Oil (UK) on the banks of the Mersey insists it will survive the crisis. Tony McDonough reports
Liverpool city region oil refinery giant Essar Oil (UK) insists will come through the most difficult period in it 10-year history amid reports it is seeking financial assistance from the Government.
According to a Sky News report Essar, which is owned by the India-based Ruia family has been badly hit by the COVID-19 pandemic which has depressed demand for refined fuel across the world.
Employing almost 1,000 people at its refinery at Ellesmere Port on the banks of the Mersey, Essar is of huge strategic importance to the UK economy. It provides 16% of all UK road transport fuels and each year produces 4.4bn litres of diesel, 3bn litres of petrol and 2bn litres of jet fuel.
It also supplies fuel for aircraft at both Liverpool and Manchester Airport and operates a number of petrol retail outlets in the north of England. Sky claims it has been in talks with Whitehall officials over the past few weeks as it looked to shore up its finances. The report added further talks were planned for this week.
Essar took over the former loss-making Shell-owned refinery in 2011 and has since invested more than £700m to make the operation profitable. In a statement the company said: “Historically, Essar Oil (UK) has been a very profitable… It is a long standing private company without public shareholders.
“The global COVID pandemic has affected all refiners, with repeated lockdowns leading to reduced product demand and depressed refining margins. We have successfully traded through a very difficult 12 months and are now seeing increased demand for road transport fuels and improving refining margins, which has resulted in increased throughput at the Stanlow manufacturing complex.
“We are not a levered business and currently we do not have any short-term or long-term bank debt on the company, other than working capital lines. Prior to coronavirus, we were generating EBITDA in excess of $(US)300 million per year.
“We remain confident that we can manage through this period and come out stronger as the economy clearly continues to recover.
“We are fully focused on supporting the customers and industries who rely on our products as lockdown restrictions are eased and we are excited about our plans to decarbonise Stanlow and increase our supply of sustainable fuels, thereby supporting the UK’s green agenda.”
As well as employing almost 1,000 people directory, Essar Oil (UK) provides work to a further 800 contractors based at the site. In February it was announced plans for a new £600m bio-refinery that will convert non-recyclable household waste into aviation fuel, would be built at Stanlow.
Essar is teaming up with US-based Fulcrum BioEnergy and Essar’s subsidiary company, Stanlow Terminals, to deliver the project. The plant will convert several hundred thousand tonnes of pre-processed waste into low carbon aviation.