• Merger ESSAR Oil Refinery with Stanlow Refinery Presented By Rahul Parihar Deepshree Patil Ketan Patil
Essar• Established in 1969 as construction company• Managed by shashi Ruia (chairmen ) and Ravi Ruuia (Vice chairmen )• Diversified in to steel, energy, power, communications, shipping ports, logistics and construction• IPO in 1988• 1990s the group entered into steel making with its Hazira plant in Gujarat and a pellet plant in Visakhapatnam. During the same decade the Essar Group expanded its scope into other businesses gas exploration, oil refinery, construction and GSM telephony.
• Essars primary business is in the power and oil sectors.it is handled by Essar Energy, which is approximately 76% owned by Essar Group,• Indias 2nd largest power generation company in the private sector.• Essar Oil has an international presence across the hydrocarbon value chain from exploration and production to oil retail. The company has access to a global portfolio of onshore and offshore oil and gas blocks with about 45,000 km2 available for exploration.• The refineries are Vadinar in Gujarat India; Stanlow in Cheshire, United Kingdom and 50% controlling stake in Kenya Petroleum Refineries. Essar also has 1600 oil retail outlets in various parts of India.• Revenue US$ 27 billion (2012)• Profit US$ 2 billion (2011)
Stanlow• owned by Royal Dutch Shell until 2011• Royal Dutch group created in 1907 by merger of two rival companies Royal Dutch Petroleum company and shell Transport Trading company• Founded by Marcus samuel• merger gave 60% ownership of the new Group to the Dutch arm and 40% to the British.• In 2011 Royal Dutch shell decided to sell stanlow• second largest in the United Kingdom after Fawley Refinery
• It Produces sixth of UK’s need of Petrol• Refining capacity : 1200 millions per year of BPD capacity of 2,96,000• Product output – petrol 3 million tonnes – diesel 3.5 million tones – kerosene/jet fuel 2 million tonnes – LPG & petrochemical feedstocks 1.5 million tonnes – Fuel oil 1 million tonnes
• To increase refinery Production• To get an access to a UK energy route between London and Manchester• Provide options for the export of products from INDIA
• Closure of oil refinery in UK in 2010- 2011.• Production of oil went down in 2011 by 7% as compared to previous year.
Principal Terms and Conditions of the Acquisition• Deal done on 29 march 2011• Acquisition Happened in 2 ways1. Asset Purchase agreement• 350 million (175 million at the time of agreement and rest 175 million after 1 year @ interest rate 4 %)2. Inventory agreement• 922 million for stock of crude oil
IMPACT• Raises Essar’s capacity up to 800,000 BPD.• 193% increase in operating profit• In the April-September half, Essar Energy posted revenues of $12.84 billion, up 97% from $6.5 billion in the eight-month period of June 2011-March 2012• Essar Energy’s Indian refining and marketing operations delivered an operating profit of $311.1 million in April-September, up from $107.7 million in January-June 2011 (excluding sales tax benefit).• By this acquisition Essar become 2nd largest oil refinery in India.