Essar forms new crude oil agreement with Barclays

Essar Energy, the India-focused integrated energy company, has announced that its subsidiary Essar Oil UK has entered into new arrangements with Barclays Bank covering the supply of crude oil to its Stanlow refinery in the UK.

Under the new arrangements, Barclays will hold the inventories of crude oil and petroleum products at Stanlow and will supply crude to the refinery in line with its requirements.

The agreement allows Essar Oil UK to repay its existing working capital revolving credit facility, provided by 13 banks. In addition, it allows it to reduce its costs by reducing its crude oil inventory holdings and also permits greater operational flexibility.

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The customer relationships and product sale processes will remain with Essar Oil UK. The arrangements are for three years and take effect immediately.

Volker Schultz, Chief Executive Officer of Essar Oil UK, said: "This transaction with Barclays is an important landmark step for Stanlow. We have built a strong working relationship with Barclays, allowing us to continue delivering a high level of service to our customers, but in a much more efficient manner.

"The change is fully in line with our strategy to maximise efficiency, to substantially improve margins and to ensure that the refinery can thrive in all market conditions."

The share price rose 1.16% to 113.80p by 09:28.

NR