Stanlow refinery owner wards off talk about financial collapse

London, (Quantum Commodity Intelligence) - Essar Oil UK, the owner and operator of the 210,000 b/d Stanlow refinery in the UK, issued a statment on Monday to ward off speculation that it was on the brink of financial collapse. 

The company, a subsidiary of Indian conglomerate Essar, was reported on Friday to have scheduled talks with Whitehall officials this week amid financial difficulties due to a collapse of fuel demand.

"The global Covid pandemic has affected all refiners, with repeated lockdowns leading to reduced product demand and depressed refining margins," the company said in a statement.

"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," it said.

"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 $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," it said

The company, which bought the refinery near Manchester from Shell a decade ago, was reported by Sky News to be in talks about its future.

The refinery produces around 15% of the UK's transport fuels, equating to 4.4 billion litres of diesel, 3 billion litres of petrol and 2 billions of jet fuel.

Fuel demand, particularly jet fuel, has collapsed in the past 18 months due to lockdowns across Europe.