Royal Dutch Shell Plc today said it hopes to finalise the sale of its Stanlow refinery in Britain by the end of February. If not, it would withdraw the asset from the market and continue to run it as a manufacturing complex within Shell’s global portfolio.
Clarifying media speculation that the sale of Stanlow assets to India’s Essar Oil had been completed, a Shell spokesperson said: “We are still in detailed negotiations, with a deadline set at the end of February. If we cannot agree (on the price), then the assets will be withdrawn from the market and run as a manufacturing complex.” He said Shell was in negotiations with parties other than Essar, too.
The comments were in response to reports in the Indian media that the deal had been finalised at $350 million. An Essar spokesperson also said the negotiations were still on and no agreement had been finalised.
The refinery at Stanlow, Britain’s second-largest processing plant, can handle 233,000 barrels a day and employs 800 people. In all, Shell operates out of 90 countries and employs around 101,000 people.
Shell’s plant at Hamburg in Germany has a capacity of 110,000 barrels a day and is also for sale, though Essar is not in talks with the energy major for this plant.
The end-of-February deadline fixed by Shell comes when Essar had said last week that it was in discussions to buy Stanlow, without putting a timeline for conclusion. In August 2010, Shell had announced an agreement for the sale of its Heide refinery (90,000 barrels per day capacity) and associated local infrastructure and businesses in Germany to Klesch. The company had said the agreement with Klesch marked the latest step in Shell’s downstream strategy to reduce net refining capacity by 15 per cent, to reduce its marketing footprint, and focus the portfolio on profitability and growth potential.
Essar Energy yesterday said it planned to issue bonds worth $500 million to finance its acquisition plans. The pricing of these bonds were announced today.
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