Essar Energy arm ties up with Barclays for crude supplies
Essar Energy's subsidiary Essar Oil UK has entered into new arrangements with Barclays Bank plc covering the supply of crude oil to its Stanlow refinery in the UK.
The company in a press statement said, "Under the new arrangement, 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."
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The new arrangement will allow Essar Oil UK to repay its existing working capital revolving credit facility, provided by 13 banks. In addition, it allows Essar Oil UK to reduce its costs by reducing its crude oil inventory holdings and also permit greater operational flexibility.
The customer relationship and product sale processes will remain with Essar Oil UK. The arrangement with Barclays is for three years and takes effect immediately.
Mr Volker Schultz, Chief Executive Officer of Essar Oil UK, said in a statement, “This transaction with Barclays is an important landmark step for Stanlow. The change is fully in line with our strategy to maximise efficiency, to substantially improve margins and ensure that the refinery can thrive in all market conditions.''
Essar Energy completed the purchase of Stanlow, the UK’s second largest refinery with a capacity of 296,000 barrels per day, from Shell on July 31, 2011.