Essar Energy in pact with Barclays Bank
New Delhi: Essar Energy plc Wednesday said its 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.
"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 company said in a statement.
The new arrangements allow Essar Oil UK to repay its existing working capital revolving credit facility, provided by 13 banks.
In addition, they allow Essar Oil UK to reduce its costs by reducing its crude oil inventory holdings and also permit greater operational flexibility.
The customer relationships and product sale processes will remain with Essar Oil UK.
"These arrangements with Barclays are for three years and take effect immediately," the statement said.
Essar Oil UK CEO Volker Schultz said the transaction with Barclays was an important landmark step for Stanlow.
"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," he said.
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.