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Indian Essar Energy didn't give any confirmations about buying Shell's refineries in UK and Germany

Essar Energy has made it clear that there is “no certainty” on its proposed acquisition of Shell's refineries in the UK and Germany.

 

 

Essar Energy has made it clear that there is “no certainty” on its proposed acquisition of Shell's refineries in the UK and Germany. Even if this were to materialise, it would be a minor investment, said Mr Prashant Ruia, Vice-Chairman, at a conference call with journalists here on Thursday. Essar Energy and Shell have been in talks on a likely buyout of the latter's refineries in Stanlow (UK), Harburg and Heide. “There is no binding commitment,” Mr Ruia said, reiterating that most of the investments in the oil & gas space would, in any case, be made in India. “Essar Energy is wedded to the future of India,” he said.

 

The company plans to increase capacity of its Vadinar refinery in Gujarat in two phases to 18 million tonnes and then to 36 million tonnes. It also holds 50 per cent in Kenya Petroleum Refineries (KPRL) with the balance held by the Government of Kenya. KPRL owns and operates the refinery in Mombasa which has a nameplate capacity of four million tonnes but is operating at 1.6 million tonnes. The refinery, which is the only one in East Africa, serves Kenya, Uganda, Burundi and Rwanda.

 

On the exploration side, Essar Energy has six blocks in India and one coal seam gas block. In addition, it has obtained participating interests in oil and gas blocks and fields in Nigeria, Vietnam, Australia, Indonesia, and Madagascar.

 

According to the company's Intention to Float announcement, nearly two-thirds of the money raised from the IPO will be used for the completion of its phase 1 and 2 power projects coupled with the acquisition/development of captive coal mines. Mr Ruia said these initiatives would expand Essar Energy's total installed capacity from 1,220 MW to 11,470 MW by 2014. The expansion plans are divided into two phases designed to bring total installed capacity to 11,470 MW. The six Phase I projects have a capacity of 4,880 MW and are expected to become operational between 2010 and 2012.

 

In addition, the company will expand operations with six Phase II projects which will increase capacity by another 5,370 MW and due to become operational during 2013 and 2014. Post-offer, the Essar group will hold 75 per cent in Essar Energy which, in turn, will continue to operate its oil and gas business through Essar Oil. The group, incidentally, will have invested over $2 billion in Essar Energy before the offer, Mr Ruia said.

Source : The Hindu Business Line