News
Essar Oil UK – ‘a significantly better year’
Essar Oil UK reported its highest ever annual Current Price Gross Refining Margin (CP GRM) at $7.80/bbl, a 91% increase to the $4.08/bbl reported in FY14, primarily due to refinery reconfiguration and improved benchmark margins. Stanlow has outperformed the Northwest European FCC Cracking margin off Dated Brent for the year, which stood at $2.66/bbl.
Chairman – confident that the business will continue to improve its performance
“This was a significantly better year for us,” said chairman, Naresh Nayyar.
Essar has taken several initiatives since acquiring the Stanlow site in 2011, in order to improve and optimise the operational and financial performance of the company. Besides re-optimising the configuration, the company has connected the refinery to the natural gas grid, materially diversified its crude slate, significantly improved the production of high value products and delivered a variety of cost efficiencies. This has enabled Essar to deliver an additional margin of $3/bbl.
It’s heartening to note that the impact of several initiatives taken at the site in recent years is now being reflected in the operational and financial performance of the company,” said Naresh.
“I am confident the business will continue to improve its performance. We also take pride in saying that the company delivered 100% product availability to our customers throughout the period, significantly contributing to energy supply security in the region.”
Key highlights
• Highest ever Profit after Tax (PAT) at $70 million vs a loss of $121 million in FY14
• Highest ever Current Price Gross Refining Margin (CP GRM) at $7.80/bbl vs $4.08/bbl in FY14
• EBITDA at $177 million vs a loss of $113 million in FY14
• Stanlow’s optimised configuration delivers improved refinery economics
• Strong financial position with a Net Worth of $640 million
Meeting 15% of the UK’s transport fuel demand
The refinery, which meets about 15% of the UK’s transport fuel demand, processed 8.54 MMT of crude, an 18% increase on the previous year’s 7.24 MMT which had included a major site maintenance turnaround.
Gross revenues for the year stood at $7,615 million, an 11% drop to $8,569 million reported in FY14, largely due to the lower crude oil price which fell 21% year on year average.
EBITDA for the year was at $177 million, against a loss of $113 million reported in FY14. Profit after Tax (PAT) in the period grew to $70 million, against a loss of $121 million in FY14. www.essar.com
During the year, Stanlow began to operate as a reconfigured and optimised single train site to increase the production of high value products. In the new single train operation, higher margin gasoline and middle distillates yield improved by about 5% compared to the representative period of FY14 and lower margin fuel oil and naphtha reduced by about 6%.
“We continued to receive strong support from our shareholders, who helped substantially strengthen the balance sheet by equity capitalization,” said chief executive Volker Schultz. With strengthened operations and a refinanced business, we can now look ahead with renewed confidence, as we pursue projects to further strengthen our operation and improve the profitability of the business.”