Diversification

News

Key Jet site near refinery is transformed

Following a complete knock down and re-build and many months of construction, JET Retail UK Limited has re-opened its flagship retail fuel site close to the Phillips 66 Limited Humber Refinery in South Killingholme, North Lincolnshire.

News

A UK hydrogen first for Stanlow

With funding support agreed by BEIS, Stanlow could be home to the UK’s first carbon-free hydrogen power plant contributing to decarbonisation as part of the transition to future fuels.

More Diversification

News

New CEO to assist delivery of energy transition at Essar Oil UK

Essar has announced the appointment of Deepak Maheshwari as chief executive officer for Essar Oil (UK) Ltd (EOUK). Deepak joins EOUK, an important asset in the energy portfolio of Essar Global Fund, at a transformative juncture as it accelerates its transition to a ‘Low Carbon Energy Provider’ of the future. As CEO, Deepak will work closely with the EOUK Board on the delivery of a number of strategic energy transition projects aimed at making Stanlow a green refinery to meet the post-carbon needs of a progressive UK. Amongst these are HyNet (a low carbon hydrogen energy and carbon capture project) which will transform the North West of England and North Wales into one of the world’s first low carbon industrial clusters, together with the building of a biofuels business which will include production of both renewable diesel and sustainable aviation fuel (SAF). With more than 25 years’ senior leadership experience across the utilities, energy, and infrastructure sectors in Europe and Asia, Deepak will lead an experienced management team and further strengthen corporate governance within the ESG framework. EOUK chairman, Prashant Ruia, said: “We are delighted to welcome Deepak to EOUK. His immense corporate experience will prove invaluable during such an important period of growth for the company, which is aiming to be a leading player in the transition towards a sustainable society by delivering cleaner energy solutions.” Deepak commented: “I am delighted to be joining EOUK as chief executive officer and look forward to building on the impressive legacy that Essar colleagues have created. The UK’s green economy continues to develop and flourish, and the Board and I will work hard to ensure EOUK sits at the fulcrum of the UK’s sustainable, low carbon future.”  

News

Stanlow secures government backing

A new project that forms part of Essar’s plans to decarbonise the Stanlow Refinery in North West England has secured a £7.2m grant from the Industrial Energy Transformation Fund. The funding has been made available through the Department for Business, Energy & Industrial Strategy (BEIS) and will be invested in a project to install a new furnace in the crude distillation unit at Stanlow that will be able to run on a 100% hydrogen fuel source. It will be the UK’s first refinery-based furnace able to be fuelled entirely by hydrogen. Once completed and operational, the net zero ready furnace will reduce Stanlow’s CO2 emissions by 11% per year and deliver immediate energy efficiency improvements. The furnace will use hydrogen produced by the HyNet North West project at Stanlow, with the first stage of the initiative set to come on stream in 2025. The new furnace is another element in Essar’s transition to becoming a ‘Low Carbon Energy Provider’ of the future. This will also include the construction of two blue hydrogen production hubs at Stanlow under the HyNet project, which will attract £750 million in total investment and support a hydrogen economy across North West England and North Wales. HyNet’s hydrogen and carbon capture and storage (CCS) chain represents a major step forward for low carbon energy technology and innovation in the UK. Together with HyNet, Essar has also announced plans to create a new facility to convert non[1]recyclable household waste into sustainable aviation fuel (SAF) for use by airlines operating at UK airports. The £600m project involves Essar Oil UK, Fulcrum BioEnergy and Essar’s subsidiary company Stanlow Terminals Limited and will convert several hundred thousand tonnes of pre-processed waste, otherwise destined for incineration or landfill, into approximately 100 million litres of low carbon SAF annually. Essar chief operating officer Jon Barden commented: “This year has been about beginning to execute the strategy we’ve put in place to decarbonise Stanlow and position the site as a provider of sustainable fuels for the future. The investment into CD4, alongside the HyNet and Fulcrum projects, demonstrates our commitment to developing low carbon operations, with the ambition of becoming a net zero site by 2040. “The funding from BEIS is an endorsement of the steps we’re taking, as well as a signal of the Government’s intent to transform the North West into a clean energy hub supporting jobs and economic growth for years to come.”    

Interview

In Conversation with Bangor Fuels

Diversification is a constant theme of our industry currently as those involved in all aspects of fuel production and distribution find ways to keep pace with the evolving nature of fuel demand. Here we speak with Damian Fusco, owner of Bangor Fuels in Northern Ireland, to learn how the business has grown and diversified since he took the bold step to take it on 20 years ago. It began with belief Now a multi-faceted business, Bangor Fuels is where it all started, and where Damian clearly still feels the greatest sense of pride. Damian takes us back: “Most local people will recall Rayker Fuels, a coal business. Well, I managed them from 1994 and, after a few years there, I saw an opportunity to buy the business.” It turns out that ‘buying the business’ was a different arrangement to the way it would usually be understood. Damian didn’t have the ready cash to invest in the way he wanted to but he did have sufficient belief in the future of the business to propose a bolder arrangement. “I offered the owners the opportunity to sell to me and for me to pay them back out of annual profits. Accepted, I took over in 2001, and so it began. I had just backed myself to make a success of it and be able to make a living as well as paying for the business!” A lot of hard work followed over the next 12 months leading to two major developments. January 2002 saw the purchase of a first oil tanker and then the business moved to Gransha Stores later that same year. The years that followed were about keeping his head down and building a reputation. “There is no real secret to those years,” Damian admitted. “It was largely down to hard work, making sure that our service was second to none, and holding a keen price. I didn’t have a grand vision of where the business was going, and none at all of me being where I am now.” An unspoken testimony to the personal graft that Damian has invested over the years is that his hands are black. They are, in fact, ‘permanently black’ due to the number of times he lay under lorries and vehicles until the early hours of the morning putting in new clutches or doing what was needed to keep the wheels moving. “If it needed done I just did it myself, whatever it was.” A commitment well understood by other self-made businesses but, as Damian is first to acknowledge, family and friends were also a ‘massive support’. Constant investment and growth As the company has grown it has continually looked for ways to improve and diversify through investment. By 2007, a new home was needed, and 5 Balloo Way was purchased, which is where Bangor Fuels remains now. With the rapid growth experienced under his ownership, we asked Damian to explain the principles the business was so successfully built on and he answers without hesitation: “Quicker, cheaper and more reliable. That’s what I set out to be and how we’ve succeeded. Furthermore, we are now renowned for our respected ‘one price promise’ – irrespective of distance.” This approach proved to be a successful growth strategy, very popular with customers and, having started in North Down and Ards, BT1 to BT9 and BT16 were soon incorporated, and in time, greater Belfast and beyond as Damian confirms: “We now go to Antrim and Larne, as demand has pushed expansion.” Diversification came naturally Another driving force is the desire to add value to the local area and employ people who are willing and keen to work. Constantly regarding challenges as opportunities has led to natural diversification and the business became businesses, with Damian now proud owner of not only Bangor Fuels, but also Fusco Vehicle Sales, Maypole Garden Services, Maypole Construction Design & Build, Maypole Lawnmowers and, most recently, Wolseys Bar & Restaurant. All are now prosperous, well-known local brands important to the local area with Bangor Fuels employing 35 people and 85 employed in total across the companies. When asked how these other businesses came about Damian explains: “What do you do with drivers in the summer when orders are down? How do you keep seasonal factors at bay and keep paying people? Well, we put an ad in the Spectator and opened a gardening company!” And this ability to create an opportunity from a challenge wasn’t a one-off. “What happens when you build a fleet of vehicles that need replaced, and need repaired, and lawnmowers that need updated and fixed. Well, you get the drift.” At each challenge the business has evolved and grown, and we wonder what other developments may be coming. “The challenges of the future are not just operational, such as the fact that it is now much harder to get qualified tanker drivers, but also how far to expand and develop the business.” Damian replies thoughtfully. “I’m not necessarily going to grow province-wide, but the business is expanding organically as new customers continue to come to us. And I’m still very passionate about Bangor. All my businesses are in Bangor and I try to support the local community where possible. It would have been easier and less rick to tick along as Bangor Fuels, but I’m keen to invest locally, which is why I’ve expanded into other local areas”. It seems that Damian is not a man to rest on his laurels and our suspicions are confirmed when we ask about his out of work passions. Damian thinks for a while then admits: “When I’m not working, I’m in work”. Given this passion for the business and the area we have no doubt there will be more developments to hear from Bangor Fuels soon and we will look forward to sharing them. The hands may be black, but the future certainly doesn’t appear to be so.  

News

Exolum’s future lies in new energies

Exolum’s CEO, Jorge Lanza, recently addressed the evolution of the business and the new challenges faced in the current energy transition. The company will continue its traditional business of hydrocarbon transport and storage in an efficient and sustainable manner, ensuring that society has access to fuels, while progressing towards the diversification and expansion of logistics services for other products. This will enable the company to leverage its capabilities and guarantee business sustainability. To support this diversification, a dedicated division, promoting innovation and entrepreneurship within the company under the name of Exolum Ventures, cooperates with other entrepreneurs or start-ups that can contribute to faster and better innovation. Hydrogen Exolum has submitted a portfolio of renewable hydrogen-based projects to the call for expressions of interest launched by the Ministry for Ecological Transition and Demographic Challenge and the Ministry of Industry. This portfolio of projects has associated investments reaching over 500 million euros and includes different projects to be developed on the Iberian Peninsula, the Balearic Islands and the Canary Islands. Exolum focuses on integrating solutions throughout the value chain for the production, transport, storage and distribution of green hydrogen. One of the most ambitious projects is the development of hydrogen corridors that cover the whole Iberian Peninsula, thus allowing the new energy vector to have a uniform penetration. The company is also developing alliances throughout the hydrogen value chain that enable the development of new technologies. The circular economy Exolum is looking to use its excellent location and its extensive experience in the hydrocarbon sector to develop projects relating to water and waste treatment. One such project is the building of a waste recycling plant in the port of Algeciras which will make it possible to transform wastewater into fuel for ships. Eco-fuels Exolum manages infrastructures in Spain that are fully adapted to biofuel storage and distribution and cooperates with the oil sector in the development and promotion of 2nd generation advanced biofuels. Sustainable aviation fuel (SAF) Exolum’s AVIKOR platform offers both individuals and companies flying from Spain the chance to do so more sustainably by enabling them to reduce the emissions from their flights by using sustainable aviation fuel. Sustainability Exolum has signed the UN Global Compact committing to making a contribution to compliance with the Sustainable Development Goals established by the UN in 2015 and has a sustainability strategy that aims to reduce its CO2 emissions by 50% in 2025 and to become a zero-emissions company in 2050.  

Interview

Celebrating 50 years of innovation

This spring sees OTS Group Ltd celebrating its 50th anniversary and, from humble beginnings in 1971 in a farm cowshed to becoming a leader in the fuel industry, the company has never lost sight of its values.

Opinion

Fears for future of Stanlow oil refinery

Essar-owned Stanlow refinery, located in Ellesmere Port, is reportedly facing financial problems, but the company has said it is fully committed to its operations at the Ellesmere Port oil refinery, including plans to decarbonise its activities and produce sustainable fuel there. It has been reported that the plunging demand for fuel during the pandemic has forced Essar Oil UK to have discussions with the Government with regard to its financial position. Essar has recently said that there was a ‘material uncertainty’ that could throw doubt over its ability to continue as a going concern. The company also added that a ‘significant drop in demand and poor refining margins, coupled with market volatility caused operating losses’. A spokesperson for Essar said the company has ‘historically been very profitable, but the pandemic has affected all refiners, with repeated lockdowns leading to reduced products demand and depressed refining margins’. “We are not a levered business. We remain confident we can manage through this period and come out stronger as the economy continues to recover.” Essar bought the former Shell refinery at Stanlow in 2011. The site directly employs around 900 staff, with up to a further 800 contractors and produces 16pc of the UK’s diesel and petrol as well as almost 10bn litres of aviation fuel a year. With reports suggesting that discussions could involve a request for direct financial support, questions would be sure to arise around the ‘optic’ of the government providing such support to the fossil fuel industry in the year of COP26. It will be interesting to see if this could be avoided by placing the emphasis of any support on Essar’s plans to move to more sustainable ventures. Diversifying to thrive or survive? In January 2021, plans were announced to create a £760m hydrogen production plant at Stanlow with Essar and Progressive Energy, developers of HyNet North West, joining forces in a venture to produce low carbon hydrogen at the Ellesmere port refinery. The hydrogen will be manufactured for use across the HyNet region and is expected to create hundreds of construction jobs, followed by thousands more across the region once the network is completed. Stein Ivar Bye, Essar Oil UK chief executive, said at the time: “Essar is committed to innovative growth as a means to create positive impact to both economy and environment. HyNet and hydrogen production is integral to Stanlow’s strategy and will set it on a journey to be the UK’s first net zero emission refinery with the ambition to avoid emissions of over two million tonnes of carbon dioxide to the atmosphere per year, the equivalent of taking nearly a million cars off the road. “With the support from government to establish the appropriate business incentives, together with Progressive Energy, we are committed to undertaking the development and the financing of its construction.” February brought Essar’s announcement that it has joined forces with Fulcrum BioEnergy and Stanlow Terminals to create a new £600m facility which will convert non-recyclable household waste into sustainable aviation fuel (SAF) for use by airlines operating at UK airports. This project, Fulcrum NorthPoint, will create 800 direct and indirect jobs during the design, build and commissioning process and more than 100 permanent jobs during its operation. A spokesperson for Essar said: “Historically, Essar Oil UK has been a very profitable business that has attracted over $1bn in investment since its acquisition in 2011. It is a long-standing private company without public shareholders. “The global COVID pandemic has affected all refiners, with repeated lockdowns leading to reduced product demand and depressed refining margins. “We have successfully traded through a very difficult 12 months and are now seeing increased demand for road transport fuels and improving refining margins, which has resulted in increased throughput at the Stanlow Manufacturing Complex. “We are not a levered business and currently we do not have any short term or long-term bank debt on the company, other than working capital lines. “Prior to coronavirus, we were generating EBITDA in excess of $300m per year. We remain confident that we can manage through this period and come out stronger as the economy clearly continues to recover.”    

Further Reading

News

Leading industry company celebrates 50 years of innovation

This Spring sees OTS Group Ltd celebrating its 50th anniversary and, from its humble beginnings in 1971 in a farm cowshed to becoming a leader in the fuel industry, the company has never lost sight of its values.

News

CLH Group evolves to Exolum

Exolum is the new brand name chosen by the CLH Group, strengthening the identification of the company with its future aims, focused on adapting its business to decarbonisation and the energy transition, the digitalisation of activities and the fight against climate change. This rebranding is due to the need to adapt to the new environment and to transform the company itself, which, in addition to carrying out oil product storage and transport activities in Spain, has embarked on an international growth process and is now present in 7 other countries. The group has expanded its activity to the storage, management and transportation of liquid products, especially chemical products, operating in new sectors, such as eco-fuels, the circular economy and the development of new energy vectors. In recent years, the CLH Group has experienced a series of notable changes, mainly focused on sustainable diversification, both of the geographical areas where it operates and the services offered to customers, over and above hydrocarbon logistics. Therefore, it became necessary to renew the brand and align it with this new era of the company. “We want these initiatives for diversification and adaptation of the company to be aligned with the new challenges of the sector with a change in our corporate identity that reflects our growth and leadership,” explains Jorge Lanza, CEO of Exolum. “This brand reflects the transformation process that we are going through internally, to align with the company’s new business models and transmit our company values. These values are innovation and trust, reflecting the open and flexible way that we face the future, promoting new business opportunities committed to the development and sustainability of the planet.” The new name, simple but modern, shows a spirit where innovation is the key. The brand is easily recognised in any language and the company will use this one name for all its business, both in Spain and six other countries where it currently operates (UK, Ireland, Germany, Netherlands, Panama and Ecuador – in Oman, it will continue to operate with the joint venture OQ Logistics), thus reinforcing the global identity of the group and creating a great brand that is sound, international and unifying. With Exolum, the company sets itself a challenge to maintain the same level of recognition, extending it to the public at large, adapted to meet the aim of the company: “We create innovative solutions to improve our world”.    

Opinion

Stick or Twist: oil services have crucial choices to make as energy transition accelerates

Oil services companies can no longer delay making a choice on their future direction according to the latest report from PwC Strategy&, called ‘Time to Choose’. The options are to stick with their hydrocarbon heritage; becoming ultra-efficient and digitally enabled or pivot towards low carbon growth opportunities such as offshore wind or carbon capture, using hydrocarbons as the cash generating engine to fund this transition. ‘Time to Choose’ states that a perfect storm of COVID-19, increasing public scrutiny and the growing momentum of Environmental, Social and Governance (ESG) factors influencing investor and buying decisions, has accelerated the pace and impact of energy transition in many regions. According to the report’s respondents, many oil services companies already recognise the need to transform in order to better align with their customers, with some helping to set the pace of decarbonisation alongside major players. Transformation influences Low carbon credentials could become an area of significant competitive advantage. The report highlights how oil services companies can increasingly showcase their decarbonisation credentials as a means of securing tenders. Some respondents also mentioned increasing pressure being brought to bear by some majors who are keen for supply chain decarbonisation credentials to help support their own strategic direction and licence to operate. Where firms operate can also influence the pace of transformation. As governments around the world respond to the pandemic, fiscal stimulus packages have been developed with many countries looking to use this pivotal moment in time to stimulate a green recovery to ‘build back better’.  For those companies with a major footprint or head office in Europe, energy transition and ESG themes are likely to be much higher up the corporate agenda than other regions, such as the Middle East, which will see hydrocarbons retain their importance as a focal point. Drew Stevenson, PwC’s Energy, Utilities and Resources leader, commented: “We believe the oil services sector has a significant contribution to make in the UK’s energy transition journey. “From engineering expertise and innovation to project management and global operational scale, these businesses have a golden opportunity to not only channel this capability into market leading credentials that will be in-demand globally, but to play a role in shifting the conversation about how this industry fuels and sustains energy and employment into the future.” Decarbonisation driven by digital technology, deals and diversifying skills In many ways COVID-19 has accelerated the need to adopt and deploy digital solutions. Given the physical impact of coronavirus on the workforce, companies in the oil and gas sector have been forced to increase automation and use of digital technologies, such as remote controlled vessels and robots to inspect underwater pipe networks and conduct maintenance scans of industrial complexes. Needless to say, while digital offers great potential for efficiency gains in the oil services segment, in the short term at least, it will be balanced against tight cost control. As a strategic imperative, investment in digital solutions cannot be cut off. M&A is another means by which energy transition could be accelerated, with complimentary skills, technologies and credentials likely to be highly sought after as entry points into new markets.  Premium valuations are already evident for renewable-facing businesses. The availability of finance will probably also be a driver of this transition. As for the transferability of skills between oil and gas and low carbon, this is not always easy or evident. All oil services companies have core capabilities in particular areas – some may have skills that are transferable while others may struggle. Have you selected a strategic pathway that will allow you to flourish in an increasingly volatile trading environment? Let us know.    

News

Sister company EL Oils strengthens family business Halso Fuels  

With a brand-new website and the introduction of a sister company, Halso UK Fuels Ltd continues its exciting journey from modest beginnings to a thriving business recognised as one of the country’s experts in petroleum, gas & oil supply and distribution.  Progressing from its launch in a caravan in 1967 through the wooden huts which still exist to the current modern offices it has always been renowned for excellent customer care and service which remain second to none.  Supplying fuels to industrial, commercial and domestic customers, this family run business is now in its third generation. Emma Osborn-Wilkes, granddaughter of founder Sid Osborn, is managing director of both Halso and its new sister company EL Oils which has been trading in some capacity for the last 50 years.   Emma commented; “We still supply fuel, oils and lubricants to our local farmers and domestic, residential customers but now we also service commercial clients nationwide.   “It was little over 12 months ago we decided to diversify, offering our lubricants, oils and greases under our sister brand EL Oils. We find this to be a much cleaner way of showcasing our varied product portfolio.”   Emma continued; “Halso continues to be our brand for fuel management and distillates, and EL Oils offers our additional products, as well as services including tank cleaning, oil changes and tank monitoring.  “EL Oils, like Halso, is a very proud family business with high standards offering a personal service to all customers. We want to seamlessly support all of our commercial or domestic clients with their fuel, oil and lubricant needs. It’s our job to power your business and home.”   

News

A change in direction for Thomas Silvey

Following an extensive review of Mabanaft’s UK-based companies – Mabanaft Limited, BWOC and Thomas Silvey – the latter is now focusing on fleet solutions. This change sees the Mabanaft OnRoute fuel card division being merged into the existing Silvey Fleet business.

News

Diversifying into truckstops

In a deal completed on 31st January, Mabanaft Ltd has acquired Avon Lodge, one of the UK’s top-tier independent truckstops.  The transaction highlights Mabanaft’s strategic commitment to developing a network of truckstops across the country, offering drivers and companies good-value, high-quality truckstops outside of those owned by the oil companies and large group networks.

News

Major rebrand for Scottish Oil Club

The Scottish Oil Club has announced a relaunch, with a new name and refreshed branding that better reflects its role as a discussion forum for professionals from across the energy sector.

News

Mabanaft acquires Junction 29 Truckstop

Mabanaft has acquired Junction 29, one of the UK’s top-tier independent truckstops.  Completed on 5th August, the deal marks Mabanaft’s strategic commitment to developing a network of truckstops across the country, offering drivers and companies good-value, high-quality truckstops outside of those owned by the oil companies and large group networks.

Interview

‘More energetic, representative and visible’

Guy Pulham, who has succeeded Mark Askew as CEO of the Federation of Petroleum Suppliers, is seeking ‘greater engagement of members, Government and other trade associations’ Earlier this month Guy Pulham started his new role as chief executive officer (CEO) of The Federation of Petroleum Suppliers (FPS). 

Interview

Taking a different approach

Speaking to many fuel distributors in Ireland recently, the most frequently used word to describe the current market was ‘challenging.’ “It’s been a tough year to date,” said Donall O’Connor, managing director of online distributor www.ValueOils.com based in County Antrim.  “Customers are trying to extract the best price for everything – including their oil – and at the same time they’re also buying lesser quantities.  On top of that, oil is less attractive for heating and gas is making significant inroads.” FON asked distributors what they were doing to tackle the tough times and to ensure their business survives, and even thrives. Be prepared “We spend a lot of time preparing the company for the busy periods, so that when they arrive we’re in the best position to take advantage of opportunities,” added Donall. “Being web-based, we have a lower cost structure; 99% of our orders are online. That means we can compete at the sharper end of the price strategy, and offer a more attractive deal.” “We introduced a budget prepayment scheme following customer feedback. While we don’t offer credit, customers can choose to put an amount on a card each month, and then just pay the balance when the bill comes in.” Stay positive Agreeing that customers are increasingly price focused is Gordon Halnon, of County Wexford-based Gordon Halnon Oils.  “You can lose a customer for the sake of €10 here or there. Service is much less important to them. “It’s extremely competitive but important to stay positive. Hold onto your customers as best you can – the market will get better eventually and we all want to be there when it does!” Reward customers and staff Another distributor spoke about benefits now being offering to customers and staff. “We incentivise staff with new account and upgrade bonuses, and seasonal prizes – last year’s was a 42-inch television; this year we’re offering free iPads for the highest upgrade to our premium kerosene. “When they purchase 700 litres or more of heating oil, customers are being offered 10ppl off their next fill of petrol/diesel from one of our retail sites.” However, this distributor emphasised that the biggest way to safeguard business was to protect reputation. “Deliver on promises, be fair and do the right thing when situations arise.” Diversify Brian Uprichard, who owns Armagh-based Brian Uprichard Fuels, said: “We diversified about a year ago and acquired a petrol station.  As well as added sales from petrol, we also have a kerosene pump for heating oil. For those who might be struggling, it’s a way to budget for small amounts of oil at a time. “We’ve also put a PayPoint logo in the shop, so when customers come in to pay for petrol they see the logo and ask about the delivery business.” Brian’s last piece of advice is the easiest to implement.  “Get down on your knees and pray a lot!”