News 72
Creating destination sites – Rontec’s ‘Shop n Drive’ brand sells its own ‘Eat Me’ food range
Having merged his two petrol retailing businesses – Snax 24 and Rontec – chairman Gerald Ronson has created one of the UK’s largest roadside retail businesses.
Over the last 12 months Rontec has made acquisitions totalling over £100 million pounds.
Based on delivery of 250 million litres of fuel per year and with a potential value of £1 billion over five years, the enlarged Rontec group has also entered into a five-year supply deal with BP.
Snax 24’s 44 sites have been added to Rontec’s 166 sites creating a business with 210 stations, including two motorway sites, and total combined sales per annum of around £1.5 billion; the majority of the enlarged group’s sites are freehold. The group, substantially all of which is owned by Gerald Ronson and his family and charitable trusts, will operate under the Rontec name, is based in Watford, and provides employment for 2,500 people nationwide.
“Having opened our first petrol station in St Albans in 1966 and developed nearly 1,000 in the UK since, this is a business we’re passionate about,” said chairman Gerald Ronson CBE, who pioneered self-service petrol stations in the UK.rontec.com
Firstly let’s get the partisan stuff out the way. Portland strongly believes that Britain is “Better Together” and sincerely hopes that Scots vote to stay part of Great Britain on September 18th. This view is partly forged from a lifetime of summer holidays on the West Coast of Scotland (42 summers and counting) but also based on a career that over the years has resulted in many periods “North of the Border”.
The politics of independence is the usual ding-dong affair between Nationalists (pro-independence) and Unionists (anti-independence), but when it comes to the economics of independence, the subject of oil is never far away. Over the last 18 months, the Nationalists have done their upmost to paint a picture of an independent Scotland where oil is only part of a balanced economy made up of manufacturing, technology and financial services. But the facts would say otherwise. In 2012, the Oil & Gas industry (crude oil, natural gas and refined products) accounted for over 50% of Scottish exports and without the sector, Scotland would be running an annual budget deficit in excess of £20bn. Scottish Independence and oil are inextricably linked and it is no coincidence that nationalism only really came into the popular Scottish psyche in the early 1970s, when North Sea oil had just been discovered and the slogan “it’s our oil” began to get traction.
Back in October 2013, we looked at the downstream oil industry in Scotland (Grangemouth strike, Compulsory Stocking requirements) and that was complicated enough, but the issues around North Sea Oil make the downstream industry look like child’s play. Firstly there is the thorny issue of who the oil belongs to. Depending on which boundary lines are used (fishing regulation, maritime law, UN demarcation or ancient legal frontiers), most experts agree that around 75% of North Sea oil lies in Scottish waters. But this seemingly simple measurement ignores the fact that British government money was used for the initial geological surveys, British tax incentives were used to incentivise oil company investment and British government grants were used to build the offshore logistics structure that runs from Montrose up to Peterhead. Nor does the 75% figure take into account that much of the oil sits off the Shetland Islands and the Shetlanders have a very different view of independence to their mainland counter-parts. They also have used their oil royalties to create a mini-Sovereign fund that they are hardly likely to cede to a newly formed Scottish government (they haven’t yet handed it over to the British government in 30 years of asking!). And finally, when commentators talk about North Sea oil what they really mean is North Sea Oil & Gas and rightly so, because most energy forecasts predict gas demand comfortably outstripping oil over the next 50 years. But when it comes to gas, the tables are turned as circa 60% of North Sea gas sits in English waters.
Nonetheless, oil and gas proceeds still sit at the heart of the Nationalist plan and high levels of ongoing tax revenue will be crucial if they are to create the society (some say utopia) that has been set out in their referendum manifesto. Scotland already spends about £3,000 more on its people than any other part of the UK and post-independence (according to campaign promises), that figure is to increase so that public spending per head will be circa 25% more than in England, Wales and Northern Ireland. No wonder the vision presented by the Nationalists is so popular amongst the less well-off!
This extra money can only realistically come from the North Sea and here the Nationalists have made some pretty risky assumptions on oil prices. But the truth is that income from oil can never be guaranteed and no prudent government would sensibly rely on roller-coaster oil prices to build a new nation state. In the first 5 years of Scottish Independence, it is totally feasible that the world could be faced with another financial crisis and oil prices could plummet to below $50 per barrel. It has happened in the very recent past – in 1999 oil prices were $15 per barrel, in 2005 they were at $50 and at the end of 2008 oil prices were $35. If these events happened again for anything other than a short period of time, then the economics of Scottish Independence would be utterly blown out of the water.
That being said, Portland has long maintained that oil prices will remain high and will even go higher as the world’s population grows. So it would be insincere of us to argue against the pro-independence position on oil prices, however risky they may seem based on historical precedent. What is far more reckless is the Nationalist position on future North Sea production levels. In 2008-09, tax revenue from North Sea Oil was £12bn, but by 2012-13 and with oil prices still high, revenues had dropped to £6bn. All industry predictions show declining production going forward – irrespective of the price of oil – so when the Office for Budget Responsibility (an independent body) predicts tax revenue of £3bn by 2016-17 and the Nationalists predict $7bn, something is amiss. Plus if the oil fields are nearing the end of their working lives, then consideration has to be taken of the massive costs (billions) involved in the environmental remediation and decommissioning of exhausted oil fields – the cost of which one assumes will fall to the newly created Scottish State.
That North Sea oil will provide a nascent Scottish state with tremendous economic clout is without doubt. But overwhelming reliance on a declining industry, in a sector as fickle as energy is a dangerous game indeed. And take a perfect storm of low oil prices, reduced production and spiralling decommissioning costs and you can kiss goodbye to increased public spending, let alone the proposed idea of a rapidly endowed Sovereign Wealth fund (a la Norway). Yes, there is enough oil to ensure that an independent Scotland would not be the economic disaster that some have claimed, but equally nor will an independent Scotland be the economic panacea that the Nationalists claim. In fact the pro-independence groups have been disingenuous in presenting the offshore industry as a stable and non-shifting entity – something it is blatantly not. With a fair wind an independent Scotland could sail a clear course to prosperity, but if those winds change and oil prices drop, investment in the North Sea dries up and the moth-balling process begins earlier than expected, then it is neither scare-mongering nor propaganda to suggest that periods of serious economic stagnation will be the result.
On Friday 26th June, State Oil announced that it had successfully completed the acquisition of Harvest Energy and Harvest Energy Aviation.
Under the terms of the agreement, the companies will be owned by the current shareholders of State Oil.
The enlarged group expects that its annual sales volume will represent a 15% share of the UK’s road fuel demand. The activities of the merged companies will be separated with sales and marketing performing under the Harvest Energy brand and the remaining businesses, including terminal management and cargo trading operating under the Prax marque.
Headquartered in Weybridge UK and with a trading office in Zug Switzerland, the State Oil group is a leading independent trading, storage, distribution and retail conglomerate dealing in petroleum products and biofuels. It has substantial syndicated banking facilities which provide a platform to support the group’s national and international ambitions.
State Oil’s managing director Sanjeev Kumar said: “These acquisitions bring together strong and complementary companies that will create a major UK downstream business with a strong brand which will benefit our customers and allow us to compete on a truly national scale. I am very much looking forward to leading the enhanced group. I would like to take this opportunity to thank our banks and professional advisors for their energy and tenacity which ensured the successful consummation of this transaction.” www.praxpetroleum.com
Essar Oil UK’s Stanlow refinery, which has reported ‘strong results and healthy financials’ produces approximately 15% of UK transport fuels, including three billion litres of petrol, 3.5 billion litres of diesel and two billion litres of jet fuel per year
Essar Oil UK has agreed new long term working capital facilities to ‘plan for the long term growth ’of its Stanlow oil refinery in Ellesmere Port.
The Inventory Monetisation arrangement with J. Aron & Company covers the supply of crude oil to Stanlow and replaces a similar agreement with Barclays Bank Plc, who are exiting the global commodities business.
Under the new five year deal, J. Aron will provide inventory management services in relation to approximately 5.8 million barrels of crude oil and petroleum products at Stanlow. Management of customer relationships and of product sales processes remain with Essar Oil UK.
In addition, a previous invoice discounting receivables financing arrangement has been replaced with a new three year £300m ($475m equiv.) Receivables Securitisation arranged by Lloyds Bank Plc.
Essar Oil UK chief finance officer, Sampath P, commented: “I’m delighted we have the funding in place to plan for the long term growth of our business. The arrangements give both operational and planning flexibility and will help us continue to deliver an excellent level of service to our customers.”
Chief executive Volker Schultz said: “I’d like to thank Barclays and ICICI for their support over the last few years and warmly welcome J. Aron and Lloyds as our new banking partners. We can now look ahead with renewed confidence. Stanlow is running very successfully and competitively as a single train highly optimised refinery, while ongoing projects to further improve margins will see us making further significant investment to unlock even greater value.” www.essar.com
The remaining refinery demolition on the former Coryton site is due to be completed in 2016. A 403-acre plot on this regionally important industrial development site is now up for sale
Up to 403 acres of land at Thames Enterprise Park is being offered for sale for industrial development by Vopak, Greenergy and Shell, the joint venture partners in the Thames Oilport project.
A further 12 sites have joined the JET network including one owned by north of Scotland distributor Simpson Oils.
Among the latest wins are sites in Thurso, Gloucestershire and Grimsby with nine new sites in the north east thanks to a deal with KSC Worldwide. The latter sees a multi-million litre volume deal for its nine Teesside and County Durham sites which are a mixture of smaller community-based and larger high volume traffic sites on main routes.
Expanding its north east presence
“JET offered us a competitive deal,” said KSC finance director Chirayu Patel.
“Combined with the refinery down the coast offering a secure and flexible supply, it gave us confidence that JET was the right choice for us. Our sites have been quickly and expertly rebranded and we’re predicting a very successful future with JET!”
“We’re very much looking forward to a long and prosperous relationship with KSC and to further expanding our brand in this key region,” said Carl Smaller, JET’s territory manager Immingham north & east.
Simpson Oil goes with JET
JET has also secured its most northerly Scottish site, Ormlie filling station in Thurso; a site owned by Simpson Oils, a longstanding wholesale customer of Phillips 66.
Hugh Simpson, director of Simpson Oils, commented: “We knew we had to choose a really strong fuel brand to compete with the two other forecourts in Thurso. With its competitive pricing, JET was simply the best solution for our local customer base. As a Phillips 66 wholesale distributor for over six years, choosing JET as our fuel brand also feels like a natural progression. We know the company very well and have an excellent working relationship. Security of supply was also a key factor in our decision-making process.”
Also in Scotland the JET brand has recently resigned a contract with Springburn Service Station in Glasgow – a 48 nozzle site and the largest site in JET’s Scottish network. Co-operative Food also chose JET following a £5 million programme of investment to overhaul its Aberfeldy filling station and supermarket. So far this year, four new JET sites have joined JET’s Scottish network, with four others committed to join in the coming months. The network now spans from Newton Stewart in Dumfries and Galloway to Thurso in the Highlands.
JET has also agreed a retie deal with the country’s largest independent dealer MRH (GB) for eleven existing JET branded sites and has also secured an additional MRH site in Grimsby. The sites span from York to London and will all be rebranded in JET’s latest image throughout June and early July. www.phillips66.co.uk/EN/jetbrand
Volvo Trucks has now approved the use of hydrotreated vegetable oils (HVO) in all its Euro-5 engines with unchanged service intervals. In September 2015, there will be a global type-approval for HVO in FL and FE Euro-6 engines with other engine variants to follow
After extensive field testing of the renewable synthetic diesel HVO (Hydrotreated Vegetable Oils), Volvo Trucks has approved the fuel for all its Euro-5 engines and are preparing certifications for Euro-6. The HVO performed the same as regular diesel, but reduced CO2 emissions between 30% and 90%
In 2013, Volvo Trucks started a field test together with Renova, DHL Freight and OKQ8 to see how the use of 100% HVO affected engine performance and components. The six field test trucks were equipped with Euro-5 engines and covered approximately one million kilometres in commercial service over a two-year period.
“The field test showed that the HVO works very well in our engines and can be used under the same conditions as regular diesel. It is also possible to freely mix diesel and HVO,” says Tobias Bergman, product manager for alternative fuels and hybrids at Volvo Trucks.
The positive results from the field test mean that Volvo Trucks has now approved the use of HVO in all its Euro-5 engines with unchanged service intervals. In September 2015, there will be a global type-approval for HVO in FL and FE Euro-6 engines and, in parallel, work is also underway to certify FM, FMX, FH and FH16 engine variants.
“The fuel is suitable for all customers who want to reduce their CO2 emissions and we see no restrictions regarding the type of transport or business. Combining HVO with the low emissions of our Euro-6 engines will allow the environmental impacts of the trucks to be minimised,” says Tobias Bergman.
HVO is a synthetic diesel and is produced from renewable raw materials such as vegetable and animal fats, from rapeseed oil or abattoir waste, for example. The fuel can be distributed via existing diesel depots and uses the same type of tanks and pumps as regular diesel. HVO reduces CO2 emissions between 30% and 90% well-to-wheel, depending on the raw material.
“We believe in HVO’s potential and see an increasing interest from both customers and transport buyers. The major challenge is the availability of raw materials and refineries. We therefore hope that our investment in fuel will contribute to increased demand and that the HVO can be used in many other parts of the world in future,” says Lars Mårtensson, director environment and innovation at Volvo Trucks. www.volvotrucks.com
“We can now look ahead with renewed confidence,” said chief executive Volker Schultz
Last week the owner and operator of the Stanlow Refinery filed financial results for the year ending March 31st 2015 and announced the agreement of new long term working capital facilities.
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 millionMeeting 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.”
“We’re already working towards providing tests on another sample we have received from the ASTM and will be submitting that before July,” said Phil SaundersPicture by www.edwardmoss.co.ukAll rights reservedMorris Lubricants
The American Society for Testing and Materials (ASTM) has given its seal of approval to the laboratory testing procedures of Morris Lubricants.
The Shrewsbury-based company signed up for the ASTM’s engine oil proficiency testing programme, a statistical quality assurance test which enables laboratories around the world to assess their performance in conducting test methods.
Along with other leading laboratories around the world, Morris Lubricants received a sample from ASTM to examine; each laboratory tested the sample and their results were assessed against ASTM’s benchmarks. Tests undertook included base number, density, colour, viscosity, cold crank simulator, open and closed flash points and pour point.
Quality assurance manager Phil Saunders said the hugely positive results represented another significant step towards the business becoming the first ever lubricants manufacturer to secure the UKAS ISO 17025 accreditation for laboratory quality.Thorough and rigorous
“Our testing has always been extremely thorough and rigorous,” said Phil.
“The results we received from the ASTM confirmed that and ensures we’re at the very highest level in terms of our testing procedures in the lubricants industry.
“We submitted tests across a wide spectrum of different areas and we will continue to expand the number of tests we submit to ensure we have assurances across every test method performed.
The ASTM results come on the back of Morris Lubricants investing around £200,000 in new equipment to ensure its products remain at the very highest standard.
The company purchased a new automated open flash point machine, a top-of-the-range density meter, a new Karl Fischer to measure trace levels of water, a low temperate Brookfield viscometer and a high temperature high shear simulator. www.morrislubricants.co.uk
Gulf Aviation – now fueling a private charter service from Leeds East Airport
Gulf Aviation has been selected to supply fuel to the recently rebranded Leeds East Airport, near Tadcaster, North Yorkshire; the home of private aviation service provider, Makin Air.
Nestled between the affluent cities of Leeds and York, and easily accessible from the A1(M) and M62, Leeds East Airport is located on the former RAF Church Fenton base.
Yorkshire entrepreneur Chris Makin acquired the site in December 2014, with the aim of providing a new location for airlines and flying clubs requiring a base in the north of England. Makin has long-term investment plans for Leeds East, with a view to developing the airport into a hub for air travel in the north of England.
In May 2015 Makin Air (owned by Chris Makin) launched its private charter service from Leeds East Airport. The airline offers a luxury, stress-free travel alterative to London or other southern cities. The launch event was held in the airport’s refurbished hangar supported by Bentley, Ginetta cars and Gulf Aviation with the Gulf Aston Martin racing car.
To entice customers to trial this service, Makin Air has invested in a new HondaJet and an executive Agusta helicopter to provide a personalised doorstep-to-destination service. For those seeking that extra bit of indulgence, Makin Air also has use of a Learjet which offers executive trips further afield. Currently perceived to be a service for the wealthy, Makin Air aims to offer a charter service to London City airport with prices competing with first class train travel.
“This is an exciting opportunity for Gulf Aviation to be involved with this venture from the offset,” said head of aviation Alex Murphy.
“Chris Makin has big plans for his Makin Air service and the airport itself. With a luxury business offering such as the service from Makin Air, the airline needs to be supported by a fuel supplier able to provide a bespoke, flexible service, which is why they selected Gulf Aviation.”
Gulf Aviation supplies the 450-acre two-runway, site with Jet A1 fuel via two on-site refuelling vehicles. In future, Gulf will also supply Avgas. aviation.gulfoil.co.uk
Steve Gillingham
Steve Gillingham, principal engineer – safety, dangerous goods division has updated Fuel Oil News as to the progress of the government’s supplementary research on the tankers manufactured by GRW Engineering.
“The further work by the Department for Transport (DfT) to establish acceptance criteria for the circumferential welds of GRW tankers built after the middle of 2010, which could allow these tankers to continue in use for up to 12 years after entering into service, has been suspended as neither GRW, nor any other interested party, chose to undertake the necessary related work on manway flanges and bottom nozzles.
“This means that it will not be possible to allow the use of these tankers to continue beyond 31st December 2015. In the meantime, as originally planned, GRW tankers built before the middle of 2010, and still in service, are to be withdrawn by 30th June 2015 or when they have been in use for six years, whichever is the sooner.
“DfT has notified owners and operators of the situation and GRW is supplying new replacement tankers that have been certified as ADR compliant by a different tank inspection body.”
The DfT work to further assess the end dish to extrusion band joints is not affected by the suspension and is expected to be available soon.
See also the Tanker Knowledge feature in the February 2015 issue of Fuel Oil News.
Mark Askew – hopeful of a change in policies relating to the off grid sector and in particular the oil heating industry
The Federation of Petroleum Suppliers (FPS) is looking forward to meeting of the new energy & climate change secretary, Amber Rudd and her team.
“There are important issues relating to the oil heating industry and the off grid energy sector which we want to discuss,” said chief executive Mark Askew. “In particular looking at ways in which we can work together to tackle fuel poverty.
“The new government and a new energy & climate change secretary present a great opportunity to make the necessary changes to home heating policies.
“With the previous government, the policies simply didn’t work. The Green Deal put people off because of the prospect of debt; the Renewable Heat Incentive (RHI) policy was unaffordable for many; and the Green Deal Home Improvement Fund excluded oil condensing boilers.
“By working with Amber Rudd on the issues that really matter to the oil heating industry, we feel positive that we will be able to help ensure the sector is better recognised in policies under the new regime.
“It’s time for change. We’ve had a change of government and now we are hopeful of a change in policies relating to the off grid energy sector and in particular the oil heating industry.”
“There are currently one million homes in rural England, Scotland and Wales, and almost half a million homes in Northern Ireland, heated by oil. It has been suggested that up to an estimated 80% of them are in the lowest energy rating with efficiency bands of F or G,” added Mark.
“This means these boilers are inefficient and cost more to run than modern condensing boilers. With a substantial number of inhabitants living in rural fuel poverty, we urge a change in government policies to incentivise the replacement of old and inefficient boilers in these houses with modern condensing boilers which are far cheaper to run and give off much less CO2.
“Steps need to be taken to make homes more energy efficient, including a policy to improve the insulation of UK homes and making the reduction of fuel poverty and carbon emission the same goal.”www.fpsonline.co.uk
Pete George will retire at the end of September 2015
Having started his career with Conoco in the routing office at Immingham 45 years ago, Pete George, now managing director of UK & Ireland marketing at Phillips 66, is to retire.
Pete’s career began in 1970 when he began taking orders from customers and allocating work to what were then the company’s in-house drivers.
In the course of his career with Conoco, ConocoPhillips and Phillips 66, Pete has had 14 different roles in several locations. In addition to Immingham he has also worked in London, Slough, Manchester, an 18 month training stint that included Kingsbury, Cliffe (Kent), Tyneside and London, back to Immingham, Harrogate, Warwick, Brussels and then Warwick again!
Speaking about the variety across his 14 roles Pete said it had been a joy getting to know the company’s customers.
“Our customers have diverse backgrounds and businesses and it has been a joy getting to know them and building relationships over the years.”
Asked what he hoped would be his legacy, he added: “An organisation that has a great attitude towards getting things done efficiently by helping and supporting each other.
“No egos, no politics – that’s what our customers demand and they are the reason we are here.”
Mary Wolf will be taking on the role of managing director, UK & Ireland Marketing with effect from 2nd October 2015.www.phillips66.co.uk
Colin Levy is looking forward to “expanding the company‑owned retail forecourt position and to becoming a more prominent player in the forecourt industry”
Last month Colin Levy joined Certas Energy’s retail division as company-owned operations manager.
Based at the company’s Scottish head office in Larbert, Falkirk, Colin brings almost 20 years’ experience in the forecourt retail arena, primarily with BP and partner companies. Colin’s career saw him progress from store management to area management, covering stores in Scotland, North West and North East of England.
In his new position, Colin is responsible for maintaining the safety and operational performance at the 21 Gulf and Shell branded sites owned by Certas Energy across Scotland, while looking for opportunities of potential growth which fit in with the company’s strategy.
“I was drawn towards this role at Certas after learning about the ambition within the retail team and expansion plans for the business,” commented Colin. “I pride myself on the service I provide to customers and am always looking for ways I can improve customer service levels.
“I look forward to being able to help push the retail side of the business forward, with a view to expanding the company‑owned retail forecourt position and to becoming a more prominent player in the forecourt industry.”
“We warmly welcome Colin to our growing retail team,” said retail director Ramsay MacDonald. “Colin has a proven track record of driving improvements in store standards and performance. As Colin begins to embed himself in the business, we will be looking for him to utilise his experience and develop our business even further.”
Certas Energy currently delivers fuel and lubricants to over 1,200 independent and dealer forecourts across the UK.www.certasenergy.co.uk
Senior advisor to CD&R Funds, Sir Terry Leahy is joining the MFG board
Private investment firm Clayton, Dubilier & Rice, (CD&R) will be partnering with the Motor Fuel Group (MFG) to acquire the company from its original institutional investor, Patron.
Former chief executive of Tesco and current chairman of B&M European Value Retail, Sir Terry Leahy is a senior advisor to CD&R’s Funds.
The transaction, which is valued at approximately £500 million, is expected to close in July, subject to customary regulatory approvals.
The MFG management team, whose chairman is oil industry veteran Alasdair Locke, partnered with Patron in 2011 to acquire the MFG business and today, it is the number two independent petrol and convenience retailer in the UK.
Through a series of strategic acquisitions, Patron and MFG management have grown the company from 48 stations in 2011 to a current total of 373 stations operating under the BP, Shell, Texaco and Jet brands. In addition, MFG also operates a Murco-branded dealer network of more than 200 sites.
In April 2015, MFG was ranked 9th in a league table of Britain’s 100 private companies with the fastest-growing profits in the 16th annual Sunday Times BDO Profit Track 100.
Jeremy Clarke, managing director of MFG said: “We thank Patron for helping us to become one of the largest, most dynamic and profitable independent petrol and convenience retail operators in the UK and we are excited to be partnering with CD&R. The firm’s reputation for operational excellence and deep consumer and retail experience will be especially useful as we move the business forward to the next stage of profitable growth.
“We are also delighted that Sir Terry Leahy will be joining the MFG board.”
Marco Herbst, a partner at CD&R, commented: “We look forward to building on MFG management team’s success by continuing to accelerate the company’s transformation into a best-in-class petrol and convenience retailer.”www.cdr-inc.comwww.motorfuelgroup.com
Adler and Allan’s flood defence system, JBAR
Asset protection and PPM will be key messages from Adler and Allan when the company exhibits at the Facilities Show from 16th-18th June at London’s Excel.
The company is focusing on key areas affecting facilities managers – flood protection, planned preventative maintenance (PPM), asset protection and fuel services.
With the threat of flooding and associated damage to UK organisations still very much an issue, group marketing manager Alan Scrafton says the company is making sure that businesses have the appropriate plans and protective measures in place is key.
“This year, our stand will include a working model showing the benefits of having flood defences, such as our JBAR system. Visitors can see for themselves the positive impact flood defences can have, eliminating critical downtime in the event of an environmental disaster.”
In addition to providing advice in keeping assets in good working order through PPM, Adler and Allan will also be showcasing its range of protective coatings and linings, as well as fuel services available for facilities managers. Keeping fuel in top condition is a priority; the company also provides tank cleaning and polishing, on-site or at its dedicated laboratory.www.adlerandallan.co.uk
Latest industry figures show that heating oil prices are now 13% cheaper than mains gas to heat the average home.
According to the Sutherland Tables, a recognised independent source of data on comparative UK domestic heating prices, oil is now by far the cheapest of all the major heating fuels, costing just £930 a year to heat an average three bedroom home in Great Britain. This compares to an annual heating bill of £1072 for the same home on mains gas, the second cheapest option.
Comparing the equivalent heating costs for LPG and electric storage heaters – the other main heating methods used by off gas grid households – and oil remains vastly cheaper, currently coming in at 42.5% less expensive than LPG and 42% cheaper than electricity.
A renewed appreciation of the benefits of oil
Most experts agree that oil prices will remain low for some time and with the sales of oil condensing boilers up by 7% in the first quarter of this year compared to 2014 figures, it would seem that homeowners have a renewed appreciation for the benefits of oil.
Jeremy Hawksley, director general of OFTEC, said: “Oil prices have now fallen to their lowest point since autumn 2009 and are currently over £500 cheaper than when prices peaked in the early summer of 2013. This is great news for the industry and the UK’s 1.5 million oil using households.
“With prices forecast to remain low for the foreseeable future, we anticipate many households currently using LPG and electricity will consider a switch to oil. Making the change could save LPG users around £700 per year – or over £1,000 if their boiler is a standard efficiency model. Even allowing for the cost of a new oil boiler and tank, the move would provide considerable savings over the lifespan of the installation.
“The continued drop in oil prices is also expected to further dampen demand for the government’s domestic Renewable Heat Incentive (RHI) scheme. With cost remaining a key driver for most consumers, there is little incentive for oil-using households to switch to renewables, especially considering the high up-front costs of installing these technologies.
“OFTEC has called on the government to back a boiler scrappage scheme to incentivise the switch to high efficiency condensing boilers – for which there is clearly still a strong demand.”
www.oftec.org.uk
Manufactured by Ledbury Welding, the 10,000 litre SuperVault petrol storage tank with associated dispensing equipment is now on route to Fox Bay Village in the Falkland Islands.
The contract was awarded by Stanley Services, which provides fuel to both the domestic population of the Falkland Islands and the fishing fleet operating in the waters near and around the islands.
“This new above ground facility, which will be located alongside existing diesel storage facilities, will allow our customers on West Falkland to collect petrol by way of a self–service account in a very straightforward and easy manner and saves them having to store highly inflammable product in 205 litre barrels,” said Tom Swales, managing director of Stanley Services.
“We won this order against a competitive bid,” said LWE managing director, Kevin Powell.
“We believe that a deciding factor was the integrity of our SuperVault technology which has been designed to pass rigorous fire and multiple–hazard test requirements.
“The tank is self-bunded (in excess of 110% of the nominal capacity) to ensure secondary containment. Its design features a steel inner and outer tanks and the cavity is filled with a specially formulated cement-based, lightweight insulation.”
www.stanley-services.co.fk
www.lweltd.co.uk
The oil business must adapt to suit the needs of the millennial generation says Easy Oils.
The millennial generation – those born between 1980 and 2000 – marks a whole new brand of oil clientele.
“This generation works a little differently to its predecessors,” says Russell Bush of Easy Oils. “But, with the support of EasyOils you can make sure that your business is fully equipped to support this technological, fast-paced and flexible generation.
“The millennial consumer will expect to use online banking as their primary method of payment; to place orders from apps and smartphones and to be able to make instant contact with companies online.
An online SAAS company, Easy Oils offers a business software as a service which can be built into existing company websites without an unnecessary or complicated ‘add-on’ process.
“Your millennial customer can then make an order based on the most recent pricing parameters, with a range of delivery dates and payment options at the click of a button – simpler than ordering the groceries!
“Utilising cutting edge technology and software Easy Oils, which also offers oil-based websites and instant pricing systems, can design and construct a system to meet the needs of the next generation,” adds Russell.
www.easyoils.co.uk
Newly appointed FPS president, Duncan Grant intends ‘to use every opportunity and more to promote what is an incredibly hard working and conscientious industry’
On 22nd April 2015 Duncan Grant, Certas Energy’s customer sales and development manager, was appointed as the 31st Federation of Petroleum Supplier (FPS) president.
Formerly FPS vice president and regional representative for the West Midlands, Duncan Grant, who is based in Certas Energy’s Coleshill depot, takes over the presidency from Mark Nolan of Nolan Fuel Oils who has been president for the last two years.
Duncan brings extensive experience and expertise to the role having spent over 32 years in the industry with companies such as BP Oil, Kuwait Petroleum, Pace Fuelcare and now Certas Energy, one of the largest fuel distributors in the UK.
Commenting on his appointment, Duncan said: “As president I will be working closely with FPS chief executive, Mark Askew and the FPS team to support them in the day to day running of the organisation as well as being an ambassador for the industry as a whole.
“The oil distribution industry is facing some tough times, the growth of online ordering, buying groups and agents are changing the way our industry trades. Distributors who can’t adapt or embrace change may start to find life difficult. So, as part of my role, I want to ensure that the pros and cons of the different ways of purchasing heating oil are understood and communicated to both the industry and customers.
“Oil supply and availability, particularly at peak periods, also remains a significant threat. The FPS stock sheet is helping the government understand the issues and dangers. The threat of a stock out remains high but, during my time as president, I will ensure that our members are heard at government level.
“I also think that we must try to improve the image of the industry in order to repair the reputational damage, mostly undeserved, which has been attached to the sector in recent years. I intend to use every opportunity and more to promote what is an incredibly hard working and conscientious industry.
“The FPS is doing lots of exciting work at the moment and has been working closely with the Department of Energy & Climate Change (DECC) and consumer groups on different initiatives from the Buy Oil Early Campaign through to the launch of the FPS Surviving Winter Charity, which helps those in fuel poverty who receive heating oil with the help of local community foundations and their surviving winter campaign. We are hoping to expand on this initiative in 2015.
“The FPS is in a strong position to continue to represent the industry. It is important that all members of the FPS, whether they are large or small companies, feel that the FPS is addressing the issues which affect them, and this will always be a challenge for the future.
“At local level, all members are given the opportunity to share and contribute to all these relevant issues and I will continue to work closely with all our members both existing and new.” www.fpsonline.co.ukSEE THE JUNE ISSUE OF FUEL OIL NEWS FOR MARK NOLAN’S REFLECTIONS ON HIS TENURE AS FPS PRESIDENT
“Kinesis perfectly complements our existing fuel card offering and adds another tool to help customers manage their fleets more effectively no matter how many vehicles they operate,” says UK Fuels chief executive, Bill Holmes
Fuel card provider UK Fuels has boosted its offering to customers with the launch of Kinesis – a fully integrated telematics/fuel card management product with an ‘accessible price point’.
Channelling telematics data on driver and vehicle performance alongside fuel card usage information, Kinesis will provide fleet owners and managers with some of the most accurate MPG reporting available on the market.
Research conducted with over 4,500 fuel card customers found 8 in 10 (83.5%) cited cost as a major barrier to implementing telematics across their fleet. Although, over half have considered putting the technology in place to save fuel (57.64%), improve driver behaviour (66.67%) and enhance business productivity (65.97%).
Further customer consultation revealed a need for an integrated telematics system at a price point accessible to SMEs and businesses operating fleets as small as two or three vehicles. UK Fuels chief executive and founder Bill Holmes commented:
“Although use of telematics is becoming more and more widespread, there still seems to be a misconception that it’s only affordable for large fleets and businesses. Kinesis has been designed and developed to provide a cost-effective and streamlined system that will provide users with a host of benefits whilst saving time and reducing admin.
“Telematics data will be channelled through our existing Velocity online account management system and updated alongside fuel card data in real time so customers can log in and view up to the minute fleet activity from one central platform.
“Kinesis perfectly complements our existing fuel card offering and adds another tool to help customers manage their fleets more effectively no matter how many vehicles they operate.” www.kinesisfleet.comUK Fuels is part of Radius Payment Solutions Ltd, one of Europe’s leading fuel card management companies. Radius was established over 25 years ago and now has over 600 people located in 17 offices across Europe. Radius issues over one million cards per year and manages over 2.7 billion litres of fuel annually.
On 16th July 2015 the Energy Institute will launch its updated and substantially revised edition of the Model code of safe practice Part 15: Area classification code for installations handling flammable fluids, at a one-day seminar event in Manchester.
The Model code of safe practice (Part 15) for area classification publication is a key piece of process safety guidance, used globally across all industry sectors handling flammable fluids. The code presents a pragmatic and flexible approach to classifying installations into potentially flammable zones referred to as hazardous areas. It is referenced in the UK DSEAR approved code of practice, L138, as a key guidance document for the effective management of the risks associated with the potential ignition of flammable fluids.
At this one-day seminar delegates will hear from the contributors of the guidance, who will present the key technical changes of the fourth edition including: Ventilation, Mists, Frequency Data, and Consequence Modelling. Attendees will receive a free copy of this new edition of the guidance at the event.
Discount for Fuel Oil News’ readers
Fuel Oil News readers can attend this event at the discounted member rate when quoting ‘Fuel Oil News’ at the time of booking. Plus, delegates who book before the 12th June will receive a £50 discount on the full delegate fee.
For more information please visit: www.energyinst.org/ei15-seminar, or contact Francesca Ferrari at the Energy Institute: e: FFerrari@energyinst.org; t: +44 (0) 20 7467 7192.
Michael Sutton, chairman of the Suttons Group whose ‘presence, guidance and humour will be greatly missed’
The Suttons Group is sad to announce the death of its chairman Michael Sutton who died on 8th May aged 66 following a short illness.
The son of founder Alf Sutton, Michael has been chairman of the logistics and supply chain company since 1987.
Working in the business since he was 19, Michael held a number positions before succeeding Alf as managing director in 1978 at the age of 30. During his time Michael oversaw the expansion of the group into new markets and territories across the world.
Not satisfied with maintaining the company’s position as a leading road haulier, Michael significantly developed the company’s portfolio of services, which now serves the chemicals, gases, food and fuels markets across the supply chain.
Still very much a family firm, Suttons’ current CEO is Michael’s eldest son John Sutton. His youngest son Robert Sutton is the Group’s IT director, and other family members sit on the Group’s board. Together the family issued a joint statement:
“It is with deep sorrow that we announce the death of our chairman, Michael Sutton on May 8, 2015. He was a much-loved and respected leader, as well as a beloved father, grandfather and uncle. His presence, guidance and humour will be greatly missed.
“In the meantime, we would like to assure you that the family are determined to continue to run Suttons in the spirit that both Michael and Alf have done in the past.”www.suttonsgroup.com
Ben Carter, operations manager at Turners (Soham) receives his prize from Mabanaft’s marketing manager Martin Cook
Ben Carter, operations manager of Turners (Soham) Ltd and Brian Nelson, corporate sales manager of LCM Environmental were the winners of an iPad mini 2 in the ‘Guess the Price on MabaLIVE’ competition.
On each day of FPS EXPO 2015 participants were invited to predict the MabaLIVE ex-rack price for kerosene at Grays at a pre-specified date and time; the ones to guess closest to the actual price were the winners.
Martin Cook, marketing manager for Mabanaft said: “Turners is a long-standing partner of Mabanaft. They use MabaLIVE to track prices and buy fuel on a regular basis therefore Ben had a good appreciation of the oil market. Brian, on the other hand, doesn’t usually purchase fuel so he just took a guess and got it right! We’d like to congratulate both Ben and Brian on winning and hope that they enjoy many happy hours on their iPads.”
FPS EXPO is a key event in the Mabanaft calendar and the team felt that this was one of the best shows yet with a very up-beat and positive atmosphere. Martin said: “We felt sorry to bid farewell to Harrogate knowing that we would not be returning next year. That said, we are excited about ringing the changes, and look forward to seeing everyone at the new Liverpool Exhibition Centre in April 2016.”
For more information on MabaLIVE, Mabanaft’s free online price information and fuel ordering service, please call 0207 802 3300, email sales@mabanaft.co.uk or visit www.mabalive.co.uk.