Fears for future of Stanlow oil refinery amid urgent financing talks

Business

The owner of the vast Stanlow oil refinery in north-west England is in urgent talks about its future amid growing concern that it could be nearing collapse.

Sky News has learnt that Essar Oil UK, which bought the site at Ellesmere Port from Shell in 2011, has been in discussions for weeks about efforts to stabilise its finances.

Whitehall officials are said to have been alerted to the company’s deteriorating financial position, with crucial meetings said to have been lined up to take place next week.

Details of the company’s troubles were unclear on Friday, but an insolvency of the company behind the Stanlow manufacturing complex could have significant implications for the regional and national economies.

The site produces roughly one-sixth of Britain’s transport fuels – equating to 4.4bn litres of diesel, 3bn litres of petrol and 2bn litres of jet fuel.

It is an important part of the UK’s industrial manufacturing sector, directly employing more than 900 people, with an additional 800 on-site contractors and a further 5,000 people employed indirectly through the extended value chain, according to Essar Oil UK’s website.

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A source close to Essar Oil UK said the COVID-19 pandemic had depressed margins and impacted demand for its products, along with other refining businesses around the world.

It was unclear whether a direct request for financial assistance from the government had been made.

Stanlow was now seeing increased demand for road transport fuels, and the company remained committed to a sustainable future and aiding the UK’s decarbonisation agenda, the source said.

Sources said a number of executives and professional advisers had recently resigned from roles with the business, which is controlled by the Ruia family.

Stanlow has been beset by problems in recent months, with an unplanned shutdown in 2019 triggering a significant oil spill.

Essar Oil UK has been contacted for comment.

The Department for Business, Energy and Industrial Strategy said: “We do not comment on individual companies.

“The government has put in place a far-reaching package of support to help businesses across the economy during the pandemic, including the furlough scheme, loans and VAT deferrals.

“The government continually monitors fuel supply across the country to ensure the public do not see any disruption.”

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