Essar Oil UK has revealed that it has ceased importing any Russian products for processing at its Stanlow refinery.
In a trading update on the first quarter of its financial year (three months ending 30th June 2022) it stated: “In support of the UK government’s ban on Russian imports to be implemented by the end of this calendar year, Essar ceased importing all Russian products (including diesel) from mid-April. The company has successfully replaced any shortfall from this strategy by maximising indigenous diesel production as well as sourcing non-Russian diesel.
“Our objective continues to be to support the UK’s longer-term fuel security and resilience and do what we can to meet the needs of our customers in the face of tighter levels of supply. All crude processed at Stanlow comes from US, West African and North Sea sources.”
The company said trading in the quarter was significantly ahead of forecasts, driven by increased demand for locally produced fuel amid the tight global supply situation.
It stated: “This stronger financial performance has enabled Essar to improve its capital structure and strengthen its balance sheet. Essar’s overall debt levels for the current fiscal year are significantly less than 1x expected EBITDA, in line with our low leverage approach to capital structure. A stronger balance sheet also ensures we can deliver on our strategic objectives, in particular our low carbon agenda by investing in hydrogen production, carbon capture, biofuels and other similar opportunities.”
It also confirmed it had paid all historic Covid-related deferred tax payments in full.
The company said plans to build the UK’s largest hydrogen hub at Stanlow were on track and Deepak Maheshwari, chief executive officer of Essar Oil UK, said: “After a very challenging 18 months, we have made huge progress on all fronts in the first quarter of 2022/23. I would like to thank our people for their hard work, dedication and commitment in what has been an unprecedented two years for our business and the sector as a whole.
“Volumes are now largely at pre-Covid levels and we have been able to significantly strengthen our balance sheet and operating performance. We accelerated our support of the UK’s transition away from relying on Russian products and have ceased all Russian imports, while ramping up production of UK-made diesel.
“We look forward now with real confidence and a very clear strategy. We will be the UK’s first low carbon refinery supplying the fuels of the future, both in terms of low carbon processes for traditional fuels, and also biofuels and a huge investment into the UK’s hydrogen future. We are delivering on our strategy and securing the long-term future of this important facility.”