OIL giant Royal Dutch Shell is still locked in talks with a possible India-based buyer of its refinery at Stanlow in Cheshire.

Negotiations between Shell and Essar began in October last year over a possible sale of Stanlow and two German refineries.

Stanlow employs 900 people and processes 233,000 barrels of oil a day. Shell plans to sell about 15% of its global refining capacity, or about 600,000 barrels a day, in the next few years as part of a restructuring program aimed at improving profitability and efficiency.

Essar chairman Shashi Ruia,  said: “Negotiations are going on with Shell.” Shell confirmed this in a statement.

Shell said yesterday it would cut another 1,000 jobs this year after reporting a 69% slide in annual profits to £6.1bn.

The Anglo-Dutch firm also reported a steep drop in fourth quarter earnings – down 75% to 1.18 £738m – after pressure on margins in refining offset a year-on-year increase in oil prices.

Shell has cut 5,000 jobs in the past year and said it will remove another 1,000 in 2010 – mainly in downstream and corporate functions – to make it more competitive against rivals such as BP.

BP has moved ahead of its rival after chief executive Tony Hayward stripped costs out of the business and improved the group's refining performance.

The gap was highlighted earlier week when BP said fourth-quarter profits rose 33% to £2.16bn.

Shell chief executive Peter Voser said his company was making “good progress” in its efforts to become more efficient.

“We have reduced complexity in the company, and our new organisation, announced in July 2009, is now fully up and running,” he added.