STANLOW oil refinery owner Essar Energy reported higher margins at its Ellesmere Port site today within its six month figures to September 30.
They showed a 97% increase in group revenues of approximately £8.42bn on the back of increased capacity and production at its Vadinar oil refinery in India, and at Stanlow.
However, after finance and other costs, the India-based group made a loss of £186m.
Naresh Nayyar, Essar Energy chief executive, said: “We have made good progress during the half year to improve margins at both our Vadinar and Stanlow refineries.
“At Vadinar we are capitalising on our new, higher complexity units by selling large volumes of high value diesel into India and have resolved all outstanding sales tax and related funding issues.
“Stanlow delivered a very substantial increase in current price earnings before interest, tax, depreciation and amortisation (EBITDA) on the back of a good operating performance and favourable market conditions.
“We have several further projects underway at Stanlow to deliver significant additional margin enhancements.”
He added: “The last six months has seen significant progress on our growth projects and the transition to becoming an operational energy business continues with the majority of our capex (capital expenditure) programme now complete.
“We are a very different company to the one that listed two and a half years ago with many of the key risks from that time now behind us.”
During the half year the Stanlow plant saw a current price average cost per barrel of oil of $8.03. which was a sharp increase on the $3.06 during the first eight months of Essar’s ownership of Stanlow from August last year.
During the six month period, Stanlow had a throughput of 39.2 million barrels, or approximately 5.2 million tonnes, of crude oil.
Essar said Stanlow had an operational EBITDA of £86.8m in the first half.
Progress continued with the implementation of Essar’s 100 day plan devised following the acquisition, with the objective of sustainably increasing refinery margins and profitability.
The installation of a natural gas supply to the refinery, to provide fuel for the site’s six boilers, is now complete, with the a kilometre, 12 inch, pipeline installed and refurbishment of the six boilers almost finished.
This project will be fully completed in the near future, allowing the benefits of lower emissions and more flexibility in choice of crude oils to feed through to margins.
The group said it continue to broaden the range of crudes processed at Stanlow.
During the half year it introduced three further lower cost opportunity crudes, taking the total number of additional crudes introduced since acquisition to 11.
Management’s objective is to add more than $3 per barrel to margins within the next two years at Stanlow aimed at ensuring the refinery is net cash positive, even when market conditions are at the bottom of the cycle and will provide attractive returns through the market cycle.
Throughput is expected to continue at around 75 million barrels per year, excluding turnaround periods.