Mumbai: The Essar Group, the owner of India's second-largest non-state refinery, plans to buy Royal Dutch Shell's Stanlow plant for about $350 million (Dh1.29 billion), two people with direct knowledge of the matter said.
A preliminary announcement giving Essar exclusivity in the discussions may be made this week, one of the people said, asking not to be identified before a final agreement is reached. The Indian company may pay $150 million initially and the remainder later, the other person said.
Stanlow, the second-largest UK refinery, can process 233,000 barrels of oil a day.
Reduced demand
The Essar Group, controlled by billionaire brothers Sashi and Ravi Ruia, is targeting one million barrels a day of oil processing capacity by expanding its Indian plant, operated by Essar Oil Ltd, and buying refineries in Europe and Africa. Shell put up 15 per cent of its refining capacity for review after the global recession reduced fuel demand and has been in talks with Essar for more than a year.
Essar Oil shares gained as much as 2.6 per cent to 114 rupees and traded at 112.80 rupees at 2:29 p.m. in Mumbai. The benchmark Sensitive Index climbed 1.2 per cent. Shell rose as much as 0.8 per cent to 2,163 pence.
