Essar Oil UK, part of the Essar Group, has acquired a number of U.K. assets from oil giant BP, as part of efforts to strengthen its distribution and logistics network, even as the company seeks to increase its presence across a number of markets here.
The assets include an equity stake in the UKOP north-to-south pipeline — a 200-km-long multi-product pipeline that connects the company’s Stanlow refinery to the Kingsbury oil terminal. It has also acquired an equity stake in the joint venture that runs the terminal as well as a 100% stake in the Northampton fuel storage terminal. The value of these deals comes to about ₹800 crore, according to sources.
Essar Oil UK, through its two wholly owned subsidiaries, namely Essar Midlands Limited and InfraNorth Limited, will acquire the BP Plc. assets. The UKOP pipeline is BP Plc.’s joint venture with Shell. The acquisitions are part of the company’s efforts to strengthen its position in the U.K.’s highly competitive Midlands region and to expand its footprint there.
With these acquisitions, Essar’s total investments in the U.K. now stands at $1 billion since the company bought the Stanlow refinery in 2011.
“Essar continues to have great faith in the U.K. market, which represents an important part of the group’s strategic business growth ambitions. The acquisition of these BP assets further demonstrates the company’s ongoing commitment to investing in and growing their businesses within the United Kingdom,” Essar Oil UK chief executive S. Thangapandian said. The company currently supplies 16% of the U.K.’s transport fuel demand and the acquisitions will enable it to further improve its competitiveness, he said.
He said that the company would continue to look for further acquisitions in the U.K. that met the requirements of adding long-term value and complementing growth plans. The company is also expanding its presence in the U.K. fuel retail market, with plans to grow its network to 400 sites over the next five years.
Retail expansion
There are already 67 Essar-branded U.K. retail sites across England and Wales – some of them supplied by the terminals that Essar has acquired stakes in. It has also been ramping up its presence in the supply of aviation fuel, both through wholesale supply to major U.K. airports, as well as direct supply to a number of airlines.
Essar will continue to look for opportunities to expand inorganically, provided the acquisitions are long term value-accretive and complements Essar Oil UK’s growth plans, Essar said.