Essar Energy has made a $1.3bn offer to buy Shell’s 272,000bpd Stanlow refinery and associated local marketing businesses in the UK.
Based on the offer, the two firms signed an exclusivity agreement up to 1 April 2011, under which break fees would be payable if either company fails to sign an asset sales agreement.
Essar’s offer includes oil products and chemicals manufacturing and distribution terminal assets, as well as commercial fuel, bulk fuel and local marine fuel businesses associated with the Stanlow refinery.
The deal, in line with Shell’s strategy to concentrate its global manufacturing portfolio on larger and more sophisticated assets, is expected to close by mid-2011.
The two firms also entered an exclusive five-year crude supply contract by Shell to Essar and long-term agreements for the supply of products in the UK by Essar to Shell.
