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Libyans bid for Shell sites

The Sunday Times

August 9, 2009

Danny Fortson

LIBYA’s national oil company and two billionaire Indian brothers are among the contenders to buy Britain’s second-largest oil refinery.

Shell’s Stanlow complex near Ellesmere Port, Cheshire, produces a sixth of the UK’s petrol and is the oil giant’s only refinery in Britain. However, the company has put it up for sale as it tries to rein in its huge cost base and struggles with the effects of an oil price that is half the level of the historic high hit last year.

Shell last month reported a sharp fall in profits and Peter Voser, chief executive, has launched a savage efficiency drive that is expected to cost thousands of jobs.

Stanlow is being sold along with two German refineries, at Heide and Harburg. The auction is being run by Lazard and final bids are due on August 17. Shell hopes to pocket up to £1.5 billion from the sales.

Among the bidders are Libya’s National Oil Corporation and Essar, the mobile phone to shipping conglomerate owned by the billionaire Ruia brothers, Ravi and Shashi. The American refining giant Valero and an investment vehicle controlled by the Saudi royal family are also expected to make offers.

The involvement of Essar and the Libyans reflects a wider interest by developing-world groups that produce oil and want to break into the European market. PetroChina is in talks with Ineos, the chemicals maker, about taking a stake in its Grangemouth refinery. Refineries take crude oil and convert it into petrol and other fuels.

Stanlow, which employs more than 800 people, has seen much controversy recently. Next week, construction engineers will be balloted on strike action over pay, and it has also been targeted by fuel protesters over petrol prices.

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