Essar looks at 50% stake in Kenyan refinery

Essar looks at 50% stake in Kenyan refinery

London: Indian conglomerate Essar group is understood to have entered into discussions for acquiring 50% stake in a Kenyan refinery firm from international oil players as a part of its move for a global footprint.

The refinery in Mombasa with an annual production capacity of about four million tonnes is owned 50% by the government of Kenya.

Sources close to the development informed, Essar is looking to buy out the remaining 50% stake held by three global energy giants -- Chevron, Royal Dutch and British Petroleum -- in Kenyan Refinery and Petroleum Ltd.

Essar is looking at this potential deal, the announcement for which is expected shortly, in pursuance with its worldwide expansion plans and it would further expand its presence in the African sub-continent. The group already has three exploration and production blocks in Madagascar and one additional block in Nigeria.

When contacted, company officials from Mumbai said: “We continue to look for growth opportunity in sectors, where ever we are present. As a corporate policy we will not like to talk about any such proposal."

Essar has been scouting for refinery assets outside India for quite some time and has recently expressed its intention to expand its refining capacity to 10 lakh barrels per day, including three lakh barrels per day outside the country.

Essar Oil recently announced that its board has approved plans to expand the capacity at its Vadinar refinery from 10.5 million tonnes (2.2 lakh barrels per day) to 34 million tonnes per annum (seven lakh barrels per say) by 2010.

The expansion would be carried out at a cost of about six billion dollars (Rs24,000 crore), the company said.