Stanlow refinery’s parent grapples with ties to Russian lender VTB
The owner of one of Britain’s biggest oil refineries has moved to distance itself from a relationship with VTB Bank, one of the Russian lenders which has been sanctioned since the invasion of Ukraine.
Sky News understands that Essar Oil UK (EOUK), which owns the Stanlow refinery in northwest England, has been given “assurances” about the compliance of its parent company with ongoing sanctions affecting VTB.
Stanlow produces one-sixth of Britain’s transport fuels – equating to 4.4 billion litres of diesel, 3 billion litres of petrol and 2 billion litres of jet fuel and directly supplies airports in Manchester and Birmingham.
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The refinery processes more than 20,000 litres per minute
EOUK employs roughly 900 people at the refinery, with an additional 800 on-site contractors and a further 5,000 people employed indirectly through the extended value chain.
The company, which is ultimately owned by Ravi and Shashi Ruia, two industrial entrepreneurs, has been wrestling with financial challenges for the last year, securing an extension of a Time to Pay arrangement with HM Revenue & Customs late last year.
VTB has been sanctioned and was scheduled to be removed from the SWIFT global payments messaging system last weekend, as a result of which it is reported to be preparing to wind down its European operations.
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It was unclear on Tuesday whether the restrictions against it would necessitate EOUK’s shareholder securing alternative financing arrangements.
In an initial statement provided by Powerscourt, Essar Oil UK’s public relations firm, the company said it “does not have a banking or borrowing relationship with VTB Bank”.
Powerscourt subsequently provided a further, longer statement, in which it said: “EOUK does not have a banking or borrowing relationship with VTB or any UK entity covered by UK sanctions.
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“EOUK is aware that its shareholder has arrangements with VTB.
“The shareholder has provided assurances that it is taking all necessary actions to ensure full compliance with the prevailing sanctions regime impacting VTB.”
The PR firm said that the precise name of EOUK’s immediate parent was “a matter of public record” but refused to provide it.
It added: “EOUK’s operations are not expected to be impacted by the current announced sanctions.
“We are actively monitoring the developing body of new sanction rules as they evolve and taking appropriate advice to maintain our compliance with applicable sanctions laws.”
Whitehall officials have been monitoring the situation at Stanlow for the last year given the refinery’s key status in UK fuel production.
EOUK bought the site at Ellesmere Port from Shell in 2011.