Trafigura and a private investment group UCP Investment Group has completed the acquisition of a 49 percent stake in Mumbai-based Essar Oil Limited (EOL) from Essar Energy Holdings Limited and Oil BidCo (Mauritius) Limited.
Trafigura said in a statement that the acquisition includes the Vadinar oil refinery and world-class storage and import/export facilities, as well as a domestic retail network business consisting of over 3,500 retail service stations. The 20Mtpa super-refinery, with a Nelson complexity index of 11.8, is located on strategic shipping routes to demand centres in the Far East and close to Middle East sources of production.
India is one of the world’s most important sources of growth in energy demand and the deregulation of pricing of the Indian retail market is expected to bring potential growth opportunities for EOL’s retail network.
Jeremy Weir, Chief Executive Officer of Trafigura commented: “Essar Oil will now be able to take advantage of the strengths of its international investors to further develop and enhance value to this world class asset. Our stake in Essar Oil also complements Trafigura’s growing presence in India at a time when the country’s economic outlook is positive.”
Ilya Sherbovich, Managing Partner of UCP Investment Group, commented: “Achieving a successful closing of the deal with a group of strong partners represents an important milestone for Essar Oil. We are confident that together with all the new shareholders – recognised leaders in their industries, we will oversee the growth potential of Essar Oil to increase the long-term value of the company.”
A new Board of Directors for EOL will be formed straight away consisting of representatives from each shareholder, from EOL’s management team and independent directors.