India’s Essar to exit Kenya refinery, upgrade 'not viable'

03 October 2013 16:42  [Source: ICIS news]

LONDON (ICIS)--Essar Energy plans to exit from Kenya Petroleum Refineries Ltd (KPRL), which operates Kenya's Mombasa oil refinery, the India-based energy major said on Thursday.

Essar said that it decided sell its 50% stake in KPRL after “an extensive series of studies by international consultants” found that an upgrade of the Mombasa refinery is not economically viable in the current refining environment.

Essar will sell its stake in KPRL to Kenya's government, which owns the remaining 50%.

Essar acquired the stake in 2009 for $7m (€5m) from BP, Chevron and Shell. Under the terms of a shareholder's agreement at the time of the acquisition, Essar has the right to exercise a put option under which the government would buy Essar’s stake in KPRL for $5m, it said.

($1 = €0.74)

By: Stefan Baumgarten
+1 713 525 2653

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