Shell BP, Chevron offload stake in Kenyan refinery to Essar Oil

Global petroleum majors Shell BP and Chevron have offloaded their stake in Kenya Petroleum Refineries (KPRL) to Essar Oil. However, did not announce the value of the transaction. The acquisition has been routed through the company’s overseas arm – Essar Energy Overseas.

Shell and Chevron together held 50% stake in the Mombasa-based refinery while the government of Kenya holds the balance stake. The refinery produces LPG, gasoline, diesel, kerosene and fuel oil and would be upgraded by adding secondary units at a project cost of $400-450 million

KPRL’s products are marketed in Kenya and exported to neighbouring countries, including Tanzania, Uganda, Burundi and Rwanda.

The acquisition heralds Essar’s entry in the overseas refining segment and is part of the company’s focus of a achieving a global refining capacity of 1 million barrels per day.

Essar Oil has a 2,80,000 bpd refinery at Vadinar in Gujarat. This refinery capacity is being expanded to 3,20,000 bpd by 2010 and further to 7,00,000 bpd by 2011.