March 10 (Reuters) - Essar Energy Plc has no plans to close its Stanlow oil refinery in Britain, the company said on Monday, in response to a newspaper report that the troubled plant is under threat from “uneconomic conditions”.
Shares of the company fell as much as 4.5 percent on Monday.
City A.M., a free newspaper distributed in London’s financial district, reported that the future of Britain’s second-largest oil refinery was under threat from an influx of refined products from the United States.
Essar Energy’s largest shareholder, Essar Global Fund, wants the UK government to lobby Washington to overturn a ban on U.S. crude oil and natural gas exports, the newspaper reported, without citing any sources.
Essar Energy said in a statement that it had embarked on a $100 million cost improvement programme at Stanlow to ensure the plant could withstand a period of “exceptionally poor” refining margins.
“With reference to recent press reports, Essar Energy Plc denies that it has any plans to close its Stanlow refinery,” the company said in a statement.
A company spokesman said the statement was a response to the City A.M. report.
“Essar Energy and the entire transport fuel supply industry are working together with the UK Government to improve the resilience of UK refineries and importers,” the company said.
London-listed Essar Energy is the target of a takeover proposal from its founders, India’s billionaire Ruia brothers.
The company said in February it would shutter one-third of Stanlow’s production capacity as weak demand, overcapacity and huge flows of diesel from overseas competitors hammer refining margins.
Essar Energy’s shares were down 2.1 percent at 70.75 pence at 1130 GMT on the London Stock Exchange.