Owner of major UK refinery extends loan deal with Russian oil firm
The owner of one of the UK’s largest oil refineries has agreed an extension to a loan facility with a Russian oil company that is under sanctions in the US, company accounts show.
Essar Oil UK, which owns the Stanlow oil refinery, has a $500m (£393m) credit facility with Litasco, a Swiss trading company owned entirely by Russia’s second-largest oil company, Lukoil.
In essence, the deal is a ‘buy now, pay later’ facility for Essar to acquire fuel and defer payment.
The two year agreement was set to come to an end in May last year, but accounts for Essar Oil, which is part of the Essar Group owned by the Indian billionaire brothers Shashi and Ravi Ruia, show it has been extended until June 2024.
While the credit facility remains, Essar stopped importing Russian oil in 2022 in line with the sanctions issued by the UK government.
Lukoil is under sanctions in the US, but not in the UK or EU. Litasco is not under any sanctions.
Vagit Alekperov was the director of Lukoil until 2022 when he was sanctioned by the Australian and UK following Russia’s invasion of Ukraine. He was later sanctioned by New Zealand and Canada.
Despite stepping down from the top, Alekperov continues to hold a 8.5 per cent stake in the company.
A spokesperson for Essar Oil UK said: “EOUK took immediate action to stop all Russian diesel imports many months ahead of the government deadline and our peers in the sector, by identifying alternate sources and ramping up our own production. We do not import any fuel of Russian origin.
“We operate at all times in line with sanctions legislation. Our focus now is very much on the massive opportunity presented by the energy transition and our ambition to become the world’s first low carbon refinery, while also making Stanlow the catalyst for the broader decarbonisation of the north-west.”
Lukoil was contacted for comment.