Essar Energy Overseas Limited today announced the completion of acquisition of 50% stake from Shell, BP and Chevron in Kenya Petroleum Refineries Ltd (KPRL). The Government of Kenya holds the remaining 50% stake in the company. KPRL is a 4 million metric tonne (MMTPA) per annum refinery in Mombasa, Kenya.

This acquisition marks Essar’s foray in overseas refining market and is a step towards realising its vision of a global refining capacity of 1 million barrels per day.

Essar Oil is currently operating a 280000 bpd refinery in India. This capacity is being expanded to 320000 bpd by 2010 and then to 7,00,000 bpd by 2011.

Commenting on the acquisition, Mr Shashi Ruia, Chairman, Essar Group said, “This is an excellent addition to our oil assets and fits well with the Group’s strategy of building and becoming a global oil and gas player. This will further enhance our presence in the growing African market”.

The Mombasa refinery is the only refinery in Eastern Africa. It currently produces LPG, gasoline, diesel, kerosene and fuel oil. The refinery is planned to be upgraded by adding secondary units at a project cost of USD 400- 450 million.

With this acquisition, Essar expects to play a major and vital role in the African oil and gas markets. KPRL’s products are sold into the Kenyan market and exported to neighbouring countries including Tanzania, Uganda, Burundi and Rwanda. Demand for petroleum products in these markets is estimated at 5 million tonnes per annu