Essar Energy plc, the India-focused integrated energy company, announced that it intends to exit from its 50% owned joint venture business Kenya Petroleum Refineries Ltd (KPRL), which operates the oil refinery in Mombasa, Kenya.

Essar Energy, through its subsidiary Essar Energy Overseas Limited, has exercised a put option under the shareholders’ agreement to sell its stake in KPRL to the Government of Kenya, which owns the remaining 50% interest in the Mombasa refinery.

This decision by Essar Energy follows an extensive series of studies by international consultants into the technical, economic and funding elements of an upgrade of the Mombasa refinery. Following these studies, Essar Energy believes that the upgrade is not economically viable in the current refining environment.

Essar Energy will continue to work closely with the Government of Kenya to ensure a smooth transition of ownership.

Essar Energy acquired its 50% stake in KPRL in July 2009 for a total consideration of US$7 million from BP, Chevron and Royal Dutch Shell. Under the terms of the shareholders’ agreement established with the Government of Kenya at the time of the acquisition, Essar Energy has the right, under certain conditions, to exercise a put option under which the Government of Kenya would buy Essar Energy’s 50% share of KPRL for US$5 million.

About Essar Energy

Essar Energy (LSE:ESSR) is a world class, low-cost, integrated energy company with an established track record.

Essar Energy, through its subsidiaries, owns one of India's largest private power producers with 3,910MW of installed capacity and projects under construction to expand its capacity to 6,700MW.

Essar Energy, through its subsidiaries, owns one of India's fastest growing private sector oil and gas companies with a diverse portfolio of exploration and production assets. The Vadinar refinery, located in Gujarat, is India's second largest private sector oil refinery with throughput capacity of 20 million metric tonnes per annum, or 405,000 barrels per day. The Stanlow refinery is the UK’s second largest refinery with throughput capacity of 296,000 barrels per day, or 14.6 million metric tonnes per annum.

About Essar

Essar is a multinational corporation with annual revenues of c.US$39 billion and investments in Steel, Energy, Infrastructure and Services. With operations in more than 25 countries, it employs over 73,000 people.

See the site of the Mombasa refinery