Fresh from receiving a low-ball takeover approach from its biggest shareholder, Essar Energy reported a 68 per cent dive in quarterly production at its Stanlow refinery in Ellesmere Port yesterday and announced a $100m (£60m) cost-cutting drive.
Essar Energy said that it had processed just 5.8 million barrels of oil at its Stanlow facility in the final three months of 2013, down from 18 million a year earlier, as planned maintenance work – and problems with its furnace when it started up again – interrupted work at the refinery.
In an interim statement that made no mention of this week's proposed bid, Essar said that margins in European refining remained slim, as a result of increasing competition from super-refineries based in Asia and the Middle East. The refinery, which supplies about 15 per cent of the UK's transport fuel, was also hit by weakening commodity prices.
"Stanlow is embarking on an estimated $100m cost improvement programme to ensure that the business is able to weather this period of exceptionally poor refining margins," a spokesman said.
"This programme will focus on all aspects of operating, capital and financial costs without compromising safety or reliability," he added.
The trading statement comes just a day after investors in the City expressed anger at the billionaire Ruia family's offer of £900m – or 70p a share – for the 22 per cent of the company that they do not own already.
The shares lost 1.15p, or nearly 2 per cent, yesterday, falling to 67p.
Essar said it continues to look for a replacement for Mark Lidiard, who resigned from his position as director of investor relations and communications in December.
Essar said it was still repairing the furnace at Stanlow, which was damaged in November. The company currently expects the furnace to be back up and running again between July and September.
As a result, Essar has slightly reduced the volume of oil it expects to process at Stanlow during this financial year from 59 million to 56 million. The company's financial year ends on 31 March.