Thursday, March 26, 2009

Sem Group’s Sem Logistics oil storage site in UK for sale by auction

TULSA, Okla. - Britain’s largest oil storage facility has been put up for sale after its troubled American owner filed for bankruptcy protection from creditors.
The sale of Sem Logistics, operator of more than 50 huge storage tanks at Milford Haven, Pembrokeshire, with the capacity to store 8.5 million barrels of crude oil, or about 10 per cent of global daily production, is being handled by Blackstone Group, the American private equity firm.
The auction follows the collapse of Sem Logistics’ parent, the oil trading and services group Sem, which was once one of America’s 20 largest private companies. Last year, Sem suffered hedging losses of more than $2 billion when it was caught on the wrong side of the extreme volatility in global oil prices.
The Sem Group, based in Tulsa, Okla., was later forced to file for Ch. 11 bankruptcy protection from creditors and is facing restructuring. Among those affected by the collapse of Sem Group are the private equity firms Carlyle Group and Riverstone, whose European division is now led by Lord Browne of Madingley, the former chief executive of BP. They were among the biggest shareholders in the group.
Despite the problems faced by its American parent, the Sem Logistics operation in Wales remains profitable and was isolated from the bankruptcy filing. In recent weeks it has been discreetly offered for sale by Blackstone to a number of potential bidders, including large oil companies and other private equity firms. It is thought that a buyer could be announced within weeks.
As well as the oil storage tanks, the site includes a deep-water port and two jetties capable of handling super-tankers weighing up to 165,000 dead-weight tonnes. Between 2006 and last year, the group invested more than $50 million on the Milford Haven site, refurbishing tanks and improving infrastructure.

1 comment: