Barclays Bank, under the arrangements, will hold the inventories of crude oil and petroleum products and supply it to the refinery as and when required.

The three-year arrangement with the bank will help Essar Oil UK reduce the inventory holding costs and allow operational flexibility.

Essar Oil UK chief executive officer Volker Schultz said the transaction with Barclays is an important landmark step for Stanlow.

"The change is fully in line with our strategy to maximise efficiency, to substantially improve margins and to ensure that the refinery can thrive in all market conditions," Schultz added.

The arrangements will also help the company repay its current working capital revolving credit facility to the 13 banks.

The company will retain the product sales and customer relationship processes.

India focused Essar Energy is a low-cost, integrated energy company.