Shell puts Australian refinery up for sale
The refinery could be converted into an import terminal if no buyer is found, said Andrew Smith, vice-president of downstream operations for Shell Australia. He said the move was part of Shell’s strategy to focus investment on larger sites.
“Shell has a rich portfolio of opportunities and there is a competition for capital for those opportunities and in the world we are in, Geelong just can’t compete for that capital,” Smith added.
The Geelong refinery, which handles 120,000 barrels a day, has been operating for 55 years and supplies about half of the Australian state of Victoria’s fuel.
It takes crude oil from Vietnam, Malaysia, Brunei and Indonesia as well as Algeria, Gabon, United Arab Emirates, New Zealand and Australia.
Some traders were doubtful on the chances of a buyer being found for Geelong, which employs about 470 people.
Australia is one of Asia’s biggest importer of fuels, and a growing number of its ageing refineries are being shut.
If Geelong shuts on top of two other refinery closures announced last year, Australia’s refining capacity would drop by nearly 40 per cent to 408,600 barrels a day by 2015.
Along with competition from newer Asian facilities, owners of older refineries are grappling with higher global oil prices, a drop in Australian crude output, as well as rising labour costs.