World News – UA – BP to shut down Australian oil refinery, leaving only three in the country

British energy giant BP will shut down one of Australia’s last oil refineries for good, causing hundreds of job losses and increasing the nation’s reliance on imported fuels

BP said on Friday it would close its 65-year-old Kwinana refinery in Perth and convert the site to a fuel import terminal, saying the refining business is no longer economically viable

« After exploring multiple possibilities for the future of the refinery, BP concluded that conversion to an import terminal was the best option, » the company said in a statement.

BP and the country’s three other refineries in Brisbane, Melbourne and Geelong – which turn crude oil into refined fuels – have come under tremendous pressure since travel restrictions and home orders began to curb the advance of COVID – 19 wiped out demand for gasoline and jet fuel and squeezed their profit margins

The Kwinana oil refinery employs around 650 people, of whom 400 are permanent and 250 are contractors Refining activities are set to end within the next six months, the company said

Once the conversion to a fuel import terminal was completed, the Kwinana site was expected to take on around 60 jobs, he added

« The decision taken today to stop refining is a difficult decision and in no way the result of local policies », said Frédéric Baudry, BP Australia Director « It comes in response to long-term structural changes in the regional fuel market »

In the past decade, three refineries have closed across Australia, increasing the country’s dependence on imported fuels, as the local sector struggles to compete with the mega-refineries in Australia. Southeast Asia with their much larger scale and lower operating costs

Friday’s decision was disappointed by the Morrison government, which drew up a bailout for the country’s ailing oil refiners

After months of industry consultation, Federal Energy Minister Angus Taylor last month revealed a series of measures aimed at mitigating potential supply shocks caused by global events such as wars or pandemics, and to help keep refineries open « wherever commercially possible » Under this plan, refiners would receive a direct payment of 115 ¢ per liter of locally manufactured fuel

However, oil refiners have warned that the measures may not be enough to support the viability of their businesses amid unprecedented pressure from oversupply of fuel caused by the virus

M Taylor said the government expects BP to live up to its pledge to do everything in its power to support its workers. « Our hearts go out to BP workers, their families and the local business leaders who depend on them from the refinery for their livelihood, « he said

« We will work with BP and the Government of Western Australia to ensure workers and the community are supported »

Ampol, formerly known as Caltex Australia, said it has launched a review of its refinery in Brisbane by looking at options, including the permanent closure of the plant which employs 500 people and the conversion of the site into a terminal of  » fuel import

Viva Energy, listed on ASX, has also placed its 65-year-old refinery in Geelong under review, which could lead to its closure

The federal government said on Friday it was helping support the domestic refining sector through the JobKeeper program to maintain operations and jobs, while its fuel safety package would improve fuel supply in the long run. country term

« We will ensure that Australia maintains sovereign refining capacity to support local industry, meet our country’s emergency needs and protect motorists from future price hikes, » said M Taylor « The closure of the refinery will not have a negative impact on Australia’s fuel supply »

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BP, Kwinana Oil Refinery, Oil Refinery, Kwinana Beach, Australia