By ROSS KELLY
SYDNEY -- Royal Dutch Shell said it plans to sell its only
oil refinery in Australia, as the local industry struggles to
compete with low-cost operators in Asia.
The number of refineries in Australia has dwindled in recent
years as vast new processing facilities have sprung up in India, Singapore and elsewhere in
the region, producing products such as gasoline, jet fuel and
motor oil more cheaply.
The Anglo-Dutch oil company said Thursday it may convert its
refinery in Geelong to a fuel import
terminal if it can't find a buyer. The plant, near the
country's second-most populous city, Melbourne, currently
supplies about half of Victoria state's fuel. It employs about
450 staff, plus between 100 and 150 contractors.
Shell has hired Bank of America Merrill Lynch to assist with
the sale process, which it expects to complete by the end of
Last year, the company converted a refinery in the commercial capital,
Sydney, to an import terminal. Caltex Australia, half-owned by
Chevron, plans to make a similar conversion to its Sydney
refinery next year.
The Geelong plant is larger than Shell's former Sydney
operation, producing up to 120,000 bpd of crude oil. It can
process cheaper types of crude and also makes a larger range of
products including solvents, high-octane gasoline and bitumen,
potentially making it a more attractive sale target.
"Every refinery in Australia is different," said Andrew
Smith, the head of Shell Australia's refining unit. He declined to
comment on whether the refinery is profitable, or if it has
attracted any early buyer interest.
Among the handful of remaining refineries in Australia,
Caltex has another plant in Brisbane, BP owns refineries in
Perth and Brisbane, and ExxonMobil has a refinery in Melbourne.
Dow Jones Newswires