By ALISON SIDER
Phillips 66 is selling its business in Ireland, including the 71,000-bpd Whitegate refinery in Cork, the company said Tuesday.
Rich Johnson, a spokesman for the US refiner, said in a statement that Phillips 66 has retained Deutsche Bank to market the Ireland assets, which include the sole oil refinery in the country, its associated wholesale marketing business and a storage terminal for crude oil and refined products in Bantry Bay.
"Phillips 66 intends to continue operating the assets as usual during the marketing process, which is expected to last for several months," Mr. Johnson said.
The move reflects the challenges refiners are facing in Europe, where lower demand for fuel and higher costs of feedstock have put pressure on profits and led some companies to close down plants.
"If you look at key drivers of refining profitability -- none are really favorable for Europe," said Morningstar analyst Allen Good.
Most of Phillips 66's refining capacity is in the US and the company has been focused on growing returns there, aided by access to the country's booming output of inexpensive crude oil from shale formations.
Mr. Good said importing fuel to Ireland might make more sense than producing it there -- a potential buyer could turn the Whitegate facility into a storage terminal than operating it as a refinery.
"If it's not working for Phillips 66 [as a refinery], it's unlikely that it's going to work for anyone else," he said.
Earlier this year, Larry Ziemba, Phillips 66's executive vice president for refining, project development and procurement, told analysts that the company would be open to selling the Whitegate facility, saying that the refinery is "not sophisticated" and not central to the company's strategy.
At the time, Mr. Ziemba also said Phillips 66 would also consider selling its stakes in refineries in Malaysia and Germany.
Mr. Johnson said Tuesday that the company isn't currently marketing any other assets for sale.
Dow Jones Newswires