Exxon to Shut Altona Refinery, Convert to Import Terminal

   By David Winning

SYDNEY--Exxon Mobil Corp. said it will cease producing fuel at its Altona refinery in Australia and convert the site to an import terminal because it no longer considered the operation to be economically viable.

Exxon said the decision was made following an extensive review of operations at Australia's smallest refinery, which has been operating in Victoria state since 1949. It puts the country on a path to having two refineries within a few months, from seven refineries a decade ago.

The shutdown of the Altona refinery is part of a rash of global closures in the world's richest economies as operators reckon with anemic fuel demand and growing competition from newer, more efficient fuel-making facilities in Asia and the Middle East.

Last year, BP PLC said it would close the Kwinana refinery in Western Australia while Ampol Ltd. is continuing to review its Lytton refinery on Australia's east coast. As of 2018, domestically refined fuels met just 40% of demand in Australia, which has become increasingly dependent on imports.

The threat of refinery closures has angered unions and prompted the government to offer financial aid, even though it has turned down requests for help from other businesses hurt by the pandemic, including Australia's second-largest airline, which became insolvent in April.

"The Altona refinery workers are highly skilled and valued by their employer," said Tim Kennedy, national secretary of the United Workers Union. "However our domestic labor market has been hollowed out so extensively that these workers will likely not have equivalent jobs to move into once the site closes."

Prime Minister Scott Morrison's government says it is willing to give cash to refiners that stay open, worried that boosting imports will drive up prices for fuels such as diesel that are used by farmers and for mining trucks. It has offered to subsidize every liter of fuel refined in Australia, and build new diesel-storage tanks.

That offer wasn't enough to persuade Exxon to keep the refinery open beyond a period of transition work to ensure continued fuel supply for customers.

"We extend our thanks to the federal government for the significant support offered to Altona and other refineries," said Nathan Fay, chairman of Exxon Mobil Australia. "Our decision to convert our facility to a terminal is not a reflection of those efforts."

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

February 09, 2021 18:56 ET (23:56 GMT)

Exxon Mobil (NYSE:XOM)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024