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Ampol mulls Australian

refinery closure

PROJECTS & AUSTRALIAN refiner and fuel retailer Ampol
COMPANIES has warned that it may have to shutter its 109,000
barrel per day (bpd) Lytton refinery in Queens-
land after the facility’s losses in the first nine
months blew out to AUD141mn ($100.6mn).
Ampol said on October 8 that it had begun
reviewing options for the facility in Brisbane,
including the plant’s permanent closure and
conversion into a fuel import terminal.
The company said the refinery had racked up
AUD82mn ($58.5mn) in losses in the third quar-
ter alone, owing to the coronavirus’ (COVID-19)
downwards pressure on oil demand and refiner
margins, as well as the early and extended turna-
round and inspection (T&I) of the facility in the
period.
The Lytton refinery posted a pre-tax loss of
AUD59mn ($42.1mn) in the first half of this
year, compared with a pre-tax profit AUD1mn
($728,000) in the same period of 2019.
With the facility now back online, Ampol said
no further costs were expected in the company’s
fourth-quarter 2020 results. Production in the
final three months of the year is projected to
reach 1.3bn litres, bring the year’s total to 3.4bn
litres. Energy warning in September that its Geelong
“Global economic conditions triggered by oil refinery could permanently close as well.
COVID-19 have put significant pressure on The Australian downstream industry’s dis-
refining, as evidenced by our performance in the tress has not gone unnoticed by the federal gov-
first half and the significant losses announced ernment, which has rolled out a fuel security
today,” Ampol CEO Matt Halliday said. He package worth more than AUD2.5bn ($1.78bn).
added: “This review will allow us to be proac- The measures flagged up by the plan include
tive in determining the best course of action to a refinery production payment programme
protect our balance sheet, improve earnings cer- that would see both Ampol and Viva’s facili-
tainty, and maximise shareholder value from our ties receive a direct payment of AUD0.0115
integrated supply chain.” ($0.0082) per litre for domestic fuel production.
The company aims to conclude the review in The Sydney Morning Herald quoted Credit
the second quarter of 2021. Suisse as saying the proposed payment plan
Ampol is not Australia’s only refinery oper- could bolster the Lytton refinery’s earnings and
ator to consider shutting up shop, with Viva free cash flow (FCF) by AUD60mn ($42.8mn).™

P16 www. NEWSBASE .com Week 40 08•October•2020