ROYAL Dutch Shell yesterday put its last remaining Australian oil refinery up for sale as part of its strategy of focusing on larger scale sites.
Shell, which has been hit by mounting competition from Asia and reduced margins on oil refining, said it wanted to complete the sale of the Geelong oil refinery by the end of next year, warning if a sale was not possible that it could instead convert the site to an import terminal.
Shell, which has operated in Australia for over 110 years, reiterated that despite the sale it remained committed to the country.
“Shell has a rich portfolio of opportunities and there is a competition for capital for those opportunities and in the world we are in Geelong just can’t compete for that capital,” explained Shell Australia’s downstream vice-president Andrew Smith.
Shell’s decision to sell the 55-year-old refinery follows closely on last year’s closure of its 79,000 barrels-per-day Clyde Refinery near Sydney. In 2011, Shell also sold its 270,000 barrel-per-day Stanlow refinery in the UK to Essar Oil. Shell said it would now focus on its larger sites such as its Pulau Bukom refinery in Singapore.
In Australia, it plans to concentrate on retail and bulk fuels as well as terminals and pipelines.
If a buyer is not found for the refinery – which provides around half of the Australian state of Victoria’s fuel – it means that the country, already one of Asia’s biggest fuel importers, is soon likely to overtake Indonesia – which imports 400,000 barrels of oil a day – in the volume of oil it buys in.
Australia currently consumes around one million barrels a day of refined oil products.