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No chance for Shell refinery sale: analyst

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Screen Shot 2013-04-04 at 17.10.19ABOUT 450 fearful Shell refinery workers in Geelong face a long wait for a lifeline that analysts and unions doubt will ever come.

The petroleum giant has announced plans to sell its last remaining Australian refinery, but if it can’t find a buyer by the end of 2014 to keep it open, it may convert the site to a fuel import terminal.

If that happens, the Australian Workers Union (AWU) says hundreds of jobs will go, with only 50 to 100 workers needed to staff a terminal.

Financial data firm Morningstar’s head of equities, Peter Warnes, says Shell will struggle to sell the 60-year-old refinery.

“Shell have got no chance of finding a buyer,” Mr Warnes told AAP.

He said Caltex, Mobil and BP were unlikely to be interested in an unprofitable refinery that cannot compete with the super refineries of Asia, so an import terminal was the most likely outcome.

AWU Victoria acting branch secretary Ben Davis says the refinery’s 450 full-time staff and 150 contractors have been rocked by Thursday’s announcement.

“They’re all wretchedly concerned for their futures,” he said.

Mr Davis said he was also pessimistic about a successful sale, with only three or four potential buyers for Shell to pursue.

Shell worker Kent Staines says his family, who moved to Geelong so he could work at the site, could be forced to move.

“If the job finishes, the lifestyle here finishes too,” he told AAP.

The company in September closed its refinery in the Sydney suburb of Clyde, converting it to a fuel terminal and shrinking the workforce of 275 Shell workers and 100 contractors to several dozen.

Shell’s Australian downstream vice-president Andrew Smith said the company would do all it could to find a buyer to secure jobs in Geelong.

“Shell will be seeking a buyer who will show due care for employees, provide reliable supply for the company and its customers, and run the facility safely with respect for the environment and the Geelong community,” he said.

Another analyst, who did not want to be named, said refining was not a profitable industry at the moment, so any buyer would not be paying a high price.

“Everyone else is running for the door,” he said.

The Geelong refinery opened in 1954 and supplies about half of Victoria’s and 30 per cent of South Australia’s fuel.

The company wanted to grow its retail and bulk fuels business, along with terminals and pipelines, Mr Smith said of the decision to sell the site.

Victorian Premier Denis Napthine said the government would support Shell in trying to find a buyer for the refinery, while Opposition Leader Daniel Andrews called on the government to spell out its plan to help workers.

Federal Resources and Energy Minister Gary Gray dismissed as fear-mongering claims by opposition industry spokeswoman Sophie Mirabella that Shell’s announcement was linked to Labor’s economic policy.

SOURCE

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