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Geelong mayor ready to advocate for Shell

  • By Sarah Malik
  • From: AAP
  • September 18, 2012 4:13PM

GEELONG’S mayor is prepared to ask for federal and Victorian government assistance to prop up the local Shell refinery, with an oil company executive saying its future is “borderline”.

Shell says its Geelong refinery is facing challenges, including more competition from new mega-refineries in Asia, after its global downstream director Mark Williams said the operation of the refinery was “questionable” given the challenges.

“It’s borderline,” Mr Williams told the Australian Financial Review.

“It depends a lot on how it performs over the next few years whether or not it will ultimately be a survivor.”

Geelong mayor John Mitchell said he would seek talks with the company and advocate on behalf of Shell for federal and state government assistance if necessary.

“We’ve done that in the past with other industries and we’ve been very successful,” Mr Mitchell told AAP on Tuesday.

Shell, which is closing its Clyde refinery in Sydney at the end of this month, said Australian refining was part of a highly competitive global market.

“Geelong Refinery faces challenges, including increased competition from new mega-refineries in Asia,” company spokesman Paul Zennaro said in a statement.

“Shell employees are working to make the refinery more competitive with a continued focus on safety, while enhancing profitable niche products including Avgas, bitumen and solvents.”

Mr Mitchell said Shell had not asked for help and he trusted the company would overcome its problems.

“It didn’t say it was closing down,” he said.

“They’re working towards maintaining their viability.”

A Victorian government spokeswoman said the Australian refining sector, like others, was facing major challenges.

“That’s why we have been calling on the Gillard government to address issues that impact Australia’s competitiveness,” she added, pointing to rising energy prices and the carbon tax.

She said the state government committed $4 million to a Geelong-focused assistance fund in June.

Shell said it recently invested $47.5 million in a new water processing plant and $20 million in new bitumen facilities at the Geelong facility.

The plant, one of the largest hydrocarbon refineries in Australia, employs more than 400 people on site.

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