Shell sale fuels jobs fears – 600 jobs on the line

UP to 600 local jobs are on the line after Shell announced it is selling the Geelong refinery it opened in 1954.

Shell’s Geelong workers and senior management were told the news yesterday morning, just moments before a public announcement that the company was putting the refinery up for sale.

While workers were told not to talk to the media, union boss Ben Davis said the 450 Shell employees and 150 plus contractors were sickened by the announcement.

Shell has given itself 12 months to find a buyer for the Geelong refinery or face possible conversion to a fuel terminal with a greatly reduced workforce.

As news of the sale spread through the workforce yesterday, employees were offered counselling and given the chance to go home.

Employee Kent Staines, who has worked at Shell for three years after moving his family from Western Australia, said he may have to leave the region.

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

Mr Staines said the announcement was bad news for the region and came out of the blue to workers.

“A lot of people are resigned to it. Some people see it as inevitable and others are quite shocked, I think,” he said.

“It’s still sinking in for many people.”

He said workers carried out their normal duties at the Corio refinery yesterday, in between briefings about Shell’s decision.

A Shell contractor who did not want to be named said he hoped it was possible someone could buy the refinery and retain the staff.

“It’s the $60 question will it go or won’t it go? Time will tell,” he said.

“Until the final death knell it’s all speculation.”

Australian Workers Union (AWU) acting state branch secretary Ben Davis said workers were scared for their future and sickened by the announcement.

Unions will meet on Monday and are seeking urgent talks with the company to discuss plans, but Mr Davis said it would be difficult to find a buyer.

“This is an oil refinery, it’s not a milk bar,” Mr Davis said.

Morningstar energy analyst Peter Warnes said it would be “almost impossible” to find a buyer for the facility which supplies about half of Victoria’s and 30 per cent of South Australia’s fuel but, with a production of 120,000 barrels a day, it was a minnow compared to the large Asian refineries which pump out up to 900,000 barrels of oil per day.

“We can’t compete with these mega refineries in Asia. The unit cost is just too high here,” Mr Warnes said.

Shells downstream vice-president Andrew Smith said putting the refinery up for sale was a difficult decision.

“I understand this announcement will be difficult for refinery employees, but Shell will support them through this period of uncertainty,” Mr Smith said.

“Refinery employees in Geelong have made a significant contribution to both Shell and the local community over many years.”

Shell’s head of media Paul Zennaro said the company had a long and rich history in Geelong.

“Shell has always been very proud of its presence in this community and that’s not something we are shying away from,” he said.

“It’s a tough day for everyone.”

Citing its global strategy to concentrate refining operations into its largest sites, the company wants to sell the Geelong refinery as a going concern, with the aim of completing the complicated sales process by the end of next year, subject to regulatory approvals.

The company said the decision was not a result of any government policy and said it would be inappropriate to seek financial assistance from the Federal Government to prop up operations in Geelong.

Geelong is the only refinery in Australia that produces avgas, as well as a range of niche products including bitumen for roads, solvents and chemicals used in the manufacturing of other products.

Shell hopes this diversity will give the refinery added value to a buyer looking to enter or expand in the Australian refining market.

with AAP and Courtney Crane

SHELL AND GEELONG – THE HISTORY

* 1949: SHELL Australia announces it will be constructing an oil refinery in Geelong.

* 1952: PLANS underway to construct prefabricated housing on 24ha of land close to the refinery (the area rapidly grew into the Shell housing estate).

* 1954: FIRST oil flows from Geelong refinery.

* 1958: THE first super tanker enters the Port of Geelong (the 28,000 tonne Velutina).

* 1968: GEELONG refinery reaches its first million hours without a lost-time injury (LTI).

* 1979: GEELONG refinery is connected to the state’s power grid.

* 1985: GEELONG refinery’s first female operator starts and unleaded petrol is introduced into the Australian market.

* 1992: THE refinery commissions its new residue catalytic cracking unit. At the time it was one of the largest construction projects undertaken in Victoria for many years.

* 2003: THE refinery’s Contractor Safety Centre opens.

* 2004: THE refinery’s hydro-desulphurisation (HDS) facility is completed, enabling the refinery to produce ultra low sulphur diesel fuel.

* 2012: SHELL’S Clyde refinery in Parramatta closes and is converted to a fuel terminal.

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