Manufacturing News

Shell Geelong refinery looking for a buyer

Geelong’s Shell refinery is up for sale, its owner Royal Dutch Shell announced on Thursday, with an estimated 450 jobs at risk if a buyer is not found by the end of next year and the site is converted into an import terminal.

The refinery, described by management last year as “borderline", is under stiff competition from Asian “mega-refineries”.

"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," said the company’s Andrew Smith.

Victorian MP Richard Marles said Shell owed it to the community to find a buyer and protect the workers’ jobs. A terminal would only require an estimated 50-100 staff to operate.

"Geelong has been very good to Shell," Marles told the Geelong Advertiser. "We owe it to the workforce to help Shell to find a buyer and make sure the refinery can continue."

Several analysts have expressed scepticism about the likelihood of a sale – which is being assisted by Bank of America Merrill Lynch – of the refinery, which has been operating since 1954.

"My initial feeling is it's going to be a limited audience for a business where it is difficult to make adequate returns," Deutsche Bank energy analyst John Hirjee told The Australian.

The Australian Workers Union was also pessimistic about a sale, and its acting Victorian branch secretary Ben Davis noted that employees were “all wretchedly concerned for their futures."

The federal industry spokeswoman Sophie Mirabella said that it was an example of how difficult conditions had become.

“Shell’s announcement today comes on the back of continued business warnings about the economic instability and lack of confidence brought about as a result of the bad decisions made by the Gillard Government,” she said in a statement.

In the manufacturing sector alone, we have seen over 140,000 jobs disappear in five years under Labor – this equates to one manufacturing job lost every 19 minutes.

Shell closed its Clyde terminal, which has been running since 1928, last year. It now uses the site as a terminal facility.

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