(EnergyAsia, August 26 2011, Friday) — Australia’s largest oil refiner is wondering if it should stick it out in an increasingly cut-throat business hurt by competition from cheaper imported fuel from Asia, a strong Australian dollar and high crude oil prices.
After reporting that its two refineries and downstream operations had suffered a 24.2% decline in first half profits to A$113 million from year-ago levels, Caltex Australia dropped the bombshell announcement that it had been reviewing the viability of its Kurnell refinery in Sydney and Lytton refinery in Brisbane since June.
The two plants account for about a quarter of Australia’s 860,000 b/d oil refining capacity.
Describing this as a serious long-term review of a complex issue, managing director Julian Segal said the company would take its time and not rush into a decision “simply because of the current volatility.”
Earlier this year, rival Royal Dutch Shell said it had decided to shut down its 100,000 b/d Clyde refinery in Sydney as it could no longer compete against new and larger refineries in Asia.