(EnergyAsia, August 26 2014, Tuesday) —- Caltex Australia said its first-half profit fell 12.3% from year-ago levels to A$173 million caused largely by the impending shutdown of one of its two oil refineries and the weaker local currency against the US dollar. (US$1=A$1.08).

But the decline was not as severe as feared when the listed company advised in June that it expected net profit to fall to between A$150 million and A$170 million for the January-to-June period.

Caltex said it is on course to shut down its 58-year-old refinery in Kurnell in Sydney in October ahead of conversion into a fuel terminal.

With the loss of the 124,500-b/d refinery, Caltex, half-owned by US major Chevron, will be left with only the Lytton plant in Brisbane.

Battered by cheaper imported fuels from Asia’s larger and more efficient refineries, Australia’s largest downstream operator said its refining and supply division reported a bigger loss of A$65 million compared with last year’s A$43 million.

“This result is at the upper end of our recent half year profit guidance. Our balance sheet remains strong and, despite operating within a competitive and ever changing environment, the outlook for our business continues to be positive,” said Caltex Australia managing director and CEO Julian Segal.

“We are well progressed in restructuring our supply chain, with the conversion of our Kurnell refinery to a leading import terminal on schedule and the refinery closure sequence to commence in October.”

As part of the restructuring, the company said it will cut 350 jobs across operational and support functions over the next 12 months related to Kurnell’s closure.
“We are discussing with our employees redeployment opportunities and their redundancy entitlements. We are also providing them with outplacement support,” Mr Segal said.