The risk of closure of the Geelong oil refinery would mean a critical loss of fuel protection for the country and would cause a domino-like collapse in Victorian manufacturing, Viva Energy executive leader Scott Wyatt said, noting that only a government program can now save the country.loss-producing plants.
Wyatt said the closure of one of Australia’s remaining four remaining oil refineries, all of which were affected by the consequences of the COVID-19 pandemic, would have serious implications, nationally and statewide.
Viva Energy’s Geelong oil refinery may simply be closed. Nic Walker
“It’s not just a national crisis, it’s a state crisis that wants to be resolved,” he told the Australian Financial Review.After Viva reported on a imaginable closure of the 120,000-barrel-per-day plant due to “extreme pressures” in refinement exacerbated by Victoria’s lockdown restrictions.
“There is a total [manufacturing] ecosystem in Victoria that we are a part of, and you get a share of it and, like the automotive industry, the total ecosystem is at risk.”
The federal government is already contemplating assistance measures for the plant, which supports 700 jobs, but Wyatt said action was also needed through the Victorian government, which took a long time to address the inconveniences of shipping and energy prices left by the Geelong plant.unre-competitive, even compared to their national peers.
Australia already imports more than one component of its gas and diesel needs, which is a component of the explanation of why Canberra’s strategic garage plan, where the 4 refineries compete for contracts with the government to build and manage oil and fuel garage plants.
“In a world where sovereign security and energy security have come to the fore through the effects of COVID-19, maintaining this refining capacity is, I think, certainly for the country,” Wyatt said.
But in Victoria, a closure of Geelong would jeopardize production and chemical plants, risking the elimination of an entire sector, as has happened with the automotive industry, he argued.
“You have to perceive that Geelong, Altona, LyondellBasell, Qenos – is a total ecosystem of plants that intersect indirectly and separate a detail from it and it is threatened that everything will collapse,” he said.
Limitations on the shipping channel to Geelong charge Viva $20 million a year, while the state has electricity and fuel prices in the country, which expanded the plant’s energy prices from $20 million to $30 million in recent years, Wyatt said.
“I’m disappointed with the speed at which they’re moving, and unfortunately the weather isn’t on our side,” Wyatt said of the Victorian government’s response, adding that the federal government is responding more temporarily with its industry review than in the hope of getting results.
“We want to see the same point at the point of state.”
“Ultimately, this will be a package that will be critical if we want to have the confidence to continue investing in the refinery and continue to run the refinery for the foreseeable future.”
Short-term customers of the plant are not helped by the “potentially unattainable” fitness criteria that the Victorian government announced Sunday for the reopening of the economy, meaning it will be “difficult” to restart all remedies in Geelong in November as planned.Mr. Wyatt.
“The short term in the long run becomes less difficult to manage if there is confidence in the roadmap and if we have more confidence in the long term in the long run,” he said.Viva has a plan to adapt the long-term to the sun.energy production, garage and hydrogen.
A spokesman for the Victorian government said only: “We are aware of the significant effects of the pandemic on businesses and industry and are largely tracking it at Viva Energy and are working with the organization.”
A spokesman for federal energy minister Angus Taylor said Morrison’s government was providing ongoing services to refineries through JobKeeper and was working heavily with the industry on its long-term viability, so he placed responsibility on Victoria’s government to take action.
“As Viva has made clear, the restrictions of the fourth stage of the Victorian government have a significant effect on the viability of its Geelong refinery,” Taylor’s spokesman said.
“We expect the Government of Victoria to work hard with refineries for the sector and its painters.”
Australian Workers’ Union Secretary ben Davis said the risk of closure was genuine, but could have been avoided through a federal and state aid program.
The union is not pressuring governments to guarantee losses, but offers a plan to help the refinery overcome the crisis.
“We can’t pass up our refining ability, ” said Mr. Davis.”As a piece of national security and an economic piece, it would be a disaster.”
He said union members were surprised by Viva’s announcement, saying they knew the closing talks were monetary “came out of nowhere.”
However, the Geelong refinery, which contains more than part of Victoria’s fuel, was supposed to close in part six years ago when former owner Shell left, and little was expected to be a buyer.for transport fuels and lower refining margins.
The plant suffered a loss of nearly $50 million in June of the year and the damage continued even with production at just 60% of its capacity The plant’s gross margin to convert oil into subtle fuels was only US$2 consistent with the barrel in July.less than the $4.50 to $5 part you want to reach at the break-even point.
“We can’t go on like this forever, ” said Wyatt, reporting a resolution until October.While the federal government’s plan of passes for a strategic oil garage can help, it’s not enough.
“We are now at a point where demanding situations are so wonderful that we want the help of state and federal governments and the commitments we have with them over the next month will surely be critical,” he said.
Viva’s shares, partly owned through global commodity trader Vitol, fell 0.5 cents to $1,595.
Matt Halliday, Ampol’s chief executive, also warned of dangers for Ampol’s Lytton refinery in Brisbane, while ExxonMobil’s Altona refinery and BP’s Kwinana plant in Western Australia also had to slow down their operations this year.
Viva, which owns Shell’s network of service stations, said its fuel retail business “remains resilient” to ongoing restrictions in Victoria.retailers’ margins remain “favourable.”
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