After a bruising year, Ampol revs up rebrand and green fuel ambitions
On the side of the Sturt Highway in Wagga Wagga this month, a milestone was reached. The old Caltex sign was taken down and replaced with a new one: “Ampol,” it said. Red letters on a white background. It was the 300th petrol station the company has rebadged since January.
“We’re on track to complete the entire network of almost 1900 sites before the end of next year,” Ampol’s retail boss Jo Taylor says. “You turn the corner, you’ll see an Ampol.”
Last year was one of extraordinary upheaval for Australia’s fuel suppliers. Lockdown restrictions to arrest coronavirus brought normal life to a halt, wiping out sales of petrol, diesel and jet fuel on a scale never seen before. The crash pushed some parts of the industry to breaking point, with two of Australia’s four oil refineries closing their doors for good.
The fuel giant formerly known as Caltex Australia had to confront those challenges and more. After US oil major Chevron terminated a licensing agreement, the company began the mammoth task of rebadging its nationwide fuel network as Ampol, the once-ubiquitous Australian brand phased out in the mid-1990s. Matt Halliday was chosen to replace Julian Segal as CEO to steer the business through.
In reviving the Ampol brand, Halliday insists there are more benefits than challenges. In a market saturated with foreign brands like BP (British Petroleum), Shell (Anglo-Dutch) and Mobil (American), the name Ampol, they hope, might just stand out.
“The Ampol brand is one that strongly resonates with Australians,” Halliday says. “We will continue to leverage our position as the only major Australian fuel brand to win new customers.”
Halliday, formerly an executive at Rio Tinto before joining Caltex Australia as chief financial officer, took the reins as Ampol CEO at a decidedly turbulent time last year. As fuel usage collapsed across the country, its profit crashed by 38 per cent for the 12 months to December. Losses at its Brisbane oil refinery – which processes crude oil into fuel products – blew out to $145 million, down from a profit of $70 million the prior year.
The company was forced to launch a review into the future of that refinery, and the hundreds of workers employed there, including whether to shut it down and convert the site to a fuel-import terminal instead.
This year, snap COVID-19 lockdowns continue to depress fuel volumes and a dark cloud hangs over jet fuel in particular. But Ampol has told investors it expects to see a recovery in demand as the year progresses. And last month, Halliday delivered the good news for refining workers that Brisbane would remain operating until at least 2027 after striking a deal with the Morrison government. A rescue package for it and Viva Energy’s Geelong refinery, which includes a 1.8¢-a-litre payment for locally made fuel and further grants of as much as $125 million to upgrade their refineries to meet new sulphur fuel limits, passed parliament last Wednesday with bipartisan support.
“Our decision to maintain refining operations at Lytton provides clarity and a path forward for our valued employees, supporting the continued employment of 550 Australian manufacturing jobs and the indirect employment of hundreds more,” Halliday says.
As the electric vehicle era begins to dawn and concerns around greenhouse gases deepen, climate advocates have questioned the merits of taxpayer subsidies for fossil fuels and dispute the necessity to retain domestic fuel-production capacity.
“The oil industry is a key driver of climate change,” Greenpeace Australia says. “Rather than propping up one of the biggest drivers of climate change, the federal government should be investing in electric vehicle infrastructure and the electrification of our transport systems, which currently rely on oil and contribute around 19 per cent of Australia’s domestic emissions.”
While Halliday and others in the fuel sector insist an “orderly transition” to a cleaner transport fleet will take time and traditional fuels will play a big role for many years, he says Ampol is attuned to the fact the energy transition is accelerating and the business must evolve with it.
In May, he mapped out Ampol’s decarbonisation and transition strategy, committing to neutralising operational emissions by 2040 and launching investments in future energy solutions including powering electric vehicles and manufacturing green hydrogen. “We know our customers’ needs are changing,” he says. “Our infrastructure assets, integrated supply chain capabilities, Australian brand, and industry knowledge will play an important role in delivering a range of energy solutions for our customers in the future to support change across major parts of the Australian economy.”
Extracted from The Sydney Morning Herald