Key points:
- BP has run the refinery in Kwinana for 65 years
- The site will be converted to an import terminal employing 60 people
- The firm says it is the international market that prompted the move
Hundreds of jobs are set to be lost as BP Australia’s Kwinana Refinery stops fuel production.
The company announced on Friday that the oil refinery, which has been operating for 65 years, was no longer economically viable, and it would convert the site to an import terminal.
Refining activities will wind down over the next six months, with the new terminal expected to open in 2022.
The refinery currently employs around 650 people between permanent staff and contractors, and will employ around 60 once the import terminal is completed.
BP Australia Head of Country Frederic Baudry said the decision had been difficult, and came in response to ‘long-term structural changes’ in the Asia and Middle East markets.
“Today’s decision to cease refining is a difficult one and not in any way a result of local policy settings,” he said.
“Converting to an import terminal will not impact the safe and reliable supply of fuel products to Western Australia; however, it will require fewer people to run.
“We deeply regret the job losses that will result and will do everything we can to support our people through the transition.”
The closure BP’s Kwinana refinery will leave three refineries in Australia, with none in WA.
One is in Melbourne, another in Brisbane, and one in Geelong.
No impact on Australia’s fuel supplies, Federal Government says
The Federal Government has expressed disappointment over the refinery closure.
Energy Minister Angus Taylor said his thoughts were with the BP workers, families and local business owners.
He said the Government expected BP to deliver on its commitment to supporting workers during a challenging period, but that closure of the refinery would not impact Australian fuel supplies.
“We will ensure Australia maintains a sovereign refining capability to support local industry, meet our nation’s needs during an emergency, and protect motorists from future higher prices,” he said.
Opposition leader Liza Harvey also expressed concerns about the refinery’s closure on local supply.
“We need to be more self-reliant in Western Australia,” she said.
“With the announcement today that the BP oil refinery in Kwinana will close, we will now be completely reliant on importing petrol from interstate and overseas for our domestic fuel security.”
Union pushes for Commonwealth intervention
The Australian Workers’ Union (AWU) called on Prime Minister Scott Morrison to intervene to stop the refinery closure.
AWU WA secretary Brad Gandy said the news was a shock to members.
“The Kwinana refinery is rightly viewed by West Australians as a critical piece of state infrastructure — this abrupt announcement is shocking,” he said.
“Six hundred and fifty employees who have worked tirelessly through the pandemic to deliver fuel to West Australians have been utterly blindsided by management today.”
AWU national secretary Daniel Walton said losing Kwinana would be a ‘mortal blow’ to the Federal Government’s intention to maintain Australia’s refining capacity.
“This is an occasion where the PM needs to get on the phone to BP and tell them to stop dead in their tracks.”
Closure happens despite State Government opposition
The State Government said BP confirmed a redundancy package would be available for workers, and that they had commenced efforts to find workers new positions in the sector.
Premier Mark McGowan said the Government had repeatedly called on BP to continue operations at the refinery, but that the company made its decision after years of significant financial losses.
“This is an extremely disappointing outcome, and our primary concerns are the welfare of the dedicated workers at the Kwinana refinery and the continuation of fuel supply to WA,” he said.
“This is a sad day, and the State Government has an expectation that BP will honour its commitment to do everything possible to find alternative work arrangements for those who want it.”
Mr McGowan said the government would provide a team at South Metropolitan TAFE’s Jobs and Skills Centre to support workers with advice on work and training options.
Both BP and the State Government said they would continue to work on a potential clean energy hub in Kwinana.
“This is a matter of national security — BP cannot be allowed to breezily announce this on a Friday afternoon as if it’s some run-of-the-mill commercial decision,” he said.
Extracted from ABC