Viva Energy Group may face a potential loss of up to $105 million in refining revenue following an incident at its Geelong Refinery in Corio. The company released a statement on the Australian Securities Exchange (ASX), explaining that a compressor was accidentally dropped from a crane during planned maintenance work. Fortunately, there were no injuries as the area was cordoned off at the time. Viva Energy has initiated an investigation into the incident, with the involvement of WorkSafe. The extent of damage to the compressor is yet to be determined, but repairs are estimated to take approximately three months.
As a result of this incident, Viva Energy expects a monthly Refining EBITDA (RC) loss of AUD$25 million to AUD$35 million, including June, due to the impact on production and margins. However, the company has insurance coverage for property damage and business interruption, which is anticipated to mitigate a significant portion of the financial impact. Viva Energy reassured that the ongoing maintenance turnaround at the refinery, scheduled to conclude by the end of this month, will allow unaffected units to resume operation. The company stated that supply to the market is not expected to be disrupted.
In response to the incident, Viva Energy promptly informed the government, according to a spokesperson for Climate Change Minister Chris Bowen. The government is closely monitoring the situation but does not anticipate any supply or price disruptions. The market response to the incident was reflected in a slight dip in Viva Energy’s share prices, which decreased from $3.23 to $3.20 before the close of trading on Tuesday, and further dropped to $3 on Thursday afternoon.
For the latest retailer news and information, check out the ServoPro website or to speak to us on how we can help your business contact us.