Viva Energy has refused to comment on the future of its Geelong refinery, pending its June review.
Questions over the long term viability of the refinery were raised after reports Viva chief executive Scott Wyatt said the company was “rethinking” its planned $100 million maintenance upgrades in Geelong, known as the cracker turnaround.
A spokesman told the Geelong Advertiser the refinery would await the outcome of a review due to be handed down by the end of next month.
“Our Geelong refinery is currently continuing operations,’ he said.
“However, due to significantly lower retail demands we have shut down our smaller crude unit and the Catalytic Cracker (RCCU) at the refinery to help us balance our gasoline production.”
The turnaround program could employ around 200 contractors from around Australia as the refinery looks to minimise costs.
Mr Wyatt outlined the company’s recovery strategies at the Macquarie Australia conference on Thursday.
Amid challenging economic times, the presentation revealed the review would assess the “scope, timing and method” of the turnaround.
Figures showed a 34 per cent decline in retail sales and a 75 per cent decrease in Jet Fuel compared to April last year.
“Reducing our gasoline production will not impact our capacity to continue to produce diesel fuel where we are still seeing relatively good demand,” the spokesman said.
“As we have previously announced we are currently undertaking a review in relation to our refinery RCCU turnaround, and expect a decision before the end of June 2020.”
Mr Wyatt had initially said the maintenance works were initially slated to cost up to $140 million and employ 700 contractors.
Mr Wyatt previously said a dramatic drop off in demand, falling prices due to a global oil glut and added workplace restrictions had led to less work for contractors at the refinery.
He also outlined plans to defer a $680 million share buyback.
The buyback, announced in April, would return $680 million made from the company’s stake in a property trust to all shareholders.
Extracted from Daily Telegraph