Viva Energy stands to gain more from an interim $83.5 million federal government lifeline for the refining sector after Victoria’s other refinery announced on Wednesday it would shut.
ExxonMobil’s refinery at Altona is expected to turn into an import terminal later this year, which will leave a larger slice of a production support payment for the Geelong refinery and Australia’s other refinery in Brisbane.
Viva Energy is due to receive $30 million before July to produce transport fuel for the national stockpile, but it comes as the company recorded a loss of almost $100 million in 2020.
About 700 people are employed at the Geelong refinery.
Viva Energy chief executive Scott Wyatt said refining remained “very challenging”.
“Viva Energy remains committed to working with the federal government to implement the fuel security package, and with the Victorian Government on investments to improve the competitiveness and long-term sustainability of our refinery,” Mr Wyatt said.
“We are also progressing projects such as the LNG regasification facility, which will see the development of a broader energy hub at Geelong and consolidate our role as a long-term supplier of energy to the state.”
Mr Wyatt would not reveal on Wednesday if Viva was operating at full production, if it had secured a federal government support package beyond July, or if it would provide the Commonwealth with a portion of the 780 megalitres of onshore diesel storage it has on offer in return for $200 million of government grants.
It is understood that beyond July refineries who commit to staying in Australia will be paid at least one cent per litre for producing transport fuel for the national stockpile.
Mr Wyatt said Viva was “encouraged” by support it had received from government, business partners and the broader community. He said the refinery was “committed” to improving its competitiveness and long-term sustainability.
A spokesman for Energy Minister Angus Taylor said: “The Morrison Government is working closely with Viva to ensure their continued operations in this country.”
Corio Labor MP Richard Marles said two of Australia’s four refineries had closed under the Morrison Government’s watch.
“The Morrison Government has overseen the closure of half of our domestic refineries in the last six months,” Mr Marles said.
“Morrison and Angus Taylor said their fuel security plan would ‘create 1000 new jobs and protect workers in the fuel sector and in fuel-dependent industries.
“Instead, their ‘stewardship’ has seen the loss of 600 jobs at Kwinana, and the imminent loss of 350 direct jobs at Altona, and many thousands more if they continue to sit on their hands.”
Mr Taylor said ExxonMobil made it clear impacts of COVID-19, declining crude production and other commercial factors led to the decision to close the refinery.
“It’s closure will not negatively impact Australian fuel stockholdings,” Mr Taylor said.
“The comprehensive fuel security package, announced as part of the 2020-21 Budget … will see an increase to Australia’s onshore diesel stocks and protect motorists and industry from future higher fuel prices.”
APCO petrol stations director Peter Anderson, who has long-term supply contracts with both Viva and the Altona refinery, said the federal government needed to boost onshore storage to ensure world events did not drive up fuel prices.
“We’ve got to have massive supply (on shore) and we just don’t have it now,” Mr Anderson said.
Extracted from Geelong Advertiser