Global oil giant BP will shut its Bulwer Island refinery in Brisbane with the loss of hundreds of jobs.
Staff numbers at the refinery will be cut from 380 to 25 by 2015.
Andy Holmes, president of BP Australasia, told a press conference in Melbourne that the refinery was being closed because the emergence of major export-based refineries in Asia operating on a lower cost base had “transformed the industry”.
“[It has] presented the Bulwer operation with an unsurmountable challenge,” he said.
Mr Holmes said the company had invested “heavily” in the Bulwer Island refinery, and that every effort was made to keep it open.
“This is a difficult day of the people of Bulwer and we are doing everything we can to support them,” he added.
He said the plant’s closure would involve “unavoidable disruption” to employees and their families.
“Every effort will be made to minimise that disruption and given the quality of our people I am sure they will be of considerable interest to other employers in the oil and gas sector in Queensland and beyond.”
Mr Holmes said he did not believe that today’s decision would affect Australia’s energy security.
The refinery produces 101,000 barrels of oil per day, according to the BP website.
BP’s other refinery is in Western Australia.
The move follows Shell’s February decision to sell its Australian refinery as well as 870 petrol stations to Vitol for $2.9 billion.
The sale was part of a global move away from “downstream operations”, the company said. It also sold refineries in the United Kingdom and Europe.
Shell said there were no job losses among the 450 employees at the Geelong refinery.
Government needs plan for dealing with job losses: Bowen
The Opposition’s Treasury spokesman, Chris Bowen, says BP’s announcement is distressing news for the workers.
“I understand that BP is making steps to retain some of the workers but obviously not all,” he said.
“Refining has been under challenge in Australia for many years now. We’ve seen refineries across Australia dealing with those challenges.
“Obviously we’d encourage BP and [federal] and state governments to work cooperatively to ensure every assistance is given to those workers.”
He said the Federal Government needed a plan to deal with mounting job losses.
“We’ve seen job losses in many major manufacturing sites in recent months,” he said.
“We need a plan for dealing with this.
“This government seems more devoted to spinning their way into May’s budget than they are determined to assist workers affected by change.”
Australian Workers Union Queensland secretary Ben Swan says the decision has come as a “horrible shock” to workers.
“Once again, manufacturing jobs have been shed, with little thought for how these workers might make their way in a difficult labour market,” he said.
“The fact this has come with no consultation makes it even harder for our members to absorb.”
The local federal MP and former treasurer Wayne Swan is attacking both the company and the Federal Government for the job losses.
He says there is no “adequate” explanation for why the plant is suddenly non-viable, as the company says.
“So I think it’s a big blow,” he said. “And the way in which it has been delivered, like a bolt out of the blue, makes it more difficult to swallow for very many people.”
Asked what his government would have done to protect the jobs, Mr Swan said “we would have been out there, working from day one”.
Australia now more vulnerable to fuel supply disruptions: expert
An expert has warned that the loss of Australian refining capacity could have a knock-on effect for motorists and other fuel users.
Griffith University’s Dr Vlado Vivoda, who specialises in researching energy security, says Australia’s refining capacity has roughly halved in recent years.
“Our supplies are essentially subject to the security of supply lines that bring petroleum products from international markets, particularly from Singapore, which we are becoming increasingly reliant on,” he said.
“An event at a particular refinery in Singapore could have significant ramifications on our refined petroleum product supplies in Australia.”
Dr Vivoda says Australia’s oil refining sector is likely to keep dwindling.
“I think this is not the last of refinery closures either… I wouldn’t be surprised if some others closed, even [BP’s Perth refinery] Kwinana at some point,” he said.
“I think this is not the last of refinery closures either… I wouldn’t be surprised if some others closed, even [BP’s Perth refinery] Kwinana at some point,” he said.
“It just doesn’t appear to be profitable for big oil companies to run refineries in Australia that are old, that are small in capacity compared to international refineries. It’s simply not a viable business.”
Latest blow for Australian industries
BP’s announcement is the latest in a series of job cuts across Australian industries.
This morning, Philip Morris announced it would close its Melbourne cigarette factory, where up to 180 workers will lose their jobs. The company said it would be moving the manufacturing jobs to South Korea by the end of the year.
The car manufacturing industry has also suffered serious blows in Australia in the past 12 months.
Car manufacturer Toyota announced in February it would move all production out of Australia by 2017. Almost 2,500 manufacturing employees are expected to be affected by the closure.
The Japanese company was the last car manufacturer to announce it would pull out of Australia; Ford announced last year that it would pull out in 2016, and Holden will shut down its manufacturing in 2017.
Holden’s closure will see nearly 3,000 workers lose their jobs and Ford’s closure will cause the loss of 1,200 jobs. There are also concerns the closures will see flow-on effects for the car parts supply industry.
In February Qantas also announced job cuts equivalent to 5,000 full-time positions, after the airline posted a half-year loss of $252 million.
source: abc.net.au
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