Whitegate refinery firm gets €180m injection

The firm that operates the State’s only oil refinery has received a cash injection of $200m (€179.9m).

Whitegate refinery firm gets €180m injection

The increase in authorised capital in the US-owned Phillips 66 Whitegate Refinery Ltd is confirmed in documents lodged with the Companies Office.

Phillips 66 is the fourth largest non-government refiner in the world and its Whitegate refinery has a capacity to produce 75,000 tonnes of oil per day and supplies around 40% of Ireland’s fuel needs.

The refinery has operated in east Cork for 55 years and it was sold by the State in 2001, along with a crude and products terminal in Bantry Bay, to US oil firm Tosco, which was subsequently bought by Phillips before being taken over by Conoco.

The cash injection will sharply reduce the deficit on the firm’s balance sheet — at the end of December 2013, the firm had a shareholders’ deficit of $230.29m.

Last year, Phillips 66 pulled the proposed sale of the Whitegate oil refinery as attempts to find a buyer failed.

At the time, Phillips 66 boss Greg Garland said: “In Whitegate, we gave it a good try. We had the asset on the market for more than a year and I would say we’ve got limited to negative interest in that facility.”

The failure to resolve the refinery’s long-term future is against the background of a contractual obligation between the Government and Phillips 66 to operate the refinery until July next year.

Last month, Phillips 66 left the door open on a potential sale when it confirmed that it is considering selling the refinery, adding that, longer term, it expects that the “asset will be challenged”.

The company said options for the refinery included possibly offloading the refinery or transforming it into an import terminal.

At the end of last year, Phillips 66 had 14,000 employees globally and assets worth $49bn.

Fianna Fáil finance spokesman Michael McGrath said last month that he is “extremely fearful for the future of the refinery” once the obligation concludes, adding that its closure would have a devastating impact on employment.

The most recent accounts for the Whitegate firm show that numbers employed by the group totalled 157 with staff costs at $30.5m.

In a Dáil response in the last parliamentary term, Energy Minister Alex White told Fine Gael’s Jerry Buttimer that he was in regular contact with Irish and US executives of Phillips 66, while officials from his department met with the Irish Petroleum Industry Association late last year to discuss the future of refining in Ireland.

In response to a separate parliamentary question from Fianna Fáil’s Michael Moynihan, Mr White said that his most recent meeting with Philips 66 representatives was in April of this year.

He said they indicated that they remain committed to honouring its contract with the State to operate Whitegate to next year “and they are actively considering a number of options for the future of the refinery beyond that date. I understand a potential sale is one the options under consideration.”

The most recent accounts show that the Phillips 66 Whitegate firm that operates the refinery plunged into the red in 2013 to record pre-tax losses of $53.37m.

New figures show that it had a pre-tax profit of $9.1m in 2012. The group’s cost of sales reduced from $3.05bn to $2.9bn last year.

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