Whitegate oil refinery back on the market after €263m loss

The parent company of Whitegate oil refinery has confirmed that the country’s only such facility is back on the market after it reported losses of more than $280m (€263.13m) last year.
Whitegate oil refinery back on the market after €263m loss

The future of Ireland’s sole oil refinery has been shrouded in uncertainty for more than 18 months since its parent group, Phillips 66 pulled the plug on its sales process in early 2014 having failed to find a buyer.

The decision to recommence the process of finding a buyer for Whitegate and its wholesale marketing business has now been confirmed by the Texas-based company.

The process of identifying a potential buyer is likely to run into next year, however, with the company anticipating that the process will take a number of months to be completed.

“Phillips 66 has decided to seek a buyer for its 71,000 barrel-per-day Whitegate Refinery and associated wholesale marketing business in Ireland.

“Phillips 66 intends to continue the business as usual, in compliance with the terms of agreements between Phillips 66 and the Irish Government, during the marketing process which is expected to last for several months,” a Phillips 66 spokesperson said.

The company is contracted to operate the refinery until July 2016. The confirmation that the refinery is back on the market comes as latest accounts filed with the Companies Registration Office show that losses at the Whitegate facility soared $282.18m in 2014. The losses represent an almost fivefold rise on the $58.98m figure of 2013.

The refinery’s income statement shows an operating loss of $148m — more than three times that of 2013 — as its turnover was impacted. Revenue dipped by $268.8m in the year as the European oil refining industry remained challenged.

The directors’ report details a small recovery in its refining margin during the year as the economic recovery and increasing demand helped offset “external competitive factors” such as low energy costs in the US and supply from Russia.

“The combined impact is that refining margins have been depressed but are showing signs of recovery,” the report reads.

An impairment cost also contributed significantly to the refinery’s overall losses.

Phillips 66 reduced the value of the plant and equipment resulting in an impairment cost of $127.6m.

“The revaluation of the refinery in 2014 had a significant impact, as reflected in the latest accounts. We’ve seen a stronger margin in the Atlantic Basin this year and Whitegate has been performing well in this environment,” Phillips 66 spokesperson said.

Fine Gael TD Jerry Buttimer said it was a concern that there may not be a suitable bidder for the facility given the scale of the losses and Phillip 66’s previous failure to offload the refinery.

He said he will raise the issue with Environment Minister Alex White to ensure the Government’s involvement in the process while everything needs to be done to safeguard the 300 or so jobs at the refinery.

Fianna Fáil finance spokesperson Michael McGrath called on the Government to engage directly with Phillips 66 to determine the possibility of “carving out” a joint venture with a private company.

Mr McGrath said Whitegate is vital to the country’s economic interests and the national interest is best served by ensuring the refinery remains in operation.

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