Sale of Whitegate oil refinery moves closer

The sale of Whitegate oil refinery could be announced as early as next week with negotiations believed to be at an advanced stage.

Sale of Whitegate oil refinery moves closer

The country’s sole refinery has been on the market since November 2015 when its current owners Phillips 66 (P66) took the decision to again seek a buyer after earlier attempts to offload it in 2014 failed.

It is understood a preferred bidder has been identified by Texas-based P66 from a shortlist of interested companies which included private equity firm ArcLight Capital, Irving Oil, UK-based PTFPlusOne and Valero Energy.

An announcement is likely to follow in the coming weeks but the future of the refinery’s staff is unclear.

Approximately 155 staff, both full-time workers and contractors, are employed at the refinery.

Phillips 66 is obliged to operate the refinery until July 2016 as part of a deal it has with the Government.

Canadian family-owned Irving Oil are understood to be the frontrunners in the sales process.

Irving is a gas and oil processing, transporting and marketing company headquartered in Saint John with additional operations in the US state of New Hampshire.

The Canadian firm was one of the companies touted as a potential buyer for Whitegate in 2007.

Irving Oil also has close ties to Topaz’s new owners, Alimentation Couche-Tard.

Irving leases some of its Canadian stores to Couche-Tard which then operates them under its ‘Circle K’ brand. It also owns Irving Oil Refinery — Canada’s largest refinery. Whitegate last year reported losses of more than $280m (€263m) in 2014.

The losses represented a fivefold increase on the $58m loss it made the previous year.

Phillips 66 reduced the value of the plant and equipment resulting in an impairment cost of $127.6m in addition to its $146m operating loss.

A number of politicians have called for Whitegate’s future to be prioritised since it was put back on the market late last year.

Fianna Fáil Cork South Central TD Michael McGrath mooted the suggestion of a joint venture between government and private operators as a means of securing its future.

Last month, Fine Gael MEP Seán Kelly underlined what he referred to as the “key strategic importance” of the refinery and highlighted its crucial role in Ireland’s fuel security which he said could be made more precarious in the event of the UK voting to leave the EU.

“With Whitegate up for sale and our dependence on the UK what it is, I feel there is a real cause for concern given there are now question marks surrounding the reliability of nearly all of our petrol, gasoil and diesel supply,” Mr Kelly said.

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