The Government is unable to guarantee the operation of the Whitegate oil refinery once an obligation to operate it expires in a year, according to a department spokesperson.
Fears have been raised in recent days for the country’s only refinery after the Irish Examiner revealed its parent company, US-based Phillips 66 was still considering selling the east Cork facility.
A spokesperson for the Department of Communications, Energy and Natural Resources said the Government’s preference is for refining to continue after July 2016 when Phillips 66’s obligation expires.
However, the decision is beyond its control since the State offloaded the facility in 2001 — meaning its future will be decided solely on a commercial basis by its parent company.
“Under the sale and purchase agreement made at that time, commercial decisions beyond July 2016 are a matter for the company who operate in a fully liberalised market,” the spokesperson said.
Cork County Council has written to the Government urging the Coalition to set up a taskforce to secure the refinery’s longer-term future amid fears that more than 150 employees and an additional 130 contractors could be out of work.
Further concern surrounds the refinery’s strategic importance in securing Ireland’s fuel needs and its value to the nearby Port of Cork which derives almost a third of its income from the refinery.
There have been five meetings between sitting energy ministers and Phillips 66 over the past two years.
Former minister Pat Rabbitte attended two of those meetings while the remainder took place with current energy minister Alex White.
The most recent of these meetings took place in April 2015, according to the department which added that its officials remain in ongoing contact with Phillips 66’s management team.
The department also engaged with the Irish Petroleum Industry Association in early 2014 to discuss the refinery’s future and said it would consult widely on an individual basis with stakeholders.
Fianna Fáil finance spokesperson Michael McGrath has called for the Government to find “a strategic partner” with whom it could work to ensure the refinery’s future in the absence of a firm commitment from Phillips 66.
“If the Government does not receive a commitment from Phillips 66 to continue to operate the refinery in the medium to long term, the State should consider identifying a strategic partner with a view to ensuring the continuation of the refinery.
“Ireland imports 55% of its oil products — diesel and petrol. This dependence on imports presents us with an acute security of supply problem. Notwithstanding the efforts to boost the supply of renewable energy in Ireland, we are likely to remain quite dependent on oil for years to come,” Mr McGrath said.
The refinery made a pre-tax loss of $53.37m (€48.47m) in 2013 — the most recent year for which its accounts are available.
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