Phillips 66 has appointed Deutsche Bank to handle the sale of the strategic assets at Whitegate and Bantry, in West Cork, with a target to complete the sale by the end of the year.
The company’s US-based spokesman Rich Johnson said: “Phillips 66 intends to continue operating the assets as usual during the marketing process, which is expected to last for several months.”
While the Whitegate facility is perfectly positioned to process any oil recovered from the Barryroe and Dunquin fields, industry sources suggest the refinery when sold could be closed as a refining facility and used as an oil products distribution base for fuels such as imported petrol and diesel.
In March, Phillips 66 executive vice-president Larry Ziemba told a Bank of America-Merrill Lynch conference the Irish refining operation was neither sophisticated nor competitive. “We’ve got a refinery in Ireland that is small, and not sophisticated. It really can’t compete in Europe,” he said.
The Whitegate refinery began operations in 1959 and supplies one third of the country’s transportation fuels — processing 71,000 barrels of crude oil a day — employing 155 people full-time and up to 100 contractors on an ad hoc basis.
Phillips 66 also operates a crude oil and refined products terminal employing 27 people with 7.5m barrels of storage in Bantry Bay. The National Oil Reserves Agency (NORA) is a major long-term customer, making the facility of national strategic importance.
At present, Whitegate produces a range of petroleum products, including unleaded petrol, auto diesel, central heating oils, and liquid petroleum gas. It also blends biofuels.
The Department of En-ergy and Natural Resources was queried last night on the impact of the sale of the two facilities on NORA and government policy but had not responded at the time of going to press.
However, earlier this year, the department said the Government was committed to enhancing energy security and to delivering national renewable energy and energy efficiency objectives aimed at moving the economy away from reliance on imported fossil fuels.
“The day-to-day operation of the refinery is a matter for the current owners, Phillips 66, and the department is continuing to engage with Phillips 66 regarding their future plans for the Irish business. The department is also participating in the wider debate at EU level as to the future of the European oil refining sector through the Oil Refining Roadmap process,” a spokesperson said in March.
“Ireland continues to be dependent on oil and natural gas to meet its energy needs and in that regard Whitegate refinery remains an important element of Ireland’s overall oil supply infrastructure.”
The first oil production from the Barryroe oil field, off the coast of Cork, could start within “three to four years” according to Tony O’Reilly jr, chief executive of Providence Resources.