Royal Dutch Shell has put its last remaining Australian oil refinery up for sale as part of move to reshape local operations in the face of growing competition from Asia.
The London-listed company said would dispose of the plant in Geelong, near Melbourne, in an effort to focus on investments on large scale sites including its Pulau Bukom refinery in Singapore.
Andrew Smith, Vice President of Downstream Operations for Shell Australia, said if no buyer is found for the 55-year-old Geelong refinery it could be converted into an import terminal.
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"Shell has a rich portfolio of opportunities and there is a competition for capital for those opportunities and in the world we are in Geelong just can't compete for that capital," Smith told Reuters.
Some experts believe a buyer is unlikely to emerge despite producing about half of the Australian state of Victoria's fuel and much of South Australia's.
The refinery's conversion to an import terminal is expected to result in a massive cut in the number of workers. More than 450 jobs are at risk.
The 120,000 barrels per day plant takes crude from Vietnam, Malaysia, Brunei, Indonesia, Algeria, Gabon, United Arab Emirates, New Zealand, and Australia.
Shell said it recognises that other parties might want to enter or expand in the Australian market which is set to overtake Indonesia as the biggest importer of oil products as domestic demand increases and as small, outdated refineries close.
Some investors view the shift to oil imports as an opportunity to make money in a developed country with low risks. It has attracted the likes of trading houses such as Trafigura which spent $800m on petrol companies and oil import terminals in Australia.
However, other trading houses believe the benefits have been overstated.
Last year Shell and Caltex Australia said they were closing two ageing refineries near Sydney. It reduced almost a third of the country's refining capacity.
Australia consumes about one million barrels a day of refined oil products - about the same as a medium-sized European country.
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