A struggling oil and gas operation is deciding whether to axe much of its workforce in southeast Queensland.
Ampol has launched a comprehensive review of its Lytton Refinery near the Port of Brisbane, after the business suffered a downturn due to falling commodity prices and the coronavirus recession.
The business had tried to fast-track and extend a planned refinery turnaround and inspection. However, it could not compensate for the higher cost of managing the crude supply chain, reporting a year-to-date loss of $141 million.
Up to 550 jobs could go
The proponent is now considering more drastic options for the facility and supply chains, including closing and permanently transitioning to an import model. Such a decision would impact on about 300 permanent staff and 250 contractors who work at the Lytton Refinery.
“Global economic conditions triggered by COVID-19 have put significant pressure on refining, as evidenced by our performance in the first half and the significant losses,” Ampol managing director and CEO Matt Halliday said in a public statement.
“We must continue to deliver strong returns on capital and this review will allow us to be proactive in determining the best course of action to protect our balance sheet, improve earnings certainty and maximise shareholder value from our integrated supply chain.”
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For now Lytton refinery will continue to operate with production for the rest of the year expected to total 1.3 billion barrels.
A decision is expected to be made on whether to close the refinery during the second quarter of 2021.