A multinational energy producer has decided to shut down one of the nation’s major oil refineries and retain very few workers.
BP Australia recently confirmed it would restructure its Kwinana Oil Refinery, 45km south of the Perth CBD. In about six months’ time fuel production will stop and the site will be redeveloped into an import terminal.
There is also potential to create a clean energy hub at the site to produce and store lower carbon fuels, including sustainable aviation and marine fuels, renewable diesel and other waste-to-energy products. The company believes this will help the Golden State achieve net-zero emissions by the year 2050.
Oversupply and low margins blamed
BP blamed a regional fuel oversupply and low refining margins for preventing the refinery from being “economically viable”. The industry has also increasingly shifted towards large-scale, export-oriented refineries throughout Asia and the Middle East instead of domestic production.
“[The] decision to cease refining is a difficult one and not in any way a result of local policy settings,” BP head of country Frédéric Baudry said in a public statement.
91 per cent of workforce lost
The decision means the current workforce of 400 permanent staff and 250 contractors will be downsized by nearly 91 per cent. Affected staff will be redeployed to other duties until construction of the new terminal ends in 2022. Only 60 workers will be retained for when the new terminal begins operation.
“Converting to an import terminal … will require fewer people to run,” Baudry said.
“We deeply regret the job losses that will result and will do everything we can to support our people through the transition.”
State Premier Mark McGowan urged the proponent to help affected workers find new jobs.
“This is an extremely disappointing outcome, and our primary concerns are the welfare of the dedicated workers at the Kwinana refinery and the continuation of fuel supply,” he said according to the Australian Associated Press (AAP).
Not enough notice
Australian Manufacturing Workers Union (AMWU) state secretary Steve McCartney is concerned affected workers do not have enough time to be retained and will have to consider fly-in, fly-out work elsewhere.
“Five months, including a Christmas period, is not long enough to substantively retrain workers,” he said according to AAP.
“Many AMWU members who work in Kwinana do so because they can work in a critical job that literally fuels the economy, and still be home every night with their families.”
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The refinery has operated for 65 years and will be remembered for playing an “important role” in history.
“It helped underpin the early development of the surrounding community and key industries,” Baudry said.
“Generations … have worked at the facility, building a fantastic legacy of safe and reliable operations that we will always be proud of.”