Caltex axes up to 630 jobs with refinery closure

[Keepleft]

Originally Posted by neptune blue

Good god not another conspriracy theory
Mate I do believe that we are fed bull s&@t by politicians and the elite rich are treated diffently and there are powerful organizations that have a big say on the way the world is run but Caltex are pulling out because they are going to make more money by going off shore
I don't think there is any conspiracy here

I didn't say there was. I linking, I was responding to another poster about manufacturing-in-AUS, not about Caltex per se.

The Lima Agreement is not a conspiracy, I was simply pointing out 'why', as one key reason, we and the western world have had our manufacturing jobs go offshore. You need to read those resolutions.

I'm not paying attention to what folk on the sites are saying, if thats where your getting the conspiracy idea.

[XC GXL]

Originally Posted by Road_Warrior

Ok let me get this straight. When Kurnell closes, the only refineries in operation Australia wide will be the two BP refineries - Kwinana and Bulwer Island?? Shell's Clyde refinery is already closing next year, and the Shell refinery in Geelong is under a cloud..? What next?

Caltex still have Lyton in Brisbane. Not sure if that is going to close.

Wayne

[PlukaDuck]

THE END IS NEAR.

An article from 3 days ago. When the mining and construction boom is over we are **********d. What else does australia have now?



AUSTRALIA'S mining boom will end in just two years, economists predict.
In the sternest warning yet of troubled times to come, Deloitte Access Economics today said: ''The strong bit of Australia's two-speed economy won't stay strong for more than another two years or so''.
Access’s Chris Richardson said that the boom continues to do all the heavy lifting on Australia's economic growth, but the peak of the project pipeline is already in sight.
Investment in resources projects - the key driver of the boom - is looking "less certain the further out you look", Mr Richardson said.
Access, Australia's leading private-sector economics advisory, said: "Mining companies are making it clear the current spike in investment is due to decisions taken a while back, whereas we are getting few new mining mega-projects across the line."








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The report also said that costs in the mining industry are rising fast and potential profits are being dialled down on the back of deflating commodity prices and doubts over demand from Asia.

[whynot]

There appears to be a theme that we need these refineries as some form of self-reliance. That overseas manufacturer will be able to somehow hold Australia to ransom. For a moment, let’s put the boot on the other foot. Australia exports huge quantities of coal, iron ore, and gas.

How do the Japanese consumers feel about the security of their electricity supply relying on Aussie coal and gas? How to the Chinese and Indians feel about their manufacturing security relying on Aussie iron ore? Do we not see ourselves as reliable suppliers who one can trust? And do we not know that if we are not reliable, these countries can quickly swing to other suppliers? So, why are we fretting on overseas refined petroleum products if there is already substantial oversupply in the market?

[Jim Goose]

http://www.abc.net.au/news/2012-07-2...losure/4157396

Australia's peak motoring body fears Caltex's decision to shut its Kurnell site has left the country exposed to fuel supply risks and price volatility.

Caltex will shed more than 330 jobs as the Kurnell site in Sydney is transformed into a simple fuel import facility over the next two years.

The closure follows a recent decision by Shell to shut its refinery at Clyde. It will leave Sydney without an oil refinery.

Serious questions are now being asked about the security of Australian fuel supplies and the potential flow-on effects at the bowser.

Australian Automobile Association executive director Andrew McKellar says the closure could hit consumers hard.

"We need to ensure that we have adequate reserves in place but also that we're encouraging and developing alternative sources of supply," he said.
Audio: Listen to the story (PM)

"We need to ensure that there is adequate account taken of the impact that that sort of outcome can have on consumers and on the Australian economy."

Caltex currently supplies around 30 per cent of all transport fuels in Australia.

To ensure an uninterrupted flow of petrol into Australia, Caltex has teamed up with Chevron. Under the agreement, Chevron will procure and supply to Caltex imported product from Singapore at market-based prices.

Fat Prophets Resources analyst David Lennox says that is cold comfort for motorists now even more reliant on imported products to fuel their engines.

"If there's a blockage in the supply chain somewhere outside of Australian shores then we would be impacted no matter what happens," he said.

"Australia is not self-sufficient in crude supply, and while that is the case then we will always be susceptible to those types of blockages."
Fuel security

We are not meeting evidently our international obligations on fuel reserves in Australia, so we're in a very vulnerable position and unfortunately there's 52 other countries in the world who are a block ahead of us.
NRMA's Graham Blight

The NRMA agrees, with director of motoring and services Graham Blight saying Australia has not done enough to invest in alternative fuel sources like biofuels.

"The real issue is about fuel security in Australia," he said.

"We are not meeting evidently our international obligations on fuel reserves in Australia, so we're in a very vulnerable position and unfortunately there's 52 other countries in the world who are a block ahead of us."

But the body that represents independent service stations says petrol prices and supply should not be affected.

Colin Long, head of the Service Station Association, told the ABC the mega refineries in Singapore and India would easily be able to meet Australia's fuel supply needs.

Mr Long says that in the short term motorists will not be affected.

"Like Shell they will be bringing in the refined product all ready to go into Australia through their tanks and out to the distribution of service stations," he said.

"So the public and the service stations will notice no difference, so there's no actual threat as to supply in that scenario."
Economic decision

We believe this decision puts Caltex on a much more sustainable path going forward. We will continue to invest in our supply chain and marketing operations to further develop our proven growth platform.
Caltex CEO Julian Segal

Caltex says its decision to close the Kurnell refinery is based purely on economics.

"I'll just point out to you that last year we lost $208 million in our refining operations. That's a situation that cannot continue," said chief executive officer Julian Segal.

"We believe this decision puts Caltex on a much more sustainable path going forward. We will continue to invest in our supply chain and marketing operations to further develop our proven growth platform.

"Concurrently we will stem the losses at our refining operations by converting Kurnell to a major import terminal."

The terminal will take in and distribute fuel to the Sydney metropolitan basin.

That has been the role of the Kurnell refinery for the past 57 years, but Caltex says it was small in scale, producing only 100,000 barrels of petrol a day.

It was competing with new facilities in Asia which pump out more than 1 million barrels a day.
Further redundancies

Caltex maintains its refinery at Lytton in Brisbane will continue to operate as normal. It is even getting a modest upgrade.

But with refineries at Kurnell and Clyde gone, it leaves just six refineries remaining in Australia.

The Federal Government has downplayed the impact, saying most of the oil refined at the Kurnell site was imported.

"The independent national energy security assessment established excess refinery capacity in the Asia-Pacific region, and already 80 per cent of the crude oil refined at Kurnell is imported," said Resources Minister Martin Ferguson.

"There are mature import channels and ample product available to meet our needs and I am confident there will be no problems, difficulties in terms of the supply of fuel to Sydney or any other place in Australia."
Audio: Paul Howes speaks to PM (PM)

Caltex will now incur significant costs as it closes the Kurnell refinery totalling around $430 million.

It will also pump $250 million into converting and expanding the current import facilities.

The closure of the Kurnell site is expected to be completed in the second half of 2014.

Unions, meanwhile, are calling on the Federal Government to lobby Caltex to prevent the closure.

Australian Workers Union national secretary Paul Howes says both the State and Federal governments have neglected the Kurnell refinery.

"Why aren't they stepping in here and saying, 'Chevron, if you want the right to exploit our natural resources in the form of the Gorgon project - a $48 billion natural gas project - then you have the obligation through your 50 per cent share holding of Caltex to ensure that just a little bit of the crude oil is value-added in Australia."

[jpd80]

Originally Posted by XC GXL

Caltex still have Lyton in Brisbane. Not sure if that is going to close.

Wayne

2020 has been mentioned but that also depends on BP across the river....

[302 XC]

Originally Posted by mr smith

Forget the GFC the real crisis is on us now.

Dont want to scare anyone, but we are no where near finished with the global financial hardship yet, not by along shot ...

Better start learning to be self sufficient, cause when we are nearly all outta work , there will be no tax money to pay for those unemployed and the tap will get turned of
Some countries are running 3 outta 10 unemployed,this country cant handle that amount,we are under 10 % now its only gunna get worse

As for the fuel refinery , well we will have to by electric powered now wont we

[KIWI-1]

Professor John Buchanan, Director of the Workplace Research Centre of the University of Sydney Business School spoke on ABC TV this morning about how Norway had used the revenue from the "gift" of North Sea Oil to upskill and educate their citizens to work in other areas of employment.

Even as little as 1% of the mining tax revenue would train thousands of people currently being made redundant in the skills needed to work in the 90% of non-manufacturing jobs in Australia.

[hawkgirl]

sadly, the reason that it is cheaper for these companies to import rather than refine/ produce here is purely running costs.

Why pay someone here maybe $26 an hour when some guy in asia will do the job for $9?

[Ducati888]

Originally Posted by KIWI-1

Professor John Buchanan, Director of the Workplace Research Centre of the University of Sydney Business School spoke on ABC TV this morning about how Norway had used the revenue from the "gift" of North Sea Oil to upskill and educate their citizens to work in other areas of employment.

Even as little as 1% of the mining tax revenue would train thousands of people currently being made redundant in the skills needed to work in the 90% of non-manufacturing jobs in Australia.

And there we have our problem. A mining tax collected by the Feds, and an education system run by the states (except Universities, but they are not there to upskill or reskill workers).

There needs to be an alignment between federalised education, TAFEs and upskilling workers who lose their jobs. Currently it's just one of those buck passing things between the states and the Feds. Companies have to pay to retrain staff who are made redundant to some extent, and while this is the case, governments will shirk any responsibility.

[jpd80]

Originally Posted by hawkgirl

sadly, the reason that it is cheaper for these companies to import rather than refine/ produce here is purely running costs.

Why pay someone here maybe $26 an hour when some guy in asia will do the job for $9?

Not even that,
It's around $3/barrel to refine crude here but Asian plants can do it for significantly less and
even though shipping costs add back onto that, the additional product flow through an Asian
refinery more than offsets sustaining infrastructure in Australia, badly outdated structure at that.

[Ducati888]

Labour costs are a small component, not the overlying component. As stated earlier, the refineries are old and costs to refurbish and modernise them are prohibitive.

Whilst labour costs are cheaper in Asia, the ability to build massive state of the art refinieries is greater because of the lack of environemental and other regulations in some of those countries.

[jpd80]

Originally Posted by Ducati888

Labour costs are a small component, not the overlying component. As stated earlier, the refineries are old and costs to refurbish and modernise them are prohibitive.

Whilst labour costs are cheaper in Asia, the ability to build massive state of the art refinieries is greater because of the lack of environemental and other regulations in some of those countries.

Sad part is those state of the art refineries are actually more enviro friendly than our old refineries here.

[Ducati888]

Not when they bulldoze 200 acres of rainforest to put them on, and run them on electricity generated from burning old tyres.

[XWGT]

Originally Posted by 302 XC

Dont want to scare anyone, but we are no where near finished with the global financial hardship yet, not by along shot ...

Better start learning to be self sufficient, cause when we are nearly all outta work , there will be no tax money to pay for those unemployed and the tap will get turned of
Some countries are running 3 outta 10 unemployed,this country cant handle that amount,we are under 10 % now its only gunna get worse

As for the fuel refinery , well we will have to by electric powered now wont we

You know I dont think I even saw this level of scaremongering in 91, when we actually did have a recession.

Unemployment currently sits at around mid 5%, interest rates are at the lowest level ever, the economy just celebrated 21 years without a recession, which is a WORLD record by the way, our GDP has been at the upper end of world standards for the last few years and the agencies I use for labour hire cant find enough humans with a pulse, and everyone is convinced the world is going to end? YOU HAVE TO BE KIDDING??????????????????????

All your seeing is what has been happening within our economy for the last 20 or 30 years. Old inefficient industries that have not updated plant and technology at the expense of profit taking are now so uncompetitive the capital cost of modernising is beyond a reasonable pay back level, so they quit the market. Only difference is today is more immediate reporting in the media and scare campaigns sell...........

Its a natural life cycle for the economy. Jobs lost here are repalced in other industries and the world moves on.............

I think overall more brand new businesses opened their doors yesterday than existing business closed...........its just that one gets reported and one dosnt.

[mik]

Originally Posted by whynot

There appears to be a theme that we need these refineries as some form of self-reliance. That overseas manufacturer will be able to somehow hold Australia to ransom. For a moment, let’s put the boot on the other foot. Australia exports huge quantities of coal, iron ore, and gas.

How do the Japanese consumers feel about the security of their electricity supply relying on Aussie coal and gas? How to the Chinese and Indians feel about their manufacturing security relying on Aussie iron ore? Do we not see ourselves as reliable suppliers who one can trust? And do we not know that if we are not reliable, these countries can quickly swing to other suppliers? So, why are we fretting on overseas refined petroleum products if there is already substantial oversupply in the market?

lets not put the boot on the other foot!
our primary concern is Australia, lets say for some reason there is a shortage of fuel around the globe, suddenly the country that refines our fuel that we send them has a natural disaster and can only supply themselves with fuel for the next six months, (or we could add to that war causing shortage of fuel around the world)
, all of our refineries have shut down because it was more profitable to allow other countries to do it for us, and we allowed it to happen .

can we build a refinery in a couple of weeks or a month to keep us going till the the problems at the over sea`s are resolved and their refinery's come back on line if they are able?
the way i look at , it is not a theme ........it is fact ! yes for the time being things are ok, but things can change very quickly over night, trading partners can become distant at the drop of a hat through political, cultural, or natural disaster reasons, and every time we lose a bit of our own ability to be self sufficient....................... if it hits the fan down the track we are less able to deal with it.
ever seen what happens to this country when trucks stop running for a few days let alone a week or a month? maybe we can get by now, i would hate to see us be absolutely reliant on other countries, our self reliance in my book is one of the reasons we are the lucky country, but it seems to be slipping away.

[jpd80]

Originally Posted by Ducati888

Not when they bulldoze 200 acres of rainforest to put them on, and run them on electricity generated from burning old tyres.

I think you'll find that's Palm Oil...

In any case the decisions have ben made to progressively exit oil refineries in this country

[mik]

Originally Posted by XWGT

You know I dont think I even saw this level of scaremongering in 91, when we actually did have a recession.

Unemployment currently sits at around mid 5%, interest rates are at the lowest level ever, the economy just celebrated 21 years without a recession, which is a WORLD record by the way, our GDP has been at the upper end of world standards for the last few years and the agencies I use for labour hire cant find enough humans with a pulse, and everyone is convinced the world is going to end? YOU HAVE TO BE KIDDING??????????????????????

All your seeing is what has been happening within our economy for the last 20 or 30 years. Old inefficient industries that have not updated plant and technology at the expense of profit taking are now so uncompetitive the capital cost of modernising is beyond a reasonable pay back level, so they quit the market. Only difference is today is more immediate reporting in the media and scare campaigns sell...........

Its a natural life cycle for the economy. Jobs lost here are repalced in other industries and the world moves on.............

I think overall more brand new businesses opened their doors yesterday than existing business closed...........its just that one gets reported and one dosnt.

i don`t know if i believe those employment figures to be representative of real full time employment, my own opinion is a lot of those employed are part timers and the actual full time employment is worse off, another point some of these "inefficient" industry`s that people talk of, some are no doubt but some that are labor intensive and or energy intensive are very difficult or impossible in some cases to do better unless either cheaper labor or cheaper energy comes along,
no amount of solar panels is going to help a steel smelter for example, they rely on masses of power to heat the raw materials, it`s a bit easy to look at Australia as a whole and say we are`nt doing to bad compared to other countries with out resources ,while we are riding on mining/resource sectors back, lets see what happens if the resource sector has the predicted slow down, myself i firmly believe in the two speed economy, a percentage is doing it harder while the other percentage is coasting along at the moment, i hope we are as well off as some say.

[mr smith]

Originally Posted by XWGT

You know I dont think I even saw this level of scaremongering in 91, when we actually did have a recession.

Unemployment currently sits at around mid 5%, interest rates are at the lowest level ever, the economy just celebrated 21 years without a recession, which is a WORLD record by the way, our GDP has been at the upper end of world standards for the last few years and the agencies I use for labour hire cant find enough humans with a pulse, and everyone is convinced the world is going to end? YOU HAVE TO BE KIDDING??????????????????????

All your seeing is what has been happening within our economy for the last 20 or 30 years. Old inefficient industries that have not updated plant and technology at the expense of profit taking are now so uncompetitive the capital cost of modernising is beyond a reasonable pay back level, so they quit the market. Only difference is today is more immediate reporting in the media and scare campaigns sell...........

Its a natural life cycle for the economy. Jobs lost here are repalced in other industries and the world moves on.............

I think overall more brand new businesses opened their doors yesterday than existing business closed...........its just that one gets reported and one dosnt.

Not one person who has been made redundant in the last 12 months and taken a package would show up as unemployed. I would put the real figure at 10%

[Ducati888]

They are only unemployed if they are actively looking for work.

I contend that the refinery in question (with the exception of the contractors) would have a very well established work force, most of whom would have spent the best parts of their careers there. When they are made redundant, they will come out of it extremely well, to the point that if any of them are over 50 they would not need to work again.

Same goes for Alcoa in Geelong. Everyone's been there forever. They will do nicely out of its closure. A story that the Unions would prefer you don't hear.

It's the ancilliary and related businesses that are reliant on these large companies that stand to suffer the most. The ripple effect.

[Road_Warrior]

Originally Posted by Ducati888

Labour costs are a small component, not the overlying component. As stated earlier, the refineries are old and costs to refurbish and modernise them are prohibitive.

Whilst labour costs are cheaper in Asia, the ability to build massive state of the art refinieries is greater because of the lack of environemental and other regulations in some of those countries.

The irony there is that it is going to cost Caltex $620 Million to decommission and remediate that refinery. You could almost build a new state of the art one for that.

[XWGT]

Originally Posted by mik

i don`t know if i believe those employment figures to be representative of real full time employment, my own opinion is a lot of those employed are part timers and the actual full time employment is worse off, another point some of these "inefficient" industry`s that people talk of, some are no doubt but some that are labor intensive and or energy intensive are very difficult or impossible in some cases to do better unless either cheaper labor or cheaper energy comes along,
no amount of solar panels is going to help a steel smelter for example, they rely on masses of power to heat the raw materials, it`s a bit easy to look at Australia as a whole and say we are`nt doing to bad compared to other countries with out resources ,while we are riding on mining/resource sectors back, lets see what happens if the resource sector has the predicted slow down, myself i firmly believe in the two speed economy, a percentage is doing it harder while the other percentage is coasting along at the moment, i hope we are as well off as some say.

I wrote out a 200 word reply but then deleted it.

Bottom line is, mining is only around 10% of our economy, and the other 90% is in good shape. The glass is more than half full, and I wouldnt be panicking anytime soon.

[XWGT]

Originally Posted by mr smith

Not one person who has been made redundant in the last 12 months and taken a package would show up as unemployed. I would put the real figure at 10%

You can make it 15% if you like, it wont change the fact the economy is in good shape and there are labour shortages in lots of areas.

[KIWI-1]

Originally Posted by XWGT

Bottom line is, mining is only around 10% of our economy, and the other 90% is in good shape. The glass is more than half full, and I wouldnt be panicking anytime soon.

Mining employs 2% of the workforce according to the aforementioned Professor.

[jpd80]

Originally Posted by Road_Warrior

The irony there is that it is going to cost Caltex $620 Million to decommission and remediate that refinery. You could almost build a new state of the art one for that.

I hear Clyde and Kurnell will turn it into a major storage facilities with additional tanks being built..

[XWGT]

Originally Posted by KIWI-1

Mining employs 2% of the workforce according to the aforementioned Professor.

And how much does it contribute to GDP overall?

[JG34JA]

I agree with you XWGT that things are more 'glass half full'. A trip to WA, or the sheer volume of Residential construction and employment in my area, attest to this.

I also agree with you Mik that it is best, historically to be self sufficient.

As far as not being able to smelt steel with solar panels, try this:

https://en.wikipedia.org/wiki/Solar_furnace

It's a start!

As far as the unemployment being high, or low (it seems depending on one's opinion the data can be skewed any way), I found this fascinating -

http://www.theage.com.au/business/wo...712-21yuw.html

It seems there are people out there who are not working, and not unemployed either - just waiting and seeing. In my mind I see Ayn Rand's hero, John Galt, withdrawing his mind and productivity from society until the time of looting is over, but I am sure the truth is something different...

[roberts]

bring the retirement age back to 55 years, get these old no good baby boomers out of the work force pronto before anymore country shapping sceams come out.

We as australians have a choice, follow the old living model of the usa(the american/baby boomers dream)- this involves living way beyond our means on easy credit
being a nation of over weight high consumers, we dont need to manufactor anything it can all be purchased with our high dollar, obviously this lifestyle requires large amounts of money(at the moment this money comes from selling our noreplensiable natural resources) in the future, well this concept has no future and you most defintly cant save the enviorment living by this model 50 years time the mines are empty of coal and iron so we make the decission to fill them with all the broken made in china product we consume.

or we
get rid of our credit cards, personal loans, pay tv, car loans
if you cant find a product with made in australia written on it dont purchase that iteam (and no i dont care if its the same phone that Jay-Z has)
tax the hell out of the miners, like Puttin and Gaddafi did with the oil tycoons. I mention Gaddafi as when he was in power a % of all oil profit out of libya where paid directly to its natural born citizens bank accounts. This concept has it merrits as it shares the wealth from natural resources to all natural born citizens in a given country. As a result of living in our means prices come down as demand drops, the dollars comes down as growth slows now we have more spare time to work out the important things , to be inventors, develope critical thinking, all of a sudden investment picks up, we can afford to manufactor again, we USE of resourses not just sell them. Personal weath grows and only now can we think about saving the enviroment.

[KIWI-1]

Originally Posted by XWGT

And how much does it contribute to GDP overall?

Dunno.
My take on what the Prof was saying is that if we trained more to go into mining, and doubled the mining workforce, we would only go from 2% to 4%; therefore we need to be training for other skills, technologies to improve employment prospects.

[dart434]

guys i work in a oil refinery as a operator, this is disgusting that the government will let chevron go ahead with gorgon and wheatsone projects and not save this refinery they are in a partnership with caltex, its ok for them to reap the resources but not put back, singapore/india imports are cheap because they import slave labour from india/sri-lanka-bangaldeish, make no mistake that the contractors at these foriegn refineries are treated like dirt, the foreign refinerires constantly kill workers, Martin fergunson is a twit, "80% of crude oil is imported anyway" no crap we sell our good low sulphur light crude overseas cause they get a better price for gippsland and kosack (WA) crude oil, and that stupid GM of caltex to say the carbon price is not to blame, so they never considered the extra 1-2 million $$$ it would cost the base business??, yes it wasn't the straw the broke its back but it helped nevertheless!! Australia must retain its refining capacity for energy security, what get's me is that no one is realising that once these gas projects go ahead that our Nat gas will become more expensive because the market place will open up and we as consumers will be paying more, other countries will want to seek our cheap gas, supply and demand, we lose, big oil gets bigger, a sad sad outcome for all of us, i should mention that we already for excess supply of nat gas...