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Milford Haven refinery faces closure after Murco fails to find buyer

07 April 2014

On April 4, Murco Petroleum, a subsidiary of Murphy Oil of the US, announced it is entering into consultation with staff over possible redundancies at the Milford Haven refinery in Wales following a fruitless three-year search to find a buyer for the site. The refinery employs 370 full-time staff, and up to 150 contractors could also be affected.

The Milford Haven refinery currently employs 520 staff and contractors
The Milford Haven refinery currently employs 520 staff and contractors

A spokesman for the business said: "UK refining remains a particularly challenging market, caused in part by declining demand and increased international competition.

"Following the expiration of exclusive talks with a potential buyer, Murphy and the company plan to speak with a small number of interested parties, which may or may not lead to allowing the refinery to continue to operate.

"Murco is therefore today entering into a period of consultation with employees and their representatives, including the employees that work at the refinery.

"Until this period is completed it is not possible to predict the outcome of this process.  In the interim we will ensure we properly consult with our employees during what will understandably be an unsettling time for everyone concerned."

Tom McKinlay, Managing Director of Murco said: "Our focus today is on helping our people understand what this means for them. For over three years, we have left no stone unturned in trying to find a buyer for the plant.

Pembrokeshire MP and Wales Office Minister Stephen Crabb said: “The collapse of the Murco refinery sale is a hammer blow for Pembrokeshire and the wider West Wales economy. Hundreds of skilled, high quality jobs in our community are now at risk. Pembrokeshire has seen refinery closures before and we know the short-term impact can be colossal.

The Pembrokeshire site is one of just seven remaining UK refineries, down from a peak of 18 in the late 1970s. It processes 135,000 barrels of crude oil each day, contributing about a tenth of the UK's refined products output.

Murco had been holding exclusive talks with private equity firm Greybull Capital over a $500m sale, but this ended with no deal. Since July 2010 the company has spoken to many potential buyers without success.

The refinery has lost tens of millions of pounds in recent months in the tough refining market. European refiners are facing a long-term problem of overcapacity as petrol production outstrips demand at the pumps, due to a combination of more efficient cars, increased use of biofuels and the growing popularity of diesel.

Refiners are struggling to find buyers for surplus European petrol production, which has to compete with output from modern, efficient refineries with cheaper running costs elsewhere in the world.


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