Chevron's Welsh refinery buyer considers impact of fatal blast
06 June 2011
The prospective buyer of Chevron's oil refinery in Wales is examining whether an explosion which killed four people at the site last week could affect the deal.
Valero, a US refining giant, agreed to buy the plant for $730m (£445m), plus $1bn for oil stocks and other businesses in March. The deal is due to close in the third quarter of this year. However, a spokesman for Valero said: "There's no way of knowing at this early stage what the impacts of the incident might be. For now our concern is for those affected and their families. "It's too early to know what effects, if any, there will be on the process."
A joint police and Health and Safety Executive investigation is currently trying to determine the cause of the accident, which happened during maintenance work, when a 730 cubic metre storage tank exploded. Chevron said it does not expect any consequences on the Valero deal. "Right now we don't see why this would impact the sale," a Chevron spokesman said. The 220,000 barrel-per-day Pembroke Refinery was sold along with 1,000 Texaco-branded retail service stations in the UK and Ireland.The deal also includes a commercial and industrial fuels business, seven equity-owned terminals, shareholdings in four pipelines, eight aviation facilities and related support & trading operations. The disposal was part of Chevron's wider re-evaluation of its business and restructuring that involved 2,000 redundancies worldwide, with most cuts across the US, Africa and Asia. The Pembroke refinery, which employs 1,400 people, had been up for sale for a year before Valero said it would buy the site. Four out of Britain's eight refineries were up for sale at the same time earlier this year. Oil majors have been shedding their refineries across the globe after reporting losses in 2010 in their downstream units on weak margins from the plants, which convert crude into petroleum products. Analysts say that Asian companies are most likely to survive the excess capacity in the refining industry because their costs are lower. Shell recently sold its Stanlow refinery to Essar Energy at a price well below analyst expectations. The Pembroke refinery first opened in 1964.
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