Refinery racks up big loss

AMPOL’S Brisbane oil refinery has stacked up big losses as the pandemic slashed demand for fuel across Australia.

Ampol, formerly known as Caltex, said the Lytton facility made a first-half loss of $59m from a $1m profit a year ago. Writedowns and inventory losses pushed Ampol $626m into the red, down from a $155m profit a year earlier.

The Lytton facility is set to be restarted next month after a four-month period of maintenance, but demand for fuel remains weak.

Ampol said that market conditions were uncertain and the company would continue to review its refining operations. It expects the refinery to be able to produce at full capacity by October but will continue to evaluate prevailing market conditions.

The Lytton refinery has a workforce of about 300 permanent employees and 250 contractors who work at the site during routine operations.

The company said the maintenance program represented a significant investment in the future of the refinery, with about $95m in capital forecast to be spent on the facility in 2020.

Ampol chief executive and managing director Matt Halliday said the company had performed well in extremely challenging market conditions.

Mr Halliday said the company faced sustained weak refining margins and “severe demand destruction” caused by a range of factors, including COVID restrictions imposed by governments.

AWU Queensland branch secretary Steve Baker said despite the difficulties facing the sector, the union had been encouraged by the investment made by Ampol in the future of the Lytton refinery.

“The importance of the refinery to the Queensland and Australian economies cannot be overstated,” he said.