The US oil major Chevron has said it is seeking a buyer for its UK refinery in Pembrokeshire. The plant employs around 1,400 people and processes 220,000 barrels of crude oil per day.
The company said it wanted to gauge interest in the site, which is said to be worth around ┬ú1.5 million a week to the Welsh countyÔÇÖs economy, but that it would not close it down.
It is thought that Essar, the Indian group in talks with Shell about buying its Stanlow plant, has said it is not interested in the potential acquisition, although it is currently looking to expand its European portfolio.
Chevron has ruled out shutting down or mothballing the plant, as its French rival Total has done with its Dunkirk refinery, which is being converted into a gas plant after sitting idle for a number of months.
Deputy first minister for Wales Ieuan Wyn Jones said of the announcement: ÔÇ£No decision about any of ChevronÔÇÖs plants has been taken. The Pembrokeshire plant makes a major contribution to UK refining capacity which is still required even in these difficult times.ÔÇØ
He continued: ÔÇ£The site has recently been upgraded to improve the efficiency of the refinery operation. I believe that the refinery has a good future and it is well placed to continue operations.┬áI will be making this case strongly to Chevron but it is important to emphasise that to date the company have not suggested that the refinery itself is in any danger of closing."
The move comes as Chevron looks for bids for several of its European operations as part of its global restructuring programme. It may also sell selected downstream assets in the Caribbean and Central America, including its lubricants and marketing business.
Mike Wirth, executive vice president of ChevronÔÇÖs Global Downstream unit, said: "Downstream market conditions are likely to be difficult for the next several years. We intend to further concentrate our downstream portfolio in North America and Asia-Pacific. These are markets in which we have our greatest competitive strength. We are also rapidly and aggressively lowering costs, reducing capital spending, improving efficiency and simplifying our organization."
The cost-cutting measures are expected to boost profit for Chevron this year. In the fourth quarter of 2009, the company lost $613 million (£410 million) in its downstream operations, compared with a $2.1 billion (£1.4 billion) profit during the same period in 2008.
Chevron has suffered from falling downstream profits as drivers cut their fuel purchases due to the recession. Having paid top prices for oil, refiners are struggling to claw back the money at the pumps, causing a slump in profits.
The company said its 2010 capital expenditure budget would be $21.6 billion (£14.4 billion), 2.7 per cent lower than a year ago.
Analysts have said that Asian companies are most likely to survive the excess capacity in the refining industry because their costs are lower.
ChevronÔÇÖs Welsh refinery, which first opened in 1964, benefited from an ┬ú84 million upgrade in 2005. It provides petrol to the oil company's 1,100 Texaco stations across the UK.
