Troubled times spark Caltex oil-refining revi

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  1. 13.0k

    Would not surprise me if they closed down manufacturing in Australia all together & ended up importing from Singapore

    Troubled times spark Caltex oil-refining review

    Andrew Burrell

    From:The Australian

    August 23, 201112:00AM

    CALTEX has become the second oil major in recent months to review the future of its underperforming refining business as the strong Australian dollar, high oil prices and mounting regional competition eat into the sector's thin margins.

    Caltex Australia chief executive Julian Segal said yesterday the review would include the long-term operations of the company's Kurnell refinery in Sydney and Lytton refinery in Brisbane.

    The two plants account for about one-third of Australia's oil refining capacity.

    Mr Segal's comments came as Caltex said a 24 per cent slump in first-half net profit to $113 million had been caused by low refining margins.

    The result was in line with market expectations.

    "With the review, we are not looking short-term; this is a complex issue," Mr Segal said.

    "There is quite a bit of serious work to be done and we won't be making a decision in a rush simply because of the current volatility.

    "We are doing it with a steady hand and a cool head."

    Mr Segal could not guarantee the longer-term future of the refineries, but he played down the significance of the review.

    "That's what we do from time to time," he said. "Even in the two years I have been here, we have already undertaken one review."

    The review comes after global petroleum giant Royal Dutch Shell said in April it would stop refining at its Clyde facility in Sydney and convert the operation into a regional import terminal.

    Shell cited the emergence of "mega-refineries" in Asia for eroding Clyde's competitiveness.

    Deutsche Bank analyst John Hirjee said yesterday the Caltex review underlined the challenges to petroleum refining in Australia.

    The high Australian dollar, weak regional margins and competitors choosing to reduce capacity in Australia all pointed to a difficult outlook, he said.

    "We expect the review will result in a shift in capital spend towards the marketing business rather than wholesale refinery mothballing, given the strategic benefits of an integrated position remain," he said in a client note.

    UBS analyst Gordon Ramsay said the outlook for Caltex would remain muted because of currency issues, the high oil price and concerns about regional net capacity additions.

    Mr Segal said preliminary estimates had shown that the Gillard government's carbon tax would hit Caltex's earnings by $5m-$10m from next year.

    Caltex's two oil refineries will qualify for free permits representing 94.5 per cent of carbon costs as part of transitional assistance under the tax.

    Transport fuels were excluded altogether from the tax, which he described as "a good outcome".

    "It is still $5m-$10m that will impact on our business, but the magnitude, of course, has been significantly reduced."

    Mr Segal said the carbon tax "won't come into play" when Caltex considers the future of its refineries.

    A resolution of the six-month conflict in Libya could be positive for Caltex's refining business as it would reduce the price of light sweet crude oil.

    Caltex's marketing division performed well, with first-half sales rising 4.3 per cent, driven by jet fuel and diesel.

    Caltex shares were unchanged at $9.84.

  2. 18.4k

    chart looks real bullish on a break of $14..

  3. 13.0k

    "Speaking of refineries, the case for Caltex Australia to offload some of its refinery assets is building. The Australian Financial Review reports that Macquaries institutional sales desk has run the numbers and estimates that if chief executive Julian Segal converted the company into an exclusively fuel marketing company, it could unlock significant value. The trouble is regulatory hurdles would be a significant barrier to any big cash spends";emcontent_wheelsdeals

  4. 18.4k

    very bull chart on a $14 break..good luck..$2 bill franking credits not bad to have..

  5. 13.0k

    Jobs to go as Caltex closes two units

    27 October 2011 | 11:28:06 AM | Source: AAP


    Oil refiner Caltex says up to 30 positions will be lost when it closes two plants at its Kurnell refinery in Sydney's south.


    Caltex said on Thursday it plans to close its propane de-asphalting unit (PDU) by the end of 2012, and its number one fluidised catalytic cracking unit (FCCU) by February 2013.

    The decision to close the FCCU has been made because of higher demand for diesel and lower demand for gasoline, which has led to Caltex's two FCCU's operating well below capacity, the company said.

    The timing of the closure of the number one FCCU is line with planned maintenance, which requires significant investment, Caltex said.

    The PDU is used to make bitumen, and will be closed once Caltex begins importing bitumen and triples its storage capacity in NSW, the company said.

    Affected employees will be deployed to other Caltex operations where possible, it said.

    The closures will incur a cost of $77.7 million, pre-tax, which consists of $67.7 million in redundancies and impairments and $10 million in demolition costs.

  6. 6.1k

    More of the same, distribution is apparently more profitable than refining

    800 jobs would go


  7. 61.0k

    you mean the strategic alliance with WOW ??? (hold WOW,CTX MTS)

  8. 13.0k

    "The company said it may record a significant loss if its 50-percent owned Caltex Australia Ltd."

    Chevron Starts China Shale Gas Exploration, Builds Sichuan Plant

    By Guo Aibing - Feb 24, 2012 3:03 PM GMT+1100

    Chevron follows rival Royal Dutch Shell Plc in exploring for shale gas in China , which has yet to commercially produce the fuel. Photographer: David Paul Morris/Bloomberg


    Chevron Corp. (CVX) said it began exploring for shale gas in China, holder of the worlds biggest reserves of the fuel, and expects to start a natural gas processing plant in the country next year.

    The company signed a joint study agreement to explore for gas from shale resources in the Qiannan Basin in April and commenced seismic operations in July, the second-largest U.S. energy company said in a filing to the Securities and Exchange Commission yesterday, without identifying its partner in the project in southwestern Guizhou province.

    Chevron follows rival Royal Dutch Shell Plc in exploring for shale gas in China, which has yet to commercially produce the fuel. The San Ramon, California-based company has allocated a 2012 budget that includes $28.5 billion for exploration and production in locations including Brazil, Africa and the Gulf of Mexico as U.S. oil refining margins shrink.

    The company expects to start building the second phase of a gas processing plant at Chuandongbei field, Chinas largest onshore energy exploration venture with a foreign producer, in 2012, according to its filing. Chevron said the first phase of the plant in southwestern Sichuan province may start next year.

    In Africa, the company said the Phase 3B project at the Escravos Gas Plant in Nigeria may be completed in 2016. Chevron had expected production at the project, designed to process 120 million cubic feet of gas a day from eight offshore fields, to start next year.

    In Argentina, Chevron said it expects to drill two exploratory wells this year in the Vaca Muerta formation, targeting shale gas and tight-oil deposits.

    U.S., Australian Refineries

    Chevron signed an agreement this month to sell its 80,000 barrel-a-day refinery at Perth Amboy, New Jersey, to a company that it didnt identify, according to the filing. The deal is expected to close in the second quarter. Chevron shut the plant in 2008 and has been using the facility as an import terminal.

    The sale follows other companies idling or selling their plants in the northeast U.S. as rising crude prices have limited profits. ConocoPhillips (COP) closed its Tranier, Pennsylvania, facility Sept. 30, while Sunoco Inc. (SUN) said Sept. 6 it was seeking to dispose of its two refineries in the state by July or shut them then if a buyer wasnt found.

    Chevron posted its biggest quarterly earnings decline in two years after its refineries lost an average of $2.2 million a day in the final three months of 2011. The shares gained 0.8 percent to close at $108.35 in New York trading yesterday.

    The company said it may record a significant loss if its 50-percent owned Caltex Australia Ltd. (CTX) alters operations at its two refineries. Caltex said Feb. 16 it aims to complete a review of its refineries in Sydney and Brisbane in about six months and that closing the facilities is an option.

    Caltex, based in Sydney, wrote down the value of the refinery assets this month by A$1.5 billion ($1.6 billion) because of Asian competition and a strong Australian dollar.

    Should the review result in a decision to significantly alter the operational role of the Caltex refineries, Chevron may recognize a loss that could be significant to net income in any one period, according to the companys filing.

    To contact the reporter on this story: Guo Aibing in Hong Kong at

  9. 18.4k

    break of $14 very bullish chart gives $16 ish..dyor good luck

  10. 18.4k

    brek of $14 game on.

  11. 18.4k

    big bull on CTX chart $16 ish target on a close break of $14

  12. 18.4k

    $16 here we come..great chart

  13. 13.0k

    Caltex closer to shutting Kurnell refinery

    Brian Robins

    May 10, 2012 - 10:10AM Read later

    Caltex is closer to shutting down its Kurnell oil refinery, disclosing that it is continuing to lose money while also stating that it may opt for a mix of imported and domestically supplied products, signalling the possible retention of Brisbane's Lytton refinery.

    At this morning's annual meeting, company chairman Elizabeth Bryan confirmed that the Lytton refinery was "better suited" to produce the mix of products demanded by customers.

    "The optimal mix of product sources may include domestic and international competitor refineries as well as our own production," she told shareholders.

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    "Refining has continued to lose money during the first quarter, with Kurnell representing the majority of the losses in 2011 and 2012 to date.

    "This is expected to continue into the future. Therefore, the review is focused on the Kurnell operation.

    "Lyttons configuration is better suited to the product mix demanded by our customers."

    After launching a reveiw of the viability of local refining last August, the company said in February it had set a deadline of six months to make a decision.

    "Before a final decision can be made, a number of matters have to be determined such as supply alternatives for our core business, the risks associated with each strategic option and the impact of possible decisions on a broad range of stakeholders," Ms Bryan told the meeting.

    Ahead of the final decision on the Kurnell closure, Caltex wrote down the value of its refining assets by $1.5 billion before-tax, pushing the group into the red for 2011, with a net loss of $714 million booked.

    In the March quarter of 2012, the refining division lost another $60 million before tax, up from the loss of $39 million before tax in the first quarter of 2011.

    Overall, the company posted a first-quarter net profit of $106 million, down from $194 million a year earlier. The 2012 March quarter profit included an inventory gain of $117 million, which covered losses elsewhere.

    Sales in the quarter rose more than 2 per cent to 4.1 billion litres, buoyed by 26 per cent growth in sales of premium fuels with diesel sales up nearly 6 per cent, while jet volumes were up nearly 4 per cent and lubricant sales up 8 per cent.

    The short-term outlook for the core marketing business remains positive, shareholders were told, while Singapore refiner margins for April have improved, which delivering a positive earnings result for refining in that month.

    "We anticipate an improvement in the second quarter earnings for Refining compared to the first quarter, but believe the ongoing strength of the Australian dollar will continue to pressure the Caltex refiner margin in the medium to long term," the managing director, Mr Julian Segel told shareholders.

  14. 18.4k

    $16 here we come

  15. 18.4k

    $16 target getting near

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