18 Feb 2012

Caltex considering closure of two refineries

12:19 pm on 18 February 2012

Caltex is considering closing its two oil refineries in Australia.

The Kurnell in Sydney and Lytton in Brisbane refine almost a third of Australia's crude oil.

Now their operations are under review due to the rising Australian dollar and competition from larger Asian refineries.

The ABC reports the two plants have 800 full-time employees and about 600 contractors.

On Friday, Caltex Australia reported to the stock exchange that it had written down the value of the refineries by $A1.5 billion, partly because of the effect of the strong dollar.

Caltex said the review is expected to be finished in six months and one of the steps being considered is closing the facilities.

Australia currently has seven oil refineries. However, Shell's facility at Clyde, near Sydney, is due to shut next year.

Service Station Association president Craig Glasby says companies are finding it cheaper and more efficient to import refined oil products from Asia.

However, he did not believe there will be any impact on fuel prices.