Hundreds of jobs in Wales are in danger after the collapse of a deal to secure the future of Milford Haven oil refinery.
Murphy Oil, which owns the refinery, has been negotiating a sale with entrepreneur Gary Klesch for several months.
However, the US company said on Tuesday that its subsidiary, Murco Petroleum, had been unable to complete the sale to Klesch Refining by the 31 October deadline despite it being extended. A sale had depended on a combination of government support and bank loans.
Murphy Oil, which has been seeking a buyer for two years, said: “The parties are not engaged in further discussions.” A source close to the negotiations said the delay was partly due to concerns that a proposed £100m loan guarantee from the Welsh government could contravene European Union state aid rules.
Murphy said: “The refinery is in a period of shutdown and will be decommissioned and operated solely as a petroleum storage and distribution terminal.
The company will seek a buyer for the terminal facility along with three inland terminals.” Like many other European refineries, Milford Haven has struggled in recent years due to negative profit margins and lower demand for oil.
The facility, which refines petrol, diesel, fuel oil, jet fuel, LPG and propylene employs 400 workers and another 200 contractors, according to Unite. Edwina Hart, Welsh minister for economy, science and transport, said it was a devastating blow to refinery staff and the local community.
“Murco has been integral to the fabric of the oil and gas infrastructure in Wales and the Welsh economy for many years,” she said. “This news is especially disappointing as the Welsh government did everything we could to support the success of this deal.”
Stephen Crabb, Conservative MP for Preseli Pembrokeshire and secretary of state for Wales, said the outcome was incredibly disappointing. He said in late June he was very optimistic that a sale could be completed.
“I feel desperately sorry for the workforce and their families who have endured months of uncertainty only for the sale to collapse once again. Right up until late last week everything looked on track. When it became clear that last Friday’s deadline was not going to be met, we worked through the night to persuade Murphy to keep talking to the buyer.
They showed a lot of goodwill by once again extending their deadlines but clearly now have taken a view that there is no chance of completion within an acceptable timeframe,” Crabb said.
The MP did not believe anything more could have been done by either Westminster or Cardiff to save the deal. He said: “We all now need to focus on how we minimise the significant economic impact the closure will have on our county.
Both the UK and Welsh government will shortly outline a package of measures to help those affected. I am committed to working closely with them to ensure that those losing their jobs get the right support at this time.”
theguardian.com
However, the US company said on Tuesday that its subsidiary, Murco Petroleum, had been unable to complete the sale to Klesch Refining by the 31 October deadline despite it being extended. A sale had depended on a combination of government support and bank loans.
Murphy Oil, which has been seeking a buyer for two years, said: “The parties are not engaged in further discussions.” A source close to the negotiations said the delay was partly due to concerns that a proposed £100m loan guarantee from the Welsh government could contravene European Union state aid rules.
Murphy said: “The refinery is in a period of shutdown and will be decommissioned and operated solely as a petroleum storage and distribution terminal.
The company will seek a buyer for the terminal facility along with three inland terminals.” Like many other European refineries, Milford Haven has struggled in recent years due to negative profit margins and lower demand for oil.
The facility, which refines petrol, diesel, fuel oil, jet fuel, LPG and propylene employs 400 workers and another 200 contractors, according to Unite. Edwina Hart, Welsh minister for economy, science and transport, said it was a devastating blow to refinery staff and the local community.
“Murco has been integral to the fabric of the oil and gas infrastructure in Wales and the Welsh economy for many years,” she said. “This news is especially disappointing as the Welsh government did everything we could to support the success of this deal.”
Stephen Crabb, Conservative MP for Preseli Pembrokeshire and secretary of state for Wales, said the outcome was incredibly disappointing. He said in late June he was very optimistic that a sale could be completed.
“I feel desperately sorry for the workforce and their families who have endured months of uncertainty only for the sale to collapse once again. Right up until late last week everything looked on track. When it became clear that last Friday’s deadline was not going to be met, we worked through the night to persuade Murphy to keep talking to the buyer.
They showed a lot of goodwill by once again extending their deadlines but clearly now have taken a view that there is no chance of completion within an acceptable timeframe,” Crabb said.
The MP did not believe anything more could have been done by either Westminster or Cardiff to save the deal. He said: “We all now need to focus on how we minimise the significant economic impact the closure will have on our county.
Both the UK and Welsh government will shortly outline a package of measures to help those affected. I am committed to working closely with them to ensure that those losing their jobs get the right support at this time.”
theguardian.com
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