Global energy giant Shell announced on Thursday it was selling its last remaining Australian refinery to focus on more sizeable assets abroad, a move that threatens 470 jobs.
Shell Australia, the local arm of Royal Dutch Shell, said it would put its 120,000 barrel-per-day Geelong refinery in Victoria state on the market in line with its new Australian strategy focusing on retail and bulk fuels.
It follows the 2011 conversion of its Sydney refinery at Clyde to an import terminal for Asian fuel due to major competition in the region which had rendered the 75,000 barrel-per-day site unfinancial.
"The proposed sale of the refinery is in line with Shell's global strategy to concentrate investment on large-scale sites, such as the company's world scale Pulau Bukom refinery in Singapore," Shell said in a statement.
Though it was targeting a sale, Shell said converting the Geelong plant to an import terminal was also a possibility "if a sale with agreeable terms and conditions cannot be reached".
Shell Australia downstream vice-president Andrew Smith said the company was hopeful of finding a buyer that would keep the refinery open and the site's 470 workers in a job.
The Geelong plant has been running since 1954 and supplies about half of Victroia's fuel and 30 percent of that in neighbouring South Australia state.
It is Shell's last remaining refinery in Australia.
"Shell is one of Australia's largest private sector investors, and remains committed to its business in Australia," said Smith.
"I understand this announcement will be difficult for refinery employees, but Shell will support them through this period of uncertainty."
Shell has said its Australian operations offered dwindling margins as major competitor refineries opened in India, Singapore, South Korea and Japan.
It has shifted its Australian focus to the burgeoning liquefied natural gas sector, where it hopes to be a major investor.
Local petroleum rival Caltex Australia -- 50 percent owned by Chevron -- also shut its struggling Sydney operations last year, leaving the nation's largest city with no local refinery and reliant on imports for its fuel needs.