* Greybull Capital tipped to buy the struggling refinery
* Plant and retail petrol stations would continue operating
By Ron Bousso and Simon Falush
LONDON, March 18 Murphy Oil is in
advanced talks to sell its Milford Haven refinery in Wales to a
low-profile private equity fund that will continue operating the
struggling plant, sources familiar with the situation said on
Arkansas-based Murphy Oil has been trying to sell the
135,000 barrels-per-day plant and its Murco petrol stations for
around four years. But buyers who were willing to keep it
running have proved elusive as European refineries fight for
survival due to failing demand.
A deal is now moving closer with London-based Greybull
Capital after it had agreed to fund a major planned maintenance
at the plant within the next 18 months, sources said.
"There is a form of agreement pending finance," said a
source close to the negotiations.
The maintenance turnaround at Milford Haven was expected to
cost less than $75 million, the source said. The full cost of
the deal was unclear.
The source said that a commitment to fund the turnaround was
vital to prevent any buyer from running the plant for a short
time before closing it down to sell assets, or demand a
Greybull has in the past focused on financing deals to buy
struggling British high street chains such as the ultimately
doomed electrical goods outlet Comet. It declined to comment on
the Milford Haven discussions.
Greybull would probably need to partner with either a
commodity trading house or a bank with trading capabilities in
order to secure the funding for the deal to keep the 450
employees in place.
"They are trying to raise the money in order to keep the
work force in place," an industry source said.
A spokeswoman for Murco, the Murphy Oil subsidiary that
operates the refinery, confirmed talks for the sale of the
refinery were coming closer to a conclusion.
"Discussions with regard to the sale of the Murco UK
business by its U.S. parent, Murphy Oil Corporation, are ongoing
and are at an advanced stage," Emma Murphy said in an email.
Murco's 400 petrol stations across the country would also be
part of the deal.
"The buyers will purchase the Murco name and the supply
system which will continue to supply the Murco petrol stations,"
the industry source said.
Murco also operates three storage and distribution terminals
in Britain which are supplied by rail from the refinery and
handle around 2 million tonnes of oil product a year, according
to the company's website.
The Welsh plant, like other British and European refineries,
has struggled in recent years due to weak demand in the region
and in its U.S East Coast export market, as well as growing
competition from U.S., Russian and Asian plants - factors which
have hammered margins.
India's Essar Energy said last month it will shutter one
third of its production capacity at Britain's second-largest oil
Last year the Grangemouth refinery in Scotland was brought
to the brink of closure following a bitter industrial dispute,
after owner Ineos said it needed to slash costs to keep it
This followed the closure of the Coryton plant owned by
bankrupt Petroplus which closed in 2012.