* Murphy Oil launches 45-day talks with 500 employees
* Company to contact potential new buyers
* Private equity fund Greybull was in advanced talks on a
$500 mln deal
(Recasts lead, adds quotes)
By Simon Falush and Ron Bousso
LONDON, April 3 Murphy Oil told staff on
Thursday it could be forced to close its loss-making Milford
Haven refinery in Wales after exclusive talks with a private
equity firm collapsed.
The Arkansas-based oil company' UK subsidiary Murco said it
had started 45 days of consultation with employees and their
representatives on the future of the loss-making 135,000 barrels
per day refinery.
Low-profile private equity company Greybull had been in
advanced stages of talks with Murco to buy the plant and
associated assets for around $500 million. The deal was expected
to be completed by mid-April.
"The deal we were trying to conclude didn't happen during
the exclusivity period that we had extended to March 31," Tom
McKinlay, Managing Director of Murco told Reuters.
"As a consequence, having missed several deadlines up to that
point, we decided to allow that exclusivity to expire which
allows us to talk to other people."
The plant employs 370 staff and between 100 and 150
contractors, McKinlay said, and Murphy Oil's UK subsidiary Murco
also operates hundreds of filling stations around the country.
"For over three years, we have left no stone unturned in
trying to find a buyer for the plant," Tom McKinlay, Managing
Director of Murco, said.
He added that a possible outcome would be to turn the plant
into a storage terminal should no viable buyer emerge.
European refiners have struggled with shrinking domestic
demand and increased overseas competition which has crushed
margins and led to periods of loss-making.
In the UK, the Coryton plant in the east of England closed
down in 2012 after the collapse of owner Petroplus, while the
PetroIneos owned Grangemouth in Scotland was brought to the
brink of closure during a bitter industrial dispute last year.
Consultations will last 45 days, after which either a deal
will be reached or Murphy will begin implementing a wind down of
the plant, a source close to the talks said.
"Talks have been going on for three years and this has been
a loss making business for a long time, multiple bids have
failed," he said.
The possible closure of the Milford Haven refinery comes at
the height of one of the biggest crises faced by Europe's
Another 2 million bpd of capacity, more than 10 percent of
Europe's total, is expected to shut over the next five years,
analysts at Vienna-based JBC Energy said.
Milford Haven was the smallest and among the least complex
of Britain's seven refineries in 2012, according to a report
produced by Purvin & Gertz for the UK Petroleum Industry
The refinery has undergone upgrades in recent years to
increase its high-value diesel yield. The site also has deep
water births that allow large tankers to be loaded and
(Reporting by Simon Falush and Ron Bousso; editing by William