Exxon presses Australia to release aid to oil refiners by January

MELBOURNE (Reuters) - Exxon Mobil Corp XOM.N is urging the Australian government to start releasing aid to the country's oil refineries by January after a decision last week by BP plc BP.L to shut the nation's biggest refinery.

FILE PHOTO: An Exxon sign is seen at a gas station in the Chicago suburb of Norridge, Illinois, U.S., October 27, 2016. REUTERS/Jim Young/File Photo/File Photo

Exxon owns Australia’s oldest refinery at Altona near Melbourne, which can process 90,000 barrels per day of oil, the smallest of the nation’s four refineries. The site supplies about half of the fuel for the state of Victoria, which has been subject to one of the world’s longest and tightest coronavirus lockdowns.

Exxon said the prolonged lockdown “has placed unprecedented pressure” on Altona, causing the plant to run at a loss.

Victoria’s government only last week eased restrictions limiting people to a 5 km (3 mile) zone around their homes and allowed shops and restaurants to reopen for the first time since Aug 2.

The Australian government is in talks with the refining industry on an offer of A$2.3 billion ($1.6 billion) in incentives over 10 years to keep refineries open to bolster of national fuel security.

The country's two other refiners, Viva Energy VEA.AX and Ampol ALD.AX, are considering shutting their refineries.

Exxon said the proposed six-month time frame for talks with the government was “too long given the near term challenges faced by all refineries” and it was working with the refiners’ industry group and the government to get the first part of the fuel security package released by January 2021.

The Maritime Union of Australia (MUA) said the government should take over BP’s plant at Kwinana, Western Australia, the only refinery on the west coast, to prevent fuel supply disruptions.

“More than 90 percent of Australia’s liquid fuel already arrives via foreign owned and operated tankers, but that figure will only increase if the Kwinana refinery is allowed to close,” MUA Assistant National Secretary Ian Bray said in a statement.

($1 = 1.4259 Australian dollars)

Reporting by Sonali Paul; Editing by Christian Schmollinger