Refining NZ proposes to cut 100 jobs as talks over longer term future of refinery continue

Monday, 5 October 2020

Quarter of jobs would go at Marsden Point oil refinery.

Refining NZ is proposing to cut 100 jobs at its Marsden Point oil refinery after confirming plans to reduce its output.

The company said in an NZX statement that it had set aside $5 million for restructuring and expected to reduce its operating costs – including its labour costs – by $20m in 2021.

Spokeswoman Ellie Martel said plan was subject to consultation with staff, but would see 100 of the refinery’s 400 jobs go.

* Refinery closure would cost 1000 Northland jobs and push up fuel prices, says union

* Ending refining at Marsden Point could impact 3500 jobs, says union

Refining NZ said in its NZX statement that it had decided to reduce the throughput of the refinery to 90,000 barrels a day.

In the longer term, Refining NZ may switch to importing pre-refined fuels.

Last year, that figure averaged 115,000 barrels a day.

The company indicated it was still considering a longer term plan that could see refining at Marsden Point cease completely, and it switch instead to importing refined fuels.

Demand for fuel has impacted by the Covid crisis, with a steep drop in demand for jet fuel which Refining NZ pumps from its refinery to Auckland airport.

First Union organiser Justin Wallace said the company’s announcement represented the first confirmed job losses on the way to a possible importing model for the refinery.

'It’s also a warning sign that the company and producers really are serious about going down this track, which I know many workers think would be a disaster and a missed opportunity to partner with the Government on a sustainable future that kept the community alive,' he said.

Wallace said there was an opportunity to switch work at Marsden Point towards the production of “green hydrogen” – hydrogen produced from water using renewable energy.

'No one is under any illusion; the sun is setting on fossil fuels and the Covid-19 pandemic has altered market demand for aviation and other fuels. It’s inevitable that things need to change at Marsden Point immediately.

'But now is the time to be brave and invest in these communities rather than cut jobs and give in to what we assume is inevitable,' he said.

Australian steel company Bluescope separately announced last month that it might cut 200 jobs at its Glenbrook steel mill following a review of the business.

Wallace said he was surprised the jobs cuts in heavy industry had not become a political issue.

The future of another 1000 jobs for staff and contractors at the Tiwai Point aluminium smelter near Bluff appear safer for a few years following discussions between the Government and the smelter’s majority owner Rio Tinto.