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Chevron raises refinery jobs fear Chevron raises refinery jobs fear
(about 2 hours later)
Fears over job losses at the Chevron refinery in Pembrokeshire have been raised after the oil giant said it was to "exit from certain markets".Fears over job losses at the Chevron refinery in Pembrokeshire have been raised after the oil giant said it was to "exit from certain markets".
The firm, the fifth-largest refiner in the United States, has told staff it is planning a restructuring that would involve sweeping cuts globally.The firm, the fifth-largest refiner in the United States, has told staff it is planning a restructuring that would involve sweeping cuts globally.
It said it had not decided whether to close any of its refineries.It said it had not decided whether to close any of its refineries.
The Pembroke site has 1,400 permanent and contract staff and processes 220,000 barrels of crude oil a day.The Pembroke site has 1,400 permanent and contract staff and processes 220,000 barrels of crude oil a day.
Chevron said further details on its plans were expected to be released in March.Chevron said further details on its plans were expected to be released in March.
A spokesman for the company said it is planning to restructure some of its refinery operations, cut some jobs and exit some markets.A spokesman for the company said it is planning to restructure some of its refinery operations, cut some jobs and exit some markets.
It's going to be a leaner organisation with fewer positions, but we have not yet determined the number of positions we need Lloyd Avram, ChevronIt's going to be a leaner organisation with fewer positions, but we have not yet determined the number of positions we need Lloyd Avram, Chevron
In America, some refiners have shut down operations as the rising cost for crude oil cut profits faster than the income from the products they refine such as heating oil, diesel fuel and jet fuel.In America, some refiners have shut down operations as the rising cost for crude oil cut profits faster than the income from the products they refine such as heating oil, diesel fuel and jet fuel.
Chevron employees have been told about the plans to restructure the firm.Chevron employees have been told about the plans to restructure the firm.
"It's going to be a leaner organisation with fewer positions, but we have not yet determined the number of positions we need," Chevron spokesman Lloyd Avram said. "The global recession has reduced demand for refined products while global refining capacity continues to surge," explained Chevron spokesman Lloyd Avram.
He said it has not yet been decided which markets the company will leave although there are plans to exit some. "To improve profitability and long term competitiveness, Chevron has created a new downstream organisation.
"This organisation is less complex, more responsive to market opportunity and smaller, requiring fewer positions and people.
"No further decisions regarding assets or markets have been made."
He added that no decision about how many jobs would be needed after the restructure.
The refinery has been running in Pembroke since 1964The refinery has been running in Pembroke since 1964
He said Chevron has also not decided whether to close any of its refineries.He said Chevron has also not decided whether to close any of its refineries.
The Chevron refinery in Pembroke, which first opened in 1964, employs 1,200, processes 220,000 barrels of crude oil a day.The Chevron refinery in Pembroke, which first opened in 1964, employs 1,200, processes 220,000 barrels of crude oil a day.
The refinery is the fourth largest in the UK, with just under 12% of the UK's overall refining capacity.The refinery is the fourth largest in the UK, with just under 12% of the UK's overall refining capacity.
Julian Lee, senior energy analyst at the Centre for Global Energy Studies, said oil demand in Europe has been falling since 2005 and was showing few signs of growing, while there was refining overcapacity in the region. In 2005, the Pembroke refinery had an £84m upgrade.
He said: "What is a problem for the industry is that the developed economies, on whom they have depended for much of the last 20 or 30 years, are using less and less oil. They are using it more efficiently.
Options
"Environmental concerns, as we look ahead, are likely to eat in to the amount of oil that they use.
He said a potential "silver lining" for oil firms like Chevron was that Russian oil companies were looking to expand westwards.
He said: "Certainly Chevron's first option, if - and it is a big if, the Pembroke refinery is part of their plans for a rationalisation, their first option would be to sell the refinery rather than just to close it."
Chevron's website says that, as one of the first retailers to introduce ultra low sulphur petrol and diesel in the UK, it is "committed to a programme of cleaner fuels".
'Massive contributions'
It said the the Pembroke refinery had an £84m upgrade that allows the firm to produce sulphur-free fuels, in line with EU legislation that came into effect in 2005.
A senior member of Pembrokeshire council said the plant "is a very important part of the Pembrokeshire economy and we hope will continue to be so".A senior member of Pembrokeshire council said the plant "is a very important part of the Pembrokeshire economy and we hope will continue to be so".
Councillor John Allen-Mirehouse, the cabinet member for Regeneration and Economic Development, said: "Over many years, the company - and its predecessor Texaco - has made massive contributions in this part of the world not only in terms of employment but also through its active involvement in the community.Councillor John Allen-Mirehouse, the cabinet member for Regeneration and Economic Development, said: "Over many years, the company - and its predecessor Texaco - has made massive contributions in this part of the world not only in terms of employment but also through its active involvement in the community.
"Pembrokeshire County Council has always worked closely with the management at the refinery and will continue to do so.""Pembrokeshire County Council has always worked closely with the management at the refinery and will continue to do so."
'Optimistic'
Stephen Crabb, the MP for Preseli Pembrokeshire, said he met the general manager of the refinery a week ago to discuss the future of UK oil refining and said he came away feeling "optimistic" about the plant.
He said: "As the largest private sector employer in Pembrokeshire, the refinery is of critical importance to the local economy. Its loss would be a catastrophic blow to the area."
"There is no question that oil refining in the UK is currently facing a very challenging commercial environment but I came away from the meeting with Chevron optimistic that the scale and efficiency achieved at its Pembroke site means that it is well-placed to weather the current storm affecting the industry."