Oil refineries rebound with windfall profits


Viva Energy, meanwhile, said its net profit for fiscal 2021 rose to $191.6 million from $33.4 million the company reported a year earlier. The results were the largest since the company floated in 2018.

The refining business was the best performer for Ampol and Viva, and the two said separately they expect the strong performance to continue throughout the year as oil demand picks up after the COVID-19 closures.

“There’s a good recovery in the oil market as the markets reopen, and it feels like they’re reopening permanently as well,” Viva CEO Scott Wyatt said. The Australian Financial Review.

“There is a commitment from governments around the world to live with COVID, and that will support oil.”

hump of Omicron

Although Ampol’s refining business had a bumper year, its petrol and retail retail segments saw annual declines of more than 10% as lockdowns in Victoria and NSW limited mobility .

Ampol said both areas of activity rebounded strongly in December, but analysts noted a drop a month later.

Mr Halliday said January was a short-term blow amid a surge of omicron cases, and more recent data showed mobility had increased.

“When market conditions normalize, all parts of our business react quite strongly,” Halliday said in an interview.

“It was a short-term blow, but we can see volumes in February recovering strongly as people start to come out again. There was a near-lockdown in January as the number of cases peaked. »

New opportunities

Backed by the grant package which puts a floor under their revenues, Viva and Ampol are aiming for further revenue growth – although both insist that the traditional petrol station and wholesale fuel business has still a long way to go.

Viva is expected to make a final investment decision in the September quarter on its plan to convert Geelong into an energy ‘hub’, including an LNG import terminal which is Victoria’s main prospect for gas imports after the collapse of AGL Energy’s Crib Point project.

Viva could move into gas wholesale and retail, gas-fired power generation and gas storage once the terminal becomes operational in the mid-2020s, when imported LNG would be needed for its own use. A potential solar plant in Geelong could provide up to 10% of the hub’s needs.

Mr Wyatt said the decision on the project would be determined by regulatory approvals and supply contracts.

“The project file continues to grow. The rapid decline in production from Bass Strait is simply not being replaced, and we have the opportunity to fill this gas shortage,” Mr. Wyatt said.

Ampol meanwhile expects to complete the takeover of Z Energy for NZ$1.97 billion ($1.8 billion) in the first half of fiscal 2022.

Ampol will use its trading arm to help supply the New Zealand market, where the sole refinery is set to be converted into a fuel import terminal.


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