Closure threat to Murco oil refinery as deal collapses

  • 3 April 2014
  • From the section Wales
Media captionA buyer has proved hard to find and time is running out

A Pembrokeshire oil refinery could face closure with the threat of up to 400 job losses after talks broke down with a potential buyer.

Murphy Oil said it was entering into consultation with staff on the future of the Murco plant in Milford Haven.

The site has been up for sale for four years but the firm had been in "advanced" talks with a private equity fund over a possible buyout.

Murco admits closure is an option but all possibilities are being considered.

The first minister will visit the site to see if jobs can be retained.

Murphy Oil Corporation UK said the oil refining industry was a "challenging market", partly caused by declining demand and increased international competition.

'Good solution'

During the past three years the firm has negotiated with numerous parties but has not yet been able to find a buyer for Murco.

It said exclusive talks over a potential deal had ended and the company now planned to speak with a small number of interested parties, which may or may not lead to allowing the refinery to continue to operate.

The company had been in talks with London-based private equity fund Greybull Capital.

Tom McKinlay, managing director of Murco, told BBC Radio Wales the possible closure of the refinery was an option, but all possibilities were being looked at if a buyer could not be found.

He said: "We are very conscious of our refinery operation on the local economy which is why we take it very seriously, the responsibility that we have to try to find a good solution here.

"We've been trying to sell this business for more than three years now and will continue to carry it forward as a going concern, even though we've made significant losses over the past several months.

"A positive outcome for everyone in this part of the country is what we're trying to achieve."

Asked whether the business was still a going concern, Mr McKinlay replied: "It's challenging at the moment because of the losses received."

Media captionStephen Crabb MP said the short-term impact of the refinery's closure could be 'colossal'

Wales Economy Minister Edwina Hart said First Minister Carwyn Jones would visit the site at the earliest opportunity to explore all options to retain the "valuable jobs" at Milford Haven.

"We are very keen to work collaboratively with all levels of government and I have already spoken with the UK minister for business and energy to discuss how we can support the employees and the company through this difficult and worrying time," she added.

Secretary of State for Wales David Jones said the Wales Office would support Murco in its efforts to find a buyer, with a view to securing the future of the plant and jobs.

Preseli Pembrokeshire MP Stephen Crabb described the deal collapse as a "hammer blow" and said Murphy Oil must now explore all possible alternative sale options as a matter of urgency.

"Hundreds of skilled, high quality jobs in our community are now at risk. Pembrokeshire has seen refinery closures before and we know the short-term impact can be colossal," he said.

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