10:55am Thursday 3rd April 2014
A deal to buy the Murco Milford Haven refinery has collapsed, putting hundreds of Pembrokeshire jobs at risk.
Milford Haven Refinery staff have been informed of the developments this morning (Thursday).
It had previously been reported that a $500m deal involving investment firm Greybull Capital was close to being completed but that deal has fallen through.
A source close to the deal told the Western Telegraph: “Up until 48 hours ago it was looking very positive but it went sour, the deal just couldn’t be done.”
Around 400 people are employed at the refinery.
In a statement, Murco Petroleum Limited said it will be entering into a period of consultation with employees, and their representatives, as to the future of the company and its Milford Haven refinery.
The statement said: “UK refining remains a particularly challenging market, caused in part by declining demand and increased international competition. The UK currently has seven oil refineries down from a peak of 18 in the late 70s. It is against this backdrop that the company and Murphy have been working to try and find a solution that would allow refinery operations to continue at Milford Haven.
“During the past three plus years Murphy has negotiated with numerous parties but has not yet been able to find a buyer for Murco. Following the expiration of exclusive talks with a potential buyer, Murphy and the company plan to speak with a small number of interested parties, which may or may not lead to allowing the refinery to continue to operate.
“Murco is therefore today entering into a period of consultation with employees and their representatives, including the employees that work at the refinery. Until this period is completed it is not possible to predict the outcome of this process. In the interim we will ensure we properly consult with our employees during what will understandably be an unsettling time for everyone concerned."
Tom McKinlay, Managing Director of Murco said: "Our focus today is on helping our people understand what this means for them. For over three years, we have left no stone unturned in trying to find a buyer for the plant. Our efforts highlight the challenges and on-going changes confronting the European refining industry and are in no way a reflection on the attitude and work ethic of the Murco team. We will continue to do all we can to ensure our employees are supported during this time.”
Responding to the news this morning, Preseli Pembrokeshire MP Stephen Crabb, told the Western Telegraph that the collapse of the deal was “a hammer blow for Pembrokeshire and the wider West Wales economy.”
Mr Crabb added: “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."
Mr Crabb said it was now essential that another potential buyer be contacted to see if a sale could be salvaged.
The Wales Office Minister said: "If Murphy Oil cannot do the deal with Greybull then it must explore all possible alternative sale options as a matter of urgency.
“I have met with one other buyer on two occasions now who so far has been locked out of the sale process because of the exclusive negotiations with Greybull. The time has come for Murphy to speak to this company about what their intentions would be.”
"I have had an urgent meeting with the Energy Minister Michael Fallon, and have asked that he and his department work closely now with Welsh Government to offer every possible support to avoid the worst outcome of full refinery closure. Everyone understands the seriousness of the situation and what this means for Pembrokeshire."
"The staff and management at Murco in Milford Haven have worked incredibly hard over the last three years to turn the plant around and create one of the leanest and most efficient refineries in the country. Their commitment and effort has been hugely impressive and it is a very sad day for them and their families to be told that the sale has collapsed."
Secretary of State for Wales, David Jones said: "The Government very much regrets to hear the developments at the Murco Petroleum refinery in Milford Haven, and the potential impact this may have on its employees, their families and the community.
“The Wales Office is in close contact with colleagues at the Department of Energy& Climate Change, the Welsh Government and with officials at Murco Petroleum Ltd on this matter. We stand ready to support Murco in their ongoing efforts to find a buyer, with a view to securing the future of the plant, and the jobs of the people who work directly and indirectly for it."
Pembrokeshire County Council’s Leader, Councillor Jamie Adams, said: “I am sorry to hear that the sale of the refinery has fallen through.
“We hope that it will continue to operate as a refinery as that will save the jobs of both refinery staff and of the many local sub-contractors who work there.
“The County Council and the Welsh Government will continue to support Murco as they look for an alternative buyer.
“Ideally we would want a viable, sustainable purchaser to come forward from within the industry who could guarantee the future of oil refining at the site.”
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