About 90 Refining New Zealand employees will be made redundant between now and the first quarter of next year.
The company made the announcement in an operational update for September/October to the New Zealand Exchange (NZX) following the completion of consultation with affected staff and their unions.
The bulk of the unionised workers belong to First Union while the rest are E Tu members.
Apart from job cuts, New Zealand’s only oil refinery, based at Marsden Pt, will also scale back production from next year after a tough time when fuel demand plummeted because of the global pandemic.
The publicly listed company will reduce production from 115,000 barrels a day to about 90,000 – the same level as in 1995 – and stop producing bitumen, a residue from petroleum distillation used for road surfacing and roofing.
“Employee consultation has been completed and approximately 90 of the company’s employees, whose roles are impacted by simplification, will depart between November and Q1 2021,” the refinery said.
In its operational update, the refinery said its net debt was $232 million at the end of October this year which was $17m lower than the last update at the end of August.
The reduced debt, it said, reflected savings from the temporary shutdown of the refinery in July/August and $13m realised from asset sales, which would be used in part to fund restructuring costs associated with the refinery simplification plans.
Discussions on the potential conversion to an import terminal is continuing.
In September, the refinery completed a safe restart after a six-week shutdown to help rebalance stocks across the country, due to the impacts from Covid on New Zealand fuel demand.
“Global refining margins remained weak during September/October, with product demand reduced due to ongoing Covid-19 impacts.
“In response to weak margins, refiners globally have lowered runs, brought forward maintenance plans and implemented some temporary or permanent closures. Although global oil demand recovered considerably from May to September, the recovery in demand slowed in October due to a resurgence of Covid-19 infections globally,” the refinery said.
Falling fuel demand during level 4 lockdown drove the company $186.4m into the red in the six months to June 30.
The interim net loss compares with a $3.5m shortfall in the same time last year.
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