Exxon Mobil Corporation XOM plans to shut down its Altona refinery, located 13 kilometers west of Melbourne in the Australian state of Victoria.
The 72-year old facility will be transformed into an import terminal as the refinery has been struggling with low demand for fuel. Notably, ExxonMobil stated that the terminal would ensure the constant and steady supply of fuel for Victoria.
The oil giant added that the transition is expected to commence in around six months. Till then, the refinery, which serves nearly 50% of Victoria's refined fuel needs, will remain in service. The facility has a refining capacity of up to 14.5 million liters per day and is plenty to fill more than 330,000 cars.
The refinery significantly contributes to Victoria’s fuel supply chain, and the local and state economy. It offers several job opportunities and produces refined fuel products for industrial customers. However, the closure of the Altona refinery is likely to trim more than 300 positions that the facility employees.
As the coronavirus-led lockdowns and restrictions on international travel resulted in falling fuel demand, the refining sector was struggling with unprecedented losses. In fact, fellow international oil major BP Plc BP unveiled its decision to close the Kwinana facility, which is its only remaining refinery in Australia, by April. As a result, ExxonMobil decided to close the refinery as it was no longer economically feasible.
The Australian government offered a $1.8-billion fuel security package to the refineries to overcome the budgetary shortfalls and secure the future of the country’s shrunken refining sector. However, per media reports, ExxonMobil declined the offer. The refinery, which opened in 1949, is crucial to the industrial hub of Victoria and its closure is expected to not affect the Australian fuel stockholdings.
Company Profile & Price Performance
Headquartered in Irving, TX, ExxonMobil is one of the leading integrated energy companies in the world.
Notably, the company’s shares have outperformed the industry in the past three months. The stock has gained 38.1% compared with the industry’s 20.7% growth.
Zacks Rank & Other Stocks to Consider
The company currently flaunts a Zack Rank #2 (Buy).
Some other top-ranked players in the energy space are PDC Energy, Inc PDCE, currently sporting a Zacks Rank #1 (Strong Buy), and Enerplus Corporation ERF, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PDC Energy’s earnings for 2021 are expected to increase 165.9% year over year.
Enerplus’s earnings for 2021 are expected to surge 1066.7% year over year.
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