MURCO has today announced that 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 Pembrokeshire Herald understands that Murco’s efforts to finalise a deal with Greybull Capital have not been successful, despite hopes that a deal was in its final stages last week. Four hundred jobs are now at risk at the oil refinery. In a statement the company said: “The 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.”

Commenting on today’s announcement, 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.

“The collapse of the Murco refinery sale is a hammer blow for Pembrokeshire and the wider West Wales economy. 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.”

Stephen Crabb MP told the Herald: “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.”

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.”

Commenting on the news that a deal to sell Murco oil refinery in Milford Haven has fallen through, local Assembly Member Paul Davies told the Herald: “I am extremely concerned about today’s statement regarding the Murco refinery at Milford Haven. Murco is a significant employer in Pembrokeshire and the refinery is of huge importance to the local economy. This news will be a bitter blow for Pembrokeshire and will undoubtedly leave hundreds of highly skilled jobs in our community at risk.”

“I appreciate that the oil industry is facing difficult times and I very much hope that Murco are exploring all sale opportunities. However, this news is of great concern to the people of Pembrokeshire. I have now written to the First Minister of Wales, expressing my concern at this latest news and calling for support from the Welsh Government. It is crucial that we all work together to help secure the sustainability of this refinery for years to come.”

Rebecca Evans, Assembly Member for Mid and West Wales, has expressed disappointment at the news that a deal to sell the Murco oil refinery in Milford Haven has fallen through, and a consultation has begun with employees.

Mrs Evans said: “I have spoken to Murco this morning to reiterate my support for the workforce. They reassured me that each and every affected worker would be individually consulted with.

“I know that the First Minister has also been in touch with the company, and will be visiting at the earliest opportunity to explore all possible options to retain these jobs in Milford Haven.

“Recent weeks and months have been a rollercoaster for the workforce and the local community. We were all hoping for a successful completion to the sale.”

Owen Smith MP, Shadow Welsh Secretary, told The Herald: “The loss of hundreds of skilled jobs would be a devastating blow to Pembrokeshire. This is terrible news for the families and communities that rely on the refinery and it is important that the company are supported by both the Welsh and UK governments in finding another buyer and securing the future of the plant.”

Paul Miller, local Labour candidate and leader of the opposition on Pembrokeshire council, said: “After so many half steps forward in the last few months and weeks this is a distressing development for Pembrokeshire. The Murco refinery has over the years employed pretty much all of my family so I know only too well the contribution this plant makes to the local economy. There should be no effort spared salvaging the future of this plant, it’s an absolutely critical part of Pembrokeshire’s economy.”

Simon Hart MP said: “I am very sad to hear that talks have broken down. I am concerned obviously about the large number of employees from the south of the county who are working at Murco. I’m looking forward to working with Stephen Crabb and other colleagues to help the employees in these circumstances”.

MURCO TIMELINE:

1973: The refinery opens under Amoco’s ownership.
1981: A major upgrade was carried out and a catalytic cracker was added.
1981: Murco (a subsidiary of Murphy Oil) purchased a 30% share of the refinery.
1983: Refinery storage tank containing 46,000 tonnes of North Sea crude oil catches fire
1990: Elf buys Amoco’s interest.
1994: Explosion and fires at refinery after electrical storm.
2000: Elf was acquired by Total in 2000.
2004: Total cautioned for unsafe dust release in 2002.
2007: Murco purchases Total’s 70% interest in the refinery to become the 100% owner.
2010: Firefighters tackle blaze at refinery.
2010: Murco expresses an intention to sell the refinery.
2012: Refinery bosses in talks with several interested parties about potential sale of Murco.
2012: Small fire breaks out at refinery
2013: First Murco sale talks collapse.
2013: Refinery makes $105m loss leading to reports that the refinery may be closing.
2013: Murco denies reports that the refinery will be closing.
2014: Greybull enter into negotiations with Murphy Oil about buying the refinery.
2014: Deal with Greybull collapses.