Exxon in Australia has had to close its Altona refinery in the state of Victoria due to the coronavirus pandemic. However, Australia is still trying to support its oil sector, which is essential to its energy policy.
Exxon in Australia: a failure with reprieve
The closure of the Altona refinery
Exxon in Australia is suffering a setback with the shutdown of its Altona refinery in Victoria. The latter will be converted into a simple fuel import terminal. The decision is due to the oil market turmoil caused by Covid-19.
Exxon still owns Australia’s largest oil producer
Despite this, the company will continue to be an important supplier. It owns 50% of the Gippsland Basin Joint Venture (GBJV), the main oil producer in Australia (54% in 2015).
Weakening of the Australian oil sector
Only two refineries left on Australian soil
In addition, Altona is one of many refineries to be closed. There are only two left for the entire territory, and they can only provide a quarter of the domestic market. The government has tried to provide economic support to the sector, but many companies have refused its help, including Exxon.
A country in need of oil stocks
During the health crisis, Australia tried to take advantage of the drop in the price of oil. The country wanted to build up genuine strategic reserves, which are currently insufficient. Australia remains far too vulnerable to the international situation, including, for example, the US-Iran situation.
In short, while Exxon has failed in Australia, its business and its future in Australian oil are not doomed.