Business Irish

Wednesday 12 December 2018

Whitegate refinery profits plunge but owners paid $55m dividend

Processor: Ireland’s only oil refinery, Whitegate in Cork Harbour, employs 170 staff who were paid a combined €18m last year. Photo: David Creedon / Anzenberger
Processor: Ireland’s only oil refinery, Whitegate in Cork Harbour, employs 170 staff who were paid a combined €18m last year. Photo: David Creedon / Anzenberger
John Mulligan

John Mulligan

The Canadian owners of Ireland's only oil refinery - Whitegate in Cork Harbour - were paid a $55m (€48.4m) dividend by the company behind the facility last year.

The payment was made just over a year after Irving Oil acquired the refinery.

Accounts just filed for the Whitegate business, which revealed the dividend payment, also show that pre-tax profits at the refinery plunged last year by 80pc to $14.3m (€12.6m), while turnover rose to $1.5bn (€1.32bn) from €1.3bn in 2016.

"An improved risk mitigation strategy for commodity price risk, offset the impact of increased crude oil prices on gross margin," its directors said in the accounts.

Irving, which during the summer bought Ireland's Top Oil, acquired the formerly State-owned Whitegate refinery in 2016 from Philips 66.

Philips 66 said in its 2016 annual report that the net carrying value of the Whitegate assets at the time of the sale was $135m (€119m), which included $127m in inventory, other working capital and $8m of goodwill.

Philips 66 said an "immaterial gain" was recognised on the sale to Irving Oil.

Irving Oil, which is based in New Brunswick, is a privately-owned company that operates the largest refinery in Canada.

The New Brunswick facility can process more than 320,000 barrels of oil a day.

Whitegate processes up to 75,000 barrels of oil a day. It produces petrol, diesel and kerosene and supplies about 40pc of refined fuel used in the Irish market.

The company behind the refinery - Irving Oil Whitegate Holdings - noted that crude oil prices had continued to rise during 2017.

The accounts also show that the Whitegate refinery paid $1.43bn (€1.26bn) on crude oil purchases during 2017, and incurred $9.8m in transportation costs, which was more than double the amount spent in 2016.

Its manufacturing, operating and administrative expenses jumped to $66.5m (€58.6m) last year from $50.6m in 2016. The refinery employs about 170 people, who were paid combined salaries of $20.4m (€17.9m) last year, or an average of $120,700 (€106,350) each.

When it acquired Whitegate, Irving Oil said that, as with its New Brunswick refinery, "safety is always our number one priority".

Irving Oil was forced to temporarily shut its New Brunswick refinery in early October this year after an explosion and a fire that followed.

The company had closed most of the plant for planned maintenance in late September, but its smaller, 25,000 barrels of oil per day petrol-making units, and a 125,000 barrels of oil per day crude unit, were still running at the time, a source said at the time.

Canadian media reported last month that the cause of the fire remains unknown. Piping has been removed from the site of the fire for analysis to determine whether it was damaged as a result of the blaze, or was itself a possible cause of the fire. Nobody was seriously hurt in the incident.

Additional reporting: Reuters

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