Petro-Canada closing Oakville, Ont. refinery, 350 jobs lost
Petro-Canada is shutting down a refinery in Oakville, Ont., in a move that will put 350 people out of work, the company said Wednesday.
Petro-Canada said it will consolidate the refining operations at a plant in Montreal, which will be expanded over the next 16 months. Meanwhile, the company's terminal facilities in Oakville will be expanded.
The company said the move is timed to coincide with a legislated January 1, 2005 deadline requiring gasoline sold in Canada to contain less sulphur.
Gasoline produced or imported into Canada must meet an average of 150 parts-per-million of sulphur during the phase-in period of July 1, 2002 to December 31, 2004. Beginning in 2005, gasoline produced or imported into Canada must meet an annual average sulphur content of 30 ppm.
"In recent years, the global petroleum refining industry has witnessed widespread rationalization of smaller, simpler refineries such as Oakville and consolidation of refining capacity to larger, more complex facilities," the company said.
"We would have had to put $250-$300 million dollars into Oakville to enable the facility to meet new specifications for ultra low sulphur gasoline and diesel, but the standards to meet those environmental rules didn't make sense to implement (at) the small disadvantaged facility," Petro-Canada chief executive officer Ron Brenneman said during a conference call.
Petro-Canada said it will take a $200 million charge against its earnings to cover the cost of the consolidation of its operations.
The Communications, Energy and Paperworkers Union panned the closure, which will cost 140 unionized jobs.
"We are not surprised by this decision, but not because the company has been forthright with us," CEP President Brian Payne.
"Petro Canada told us that they would consult before final decisions are made about the future of the refinery, but they haven't provided us with an opportunity to discuss why this is a very bad business decision that puts Canada`s energy security at risk," he said.
Petro-Canada shares rose 62 cents to close at $55.83 on the TSX.