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Energy Minister, Pat Rabbitte, has today published a report into the future of Oil Refining in Ireland. He said that he had commissioned the report “as a proactive measure, well in advance of the expiry of Whitegate’s refining obligation in 2016”. The report - “Study of the Strategic Case for Oil Refining Requirements on the Island of Ireland” has recently been considered by Government.

Minister Rabbitte said “The Government’s primary conclusion on the strategic case for oil refining is that the presence of an operational refinery on the island of Ireland provides flexibility enhancing the options available to the State in the event of an oil supply disruption by providing an alternative source of product thus mitigating a complete reliance on product imports. As such, the continued operation of the Whitegate refinery on a commercial basis is highly desirable. An operating refinery also adds value to the Irish economy and provides significant employment.”

“In light of this, the Government has agreed that my Department should liaise with the Irish oil industry and appropriate public bodies to determine available policy options that might facilitate the commercial future of refining in Ireland. I will revert to Government for further consideration of these options in due course”

The study was carried out at a time of ongoing rationalisation in the EU refining sector and, together with the analysis undertaken by the International Energy Agency (IEA) and by the EU Oil Refining Forum and Roundtables, the study has helped inform the Government’s position.

The Minister noted that security of oil supply will continue to be of central importance to the Irish economy and society into the medium term. Oil comprised 59% of total final energy consumption in Ireland in 2011. He said that while significant efforts are underway to improve energy efficiency and increase renewable energy, it is clear, particularly in the heating and transport sectors, that oil will play a pivotal role in the economy for some years to come.

“My Department will also continue to participate in the debate on refining at EU and IEA level. We support the EU refining “fitness check” process and will engage with the EU on the scope for a coordinated EU approach arising from this assessment. We will also seek to deepen our cooperation with counterparts in Northern Ireland with regard to ensuring the robustness of oil supply infrastructure on the island and the development of contingency measures to mitigate risks to oil supplies.”

“I welcome an additional finding of the study - that the existing oil import facilities on the Island of Ireland taken as a whole offer a robust infrastructure that would provide comfortable alternatives in the event of a serious disruption at any of the six principal oil ports. They could supply the total oil demand, regardless of any future decisions on the operation of Whitegate as either a refinery or terminal. The study demonstrates that the improved motorway network and the robust capacity at ports on the island have enhanced oil security in recent years. The National Oil Reserves Agency (NORA) holds the bulk of Ireland’s strategic oil stocks for use in the event of an oil supply disruption. I am also pleased to say that NORA has made excellent progress in rebalancing its strategic oil stockholding, so that over 70% of its stocks are now held on the island of Ireland.”

The study has been published on the Department’s website and can be accessed Here

Notes to editor:

The study was prepared for the Department of Communications, Energy & Natural Resources by consultants Purvin & Gerts and Byrne O’Cleirigh. Commercially sensitive aspects of the report have been redacted.

Ireland’s only refinery, the Whitegate Refinery, is located in Cork. It is currently owned and operated by Phillips 66, a large international petroleum refining company. Ireland imports all of its oil needs. Oil is imported in the form of final product or alternatively as crude which is refined in Whitegate. The refinery supplies 25-30% of the domestic market and approximately one third of the product from the refinery is exported. The crude oil processed by the refinery is light, low-sulphur crude oil sourced mostly from the North Sea, North Africa and West Africa. Phillips 66 also operates a crude oil and products terminal in Bantry Bay, Cork.

When the Whitegate refinery and Bantry storage terminals were sold by the state in 2001, it was a condition of the sale that they must continue to be operated until at least 2016. This requirement applied to the company that purchased the assets and any future owners.

In June 2013, Phillips 66 announced that it had retained Deutsche Bank to market its business in Ireland including the Whitegate Refinery and associated wholesale marketing business, and the crude oil and refined products storage terminal in Bantry Bay. Phillips 66 intends to continue operating the assets as usual during the marketing process which is expected to last for several months.

“Oil comprised 59% of total final energy consumption in Ireland in 2011” - Source: Sustainable Energy Authority of Ireland report “Energy in Ireland 1990-2011”