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Murco sells Milford Haven refinery and UK retail outlets

Petroleum Review; 09/08/2014

Murphy Oil is pulling out of the UK with the sale in August of its Murco Petroleum subsidiary’s Milford Haven refinery to the Klesch Group, and simultaneous sell-off of its entire UK-based Murco fuel retail assets to the Motor Fuel Group (MFG).

The sale of the refinery will come as a relief to employees, as the future of the refinery has been in doubt since a £300mn deal to save the plant collapsed in April, and Murphy had recently stopped buying crude oil for processing at the plant.

Bryan Kelly, Vice President of Business Development West Africa, Middle East and UK for Murphy Oil, told Petroleum Review: ‘We hope to be at the end of a four-year sales process. We are pleased we were able to arrive at an agreement with The Klesch Group and appreciate that they are active in Europe and operate a refinery in Germany. We are excited about the transaction and believe they are the right people to take the Milford Haven refinery forward, making it a thriving business.’

The sale of the Milford Haven refinery and terminal assets to Klesch Refining, pending regulatory approval and subject to other material conditions, is scheduled to close no later than 31 October 2014. No details of the sale price were available.

Klesch Group founder Gary Klesch told BBC Wales he was ‘excited’ by the takeover and would be keeping the plant’s current workforce. However, a spokesperson for the Klesch Group refused to confirm potential workforce numbers to Petroleum Review. The Milford Haven plant currently has 370 employees and 135 on contract, and impacts about 1,500 jobs indirectly.

The Klesch Group is a Swiss registered company, headquartered in Geneva, with operations round the world specialising in production and trading of chemicals, metals and oil. The group has revenue exceeding $5bn and owns the Heide refinery in Germany, which processes about 4.5mn t/y of crude oil. Founder Gary Klesch said he was ‘delighted’ to announce the acquisition of the Milford Haven refinery ‘subject to certain conditions’ and looks forward to return the site to profitable growth.

The Milford Haven refinery is a modern cracking facility with the ability to manufacture ultra-low sulphur transportation fuels and has a capacity of 135,000 b/d. Most of the output from this Welsh refinery is exported worldwide.

Two weeks later, Murphy signed an agreement to sell its Murco fuel retailing assets, which include 228 company-owned sites and a similar number of branded dealers, to the MFG for completion by 30 September. ‘After that, Murphy plans to have a complete operational exit from the UK,’ said Murphy Oil’s Kelly.

Murco will cease trading as a commercial entity. Murphy Oil Corporation has an HQ in Arkansas, US, and according to Kelly ‘will redeploy capital from the two deals in its five focus areas for E&P – onshore North America, the Gulf of Mexico, West Africa, South East Asia and Australia’.

The Petroleum Retailers Association (PRA) welcomed news that Murco is to sell its retail business. Brian Madderson, Chair of the PRA told BBC TV Wales: ‘The agreement between MFG and Murco provides much certainty in the UK forecourt sector. These service stations have been on the market for a while now and the acquisition of Murco will firmly anchor MFG in the top five UK independent fuel retail groups and brings with it a significant dealer network too.’

News Item details

Journal title: Petroleum Review

Countries: UK -

Subjects: Retail and marketing, Recruitment, Jobs, Workforce