Texans concede defeat in bid to sell off Ireland's single oil refinery

Greg Garland, chief executive of parent company Phillips 66, said that the sales process for the Whitegate refinery in Co Cork had been a failure.

The Texas-based company scrapped the sale in March and said yesterday that it would continue to run the refinery as usual, which has operated in east Cork for nearly 55 years.

It had been speculated that a closure could be on the cards if a buyer wasn't found.

But a spokesman for Phillips 66 said the operation would remain open.

"Regarding plans for the Whitegate Refinery, Phillips 66 will continue operating the refinery as usual while identifying opportunities to enhance returns from this business," he told the Irish Independent.

Phillips 66 revealed last year that it intended to sell the refinery, which is considered a strategically important asset by the State. The fact that the sales process failed would have come as little surprise to analysts.

They warned when the sales process started that there was unlikely to be a trade buyer for the business, but warned that it may well end up shutting down.

Ireland imports all of its oil needs, with imports in the form of final product or alternatively as crude which is refined in Whitegate. The crude oil processed by the refinery is light, low-sulphur and sourced mostly from the North Sea, North Africa and West Africa.

The refinery supplies 25pc-30pc of the Irish market and about one-third of the product from the refinery is exported.

Phillips 66 also operated a crude oil and products terminal in Bantry Bay. The company sold the Bantry Bay facility to Zenith Energy Partners, with the deal expected to close before the end of the year,

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.

A report commissioned by the Department of Communications, Energy and Natural Resources last year found that overall oil demand has declined since peaking at 11.8m tonnes in 2006 for the island.

After falling between 2007 and 2009, current demand for refined products is estimated to have risen to 9.8m tonnes, of which 7.8m is associated with Ireland.

The report said there is expected to be a moderate future growth in oil demand reaching between 9 and 10m tonnes per year by 2030.

Then Energy Minister Pat Rabbitte said the report showed that having an operational refinery on the island provided flexibility and enhanced the options available to the State in the event of an oil supply disruption by mitigating the complete reliance on imports.

"As such, the continued operation of the Whitegate refinery on a commercial basis is highly desirable," Mr Rabbitte said.