“The lower-than-expected Lytton refiner margin was a result of extended Lytton refinery maintenance … over the quarter that had 10 days of extra downtime, followed by a slower-than-expected ramp-up after it was fixed,” he said.
Ampol estimated that the impact of weaker margins, maintenance downtime and reduced supply would amount to a $100 million hit to its benchmark underlying earnings.
Ampol chief executive Matt Halliday said the global refining market and Lytton’s operational performance had both been “challenging” across the September quarter. But he expressed confidence in the company’s ability to improve the refinery’s performance next year, while global refining margins were expected to strengthen.
“We are confident in the steps we are taking at Lytton to enable stronger operational performance in 2025 which should coincide with the refiner margin impact of production run-cuts currently being taken across the world,” Halliday said.
In response to weak refining margins globally, several refiners in northern Asia and Europe have been cutting production, leading to a “modest recovery” in Singapore refining margins since the start of October, Ampol said.
The future of the Lytton refinery and the 550 people it employs in Brisbane has regularly been in doubt, as Australian plants struggle to compete against the vastly cheaper-to-run mega-refineries of Southeast Asia.
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Lytton faced potential closure as recently as 2021, when lockdowns to arrest the spread of COVID-19 infections wiped out demand for fuels, hammered profits and prompted Ampol to launch a review of the refinery’s future.
Two other refineries – ExxonMobil’s Altona plant in Victoria and BP’s in Perth – decided to shut down for good.
But after reaching a rescue deal with the federal government, Ampol and rival fuel supplier Viva Energy, which owns the Geelong oil refinery, agreed to keep their plants open until at least mid-2027.
