Shareholders voted on Friday to approve the $365 Million Marsden Point Refinery upgrade despite the rejection of the plans by two major oil companies. Sixty-five percent of investors voted in favour of the plans and it is understood that Chevron and Mobil were the two companies to object to the upgrade.
I speculated last week why these companies may have been looking to avoid investing more money in oil refining in New Zealand. Mobil is well known to be trying to exit the New Zealand market although Chevron appears to be in for the long haul after approving the $4 million refurbishment of fuel storage tanks in Timaru after increasing pressure from Z Energy to make use of the assets or sell up.
James Schofield, from Craig's Investment Partners, told TVNZ's Breakfast on Saturday morning that the upgrade would have little impact on petrol prices a the pump." The reality is the major factors for pump prices are crude prices, foreign exchange and tax." Schofield was cautious due to global refinery capacity currently being over-supplied and preferred to delay any development until the global refining outlook strengthened.
Refining NZ's Chief Executive, Ken Rivers said "My aim for my customers is to provide a more reliable supply, a more cost-effective supply and a supply with a lower environmental impact."
Energy and Resources Minister Phil Heatley yesterday welcomed the announcement "Spending $365 million on this upgrade will mean 700 new jobs, higher energy efficiency and fewer carbon emissions."
Neither Rivers nor Heatley seem to understand that increasing the refinery capacity by 10 percent will of course increase carbon emissions. I am dubious about any commitment the New Zealand government has to reducing carbon emissions when it supports increasing refinery capacity as well as a massive increase in oil and gas exploration. It appears to be playing lip service to environmental concerns while doing everything in it's capacity to support projects that will increase carbon emissions and New Zealand's reliance on fossil fuels. Business as usual as always.