BP Australia will invest more than AUD 450 million (USD 354 million) over the next three years to expand its oil retail network, as well as to upgrade existing service stations.
The focus of this expansion will be in the urban areas of Melbourne, Brisbane, Sydney and Perth, said Andy Holmes, president of BP Australia.
Last month, two major stations were opened in Sydney and outside Melbourne, and there are plans to upgrade 75 existing sites in 2015. It plans to open a total of eight service stations this year and 60 over three years. BP has about 1,400 branded sites, 350 of which are company operated. Included in the refurbishment are plans to increase coffee and food options at existing outlets.
According to the Australian Competition and Consumer Commission, the oil retail sector had a net profit of AUD 495 million (USD 390 million) in 2013-14. Non-fuel sales made up less than 20% of total revenues, but contributed more than 40% of net profits.
“It is a period of significant change in the downstream business,” Holmes said, “but the market continues to grow. When you look at the GDP outlook for Australia and how that flows into fuels demand, the outlook is very strong.”
The announcement came as BP shuttered its oil refinery in Bulwer Island this week. The Bulwer refinery, which is located in the suburb of Pinkenba, Brisbane, Queensland, had a capacity of 102,000 barrels per day (bpd). BP said it is unable to compete with Asia’s mega-refineries. Caltex Australia will be supplying all of BP’s requirements for diesel fuel and regular and premium grade petrol in South Queensland, from the Caltex Lytton refinery. BP will import Jet A1 from Asian refineries.
The import jetty, aviation fuel tanks and associated pipelines in Bulwer will remain operational while other storage tanks and pipelines will be placed on a care and maintenance basis, pending a decision to convert the site to a multi-product import terminal.
BP employs 380 staff at the Bulwer Island refinery and this is expected to fall to about 25.
BP has one refinery left, the Kwinana refinery, located 35 km southwest of Perth, in Western Australia. With a capacity of 146,000 bpd, it is Australia’s largest oil refinery.