Caltex says it will find enough fuel to supply customers despite the looming closure of a refinery adding to worries about Australia’s energy security.
Last year’s decision by Caltex and Shell to close oil refineries reduced Australia’s refining capacity by nearly a third.
It has the potential to be the Asia Pacific’s largest importer of oil refined products, with imports jumping to nearly half of almost one million barrels of oil a day, compared to five per cent in 2000.
Analysts doubt that all of the nation’s five remaining refineries, including Caltex’s Brisbane plant, will stay open, jeopardising energy security.
Caltex Australia announced on Monday that it had returned to profitability in 2012 due largely to the absence of the massive refinery writedown that hurt last year’s result.
Caltex Australia chief executive Julian Segal suggested people should not be alarmed as supply was plentiful and Australia was already a large fuel product importer.
“The closure of Kurnell (Caltex) and Clyde (Shell) will add another 200,000 barrels a day to be imported but that is low volume compared to total refining capability globally,” Mr Segal told reporters.
“Jamnagar (Indian refinery) is itself producing over one million barrels a day, the whole of demand in Australia.”
However a report by BP last year showed Australia’s own oil production had been declining long term to near 30-year lows.
Morningstar equities analyst Mark Taylor said it was a worry to have an essential commodity service wholly reliant on overseas imports and exposed to instability in the oil-rich Middle East.
“It is a problem but the reality is that the existing small refineries can’t compete with much larger more technologically advanced Asian refineries,” he told AAP.
Mr Taylor saw a silver lining in Australia’s suite of large natural gas projects, offsetting a lack of oil and refineries and supporting a future economy with cars and trucks running on gas.
Caltex made a net profit of $149 million in the year to December 31, on a replacement cost basis, which excludes the effect of changes in the world oil price.
That compares to an $852 million loss in the previous year.
Its bottom line was a $57 million profit compared to a $714 million loss.
Its shares closed up 43 cents, or 2.4 per cent, at $18.67, having risen 42 per cent since July.
Caltex supplies more than one-third of Australia’s transport fuel, and the lions’s share of this year’s profits came through better sales of high margin premium petrol, diesel jet fuel and lubricants.
Mr Segal predicted further growth in its marketing and distribution division, and less volatility in its earnings as it moved away from refining.
He said Caltex’s reliable reputation would enable it to handle more competition in fuel marketing, with trading house Trafigura spending $US800 million earlier this month buying in to Australia fuel importing.
Caltex declared a fully franked final dividend of 23 cents per share, down from 28 cents.
