Shell refinery hit with writedown

Royal Dutch Shell has absorbed a further $203 million writedown of its Geelong refinery brought about by the energy giant's plans to sell or shutter the struggling facility, according to The Australian.

The writedown dragged Shell's Australian refining and fuel marketing assets towards a third consecutive annual loss and follows a $638 million writedown last year and a $407 million writedown of the now-closed Clyde refinery in Sydney in 2011.

“The writedown is the result of Shell's view of cash flow from the refinery prior to the transfer of ownership,” a Shell spokesman told The Australian.

“Experience says that buyers are interested in long-term cash flows, not book values, and any buyer would take a longer-term view of the refinery.”

Shell has warned that if it cannot sell the refinery it will shutter the facility and convert it into an import terminal, as it did with the Clyde refinery.

Shell disclosed in a filing with the Australian Securities and Investments Commission that its refining and marketing business posted an after-tax loss of $288.8 million last year, The Australian added.

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