Petrobras to shut down Nansei Sekiyu Nishihara refinery

Lincoln Shiodiro Ishikawa, the president of Nansei Sekiyu K.K. that operates the only oil refinery on the island, visited Akikazu Shimoji, the director general of the Prefectural Department of Commerce, Industry and Labor, on Nov. 9th to explain that the company would not renew the contract of refining petroleum products in Okinawa, and would significantly raise the wholesale prices from next March.

Nansei Sekiyu is a fully owned subsidiary of Brazilian government-owned Petrobras. The company announced in March that is wanted to close its refinery on Okinawa. It has sought for a buyer for its refinery in Nishihara since 2011 but has found no takers. Industry sources and analysts have said there is very little interest in such a small, simple refinery that processes only expensive crude for the local market, where fuel demand is decreasing.

Although the meeting was held with closed doors, according to people who attended the meeting, Ishikawa reported that the company has not found a buyer willing to take over its Okinawa operations. He also explained to Shimoji that the company is struggling with debts, and is operating in millions of dollars in red every year.

However, Shimoji stated that, “Nansei Sekiyu is responsible for a stable supply of oil and oil products to the prefecture. A sudden rise in the wholesale price, or withdrawal from Okinawa, is not acceptable.” He also expressed his disappointment about the company’s decision.

13:46 13 Jun , 2024