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Murphy nears $500m sale.

Murphy Oil is ready to exit British refining next month with the sale of its Milford Haven plant and retail assets to private equity fund Greybull Capital for over $500 million, sources close to the talks told Reuters.Murco, a Murphy Oil subsidiary, is expected to sell its 135,000 barrels-per-day (bpd) refinery in Wales, oil inventories, storage facilities and hundreds of petrol stations across Britain, the sources said.European refiners have struggled in recent years with shrinking domestic demand and increased overseas competition, which have forced a number of painful closures. The deal, which is expected to be signed in mid-April, could ensure Milford Haven's short-term survival despite its recent low profit margins.Also Arkansas-based Murphy Oil, which bought its initial stake in Milford Haven in 1981, would be exiting British refining after a four-year search for a buyer.Crude oil and oil product inventories held by Murco were expected to account for more than half of the $500 million price tag, while the 400 service stations would account for most of the remainder, a source familiar with the deal said.The price put on the plant would represent a small fraction of the cost of the deal.One of the sources said Greybull planned to keep the refinery in operation despite weak and often negative profit margins. Last year, its refining margin averaged 75 cents per barrel of crude processed, according to Murphy Oil's annual presentation.

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Publication:Oil & Gas News
Date:Apr 7, 2014
Words:258
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