Annual profits

Viva Energy to issue final dividend as annual profits soar

Mr Wyatt said Viva was supported by signs that governments around the world were lifting restrictions, which would boost oil demand, particularly for the company’s aviation fuel.

Despite the brighter outlook, shares of Viva Energy were down nearly 3% in mid-afternoon trading.

Wyatt said he also expects the company’s strong performance in its refining business to continue.

The company was helped last year when the federal government announced it would pay Viva and Ampol – the country’s two remaining oil refineries – up to $2.3 billion through 2030.

The subsidies were introduced to keep domestic oil refineries open and protect Australia’s energy security as the country’s aging refineries struggle to compete with much larger new refineries in Asia. The country’s other two refiners – BP and ExxonMobil Corp – closed their plants last year.

The subsidy package put in place in July puts a floor under Viva’s earnings, and the company is now aiming for further earnings growth.

Mr Wyatt said the company’s traditional petrol station and wholesale fuel business still had a long way to go, but he pointed to the company’s proposed gas import terminal in Geelong , which Viva hopes will supply the country’s east coast market at a time of tight supplies. .

Viva is expected to take a final investment decision on its plan to convert Geelong into an energy ‘hub’, including an LNG import terminal in the September quarter which is Victoria’s main gas import prospect after the collapse of AGL Energy’s Crib Point project.

Viva could move into gas wholesale and retail, gas-fired power generation and gas storage once the terminal becomes operational in the mid-2020s, when imported LNG would be needed for its own use. A potential solar plant in Geelong could provide up to 10% of the hub’s needs.

Mr Wyatt said the decision on the project would be determined by regulatory approvals and supply contracts.

“The project file continues to grow. The rapid decline in production from Bass Strait is simply not being replaced, and we have the opportunity to fill this gas shortage,” Mr. Wyatt said.