Viva Energy
Viva Energy Australia Pty Ltd is a privately held petroleum company based in Docklands, Victoria, which operates under the Shell brand name. It owns one of Australia’s four oil refineries located in Geelong, which processes approximately 120,000 barrels of oil per day, making it significant in meeting the nation’s fuel needs. Viva Energy is backed by the Vitol Group, a prominent independent energy trader, and has exclusive rights to supply Shell-branded products in Australia, maintaining a network of over a thousand service stations across the country. The company is involved in refining, importing, and delivering a variety of petroleum products, including fuels, lubricants, and chemicals.
Viva Energy has a rich history dating back to the early 20th century with ties to the Royal Dutch Shell group, having transitioned to its current structure in 2014 after being sold to Vitol. It also plays a role in community initiatives, such as providing low aromatic fuel to reduce petrol sniffing in regional areas. Following its acquisition, Viva has invested significantly in infrastructure improvements, enhancing the efficiency and capacity of its operations. With its extensive reach and commitment to service, Viva Energy is a key player in Australia’s energy landscape, contributing to about a quarter of the country’s liquid fuel supply.
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Viva Energy
- Date founded: 2014
- Industry: Oil; energy
- Corporate headquarters: Melbourne, Australia
- Type: Private
Viva Energy Australia Pty Ltd is a privately held Australian petroleum company headquartered in Docklands, Victoria, and selling petroleum products under the Shell brand name. In addition to owning and operating an oil refinery at Geelong in Victoria—one of only four refineries in Australia—Viva Energy operates a network of more than twenty fuel import terminals. It is backed by the Vitol Group, the largest independent energy trader in the world, and is the exclusive Australian supplier of the Shell brand, having previously been part of the Royal Dutch Shell group. Viva Energy makes, imports and delivers fuels, lubricants, chemicals and bitumen. Because of Royal Dutch Shell's long presence in Australia, there are over one thousand Shell-branded service stations around the country, from the cities to far more remote locations. Viva Energy has also partnered with organisations such as headspace and the supply of low aromatic fuel to regional communities to help combat petrol sniffing.
History
The then British oil company Shell Transport and Trading established bulk fuel facilities in Sydney and Melbourne in 1901. In 1905, two years before Shell merged with the Royal Dutch Petroleum Company to become Royal Dutch Shell in order to compete with Standard Oil, the British Imperial Oil Company in Australia was founded as a joint venture between those two companies. British Imperial Oil expanded over the next two decades, and was renamed the Shell Company of Australia in 1927. In 1954, it opened its second refinery, later to become its only refinery, in Geelong. It developed onshore and offshore oil resources over the next decades, while expanding into various petroleum products and services.
Viva Energy originated with the sale of the Geelong refinery and associated Shell service stations to the Vitol Group in 2014 for $2.9 billion. Physical trading, logistics and distribution are at the core of the business but are accompanied by refining, shipping, terminals, exploration and production, power generation, mining and retail businesses. The group was founded in Rotterdam in 1966; today the company has almost forty offices worldwide, and its largest operations are in Geneva, Houston, London and Singapore. The group's turnover in 2016 was $152 billion. A privately held company, Vitol ships about 350 million tons of crude oil each year, with a fleet of 250 supertankers and other marine vessels. The company has also been accused of illegally dealing with various corrupt governments, paying a $17.5 million penalty in 2007 for circumventing the United Nations oil-for-food program in its dealings with Iraq. It has also been accused of illegally bypassing the European Union (EU) embargo against Iran and taking steps to avoid paying payroll tax on its British employees.
Vitol renamed its subsidiary Viva Energy and licensed the Shell brand name from Royal Dutch Shell. In 2016, Viva acquired more of Shell's business as the Royal Dutch Shell Group transferred Shell Aviation Australia, its aviation refuelling network, for $250 million. As with the retail network, the aviation refuelling network continued to use the Shell brand name. Shell retains upstream operations in Australia, including exploration and production.
In 2008, Shell Australia and Barwon Water signed an agreement to construct the Northern Water Plant (NWP). Owned and operated by Barwon Water, the NWP, which would help recycle sewage from homes and trade waste from Shell Geelong refinery. The 'Class A' pure and refined water will be used by the refinery, saving approximately 5 per cent of Geelong's total water consumption.
In 2015, after the sale to Vitol, Viva was taken to court by Eureka, a subsidiary of the Coles network of service stations. The Shell Company of Australia had entered into an agreement with Coles in 2013, shortly before the sale, to lease service station sites as Shell/Coles Express from 2014 to 2024, under which arrangement Shell (later Viva) would be responsible for the fuel and infrastructure. When Viva planned to form a real estate investment trust, Eureka sued over the potential impact to these stations, including Coles right of first refusal on the sale of any such site. The Supreme Court of Australia ruled in Viva's favour.
Impact
Between its refining and its imports, Viva Energy provides about a quarter of Australia's liquid fuel, and more than half of Victoria's fuel needs. Viva Energy operates over one thousand Shell-branded service stations, and its refinery in Geelong handles about 120,000 barrels per day, making it one of the largest in Australia. By 2021, it was just one of two oil refineries in Australia that had not closed or announced closure dates. It is the only Australian refinery producing bitumen and aviation fuel. It also produces solvents to support the Australian mining, paint, adhesive and other industries.
Viva Energy was the first Australian company to offer a full-time superannuation payment of 12 per cent base salary to employees on unpaid parental leave or in part-time work periods (for up to five years).
Following the sale to Vitol, Viva Energy began expansion efforts that included a new 100-million-litre crude oil tank at the Geelong refinery as a growth investment, increasing the company's crude storage capacity by 40 per cent. Millions of dollars were invested in infrastructure products, including a $23 million pumping station connected to the Melbourne pipeline, a $4 million upgrade to Viva's jet fuel gantry, a $15 million bitumen export facility, a $23 million 25-million-litre gasoline tank for the refinery and a $7 million revamp of its crude distillation unit furnace.
In 2023, Viva partnered with Australia's Department of Defence to supply fuel to the Australian Defence Force. By 2024, the company was in the process of upgrading the Geelong refinery to enable the production of ultralow-sulfur gasoline. That same year, Viva acquired the OTR Group.
Bibliography
Brelsford, Robert. "Viva Energy on Track with Geelong Refinery's ULSG Project." Oil & Gas Journal, 18 Nov. 2024, www.ogj.com/refining-processing/refining/optimization/article/55243782/viva-energy-on-track-with-geelong-refinerys-ulsg-project. Accessed 24 Jan. 2025.
Cummins, Carolyn. "Coles Loses Battle with Viva Energy over Shell." The Sydney Morning Herald, 30 Dec. 2015, www.smh.com.au/business/property/coles-loses-battle-with-viva-energy-over-shell-stations-20151130-glbpmd.html. Accessed 24 Jan. 2025.
Dagge, John. "Coles Feels Petrol Pinch as Viva Energy Lifts Supply Prices." Herald Sun, April 27, 2017, www.heraldsun.com.au/business/coles-feels-petrol-pinch-as-viva-energy-lifts-prices/news-story/3c637231a2002344d03cb5a2a90b3dd8. Accessed 24 Jan. 2025.
"Viva Energy Becomes First Australian Company to Pay Full Super Benefit to Part-Time Parents for Five Years." Viva Energy, www.vivaenergy.com.au/about-us/media-centre/news/2017/viva-energy-becomes-first-australian-company-to-pay-full-super-benefit-to-part-time-parents-for-five-years. Accessed 24 Jan. 2025.
"Viva Energy Opens Australia's Largest Crude Oil Tank at the Geelong Refinery." Viva Energy, www.vivaenergy.com.au/about-us/media-centre/news/2017/viva-energy-opens-australias-largest-crude-oil-tank-at-the-geelong-refinery. Accessed 24 Jan. 2025.