Marsden Pt-based Refining NZ could have closed two years earlier had its board and management not consulted widely over 18 months to ensure well-informed decisions were made to cushion the impacts of change.

In April
last year, the company was renamed Channel Infrastructure after transitioning to an import-only terminal and outgoing chief executive Naomi James spoke to The Northern Advocate about a tough three years since she took charge.

The Australian started as the refinery CEO on or about the time the first Covid lockdown happened in early 2020, at a time of huge change for the business when demand for refined fuels plummeted due to the global pandemic.

Refining NZ shareholders voted to convert the business into an import-only fuel terminal, causing a backlash from a wide cross-section of Northland as well from outside the region but James believes while the transition has been tough, it was well-managed.

The board and the Government came under fire for failing to retain a strategic asset and warned of fuel supply disruptions in future.

On how the board and management handled such pressure, James said:

“We don’t aim for consensus. The aim is for well-informed decision making and that means decision-making that has the benefit of a diverse range of views. The key is when we’re hearing feedback, we’re listening, we are making sure it’s being considered in the process.”

“This was why it was so important, if you go back a couple of years, we took the step to simplify the refinery to buy time. The refinery could have closed two years earlier and because of that decision to buy time to make sure we have all those conversations, everyone having an opportunity to have an input.

“It doesn’t change the loss involved in a closure like this. These sites, they are institutions, and they have huge history and legacy and so there’s always sadness and grief, and we feel that first and foremost on our site because our people have been at the heart of that business and so the way we deal with that is we make that process of grief a part of our planning,” she said.

Decommissioning of the refinery is almost complete and next would be doing the same around the rest of the site.

Although James didn’t have a fixed-term contract, she said now was the right time for her to hand over to Rob Buchanan who would grow the business from here.

“When I came in, it was really to look at the future of the business. We knew what we were doing wasn’t sustainable, we couldn’t continue with the status quo, and we needed to make a change so really my job was to work through what that change was.

“It was important that we took a good amount of time and looked at all of the options and that’s why we had that 18-month strategic review before going ahead with the change.

“There were so many parts to this. We had our staff and community, we’re a big employer, we have a big presence in Northland and have been for a long time and so when we do something, it has impacts on our community. So that was a big part of having to think through, not just what change we were making, but how we were making that change.

“Doing one of these things on its own is manageable but doing all of those things at the same time in a way that is coordinated and allows you to move forward and make progress, get to a decision, then execute a decision well, that’s complex. This is one of the biggest industry transformations in NZ.”

Getting support from the Government, the refinery’s shareholders, lenders and fuel companies that own Channel Infrastructure was critically important for a successful transition, she said.

It was a steep learning curve for James personally, given the fact it was her first time at the helm of a refinery.

From Sydney, James was not just learning refinery operations but also getting to know New Zealand and Northland, as well as building relationships. Prior to the refinery, she had worked in commodity, big manufacturing and infrastructure businesses. James started in steel and later worked in iron ore, oil and gas.

Misinformation and misconception about the entire transition process still exists and James allayed perhaps the biggest fear of all— threat to fuel supplies.

“We have always had an import supply chain for fuel. We have always imported our fuel. What changed was we went from importing crude oil to importing already refined product. There are supply chain risks with both.

“When we had a refinery, it was a huge risk, at any time the refinery could have a problem and this did occur at times, and then we have a fuel supply problem. When we have an import supply chain, we have risks that we have ships delayed or that we have product quality issues on a ship.

“And the key to that is that we have enough product in the country at any time so if there’s a disruption, it’s okay. We’ve got enough here, until the next ship comes in.

“There’s a lot of misinformation about, I guess, the relationship between the refinery and fuel security and we are still working through that because the Government is right now legislating its programme of fuel security measures.

As for her legacy at both businesses: “I hope it’s in the people, having gone through such a challenging time and seeing people rise to that and respond it actually brings out the best. When people go through that, they realise what they are capable of.

“Everything that’s going to play out from here— the fuel transition, climate change and all the different roles that we can play in keeping fuel secure and reliable in New Zealand— we’re going to be so well-placed to chase those things down and play an important role.”

James describes her future once she finishes up next month as “completely a blank page at this point”.

“I am going back to Sydney and am going to take a bit of time out and have a little bit of a rest before I work out what challenge I take on. Spend some time with my family and take some time out.”