If it was truly a sunset industry in terminal decline then we would see a sustained decrease in oil consumption in NZ. Apart from a GFC related dip NZ demand is higher than ever (snip from MBIE EDF 2018). I would hazard that NZR will still be refining in 10 years.

Attachment 10945

Regarding earnings


Average FCF since 2010 has been $11 million a year. Significant plant upgrades and shut downs are out of the way so I would hope the next 10 year are more profitable with more material processing more cheaply.
If I take out the years around Te Mahi Hou (2013 & 2014) and the shutdown (2018) which happen infrequently (10 yr +) then average FCF is $76.5 million

Large CAPEX has been spent on:
Jet tank farm upgrade (2019-ongoing)
Shut down (2018)
Crude shipping project (ongoing)
RAP upgrade (2019)
Te Mahi Hau (2015)

All of these projects have or aim to move more volume, more efficiently, exactly what a tolling refinery should be doing. More oil through means more money. Expensive running a refinery but they seem to do it well.

Australian refineries are a bit different as they have multiple refiners, some consolidation of smaller refiners is happening. As we only have one refiner it is in a better position. Also note when the Australian refineries close they turn into import terminals, unlikely that NZR will stop refining but if they did, there would still be significant value in their infrastructure (port, pipeline and tank farms).

80% of our imported refined oil comes from Singapore and South Korea. It is likely that ultimately these mega refineries will scale sufficiently to drive NZR out of the refining business but it wont happen in the medium term with the sweet deal BP, Z and Mobil.