Klesch Deal on Milford Haven Refinery Delayed

Gary Klesch and Murphy Oil (MUR) have extended a deadline to later this week to negotiate the U.S. oil entrepreneur's purchase of the Milford Haven refinery in Wales, sources familiar with the matter said.

One source said that an Oct. 31 deadline had been missed and that an announcement on the future of the plant would be made this week. The 135,000 barrel per day refinery employs about 450 people.

The Western Telegraph reported on its website that refinery staff were emailed on Friday evening to say the sale would not go ahead according to the planned timing and that the deadline had been extended to Thursday.

Klesch declined to comment.

Murphy has been trying to sell the plant for more than two years. Klesch agreed in July to buy it, but the deal is contingent on a combination of government support and private financing from banks.

A second source said the delay was due in part to concerns that a proposed 100 million pound ($160 million) loan guarantee from the Welsh government could contravene European Union state aid rules.

Reporting by Simon Falush and Ron Bousso