Refining New Zealand is scaling down operations at Whangarei's Marsden Point

It will reduce fuel production to 1995 levels and cut jobs from next year - as part of the first phase of its strategic review.

Production will drop to about 90-thousand barrels a day.

The publicly listed company will also stop producing bitumen -- the petroleum distillation residue used for roads and roofs.

The oil refinery plans to reduce its operating expenses by $20 million, to allow completion of key processing units deferred this year.

Discussions will begin with employees on the size of its workforce, which stands at 400.