Oil giant Royal Dutch Shell has auctioned off its Geelong refinery in Australia, sending anxieties to some 400 workers who risk to lose their jobs should the company fail to find a buyer.

The oil giant only has two action plans for the plant - either to sell the refinery to keep it open, or convert it to a fuel import terminal if it fails to attract a buyer. Either which, the 55-year-old refinery definitely no longer fits the company's capex goals, as Australian refineries continue to face mounting competition from Asian counterparts.

Shell hoped to be able to close a deal by the end of 2014 and then would concentrate on refinery investment in large sites.

"The sale will allow Shell to concentrate local downstream investments in the growth opportunities in its retail and bulk fuel businesses along with investing in the terminals and pipelines that support them," Andrew Smith, vice president of downstream operations for Shell Australia, said.

The impending transition is creating anxiety to some 400 local jobs.

"I understand this announcement will be difficult for refinery employees, but Shell will support them through this period of uncertainty," Mr Smith said. "Refinery employees in Geelong have made a significant contribution to both Shell and the local community over many years, supporting the economy in south east Australia."

Shell Australia's Thursday announcement have shocked its employees.

"They're all wretchedly concerned for their futures," Ben Davis, Australian Workers Union (AWU) Victoria acting branch secretary, told AAP. "This is going to be a long, drawn-out process; it's going to take months, not weeks."

Tim Gooden, Geelong Trades Hall secretary, said labour unions will meet on Monday. It has also sought emergency talks with Shell management to discuss a more detailed work proposal.

The Geelong supplies half of the Australian state of Victoria's fuel, processing about 120,000 barrels of oil per day.