[shortonsense]

$this->bbcode_second_pass_quote('mcgowanjm', '
')Along with Shale Gas-no regs there either.

[eXpat]

Oil companies look at permanent refinery cutbacks
$this->bbcode_second_pass_quote('', 'T')he response to slumping gasoline use would probably mean higher prices for drivers. Consumer advocates want regulators to examine the firms' plans.
Some of the nation's biggest oil companies are looking at permanently reducing how much gasoline and diesel fuel they make, a move that analysts say would almost certainly trigger higher prices for drivers.

Energy companies are suffering huge losses from refining because of slumping gasoline use -- a product of the economic downturn and changing consumer habits and preferences. Energy experts say refining cutbacks have begun and will accelerate as corporations strive for profits.
Major refiners have been circumspect about their plans, saying that they are considering options that could include closing refineries, selling parts of their operations, laying off workers and slashing spending.

"Refineries will have to be closed," said Fadel Gheit, senior energy analyst with Oppenheimer & Co. "Unless this excess capacity is permanently shuttered, a recovery in refining margins is unsustainable."

This week Chevron Corp. launched an overhaul of its fuel-making and retailing business with a plan to cut at least 2,000 jobs, put a refinery in Wales up for sale and take a hard look at its Hawaii refinery.

Royal Dutch Shell said it was reviewing its refinery operations with the idea of keeping only those with the best growth potential. Sunoco Inc. has sold one plant and said last month that its previously idled Eagle Point, N.J., refinery was being shut down permanently.

Valero Energy Corp., the nation's largest refiner, last year closed a Delaware refinery, laying off 500 workers, and mothballed a plant in Aruba.

[IslandCrow]

$this->bbcode_second_pass_quote('eXpat', ' ')Consumer advocates want regulators to examine the firms' plans.

[eastbay]

http://www.sfgate.com/cgi-bin/article.c ... .DTL&tsp=1

Looks like only a few percent of the US oil refining, but it's for Washington and Oregon and for them, it's a big hit. Three killed. Four very seriously injured.

[TheDude]

Just caught that on OregonLive. Some talking head on Bloomberg says it was in the cat cracker but my link says the naphta unit caused the explosion. BostonHerald says other sections of the refinery are still up.

The naphta/desulfurization unit accounts for about 26 kb/d, the cat cracker something like 52 kb/d, out of 120 kb/d total - this figure varies by source, too, some being a bit out of date. Tesoro says 130 kb/d, apparently. Boston Herald also says naphta unit. The total loss of WA capacity is only something like 4-10%, looks like, but something like this will spike prices irrespective of the impact on actual supply.

Frack but refineries are dangerous places to work.

[copious.abundance]

I was just at a conference across the water from that thing a couple weeks ago. Had never seen those refineries before even though I've known about them for years.

Maybe I jinxed it.

[pup55]

Thanks for posting this Eastbay....

The frequent viewers of PO.com well know what is going on. Tesoro and Valero are poster children for the effects of chronic low refinery margins. These two companies are not profitable at the current pricing levels for finished products, they have ceased all of their expansion activities, and they have postponed as much of the maintenance as they can to keep running while they try hard to stay in business.....

These incidents will increase in frequency the longer the current pricing situation goes on.

Eventually all of the inefficient and dilapidated production will break down or shut down and the remaining system will be smaller and more efficient. In the meantime we will have to revive our refinery blowup thread to keep track of all of this stuff, particularly if demand ever picks back up.....

[dorlomin]

For large integrated supermajors?

http://finance.fortune.cnn.com/2011/08/ ... f-big-oil/

Is the low profitability of downstream activity now a drag on producers? Stories of BP splitting are also out and about.

The 70 year post war trend of consolidation, has it come to an end of is ConocoPhillips a one off?

[Pops]

I don't know, looks like it has more to do with speculators wanting to bet on the big payoff from a new discovery instead of a steady income from refining/marketing?

[rockdoc123]

It is really all about the sum of the parts being worth more than the whole. This was the reason that Encana split into two entities, one for natural gas (Encana) and the other for mainly heavy oil (Cenovus). For the longest time the two struggled but earlier this year both were doing well on the market (before the latest set of US and European bad news).
In my previous life I have been in the room when such discussions happened with the investment bankers. Given that they are the ones who make recommendations to the market as to whether or not to buy your shares it is only a matter of time before you fold and do what they recommend.
My own view is that for a company that counts on dividend distributions having both upstream and downstream interests is useful, not both parts of your business are likely to tank at the exact same time. If you have a year where you have production delays, bad exploration results but oil prices are high you are saved by your downstream business.
There also might be an element of "shrink to grow" here. COPI might see there is a good opportunity to acquire additional upstream assets at this time (a lot of the oil and gas companies are undervalued) and by splitting themselves off they can do a large acquisition or a series of medium sized ones without making the company so big as to be completely unwieldy.

[theragtopguy]

More evidence that peak oil is real and well known.....why would they do this otherwise?

http://www.philly.com/philly/business/2 ... =125219969

[peeker01]

Who'da thunk you can't make money in the oil business?

http://www.sfgate.com/cgi-bin/article.c ... P5EBC9.DTL

[pup55]

In the past six months or so there have been a dozen refinery transactions, and they are all for the same reason, the people that are in this business see this as the point at which they can get maximum value for their assets.

Two of these transactions are pretty major: Marathon Oil and Conoco Phillips have both spun off their refining groups into separate companies, treating their shareholders to a little dividend, and most importantly, getting them off of the books when times are unusually good because they know the current situation is only sustainable as long as the brent/WTI spread is what it is.

This flurry of activity is exactly what happened in 2007 and early 2008, an unusually good time in refining history, and for exactly the same reason, and you know what happened in mid 2008.

[dorlomin]

$this->bbcode_second_pass_quote('pup55', '
')Two of these transactions are pretty major: Marathon Oil and Conoco Phillips have both spun off their refining groups into separate companies, treating their shareholders to a little dividend, and most importantly, getting them off of the books when times are unusually good because they know the current situation is only sustainable as long as the brent/WTI spread is what it is.

[kublikhan]

$this->bbcode_second_pass_quote('', 'U').S. refinery workers and energy companies on Tuesday raced against a midnight deadline to negotiate a contract and avert the sector's first strike in more than three decades, which could shut 6 percent of U.S. refining capacity and boost fuel prices.

A strike could boost prices for gasoline, jet fuel, and other refined products at a time when crude oil prices above $100 a barrel have been a drag on the global economy. Ahead of the 12:01 a.m. Wednesday expiration of the current three-year contract, both sides remained at loggerheads in talks on wage standards, healthcare, retirement benefits, and health and safety standards.

The last nationwide strike by refinery workers was in 1980 and lasted three months. The United Steelworkers (USW) union, which represents hourly workers at refineries that account for about two-thirds of U.S. refining capacity, says health and safety standards remain the main obstacle to a deal.

"A strike would be potentially supportive for products and less so for crude," said Tom Bentz, director at BNP Paribas Prime Brokerage Inc. in New York. Other analysts said sagging U.S. fuel demand could offset potential supply impacts. Any shutdowns would likely drive up U.S. fuel prices, supported in recent weeks due to a string of plant problems, especially along the U.S. East Coast where poor economics have prompted companies to shutter refineries. Most U.S. refiners have made preparations to bring in contract workers and train replacements to keep their refineries churning in the event of a strike.

"Negotiations continue," said Emily Oberton, a spokeswoman for Shell, which faces potential strikes at refineries in Texas, Louisiana, Alabama, California that comprise about 1.2 million barrels of processing capacity. "Shell remains optimistic that a mutually satisfactory agreement can be negotiated with the USW."

While most refiners would keep their plants in operation during a strike using temporary replacement workers, just over a million barrels of capacity would be taken offline by companies in the event of a shutdown.

[kublikhan]

$this->bbcode_second_pass_quote('', 'T')he United Steelworkers union and Shell Oil have as announced a tentative deal on a new three-year contract covering Shell refinery workers across the United States. The deal was announced in statements issued by the two sides Tuesday night, hours before a midnight Tuesday deadline to reach a new agreement or risk a strike.

The deal also will be used as the model for other refiners such as Exxon Mobil, Marathon, Valero and ConocoPhillips to match.

[AirlinePilot]

245,000 bbl/day refinery.....Richmond, CA. Crude unit #4.

http://www.sfgate.com/bayarea/article/F ... 767221.php

[AirlinePilot]

RBOB prices up dramatically on this refinery fire/shutdown.

[Ferretlover]

I believe the news said that this was a gateway refinery?

[autonomous]

Chevron unit #4 refinery produces between 20% to 25% of the gasoline for Northern California, in addition to more than half the jet fuel used at all major Bay Area airports. It is also the third largest refinery on the west coast.

http://latimesblogs.latimes.com/lanow/2012/08/chevron-refinery-fire-gas-prices.html