Oil refinery sales

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On Our Own's picture
On Our Own
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Oil refinery sales

I know some of you know that I follow the oil market pretty closely.  But, there has been a derth of real facts about some transactions.

Valero had closed their aruba refinery and has been working on a sale deal for three years with either Petrobras or PetroChina.   At each step the only report has been that they are "in talks".  Does anyone know if this sale has actually been finalized??  

Industry rumor mill says Petrobras won the toss,  but I cannot find confirmation, which is usually available pretty quickly.  There are also rampant rumors that the closed Delaware City refinery was sold too,  but again, no confirmation.  (I find this one highly unlikely - it is not a good property.)

Does anyone know,  can anyone help me find some more facts on this?

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andrescasimiri
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Re: Oil refinery sales

The Valero refinery is up and running in Aruba.

Other information: PDVSA's lease contract with Curaçao's refinery RdK (Refeneria di Korsou) ends in 2019.  A local group in which I participate wants the property back, dismantle the refinery, clean up the polluted land and waters so we can expand our city and build new and clean industries. We will keep you informed. All help to reaalize our plans are welcome.

Thanks

Andrés Casimiri

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land2341
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Re: Oil refinery sales

I'd love to give you good news,  but I don't have any.

The Delaware City Refinery has been purchased by a consortium of public private partnerships.  It is not up and running yet,  but it soon will be.  I looked and your refinery is a sour crude refinery.    Few of them will be closing in the next 20 years.  There is more sour crude out there than sweet,  fewer refineries can handle sour crude.

There is a blip right now with the rices of sweet and sour crude,  but that will go back to its normal balance soon.

Sour refineries are part of many countries' security plans.  Leaders do not want their countries to be without the ability to refine sour so most will hold on to their own.  Sorry but that's my best guess.

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sunoco

has anyone heard anything about philly or marcus hook refineries being sold. ifso to who. heard pbf doesnt want them

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land2341
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 Sunoco is closing those

 Sunoco is closing those two refineries,  but as of last I heard today there were no buyers on the horizon.  PBF is changing its name to Epic Oil.

They have put out word that they'll put ex-employees from Sunoco on the top of their hire list,  but their job postings is slimmer than one might think.

Do you know if either of those plants can process sour crude?  My understanding was that they could not (or only very little)

since sour is what is out there now,  few buyers are looking for plants that cannot process it.  The PBF purchase of DE City last year was based on both its capacity to process heavy sour crude and massive gov't subsidies.  They are reporting that they are making money right now but I doubt any of it can truly be called profit.  

I think refiners will still be able to make money for another decade or two honestly,  but I may be being pollyann-ish about our continued viability as a society.

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conoco phillips trainer,pa refinery

Is there any truth to Marathon Petroleum buying Conoco phillips Trainer,Pa. refinery

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land2341
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Philly refineries

 Sorry Walt,  I cannot find anything that looks too promising on this.  Refining is in a very strange state right now.  My post of January of Last year that the blip between the prices of sour and sweet should normalize soon was obviously way off the mark.  Logic is pretty well out the  window on prices at the moment so I am at a loss to explain. 

If anyone has any information that might clarify why crude is currently more valuable than refined product I'd love to hear it.  Refineries are dropping like flies.  The Petroplus incident which seems to have vanished off the business pages was an indicator that should have foretold something that made sense,  but like everything else in this market,  there is no logic to be found.

The trainer plant - like many others - is suffering from a total lack of apital reinvestment in these facitlites.  Now when refining isn't making any money maintenance is a killer between hanging on and shutting down.  Delaware threw a ton of money at PBF.  Pennsylvania seems unlikely to follow suit.  BUt, I thought that refinery was a goner and I was wrong about that too.

I could choose two options:  either my understanding of the refining market is deeply flawed (entirely possible as I am self taught)  or the market is being severly manipulated in a manner completely disconnected from the supply and demand issues that should be driving it.

 

 

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East Coast Refineries

I was discussing the east coast refinery situation with a friend a few days ago.  He says that the long-term spread between Brent and WTI is making them non-competitive because they must use Brent at the higher cost, but the end products must compete with those made from cheaper WTI.  He commented that there is no way to get WTI to the east coast, but there are plans to reverse a pipeline to bring WTI to the gulf coast, which has lowered the spread some.  He commented that his company has been trying to sell their PA refinery for a few years with no buyers so the plan now is to shut down.  He also mentioned that the US govt is starting to take a keen interest in the shutdown of several northeast refineries that could have energy strategy consequences.  So I'm doubting there is a market manipulation issue with these...

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land2341
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 The governments interest

 The governments interest in the Delaware City refinery is reflective of the concern over energy strategy.  The spread between WTI and Brent is only a fraction of the picture here really.  

The Delaware City refinery refines sour crude.

Sour crude has always been cheaper and it currently is not.  

The government admitted just after 9/11 that it had erred in allowing such a huge percentage of its refining apacity to become so geographiucally centralized in the Gulf Coast.  But, the US has alot of refineries.  Especially when you compare its BPD output to Europe.   Too many refiners did not do the capital reinvestment needed to stay viable so some are going to close.  

I appreciate the info,  and it does impact the east coast refineries specifically.  It doesn't explain the rest.

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hess refinery

How will the closing of the Hess refinery in St. Croix effect East Coast refining or sales of refinery

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East Coast Refineries

 Walt,  honeslty,  I think nothing.  The Hess refinery was an oil fueled faciltiy and was running close to the bone.  Now that state side plants are running on natural gas and NG is at all time lows the Hess plant was not competative.

The only upside if you're one of the people adversely effected by east coast refinery closings is that there are rumblings of one or two buyers sniffing aorund the corpses,  and hints of more government intervention due to the losses effecting east coast supplies.  But, I have my doubts.  Demand is still low,  supply is still expensive and natural gas is kicking everyone's butts.

Does anyone know more about the Petroplus incident??  The whole event was strange and oddly underreported.

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re Hess

I just got this from my sister who lives on St. Croix where the Hovensa plant is:

 

What this means to us:
 
  • Well, considering Hovensa ("the refinery") is the largest private employer on St. Croix;
  • considering the refinery's closure represents "at a minimum" a loss of about $60 million in annual tax revenue for the government, from real property taxes and employee income taxes;
  • considering that they provide oil to the Water and Power Authority;
  • considering they are excellent corporate citizens, giving to every non-profit on the island and more; providing tuition benefit to employers' children and many scholarships;
  • considering we will have to import gasoline from somewhere across some ocean;
  • considering 2,000 people (many earning large salaries) will no longer be purchasing goods and services, eating in restaurants, having visitors, going to fundraising events, building or remodeling homes--in essence, spending money;
  • considering 1000+ under-educated people who cannot leave St.Croix will be set loose on an already economically depressed and high-unemployment-rated island;
  • considering violence on the island is higher than most places on the planet (this week: Wed. a.m. Hovensa announces its closure; Wed. a.m. fairly prominent citizen is found murdered in a burglary; Fri. a.m. west-end restaurant is torched unrecognizably to the ground--arson);
  • considering that there will no longer be a need for 2 college-prep private schools on the island due to the fact that one-third to one-half of their students were Hovensa related;
  • considering that the housing market was already dead and people are now leaving here, not moving here...

TEOTWAWKI getting closer- Greece, US Territories, where next- coming to a town near you?

Aloha, Steve.

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land2341
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Sympathy and empathy

 Thatchmo,  Send your sister my sympathies and empathies.  Truly the end of the world as we know it is a singualkr and personal thing.  The band plays on.....

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thatchmo
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Thanks land, I'll pass it

Thanks land, I'll pass it on.  You're right, the band does play on, and I got this from same sister today.  So humor is being maintained:

My Next Life

I want to live my next life backwards! You start out dead and get
that out of the way right off the bat. Then, you wake up in a nursing
home feeling better every day. When you are kicked out of the home for
being too healthy, you spend several years enjoying your retirement
and collecting benefit checks. When you start work, you get a gold
watch on your first day. You work 40 years or so, getting younger
every day until pretty soon you're too young to work. So then, you go
to high school: play sports, date, drink, and party. As you get even
younger, you become a kid again. You go to elementary school, play,
and have no responsibilities. In a few years, you become a baby and
everyone runs themselves ragged keeping you happy. You spend your last
9 months floating peacefully in luxury, spa-like conditions:

central heating, room service on tap. Until finally...You finish off as an
orgasm.

I rest my case.

Aloha, Steve.

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land2341
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Credit?

 Steve,  who wrote that?!?!  I fully plan to pass that on and like to give credit where credit is due.

The refiners on the East Coast are being told that Obama killing the Keystone pipeline just did them in,  but others are suggesting that indeed it is exactly the opposite.  That the pipeline straight to Texas would have nudged them out of profitability even faster.

Oil and refining are dinosaurs and will die off,  the way it is happening seems out of keeping with a systemic die off.  I would feel better about the whole thing if it looked inevitable,  as in there was a new technology found that made it clear oil was dying now as opposed to it seems to be dying even while still needed and fought over.  The other suggestion was that the "new" replacement was natural gas and the death of refining was inevitbale due to that.

 

Thoughts?

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land2341
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Oil refineries stock, gas prices and natural gas well

 Well this little universe has gotten some strange movements.  Oil from the id west is seeling at almost half of what is being imported.  People in the industry are claiming that this oil is land locked and trapped by the lack of the keystone pipeline.  I call bull on that one.  After all of these years suddenly this supply is so land locked it sells for 1/2?  Who is playng this market?  rail cars and a a new rail offloading platform on the east coast is tapping this new motherload of landlocked US produced (some tar sands) crude.  It is nasty stuff from what I am hearing.  

This is half because it is nasty stuff not because it is land locked....

 

In other news:  

http://www.reuters.com/article/2012/03/27/total-gasleak-idUSL6E8ER1J8201...

 

This is another deepwater hoizon only it is natural gas which is easier to cover up.  Volatile and will dissipate quickly airborne,  but still nasty business and quite the financial blow so to speak....

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land2341
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Northeast refining status

 For those of you who are interested in the NorthEast regions' refining status:  Particularly of interest are pages 6 - 8.  

 

http://www.eia.gov/analysis/petroleum/nerefining/update/

 

Some significant impacts of the refinery closures on the NorthEast......

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