• 4 minutes Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 8 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 11 minutes Why Trump Is Right to Re-Open the Economy
  • 13 minutes Its going to be an oil bloodbath
  • 19 mins Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
  • 40 mins US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 16 mins Russia's Rosneft Oil is screwed if they have to shut down production as a result of glut.
  • 13 hours Mr
  • 22 hours While China was covering up Covid-19 it went on an international buying spree for ventilators and masks. From Jan 7th until the end of February China bought 2.2 Billion masks !
  • 2 hours ‘If it saves a life’: Power cut to 1.5 million Californians
  • 11 hours Free market or Freeloading off the work of others?
  • 1 day What If ‘We’d Adopted A More Conventional Response To This Epidemic?’
  • 12 hours Marine based energy generation
  • 1 day Real Death Toll In CCP Virus May Be 12X Official Toll
  • 11 hours China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 17 hours Which producers will shut in first?

Breaking News:

WTI Slides On Huge Crude Inventory Build

Shell Sells California Refinery for $1 Billion

Martinez Refinery

Shell has struck a deal with refiner PBF Energy to sell it its refinery in Martinez, California, for up to US$1 billion, depending on the closing date, the buyer said in a press release, adding that the acquisition will boost its total throughput capacity to more than 1 million bpd.

The Martinez refinery has a capacity of 157,000 bpd. Shell has been trying to sell it for several years, Reuters notes in a report on the news. The supermajor will now fund the turnaround costs for the facility for the first quarter of 2020, estimated at US$70 million, as well as another US$40 million in downtime compensation if the deal does not get finalized by the end of the first quarter of 2020.

Shell first tried to sell the Martinez refinery in 2015, at the height of the latest oil price crisis, so it was no wonder it failed to find any buyers quickly. Now M&A conditions have improved significantly as evidenced by the pickup of mergers and acquisitions in the industry, with the highlight of course being Occidental’s acquisition of Anadarko.

For PBF Energy, the deal fits with plans for its California refining expansion. The company already has one refinery in the state, in Torrance, which has a capacity of 160,000 bpd.

“They wanted the two refinery systems, especially considering that when Torrance goes down they just have that one refinery and they don’t make anything back,” an analyst with Tudor, Pickering, Holt & Co. told Reuters.

This seems to be particularly important ahead of the entry into effect of new International Maritime Organization emissions rules. The acquisition, PBF said, will strengthen its position among producers of new-rule compliant fuels. This is an important step for the refiner as the industry is struggling to make refineries compliant with the new, lower-sulfur fuel requirements that will enter into effect next January.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage




Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News