July 31, 2012:

Exxon Mobil Corp has offered fewer Asian benchmark gasoil cargoes from its Singapore refinery for July and August than in previous months, traders said on Tuesday, helping push up premiums for the grade. The company offered about four cargoes of gasoil with 5,000 parts per million (ppm), or 0.5 percent, sulphur a month for July and August, down from 6-8 cargoes of the grade in previous months, they said. Instead it has been offering more gasoil with 10,000 ppm, or 1 percent, sulphur, they added. The reduction in volumes for 0.5 percent sulphur gasoil is likely due to partial maintenance at the company's integrated 605,000 barrels per day (bpd) refining complex in Singapore, traders said. This could not be confirmed, however.

An Exxon Mobil spokeswoman said the company does not typically comment on operational issues. While the units affected and the duration of maintenance were not immediately known, one trader said a "sulphur treating unit" was included. A second trader said maintenance could have already finished or was at least close to ending, with September cargoes expected to resume as normal. With Royal Dutch Shell conducting partial maintenance at its 500,000 bpd Singapore refinery from mid-July, supplies of gasoil, especially the high-sulphur variety, have been tight and driving up premiums, traders said. Cash premiums for 0.5 percent sulphur gasoil, which is the benchmark grade in Asia, shot up to an eight-month high last week, Reuters data showed. Demand for the grade, however, has been strong with countries such as Indonesia and Yemen seeking huge volumes for August onwards.

By Reuters

July 31, 2012:

Marathon Petroleum Corp can run up to 75 percent light-sweet crude oil across its six refineries if the price is right, executives told analysts Tuesday. "We constantly get questions about how much sweet crude we can run at a refinery or in our system. The answer is we can run a lot of light sweet crude," Mike Palmer, senior vice president of supply, distribution and planning, said during the company's second-quarter earnings conference call. A "rough ballpark" figure would be 75 percent of the company's crude slate could be light sweet, he said.

Light sweet crude production is ramping up in the U.S. thanks to increased shale oil output, giving refineries a cheap alternative to more expensive global crudes. Palmer said Marathon, with four refineries in the Midwest and two on the Gulf Coast -- including its 490,000 barrels-per-day Garyville, Louisiana plant -- could make adjustments to increase how much light sweet they process. "At Garyville, we're running a lot more light sweet crude than we forecast in the past," he said. The Garyville refinery underwent a $3.9 billion expansion that was finished in 2010.

The company on Tuesday reported higher second-quarter earnings, beating Wall Street forecasts, as profit margins climbed at its refineries near Chicago and on the Gulf Coast. Marathon Petroleum, which was spun off from Marathon Oil Corp a year ago, posted a profit of $814 million, or $2.38 per share, compared with $802 million or $2.24 per share in the same period a year earlier. Excluding one-time items, earnings per share were $2.53, slightly above the $2.51 per share that analysts had on average forecast, according to Thomson Reuters I/B/E/S. Revenues fell to $20.3 billion from $20.8 billion a year before. Marathon's refining and marketing gross margin rose to $11.13 per barrel in the second quarter of 2012 from $10.78 per barrel in the second quarter of 2011.

Marathon Petroleum's shares have rallied nearly 43 percent so far this year through Monday's close and were up 1.4 percent in late Tuesday morning trading to $48.15 a share.

By Reuters

A re-refinery that will convert used motor oil into a base product to create new motor oil reached a milestone at its site in Peachtree City last week. Universal Environmental Services held a ceremony last week to recognize its “tree topping” which is known as the construction of its tallest piece of equipment for the refinery, said UES President and CEO Juan Fritschy. The tree topping ceremony is part of a German tradition to recognize the tallest piece of equipment installed when the project has not had any safety issues, Fritschy explained. Construction on the $60 million plant is on schedule to end in the last week of December, and there will be a period of three to four months of testing, training and startup activities following completion of the plant, Fritschy said.

The refinery is expected to be fully operational in the second quarter of 2013, Fritschy said. It will be capable of handling 82,000 gallons a day of used motor oil. In addition to creating a new base product for motor oil, the re-refining process also will produce clean fuel to power the refinery plant and a compound for use by asphalt plants. All contaminants will be trucked off-site for disposal, Fritschy has said. UES, located in Peachtree City’s industrial park, has a collection system that includes trucks collecting used motor oil. It also accepts product via tanker cars that come onto the UES site via rail.

UES is preparing to make the transition from being a simple used oil collector, having increased its customer base by 20 percent in the last eight months, Fritschy said. “We introduced some improvements to the service for our customers and that was the result,” Fritschy said. “We expect that growth to keep going.” Fritschy said this fall the company will begin ramping up its hiring process for team leaders and plant operators. The email address to send resumes is available at the company’s website at www.universalenviro.com. Some of the new hires will go to Denmark for training at the UES refinery there.

By TheCitizen.com

July 27, 2012:

Chevron Corp (CVX.N) profit fell 7 percent in the second quarter as oil prices fell, and the No. 2 U.S. oil company said output would fall short this year, while strong margins at its refineries will cushion the blow to earnings. Like larger rival Exxon Mobil Corp (XOM.N), Chevron also faced weak prices for U.S. natural gas due to the glut of shale production, which has been a double-edged sword for U.S. companies. But Chevron is far less reliant on North American gas, which accounts for just 5 percent of its reserves, compared with 18 percent for Exxon. Chevron's second-quarter oil and gas production fell to 2.62 million barrels of oil equivalent per day from 2.69 million bpd a year earlier, and it surprised few investors by saying it would fall short of its 2012 target of 2.68 million bpd. George Kirkland, the vice chairman who also runs Chevron's production arm, blamed a shutdown of its Frade field in Brazil after a spill there; third-quarter maintenance work at the 300,000-bpd Tengizchevroil plant in Kazakhstan; and a delay to the startup of its $10 billion Angola LNG project. Kirkland now expects the first shipment of liquefied natural gas in September from Angola LNG, in which Chevron holds a 36.4 percent stake. The first exports had been expected in June. Chevron shares jumped on Friday, hitting a four-month high on Friday after it easily topped Wall Street estimates, despite a 50 percent drop in the average price for its U.S. natural gas. "I thought it was an outstanding quarter," said Edward Jones analyst Brian Youngberg. "The downstream (refining) was the main reason for the beat." Cheaper oil has helped refining by lowering the input costs. Gulf Coast margins have also been lifted by rising U.S. gasoline exports, which have run at a rate of 56,000 barrels per day this year -- double the average of the same period for the past five years, according to the Energy Information Administration. Overall, Chevron said its second-quarter net income fell to $7.2 billion, or $3.66 per share, from $7.7 billion, or $3.85 per share, in the year-ago quarter. Analysts, on average, had forecast $3.24 per share, according to Thomson Reuters I/B/E/S. The oil and gas production business had an 18 percent profit drop to $5.6 billion, while the downstream business saw profit jump 80 percent to $1.88 billion. Profits from Chevron's international downstream operations more than doubled to $1.1 billion, helped by an asset sale in South Korea, while U.S. operations saw profits rise 42 percent. Chevron said this month that industry benchmark margins on the U.S. Gulf Coast rose more than $4 per barrel to $24.89, while West Coast margins improved to $21.32 per barrel, their highest three-month average in four years. Its largest refinery is in Mississippi, with 330,000 bpd of capacity, while its two California plants can together refine 518,000 bpd. Profits at Exxon fell short of expectations on Thursday as oil and gas output sagged and its chemical unit faced weak margins. Shares of Chevron rose 0.9 percent to close at $109.26.

By Reuters

July 27, 2012:

PERTH (miningweekly.com) – Oil major Caltex would reportedly shut down oil refining operations at Kurnell, in Sydney, that could cost the Australian economy some 600 jobs. Resources and Energy Minister Martin Ferguson said this week that Caltex took the decision to cease operations at Kurnell following a 12-month review of its projects, which focused on options for improving competitiveness. The review concluded that investment to bring the Kurnell refinery to a sustainably competitive position was not economic; however, Ferguson noted that the review identified a number of affordable investments in the Lytton refinery, in Brisbane, that would support sustained improvement, and which were now under development by Caltex. “Caltex has advised that it will not be seeking government assistance, as no realistic amount of government assistance would allow Kurnell to overcome its competitive disadvantage,” Ferguson said.

“I understand this is an anxious and difficult time for many Caltex workers and their families. This decision will affect the approximately 430 Caltex employees at the Kurnell refinery and an additional 300 contractors. In the first two years, there will be a limited reduction in employee numbers to ensure the full operation of the refinery.” The Minister said that Caltex management would identify redeployment opportunities for workers wherever possible, and added that the government would work with the company to develop an approach that would integrate government and Caltex programmes. “The skills these workers have obtained in the workplace are invaluable. Workers in oil refineries are highly trained [and their] skills will be in great demand in other parts of the industry, such as liquefied natural gas processing plants.” It was thought that the introduction of the controversial carbon tax had little to do with Caltex’s decision to close the refinery, and Ferguson said that the closure would not jeopardise Australia’s energy security as the country already imported large amounts of crude oil and finished petroleum products.

“This decision will see imported supplies of crude oil being replaced by imported refined product. Additionally, the closure will not affect fuel prices, which are already determined by imported refined product and domestic competition,” Ferguson said.

By Miningweekly.com