July 5, 2012:

Sunoco Inc. officials thought U.S. Rep. Bob Brady, the city's Democratic Party boss, was blowing smoke when he told them in February that the White House was concerned about the imminent closure of the company's Philadelphia refinery. But then, at Brady's request, President Obama's top economic adviser, Gene Sperling, organized a conference call with Sunoco chief executive Brian P. MacDonald. Brady and Deputy Energy Secretary Daniel B. Poneman joined the 5:30 p.m. call on March 8. The officials told the Sunoco chief that the White House was worried about the adverse economic effects of closing the largest refinery in the Northeastern United States. The political implications were unspoken: Pump prices were escalating during an election year, and the president could not afford the loss of 850 refinery jobs.  MacDonald told them about Sunoco's fruitless six-month effort to find a buyer. But he said one outfit might have the muscle to pull off a deal if it were structured right: the Carlyle Group, a Washington private-equity firm.

The March 8 conference call proved to be a pivotal moment in the effort to keep the refinery operating. That effort ended successfully with Monday's announcement that Carlyle and Sunoco will run the 330,000-barrel-a-day plant as a joint venture called Philadelphia Energy Solutions. As soon as the conference call was over, MacDonald said, he left a message on the cell phone of Carlyle managing director Rodney S. Cohen, who, in a previous role with Pegasus Capital Advisors, had turned around a troubled refinery in Coffeyville, Kan., for a hefty profit. The same evening, White House officials called their contacts at Carlyle to urge them to talk to Sunoco. Sperling and David M. Marchick, Carlyle's managing director for external affairs, had both worked in the Clinton administration.

Brady, once he had established his credibility with Sunoco, pledged his support to MacDonald. "I told him, 'I will be your champion,' " Brady said. " 'I will set all these things up, connect you to the major players, if you are committed to doing this.' " The Hail Mary marriage of Sunoco and Carlyle Group owes much of its success to the unusual cooperation among the Democratic White House, Republican Gov. Corbett, Democrat Mayor Nutter, and Brady, one of the most liberal members of Congress. They were joined by Sunoco, Carlyle and the United Steelworkers, which represents refinery workers.

By Philly.com

July 5, 2012:

OAO Zarubezhneft (ZRNFT), a Russian oil company, plans to triple output in its Bosnian plant Rafinerija Nafte AD Bosanski Brod (RNAFRA) to three million tons of oil a year by 2016, after investing 760 million euros ($950 million) over the next four years, TPortal reported today, citing Alexander Gribok, the refinery’s technical director. The Moscow-based company is also “a step closer” in bidding to buy filling stations from OMV AG (OMV) in Croatia and Bosnia-Herzegovina, the Zagreb-based electronic newspaper said, citing Josip Pleslic, the company’s representative in Croatia. OMV of Austria is selling subsidiaries in Croatia and Bosnia as central Europe’s biggest oil company focuses on exploration and production, it said on Dec. 6.

By Bloomberg

July 5, 2012:

Bahrain Petroleum Co., or Bapco, expects to award a front-end engineering and design contract to expand its only refinery in the first quarter of next year, Alwasat reported, citing Chief Executive Officer Gordon Smith. The state-run company will draw up a master plan for the project next month and complete the expansion in 2018, Smith said, according to the Bahraini newspaper. Bapco will also award construction contracts this year to enlarge the pipeline carrying oil to the refinery from neighboring Saudi Arabia, the report said. The planned expansion of the refinery’s capacity to more than 450,000 barrels a day from 260,000 barrels would require investment of $6 billion to $10 billion, Bahrain’s Oil Minister Abdul Hussain Ali Mirza said on May 8.

By Bloomberg

July 5, 2012:

Royal Dutch Shell PLC (RDSA, RDSB, RDSA.LN, RDSB.LN) reported flaring Wednesday at its refinery in Deer Park, Texas, according to a government filing made public Thursday. The 327,000 barrel-a-day refinery sent sulfur dioxide to its flare, according to Shell's filing with the National Response Center. The company was investigating the cause of the flaring, an incident that generally stems from equipment failure. A Shell spokesperson was not immediately available. The London-based company operates the refinery as part of a joint venture with Mexican state-owned oil company Petroleos Mexicanos.

By Dow Jones Newswires

July 5, 2012:

Energy Minister Arak Chonlatanon ruled out any plans to relocate Bangchak Petroleum's refinery complex from Bangkok's densely populated Phra Khanong district, despite the fact that its distillation unit caught fire early yesterday, the second such incident in two years. "Relocation could cost as much as Bt80 billion to Bt90 billion," he said. It is believed that a spark set fire to Bangchak's third crude-distillation unit at around 7.20am yesterday, with authorities ordering a week's closure of the complex and a month-long suspension of the distillation unit. No casualties were reported. A similar blaze occurred at around the same time in the morning on January 14 last year. Arak held an urgent news conference yesterday to assure consumers that oil supply would not be disrupted even though the 30-day suspension of Bangchak's refinery complex would cut output by 80,000 barrels a day. He explained that six refineries in Thailand were churning out at least a million barrels a day, and Bangchak's daily capacity of 90,900 barrels only accounted for 9.9 per cent of the total.

"At this ratio, the missing barrels would not have a serious impact on overall output, as Thailand's actual refining capacity is 1.1 million barrels [per day]. Moreover, we have sufficient reserves, which can accommodate a shortfall," he told reporters. Meanwhile, the Public Health Ministry said people living in a 4-kilometre radius might have to be evacuated if the level of toxic sulphur dioxide in the air went beyond the 5-parts-per-million safety standard, and 100 families in a 1-kilometre radius had already been advised to prepare to evacuate. However, as of press time, no evacuation orders were issued. Four schools nearby, namely Phra Khanong Pittayalai School, Pipattana School, Poonsin School and Bopit Wittaya School, suspended classes and sent their 4,300 students home.

Deputy Public Health Minister Surawit Khonsomboon said officials were monitoring the impact the smoke may have had on residents in the area, especially those living in tall buildings. He also said the thick black smoke posed three threats. First, hydrocarbon and other solvents in oil vapour could irritate the respiratory tract and might also contain carcinogens. Second, soot could cause cancer after prolonged exposure as well as obstruct breathing and irritate the skin, and last, people might be exposed to three harmful gases, namely sulphur dioxide, carbon monoxide and nitrogen oxide.

If air in a 4km radius of the site were found to have more than 5ppm of sulphur dioxide, people would need to be evacuated, he said, as he encouraged people living in high-rises to keep their windows closed, cover their noses or move out temporarily. Pollution Control Department chief Wichien Jungrungrueng has sent two teams to the accident site to collect air and water samples to check for contamination. At the news conference yesterday, the energy minister also outlined the three measures taken to cope with the situation. The first measure is to get Bangchak to release its petrol reserves, which will last for 16 days; diesel reserves, which should be enough for nine days; and bunker oil for 24 days. Second, other refineries such as Thai Oil's and IRPC's will be ordered to boost their output by 35,000 barrels daily. And last, retailers that rely on Bangchak, such as PTT, Chevron and ICP Chemicals, will be allowed to use up their current reserves.

The minister also promised that the oil supply would not be disrupted. Meanwhile, Bangchak Petroleum said it did not expect to suffer financially from yesterday's blaze because its insurer was ready to cope with the claims. In its report to the Stock Exchange of Thailand, Bangchak said the refinery was fully insured and that it also had a business-continuity insurance policy. It also does not expect an impact on the retail oil business from the refinery's suspension. Separately, Dhipaya Insurance president Somporn Suebthawilkul said Bangchak's assets - refineries, stocks and machinery - were insured for Bt23.5 billion, while it had a Bt1.5-billion coverage for business disruption and third-party claims.

"Dhipaya is the sole insurer of Bangchak, but this incident will not dent our financial position as this policy has been mostly reinsured by foreign insurers," Somporn said. Officials from the insurance company will inspect the site and should come up with a final figure on damages within a month.

By The Nation