June 18, 2012:

LONDON- The closure of a financially troubled British oil refinery appeared more likely after the government refused to seek permission from the European Union to help it. The fate of the Coryton refinery in Essex, about 25 miles east of London, became cloudier after the British Department for Energy and Climate Change said Friday it wouldn't approach the European Commission to seek its blessing in offering a subsidy to keep the operation going. The refinery's former owner, Switzerland's Petroplus, became insolvent in January, placing the fate of its plant and its 850 jobs at risk. The facility supplies about 20 percent of the fuel used in London and southeastern England. Unions representing Coryton workers had urged the government to step in with funding while a new owner could be found but DECC issued a statement last week saying a subsidy wouldn't be feasible due to overcapacity in the refining industry and declining demand for gasoline, the BBC reported.

"If government did step in to help Coryton, this would be a short-term fix, and it could potentially lead to job losses at other refineries who would be at an unfair disadvantage to Coryton," a department spokesman said. "This was a very difficult decision and it is particularly regrettable that people may lose their jobs. "The closure of Coryton as a refinery should not have any impact on supply of fuel to London and the southeast. There are many other supply points and operational refineries which can be used." That brought an angry reaction from unions at the plant, who have staged protests this month demanding the government preserve the refinery as an integral part of Britain's energy infrastructure that puts $150 million into the local economy. Len McCluskey, secretary-general of the British trade union UNITE, said DECC's decision not to invest in the refinery was hypocritical after Chancellor George Osborne's announcement Thursday of a scheme to provide low-cost funding to Britain's largest banks in a bid to kick-start lending.

"Last night, the Chancellor pledged to pump in at least ($220 billion) into the banking system to boost lending -- which bankers should be doing anyway as that's their job -- in an attempt to build a financial firewall against the situation in Greece. "Yet a similar request from Unite for state aid in the short-term to tide over Coryton until a viable buyer is found to take over the oil refinery is dismissed by ministers out of hand. This is simply not good enough." Analysts said layoffs at the plant could begin as soon as this week in Essex, with more job losses possible at an oil storage site at Teesside in northeastern England and a research and development site at Swansea in Wales. Meanwhile, a former Russian energy minister is bidding to keep the refinery open.

Igor Yusufov, energy minister in Vladimir Putin's first term as Russian president, has emerged as sole bidder for the bankrupt refinery, The Financial Times reported Friday.  PriceWaterhouseCoopers, which is administering the bankrupt refinery, declined to comment on the report. Labor Party Member of Parliament Richard Howitt told the newspaper Yusufov was a genuine bidder. "I am aware of his bid, and have been assisting it," he said. "It did stall for awhile, but I put some efforts in trying to encourage the talks to get going again. The talks, certainly, as of [Thursday], are proceeding."

By UPI.com

June 18, 2012:

HANOI- Vietnam's only oil refinery, the Dung Quat facility, may delay its restart to early July from late June after a six-to-seven-week shutdown, a senior executive said on Monday. The $2.2-billion Dung Quat refinery, 880 kilometres (550 miles) south of Hanoi, usually supplies around 30 percent of Vietnam's domestic oil product demand. "We still aim to resume production on June 25-27, but there is the possibility of delaying to early July because of the pace of the equipment checks," said Nguyen Hoai Giang, chief executive of Binh Son Refining and Petrochemical Co, which operates the refinery. The 130,500 barrels-per-day plant has been shut since May 16 for an equipment check before final acceptance from its builder, French oil services group Technip. The refinery's operators had initially planned to resume production after three to four weeks.

The plant's shutdown has prompted domestic distributors to aggressively seek oil products in the spot market due to reduced term supply from the refinery, traders have said.

By Reuters

June 18, 2012:

Delta Air Lines Inc (DAL.N), which took the bold step of bidding for a refinery to keep a handle on fuel costs, said on Monday it would not be selling jet fuel on the open market once the deal closes. Monroe will spend about $100 million to convert the 185,000 barrel-per-day refinery in Trainer, Pennsylvania, to increase its jet fuel output to 52,000 bpd or about 32 percent of output, cutting back production of gasoline. "We will produce and sell the jet fuel to ourselves," said Eric Torbenson, a spokesman for the airline, the second-largest in the United States. Monroe Energy, the Delta subsidiary formed to own the refinery, will sell the fuel back to Delta, Torbenson said, clarifying a media report that quoted Delta's chief executive officer saying that Delta plans to become a seller in the U.S. fuel market and push prices lower.

Torbenson said Monroe Energy was legally prohibited from selling jet fuel on the open market. Monroe signed contract and offtake deals for buying crude and selling products with BP and Phillips. Delta spent almost $12 billion for fuel last year, the largest expenditure on its balance sheet. Last year, Delta paid an average $3.06 a gallon, up nearly a third from 2010. For 2012, the U.S. Department of Energy forecasts the cost of jet fuel to average $3.35 a gallon. A 1 cent variation in the cost of jet fuel can make a big difference to the airline. "One cent means a $40 million difference annually," Torbenson said.

By

June 18, 2012:

Japanese refiner Nansei Sekiyu KK, wholly owned by Brazil's Petrobras, said on Monday it would temporarily suspend all marine operations and truck shipments at its 100,000 barrels per day Nishihara refinery in Okinawa, southwestern Japan, as a very strong typhoon approaches. Refining operations have not been affected so far, a company official said. Typhoon Guchol, which is packing winds of up to 216 kph (135 mph), is set to strike the Okinawa island on Monday night, according to the Japan Meteorological Agency.

By Reuters

June 18, 2012:

Italy's refinery capacity is currently between 20% and 25% more than is needed as demand remains weak, said the head of the country's oil association, Unione Petrolifera, Monday. "Today's situation is much worse [than the past]" as consumption stagnates and "forecasts aren't encouraging," said Pasquale De Vita, chairman of the association, at the shareholders' annual meeting in Rome.

"There's the risk that the crisis in the sector may lead to the closure of some refineries but that doesn't include us," said Chief Executive Massimo Moratti of Saras SpA (SRS.MI). Italy's service station network needs to shut about 33% of the pumps to reduce them to between 15,000 and 18,000, and to make it "adequate" for the country's needs and lower prices for drivers thanks to efficiencies, Mr. De Vita also said.

By Dow Jones Newswires