January 27, 2012:

Accusations of negligence arose Sunday, a day after two Ashdod refinery workers died after being exposed to a lethal dose of highly toxic gas. A family member of one of the workers alleged that the victims were told to enter a contaminated area without adequate protection, and firefighters complained that they were not allowed access to the facility for “a long time” after responding to an emergency call for help. The victims, Michael Bilakhov, 35, and Moshe Tal, 38, had worked the Friday night shift at the Paz refinery and had gone missing after investigating a malfunction at around 5 a.m. They were found later Saturday morning lying on the ground. Initial investigations indicate the employees inhaled poisonous gas after trying to fix a leak. According to Bilakhov’s family, the workers weren’t wearing oxygen masks as they should have been. “It is insolence, they [the refinery management] don’t care about their employees and don’t provide enough training,” one family member told Channel 10 on Sunday. Another family member alleged that when she asked a company manager why the men entered a dangerous area without masks, he said, “I also enter without a mask.”

Yigal Zohar, head of the Ashkelon firefighters who arrived at the scene, said the victims may have been unprotected when they were exposed to the hazardous material for a minute or two. The Paz Israel refinery’s spokesperson said safety regulations were precisely followed. According to Ashdod Firefighting Services, a hazardous materials team that arrived at the scene was initially denied entry to the plant — despite being the best equipped to deal with the situation — and only gained access to the building after the Ashdod police chief intervened, threatening to make arrests. Magen David Adom paramedics, who were allowed to enter the facility, tried to resuscitate the victims for 30 minutes, but pronounced them dead on the spot. The refinery’s spokesperson said it allowed only the MDA teams to enter because it wanted to make sure the hazardous material was not a threat. The refinery claimed it was cooperating with inspections by the police and the Ministry of Industry, Trade, and Labor.

By The Times of Israel

January 27, 2012:

Stanlow refinery increases capacity for better margins

At a time when refineries across Europe and the UK are shutting down or reducing their capacities, Essar Energy-owned Stanlow refinery in the UK is enhancing its efficiency to improve gross refining margins (GRM). This exercise is a part of its strategy to achieve a premium of $3 per barrel to the northwest European (NWE) margin by March 2014. Instead of reducing capacity, since it produces more of jet fuel and high-speed diesel that is in demand, the company has undertaken efficiency enhancement measures like use of natural gas instead of fuel oil to run boilers and is planning to stop the production of lubricants to increase cheaper crude mix. Northwest European margin is the benchmark similar to the Singapore refining margins that Reliance Industries (RIL) and Essar Oil use in India to declare their GRMs. At the time of acquisition, Stanlow was already getting a premium of $2 per barrel to NWE margins, and within 100 days of the takeover, Essar managed to add $1 in premium. The company hopes to add another $1 by March-end and another $1 by 2014. It will all add up to a total premium of $5 per barrel to its NWE margins. Stanlow refinery averaged a GRM of $8.03 per barrel in the September quarter compared with $3 per barrel when Essar Energy bought the refinery in 2011. In September 2012, the GRM was around $10 per barrel.

The refinery has a total capacity of around 296,000 barrels per day. However, since the overall demand in Europe has slowed down, it is operating at 75 per cent capacity or refining 220,000 barrel per day. The company expects full-year contribution from Stanlow at $10 billion compared with Essar Energy’s $27 billion last financial year. Stanlow has undertaken efficiency-building measures that would add 160 cents per barrel by 2014. The refinery is incorporating changes such as converting six fuel oil-run boilers to run on natural gas. It also plans to stop the production of lubricants from the refinery soon. The company has already passed on crude inventories of around 6.5 million tonnes, out of 7.5 million tonnes, to Barclays Bank for a marginal fee and is saving around 20-25 cents per barrel through this measure. Now, Barclays maintains the inventory for Stanlow and helps Essar save on physically maintaining it. The inventories are now on the books of Barclays. A senior Essar Energy official told Financial Chronicle that the Stanlow refinery has undertaken steps like shifting to natural gas from fuel oil for its six boilers, and is in talks with customers to stop the production of lubricants that constitutes around 2 per cent of the total refinery output, but limits around a quarter of the crude mix. Both these measures would help them to achieve their target and focus on production of jet fuel and high-speed diesel, in which the UK is facing shortage.

“Shifting to natural gas and stopping of lubricant production would add around $1 or 160 cents per barrel to our refining margins. The company is working on some other projects later during this year that would add another dollar to the GRM,” said the official, declining to give further inputs on the new projects. Stanlow refinery has built a 3 km pipeline to get natural gas for the refinery from the nearest gas fields, while the production of lubricants can stop only if customers, who are buying, agree to its closure. “We are in talks with these customers and hope to work out an early resolution soon,” added the official. Stanlow has also increased its basket of crude mix for the refinery to make it cheaper and help increase margins. “We are now sourcing crude from places, such as Canada and Africa, where prices are low. However, the refinery complexity is not as high as our Vadinar facility to source sour-grade Latin American crude at present,” said the official.

According to experts another one million barrel per day capacity can go off-stream in the European market due to excess supply and lower demand. A K Prabhakar, head of retail research at Anand Rathi, said that all the initiatives were good, but the group would have to be consistent in its performance before the stocks were re-rated. Besides RIL, Essar is the only company that can boast of world-class refineries. However, they have never been investor-friendly in the past.

By Financial Chronicle

Janaury 27, 2012:

The Russian oil company Lukoil is holding negotiations with the Ukrainian government to remove technical obstacles preventing the start of the Odesa oil refinery belonging to the company, Lukoil President Vagit Alekperov told Interfax-Ukraine on the sidelines of the World Economic Forum in Davos. "The fact that the pipe is filled with Azeri oil causes questions. That is, technological issues that we are discussing with the Ukrainian government need to be resolved. And the plant will be launched if these issues are resolved," Alekperov said. In addition, the situation on the world market should be favorable for the oil refinery to operate, Alekperov said. "We are a Ukrainian processor now, and we are interested in seeing the Ukrainian oil refinery industry's stable work," he said.

Ukrainian Deputy Prime Minister Yuriy Boiko told Interfax-Ukraine that the Ukrainian government is interested in launching the oil refinery. "We will facilitate this and will provide all conditions for the domestic oil refinery industry to start working. Practical steps toward this will be taken in the near future," he said without specifying details. The government is still considering the sale of its stake in Ukrnafta, the largest Ukrainian oil producer, he added. Ukrainian oil refineries and gas processing plants halved the amount of oil processed in 2012 compared to 2011 to 4.57 million tonnes. In fact, only one of the six Ukrainian oil refineries, the Kremenchuk facility belonging to Ukrtatnafta, is operating at the moment.

The Odesa oil refinery was stopped in October 2010 in light of an economic situation on the Ukrainian oil product market and the amendment of the oil shipment procedure. The Odesa oil refinery is operated by Lukoil-Odesa Oil Refinery belonging to Lukoil. Its projected capacity is 2.8 million tonnes a year.

By Kyiv Post

January 5, 2013:

VAL-DE-REUIL, France (Reuters) - France will not take over insolvent Swiss refiner Petroplus' oil refinery in Normandy, but could help the plant financially once a suitable buyer is found, President Francois Hollande said on Saturday. About 500 jobs at the 161,000 barrels-a-day Petit-Couronne refinery are at risk, the latest industrial headache for the Socialist leader who has vowed to stem rising unemployment by the end of the year. "It's difficult to find a serious buyer. We must do everything to find one," Hollande told reporters after meeting union leaders in Val-De-Reuil, a town about 110 kilometers (70 miles) north-west of Paris. "The state will do its duty, but it cannot take the plant over, and the workers know that," he said. He added the state could at some point provide financing. Petroplus poses a major test for Hollande's government after it faced criticism over the tactics it used in a two-month battle over the future of ArcelorMittal's Florange steel plant, which unnerved investors in the euro zone's second largest economy and confused France's unions. His administration is struggling to stop a haemorrhage of industrial jobs which has helped push unemployment to 15-year highs, while curbing public spending and raising taxes to help slash debt in a stagnant economy.

A French court set a deadline of February 5 for interested parties to submit bids for the Petit-Couronne refinery. Shell , which had a six-month oil processing deal with the troubled plant running to mid-December, has not extended its contract, making the refinery less attractive for buyers due to expensive restart costs. So far only NetOil, a company led by Middle Eastern businessman Roger Tamraz, has submitted an offer while 7 others have filed letters of intent to buy France's oldest refinery. Net Oil's offer includes an oil supply deal with BP and an agreement with Hyundai to upgrade the plant. Union spokesman Yvon Scornet told reporters after the meeting that Hollande had promised to do everything possible to push the project forward, but had given no guarantees.

TAKING CHARGE

Hollande is trying to win back voters who are increasingly unhappy over the government's handling of the economy and disillusioned by communication gaffes. A survey by BVA for I>Tele on Friday showed two-thirds of respondents were not convinced by Hollande's New Year's address aimed at reassuring the country over his policies. Approval ratings for Hollande and Prime Minister Jean-Marc Ayrault hit new lows in December. Hollande, seen as letting his ministers lead the fight, has been compared unfavourably with his pugnacious, micro-managing predecessor Nicolas Sarkozy. However, the president, who appointed a new communications advisor on Thursday, appears to have decided to put himself directly in the firing line promising to carry out at least one visit a week across France to show his commitment to battling the economic crisis. "Today, I have to be more present on the ground," he said. "I have to set the example as I am the first to blame. I am not delegating to anybody else the responsibility of explaining to the French the policies that I am pushing through."

By Fox Business

January 5, 2013:

RICHMOND -- Chevron firefighters responding to a small Richmond refinery leak last summer may have accidentally punctured a main pipeline before a huge Aug. 6 blaze, federal investigators said. A crude-oil unit of the Richmond refinery burned, sending a cloud of gas and black smoke over residential areas. Thousands of people sought medical treatment, complaining of eye irritation and problems breathing. The unit remains closed. An interim metallurgical report showed the 40-year-old pipe that failed was initially weakened by the heavy sulfur content of the crude oil being pumped through it, U.S. Chemical Safety Board spokesman Sandy Gilmour wrote in an email to the Bay Area News Group. After a small leak sent hydrocarbons into the air, a small flash fire was put out. But a larger gash in the pipe released a bigger cloud of flammable gas, leading to the larger conflagration, the San Francisco Chronicle reported Friday. The federal investigation found the pipe appeared to have been punctured from the outside. "The CSB is examining the possibility that emergency response activities inadvertently accelerated the rate of the leak," Gilmour said. "We are comparing possible tool marks on the pipe -- where metal appears to be punctured inward -- with a firefighter's Halligan pike recovered from the incident." Investigators are examining the metal to determine if it matches the shape of the firefighting tool used to tear away insulation from the damaged pipe, he said. "However, we hasten to add that the blaze very likely would have happened even without this apparent puncture, but this external damage could have been an aggravating factor," Gilmour said. Sean Comey, a spokesman for San Ramon-based Chevron Corp., said in an email to The Associated Press that the company is working closely with all investigations and conducting its own probe.

The company still believes the crude unit damaged in the fire will be back online sometime during the first quarter of 2013. The rebuilding was delayed after Richmond city officials looked to independent consultants to confirm Chevron was replacing the damaged equipment with the best possible technology. Chevron threatened to lay off more than 600 workers if it failed to get the needed permits for reconstruction. The city approved the project last month. The Chemical Safety Board has not released the consultant's report, but a draft version was circulated for comment to Chevron, Cal-Osha and a Chevron employee union in late December. Anamet Inc. of Hayward, the metallurgical consultant, compiled the report. Whatever caused the fire, the federal agency questioned continuing to run crude while investigating the leak. "Regardless of the exact sequence of events, this incident emphasizes the importance of effective decision-making in shutting down the unit promptly in case of a leak of this nature," Gilmour said.

By MercuryNews