August 31, 2012:

The restart of Libya's largest refinery on Friday will help tighten availabilities of Mediterranean sweet grades, while spot differentials on Russia's main export grade Urals drifted sideways with limited activity. No bids or offers surfaced in the Platts window. Libya's 220,000 barrel per day Ras Lanuf refinery, closed by the conflict which ended the rule of Muammar Gaddafi last year, restarted on Friday after a lengthy delay. The refinery has been ready to resume operations since the end of last year but the restart was delayed due to disputes between Libya's state oil company NOC and refinery owner UAE-Lerco over payments for crude oil, industry sources said. Libyan exports are expected to fall in October as the refinery runs domestically produced Sarir and Messla crude grades, said traders. Loading dates for Libyan cargoes are due to be announced on Oct. 10. "There are fewer Libyan barrels in the market," said one buyer. Algeria's state oil company Sonatrach has started offering October loading cargoes. Offers were around dated Brent minus 60 to 70 cents, said one trader. "Sonatrach is the seller as usual but not aggressive so far," said one trader, who did not hear of any specific deals. Equity sellers are not expected to receive their October loading dates for another week or so. In tender news, Rosneft is expected to announce the results of its major tender for Urals cargoes loading over 6 months by Sept. 6 at the latest, one participant said. The Russian producer was said to have asked traders for higher bids, though traders pointed out this was quite common.

Saudi Aramco is expected to issue its October official selling prices next week, followed soon afer Iraq's state marketer Somo new prices. Re-selling of Iraqi medium sour Kirkuk has been difficult, said one trader, as loading delays are still nearly a month long. Iranian oil shipments have risen slightly in August from their lowest level in more than two decades, a Reuters survey showed. Until recently, Asian customers have had trouble circumventing the shipping insurance ban but more Iranian crude has been heading to Asia in August. Japan has managed to overcome limitations with government-backed shipping insurance has encouraged purchases, sources in the survey said. A further increase in September is expected. Japan's imports of Iranian crude oil fell to zero in July for the first time since 1981, trade ministry data showed. To compensate, Japan increased imports from the United Arab Emirates and Iraq, among other suppliers.

By Reuters

August 31, 2012:

The state Department of Labor and Industries is proposing $81,500 in penalties against the BP Cherry Point refinery in Whatcom County for six violations — one a “willful violation” — of workplace safety and health rules. L & I undertook an inspection in February after a major fire caused the refinery to shut down.  There were no injuries in the fire. “A willful violation is the most significant civil classification that can be issued:  It is used when L & I alleges that the violation was committed with intentional disregard or plain indifference or substitution of judgment with respect to worker safety and health regulations,” L & I said in a statement. The fire was caused when a corroded “deadleg” pipe ruptured.  While seldom used, such pipes must be monitored in anticipation of when they are needed to carry material in the refining process. L & I cited BP for a “willful violation” for failing to ensure that inspection and testing procedures for process piping “followed recognized and generally accepted good engineering practices for all deadleg piping circuits.”

The proposed penalty for the willful violation is $65,000.  The additional violations were for not complying with Process Safety Management standards, requirements for managing hazards associated with processes that use extremely hazardous chemicals. BP has until Sept. 13 to appeal the citation.

By Seattlepi

August 31, 2012:

KARACHI - Though volatility in the international oil prices continue to induce volatility in the domestic refinery operation, but there throughput increased by 6pc in July to 697k tons as against 659k tons in the same month last year. “The improved throughput from Attock group refineries i.e. ATRL and NRL were the primarily reason behind higher sales, while Byco sales also played its role as it was shutdown in the comparable period last year,” said the Topline analyst Nauman Khan. Furthermore, he said, despite this higher output, the country’s reliance on the imported fuel increase, with local production fulfilling only 44pc of domestic demand as against 46pc last year.

“Uncertain outlook for the refinery margins may lead to sector’s underperformance going forward, but we have liking towards ATRL on the back of i) superior product mix, ii) group synergies and iii) portfolio value,” said Khan. Domestic refinery operated at approx. 71% capacity in July 2012 as against 67% in July 2011 primarily on account of increased throughput from ATRL and NRL.

By Pakistan Today

August 31, 2012:

CARACAS - Workers have restarted two key production units at Venezuela's biggest refinery after an explosion a week ago that killed nearly 50 people, sparked a huge fire and halted operations at the facility, state oil company PDVSA said on Friday. Firefighters battled for days to put out burning storage tanks. None of the production units were affected, but were temporarily taken off line at the 645,000 barrel per day Amuay refinery, which is part of the second-biggest refinery complex in the world. "Operational activities have resumed safely and gradually," PDVSA said in a statement, adding that two crude distillation units with a combined capacity of 160,000 bpd were now running, and that a third was due to restart soon. It said other smaller processing units, including ones that make naphtha and kerosene and have a combined capacity of about 58,000 bpd, were also operating normally. The authorities are investigating what may have caused a gas leak that led to Saturday's pre-dawn blast. In addition to those killed, the explosion wrecked about 200 nearby homes.

The accident was the global oil industry's most deadly in recent years, nearing the toll of a fire that killed 56 people in 1997 at India's Visakhapatnam refinery. Experts say PDVSA might have to run Amuay's restart process more slowly than normal following the blast, while workers continue to clear debris, cool the area affected by the blaze and check the system for any more leaks or other problems. The water, power and steam supplies to the Amuay refinery, which by itself is the world's fourth biggest, were not interrupted by the disaster, however, which should help save some time. One oil industry source said that the damage to the refinery could end up costing about $3 billion, but that PDVSA has yet to choose a company to carry out an audit. As operations begin to return to normal, PDVSA said two tankers were loaded on Friday with a total of 510,000 barrels of oil products for the domestic market from docks at Amuay and the neighboring Cardon refinery. Four more tankers were waiting to be loaded, the company said, one bound for an oil storage terminal in the Caribbean and another destined for Africa.

By Reuters

August 30, 2012:

Valero Energy Corp. (VLO) said Thursday two of its Louisiana refineries, shut down in anticipation of Tropical Storm Isaac, have sustained no major damage and are starting to be restaffed. Valero shut down its refineries in Meraux and Norco early in the week as Tropical Storm Isaac entered the Gulf of Mexico. Isaac, which became a Category 1 hurricane before making landfall in southeast Louisiana Tuesday, weakened to a tropical storm Wednesday and has moved north to the central part of the state. Initial inspections have turned up minor wind damage to the facilities but no major damage to the refineries' production units, Valero spokesman Bill Day said. "We should have a better idea in the next few days when restart can begin," Mr. Day said. Valero's Memphis refinery continues to run at a reduced rate because of the closing of the 1.2-million-barrel-a-day Capline pipeline that provides oil to the refinery, Mr. Day said. Chalmette Refining LLC, Phillips 66 (PSX) and Motiva Enterprises LLC, a joint venture between Royal Dutch Shell PLC (RDSA, RDSA.LN) and Saudi Arabian Oil Co., were not immediately available to comment on the status of their shutdown refineries in Louisiana.

Marathon Petroleum Corp. (MPC) declined to comment on the state of its 464,000 barrel-a-day refinery in Garyville, La., which it ran at reduced rates during Isaac. Chevron Corp. (CVX) and Exxon Mobil Corp. (XOM), both of which reduced output at their area refineries before the storm, were not available for comment.

By Down Jones News Wire