August 28, 2012:

SAN FRANCISCO (MarketWatch) — Oil and gas stocks held their ground Monday as investors kept a wary eye on Tropical Storm Isaac as it churns across the Gulf of Mexico, prompting precautionary shutdowns on rigs and refineries in its path. BP Plc (US:BP), Chevron Corp. (US:CVX) and Royal Dutch Shell (US:RDS.A) are among the major offshore producers confirming they have brought non-essential personnel off their rigs ahead of the storm. According to the Bureau of Safety and Environmental Enforcement, about 78% of the U.S. Gulf’s oil and nearly 48% of its natural gas output has been shut ahead of the storm. The impact on oil and gas prices has so far been muted. October crude-oil futures (US:CLV2) fell 68 cents Monday to $95.47 a barrel on the New York Mercantile Exchange. The price drop reflects the view that Isaac, though following roughly the same path, is unlikely to cause as much havoc to the region’s oil industry as the much more powerful Hurricane Katrina did in 2005. Crude-oil demand also drops as refiners protectively halt operations before the storm. Natural gas futures (US:NGU2) fell 5 cents to $2.65 per million British thermal units. Read the latest on oil and gas prices. September gasoline futures (US:RBU2), on the other hand, jumped nearly 8 cents, or 2.5%, to $3.15 a gallon. It was the front-month contract’s highest closing price since April 30. Read more on oil and gas.

Meanwhile, the National Hurricane Center said Tropical Storm Isaac is about 280 miles off the mouth of the Mississippi River delta, heading northwest at 14 miles per hour with sustained winds of 65 mph. It is expected to gather strength, becoming a hurricane as it closes in on the Gulf Coast on Tuesday. A tropical storm is reclassified a hurricane when its winds top 74 mph. A hurricane warning is now in effect from Morgan City, La., to Destin, Fla., a stretch of the Gulf Coast that includes New Orleans. Heavy rains are already lashing parts of Florida, and meteorologists warn a significant storm surge — up to 12 feet depending on the tide — threatens the Gulf Coast. Further south, a deadly refinery blast Saturday at Venezuela’s 640,000 barrel-per-day Amuay refinery was seen boosting margins for U.S. refiners. Reports put the death toll from the Amuay explosion at 41. The news sent Valero Energy Corp. (US:VLO) shares 5.2% higher, closing at a 52-week high of $30.77.

Valero is seen as one of the primary beneficiaries of supply disruptions and improved refining margins stemming from the Amuay accident. But Isaac was also having an impact on refining operations along the Gulf Coast. Valero said it has shut its 270,000 bpd St. Charles and 135,000 bpd Meraux, La., refineries ahead of the storm. Other Isaac-related refinery closures include Marathon Petroleum Corp.’s (US:MPC) 464,000 barrel-a-day refinery in Garyville, La. and the 247,000 bpd Phillips 66 (US:PSX) Alliance refinery at Belle Chase, La. Chevron (US:CVX) said its 330,000 bpd Pascagoula, Miss. refinery continues to operate. The facility was among the hardest hit by Hurricane Katrina in 2005. Depsite strong gains by Valero, the NYSE Arca Oil Index (XX:XOI) slipped 0.1% to 1,229.67 points. Anadarko Petroleum (US:APC), which also appears on the natural gas index, was the group’s biggest percentage decliner, down 1.2% at $68.77 a share. The NYSE Arca Natural Gas Index (XX:XNG) was nominally higher at 641.34 points while the Philadelphia Oil Service Sector Index (US:OSX) fell 0.1% to 226.55 points, unable to cling to gains early in the session.

By The Wall Street Journal

August 27, 2012:

Awka, – The management of Orient Petroleum Resources Plc (OPR), said on Monday that its refinery, which would  be sited at Nsugbe-Umuleri in Anambra, would to be completed in the next 12 months. This is contained in a statement in Awka on Monday  by the Managing Director of the company, Mr Nnaemaka Nwakwa. It stated that the company was going to further strengthen the Nigerian oil sector and contribute positively to the nation’s economic activities. “The 3Dimension Seismic contractor is still working and and following the interpretation of the data, OPR plans to drill some high capacity wells to guarantee the crude oil feed stock for the Orient Refinery. “The phase will facilitate the fast tracking and early completion of the refinery expected in the next 12 months. “OPR’s refining activities will contribute significantly to the supply of petroleum products  for consumption in Nigeria, as well as export abroad, thereby conserving foreign reserves and boost Gross Domestic Product. “The company’s supply of natural gas from its OPL to the nearby factories will trigger industrial growth and provide economic empowerment for the people and create job opportunities for the teeming unemployed youths in the country.” The refinery, which got its Environmenntal Impact Certificate (EIC) in 2005, would be fed from the two oil blocks, OPLs 915 and 916.

The oil field covers an approximate area of 2,158 square kilometres, lying predominantly in Anambra but extending into Kogi, Edo and Delta and Enugu states. According to the statement, the company has been in constant contact with the state governments and community leaders in its area of operation, to ensure a harmonious relationship and eliminate negative social and environmental  impacts. It said the exploration activities went beyond states and in cases where hydrocarbon deposit  was between state boundaries, it was the function of the Federal Governments to determine ownership and benefit among the states. “ Petroleum is on the exclusive list of the Federal Government which grants licences for exploration, production, sales etc to suitably qualified companies like OPR. “These licences transcend state and local government boundaries and juridiction. “ and where oil and gas pool straddle between between state boundaries, the Federal Government would, through a  process, evaluate the amount of hydrocarbon deposits and allocate the benefits of production of such oil and gas accruing to each state, as has been done recently between Rivers/Akwa Ibom, Cross Rivers/Akwa Ibom states.”

Nwakwa, however, said that all facilities were ready for the president’s visit for the inauguration of Anambra River-1 oil well and its Early Production Facility on Aug. 30. He said the heli pad and heli park projects for helicopter landing in Aguleri-Otu had been completed . (NAN) .

By Vanguard

August 27, 2012:

A blaze at Venezuela’s largest refinery spread to a third storage tank as firefighters try to contain flames burning since an Aug. 25 gas explosion killed at least 48 people. Gasoline prices rallied in New York. Oil Minister Rafael Ramirez said two of the fires at tanks holding naphtha at the Amuay refinery probably will burn out by tomorrow as firefighters contend with a third fire that started at 2:15 p.m. local time today. There was no structural damage to the processing units at the facility about 240 miles west of Caracas, he said, adding that exports haven’t been unaffected. “We have to announce that a third tank which has had flames on its roof is also catching fire at this moment,” Ramirez, who is also head of state oil company Petroleos de Venezuela SA, said on state television. “We estimate that with the wind and conditions the two tanks should extinguish themselves by tomorrow, with this new tank we’re obliged to continue putting in all the effort to extinguish the fire.” President Hugo Chavez, who faces elections in October, declared three days of mourning and toured the affected areas. The explosion occurred after a gas cloud formed and erupted into a ball of flames that engulfed a National Guard post as well as homes and shops in front of the refining complex. The shutdown threatens refined product supply as U.S. Gulf Coast plants halt operations as Tropical Storm Isaac heads toward the region. Chavez said he ordered an investigation into the causes and said they won’t discard any hypotheses.

Gasoline Inventories

Venezuela has 4 million barrels of inventories of gasoline and other petroleum products and continues to produce 735,000 barrels of gasoline a day at plants, including nearby Cardon, according to Ramirez. Amuay, which has capacity to produce 645,000 barrels a day, will be restarted within two days after all of the fires have been extinguished, he said. PDVSA, as the Caracas-based company is known, has 10 days of inventory to meet its supply obligations internally and externally, Ramirez said. The state-owned company shipped five tankers of crude oil from Paraguana yesterday, he said.  “It’s probably going to be far longer than their public statements given the track record we’ve seen of maintenance at PDVSA facilities over the last couple of years,” Andy Lipow, president of Houston-based Lipow Oil Associates LLC, said by phone. “I think it concerns the market that it could take a long time given that it’s their largest refining complex.”

Refinery Accidents

PDVSA is the sole owner and operator of the refinery. The blast is among the world’s deadliest at an oil refinery. Fifteen workers were killed at BP Plc (BP/)’s Texas City refinery in 2005, while more than 50 people died in a fire at Hindustan Petroleum Corp.’s refinery in Visakhapatnam, India, in 1997. Amuay, Cardon and Bajo Grande form the Paraguana complex, which has a capacity of about 950,000 barrels a day. That’s second in size to Reliance Industries Ltd. (RIL)’s Jamnagar refinery in India, according to data compiled by Bloomberg. CRP, as the complex is known, supplies 67 percent of gasoline to the local market, according to PDVSA’s website. Cardon and Amuay also export refined products to the Caribbean and the U.S. Stella Lugo, governor of Falcon state in western Venezuela, described the early-morning blast as similar to an earthquake and said more than 200 homes near the refinery were damaged. Lugo told Union Radio today that the death toll had risen to 48 from a previous estimate of 39.

Prices Rise

The National Guard stationed at the refinery bore the brunt of the deaths, including 18 troops and 15 family members, according to Vice President Elias Jaua. More than 500 homes in vicinity of the plant have been damaged, Chavez said today. Gasoline rose to the highest level in almost four months today as some refineries shut with the approach of Isaac and the disruption at Amuay. BP and other companies have suspended some crude and gas operations in the Gulf of Mexico. The area is home to 23 percent of U.S. oil production and 44 percent of refining capacity, according to the U.S. Energy Department. Gasoline for September delivery advanced 7.68 cents to $3.1548 a gallon on the New York Mercantile Exchange, the highest settlement since April 30. Refiners with Texas operations that are less exposed to Isaac stand to benefit by exporting more product after the Venezuela explosion, said John Auers, senior vice president at Turner Mason & Company, a Dallas-based energy consultant.  U.S. Refiners. “On a sustainable basis, Venezuela hasn’t been able to produce much product as they used to,” Auers said by telephone. “The U.S. refiners have taken their place. Now in a short term, they certainly can step up and do even more.” Shares in Valero Energy Corp., based in San Antonio, Texas, jumped 5.2 percent to $30.77 today, while Marathon Petroleum Corp., based in Findlay, Ohio, gained 1.7 percent to $49.60.

The fire at Amuay, which opened in 1950, highlights the risk to supplies of oil products from large, aging plants and may lead to more exports from Asia to the U.S., according to Goldman Sachs Group Inc. Other major refinery fires elsewhere caused months of delays before full operations resumed, Nilesh Banerjee, an analyst at Goldman in Mumbai, said in a note e-mailed today. Venezuela, one of the 12 members of the Organization of Petroleum Exporting Countries and South America’s biggest crude producer, had an average output of 2.7 million barrels of oil a day last year, according to BP statistics. Its main export markets are the U.S. and China.

Crude Exports

Venezuela was the fourth-largest source of crude for the U.S. in May, after Canada, Saudi Arabia and Mexico, at 821,000 barrels a day, based on data from the U.S. Energy Information Agency. Venezuelan product imports from the U.S. nearly doubled in the first five months of 2012 to 38,000 barrels a day from 23,000 in the year earlier period, according to the EIA. They include gasoline, fuel additives and liquefied petroleum gas. Cardon has closed units several times this year after incidents. PDVSA had to halt production and evacuate workers from its Petropiar heavy-crude upgrader last year after a gas leak and a fire. Jose Bodas, an oil union leader, told Globovision on Aug. 25 that PDVSA has ignored calls by workers to improve “hazardous” working conditions at refineries. Seven out of nine planned maintenance programs for the Amuay refinery were postponed last year because of a lack of materials, according to PDVSA’s 2011 annual report.

Maintenance

Ramirez denied that PDVSA has failed to invest in maintenance and said the company spent $6 billion in the past five years on its refining circuit. Chavez also denied reports that the leak of gas had begun hours before the explosion. “Today’s price action probably already discounts refinery outages of a few days duration,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said in an e-mailed response to questions. “If refineries are in restart mode by the end of the week we could see the futures market rebalance. If the outages are extended beyond the next few days, then we’d look for more gains for gasoline and more weakness in crude.”

By Bloomberg

August 27, 2012:

The following table lists unplanned and planned production outages at U.S. refineries as reported by Dow Jones Newswires. The information is compiled from both official and unofficial refining sources and doesn't purport to be a comprehensive list. Marathon Petroleum (MPC) said Aug. 27 that it will temporarily shut down its 464,000 barrel-a-day refinery in Garyville, La. in anticipation of Tropical Storm Isaac. The company said the refinery will be shuttered until the storm passes. Phillips 66 (PSX) said Aug. 27 that it is temporarily shutting down its Alliance refinery in Belle Chasse, La. due to the approach of Tropical Storm Isaac. The 247,000 barrel-a-day refinery will be fully shut down late Monday. The company on Aug. 25 reported an unsheduled process unit shutdown resulted in flaring of sulfur dioxide at its 120,200 barrel-a-day refinery in Rodeo, Calif. Pasadena Refining Systems Inc. said Aug. 24 that its 100,000 barrel-a-day refinery released 14,000 pounds of particulate matter from its fluid catalytic cracking unit. Exxon Mobil Corp. (XOM) said Aug. 24 equipment failure would impact production at its 344,500 barrel-a-day refinery in Beaumont, Texas, according to a government filing made public Friday.

The company also said Aug. 24 that the crude distillation unit of the Beaumont refinery was back to normal after an instrumentation failiure resulted in nearly 3,000 pounds of sulfur dioxide being released on Aug. 23. Phillips 66 (PSX) said equipment failure on Aug. 23 caused a release of hydrogen sulfide at its 306,000 barrel-a-day refinery in Roxana, Ill. BP Plc. (BP) said Aug. 20 the ultracracker at its refinery in Texas City, Texas, will resume normal operations after a compressor trip caused it to malfunction the day before. Tesoro Corp. (TSO) said Aug. 19 a tripped unit caused sulfur dioxide emmissions at its refinery in Wilmington, Cali. The company did not specify which unit had the trouble. Delek Holdings USA said Aug. 18 an electrical storm caused a power outage at its refinery in Tyler, Texas. Exxon Mobil Corp. (XOM) said on Aug. 16 its refinery in Beaumont, Texas, resumed operations after an electrical outage the day before. Exxon still expected to meet its contractual supply committments, according to the company's filing with the Texas Commission on Environmental Quality. Royal Dutch Shell (RDSA.LN) said Aug. 15 that a mechanical failure occured at its refinery in Martinez, Ca., resulting in more than 100 pounds of sulfur dioxide being emitted. A fire broke out at a processing unit in the same refinery on Aug. 13.

Citgo Petroleum said Aug. 14 that the FCCU at its refinery in Lemont, Ill., was shuttered with no estimate for restart. The unit had gone down for unplanned repair on July 28. Citgo said Aug. 10 that workers were putting back online a compressor that tripped at the coking unit of its refinery in Lemont, Ill. Sunoco Inc.'s (SUN) Alkylation Unit 869 returned to service on Aug. 9 after going into circulation mode on Aug. 3 to facilitate compressor repair, a filing to environmental regulators made available on Aug. 10 said. Pasadena Refining Systems Inc. on Aug. 10 reports flaring of off-spec product at its Pasadena, Texas, refinery. Valero Energy Inc. (VLO) on Aug. 10 said an FCCU at its St. Charles refinery in Norco, La., will return to service before the end of August. It was shut on Aug. 10 for unplanned repairs. 's (CVX) fire-struck Richmond, Calif., refinery is operating at about 60% of capacity after the Aug. 6 fire that shut only the plant's CDU. The Borger Refinery in Borger, Texas, reported a process upset on Aug. 8 listing Areas C and D as the sources of emissions; no other details were provided in a filing to environmental regulators.

HollyFrontier Corp. (HFC) on Aug. 8 said repairs to the fire-struck diesel hydrotreating unit at its Tulsa East refinery in Okla., would take six to eight weeks. The fire and shutdown occurred on Aug. 2.

Citgo Petroleum Corp. on Aug. 8 said the FCCU shut for unplanned repair at its Lemont, Ill., refinery on July 28 is in restart mode. BP-Husky will begin four weeks of scheduled maintenance at an FCCU and coker unit compressors on Sept. 13, a person familiar with operations at the plant said on Aug. 7. PBF Energy said equipment malfunction on Aug. 6 at its Delaware City refinery in Delaware caused an emissions release of sulfur dioxide. No further information was provided in the filing to environmental regulators. Valero Energy Corp. (VLO) on Aug. 6 said its Benicia, Calif., refinery FCCU is on track to reach normal rate by mid-August. The unit began the process of restarting on Aug. 6; it was shut on July 26 for unplanned repair to an associated compressor. For more detailed information, search Dow Jones Newswires using the code N/ REF. Operator Refinery Capacity Description Restart (in 000s bbl/day) UNPLANNED CANADA CARIBBEAN EAST COAST PBF Delaware 190.0 Equipment malfunction on Aug. Energy DE 6 caused emissions; no further details available. Sunoco Phila. PA 330.0 Alkylation Unit 869 resumed service on Aug 9; it was placed on circulation mode on Aug 3 for compressor repair. GULF COAST Borger Borger, TX 146.0 Refinery reports upset at un- specified unit(s); filing lists Areas C and D of the plant as sources of emissions. Motiva Port Arthur 600.0 Newly commissioned 325,000-b/d Early TX CDU was shut by a small fire 2013 over the Jun 9-10 weekend. Re- start seen in early 2013; lengthy repairs needed to correct cor- rosive issue at new equipment. Marathon Garyville, 464.0 Will start suspending operations Petroleum LA in anticipation of Tropical Storm Isaac. Pasadena Pasadena, TX 100.00 Flaring of off-spec product re- Refining ported to regulators on Aug. 10. Flaring of particulate matter re- ported to regulators on Aug. 24 Phillips Rodeo, Calif. 120.2 Flaring of sulfur dioxide reported 66 Aug. 25 due to unsheduled process unit shutdown. Belle Chasse, 247.0 Announced Aug. 27 that refinery will be LA temporarily shut down due to Tropical Storm.

Valero Norco, LA 270.0 FCCU shut on Aug 10 is expected to return to service before the end of August, the Co. said. MIDWEST Citgo Lemont, IL 167.0 FCCU shut Jul 28 for unplanned Aug 8 repair in Tulsa East Plant is in restart mode, an Aug 8 filing to regulators said. Refinery operations are being affected by Enbridge.  crude oil pipeline shutdown since July 27, the Co. said on July 30. Holly Tulsa, OK 125.0 Repair to diesel hydrotreater shut by a fire on Aug 2 will take 6-8 weeks, the co. said on Aug 8. ROCKIES WEST COAST Valero Benicia, CA 170.0 FCCU shut on July 26 for un- Mid- Energy planned compressor repairs be- Aug. gan the process of restarting on Aug. 6. Planned rate expected by mid-August, the Co. said. Chevron Richmond, 245.0 An Aug 8 Bloomberg report said CA the refinery is operating at 60% of capacity. CDU No. 4 is shut after Aug 6 fire. Most other process units continue to operate, the co. said on Aug 8, but the amount of fuel being produced is unclear. Compressor failure at unspe- cified unit resulted in flaring on Aug 1; a filing said. No other details were provided in a filing to regulators. PLANNED CANADA Husky Saskatchewan Major turnaround to take place Spring Refinery in spring of 2013. Plant-wide 2013 shutdown for inspection and equipment repairs. CARIBBEAN Valero Aruba Refinery still up for sale, the Co. said on July 31, 2012. EAST COAST Monroe Trainer, PA 185.0 Delta Airlines subsidiary buys Late Energy refinery in April, plans turn- Summer around through summer. Startup 2012 planned in late summer 2012. Sunoco Philadelphia 335.0 Energy Partners buys Sunoco Inc.; 4Q PA deal to close 4Q 2012. 2012 Sunoco Marcus Hook 190.0 Marcus Hook shut Dec. 1 ahead of schedule due to poor refining economics. GULF COAST Valero Houston, TX 160.0 Eight weeks of maintenance set Oct/Nov.

By Bloomberg

August 27, 2012:

Caltex says the decision to close its Sydney oil refinery is the right one, despite its refining business returning to profit after recent losses Net profit on a replacement cost basis soared up by 74 per cent to $197 million for the six months to June 30. Replacement cost basis excludes the effect of changes in the world oil price, and reflects the company's underlying performance. Better margins from its refinery operations, where imported crude oil is turned into fuel, helped drive the result along with marketing of fuel. The company's refineries lost more than $200 million last calendar year but actually posted a profit of $2 million in earnings before interest and tax (EBIT) for the first half.

Australia's largest blue-collar union has accused Caltex of manipulating its finances in order to close its Sydney oil refinery. Caltex announced in July that it was shutting the refinery at Kurnell by 2014 and shedding between 330 and 600 jobs and spending $650 million to turn the plant into an import terminal. Australian Workers' Union (AWU) boss Paul Howes accused Caltex of being cynical manipulators and poor corporate citizens, in light of the strong profit figure and better financial performance of the refining division.

'This company would rather spend $650 million converting Kurnell into an import facility than maintain it as a profitable refinery, employing Australians and contributing to the Australian economy,' Mr Howes said. The better result for refining was driven factors,including better plant performance, 8.5 per cent higher production and fewer depreciation charges after a $1.5 billion writedowns of their value. Caltex chief executive Julian Segal defended the planned closure of Kurnell as being related to long-term issues, such as projected over-supply from mega-refineries in Asia. 'We spent 12 months in preparation for our decision and did a very thorough analysis of what needs to be done, what needs to be planned and we feel very confident we will do the right thing,' he said. 'In 100 years one thing that never changed was our ability to procure, supply and deliver good quality transport fuels to the places they were needed, every time they were needed ... sometimes we had refineries to help us do this, sometimes we didn't.' Caltex sells one third of Australia's transport fuel and is the country's largest convenience retailer. The fuel supplier and distributor's main profit driver was an eight per cent jump in earnings before interest and tax from its marketing performance to $367 million.

The company's historical cost basis net profit, or bottom line including oil price changes, was down 38 per cent to $167 million. Sales of petrol were down, but stronger premium, diesel, jet fuel and lubricants sales contributed to total receipts from customers of $13.5 billion, up from $12.4 billion previously. Morningstar analyst Peter Warnes said the short-term outlook was favourable for the company as it supplied transport fuel for big corporations including resources companies. The company declared a fully franked interim dividend of 17 cents per share, in line with the previous first half dividend.

By Sky News