Utah refiners seeking other crudes on Uinta downturn

Thu Sep 10, 2015 5:01pm EDT
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By Kristen Hays

HOUSTON, Sept 10 (Reuters) - Two Utah refiners that committed hundreds of millions of dollars on projects to run more Uinta Basin waxy crude are planning to tap other types as low oil prices prompted producers to focus on more profitable oilfields.

Tesoro Corp and HollyFrontier Corp announced upgrades to their Utah refineries in December 2011 and January 2012, respectively, as Uinta output was rising.

But oil prices down by 57 percent from mid-2014's triple-digit highs prompted producers to hunker down in other oilfields with lower operation costs and better returns.

Newfield Exploration Co, the largest Uinta producer, ceased drilling in the Utah basin earlier this year to focus on the Anadarko Basin and other Oklahoma plays.

"We've ceased investment, as far as drilling investments, in the Uinta Basin," Chief Executive Lee Boothby told analysts on Thursday during a webcast presentation at the Barclays CEO Energy-Power Conference in New York.

Bill Barrett Corp, another Uinta player, also has refocused efforts in the Niobrara shale in northeast Colorado.

CEO Scot Woodall said at the same conference on Thursday that the Uinta Basin is a vast resource that the company can exploit "if and when we come back to develop it."

In the meantime, HollyFrontier and Tesoro are regrouping to tap other barrels as needed.   Continued...