RPT-Global oil majors look to shed refineries as crude prices rebound

Fri Jun 17, 2016 7:00am EDT
 
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* Chevron solicits interest in Burnaby, British Columbia refinery

* Shell seeks buyer for Martinez, California plant - sources

By Jessica Resnick-Ault

NEW YORK, June 17 (Reuters) - Global oil majors Chevron Corp and Royal Dutch Shell Plc are putting small refineries on the auction block as they look to trim lower-margin assets in the face of headwinds from rising crude oil prices.

Chevron, the second largest U.S. oil company, is soliciting interest in its Burnaby, British Columbia, refinery and gasoline stations, the company told Reuters. Shell is looking for buyers for its Martinez, California, refinery, two people familiar with the situation told Reuters. Shell declined to comment.

These two companies, along with peers Exxon Mobil Corp and BP Plc, have sold more than a million barrels per day of U.S. refining capacity in the past three years, according to Stratas Advisors, a Houston-based consultancy.

The world's five largest oil majors together still have enough U.S. capacity to refine about 4.7 million barrels per day.

Refining profit margins have declined from highs seen in 2015, and the fear is that as crude prices recover from a two-year rout, refiners will be squeezed as the cost of oil rises but the price of gasoline does not keep pace. Selling the plants while margins are still reasonably high allows the majors to exit without a hit to their balance sheets.   Continued...