Page 11 - NorthAmOil Week 13 2021

NorthAmOil INVESTMENT NorthAmOil

Chevron reportedly eyeing Shell’s

Pacific Northwest refinery

WASHINGTON SUPER-MAJOR Chevron has reportedly Shell, for its part, has been reducing its expo-
STATE emerged as the leading contender to buy a refin- sure to refining. In October 2020 the European
ery in the US Pacific Northwest that is owned by super-major said it would shrink its global refin-
Royal Dutch Shell. This was reported by Reuters, ing portfolio to six sites from 14. It permanently
which cited three sources familiar with the mat- closed its 211,146 bpd refinery in Convent,
ter on March 27 as saying that Chevron was first Louisiana, in December, and that plant is still
in line to buy the Puget Sound refinery in Ana- up for sale. It has been trying to sell its 145,000
cortes, Washington State. bpd Puget Sound refinery for at least a year, with
The 145,000 barrel per day (bpd) Puget Sound reports that the facility was for sale emerging in
plant supplies fuel markets in the Northwest and January 2020.
competes with plants owned by BP, Marathon Thus Shell’s efforts to sell the refinery pre-date
Petroleum and Phillips 66. Neither Chevron nor the coronavirus (COVID-19) pandemic, but it
Shell have commented on the matter publicly, appears likely that the impact of the pandemic
and a deal is not guaranteed. Indeed, Reuters on global demand for refined products last year
cited analysts as saying that competing refiners could have spurred its efforts to shrink its refin-
often look at other businesses in order to evaluate ing footprint.
their own operations. Additionally, Shell is among the companies
Nonetheless, Chevron has been on some- to have adopted a long-term target of net-zero
thing of a spending spree recently, paying $4.1bn greenhouse gas (GHG) emissions, which it has
for independent producer Noble Energy in 2020 set for 2050. Chevron and fellow US super-ma-
and buying a 112,229 bpd Texas refinery for jor ExxonMobil, meanwhile, have resisted such
about $350mn from Brazil’s Petrobras in 2019. targets so far.™

PERFORMANCE

ConocoPhillips provides first-quarter update

US CONOCOPHILLIPS, the US’ largest independ- the year. This week it reaffirmed that guidance.
ent oil and gas company, released a preliminary ConocoPhillips said it expected to report
update on its upcoming first-quarter results this first-quarter transaction and restructuring-re-
week. The company said it anticipated higher lated expenses associated with the Concho
production during the first quarter than it had acquisition of around $300mn before tax, as well
achieved in the fourth quarter of 2020 thanks to as losses of roughly $300mn from commodity
improved oil prices. However, it also warned of a hedging positions. It noted that as of the end
profit hit worth roughly $600mn as a result of its of the first quarter, on March 31, it had settled
ConocoPhillips expects recent acquisition of Concho Resources, as well all oil and gas hedging positions acquired from
production to increase as related commodity price hedges. Concho.
sequentially despite Houston-based ConocoPhillips expects to Reuters reported that ConocoPhillips’ fore-
disruptions caused by achieve production of 1.47-1.49mn barrels of cast signals trouble for the company and oth-
Winter Storm Uri in oil equivalent per day (boepd). The figure does ers that had hedged oil output at below market
February. not include the company’s operations in Libya, prices. The news service cited analysts as saying
which are only stabilising now after being dis- that unwinding the hedging contracts would
rupted by the North African country’s civil war translate into hits to earnings for some shale
over the last few years. This marks an increase producers.
on the 1.1mn boepd – excluding Libya – that It also cited analysts from the Royal Bank
ConocoPhillips produced in the fourth quarter of Canada as saying the first-quarter outlook
of 2020. showed that ConocoPhillips had received strong
The first-quarter estimate includes roughly prices for its oil and gas, and had exceeded expec-
50,000 boepd of unplanned weather impacts tations for operating costs and capital outlays.
stemming from Winter Storm Uri in February. The results are better than expected, but
The company said when it released its ConocoPhillips has previously said that
fourth-quarter results in February that it would stronger oil prices will not cause it to ramp up
keep production roughly flat year on year in output anytime soon. Instead, ConocoPhillips’
2021 at around 1.5mn boepd, while setting a CEO, Ryan Lance, has urged shale producers to
capital expenditure budget of about $5.5bn for maintain discipline.™

Week 13 01•April•2021 www. NEWSBASE .com P11