Page 10 - NorthAmOil Week 03 2023

NorthAmOil INVESTMENT NorthAmOil

ExxonMobil prepares to start up

$2bn Texas refinery expansion

TEXAS EXXONMOBIL is reportedly preparing to start refinery, the Motiva plant in Port Arthur, which
up a $2bn refinery expansion in Beaumont, on can process 630,000 bpd.
the Texas Gulf Coast . US refining capacity has been tight, and US
The expansion will sharply boost gasoline and President Joe Biden has also called for refiners
diesel output at the plant and make the refinery to increase their output or face a windfall tax.
the second largest in the US. “Their profits are a windfall of war,” he said in
Preliminary start-up of a 250,000 barrel per October of the oil industry, referring to Russia’s
day (bpd) crude distillation unit (CDU) at the invasion of Ukraine. “I think it’s outrageous,” he
369,000 bpd refinery should occur later this said. If refiners passed on some of those prof-
month, Reuters reported. This will allow the its to consumers, gasoline prices could drop
facility to process more light sweet crude from by around $.50 per gallon ($0.13 per litre), he
the nearby Permian Basin. added.
An ExxonMobil spokesperson declined to It is a good time for ExxonMobil to add the
confirm the date of the initial start-up to Reuters. new capacity. In the US, stockpiles of gasoline
The super-major has previously said the CDU and diesel are close to five-year lows, while profit
would start operating sometime in the first quar- margins for producing vehicle fuels in the Gulf
ter of 2023. Coast region are close to a record.
“Construction of the new crude unit is com- “Right now, margins are sensational,” Aegis
pleted. We have initiated start-up procedures Energy Advisors’ president Garfield Miller, told
and commissioning is underway,” said the Reuters. “These margins tell you that as far as the
spokesperson in a statement. “The unit will add US Gulf Coast is concerned, there is plenty of
250,000 bpd of all new supply for the refined demand relative to supply.”
products market.” According to Refinitiv, refiners are earning
It will increase ExxonMobil’s output along around $35.40 per barrel given the industry’s
the Gulf Coast by 17% and bring the Beaumont crack spread, a comparison of the cost of crude
refinery’s capacity close to that of the US’ largest oil to sales prices for diesel and gasoline.™

PERFORMANCE

BP ups oil production in deepwater Gulf

GULF OF MEXICO SUPER-MAJOR BP has doubled oil produc- deepwater Gulf, is also planning a $1.3bn expan-
tion from the 15-year-old deepwater Thunder sion of the Atlantis field.
Horse project in the US Gulf of Mexico . Pro- The ramp-up at Thunder Horse comes shortly
duction, for the first time in over a year, has been after BP announced that it would increase invest-
increased from 100,000 barrels of oil equivalent ment in the Gulf to $2.3bn per year from 2023-
per day (boepd) to more than 200,000 boepd. 25, up from $2bn per year for the previous five
Thunder Horse, which is located about 150 years.
miles (241 km) offshore New Orleans, is one of This would help drive its transformation
BP’s largest fields in the region. toward an integrated energy company, increas-
BP operates the field with a 75% working ing the production of “resilient hydrocarbons”
interest, with ExxonMobil holding 25%. It is such as in the Gulf, which represent some of the
designed to process up to 250,000 barrels of oil lowest-carbon barrels of oil compared to other
and 200mn cubic feet (5.66mn cubic metres) of crude-producing regions, said BP in its US
natural gas per day. impact report.
BP has four production platforms – Atlantis, Still, BP also said that it would cut its planned
Mad Dog, Na Kika and Thunder Horse – in the production in the Gulf to 350,000 boepd in the
prolific deepwater Gulf. Additionally, the $9bn mid-2020s, down from the 400,000 boepd that it
Mad Dog 2 project will start production later in was previously planning.
2023 from the new Argos floating production Overall, the Gulf produced 1.7mn bpd of oil
platform, which will produce up to 140,000 bar- in 2021, according to US government data. More
rels per day (bpd) of crude from 14 production oil is produced from the deepwater Gulf than
wells. BP, one of the largest oil producers in the from shallower waters.™

P10 www. NEWSBASE .com Week 03 19•January•2023