ExxonMobil creating global trade arm in reorg

  • Market: Crude oil, Natural gas, Oil products, Petrochemicals
  • 10/02/23

ExxonMobil will create a global trading division later this year as part of the latest stage in a company-wide reorganization.

The new unit, to be called Global Trading, will incorporate "our expertise from across the company in global crude, products and feedstocks, natural gas, power, and freight trading," ExxonMobil said in a memo sent to employees today. The unit will be focused on "driving commercial intensity and ultimately delivering industry-leading trading results."

Trading has historically been part of specific business units at ExxonMobil, integrated with operations and logistics. The shift to all trading businesses under one roof may help it better compete with European rivals such as Shell and commodity houses like Trafigura.

As part of the shake-up, the company is also setting up a new unit that will include financial services, procurement and customer service starting 1 May. ExxonMobil is also creating a supply chain group to streamline operations, also effective from that date.

The company said the changes were not aimed at reducing headcount, but rather with "operating more efficiently, working more effectively."

Chief executive officer Darren Woods said last month that ExxonMobil was on track to trim structural costs by $9bn by the end of 2023 from 2019 levels.

Just over a year ago, the company announced plans to merge its chemicals and refining units and move its corporate headquarters to Houston.

ExxonMobil was forced to slash spending when the pandemic struck in 2020 and a series of aggressive cost-cutting efforts included widespread layoffs.

The company has since witnessed a turnaround in its fortunes as oil demand recovered from the pandemic. Spending has largely been kept in check and management has focused on boosting dividends and share buybacks to appease shareholders and win back favor on Wall Street.

Last month, ExxonMobil posted record annual profit of $55.7bn for 2022 after oil prices soared on the back of the Russian invasion of Ukraine.


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23/05/24

Richmond City Council proposes Chevron refinery tax

Richmond City Council proposes Chevron refinery tax

Houston, 23 May (Argus) — The Richmond City Council in California's Bay Area has paved the way for a tax on Chevron's 245,000 b/d refinery, voting unanimously at a 21 May meeting for the city's attorney to prepare a ballot initiative. The newly proposed excise tax would be based on the Richmond refinery's feedstock throughputs, according to a presentation given by Communities for a Better Environment (CBE) at the meeting. It is a "…legally defensible strategy to generate new revenue for the city," CBE attorney Kerry Guerin said. The city has previously looked to tax the refinery, with voters passing ‘Measure T' in 2008 before it was struck down in court in 2009. This led to a 15-year settlement agreement freezing any new taxes on Chevron's refinery, but the agreement expires on 30 June 2025. The city is projecting a $34mn budget shortfall for the 2024 to 2025 fiscal year and is seeking to shore up its finances with additional revenue. Ballot initiatives allow Californian citizens to bring laws to a vote without the support of the state's governor or legislature, and the tax proposal could go to voters as early as November this year, according to CBE's Guerin. "Richmond has been the refinery town for more than 100 years, but it won't be 100 years from now," Richmond Mayor Eduardo Martinez said during the meeting. Chevron reiterates risk to renewables A tax on the refinery is the "wrong approach to encourage investment in our facility and in the city that could lead to new energy solutions and reductions in emissions from the refinery," Chevron senior public affairs representative Brian Hubinger said during the meeting's public comments. Hubinger's comment echoes prior warnings from Chevron that a potential cap on California refining profit in the process of being implemented by the California Energy Commission (CEC) would make the company less willing to investment in renewable energy . "An additional punitive tax burden reduces our ability to make investments in our facility to provide the affordable, reliable and ever-cleaner energy our community depends on every day, along with the job opportunities and emission reductions that go with these investments," Chevron said in an emailed statement. The Richmond refinery tax is a "hasty proposal, brought forward by activist interests," the company said. The company last year finished converting a hydrotreating unit at its 269,000 b/d El Segundo, California, refinery to process both renewable and crude feedstocks. The facility was processing 2,000 b/d of bio feedstock to produce renewable diesel (RD) and sustainable aviation fuel (SAF) and said it expected to up production to 10,000 b/d last year. But Chevron has so far lagged its California refining peers in terms of RD volumes with Marathon's Martinez plant running at about 24,000 b/d in the first quarter — half of its nameplate capacity — and Phillips 66's Rodeo refinery producing 30,000 b/d with plans to up runs to over 50,000 b/d by the end of the second quarter . Chevron did not immediately respond to a request for current RD volumes at its California refineries. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US ethane supply gains seen trailing demand growth


23/05/24
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23/05/24

US ethane supply gains seen trailing demand growth

Houston, 23 May (Argus) — Export and domestic demand growth for US ethane is expected to outpace US supply growth by as much as 72,000 b/d by 2026, according to a recent forecast from consultancy East Daley Analytics. A surplus of US ethane production, bolstered by gains in natural gas drilling and production to meet growing demand for electricity generation and LNG exports, has led to increasing investments in additional ethane export terminal capacity to provide other outlets for the petrochemical feedstock. The US Energy Information Administration (EIA) showed US ethane production from natural gas processing rose to a record 2.78mn b/d in October of 2023 and fell to 2.69mn b/d in February, the latest data the agency has available. Those volumes don't take into account ethane that is rejected into the gas stream at processing plants during periods of restrained capacity or when natural gas prices spike on weather-related outages, incentivizing lower ethane recovery. Mont Belvieu, Texas, EPC ethane's premium relative to its natural gas fuel value at Waha reached a peak of 50.31¢/USG on 6 May, a 16-month high, and has averaged 26.08¢/USG in May so far, according to Argus data. As ethane margins versus natural gas rise, ethane extraction at natural gas processing plants becomes even more profitable, pushing ethane recovery rates higher. Yet East Daley's forecasts suggest projects to absorb this additional feedstock may quickly outpace production. The consultancy projects US ethane production will rise by 283,000 b/d by 2026, driven mostly by gains in natural gas production in the Permian and Marcellus basins. Increased gas takeaway capacity from the completion of maintenance on Kinder Morgan's Permian Highway pipeline (PHP), the Gulf Coast Express (GCX) pipeline, and the Transwestern pipeline at the end of this month, will allow for higher levels of ethane rejection, according to Rob Wilson, East Daley's vice president of analytics, limiting potential gains in ethane production from the additional gas. Further gas capacity restrictions in the Permian are expected to be mitigated when the 2.5 Bcf/d Matterhorn Express pipeline — which runs from the Waha, Texas, gas hub to Katy, Texas, on the Gulf coast — comes online in the third quarter of this year. Domestic demand for ethane is projected to rise by 129,000 b/d by 2026 with the addition of Chevron Phillips Chemical's joint venture with QatarEnergy to construct a 2mn t/yr ethane cracker on the Texas Gulf coast that is scheduled to come online in 2026. That joint venture will consume 118,000 b/d of ethane when at full capacity, but will operate at 50pc of capacity when first on line in 2026, according to East Daley. Increased US ethane cracking will come on top of a 231,000 b/d increase in ethane exports by 2026, driven by demand from Chinese crackers and burgeoning demand from Indian crackers, according to the consultancy. Ethane export expansions at Energy Transfer's Marcus Hook terminal in Pennsylvania and Enterprise Products Partners' new flexible LPG and ethane terminal at Beaumont, Texas, are expected to be complete by 2025 and 2026, respectively. Combined, these projects add another 360,000 b/d of ethane demand by 2026, outstripping expected supply growth by an estimated 72,000 b/d, according to East Daley's forecast. By Abby Downing-Beaver Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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India’s AMNS signs 10-year LNG supply deal with Shell


23/05/24
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23/05/24

India’s AMNS signs 10-year LNG supply deal with Shell

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Shell to step up gas exploration in Oman


23/05/24
News
23/05/24

Shell to step up gas exploration in Oman

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India's RIL seeks use of state-run jet fuel pipelines


23/05/24
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23/05/24

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