European oil giants are scaling back refining operations under their energy transition plans. They also shift focus toward low-carbon energy and cutting emissions. Conversely, their US rivals are still betting on the long-term demand outlook for oil.
Shell plans to reduce its refining operations from fourteen to six refineries. However, the company said it would shut them if it failed to find a buyer. Among facilities that Shell intends to keep are refineries in Texas, Louisiana, the Netherlands, Germany, Singapore, and Canada. The company has also announced plans to reconfigure its refinery in the Philippines into a fuel import terminal. It will also shut a large refinery in Convent, Louisiana and reduce crude processing capacity at its refinery at Pulau Bukom, Singapore.
Total announced a more than €500 million ($592 million) investment to convert its 93,000 bpd Grandpuits refinery into a facility focusing on biofuels and bioplastics production. The company had already converted its 160,000 bpd La Mede refinery into a 500,000 tons/year hydrotreated vegetable oil plant.
BP aims at cutting its refining throughputs from 1.7 million bpd currently to 1.2 million bpd in 2030. The firm also plans to process more renewable feedstock to increase the production of biodiesel and renewable jet fuel. BP will also work with Denmark-based Orsted on a green hydrogen project at its refinery in Lingen, Germany. The project will be scaled up to completely replace Lingen’s fossil-based hydrogen consumption with green hydrogen.
In contrast, US oil majors are not planning any radical transitions in their downstream strategies. They are focusing on integrating their refining capacities with chemical operations. ExxonMobil’s senior VP said the company had 4.5 million bpd refining capacity, of which 80% is integrated with chemicals or lubricant manufacturing. In 2019, Chevron purchased the 100,000 bpd refinery to integrate its growing upstream output from the Permian Basin. However, Chevron also plans to produce biodiesel at its refinery in El Segundo, California next year.
