LyondellBasell Industries on Tuesday said that it would cut the number of workers at its 263,776-bpd Houston oil refinery due to losses caused by the coronavirus pandemic. LyondellBasell’s VP Torkel Rhenman said the company would lay off approximately 10% of about 800 staff at the refinery. Workers with a union contract will not be affected by the planned layoffs.
LyondellBasell’s Houston refinery posted EBITDA of negative $107 million in the January-June period of 2020, compared to $81 million EBITDA in the first half of 2019. The refinery was established in 1918 and became an integral part of Lyondell’s petrochemical operations between 1985 and 2007. Since the 2007 merger with Basell and emergence from bankruptcy in 2012, LyondellBasell has been focusing on expanding its chemical capacity, making the oil refining a secondary business.
According to Refinery Manager Greg Nevermann, LyondellBasell will offer eligible employees with reassignments to other locations and enhanced retirement packages before imposing the involuntary job cuts. He added that over then next several years, the outlook for the refinery would remain challenging.
Nevermann said that the company still suffered from losses despite some cost-cutting measures, including reduction of travel and external consultants as well as deferrals of non-safety-related maintenance. Other US refiners also posted large losses this year amid reduced travel and road transports due to the pandemic. They have closed or reduced operations to ease financial burdens. Mizuho Securities USA estimates that refinery utilization rate in the US fell to a record low of 66.7% at a point this year.
