Oil refiners in the Asia Pacific, North America, and Europe are permanently closing processing plants as lost fuel demand caused by the COVID-19 pandemic may never return. The health crisis initially cut fuel demand by 30%, analysts said. However, it has not recovered to levels seen before the pandemic, and reduced travels may be here to stay and working from home may become a new norm.
In Australia, the government offered 10-year incentives of A$2.3 billion ($1.68 billion) to BP, ExxonMobil, Viva Energy, and Ampol to maintain operations at the country’s four remaining oil refineries. The refiners said they welcomed the proposal, but none committed to keeping their plants open. Refining NZ in late June said it would cut production at New Zealand’s sole refinery to cut costs before eventually reconfiguring it into a fuel import facility.
Japan’s biggest oil refiner, Eneos Holdings, which was previously known as JXTG, plans to permanently close the 115,000 bpd Osaka refinery which it owns with PetroChina in October due to falling domestic oil product consumption.
Royal Dutch Shell plans to permanently close the 110,000-bpd Tabangao refinery in the Philippines. The company blamed the coronavirus pandemic for a slump in the margin that led to the eventual closure of one of the country’s only two refineries.
US-based refiner Marathon Petroleum plans to permanently end crude processing at its plants in New Mexico and California. It will convert the Martinez plant into an oil-storage facility and bio-based motor fuel production. Phillips 66 plans to convert its refinery in Rodeo, California, into a facility that produces bio-based motor fuels.
Gunvor Group said it could mothball its 110,000 bpd plant in Antwerp, Belgium. Other European refineries which are facing a potential closure include Total’s 102,000 bpd Grandpuits refinery, BP’s 377,000-bpd facility in, and Petrineos’ 200,000 bpd plant in Grangemouth, Scotland.
