The Million Dollar Way (The Bakken Oil Blog): Re-Posting: MPC To Close Two Refineries -- August 3, 2020

Monday, August 3, 2020

The refinery deal is a bigger deal than folks realize. Another loss for California. I assume North Dakota is watching closely.

Re-posting:

MPC: "7-11" to buy Marathon's Speedway for $21 billion; link here; at the close on Friday, trading at $38.20/share; Monday: $38.89, pretty much unchanged; Reuters says the deal could fetch between $15 billion and $17 billion;
MPC: won't re-start two idled oil refineries; one in California; one in New Mexico; link here;

Martinez, CA: to comply with California's Low Carbon Fuel Standards objectives and greenhouse gas-reduction targets; fourth largest refinery in California
Gallup refinery, in New Mexico: 26,000 b/d
May 5, 2020, earnings call: said these refineries were being looked at because they are the company's highest-cost facilities among its sixteen refineries
note to folks in ND/Mandan refinery: too much global refining capacity and existing refineries will be pressured by new facilities coming online

Marathon Petroleum plans to permanently close two small U.S. oil refineries in Martinez, California, and Gallup, New Mexico, the company said, eliminating 800 jobs in response to lower fuels demand.
The largest U.S. refiner by volume had earlier idled the two facilities following weak demand due to COVID-19 outbreaks in the United States. U.S. refiners on average idled about 20% of total processing capacity on falling vehicle and air travel.
Marathon said it plans to use the Martinez facility as an oil-storage facility and is evaluating its future use to produce renewable diesel, a fuel made from industry waste and used cooking oil. Martinez is California’s fourth largest refinery.