Fossil Fuel Contracting -- Winners And Losers -- July 24, 2021

Mexico, oil production: link to S&P Global Platts --

• private companies: hitting production records;
• Pemex struggles (an understatement); twice revises production goals downward; this is much wrose than the headline would suggest

Norway: Exxon shuts down Norway Slagen refinery; link here. 

ExxonMobil has told Argus that its stopped operations at its 120,000 b/d Slagen refinery in Norway in June.

The company said in April that it would permanently shut the refinery over the summer, saying continued operation "is not economically viable over the long term" because of "strong competition, evolving regulatory measures, and falling demand."

Around 60pc of Slagen's products were exported. Its closure leaves state-controlled Equinor's 200,000 b/d Mongstad plant as Norway's only refinery.

Slagen is the fifth European refinery to halt completely since the Covid-19 pandemic, bringing the lost crude distillation capacity to more than 600,000 b/d.

TotalEnergies halted its 93,000 b/d Grandpuits refinery in France, and will convert it to process pure renewable fuels. Portugal's Galp and Finland's Neste have permanently stopped their respective 110,000 b/d Porto and 55,000 b/d Naantali refineries to focus on products imports.

Trading firm Gunvor has long-term mothballed its 115,000 b/d Antwerp refinery, and UK-Chinese Petroineos has done the same with one crude distillation unit (CDU) at the 210,000 b/d Grangemouth refinery. Gunvor has also permanently stopped both CDUs at its 80,000 b/d Europoort refinery in Rotterdam, though it continues to run secondary units.

Europe's refineries have for years been contending with competition from producers in the Middle East and Asia-Pacific, where capacity continues to grow rapidly, while local fuel demand growth slows.

Everything points to energy costs surging. And it won't be transitory.