NEW YORK --- Chevron Corp. said Tuesday, Dec. 2, that it might sell off some refineries, as global recession curbs demand for gasoline and diesel and squeezes fuel-production margins, Bloomberg News reported.
The Calif.-based company wants to focus on higher-profit ventures such as natural gas production off the coast of Australia and oil developments in the Gulf of Mexico and West Africa. These plans were revealed by John Watson, Chevron's executive vice president of strategy and development, during his presentation at an energy conference in New York last week.
Watson, however, declined to say which or how many refineries might be sold. Chevron's refining profit declined 59 percent during the first nine months of 2008, as crude prices soared to a record and refined fuel prices failed to keep pace. The refining unit's contribution to total profit diminished to just 7.1 percent during the first three quarters of this year, down from 24 percent a year earlier, Bloomberg reported.
"It's shaping up to be a difficult year for the refining business," said Watson, formerly chief of Chevron's international exploration business. "The margin environment has been relatively weak."
Chevron operates or owns stakes in 18 refineries that can process 2.94 million barrels of crude a day. The company's last refinery-related divestiture was in 2007, when it sold a 50-percent stake in a Netherlands plant to London-based BP for $900 million.
Chevron plans to continue divesting filling stations and retail fuel-distribution networks in low-profit markets, Watson said. Dropping those businesses will cut annual operating costs by $700 million, he added.
In the past couple years, Chevron has exited retail fuel markets in Norway, the Philippines, Uruguay, the Netherlands, Kenya, Britain and Nigeria.
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