Thread regarding ExxonMobil Corp. layoffs

@2rdr+1bRb2iHR Great post. Very informative. Your summary which can be read in a few minutes is better (and more honest) than listening to the 1.5 hours presentation given by our senior management during the quarterly earnings call. (And I wish more of the posts on this site were this useful, instead of the snarky and sarcastic comments made by many.)

The Value Added Chain Strategy as it applies to Beaumont and Permian crude is DOA. OPEC+ will never allow the US shale industry to grow. The Kearl of the South is finished, along with employees COLA. And the billions wasted on the Wink terminal, the grossly underperforming ExxonMobil Pipeline Company Wink to Webster Pipeline (200 kbd vs planned 1500 kbd), the infrastructure purchased sitting around idled and not utilized. Forget about the expansion of Beaumont Refinery, what a joke.
And more Canadian crude finding its way to TX died with the Keystone pipeline, thank you President Biden. Great job senior managers spending $40 billion on XTO, writing off $20 billion, spending $7 billion acquiring over priced Permian Delaware average, and countless billions on infrastructure that will never be used. Buy hey, Bart Cahir is there with a white teeth, flashy smile and an ice cream sandwich and only 8 eight months to go before we trot out our Infrastruture VP for another infamous Women's Engineering Day. Good thing the XTO management team has supported the employees so well that the Delaware ranks sixth place and Midland ranks 12th place in drilling production amongst its competitors. Yeah, Woods and XTO really do stand in front of not behind the great employees and their families of West Texas and New Mexico. Winning.

DW is very big on Exxon’s value chain integration. So the strategy for a long time has been to keep / high grade refining assets that 1) provide a strategic outlet for upstream production and 2) are integrated with the lubes and Chemicals businesses (which have better margins and returns than the fuels business or 3) generate a lot of cash.

The refining portfolio of the future, then, is:

Baytown (Permian and Canadian crude consumption, lubes and chemicals)
Baton Rouge (same as Baytown)
Beaumont (huge capacity for Permian crude post-BLADE expansion, some chemicals)
Billings they’d love to sell as soon as they can find a buyer. Joliet at one point made a lot of $$ but it’s not a strategic asset and would be sold for the right price.

Strathcona makes a lot of $$ because of the Canadian crude disconnect so might keep it. Sarnia and nanticoke are not a strategic fit.

In EU, Antwerp and Rotterdam are strategic (lubes, chemicals, synergies across the sites, and they’re both high conversion with cokers and crackers so fairly well positioned vs. EU competition. Everyone else in EU will be sold / shut down (trecate, fos, Norway and Sicily both already sold). Fawley they had $1B plans to upgrade to make it more competitive but not clear that project will go now. Without that investment, Fawley doesn’t have a place in the refining portfolio. Gravenchon has chemicals and is integrated with the other NWE assets in some feedstock and value chains … but it’s a marginal asset.

In Asia, altona is shutting down. Thailand is not strategic. the chemicals portion of that plant is old and not profitable and was shut down in 2020, and the Thailand fuels market is nothing special. Singapore is strategic but it’s not a competitive asset and it desperately needs the CRISP project to be more durable. Parts of the chemical plant in Singapore are strong, but other parts are not competitive so some selective shutdowns are likely (some have already happened on a temporary basis, just need to make them permanent).

The JV refinery in Saudi has good cash generation. Miro in Germany I’m sure they’d love to cash out. Fujian will stay.

Similar to Shell, look for the portfolio to continue to shrink, with a focus on a few complex, integrated sites in the key markets (USGC, NWE, Singapore), and the odd site here or there than isn’t strategic but has good cash Gen.

The decline from >40 refineries a few decades ago to <20 today and rapidly declining has been painful to watch. And it tells you a lot about what life in refining is going to be like in the future.

No worry. Remember we zag when other zig.
Maybe we should purchase some of them (low value) to meet our short term double earning target.

With the current standoff in Beaumont. I can see it being sold next if the deal isn’t in the works already.

will we sell singapore?

No need to fear, synergy fuel is here. Those margins will save us. LOL

Humpty Dumpty, will fix our refinery problem, so have no fear Humpty Dumpty is near. Oh wait, we have a problem.

Humpty Dumpty sat on the refinery gate, Humpty Dumpty had a great fall, all the refinery managers and all the refinery workers, could not put Humpty Dumpty back together again.

I guess we are going to have to convert more European refineries to terminals or close them, cause their ain't no buyers, as they are only worth the price of inventory. As for the US, the Value Added Chain Strategy has failed so there goes Beaumont, Joliet and Billings. Leaving Baton Rouge and Baytown which are being held together welding and duct tape and kept around because of Chemicals. IOL refineries hold the same junk status as Europe.

Unfortunately, the dedicated, hard workers running these operations will suffer the poor decisions made by the managers of past, present and future.

@hsn+1bRb2iHR

Service stations have already been sold in most countries, with the branded reseller concept. All we do is deliver products. But this takes the problem one level up. Why keep refineries?
That's why the Slågen refinery was converted into a terminal, since Norway is moving faster than many countries to renewables.

If you follow what the auto industry is planning you may conclude that selling gas stations is a smart thing to do right now. It's a strategic exit and it makes sense. Europe is going 100% electric/hydrogen by 2035, it's only 15 down the road, this will happen quickly. You do not want to end up holding assets (gas stations) that are dropping in value every day.

I hear Shell is the buyer

Since merger with Mobil: XOM has gone from over 45 refineries to under 20...For example, sold or closed Benicia, Torrance, Chalmette, Port Di-kson, Altona, Sonara, Abijan, Acajutla, Managua, La Pampilla, Martinique, Dakar, Campana, Whangarei, Adelaide, Chiba, Kawasaki, Okinawa, Sakai, Wakayama, Slagen, Larnaca, Port Jerome, Augusta,and others

Also went from over 45000 gas stations to under 10000.

Lol, our refineries are hardly worth the value of their inventory