Chevron – Will Shell (RDS.A) Sell Its Puget Sound Refinery to Chevron?
Per sources, a Royal Dutch Shell Plc RDS.A refinery in the U.S. Pacific Northwest, which is up for sale, has attracted interest from Chevron CVX. In fact, the U.S. supermajor is said to have emerged as a frontrunner in the race to buy the unit. For at least a year now, Shell has been on the lookout for selling its 145,000 barrel-per-day (bpd) Puget Sound refinery in Anacortes, WA. However, the company spokesperson Curtis Smith refused to comment on this development.
Last December, the currently Zacks Rank #2 (Buy) Shell commenced the closedown of its Convent Refinery due to slumping fuel demand as a consequence of the prevalent COVID-19 pandemic. This decision was also in line with the company’s strategy to trim its number of operational refineries from 14 to six by 2025 as part of its goals to shift to alternative energy.
The remaining facilities will have integrated oil refineries and petrochemical plants. The Convent facility located along the Mississippi River midway between Baton Rouge and New Orleans is equipped with a refining capacity of 211,100 barrel a day with a workforce of nearly 700. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The above strategic stand was taken amid successive shutdown of refineries in the United States by downstream service providers like Marathon Petroleum Corporation MPC, PBF Energy and Phillips 66 PSX. While some facilities are being shuttered permanently, others will be transformed into renewable diesel plants due to shrinking oil demand. Significantly, Shell wants to reserve its refineries with petrochemical segments including the one in Louisiana and aims to become a net zero-emission company for a low-carbon future.
Shell is one of the primary oil majors — a group of U.S. and Europe-based big energy multinationals — with global operations. The company is fully integrated as it participates in every energy-related aspect, right from oil production to refining and marketing.
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