If there was ever any doubt about Shell's view of fuels in the U.S. it's very clear now. They were down to 4 wholly owned refineries in the U.S, Martinez, Anacortes, and two in New Orleans. They are 50/50 owners of the Deer Park Houston refinery with Pemex. Now down to just 3 with the announcement of selling the highly valuable Martinez refinery to PBF. The obvious question is, why keep Anacortes? PBF has no presence in the PNW and are aggressively purchasing refineries. Look for that to be the next shoe to drop. Since dissolving the Motiva JV the two refineries in New Orleans supply Shell stations that are now wholly branded and supplied by Saudi Aramco, so begs the question why would they want them long term? 15 years ago Shell owned around 10 refineries in the U.S. With the bombshell announcement of Martinez selling it looks like the long term strategy has been to fully exit refining in the U.S. and arrange for a licensing agreements with refineries to supply the branded stations where Shell still supplies today. In fact some 60% of Shell stations in the U.S. are supplied by 100% by Saudi Aramco now, and a large portion of the remainder of the country are supplied with licensing agreements through Marathon, Suncor and others. One of the main reasons to have branded stations is to have steady and reliable outlet to clear the refineries. Selling refineries that takes away the primary reason for their existence. Thinks it going to make a lot more sense to turn over supply to more refiners. That will wipe out all of the staff that now interface with wholesalers, pricing, supply, etc. there would be no need for those folks anymore. Could probably operate the entire fuels marketing and operations organization with less than 100 people all in Houston. Always watch very closely their actions and pay little attention to anything being said. Regardless of spin from leadership selling Martinez tells us a lot about Shells view of refining in the U.S. and as a global priority.
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PBF has been looking at buying Martinez for a few years, I guess they finally offered Shell what it would take to part with it. PBF has been wanting to have another Refinery in California to compliment their LA area Refinery and due to the gasoline requirements of California of not being able to import gasoline from other states since it does not meet California clean air requirements. So if one Refinery, goes offline in California, gas prices jump and the refiners that are still producing profit from it.
I don’t know if PBF wants to enter into the Pacific Northwest Market or not.
The major F’ up in Port Arthur that Shell thought was no big deal but Motiva thought otherwise to buyout Shell’s part in the Motiva JV.
Shell is still shedding assets to pay for the BG purchase that Big Ben thought he could be smart like XOM’s purchase of XTO.
Stealth layoff