Lot decisions on Hovensa (capacity cut, hiring freeze & cancel or postpone T/A) according to Exec John Hess is driven by downsteam (Refining & Marketing) losses.
A contact friend of mine at KBC Tech pointed out that dowstream actually made a profit in 4Q & for year if you exclude the -$289MM hit they had to take 4Q for the FMV (fair market value) write-down from carrying value for tax purposes.
Making knee jerk decisions for one time hit that ~ had little to do with actual refining operations and more for reducing future tax exposure doesnt seem make lot sense to anyone not focused on upsteam operations.
Course Hess will have plent company here with Oil Co’s like MAP making the stupid decision to split off its Upstream & Downstream segments (because they feel the crude isnt really integrated) ….. just wait till upsteam needs place to log the bad/missed crude hedges, or place crude they cannot sell market or MAP loses tax deductions pushed back from Downstream into E&P because they get credit for it (lose twice on this one if split is too deep.