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Chevron to expand refinery, boost output

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This topic contains 1 reply, has 2 voices, and was last updated by  Charles Randall 16 years, 10 months ago.

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    By BRAD FOSS, AP Business Writer Tue Mar 7, 12:08 PM ET

    NEW YORK – Chevron Corp. said Tuesday that its oil and natural gas production would rise by some 600,000 barrels per day by 2010 — below some analysts’ expectations — and announced plans for a possible major expansion of a Mississippi refinery that was badly damaged by Hurricane Katrina.

    Chevron CEO David O’Reilly estimated that Gulf of Mexico production snags related to last summer’s hurricanes would result in a $500 million hit on the company’s bottom line in 2006, compared with a reduction of $1.4 billion in 2005.

    Chevron, the country’s second-largest petroleum producer, told Wall Street analysts concerned about the company’s growth that new projects coming on line over the next five years would boost daily output from 2.5 million barrels per day of oil equivalent in 2005 to 3.1 million barrels per day by 2010. By 2008, daily output would be about 2.9 million barrels per day.

    Part of that expansion was pegged to its $18 billion acquisition of Unocal Corp
    The San Ramon, Calif.-based company also forecast that its reserves of oil and gas would rise from roughly 12 billion barrels in 2005 to close to 14 billion barrels by 2008 — an estimated reserve replacement rate of almost 120 percent annually.

    Chevron pinned its growth on large projects in the Caspian and West African and Asia-Pacific regions
    , with lower growth coming from the Asia-Pacific, North America and Latin America.

    Chevron said it would spend between $15 billion and $16 billion a year in 2007 and 2008,
    with about a third of that amount spent on drilling. The company previously said it would increase its capital spending by 35 percent to $14.8 billion in 2006.

    George Kirkland, the company’s vice president for exploration and production, said the company was making “strong progress” on its drilling program and that Chevron was “specifically focused on reducing decline rates” of wells.

    Chevron executive vice president Mike Wirth said the company is “evaluating expanding” it’s Pascagoula, Miss., refinery to become “the second-largest in the United States.”
    The refinery, which was shut down in the aftermath of Hurricane Katrina, currently processes an average 325,000 barrels of crude oil a day, making it the countries eighth largest, according to Energy Department statistics.

    The largest is Exxon Mobil Corp.’s 557,000-barrel-per day plant in Baytown, Texas. The second largest, at the moment, is Exxon’s Baton Rouge plant, which refines 493,500 barrels per day.

  • #7636

    Charles Randall

    Chevron is starting to unfold its post Unocal merger strategy – aggressive in the West Africa & Asia-Pacific regions that the two companies overlapped. Chevron is the US second largest producer & one of the Top 7 US Oil companies that now account for 75% of US & World refining capacity.
    Hidden among the expansion plans is the intention to take its large coking refinery at Pascagoula from eight largest (325,000 BPD crude) and move it into the second largest spot – between the current US largest refineries – ExxonMobil’s Baytown Coking refinery 557,000 BDP crude (Delayed Petcoke 3050 & Fluid coke 500 TPD capacity) and second largest ExxonMobil B. Rouge Coking Refinery 493,500 BPD crude (5250 TPD Delayed Petcoke capacity).
    The Chevron Pascagoula Refinery would need to add at least 175,000 BPD crude charge (mostly heavy crude) and that would increase its current 6450 TPD capacity to 8500-10,000 TPD depending on how heavy the crude slate is.  The current crude to coker ratio is very high at 28% but it may still need a drum addition or debottlenecking to keep its current processing flexibility.
    Charlie Randall
    Pace Global Energy Services
    Progect Manager
    808 Travis Street Suite 1107
    Houston, TX 77002
    Direct: 713-315-5666
    Mobile: 281-813-2669
    Fax: 713-222-7520

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