Thread: O'Malley's rebuttal letter to C20
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Old 06-27-2012 | 06:52 AM
  #67  
texavia
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Originally Posted by Gomerglideslope
I was hoping some experts would sound off on this refinery business, if you don't mind please expand on this analysis, I am very interested in the future prospects of this endeavor.

Not an expert, here is what Conoco said with a few comments:

“After exploring a wide range of alternatives for the refinery, the decision to sell is based on the level of investment required to remain competitive,” said Willie Chiang, senior vice president of Refining, Marketing, Transportation and Commercial. “U.S. East Coast refining has been under severe market pressure for several years. Product imports, weakness in motor fuel demand, and costly regulatory requirements are key factors in creating this very difficult environment. This action is consistent with our stated strategic objective to reduce our refining portfolio,” added Chiang.

They had and didn't want it, same so it seems with most other majors when it comes to refineries, which considering it is impossible to permit a new refinery must mean something. Refineries are environmental time bombs, as I recall Exxon couldn’t even give the Benicia Refinery away until they agreed to take care of any future cleanup in perpetuity. Hope DAL got the same guarantee on environmental in this deal. Apparently, refineries are always on the block for the same reasons, cyclically profitable and the least profitable part of the oil business at that, never ending capital intensive EPA related expenses on top of what is capital intensive to begin with. Seems the majors think there are better ways to make money in oil than in refining it. There ain't that much margin to be had and sometimes none, so how is DAL gonna save so much getting into refining?

But, none of that means anything, core competence means something and DAL ain’t got it in anything going on at Trainer, PA.