Nigeria is in a race to increase local refining capacity to attain self-sufficiency in petroleum products and stop the importation of same but across the Atlantic, oil majors are shutting down big refining facilities in response to collapsing demand for oil.
Uncertainty regarding the prospects for a recovery in fuel demand after the coronavirus pandemic cut consumption is forcing oil refiners to permanently close processing plants in Asia and North America and facilities in Europe could be next, according to Reuters.
The move comes as the oil-and-gas sector faces pressure from investors to tackle climate change and shift away from hydrocarbons amid a historic meltdown in oil prices.
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Fossil-fuel companies in Europe are also looking to align their strategies with the European Union’s ambition to become carbon neutral by 2050, as governments ready regulations to punish big polluters.
The pandemic initially cut global fuel demand by 30 percent and refiners temporarily idled plants. But consumption has not returned to pre-pandemic levels and lower travel may be here to stay, leading to the possibility of plants shutting down permanently.
Royal Dutch Shell RDSa.L said it was closing its refinery in Convent, Louisiana, the largest such U.S. facility. The shutdown will occur in November after Shell failed to find a buyer. Shell expects to sell all but six refineries and chemical plants globally and is considering closing facilities it cannot sell.
Marathon Petroleum MPC.N, the largest U.S. refiner by volume, plans to permanently halt processing at refineries in Martinez, California, and Gallup, New Mexico.
Shell will halve crude processing capacity and cut jobs at its Pulau Bukom oil refinery in Singapore as part of an overhaul to reduce the company’s carbon dioxide (CO2) emissions to net-zero by 2050.
Japan’s biggest refiner, Eneos Corp, permanently shut the 115,000 barrels-per-day (bpd) crude distillation unit at its Osaka refinery on September 30 as planned.
