“It would allow us to have a more integrated exposure to the margins available in China,” Iain Conn, head of refining and marketing for BP, said in an interview today. “It would give us an opportunity to participate in the Chinese fuel market and get to understand how it works.”
Refiners in the U.S. and Europe without access to cheaper crude produced in Canada and new U.S. fields such as North Dakota’s Bakken shale may not survive as demand declines and developing countries including China and India add refining capacity, Conn said in an interview at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates.
As much as 7 million barrels a day of additional refining capacity may be cut through 2030 as plants that can’t access cheaper crude process heavier oil will become unprofitable, Conn said.
“There are going to be winners and losers in refining over the next 20 years, real winners and losers, and that means some people are going to go out of business,” he said. “How to win in this business is all about quality, not quantity.”
BP continues to look for a buyer for its Carson, California refinery and may put its Texas City, Texas refinery on the market soon, Conn said.
Before it can put the refinery up for sale, the London- based company must finish making changes at the plant required by the U.S. Occupational Safety and Health Administration after a 2005 accident killed 15 workers, he said. The company said last year that it wanted to gain $4.4 million by selling the two plants.
BP is upgrading its U.S. refineries that would remain after the sale in Washington, Ohio and Indiana so they can process more Canadian crude, Conn said.
The company won’t split from its refining arm, he said. ConocoPhillips (COP), the third-largest U.S. oil company, plans to spin off its refining and pipeline divisions by May 1, Chief Executive Officer James Mulva told investors yesterday.
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