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Conoco, Murphy to Sell, Convert European Oil Refineries

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July 29 (Bloomberg) -- ConocoPhillips, the third-largest U.S. oil company, and Murphy Oil Corp. plan to sell refineries in Europe or convert them into terminals as profits shrink and demand wanes for fuels such as gasoline.

The latest announcements bring the number of plants in Europe to at least 12 that are for sale, been idled, or will be converted into terminals, with a total capacity of 1.85 million barrels of oil a day. That compares with 11 in the Americas, with a combined daily oil-processing capacity of 1.23 million barrels.

ConocoPhillips shelved plans to upgrade its 260,000 barrel-a-day Wilhelmshaven plant in Germany, forcing it to write off about $1 billion in its second-quarter earnings, the Houston-based company said in a July 22 statement.

ConocoPhillips and Murphy Oil join refiners including Royal Dutch Shell Plc, Total SA, and Petroplus Holdings AG in closing or converting plants, particularly in Europe, as they seek to reduce overcapacity amid falling demand for oil-products.

Murphy Oil plans to exit refining to focus on its upstream and retail businesses, the Arkansas-based company said on July 22. The newly-upgraded 130,000 barrel-a-day Milford Haven plant in Wales, the 125,000 barrel-a-day Meraux facility in Louisiana and the 35,000 barrel-a-day Superior site in Wisconsin will be put up for sale, it said.

Refining margins, or the profit from turning crude oil into fuels, in northwest Europe fell to an estimated average of $2.55 a barrel this quarter to July 22, according to data by BP Plc. That compares with $3.84 in the second quarter and $2.60 in the third quarter of last year.

ConocoPhillips bought the German plant from Louis Dreyfus Energy Holdings Ltd. in 2005 for an undisclosed price. Murphy Oil paid $250 million in 2007 for Total’s 70 percent stake in the Welsh refinery.

The following table lists refineries around the world that have shut, are slated for permanent closure or conversion, and units idled for economic reasons. Capacity is in thousands of barrels of oil a day.

Company      Refinery         Status                 Capacity

EUROPE

Conoco       Wilhelmshaven    Up for sale            260
             Germany          or conversion.
                              Announced July 22.

Murphy Oil   Milford Haven    Up for sale.           130
             Wales            Announced July 22.

Total        Lindsey          Up for sale. CEO       221
             U.K.             announced on French
                              radio in April 2010.

Petroplus    Reichstett       Review for possible    85
             France           sale. Announced
                              April 1.

Total        Dunkirk          Conversion to          137
             France           terminal. Announced
                              in March 2010.

Chevron      Pembroke         Up for sale.           210
             U.K.             Announced in March
                              2010.

Petroplus    Teesside         Conversion to          117
             U.K.             terminal end-2009.

Shell        Gothenburg       Review for possible     78
             Sweden           sale announced in
                              December 2009.

Total        Gonfreville      Crude unit shut in     173
             France           August 2009.
                              
Shell        Stanlow          Up for sale.           233
             U.K.             Announced in August
                              2009. Talks with
                              Essar Oil failed.

Shell        Hamburg          Up for sale.           110
             Germany          Announced in March
                              2009. Exclusive talks
                              with Essar Oil failed.

Shell        Heide            Up for sale. Talks      91
             Germany          with Essar failed.

AMERICAS

Valero       Paulsboro        Possible sale          166
             New Jersey       company said on
                              July 27.

Murphy Oil   Meraux           Up for sale.           125
             Louisiana        Announced July 22.

             Superior         Up for sale.            35
             Wisconsin        Announced July 22.

Valero       Delaware City    Sold to Petroplus      190
             Delaware         in April 2010.

Chevron      Kapolei          Operations may be       54
             Hawaii           reduced, company
                              announced in March
                              2010.

Sunoco       Eagle Point      Shut on poor           150
             New Jersey       economics in
                              November 2009.
                              Possible conversion
                              to biofuels announced
                              in February 2010.

Big West     Bakersfield      Shut in January 2009    68
             California       after Big West went
                              bankrupt. Alon bought
                              the plant in February
                              2010 and plans to
                              process vacuum gasoil
                              into gasoline and
                              diesel.

Western      Bloomfield       Shut in late 2009 on    17
             New Mexico       poor economics.
                              Possible conversion
                              to biofuels plant
                              announced in December
                              2009.

Valero       Corpus Christi   FCC shut on economics   20
             East, Texas      in March 2009.

Valero       Aruba            Shut in July 2009      275
                              on poor economics.
                              Under review for
                              possible sale.

Shell        Montreal         Conversion to          130
             Canada           terminal in
                              November 2010 if
                              talks with Delek
                              fail.

ASIA PACIFIC

Shell        Marsden Pt       Shell sells 17%        109
             New Zealand      share to Infratil
                              and government
                              pension fund in
                              March 2010.

Showa Shell  Keihin           Permanent closure      120
             Japan            of Ogimachi crude
                              unit in September
                              2011.

*JX Holdings Negishi          Permanent closure      70
             Japan            of a crude unit in
                              October 2010.

*JX Holdings Mizushima        Permanent closure     110
             Japan            of crude unit 2 in
                              June 2010.

*JX Holdings Oita             Permanent closure      24
             Japan            of crude unit 1 in
                              May 2010.

Nihonkai Oil Toyama           Conversion to          60
             Japan            terminal in March
                              2009.

CPC Corp.    Kaohsiung        FCC shut on            25
             Taiwan           economics in
                              February 2009.

*JX Holdings Inc. is the parent company of JX Nippon Oil &
Energy Corp., Japan’s largest refiner, and was formed in April
2010 after the merger of Nippon Oil Corp. and Nippon Mining
Holdings Inc.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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