Struggling U.S. refineries could attract foreign buyers

AP via Houston Chronicle ^ | Dec. 25, 2009, 11:54PM | BRETT CLANTON

[thackney]

A weakened U.S. refining industry could spell opportunity for foreign oil companies wanting to enter the world's biggest fuel market or buy plants on the cheap for other strategic reasons.

Possible buyers include firms in nations with high demand for petroleum-based fuels but with insufficient refining capacity to make them, as well as companies in countries that need a home for surplus crude supplies, said Roger Ihne, a refining industry consultant with Deloitte in Houston.

And if they're willing to pay current asking prices, they have much to choose from, with about 5 percent of the nation's refining capacity up for sale — some 1 million barrels per day, he said.

Yet potential buyers so far have mostly stayed on the sidelines, even as more U.S. refineries have gone on the block, and at discounted prices.

“There's just so much uncertainty right now that buyers and sellers are not connecting,” Ihne said. “The sellers aren't in a position where they have to sell just yet, and the buyers aren't in a position where they have to buy.”

That uncertainty caused a slow year for U.S. refinery transactions, with just four deals in 2009, said Blake Eskew, vice president with Purvin & Gertz, a Houston-based energy consulting firm. Only one involved a foreign oil company.

That could change in coming months if the U.S. refining industry continues to struggle and refiners face pressure to unload more plants.

Already, U.S. refiners including Valero Energy Corp. and Sunoco have announced plans to close or indefinitely idle domestic plants amid a recessionary drop in fuel usage that has cut deeply into refining profits.

[jeffc]

Boy, I'm really lost! I was told that the one of the reasons gas prices were so high was that our refineries were at max capacity and we needed more.
Gas prices are still high, if you ask me, so people must still be using quite a bit. Now I know the gub'mint makes more on a gallon of gas than the actual producers and makers of the product, but still . . .they should still be making a profit.

[thackney]

I was told that the one of the reasons gas prices were so high was that our refineries were at max capacity and we needed more.

Gasoline Price are where they are due to the crude oil price used to make the gasoline.

When oil was this price years ago, gasoline was even higher.

[ridesthemiles]

Boy- there is a stupid idea: Give over control of our refineries to people from other countries.

Maybe I should also send a check to my ex-husband for legal fees back in 1960????