SINGAPORE (Reuters) – Exxon Mobil Corp is considering a multi-billion dollar investment at its Singapore refinery, the company’s largest, ahead of new global shipping fuel regulations starting in 2020, a senior executive said yesterday.
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“We are currently assessing a multi-billion project in our integrated manufacturing facility here in Singapore,” Matt Bergeron, vice president of Asia Pacific Fuels Business at Exxon, said at a bunkering conference.
“Should the project proceed, we plan to implement proprietary technologies that will convert lower value by-products into cleaner higher value products including 0.5 percent sulphur fuels that we believe will be the compliant option for the vast majority of the marine sector,” Mr Bergeron said.
The International Maritime Organisation (IMO) is introducing new rules on marine fuels from 2020, limiting the sulphur content to 0.5 percent, from 3.5 percent currently, to curb pollution produced by the world’s ships.
The shipping and oil refining industries are scrambling to prepare for the shift and have made large investments to comply with the new standards since they were announced in 2016.
Exxon’s Singapore refinery is the company’s largest, with a capacity of about 592,000 barrels a day. Singapore is also home to the oil giant’s biggest integrated petrochemical complex.
“We have already made significant investments at a number of other refineries around the world in order to increase our production capacity of cleaner fuels with lower sulphur content,” Mr Bergeron said.
Exxon in September announced it was planning to spend more than $650 million to upgrade the UK’s largest oil refinery, Fawley, on England’s south coast.
Exxon Mobil Corp is also exploring the sale of many of its US Gulf of Mexico assets, as higher prices prompt the world’s largest publicly traded oil company to review its portfolio, people familiar with the matter said on Tuesday.
Major oil companies have been looking to concentrate development operations in a few key areas. Irving, Texas-based Exxon is focusing on promising acreage in offshore areas such as Guyana and Brazil and onshore in the Permian basin of Texas.
Exxon has asked a small number of parties to gauge their potential interest in the company’s Gulf assets, ahead of deciding how to proceed, according to two of the sources, adding that any sale would likely happen next year.
The company is considering selling deepwater assets in the Gulf of Mexico that currently produce about 50,000 barrels per day of oil, one of the sources added. The company has stakes in Gulf assets that produce the equivalent of more than 200,000 barrels of oil per day and 730 million cubic feet of gas daily, according to company data.
Exxon produces the equivalent of about 2.2 million barrels of oil daily. While Exxon is the most valuable publicly traded oil company, it is only the ninth-largest operator in the Gulf, trailing heavyweights like Royal Dutch Shell and BP Plc, along with smaller Gulf-focused independent oil companies like Fieldwood and Talos.
The Gulf of Mexico, once considered a reliable basin for oil exploration and production, has become overshadowed by shale formations onshore and by new offshore plays like Guyana, where Exxon’s giant Liza field is expected to produce 120,000 barrels per day of crude in its first phase.
“Exxon Mobil continually reviews its assets for their contribution toward meeting the company’s operating needs, financial objectives and their potential value to others,” a spokeswoman for Exxon said in a statement.
“We remain committed to conducting business in the US Gulf region, as we have for more than 100 years.”
The sources asked not to be identified because the matter is confidential.