HOUSTON (Reuters) – Exxon Mobil Corp (XOM.N)’s U.S. second-quarter refining profits bounced back from a loss earlier this year but remain below past levels in part because of a wave of production outages, according to an examination of data from Reuters and energy industry intelligence service Genscape.
On Friday, the company reported its U.S. refining and marketing business earned $310 million last quarter, less than half the $695 million in the same period in 2018. Its overall downstream profit fell to $451 million versus $724 million in 2018.
Outages at three refineries, including Exxon’s Baytown, Texas, plant reduced overall profits by $150 million in the June quarter, the company said. Baytown resumed normal operations but two others – in Canada and in Saudi Arabia – are expected to remain at reduced levels through year-end, officials said.
The production losses “are not systemic to our overall performance,” Exxon Senior Vice President Neil Chapman said in a conference call, describing the three outages as isolated.
Exxon has forecast higher than usual maintenance at its refineries this year as it prepares for a shipping industry shift to low sulfur fuels. In April, it said second quarter planned downtime would be similar to the first.
A fire this week that struck a plastics unit at its Baytown chemical plant also temporarily reduced production at the adjacent refinery, said people familiar with the matter.
During the second quarter of this year, the company’s U.S. crude distillation unit (CDU) outages cost it 16.4 million barrels of lost production, compared to 9.65 million barrels in the second quarter of 2018, according to Reuters calculations. The totals reflect the capacity of each shut unit and the number of lost production days.
CDUs do the initial breakdown of crude oil coming into a refinery, providing feedstocks for all other units in the refinery and producing unfinished motor fuels.
During the second quarter of this year the 238,000 bpd CDU at Exxon’s Joliet, Illinois, refinery was shut for nearly two months as part of extensive multi-unit overhaul. That outage accounted for about three-quarters of Exxon’s lost CDU production last quarter.
The next largest amount of lost production was at the Baytown refinery when another CDU was shut for eight days in June because of heavy rainfall. That same plant a year earlier undertook a 47-day overhaul of another CDU that hurt output.
Reporting by Erwin Seba; editing by Grant McCool