Reports have surfaced that ExxonMobil plans to shut its gasoline-producing unit at the 560,500 barrels-per-day (bpd) Baytown refinery because of low demand because of efforts to halt the spread of the coronavirus pandemic.
The news agency Reuters reported there were plans to shut down the 90,000 bpd gasoline-producing fluidic catalytic cracker 2.
Exxon spokesman Jeremy Eikenberry said operations were continuing at the Baytown refinery, but declined to discuss the status of specific units
U.S. oil dropped to an 18-year low on Monday as demand continues to evaporate, and as Saudi Arabia and other OPEC nations prepare to ramp up production.
With much of the world in lockdown as the coronavirus pandemic rages on, demand for oil has fallen off a cliff. People aren’t traveling and business has
slowed, reducing the need for jet fuel and gasoline.
Oil’s swift and steep decline has caused energy companies to slash capital spending plans.
Oil started the year above $60 and has plunged on expectations that a weakened economy will burn less fuel.
If the shutdown at the Baytown refinery occurs, it would mean all three of Exxon’s U.S. Gulf Coast refineries have reduced production.
Crude oil intake was reduced by 60,000 bpd at the company’s 502,500 bpd Baton Rouge, Louisiana, refinery.
Exxon’s 369,024 barrel-per-day Beaumont refinery began a planned overhaul with the shutdown of the 240,000 bpd crude distillation unit on Monday.
Eikenberry said ExxonMobil is monitoring the situation closely “in view of guidance from relevant authorities.”
“ExxonMobil has well-established processes in place to manage impacts related to infectious disease outbreaks,” he said.
Eikenberry said the company is doing its best to combat the virus while still manufacturing products.
“Our focus remains the health and safety of our employees and contractors while continuing to help meet global energy demand,” he said.
Exxon is also notifying contractors and vendors of planned near-term cuts in capital and operating expenses over a coronavirus pandemic, and will announce the plans once they are final.
“Based on this unprecedented environment, we are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term,” Eikenberry said.