Home' Trinidad and Tobago Guardian : March 9th 2017 Contents MARCH 9 • 2017 guardian.co.tt BUSINESS GUARDIAN
INTERNATIONAL | BG23
When PBF Energy Inc. scooped
up a refinery from Exxon
Mobil Corp on the Missis-
sippi River in 2015, it wasted
no time sprucing up the plant
with an eye toward quickly
resuming lucrative fuel exports.
Within three months, PBF was ready to load its first
tanker for shipment abroad. By late last year, the New
Jersey-based company was exporting 22,000 barrels
a day of fuel, or 16 per cent of that refinery's output.
Now, it wants to boost that to almost 25 per cent.
PBF isn't alone in this push. From major produc-
ers such as Chevron Corp to specialised refiners
including Valero Energy Corp, the US refining in-
dustry has shifted its game over the last five years,
taking advantage of gaps left by struggling refiners
in Latin America, Africa and Asia. Along the way, it's
transforming what had long been a largely domestic
business into a new global venture.
"US refiners are now the refiners for the world,"
said Ivan Sandrea, head of Sierra Oil & Gas, which is
planning to build infrastructure to import US fuels
US companies last year exported a record 3 million
barrels a day of refined products, more than double
the 1.3 million barrels a day shipped a decade ago,
according to data from the Energy Information Ad-
ministration. Gasoline led the surge, with exports
hitting an all-time high of almost 1 million barrels
a day in December, up ten-fold from a decade ago.
On top of the export boom, US refiners are enjoying
fresh supplies of relatively cheap and high quality
crude from the Permian, the Bakken and other shale
The combination is spurring oil companies to invest
in new capacity, particularly along the Gulf of Mexico
coast. Oil refiners are set to discuss their investment
plans this week at the annual CERAWeek, an industry
conference where every year thousands of executives,
bankers and officials gather in Houston.
The export boom, together with surging domestic
shale oil output, has redrawn the global energy map.
The US a decade ago reported annual net imports of
crude and refined products of 12.4 million barrels a
day. Last year, it received a net 4.8 million barrels a day,
the lowest since 1985. In late 2016, the US exported
more crude and refined products to Latin America
than it imported from the region---a first.
The industry is embracing the new overseas fuel
When it updated investors on its strategy last week,
it showed a chart of its integrated business. Over a map
of Texas, photographs of oil pump-jacks, pipelines,
refiners and, ultimately, tankers with arrows pointing
toward Europe, South America and Asia displayed
the importance of the export market.
Mexico is emblematic of the shifting landscape.
The Latin American country relied on US gasoline last
year for nearly 50 per cent of its total consumption as
refineries operated by state-owned oil giant Petrole-
os Mexicanos (Pemex) malfunctioned. In December,
Mexico imported a record high of 1.2 million barrels
a day of US fuels, particularly gasoline.
While Mexico is an example of the strong overseas
demand for US fuels, it also represents the danger
American refiners face longer term. Mexican fuel
demand isn't booming, which means US refiners
are merely filling a gap left by domestic inefficiency.
If Mexico's own refining plants make some recov-
eries, the US business there could end as quickly as
"You've got to be careful about what you describe
as demand," said Thomas Olney, an analyst at Facts
Global Energy, a consultancy. "In effect it's just that
domestic production has been struggling," he said.
The same holds true for countries from Brazil to
Nigeria, where US refiners are taking advantage of
a lack of enough local refining capacity to meet do-
mestic fuel needs. Ixchel Castro, a Latin American
oil-market expert at consultant Wood Mackenzie
Ltd, said US gasoline exports to Mexico could drop
by 15 per cent in 2017 if Pemex re-start its refineries.
Still, American refiners can expect to keep their hold
on most of the market for now. The US Gulf Coast
will always be the cheapest region to source fuels for
Mexico, Venezuela, Brazil and Caribbean nations due
to its proximity. And they stay in good position to
serve West Africa too.
Threats abound in the eastern hemisphere. Middle
Eastern and Asian refiners are also looking for export
outlets to sell some of their surplus. Olney said Asian
refiners could start shipping fuel into countries in
the Pacific coast of Latin America, such as Chile,
competing directly against US refiners.
And there's China, which also capped a record
year for both diesel and gasoline exports in 2016.
As Chinese exports flood Asia, US refiners will find
new competition in markets such as Japan, which in
December imported a record 379,000 barrels a day
of US fuels.
US refining executives are, so far, playing down
"We still feel bullish," Phillips 66 President Timothy
Taylor told investors last month about the outlook
for US gasoline exports into Mexico and the rest of
Latin America. The region's refiners "continued to
have issues, and that's created an opportunity."
2017 with a
surplus in a row in Jan-
uary, the government
statistics agency said
Canada's trade sur-
plus with the world
rose to Can$807 mil-
lion (US$602 million)
in January, Statistics
Analysts were ex-
pecting a slightly high-
The gap in Decem-
ber was Can$447 mil-
lion (US$333 million),
which was revised
downward since the
According to the
strong auto parts and
canola exports pushed
up total exports by 0.5
per cent, while imports
were dragged down
0.3 per cent mainly by
lower imports of un-
Total exports rose
to a record Can$46.5
billion (US$35 billion)
in January, despite
declines in several
In addition to auto
parts, record foreign
sales of agricultural,
fishing and other food
products were the larg-
est contributors to the
also drove increased
Canola exports, which
have doubled since Oc-
Exports of consum-
er goods, meanwhile,
as well as metal and
al products fell in the
In the other direc-
tion, imports edged
down to Can$45.6
billion (US$34 billion).
da also noted higher
imports of auto parts
mostly from Britain
and the United States.
US oil industry---refiner
to world as exports boom
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