Chevron will use acquired refinery to bolster Permian ops

By Luke Geiver | February 11, 2019

Chevron U.S.A. Inc. is bolstering its Permian operations through the purchase of a $350 million light oil refinery. The oil major announced plans recently to acquire the Pasadena Refining System from Petrobras America Inc.

In addition to pipeline connections linked to increasing activity and other major pipelines along with waterborne access to receive and ship crude oil and refined products, the refinery can process 110,000 barrels per day of light crude.

Pierre Breber, executive vice president of Chevron Downstream & Chemicals, said the expansion enables the company to process more light crude.

In the U.S., Chevron has seen its most significant upstream growth from the Permian. According to the company, U.S. upstream operations earned $964 million in Q4 2018, compared with just under $4 billion in 2017. The decrease, the company said, was primarily due to the absence of the prior year benefit of $3.33 billion from U.S. tax reform, partially offset by higher crude oil production and realizations.

In Q4 2018, Chevron earned roughly $56/b of oil. The average sales price of natural gas was just over $2.00 per thousand cubic foot. Both oil prices and gas prices were up from the previous year.