Voros: Richmond likely to lose Chevron's golden eggs
Drew Voros, Contra Costa County Times Business Editor
Posted: 01/19/2010 01:26:53 PM PST
Updated: 01/19/2010 01:26:53 PM PST

The Richmond City Council, along with fervent environmentalists, could soon see their wildest dream come true: Chevron is poised to shut down its Richmond refinery operations.
Gone, later, hasta la vista. Kiss your economic engine, your tax-revenue generator goodbye, Richmond.
Tuesday's announcement by the San Ramon oil giant that it would seek a ``leaner'' refinery division throughout the company with jobs cuts, asset sales and exiting certain markets does not bode well for the site of Chevron's first refinery.
Chevron said that workers at its downstream operations, which manufacture, transport and sell gasoline and diesel fuel, had been notified of the decision Monday. Further details are expected in March. Expect those details to include the closure of the more than 100-year-old Richmond refinery.
While Richmond's green machine did not influence the overall change in corporate policy at Chevron, it certainly will have a hand in whether Chevron continues to operate a refinery responsible for sending millions of dollars to community groups in Richmond and has filled Contra Costa County coffers with literally billions in taxe revenue over the years.
Global oil demand is down considerably due to the worldwide recession and Big Oil is drawing down refinery capacity throughout the world. Shutting refineries is the easiest way to improve industry profit margins. Sunoco and Valero have already announced plans to close refineries in Texas and Delaware this year.
Chevron was in the midst of a major retrofit last summer at its Richmond refinery that would have enabled it to process a larger variety of crude oil, which would improve profit margins at the facility and mean less reliance on higher-grade Middle East crude. But a lawsuit put that on ice.
Last summer Contra Costa County Superior Court Judge Barbara Zuniga gave Richmond city leaders and Earthjustice lawyers a victory, saying that Chevron must clarify in its environmental report whether the expanded facility will process heavy crude oil, which generates more pollution than lighter crude.
Will Rostov, an Earthjustice attorney who filed the suit, said at the time the judge's decision means the city of Richmond will have to study Chevron's expansion plans more critically. The circuitous legal argument put forth by Earthjustice that Chevron's expansion will harm the environment is precisely the type of court fight that will keep the needed retrofit work from being done for years.
Now, with Chevron surveying its own landscape for refinery operations to shed, Richmond is certainly at the top of their list.
But city leaders shouldn't count on that expansive, waterfront property opening up for development.
Last year sources at Chevron told me that company has had discussions with Chinese buyers for the refinery, which would be dismantled and shipped to China. The land would be retained for an off-loading facility for refined crude products like gasoline, which employ far fewer people and generate scant tax revenues compared to now.
If the Chevron has been allowed to complete the retrofit in Richmond, there would be a strong fiscal argument to keep it open. Instead, there is a strong fiscal argument to close it.
Drew Voros is the business editor. His column runs on Wednesdays. He can be reached at avoros@bayareanewsgroup.com. Follow him at www.twitter.com/bizeditor.
Chevron to cut refinery jobs, exit some markets
Reuters, January 19, 2010
NEW YORK, Jan 19 (Reuters) - Giant oil company Chevron Corp plans to restructure its refinery operations, cutting some jobs and exiting some markets, a company spokesman said on Tuesday.
U.S. refiners have been shutting down operations as the rising costs for crude oil squeeze margins and outpace increases in prices for refined products such as gasoline, heating oil, diesel fuel and jet fuel.
Chevron, the fifth-largest refiner in the United States, issued a memo to employees on Monday laying out the broad outlines of the downstream restructuring, which also includes lubricants and supply and trading. It is expected to be completed in the third quarter.
"It's going to be a leaner organization with fewer positions, but we have not yet determined the number of positions we need," Chevron spokesman Lloyd Avram said.
The company will exit from certain markets, he said, although which markets the company will leave has not yet been determined.
Chevron has also not decided whether to close any of its refineries, he said. Further details are expected to be released in March.
Earlier this month, Chevron warned that its fourth-quarter results would be "sharply lower" than those of the previous quarter due to a further deterioration in refining margins.
The company operates more than 1 million barrels per day of refining capacity in the United States, including major plants at Pascagoula, Mississippi and El Segundo and Richmond in California, as well as refineries in Singapore, Thailand, South Korea and Wales.
Earlier this month, Royal Dutch Shell Plc said it will transform its Montreal East refinery into a fuel terminal. Leading U.S. refiner Valero Energy Corp said in November it would permanently close its Delaware City, Delaware, plant, three months after it indefinitely shut its Aruba refinery.
Sunoco Inc has also idled its Eagle Point, New Jersey, plant, and Flying J shut its Bakersfield, California, refinery a year ago.
Shares in Chevron dipped 0.5 percent to $78.83 in morning trade on the New York Stock Exchange. (Reporting by Matt Daily, editing by Gerald E. McCormick, Dave Zimmerman)
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Chevron will restructure refining, cut jobs
By BRETT CLANTON and MONICA HATCHER - HOUSTON CHRONICLE, January 19, 2010
Chevron Corp. plans to restructure its global refining business under a sweeping plan that will result in an unspecified number of job losses and that could see the U.S. oil giant exit some markets around the world.
The San Ramon, Calif.-based company is reviewing its entire downstream portfolio, including its five U.S. refineries, with a goal of making the unit less complex and more profitable, company spokesman Lloyd Avram said.
No decisions have been made about which plants or markets will be affected or by how many of the division's employees will be cut, he said.
Word of the restructuring came Monday in a video message to Chevron employees from Mike Wirth, executive vice president for the company's global downstream business.
Chevron's downstream business has 19,000 employees globally, including 900 in Texas. In the U.S., Chevron owns refineries in Pascagoula, Miss; Salt Lake City; Honolulu; and in El Segundo and Richmond, Calif. Internationally, it owns three additional plants, and has a stake in nearly a dozen others.
Chevron, like other integrated oil companies, has been hit hard by a downturn in oil refining, brought on by a recessionary decline in demand for transportation fuels like gasoline and diesel, an increase in usage of biofuels like ethanol and a building boom in recent years that has resulted in a glut of refining capacity worldwide.
Chevron said last week that weak profit margins from its refining and marketing operations will weigh on its overall fourth-quarter results, which will be released Jan. 29.
The company plans to release more information about the restucturing program in March and have the plan completely in place by the third quarter, Avram said.
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Richmond hurt
Letter to the Editor - Contra Costa Times, January 19, 2010
It's clear Gayle McLaughlin, Richmond's green mayor, and her supporters have wasted great amounts of human and financial resources to find ways to attack Chevron.
These so-called leaders have done little to encourage economic development or to address Richmond's continual rise in crime.
They introduced Measure T, a tax measure focused on Chevron's operations, which the courts found to be illegal. Next, they challenged Chevron's reporting of its utility user's tax, hoping to pressure Chevron into paying more than the 8 percent every other business owes.
Finally, they moved to stop Chevron's retrofit project, designed to upgrade the old plant and reduce emissions. This resulted in putting 1,100 people out of work.
Now, Councilmen Tom Butt and Jeff Ritterman, McLaughlin's primary supporters, are attacking the Point Molate resort project — a major economic development project.
The waterfront project site is presently inaccessible. The comprehensive resort promises good employment opportunities for residents — in its construction and future operations.
It's time these elected officials start focusing on positive ways to help Richmond grow, while reducing unemployment and crime.
Their past efforts have done much to hurt and nothing to help, Richmond residents have more employment opportunities and a better quality of life.
Bob Dabney
Richmond