In Memory of my Dad

My beloved Dad, Aaron-Israel Rachowitz, may He rest in peace, passed away at 8:20 p.m. Monday, July 11, 2011.


Please see a Memorial Website in honor of my Dad

Top 20 Largest Refining Companies/Refiners in the U.S. as of Jan 1, 2011

by David Rachovich

Refiners' Total Operable Atmospheric Crude Oil Distillation Capacity 

Rank  Jan 1, 2011	Company	No. of Refineries	Barrels per Calendar Day (b/cd)*
1.	ConocoPhillips (USA)**	13	2,041,000
2.	ExxonMobil (USA)***	7	1,951,490
3.	Valero Energy Corp. (USA)	12	1,682,300
4.	BP (UK)^	6	1,368,050
5.	Marathon Oil Corp. (USA)	6	1,142,000
6.	Chevron Corp. (USA)	6	1,027,271
7.	Royal Dutch/Shell (NL/UK)+	8	976,650
8.	PDVSA (Venezuela)#	4	854,050
9.	Koch Industries Inc. (Flint Hills Resources; USA)	3	771,578
10.	Sunoco Inc. (USA)	3	673,000
11.	Tesoro (USA)	7	657,300
12.	Saudi Aramco (Saudi Arabia)$	3	376,750
13.	PBF Energy (USA)	2	342,200
14.	Holly Corp. (USA)	4	285,350
15.	Access Industries (USA)	1	280,390
16.	Cenovus Energy (Canada)>	2	254,000
17.	Total (France)	1	232,000
18.	Alon (Israel)	4	231,500
19.	Western Refining Inc. (USA)	4	226,200
20.	Frontier Oil Corp. (USA)	2	185,000
U.S. Total^^		141"	17,736,370

*Includes partial interests in refineries not wholly owned by the company.  

**Including its 50% stake in the Wood River, Illinois, refinery and 50% stake in the Borger, Texas, refinery. WRB Refining LLC operates as a 50/50 joint venture between ConocoPhillips and Cenovus Energy (Calgary).

***Including its 50% stake in the Chalmette, Louisiana, refinery.

^Including its 50% stake in the BP-Husky, Toledo, Ohio, refinery.

+Including Shell's stakes in Motiva (i.e., its 50% stake in the Port Arthur, Texas, refinery; its 50% stake in the Convent, Louisiana, refinery; and its 50% stake in the Norco, Louisiana, refinery), and its 50% stake in the Deer Park, Texas, refinery.  

#Including its 50% stake in the Chalmette, Louisiana, refinery. Also, Citgo, a wholly-owned subsidiary of PDVSA, operates three refineries – Lakes Charles, Louisiana; Lemont, Illinois; and Corpus Christi, Texas.

$Consists of 50% stake in Motiva. Motiva is a 50/50 joint venture between Shell and Saudi Aramco.

>Consists of 50% stake in WRB Refining LLC (a 50/50 joint venture between ConocoPhillips and Cenovus), i.e., 50% stake in the Wood River, Illinois, refinery and 50% stake in the Borger, Texas, refinery.

^^Including other refineries but excluding Hovensa's 500,000 barrels-per-day refinery on the Caribbean island of St. Croix in the United States Virgin Islands. Hovensa is a joint venture between subsidiaries of Hess Corporation and Petróleos de Venezuela, S.A. (PDVSA).

"Only refineries with atmospheric crude oil distillation capacity.

Notes: PBF Energy Company LLC on Tuesday, March 1, 2011, announced that its subsidiary, Toledo Refining Company LLC, has completed its purchase of the Toledo Refinery in Ohio from Sunoco, Inc. Separately, Western Refining  indefinitely suspended refining operations at the Bloomfield, New Mexico, refinery in November 2009.  Atmospheric crude oil distillation -- The refining process of separating crude oil components at atmospheric pressure by heating to temperatures of about 600 degrees to 750 degrees Fahrenheit (depending on the nature of the crude oil and desired products) and subsequent condensing of the fractions by cooling.

Source: Based on data from the U.S. Energy Information Administration/EIA, Refinery Capacity Report, Release date: Jun 24, 2011, Table 5, here.

(ConocoPhillips is the largest refiner in the United States, with crude oil distillation capacity of 2 million barrels per day as of Jan 1, 2011, followed by ExxonMobil and Valero. Also, please see my post "Top 10 Largest Refining Companies in Asia, the USA and Western Europe -- OGJ," and Aaron and David Rachovich, "Top 28 Largest Refineries in the U.S. as of Jan 1, 2011 -- EIA." Update: As of late 2012, the top 5 largest refiners/refining companies in the United States have been Valero/12 refineries with 2,096,500 b/cd of crude capacity, Phillips 66, ExxonMobil, BP and Marathon---please see Warren R. True and Leena Koottungal, "Asia, Middle East Lead Modest Recovery in Global Refining," OGJ, Dec 3, 2012, Table 2 in my post "World's Top 25 Largest Refiners, Jan 1, 2013 -- OGJ," Notes. For the USA, Valero has moved into the top spot for company-wide capacity, pushing Phillips 66 to No. 2 -- D.R.)

EMG's Gas Supply to Israel Interrupted Due to EGAS Mandatory Shut Down Procedure after an Explosion in the Egyptian National Grid in the Sinai

Ampal website, Apr 27, 2011
Ampal-American Israel Corporation (Nasdaq: AMPL), a holding company in the business of acquiring and managing interests in various businesses, announced today that it has been advised by East Mediterranean Gas Co.("EMG"), in which Ampal has a 12.5% interest, that shortly after 03:30 last night there was an explosion at a gas metering station 2 Km [1.2 Miles] from Al Arish, Egypt and some 30 Km [nearly 19 Miles] from the EMG terminal. The station is owned and operated by Gasco, the Egyptian gas transport company, which is a subsidiary of EGAS, the Egyptian national gas company (EMG's gas supplier). Following the explosion EGAS has initiated its standard shut down procedure affecting gas transportation throughout the Sinai Peninsula and gas supply to Jordan, Lebanon, Syria [i.e., Arab Gas Pipeline/AGP network, please see remarks below -- D.R.]; to major Egyptian industries and gas consumers in the Sinai; and to EMG [i.e., Egypt's gas exporting company via the 100-kilometer/62-mile El Arish-Ashkelon submarine pipeline -- D.R.].

The extent of the damage to Gasco's metering station and the estimated repair period is unknown at this point. [Full story]

(The interruption of gas supplies is the second in almost three months to the pipeline network that sends gas to Jordan, Syria, Lebanon and Israel. On Feb 5, a fire and explosion at a gas metering station forced Gasco to cut off supplies to the Arab Gas Pipeline/AGP linking Egypt to Jordan, Syria and Lebanon, as well as the pipeline supplying Egyptian gas to Israel---please see my post, including remarks, here. Also, please see my post here. According to the Oil and Gas Journal, Egypt’s estimated proven gas reserves stand at 77.2 trillion cubic feet/tcf as of January 1, 2011, an increase from January 1, 2010 estimates of 58.5 tcf and the third highest in Africa after Nigeria (about 187 tcf) and Algeria (159 tcf)---please see Aaron and David Rachovich, "World's Top 22 Natural Gas Proven Reserve Holders," here. Egypt's natural gas sector is expanding rapidly with production quadrupling between 1998 and 2009. In 2009, Egypt produced roughly 2.3 tcf and consumed 1.6 tcf. Egypt's gas production totaled around 66 billion cubic meters/bcm or c. 2.3 tcf in 2010 too. With the ongoing expansion of the AGP and LNG facilities, Egypt will continue to be an important supplier of natural gas to Europe and the Mediterranean region. According to Cedigaz, in 2009 the Egyptian electricity sector accounted for the largest share of natural gas consumption (54 percent) followed by industrial sector (29 percent). While still a relatively small share, Egypt is beginning to incorporate natural gas into the transport sector through the use and development of compressed natural gas vehicles and fueling stations. Egypt began exporting natural gas in the mid-2000s with the completion of the two segments of the AGP in 2003-2006 and the startup of the first three LNG trains at Damietta in 2005. In 2009, Egypt exported close to 650 billion cubic feet/bcf of natural gas, around 70 percent of which was exported in the form of LNG and the remaining 30 percent via pipelines. Egyptian pipeline exports travel through the AGP that provides gas to Jordan, Syria and Lebanon with further additions being planned. The El Arish-Ashkelon pipeline addition, which branches away from the AGP in the Sinai Peninsula and connects to Ashkelon, Israel, began operations in 2008---please see EIA, Egypt Country Analysis Brief, Feb 2011, here. Egypt’s main focus is to increase gas production and to raise its profile as a regional gas and LNG exporter. But its ambitions for increasing exports have been hampered by rising internal gas demand. The need to alleviate domestic shortages has caused a drop in Egypt’s LNG exports, which fell last year to 9 bcm or 6.7 million tons from 13 bcm or 459 bcf in 2009---please see PIW, Apr 11, 2011, here. UPDATE: Egyptian gas exports to Israel resumed on Friday June 10, 2011. -- D.R.)

Egyptian Gas Supply to Israel Almost Back to Normal: Sources

Platts, Jerusalem, Mar 22, 2011
Gas deliveries from Egypt to Israel have reached 90% of volumes prior to the cutoff on February 5 [please see my post, including remarks, here -- D.R.] and will continue to ramp up this week, Israeli energy industry sources said Tuesday.

Supplies resumed on March 15 after the export pipeline, which was damaged by an explosion, was fixed. Shipments also resumed to Jordan.

Meanwhile, Ampal-American Israel Corp [please see remarks below -- D.R.], a partner in the East Mediterranean Gas Company -- which exports the gas from Egypt to Israel -- said in its annual report Friday [sic] that the future policy of the Egyptian government may not coincide with that of EMG.

The statement said that there is no certainty that Egypt will meet its commitments regarding the supply of natural gas to Israel in the future.

EMG supplied Israel with 2.1 billion cubic meters of gas in 2010 and its contractual commitments are to increase this to 3 Bcm in 2011. EMG has signed commitments to supply 4.8 Bcm/year of gas starting in 2013 [sic].

The Ampal statement follows remarks last week by Egypt's new oil minister Abdallah Ghorab. He said that his ministry is re-examining the gas agreement with Israel, specifically the price at which gas is sold to Israel and other countries.

Ghorab said the agreements, signed under the auspices of the previous minister Sameh Fahmi, include a mechanism that permits amending the gas supply agreements. The minister said this would not be a complicated process.

Jordan is currently paying around $3/MMBtu [please see remarks below -- D.R.] while prices to Israel were raised by nearly 50% last year to around $4.50/MMBtu when the long-term supply agreement was renegotiated.

Israeli energy industry analysts have said the price of Egyptian gas sold to Israel could go as high as $6-6.50/MMBtu. [Full story]

(Also, Egypt wants to raise price of gas to Jordan. EMG is a joint company owned by Egyptian businessman Hussein Salem, Egypt Natural Gas Company, Thailand's PTT, Israel's Merhav Group, Ampal-American Israel Corp, American businessman Sam Zell and Israeli institutional investors. Ampal holds a 16.8% interest in EMG, with 8.2% held directly and 8.6% held through the joint venture with certain Israeli institutional investors, of which Ampal owns 50% and a 4.3% interest is attributable to the institutional investors. Excluding the institutional investors, Ampal has a 12.5% interest in EMG. -- D.R.)

BOEMRE Approves First Deepwater Drilling Permit since Accident

by Nick Snow, OGJ, Feb 28, 2011
The US Bureau of Ocean Energy Management, Regulation, and Enforcement [the former Minerals Management Service] approved the first deepwater drilling permit on Feb. 28 since the Macondo well accident and crude oil spill. BOEMRE said Noble Energy Inc.’s application for a permit to bypass was for Well No. 2 in Mississippi Canyon Block 519 about 70 miles southeast of Venice, La.

The permit represents a significant milestone for both the US Department of the Interior agency and the oil and gas industry since Interior Sec. Ken Salazar placed a moratorium on new deepwater drilling following the [BP's Macondo] well blowout and explosion which took 11 lives [please see my post here -- D.R.], BOEMRE Director Michael R. Bromwich said. [The moratorium was subsequently lifted in October 2010, but the department/agency has yet to approve any new deepwater exploration drilling permits. -- D.R.]

“This permit was issued for one simple reason: The operator successfully demonstrated that it can drill its deepwater well safely and that it is capable of containing a subsea blowout if it were to occur,” Bromwich told reporters during a teleconference. “We expect further deepwater permits to be approved in coming weeks and months based on the same process that led to the approval of this permit.”

In Houston, Noble Energy said it received permission to resume drilling its Santiago prospect in the deepwater Gulf of Mexico, which it described as a middle Miocene amplitude prospect in 6,500 ft of water where the independent producer is operator and holds a 23.25% working interest. The well was drilled to a 13,585 ft depth when operations were suspended on June 12, and Noble Energy said it expects to resume work in late March to a 19,000 ft targeted drilling depth, with results anticipated by the end of May.

David L. Stover, the company’s chief executive, said Noble Energy worked over several months with other operators and service providers to make deepwater drilling operations safer, including implementing third-party certification of well designs and blowout preventer testing.

Coordinated with BOEMRE

“Our partnership with others in the Helix Well Containment Group has increased the deepwater Gulf subsea control and containment capabilities,” he said. “The industry has improved its ability to respond to surface spills as well. Our teams have done an outstanding job of coordinating with the BOEMRE on these matters…. Noble Energy is proud to help lead the industry back to drilling in the deepwater gulf.”

Bromwich emphasized that no politics were involved in approving Noble Energy’s application, which he said had been working its way toward approval for several weeks. He noted that Helix Group has said that its system works to depths of 5,600 ft, but added that Noble Energy complemented that with additions which BOEMRE determined would effectively contain a blowout from 6,500 ft. The agency also has held several meetings with the Marine Well Containment Co., the group formed by four multinational oil companies operating in the gulf, and will approve that system if a producer demonstrates that it will work, he said.

“We are taking these applications to drill as they come in. Right now, a very small number are pending,” Bromwich said. “I expect industry has been waiting for a signal that deepwater drilling would be allowed to resume, and this could be the signal. I have no way of knowing how long it will take to approve the next one. It involves careful analysis of each application. Given the rigorous safety requirements, the public can be confident that the approved wells will be safe.”

Oil and gas industry trade associations welcomed the news. “The actual issuance of a permit for new deepwater drilling is long awaited and an important step forward in the wise development of energy off our shores,” said National Ocean Industries Association Pres. Randall B. Luthi. “With all the world-complicating factors, including rising oil prices, political turmoil in the Middle East, and the loss of jobs in the Gulf of Mexico, this decision offers hope that the United States is getting back in the energy and jobs market.”

He said taking DOI at its word that approval of Noble Energy’s application is not simply a token gesture, the action “sends a calming signal to operators, producers and service companies that the long drought is just about over,” adding, “It is also a compliment to Director Bromwich and a testament to the efforts of many within industry that the containment and safety issues can be resolved when industry and BOEMRE work together.” [Full story]

(For information on Noble Energy, in general, and its operations offshore Israel, specifically, please see my post here. Also, please read my post "National Commission Releases Final Report on Deepwater Horizon Oil Spill and the Future of Offshore Drilling," here. -- D.R.)

ATP Oil & Gas Moves into Offshore Israel

Houston Business Journal, Feb 24, 2011

ATP Oil & Gas Corp. said Thursday [Feb 24] it is expanding into offshore Israel.

Houston-based ATP Oil (NASDAQ: ATPG) said it has signed agreements to acquire five licenses, of which two are pending, in approximately 4,000 feet [1,219 meters] of water in the Levantine Basin [, subject to approval by the Ministry of National Infrastructures -- D.R.].

“The recently announced discoveries in offshore Israel totaling approximately 25 trillion cubic feet of natural gas [i.e., Tamar + Leviathan -- D.R.] have demonstrated a significant catalyst for the offshore hydrocarbons sector,” T. Paul Bulmahn, ATP chairman and CEO, said in a statement.

ATP will operate all its licenses with working interests ranging from 40 percent to 50 percent. The license awards are expected by the end of March. [Full story]

(Similar stories appear in Oil & Gas Journal, here and Scandinavian Oil-Gas Magazine, here. For information on Tamar and Leviathan, please see my post here. ATP Oil & Gas Corporation is engaged in the acquisition, development and production of natural gas and oil properties in the Gulf of Mexico and the North Sea. ATP acquires and develops properties, many of which have proved undeveloped reserves (“PUD’s”) at the time of acquisition that are economically attractive to ATP, but not strategic to exploration-oriented oil and gas companies. Such strategy provides ATP with the assets to develop and produce without the risk, cost and time involved in traditional exploration. Since its inception in 1991, the company has had an exceptionally strong development success record of 98% of taking projects to production that were previously undeveloped and non-producing. ATP is headquartered in Houston, Texas, with additional offices in Guildford, Surrey (U.K.) and IJmuiden (Netherlands)---please see ATP website, here. -- D.R.)