MOSCOW (MRC) -- ExxonMobil Corp cut production at its 502,500 barrel-per-day Baton Rouge, Louisiana, refinery as poor demand has pushed up inventories and filled storage tanks, reported Reuters with reference to sources familiar with plant operations.
The number of contract workers at the Baton Rouge refinery was cut by 1,800 people on Friday as Exxon begun informing service companies of planned spending cuts.
The refinery’s production was cut to about 440,000 bpd on Saturday, the sources said.
Exxon spokesman Jeremy Eikenberry said the spending cuts will be announced when final decisions are made.
“We are notifying contractors and vendors of our intended reductions, and they may be adjusting their staffing and budgets accordingly,” Eikenberry said.
The number of contract workers at the refinery is usually 2,000 and increases when major overhauls are underway, the sources familiar with operations said.
Contract workers are employed by the third-party service companies that Exxon has been informing of its spending plans.
Social distancing and working from home to prevent the further spread of the coronavirus in the United States has reduced demand for motor fuel across the country. At least three refineries in California have cut production as well.
Lyondell Basell Industries sent home about 500 contract workers from its Houston refinery last week on Wednesday.
Exxon’s Baton Rouge refinery restored full production on March 9 after it was shut by a Feb. 12 fire.
The Baton Rouge refinery is the second-largest in Louisiana and Exxon’s second-largest in the United States.
As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC