US independent Hess Corporation has said it plans to close its last refinery and seek a buyer for its US and Caribbean terminal network as part of a drive to concentrate on upstream activities.
Chief executive John Hess said that once the changes were completed
Hess would have finished its “transformation from an integrated oil and gas
company to one that is predominantly an exploration and production company”.
He added that the sales would allow the explorer to “redeploy
substantial additional capital to fund its future growth opportunities”,
estimated at $1 billion excluding any sale earnings.
Hess now plans to close its loss-making
Port Reading, New Jersey refinery in February.
The move follows on from last year’s
decision to close the company’s Hovensa refinery in the Caribbean, a joint venture with Venezuelan state oil player PDVSA.
The US terminal network up for sale is situated along the US
East Coast, with 28 million barrels of storage capacity in 19 terminals, 12 of
which have deep water access.
Hess said the terminals previously served as the primary
outlet for Hess’ share of production from the now-closed Hovensa facility to
supply Hess retail and marketing businesses.
“With the closure of the Hovensa refinery in 2012 as well as
Hess’ ability to access refined products from third parties to supply these
marketing businesses, the terminal system is no longer core to the company’s
operations,” the company said.
The company’s St. Lucia oil storage terminal in the
Caribbean, with 10 million barrels of capacity, is also being put up for sale.
Hess will maintain its retail and energy marketing
activities after the sales.