By Phaedra Friend Troy
ConocoPhillips (NYSE:COP) has cancelled plans to upgrade the Wilhelmshaven oil refinery in Germany.
The cancellation of the upgrade project at Whilhelmshaven is in-line with the company’s initiative to downsize its downstream projects. ConocoPhillips may even consider selling the refinery.
“This move is consistent with our stated strategy of maintaining capital discipline and reducing our downstream portfolio over time,” said Willie Chiang, senior vice president of refining, marketing and transportation. “We will also explore other options to improve shareholder value including operating the facility as a terminal and pursuing the sale of the asset.”
ConocoPhillips expects to recognize a non-cash asset impairment of $1.1 billion after taxes in its second quarter financial results.
ConocoPhillips holds interest in two refineries in Germany, the Wilhelmshaven refinery and the MineraloelRaffinerrie Oberrhein GmbH (MiRO) refinery.
The Wilhelmshaven refinery was acquired by ConocoPhillips in 2006 from Louis Dreyfus Refining & Marketing. Delayed in 2009, the upgrade was supposed to add coker, hydrocracker and hydrogen units to the refinery.
Located in the northern German state of Lower Saxony, the Wilhelmshaven refinery has a crude processing capacity of 260,000 barrels per day. Processing low-sulfur crude oil primarily from the North Sea, the Whilhelmshaven refinery produces transportation fuels, fuel oil and intermediate feedstocks. The refinery has daily capacity for 36,000 barrels per day of gasoline and 102,000 barrels per day of distillate.
