ConocoPhillips COP -0.17% is seeking to sell a 185,000-barrel-a-day refinery in Pennsylvania, highlighting the oil company’s efforts to reduce its refining portfolio.
“After exploring a wide range of alternatives for the refinery, the decision to sell is based on the level of investment required to remain competitive,” said Willie Chiang, senior vice president of refining, marketing, transportation and commercial. The executive cited weakness in motor fuel demand and costly regulatory requirements as among a series of market pressures on east coast refining in the U.S.
ConocoPhillips said it will immediately begin the process of idling the facility and will permanently close the plant in six months if a sale is unsuccessful. Due to the decision, the company expects to book a non-cash asset impairment of roughly $300 million after tax in its third-quarter results.
The third-largest U.S. oil company by market value after Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) in July disclosed plans to split its refining and production arms into two publicly traded corporations, making it the largest energy company to date to reject the industry’s traditional bigger-is-better business model.
ConocoPhillips had said plans to sell noncore assets, including low-margin refining operations, will continue amid the split.
Shares were recently up 2.1% to $65.50 in premarket trade. The stock is down 5.8% since the start of the year.
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