Marathon Petroleum is close to reaching a deal to sell several refineries to CVR Energy, worth an estimated $4 billion, the Wall Street Journal reported, citing unnamed sources. The deal could be announced later today.
The refining sector has become the star of the oil industry this year as wars in the Persian Gulf and between Russia and Ukraine have severely crippled global fuel supplies, prompting refiners outside war zones to increase production. The market situation has caused refining margins to rise to unprecedented levels, making refineries an attractive takeover target for buyers with cash.
Refining margins for U.S. Gulf Coast operators hit a record high of $72 a barrel in September, driven by refinery disruptions in the Middle East and Russia and resulting fuel shortages. Margins have been below their peak since then, but remain significantly higher than they were a year ago.
According to the WSJ report, CVR Energy, 71% owned by Carl Icahn, is the seventh publicly traded refiner in the United States. Still, with its market value of around $6 billion, it is significantly smaller than Marathon, which has a market value of $125 billion. However, he is ambitious – and he is not the only one.
The Wall Street Journal recalled that Valero had just taken over an idle refinery in Houston and now plans to restart it at a daily rate of 165,000 barrels, while Exxon and Chevron are investing in their refining operations and increasing production at their existing refineries.
The ongoing wars have demonstrated that the world is suffering from a shortage of refineries, as many facilities have closed or been converted into biofuel plants as part of the shift to alternative energy sources. Europe currently struggles to import enough fuels because it has closed about a quarter of its refineries over the past two decades.
By Irina Slav for Oilprice.com
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