Shell aims to reduce its refining portfolio further, to around 10 facilities capable of enduring downturns in refining cycles, chief executive Ben van Beurden said today.
"If you look back a decade or more, we had something like 54 refineries. We are down to 19 now, and we think we will end up with something like 10", van Beurden said. "And this will be really top-notch refineries that have longevity and resilience through the [refining] cycle," he said.
He said the fundamentals of the refining industry means that the firm's refining segment is cyclical, and that its strategy is to have refining assets "that are somewhat less affected [by cycles] at least at the bottom of the cycle can have an acceptable performance".
"[We] have previously said we would continue reshaping our refining portfolio", he said.
Van Beurden did not provide a timeline or point at a particular region where further divestments could take place.
Like other majors, Shell has said it is focusing its downstream strategy on integration with trading hubs and petrochemicals complexes. Shell's capital expenditure (capex) in refining reached $2.4bn last year, stable compared with 2017, and it increased investments in chemicals by $0.7bn to $3.2bn.
Shell agreed in April to sell its 50pc stake in the Sasref joint venture, which owns the 305,000 b/d Jubail refinery in Saudi Arabia, to state-owned Aramco. More recently, it said it will sell its 156,000 b/d refinery in Martinez, California, to US refiner PBF Energy.
Most of Shell's refining capacity is located in the Americas, Europe and Africa. It has assets in Asia-Pacific.
Refineries in northwest European have long been under threat of competition from larger and more economical facilities in the Mideast Gulf, Asia-Pacific and the US. Shell's recent investments in Europe included a new solvent de-asphalting (SDA) unit to maximise production of middle distillates at its 420,000 b/d Pernis refinery in the Netherlands in 2018. But the firm scrapped plans for an SDA at its 140,000 b/d Wesseling plant, western Germany, the same year.
