With customer demand shifting as part of the energy transition, ExxonMobil says it is moving its refining operations away from fuels and towards higher value products like lubricants.
As well as being a prominent upstream producer, the company has one of the biggest refining networks in the world, allowing it to derive value throughout the supply chain. Producing fuel has been a major part of the business since the Ford Model T brought motoring to the masses, but the company says it is upgrading its refineries to transform more crude into other products.
Speaking at ExxonMobil’s office in Spring, Texas, Senior Vice President Jack Williams said:
“We’re planning on modifying some of that yield from gasoline to distillate and chemicals feed. We’ve got projects that we know we would do to take those steps.”
In the UK and Singapore, the company has already begun winding down the production of high-sulphur fuels and fuel oil, and it is now considering doing the same with petroleum. The increasing popularity of electric vehicles means that the demand for petroleum is likely to diminish over time. In contrast, there are limited low-carbon alternatives for chemical feed and base stocks for lubricants like the Mobil DTE hydraulic oil. What is more, there is potential to make a larger margin on these products.
Biodiesel, which is made from waste vegetable grease or oil, represents another attractive option for the company, because it can repurpose its existing refineries instead of building new plants.
