Chevron plans to invest heavily in petrochemicals and heavy oil upgrading in South Korea as part of a global strategy to pursue a balanced downstream portfolio, Brant Fish, president of International Products at the U.S. supermajor, said on Monday.
“There’ll be places like Korea where we go investment heavy in petrochemicals and in heavy oil upgrading,” Fish said at the APPEC energy conference in Singapore, as carried by Reuters.
On the other hand, there will be geographies and refineries “like here in Singapore, where we’ve chosen to not make those big investments and actually get a better return through most parts of the cycle on capital employed,” the Chevron executive told the audience at APPEC.
In recent years, Chevron has been working to high-grade its global portfolio and focus on core growth assets to reduce costs and boost profits.
Earlier this year, Chevron said it would lay off 15-20% of its global workforce and reorganize its business structure. The company’s Oil, Products & Gas organization consolidated into two segments: Upstream and Downstream, Midstream & Chemicals.
As part of the larger cost-cutting drive that will see its global workforce reduced by a fifth by 2026, Chevron is also giving the slip to 800 of its employees in the Permian.
In South Korea, Chevron has a 50% interest in its South Korean affiliate GS Caltex Corp. The GS Caltex refinery complex in Yeosu is the largest in the Chevron system and one of the largest in the world, the U.S. supermajor says.
The facility is capable of processing 800,000 barrels of crude oil per day.
In addition, Chevron is in the petrochemicals business in South Korea through the operations of GS Caltex, Chevron Korea Inc., and Chevron Oronite Co.
Meanwhile, South Korea last month urged its struggling petrochemicals sector to slash excess capacity and restructure operations amid a global glut that has depressed petrochemicals margins and threatened the industry in many Asian and European countries. Executives from the 10 largest South Korean companies in August signed an industry-wide restructuring deal, aimed at propping the ailing petrochemicals sector.
By Michael Kern for Oilprice.com
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