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10News: Shell CEO John Hofmeister Speaks On Controversial Refinery Closure

John Hofmeister Shell

10News: Shell CEO John Hofmeister (above) Speaks On Controversial Refinery Closure

POSTED: 8:55 pm PDT September 13, 2006

Shell workers told 10News there was an alleged plan to drive up gas prices by closing a California refinery.

“They’ve lied and led people to believe there is an inadequate supply of crude oil to run that refinery,” said one Shell worker.

10News showed internal Shell documents talking about how “operations were running well” and Shell was “taking advantage of very high profit margins.” 

The company said there was no future in Bakersfield, Calif., because the nearby oil fields were drying up.

After the 10News investigation, the state attorney general forced Shell to sell the refinery.

Now, the CEO of Shell Oil in the U.S. is speaking up on the issue.

“Bakersfield was too small. It was too small, too old,” said John Hofmeister.

Despite the profits detailed in Shell’s own internal documents, Hofmeister said the operation was not big enough and thus not profitable enough.

“We’re, for example, looking at an expansion in Port Arthur, Texas, of 350,000 barrels a day in a 250,000 barrel-a-day refinery, creating the world’s, or the nation’s, largest refinery of more than 600,000 barrels,” added Hofmeister.

Hofmeister said that makes better financial sense than running an old, small refinery in California regardless of the profit margins.

Flying J Oil, which bought the Bakersfield plant, does see a future in it. Right now, the company is putting $500 million into updating the refinery.

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