Shell to slash crude processing capacity by 50% at its Pulau Bukom oil refinery
- Shell to slash crude processing capacity by 50% at its Pulau Bukom oil refinery.
- The oil and gas firm has so far slashed its global capacity by roughly 20%.
- Royal Dutch Shell wants to reduce the number of its refineries from 14 to 6.
Royal Dutch Shell plc (AMS: RDSB) said on Wednesday that it will cut jobs and slash its crude processing capacity by 50% in Singapore at its Pulau Bukom oil refinery. The announcement, it added, was a part of its overhaul aimed at minimising carbon emissions.
Shares of the company were reported about 2% up in premarket trading on Wednesday. Including the price action, Royal Dutch Shell is now trading at £12 per share versus a sharply higher £23.61 per share at the start of the year.
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Shell has so far slashed its global capacity by roughly 20%
The announcement came only weeks after Shell reported better than expected financial results for the fiscal third quarter and raised its dividend to shareholders by roughly 4%.
Pulau Bukom is globally the largest wholly-owned refinery of Shell with a processing capacity of 500 thousand bpd (barrels per day). Including the capacity cut announced on Wednesday, Shell has now slashed about 20% of its global capacity in recent months.
Shell has reiterated its commitment to switch from oil and gas to renewable energy several times in recent months. For 2050, the Hague-headquartered company has a target of net-zero emissions.
The Coronavirus pandemic that has so far infected a little under 52 million people worldwide and caused more than 1.2 million deaths has sabotaged fuel demand this year. In the next five years, demand is likely to remain lower by almost 4.7 million bpd.
Shell wants to reduce the number of its refineries from 14 to 6
Out of a total of 14, Shell now wishes to only keep operating six of its oil refineries and petrochemical sites. The oil and gas company has already expressed plans of closing its Convent facility, that marks its largest in the United States. It also said that it will turn its refinery in the Philippines into an import terminal.
In an announcement in September, Shell had revealed plans of slashing its global workforce by 10% or close to 9,000 jobs.
Shell remained almost flat on average in the stock market last year. At the time of writing, it is valued at £91.55 billion and has a price to earnings ratio of 5.99.