Marathon to Indefinitely Idle Gallup, Martinez Refineries
OAKHURST, N.J. (DTN) --- Marathon Petroleum Corp. today announced plans to
"indefinitely idle" its 26,000 bpd Gallup refinery in Jamestown, New Mexico as
well as its 170,000 bpd refinery in Martinez, Calif., as product demand
continues to suffer due to the COVID-19 pandemic.
MPC's Refining & Marketing segment reported a loss from operations of $1.6
billion in the second quarter, compared with income of $906 million for the
second quarter 2019. The decrease in R&M earnings was primarily due to reduced
throughput and lower crack spreads driven by lower demand associated with
COVID-19, and lower crude differentials.
R&M margin was $7.13 per barrel for the second quarter and crude capacity
utilization was 71%, resulting in total throughputs of 2.3 million bpd and
clean product yield of 84%.
MPC reported net income of $9 million compared to $1.1 billion in the second
quarter 2019. Second-quarter 2020 results include a pre-tax lower of cost or
market inventory benefit of $1.5 billion. Adjusted net loss was $868 million
for the quarter profiled, compared to adjusted net income of $1.1 billion.
"Our second quarter results reflect a full three months of the challenges
COVID has created for our business," said President and CEO Michael J.
Hennigan. "We began April with demand at historic lows. Despite seeing some
recovery during the quarter, demand for our products and services continues to
be significantly depressed, particularly across the West Coast and Midwest."
Hennigan continued, "In response, we are executing on the actions we
announced in May and are advancing three strategic priorities which lay the
foundation for our long-term success. First, we strengthened the competitive
position of our assets with the decision to indefinitely idle our Gallup and
Martinez refineries, and are evaluating strategic repositioning possibilities
The company said the Martinez refinery might be repositioned to produce
The Gallup refinery was idled around mid-April in response to COVID-19 while
the Martinez refinery was idled by late April.
Hennigan said the company has begun implementing commercial strategy
changes, and also lowered capital spending.
"I'm confident we will meet the $950 million expense reduction target we
previously announced for 2020. We are also implementing plans to structurally
lower costs in 2021 and beyond," Hennigan said.
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