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ExxonMobil Greenlights Baytown Refinery Reconfiguration Project

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Key Takeaways

  • ExxonMobil approved a Baytown refinery project to boost diesel and base stock production.
  • The move positions ExxonMobil as the sole supplier of the full Group I-V base stock range.
  • Operations are set to begin in 2028, with similar U.S. Gulf Coast projects under review.

Exxon Mobil Corporation (XOM - Free Report) , a U.S.-based integrated energy giant, has taken a final investment decision on a reconfiguration project at its Baytown refinery in TX. The project will support the increased production of higher-demand products, such as diesel and base stocks. This is expected to reinforce XOM’s position as a leader in the evolving energy landscape and support its growth. 

ExxonMobil’s investment is aimed at shifting production toward high-quality base stocks and liquid fuels, such as diesel. This allows the company to increase its range of offerings and include high-quality Group III base stocks, which are critical raw materials for making lubricants. This investment also enables XOM to position itself as the sole supplier of the full range of Group I-V base stocks. The demand for diesel and other high-quality base stocks is expected to remain strong, and upon completion, the Baytown complex will likely meet this growing demand. The project is expected to commence operation in 2028.

ExxonMobil stated that its integrated Product Solutions portfolio aids profitability and reduces costs. The company will assess the scope of similar reconfiguration projects across its other U.S. Gulf Coast facilities to ensure its asset portfolio remains competitive and profitable in the long run. XOM’s Baytown chemical complex is the largest refining and petrochemical facility globally.

XOM’s Zacks Rank & Key Picks

Currently, XOM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Repsol S.A. (REPYY - Free Report) , Antero Midstream Corporation (AM - Free Report) and Galp Energia SGPS SA (GLPEY - Free Report) . While Repsol sports a Zacks Rank #1 (Strong Buy), Antero Midstream and Galp Energia carry a Zacks Rank #2 (Buy), each. You can see the complete list of today’s Zacks Rank #1 stocks here.

Repsol is a global multi-energy company, involved in exploration and production activities as well as refining and marketing petroleum products. The company is also actively involved in transitioning toward cleaner and more sustainable energy solutions. This suggests that Repsol is positioning itself in line with global energy transition needs.

Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company’s higher dividend yield, compared to its sub-industry peers, makes it an attractive choice for investors who seek consistent returns.

Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence, with the potential to become a significant oil producer in the region.

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