Airline Wants To Build Own Oil Refinery

EyeInTheSky

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Dec 2, 2003
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Virgin plans oil refinery
From: Reuters By Deepa Babington in New York
September 14, 2005

THINK you are upset about high gas prices? Maverick British entrepreneur Richard Branson is so furious he wants to build his own oil refinery.

Like the rest of the airline industry, Mr Branson's Virgin Atlantic Airways has been stung by higher jet fuel prices and was forced to raise fuel surcharges for the second time in four months.
Hurricane Katrina sent oil prices soaring to $US70 a barrel because it shut several US Gulf Coast refineries, which turn crude oil into products like diesel, gasoline and jet fuel.

"If we don't start now to get more refineries built then fuel prices could literally rocket to $US100-$US200 (per barrel of oil) and the world economy would come to a grinding halt," Branson said in an interview on financial news network CNBC overnight.

Mr Branson did not say where he wants to put his refinery, but some analysts said he should not look to the US, where no one has built a refinery in 29 years.

"My immediate reaction to that is: Not in the US," said Paul Flemming, oil analyst at Energy Security Analysis Inc. "That's definitely more pie in the sky than anything."


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In the US, getting a permit could involve years of navigating local, state, and federal regulations and protests from environmental and community groups, analysts say.
But they note that people in other places would not be too keen to have an oil refinery in their backyards.

"If you're talking about a 400,000 barrels per day refinery next to a French Chateau in the Loire valley, the timeline is infinite," said Tim Evans, senior oil market analyst at IFR Energy Services.

"If you're looking at an industrialised part that already includes an oil refinery, it's much less of a big deal."

Mr Branson said plenty of places would welcome the jobs that a new refinery would create. "Some people will kick and scream, but they may be the same people screaming about the fact that they're having to pay enormous prices every time they get into the car."

But building a refinery to ease high fuel prices would be far from a quick fix: any refinery would take at least four or five years to build, if not longer.

And according to Energy Security Analysis' Flemming, another refinery would not ease record high crude oil prices as Branson suggests, since it would not increase actual crude oil production.

Mr Branson's idea does have some fans, however, among those concerned about the lack of competition in the refining industry, which is dominated by a few large companies.

"The oil companies themselves aren't interested in building new refineries and will tend to denigrate the chances of any new investors actually succeeding in their business," said Mr Evans of IFR Energy Services.

"They'll say, 'What does Richard Branson know about oil refineries?' He doesn't have to know about that part of the business, but he can easily see that oil refiners are making a margin far superior to what he's making in the airline business."
 
FWIW, a couple of the article I've read indicate that Branson would like a cooperative effort by the airlines. He only wants to put in $100 million or so and figures it'll take $1 billion.

Here's an article from the UK Times:

Branson to put $100m into refinery

Jim
 
BoeingBoy said:
FWIW, a couple of the article I've read indicate that Branson would like a cooperative effort by the airlines. He only wants to put in $100 million or so and figures it'll take $1 billion.

Here's an article from the UK Times:

Branson to put $100m into refinery

Jim
[post="300249"][/post]​
I suggest a Jet-A refinery be built at the soon to be closed Oceana Naval Air Station at the mouth of the Chesapeake Bay in Norfolk.
 
YOu know, this really isn't that stupid an idea. A better idea than building a whole new refinery would be to buy a small west Texas or Gulf coast refinery company. Branson probably has plenty of money for that. Thn he could operate it indepently, using profits by the oil company to offset losses (like a hedge) from the airline caused by high fuel prices. He gets a huge tax write off for the airline (due to losses), and huge profits for stockholders (due to oil profits), all at the same time!
 
Richard Branson, Oil Tycoon?
Tuesday September 20, 8:11 am ET


Billionaire entrepreneur Sir Richard Branson isn't the type to sit on his tropical island in the Caribbean and merely fume about lethargic politicians. He's the maverick founder of Britain's Virgin Group, an empire of 200 companies in industries as diverse as air and rail travel, mobile phones, finance, insurance, beverages, hotel, Internet, and modeling ventures, spanning 30 countries. He has spent the past week lobbying the Canadian government to speed up number portability for mobile phones and pushing his solution to high oil prices because, he says, the politicians won't. His answer: build a $2 billion oil refinery and take Virgin into the field of oil exploration.

http://biz.yahoo.com/bizwk/050920/nf200509...db053.html?.v=1
 

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