AS DIESEL GOES FROM ‘DARLING TO DEVIL’ EUROPEAN REFINERS TRY NOT TO DROWN IN IT
Big European oil refiners plowed about $10 billion in recent years into churning out diesel, but a backlash sparked by the Volkswagen AG emissions scandal has diminished consumer appetite for the fuel, reports The Wall Street Journal’s Christopher Alessi.
The German auto giant plead guilty to cheating on its emissions and paid billions in penalties to resolve investigations in the U.S. and Europe.
“The Volkswagen scandal sent sales of diesel vehicles plummeting, particularly in the company’s home country of Germany, where politicians threatened to restrict diesel cars in some cities. Diesel, which emits nitrogen oxide, is now considered a much more serious pollutant than it was just a few years ago,” writes Mr. Alessi.
Total SA of France, Repsol SA and CEPSA of Spain, and Saras SpA of Italy are planning to use facilities built to produce diesel mostly for passenger cars to instead provide chemically similar products like container-shipping fuel and jet fuel.
The companies hope to minimize the latest blow to an industry that was already being squeezed by competition from Asian and Middle Eastern refiners.
“Diesel was the darling and has become the devil,” said Dario Scaffardi, executive vice president at Saras.
DANISH ENERGY COMPANY HAS TURNED THE PAGE ON OIL .. AND ITS NAME
Dong Energy AS, Denmark’s majority state-owned energy company, sold off its last oil and natural-gas fields last summer, a major move in its quest to become a pure renewable energy firm. Now it is also shedding its name.
The name DONG — which originally stood for Danish Oil and Natural Gas — doesn’t fit the company anymore, said the firm in a recent press release.
Its new name will be Ørsted, in reference to Danish Scientist Hans Christian Ørsted who discovered that electricity and magnetism are linked, reports the Dow Jones Newswires.
The company is now the world’s biggest producer of offshore wind power, dwarfing its rivals and spearheading industry-wide cost reductions that have made the sector a more palatable alternative to coal and other forms of energy.
“With our profound strategic transformation and the divestment of our upstream oil and gas business, this is no longer who we are,” said Thomas Thune Andersen, the chairman of the firm’s board of directors. “Therefore, now is the right time to change our name,”
Some analysts said the name change — which must be approved by shareholders — was overdue.
“Dong is not a great name. It sends the wrong message,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets. “It’s a sign of the times when companies are removing the association of fossil fuels from their name.”
Oil prices pulled back on Monday, weighed down by a strong dollar and data pointing to rising global production.
Brent crude, the global oil benchmark, fell 0.63% to $56.43 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.50% at $51.41 a barrel.
Investors are growing concerned about a recent Reuters poll showing output among the Organization of the Petroleum Exporting Countries rose by 50,000 barrels per day in September as the cartel’s overall compliance with its supply-cut deal fell to 86%.