All the majors got hit badly during the recent fuel-price upheavals, with most suffering large hedging losses when they mis-judged the post-financial crisis prices. So, on the surface, it looks like a smart move to secure your fuel supplies a bit further up the production pipeline.
But Delta will probably regret this particular move : when even the oil companies, who should have a pretty good idea of the ups and downs of refinery ownership, don't want these sites (one of two slated for closure), then buyers beware.
Plus they cant just set it to only produce jet fuel : refining crude oil doesn't work that way, so they will have to trade-off other products, perhaps in swap-deals with other refiners/distributors ; and there's the rub, the plant isn't competitive already, so they'll probably be trading that production at a loss just to get the stuff out the gate.
They'll be out-sourcing running the place, sourcing crude and distribution to the usual industry suspects who will be on cost-plus deals ; so reckon on them making their profits and Delta covering the losses until they close it down in 3 years time.
Topic: Delta buys oil refinery - aws future option? (Read 940 times)
