Exxon Boosts European Refining Investments

ExxonMobil is to pump more money into European refining, with the upgrade of a unit at its Slagen refinery in Norway, bucking an industry trend which has seen some plants in the region closing, and others on death watch.

Exxon said on Thursday it planned to install a new processing unit to enable the production of high quality vacuum gas oil.

A new residual flash tower will produce the gasoil, replacing the production of lower value heavy fuel oil, the company said in a statement.

"The new unit will enable improvement in the product yield in a highly energy-efficient manner that will help further strengthen the industry-leading position of our assets," said Stephen Hart, regional director of ExxonMobil Refining and Supply.

A spokesman declined to disclose the cost of the upgrade, but said that around 50 to 60 staff would add to the 375 staff at the plant during the 12 month building process, and that production would not be affected.

The move comes after Exxon said in July it would invest $1 billion in its 320,000 barrels per day (bpd) Antwerp refinery, even as many firms pull back from a European industry hammered by low refining margins.

Exxon's investments will likely pile on pain for others in the sector.

Thin margins forced Essar to cut production at its Stanlow plant in England this year, while the Coryton plant, also in England, closed in 2012 following the bankruptcy of its owner Petroplus, and Mantua refinery in Italy, owned by Hungary's MOL, closed in 2013.

Exxon had a refining capacity in Europe of 1.6 million barrels per day (bpd) from its European refineries out of a total worldwide throughput of 5.3 million bpd in 2013, according to its financial and operating review.

Reporting by Simon Falush