All oil – whether it’s light, medium or heavy – needs to be refined once it’s out of the ground so it can be made into usable products such as gasoline to fuel our vehicles or petroleum by-products that become the building blocks for almost everything we use every day such as smartphones, laundry detergent, contact lenses and clothes.
We have 50 percent ownership in two U.S. refineries – Wood River, located in Roxana, Illinois, and Borger, located in Borger, Texas – that are part of our joint venture with Phillips 66, the operator. Ownership in these two refineries reduces the risk of price fluctuations in the oil market, by allowing us to capture value from the production of oil through to the output of finished products, such as gasoline, diesel and jet fuel. Essentially, we shift from being just a producer of heavy crude oil to being a producer of higher-value finished products. This helps to reduce our risk and balance out the volatility in our business.
In 2016, the two refineries processed a combined average of 444,000 barrels of oil per day gross of oil, compared with 419,000 barrels of oil per day gross the year before.