New Motiva CEO talks company growth, potential expansion into chemicals

Motiva Enterprise’s new president and CEO was keynote speaker at the Greater Port Arthur Chamber of Commerce’s 118th Annual Banquet.

Brian Coffman replaced Dan Romasko as CEO and as speaker at the banquet. Greater Port Arthur Chamber President Bill McCoy said the Chamber had originally scheduled Romasko to speak at the event before the announcement was made that Coffman was taking over as CEO of the company.

Coffman is former senior vice president of refining for Andeavor Corporation, and according to a release from Motiva, brings with him a wealth of experience in business growth, operational excellence, strategy, and margin delivery.

“I’ve watched as Motiva has made significant strides over the last four years to transform its business through focused improvement efforts under Dan’s leadership,” Coffman said in the release, regarding Romasko’s tenure. “I am thrilled to be part of the journey ahead for Motiva as we explore new opportunities for growth and development.”

Since December 2013, Coffman has provided strategic operational leadership to the refineries within the Andeavor (formerly known as Tesoro) portfolio. Prior to that, he spent 30 years with Conoco serving in a variety of domestic and foreign leadership roles in refining, transportation, pipeline, marketing, and strategy and planning.

Coffman earned a Bachelor’s of Science degree in Finance from Brigham Young University and an MBA from Utah State University. He is also a veteran who served eight years in the U.S. Air Force and Utah Air National Guard prior to beginning his career in the oil and gas industry.

Wednesday, Jan. 24, on day three of his new job, Coffman spoke at the Carl A. Parker Multipurpose Center in Port Arthur.

“I haven’t spent a whole lot of time in the Port Arthur community, but I do want you to know that your reputation precedes you here,” Coffman told the crowd of approximately 600 people gathered for the Chamber event. “In talking to Greg Lucchesi, GM of the Motiva Port Arthur Refinery, I’ve just heard tremendous things about the Port Arthur community and the leaders, who are here tonight. The importance of this community to Motiva is vital.”

Coffman shared a glimpse of how Motiva fits into the growing oil and gas industry.

“Before we talk about the local impacts, it is very important to highlight the true global nature of our industry. Yes, Motiva is a U.S.-based company and our Port Arthur refinery is the largest in the Americas, but make no mistake about it, we are competing globally.”

Coffman said that when it comes to refined products — gasoline, diesel and jet fuel — U.S. production, including all refiners, is almost 20 million barrels per day (bpd).

“That’s a 6.5 percent increase just since 2010, and guess what, that 6.5 percent increase is largely because of the Motiva expansion here in Port Arthur as well as other small capacity increases throughout the industry,” he said. Motiva’s current refining capacity is 630,000 bpd.

“The additional capacity coupled with vehicle efficiency gains … means that the U.S. has flipped from an importer of refined products to an exporter, and this began in 2011,” he said. “Net imports are steadily increasing, and in 2017, refined products ended up becoming one of the largest trade balance surpluses in the U.S. at $30 billion. This helps our oil industry, as refiners can sell their products not just to the domestic market but to the world market. … We don’t expect the export trend to change.”

Coffman said Motiva primarily ships diesel to Latin America and Europe.

With the increasing number of exports, refining competition continues to get tougher.

“Capacity growth is pressuring markets in the U.S. for refiners,” Coffman said. “The truth is our business is a cyclical one. … If there is a shortage of petroleum products, companies build refining capacity or expand refining capacity. They market them to produce for the demand that exists and then the least efficient excess capacity is rationalized out. These cycles have always been a part of the industry.”

Coffman said fuel efficiency improvements and competing transportation technologies have begun chipping away at the U.S. gasoline demand.

“The flat to falling demand outlook in the U.S. has increased the importance of gasoline exports from a very competitive U.S refining industry as well as specialty products such as base oils or asphalts and petrochemicals,” Coffman said. “Motiva has not been immune to that increased competition. While many of our peers have spent an awful lot of time looking for ways to stay extremely competitive in the marketplace, we find ourselves as one of the best, most efficient refiners in the industry.”

Motiva, while a self-sufficient entity, according to Coffman, is now fully owned by Saudi Aramco, the world’s largest energy and chemical company with worldwide refining capacity of 5.4 million bpd.

“As part of this worldwide organization, Motiva has been given a mission to grow in the United States,” he said, adding that Motiva’s refining capacity in Port Arthur is 630,000 bpd.

“We produce over 9 million gallons of gasoline per day,” Coffman said. “That’s enough gasoline to fuel about 600,000 cars every day. We produce over 10 million gallons of diesel fuel a day and over 2 million gallons of jet fuel every day. We also produce base oils in Port Arthur. In fact, we have the country’s largest base oil plant right here in Port Arthur. It produces a massive 40,000 barrels a day of base oil.”

Motiva transports to over 5,000 branded stations and is the exclusive marketer of Shell branded gasoline and diesel in Georgia, North Carolina, South Carolina, Virginia, Maryland, Washington D.C. as well as the eastern half of Texas. Motiva also markets fuels under the 76 brand in 26 states and Washington D.C.

And although Motiva is no longer part of a joint venture with Shell, Coffman said the company is the primary focus by Saudi Aramco of an estimated $18 billion growth effort throughout the Americas over the next five years.

 “We are studying a wide range of opportunities including expanding our logistics capabilities, commercial operations, marketing campaign and brand presence, creating a global base oil portfolio, increasing refining capacity throughout the Americas, most likely through acquisitions and continuing to seek new markets for exporting our products,” Coffman said.

Coffman added that Motiva is also “very interested in developing a chemical business, and our preference is going to be here at the Port Arthur refinery.”

“It’s a natural fit given its location on the Gulf Coast and it’s untapped feedstock advantages.

“Global demand for petrochemicals continues to grow much faster than petroleum products,” Coffman explained. “For Motiva to grow, we are going to have to add that to our portfolio.”

Coffman explained that the Americas are currently not in Saudi Aramco’s chemical portfolio.

“This is where Motiva, and possibly Port Arthur, can address a market need,” he said.

Coffman compared a potential chemical expansion project at the Port Arthur refinery to the crude expansion of 2007, which doubled the refinery’s capacity and made it the nation’s largest refinery.

“It expanded our capability and flexibility and enabled us to be far more competitive in the global market,” he said. “All total, the project cost was more than $10 billion and more than $3 billion of that was sourced locally and resulted in more than 300 permanent jobs at our refinery. … Together, we did it and working together we hope to do it again. … If Motiva invests further in the Port Arthur Refinery, we believe it also presents tremendous growth potential for everyone in this area. “

After Coffman’s keynote speech, Port Arthur Chamber Executive Committee Chairperson Jeff Hayes presented the Motiva CEO with a photograph of roseate spoonbills as a gift.

 

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