Murphy Oil Corp. may be getting out the profit-sinking oil refining business, yet the El Dorado oil giant is apparently looking to expand its reach into renewable fuels, according to a weekend story by the Amarillo Globe-News.
Murphy Oil officials have recently inquired about possible purchasing a bankrupt $200 million ethanol plant near Heresford, Texas, formerly owned by Panda Energy International, according to the West Texas newspaper.
The plant, designed to produce 100 million gallons of ethanol a year, was slated to use manure from the many feedlots in the area to power much of the plant by turning it into a gas to burn to heat boilers. It was nearing completion when disputes started to arise with Panda’s general contractor. Then Panda subsidiaries, including Hereford Biofuels, filed for bankruptcy on Jan. 23, 2009.
On April 24, 2009, the U.S. Bankruptcy Court for the Northern District of Texas-Dallas Division approved a sale of the plant for $25 million in credit, about 12 percent of the plant’s construction and outfitting cost, to a group of Panda’s lenders.
Murphy discussed the idea of a property tax reduction with the Deaf Smith County Commissioner’s Court last Monday, the Globe-News reported.
"They haven’t specifically asked for anything, but they were talking about a tax abatement," County Judge Tom Simons told the newspaper. "They said they’d be back in touch. I expect a proposal or request at that time."
The newspaper added that any deal talks were in the early stages. "We’re not commenting on that," Murphy spokeswoman Mindy West told the Globe-News. "We have not concluded any sales agreement."
Murphy recently said it planned to sell its refineries in Meraux, La.; Superior Wis.; and Milford Haven, Wales by the end of next year’s first quarter. The company said it will use proceeds from the sale to repay debt and buttress the growth of its more profitable exploration business.
The company also said it plans to sell its 457 gas stations in Britain. That does not include the more than 1,000 gas stations Murphy operates in the U.S., many located at Wal-Mart stores.
Murphy’s first shift into the ethanol business began in October of last year when the Arkansas oil firm announced it would buy a corn-based ethanol plant in North Dakota for $92 million. Murphy Oil CEO David Wood recently said that although the company was selling its low margin refinery business, there were not plans to sell those ethanol assets.
To read more of the story on Murphy’s possible ethanol gambit, click here.