Chevron Considers Divesting Singapore Refinery Stake During Global Restructuring Drive

U.S. oil major Chevron, which is in the process of simplifying its global business and becoming financially more resilient, is said to set to sell its 50 per cent interest in a joint venture in Singapore, the Singapore Refining Company (SRC) with Chinese state-owned oil PetroChina. This move will be undertaken, as Chevron intensifies its larger strategy to reorganize its assets worldwide and rationalize operational expenses in major markets, such as the Asia-Pacific region.

The company has already retained investment bank Morgan Stanley to support the sale of Chevron and is seeking non-binding expressions of interest in the company by potential purchasers who will likely table them as soon as July. The decision is part of a multi-phase plan to divest or to shrink non-core and lower returning businesses and capitalize on high-growth and high-margin resources.

SRC refinery, built on Jurong Island in Singapore, has a large processing capability of crude oil in terms of 290,000 barrels daily. It forms a very important part of the supply chain of Chevron regionally given that it supplies the domestic and international fuel distribution system. Yet, Chevron does not seem to be focusing on geographic advantages, perhaps due to the preference given to financial flexibility and asset efficiency.

Commodities traders which have been approached, according to the sources, include world commodity trading giant Glencore which is a company which is a part of the group. Nevertheless, any possible deal would have to work around PetroChina right of first refusal (a contractual provision that gives PetroChina the right to buy the possess of Chevron before any third-party can conclude the transaction).

Growing Focus on Core Business

The action of Chevron is in line with the businesses steady policy of high-grading, or directing money away too mature or tricky resources towards Chevron core operation upstream and downstream processes. This wider realignment is also leading the company to seek to divest fuel storage and terminal infrastructures in the Philippines and in Australia.

In January, 2025, Chevron had announced a massive restructuring of its operations in a bid to simplify the corporation. This new model is set to integrate its Oil, Products & Gas unit into two simplified sectors:

• Upstream Operations
• Downstream, Midstream & Chemicals

The restructured business is headed by Mark Nelson who is the vice chairman and executive vice president currently.

It also indicated a new plan of reducing its world staff by 15-20 per cent in the next five years (through 2026), much to the concern of over 800 employees in the Permian Basin alone. The cuts are likely to result in huge savings and rise in shareholder returns amidst the instability of oil prices and increasing pressure on the companies to maximize as required by the investors.

Regional Oil Market Context

The possible move out of Chevron in Singapore markets of refining is a move that has come at the moment when oil prices are recording weak advances on a global scale:

Crude Type	Price (USD)	Daily Change
WTI Crude	$76.28	+1.52%
Brent Crude	$77.59	+1.16%
Murban Crude	$77.36	+0.69%
Natural Gas	$3.995	+0.15%

It is interesting that Chevron has decided not to be based in Singapore because it is such an important trading and refining hub in the Asian region with regard to oil. Although the region continues to be critical in terms of refining and distribution, competition is peaking, regulations on the environment are increasingly stringent, and policies on energy are changing and redefining investment priorities in the sector.

This sale, industry analysts said, should it occur, would enable Chevron to use the freed capital in its shale and deepwater oil ventures, or invest more in low-carbon technology and renewable energy.

PetroChina’s Position

The involvement of PetroChina adds a layer of complexity. PetroChina also has pre-emptive rights since the company is a 50 percent partner with SRC in the refinery: this may prompt the former to quickly take over full control of the refinery. This would strengthen its presence in Southeast Asia where it would have a larger say in its refining operations and local buying chains.

Though it has not made any public statement on whether it will exercise its right, experts have indicated that the move would be strategically beneficial to PetroChina, especially with China experiencing higher demand for refined products and its desire to obtain energy infrastructure abroad.