Flying J Files For Chapter 11
LyondellBasell Files Chapter 11
Orange Line Oil Signs Deal With Nippon Oil
ConocoPhillips To Cut 1,350 Employees

FLYING J FILES FOR CHAPTER 11

OGDEN, UT. — At the end of December, Flying J filed for Chapter 11 bankruptcy. Included in the filing are Flying J Inc. and its Big West refining and Longhorn Pipeline subsidiaries.

All of Flying J's operations, including its approximately 250 travel plazas and fuel stops, are open and serving customers. The company stated that it plans to continue normal business operations as it moves through the bankruptcy reorganization process and has no plans to lay off any of its employees.

In an official statement, the company said it chose to file Chapter 11 in order to "address near-term liquidity needs stemming from the decline in oil prices and the disruption in the credit markets."

"We regret that we had no other choice than a Chapter 11 filing to enable us to stabilize our financial base," said Flying J Flying J President and Chief Executive Officer J. Phillip Adams, announcing the bankruptcy filing. "The good news is we have valuable assets, we do not expect layoffs will be necessary, and we are optimistic we will be able to generate substantial cash internally to allow us to meet our obligations going forward. Our objective is to move through this process as quickly as possible." He added, "We appreciate the support and understanding of our vendors and suppliers during this time."

According to local reports, however, Flying J is having difficulties finding crude oil suppliers for its North Salt Lake City refinery following the bankruptcy filing. Big West Oil, the subsidiary that runs the Flying J refineries, shut down the Salt Lake City refinery for scheduled maintenance at the end of the year. However, Flying J has had to delay the restart of the refinery while it is trying to secure supply of crude in order to run the facility.

Flying J spokesman Peter Hill confirmed that Flying J was talking with its crude suppliers in order to be able to restart the refinery in a timely fashion. "Flying J values the relationship it has with suppliers," Hill said in January. "The company hopes the ongoing negotiations will eventually lead to a mutually beneficial resolution in the near future."

Flying J reported sales of over $16 billion in 2007. The company employs over 16,000 people in the U.S. and Canada.

LYONDELLBASELL FILES CHAPTER 11

HOUSTON, TX. — Refiner and chemical company LyondellBasell Industries has filed for Chapter 11 bankruptcy.

Under papers filed on January 6, LyondellBasell declared bankruptcy on its U.S. operations as well as for one of its European holding companies, Basell Germany Holdings GmbH. Included in the filing is the company's Houston refinery which produces gasoline and diesel from high-sulfur crude.

"During the past two quarters, we have seen a dramatic softening in demand for our products and unprecedented volatility in raw materials costs," explained LyondellBasell's CEO Volker Trautz. "December was particularly difficult, as many of our customers postponed orders to reduce their inventories. Though we currently anticipate this situation to be short-term and expect customers to increase their purchasing in 2009, we made the decision to file Chapter 11 in order to provide the company with the time and resources necessary to facilitate an orderly restructuring and position the business for the long term."

He continued, "Over the past several months, we announced plans to significantly reduce headcount and also reduced capital expenditures and working capital. We have also idled certain facilities and reduced production and processing at others. We are aggressively exploring additional ways to lower our costs and streamline operations in response to a very difficult global economic environment."

Trautz added that he anticipates emerging from Chapter 11 with a solid company because "Our core businesses—fuels, chemicals, plastics and technology—are fundamental to the global economy."

ORANGE LINE OIL SIGNS DEAL WITH NIPPON OIL

POMONA, CA. — Orange Line Oil Company has signed to deal to serve as the primary West Coast distributor for Nippon Oil Company's ENEOS brand of synthetic motor oils.

"We have enjoyed a successful partnership with Orange Line Oil for several years," said Nippon Oil U.S.A President Yasuhiro Kawasaki, "and look to its expertise in the oil distribution industry to expand our company's bandwidth to all of the western states."

Orange Line will partner with with associate distributors in California, Oregon and Washington to market the ENEOS product line. "Our goal is to find experienced oil distribution partners that share our core value to always exceed customers' expectations," stated Orange Line Oil Company President Scott Tredinnick, announcing the deal. "Any partner we choose must also understand and respect the ENEOS brand and what it stands for."

Orange Line Oil said they will target auto dealerships, quick lubes, high-performance centers and repair shops for the lubricant product line.

CONOCOPHILLIPS TO CUT 1,350 EMPLOYEES

HOUSTON, TX. — As part of its announcement of its 2009 Capital Program, ConocoPhillips announced that it would cut its work force by approximately 4%. They also noted that they planned "to reduce our contractor headcount."

The company said that the cuts were coming "as a result of the current business environment's impact on our operating and capital plans." They noted that the cuts would not come from selling off any of their assets.

ConocoPhillips announced a 2009 capital budget of $11.7 billion in January.

Originally published in the February 2009 issue of O&A Marketing News.
Copyright 2009 by KAL Publications Inc.