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Outlook for the European Refining Industry
The 1stICIS Refining & Petrochemical Interface Conference
Thursday 6thDecember 2012
London
Paolo Scafetta, Energy and Refining ICIS Consultant
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Agenda
Oil Demand
Refinery Industry Restructuring
Outlook European Refinery
Petrochemical Demand
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We guide executives of multinational and domestic enterprises through their
buying, selling, negotiating and planning decisions
All data in this presentation come from the suite of tools and databases owned and
managed by ICIS Consulting
About us
1950s through 2011 2012
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Agenda
Oil Demand
Refinery Industry Restructuring
Outlook European Refinery
Petrochemical Demand
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European Oil DemandKey Factors
Major factors (three E)
Economy (weak economy lower demand)
Efficiency (higher engine efficiency lower demand)
Environmental policies (renewableslower demand)
Structurally, oil demand is decreasing, with the exception of middle distillates
Imbalance between supply and demand
Deficit for all oil products except for gasoline
Imports of gas oil (~13% of total gas oil demand)
Exports of gasoline (~40% of total gasoline demand)
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European Oil Demand (1995-2011)
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Gasoline vs Road Diesel Consumption(Million Tons)
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New Registration Passenger Cars EU15+EFTA
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USA
LAM
13.8
6.7
AF
2.7
2010 Surplus Deficit
2011 Surplus Deficit
(11.4)
(20.0)
(12.8)
(0.3)
Europe
(13.8)
(8.1)
(15.7)
(4.4)
(9.2)
(14.7)
Gasoline, 2010-2011European Key Trade Flows (Million tons)
ME
5.8
16.744.1
12.0
1.9
5.6
16.2
Rest of
NAM
6.3
20102011
49.7
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ME
F.USSR
4.8
13.5
INDIA
8.8
AF
7.2
1.3
NAM
10.2
19.9
(34.5)
37.4
6.7
(36.9
)
9.1(3
.
(16.9)
(21.4)
4.0
20.8
9.8
(22.2)
40.2
4.6
17.6
(14.3)
Gas Oil, 2010-2011European Key Trade Flows (Million tons)
2010 Surplus Deficit
2011 Surplus Deficit
27.8
31.5
6.0
(38.9)
7.5
1.1
LAM
2.61.9
6.2
Europe
7.2
20102011
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Agenda
Oil Demand
Refinery Industry Restructuring
Outlook European Refinery
Petrochemical Demand
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2000 2005 2010 2015 2020
Utilization Rate (%) 82 84 77 79 80
* Number of refineries excluding dedicated Lube/Asphalt ones at 1stJanuary
European Refining vs Oil Demand
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UK Status
Grangemouth Ineos (50%), PetroChina (50%)2011
Stanlow Essar2011
Pembroke Valero2011
Teeside Storage2009
Coryton Shut down2012
Germany Status
Heide Kletch & Co2010
Gelsen.bue Rosneft (50%)2010
Harburg Shut down2012
Wilhelmshaven Storage [Hestya Energy2011]
Ingolstadt Gunvor2012
Karlsruhe Rosneft (12%)2011
Schwedt Rosneft (18.75%)2011
VOG/NE Rosneft (12.5%)2011
France Status
Fos Lavera Ineos (50%), PetroChina (50%)2011
Mardik Shut down2009
Reichstett Storage2011
Berre Idle for sale2012
Pt. Couronne For sale [Shell 2012 temporary deal]
Netherlands Status
Vlissingen Lukoil (45%)2009Belgium Status
Antwerp Gunvor2012
Switzerland Status
Cressier Vitol (50%), AtlasInvest (50%)2012
Italy Status
Cremona Storage2011
Roma Shut down2012
Priolo Lukoil (80%)2012
Trecate Total (12.67%)2010
Restructuring Europe Refining Industry (2009-2012)
FYU Status
Bosanski (Bosnia) Zarubezhne2009
Novi Sad (Serbia) Gazprom2009
Pancevo (Serbia) Gazprom2009
Romania Status
Pitesti Idle2011
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Agenda
Oil Demand
Refinery Industry Restructuring
Outlook European Refinery
Petrochemical Demand
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Competitiveness
Regional industry weakness
Domestic oil market declining
Gasoline exports opportunity to the US may disappear
Aggressive build of new refineries in developing countries
Perspectives of European Refining Industry _follow
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Competitiveness - Global Refining CapacityGrowth Outlook
Bubble size: 2011 Refinery Capacity
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Competitiveness - Incremental Refining Capacity2011-2020
Incremental
Decrement
World Refining Capacity
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Refining Capacity Evolution in Key CountriesCompetitiveness - Nelson Complexity Index
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Perspectives of European Refining Industry _continued
European policy
Different taxation between gasoline and road diesel
Green fuels
Refinery industry restructuring continues
Closures of less profitable refineries
Investments to adjust products slate
New players: E&P companies and traders
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Legend: Crude= Topping; REF= Reformer SR/CC; FCC = Fluid catalytic cracking
VISB= Visbreaker + Thermal Cracking; ALK = Alkylation+Polymerization
ISO= Isomerization Light Naphtha;
COUNTRY COMPANY SITE Year CRUDE REF FCC VIS ALK ISO
FRANCE PETROPLUS PETIT COUR 2013 141 28 22 12
FRANCE LYON.BASELL BERRE 2012 126 19 19
GERMANY SHELL DEUT HARBURG 2012 104 20 17 14 4
ITALY RAFF. ROMA ROMA 2012 86 15 31 8
ITALY API FALCONARA 2013 78 14 56 7
ITALY ENI P.MARGHERA 2014 108 15 37 6
UK THAMES OIL CORYTON 2012 172 38 68 22 20
Total (mbd) 815 149 126 150 22 45
Selected European Refinery Closures (2012-2014)(thousand barrel per day)
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Selected New European Units (2012-2020)(thousand barrel per day)
Legend: Crude= Topping; Hydro D-M = Hydro-cracking distillate+mild;
Hydro R= Hydro-cracking residue COK= Coking;
VISB= Visbreaker+Thermal Cracking; REF BTX = Reformer to BTX
COUNTRY COMPANY SITE Year CRUDEHYDRO
D-M
HYDRO
RCOK VISB
REF
BTX
BULGARIA LUK-NEFTOC BURGAS 2015 84
GREECE HELL.PETR. ELEUSIS 2012 40 21
HUNGARY MOL SZASZHALOM 2015 28
ITALY ENI SANNAZZARO 2012 23
PORTUGAL PETROGAL SINES 2012 43
ROMANIA ROMPETR. RE. MIDIA 2012 32
ROMANIA PETROBRAZI PLOIESTI 2014 12
SERBIA NIS PANCEVO 2012 30
TURKEY SOC/TUR EN ALIAGA 2017 214 66 40 28
TURKEY TURKISH PE IZMIT 2015 50 52
Total (mbd) 214 289 107 113 12 28
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Outlook European Conversion Units
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EU 15 Excise Duties on Road Fuels
Source: European Commission 2012
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Agenda
Oil Demand
Refinery Industry Restructuring
Outlook European Refinery
Petrochemical Demand
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European Petrochemical Demand
Ethylene demand slowly increases
Major contribution to production from naphtha and LPG
Propylene demand slowly increases
Perspective propylene from refineries stable
Aromatics demand slowly increases
Availability of reformate is not constrained
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2000 2005 2010 2015 2020
Feed Slate: Tot Gas (Mt) 3.8 4.4 5.2 5.1 5.5
Tot Liquids (Mt) 17.8 19.6 17.5 17.8 18.7
European Ethylene Production by Feedstocks
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2000 2005 2010 2015 2020
Feed from Refinery (%) 25 27 28 27 26
European Propylene Production by Feedstocks
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European Aromatics Production from Reformate
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Decline
Unbalanced S/D
EuropeanOil Demand
WeaknessRestructuring
EuropeanRefinery
Slow growth
Restructuring
Petrochemical
Demand
CONCLUSION
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THANK YOU.
ANY QUESTION?