Global Top Five High Growth Oil Refining Markets
10/30/2009

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Online PR News – 30-October-2009 – – Global Top Five High Growth Oil Refining Markets: Analysis of Capacity, Demand, Supply, Margin and Competitive Scenario

This report offers comprehensive information on the refining market in five countries. Brazil, China, India, Iran and Saudi Arabia, the major refining markets which are expected to witness highest percentage growth in their refining capacities during the period 2009 to 2013 are included in this report. The report is an in-depth source of information on all active and planned refineries, petroleum product demand-supply scenario, refining margins, key trends and issues along with market share analysis of major refining companies in these countries. ( http://www.bharatbook.com/Market-Research-Reports/Global-Top-Five-High-Growth-Oil-Refining-Markets-Analysis-of-Capacity-Demand-Supply-Margin-and-Competitive-Scenario.html )

According to the report, the cumulative refining capacity of these countries accounted for 18.3% of global refining capacity in 2008 but refining capacity expansions in these countries is expected to contribute around 44% to global refining capacity additions during 2009-13.

While new refineries in China will cater mainly to its domestic demand, the Middle-East and India plan to transform themselves into major refining and petroleum product exporting hubs. Brazil is expanding its refining capacity mainly to process its domestic heavy crude oil whose production is rapidly increasing.

Economic Slowdown Has Decreased Global Refinery Utilization

Global refinery throughput and utilization dipped from the third quarter of 2008 and has not recovered till the third quarter of 2009. Decreased petroleum product demand in the major consuming markets, especially the US, has affected refinery throughputs globally. Global refinery utilization averaged 85% in 2008, a decrease of 1% over the previous year. Increase in petroleum product demand has not been able to increase the refinery utilization rate. The major reason is commissioning of new refineries in countries like India, China, Vietnam, Algeria and Qatar. Refining overcapacity will keep refinery utilization at a lower level and in 2009 the refinery utilization is expected to decrease further. The refinery utilization in top five high growth refinery markets is also expected to decline in 2009 but with lesser effects.

National Oil Companies Will Drive Refining Capacity Additions Till 2013
Decreased petroleum product demand, dwindling refinery margins and high comparatively high construction cost have hampered refinery projects globally. Most companies have either cancelled projects or have delayed their projects for better industry scenario. However, national oil companies are going ahead with their refinery projects with long term strategic objectives. National oil companies in the Middle East are investing in refineries, to be able to process domestic heavy crude and reduce the import of light and middle distillates. As it is very difficult to construct new refineries in North America and Europe, the Middle East can become a major petroleum product supplier to these countries rather than crude oil supplier. The national oil companies in Brazil and Venezuela are also investing in their refineries to process more of domestic heavy crude oils. National Oil companies in India and China are targeting long term energy security and also investing to tap export markets.

Refineries of Top Five High Growth Refining Markets Are High In Capacity but Low in Complexity
The top five high growth refinery markets accounts for total 18.3% of global refining capacity. The average size of refineries in these countries at 8.08 Million Metric Tonnes per Annum (MMTPA) is above global average of 6.7 MMTPA. However, the complexity is lower than the global average. In 2008, the average complexity of the refineries in these countries was 4.6 while the global average was 5.7.

Fluctuating Crude Oil Price and Refinery Margins Have Created an Uncertainty in the Market
The oil and gas market is very dynamic and the oil prices and refinery margins have never been stable but the fluctuations in prices and margins seen in the last couple of years have been unprecedented. The WTI crude price was close to $145/barrel in July 2008 which dropped to $30.3/barrel on 23 December, 2009 - a major decline of $114.7/barrel in less than six months. Similar pattern were shown by refinery margins across different markets. Economic slowdown in the financial sector has also made it difficult to get finance for capital intensive refinery projects. Though the margins and prices are little stable now, companies are still planning cautiously and going with the policy of ‘wait and watch’ until the market stabilizes.

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