Refinery capacity rationalisation inevitable-OPEC
About 7.3 million bpd of crude distillation by 2015.
November 4, 2010 4:11 by Reuters
Oil refining capacity may have to be rationalised between regions as a fall in demand from industrialised countries and new refinery additions in emerging markets have lead to the build up of surplus capacity, OPEC said on Thursday.
“Capacity rationalisation in the refining sector appears inevitable,” OPEC said in its World Oil Outlook.
Oil demand has fallen as a result of the global financial crisis and the subsequent economic downturn and the wave of new refining capacity that has come on-line in the past few years.
“From what many have termed a `golden age’ between 2004 and mid-2008, with demand growth and refining tightness, the industry is now suffering from a severe demand collapse and surplus capacity, especially in OECD regions,” the oil producer group said.
“On top of this, it is estimated that around 7.3 million barrels per day of new crude distillation capacity will likely be added to the global refining system in the period to 2015, and this will be well supported by additional secondary processes.”
The figure is about 8.5 percent of current global oil demand, which is estimated about 86 million bpd.
The Asia-Pacific region and the Middle East has seen the majority of capacity and demand growth, while refineries in Europe, Japan, the United States and Canada face greater risk of permanent closures, OPEC said.
(Reporting by Ikuko Kurahone)