Where does the oil refining industry can go? 10

[0707]

In Europe, refining margins are very small and in some cases negative. In principle this situation should-be attributed to:

An overproduction of oil products,

A slowdown in the economy with low market demand,

Technological advances in the automotive industry,

Appearance of electric motors,

Greater environmental awareness.

Unfair environmental requirements competition between EEC, USA, Eastern countries, Africa, Asian and Australia.

In this context where does the oil refining industry can go?

Luis

 

[prc]

In India,we have to import most of the crude. But we have some refineries of latest vintage(largest one with 650 kilobarrels/day output-66MT/annum)which can use the worst crude that no one else likes to refine and export the entire output for use in US or Europe as they cannot sell locally to match the government subsidised petrol price.

 

[moltenmetal]

David, what you're saying is that we agree- small scale GTL will make sense WHEN the regions stop talking about fines for flared gas and actually either heavily fine or outright BAN it. Then you're competing small scale GTL "destruction" of the gas against compression/reinjection (which the reservoir folks apparently don't like much) and pipelines. Tough to compete with a fire, though- it takes care of the negative value for very little capital or operating cost!

Until the heavy negative cost or ban is in place, there's insufficient driving force to pay back the capital and operating of something which is still fairly complex even at the small scale.

We deal with "waste conversion" projects all the time. As soon as your waste becomes someone else's feedstock, the economics change- again- with the negative value either going away entirely or being reduced quite a bit. If you're making money off my waste, generally I notice and want a slice. The oil producers wouldn't suffer from this if they ran the small scale GTL units themselves.

 

[moltenmetal]

PS: the Banholzer paper is the best one I've read in YEARS- glad you found it worthwhile David!