European refiners seek sacrificial cuts in fight for survival

giovedì 25 settembre 2014 17:49
 

* 10 more plants must close by 2020 if rates are to increase

* Rising imports outpacing costly attempts to upgrade

* Mediterranean plants seen vulnerable to Middle East ramp-up

By Claire Milhench

LONDON, Sept 25 (Reuters) - European refiners, in a desperate battle for survival, are investing in costly upgrades or trying to close plants that bleed the most money, but industry experts say their efforts fall short of what is needed to make the industry profitable.

Some 1.8 million barrels per day (bpd) of capacity has shut since 2008, with the loss of Coryton in Britain, Harburg in Germany and Berre l'Etang in France, to name a few, but the industry is still struggling to make decent returns.

"2015 will be a very difficult year for global refining, especially in Europe," said David Wech, managing director at JBC Energy, speaking at the 2014 Platts European Refining Summit in Brussels on Tuesday.

Patrick Pouyanne, president of the refining and chemicals division at Total, said Europe needs to cut refining capacity by at least another 10 percent by 2020 to restore a utilisation rate of 85 percent, the level at which the market is seen as balanced.

"At least 10 refineries have to be shut down by the end of 2020," or cuts of 1.5 million to 2 million bpd, he said at the summit. "It's difficult, but this is the reality of the market in Europe."   Continua...