Oecd refiners need to restructure, former iea director says
Oil refiners in developed nations need to “restructure” as demand for diesel accelerates more quickly than consumption of gasoline, according to the former executive director of the International Energy Agency.
Companies face the challenge of building plants that produce more middle distillates, which include diesel, instead of the motor fuel, Nobuo Tanaka, who is now the global associate for energy security and sustainability at the Institute of Energy Economics in Japan, said in Singapore today. There are “huge opportunities for investment” in member states of the Organization for Economic Co-operation, where plants are less efficient than the newer refineries being built in emerging economies such as China, he said.
“It’s a technology challenge for refiners,” he said. “Generally there is overcapacity in the OECD.”
Europe’s shift from gasoline to diesel consumption will be “very challenging” for refiners, according to Isabelle Muller, the secretary-general of the European Petroleum Industry Association, whose members include Royal Dutch Shell Plc, Total SA and BP Plc.
Gasoline accounted for about 22 percent of Europe’s oil- products demand in 2007, according to Muller. That will fall to 8.5 percent in the future, she said at a conference in Singapore. Diesel demand will account for 48 percent compared with 40 percent in 2007, she said.
OPEC
Separately, the Organization of Petroleum Exporting Countries is likely to maintain crude output with prices at current levels, Tanaka said. OPEC is due to meet in Vienna on Dec. 14.
“How OPEC is going to view the market, that is the key,” said Tanaka, who left his post at the Paris-based energy adviser at the end of August. “If prices keep here, they are happy at maintaining production. But over $100 a barrel for consumers is too high.”
Brent oil for December settlement dropped 1.6 percent to $107.76 a barrel at 5:27 p.m. Singapore time on the London-based ICE Futures Europe exchange. The European grade, which is a benchmark price for two-thirds of the world’s oil supply, has averaged $111.18 a barrel this year.