Thursday 13 August 2009

Oil refiners opt for long-term strategy

Oil refining is tough at the best of times. Operators contend with narrow profit margins, volatile markets and the tightening noose of emissions controls. With world energy demand low, many western refineries face the threat of closure.

“The refining industry is now in dire straits,” says Aileen Jamieson of Wood Mackenzie, the Edinburgh-based energy research group. “Margins are weak and are forecast to stay weak for the foreseeable future. I think we will certainly see closures in the US and Europe.”

Yet the Middle East tells a contrasting story. The past month has seen a flurry of activity, with tenders issued and contracts awarded on a range of refinery schemes. More than $60bn of new refineries or expansions are planned in the Gulf states alone.

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