Post on 07-Apr-2020
transcript
International S/D Dynamics & its Impact on European Refining
CEE & TURKEY REFINING & PETROCHEMICAL SUMMIT
13 October 2015
Alexander Pögl
Special Presentation
Disclaimer
All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements (including those depicted in graphical form)are statements of future expectations that are based on JBC Energy’s current expectations andassumptions and involve known and unknown risks and uncertainties that could cause actualresults, performance or events to differ materially from those expressed or implied in thesestatements. Forward-looking statements include, among other things statements expressingJBC Energy’s expectations, beliefs, estimates, forecasts, projections and assumptions. Theseforward-looking statements are identified by their use of terms and phrases such as‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’,‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, “forecast”, “predict”, “think”, ‘‘seek’’, ‘‘target’’, ‘‘risks’’,‘‘goals’’, ‘‘should’’ and similar terms and phrases. All forward-looking statements contained inthis speech/presentation are expressly qualified in their entirety by the cautionary statementscontained or referred to in this section. Readers/audience should not place undue reliance onforward-looking statements. Each forward-looking statement speaks only as of the date of thispresentation. Neither JBC Energy nor any of its subsidiaries undertake any obligation topublicly update or revise any forward-looking statement as a result of new information, futureevents or other information. In light of these risks, results could differ materially from thosestated, implied or inferred from the forward-looking statements contained in thisspeech/presentation. Any persons acting on information contained in this presentation does sosolely at their own risk. JBC Energy is not responsible for the accuracy of data collected fromexternal sources and will not be held liable for any errors or omissions in facts or analysiscontained in this presentation. JBC’s third party sources provide data to JBC on an “as-is” basisand accept no responsibility and disclaim any liability relating to reliance on or use of theirdata by any party.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 2
StudiesClient Initiated ● Expert Led ● Fundamental Driven
● Commercially Focused ● Powered by SuDeP & JBC’s Extensive Databases
Training ServicesOil Market Fundamentals ● Pricing & Risk
Management ● Oil Trading ● Public Courses & Single Client Options
www.jbcenergy.com/studies
www.jbcasia.com/consulting
www.jbcasia.com/training
Energy ConsultingAudits ● Benchmarking ● Documentation ●
Optimization Pricing ● Processes ● Risk Management ● Strategy
Analytics19 Market Publications ● Oil, Natural Gas & Alternatives ● Global Focus ● Daily, Weekly,
Monthly, Quarterly & Bi-Annually
www.jbcenergy.com/analytics
ModellingIn-House Supply, Demand, Pricing (SuDeP) Model ●Data by Country, by Region, by Sector ● Bottom Up Approach ● Standardised or Customised Modules
www.jbcenergy.com/modelling
Products & Services
Tuesday, 13 October 2015 www.jbcenergy.com Slide 3
Agenda
• European Refining
• Supply, Demand & Balances
• Key Challenges
– Supply
– Demand
– Competition
– Refining
Tuesday, 13 October 2015 www.jbcenergy.com Slide 4
European Refining
We meet at a time where refiners in Europe look a bit more relieved than just a year or two ago
Tuesday, 13 October 2015 www.jbcenergy.com Slide 5
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
NW Europe - Brent Cracking
NW Europe - Brent Cracking
Cracking Margins [$/bbl]
Source: Platts, JBC Energy
European Refining
The Mediterranean part of Europe has benefitted the most from the improved demand and margin environment
Tuesday, 13 October 2015 www.jbcenergy.com Slide 6
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
NW Europe Med Europe
Crude Runs: y-o-y Change by Region [%]
In spite of strong product flows from the Middle East, Med refiners saw the relatively stronges y-o-y increases in crude runs
Source: IEA, JODI
Global Oil Supply
According to our latest balances the world will see a continued oversupply of about 1 million b/d for the next three quarters before the market will start to tighten in H2 2016.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 7
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Q1 12 Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16
JBC Energy Previous Month
JBC Energy Current
IEA Current
OPEC Current
EIA Current
Implied Stock Change [million b/d]
Source: IEA, OPEC, EIA, JBC Energy
JBC Energy OPEC production estimates are used for IEA and OPEC
figures as of Q3 2015.
Global Oil Supply
The surplus is also evident in observed stockbuilds (which increasingly switch to the refining product side). Ytd observed oil stockbuilds (crude + products) have amounted to some 1.7 million b/d.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 8
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15 Q3 15
Crude Gasoline Middle Distillates
Fuel Oil Other Total Crude and Products
World - Quarterly Observed Stock Change by Stream [million b/d]
Q3 15 stockbuild (preliminary July and August
data): +1.16 million b/dSource: IEA, EIA, JODI, Official customs data, Euroilstock, PAJ, KNOC, JBC Energy calculations
Global Oil Supply
While our spare capacity model implies that there is still around 300 million bbls of unused capacity, storage room is getting increasingly tight and the need for floating storage cannot be excluded (which would need deep front-end discounts).
Tuesday, 13 October 2015 www.jbcenergy.com Slide 9
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15
Spare Capacity* Actual Stocks Level Spare Capacity*, %
World - Crude + Fuel Oil, Spare Storage Capacity* [million barrels]
* Maximum storage capacity is defined as a sum of maximum inventory levels per
country in January 2010-present
Source: IEA, EIA, JODI, Official customs data, Euroilstock, PAJ, KNOC, JBC Energy calculations
Global Oil Supply
Irrespective of balances, the supply momentum is on the verge of a substantial change in non-OPEC markets. Besides the anticipated US output decline, we expect some baseline-effects due to the high output this year.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 10
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
US Europe FSU East
Asia Africa Middle East
North America excl. US Central & South America Total non-OPEC excl. US
Non-OPEC Crude Output Change Y-o-y by Region ['000 b/d]
Global Oil Supply
A currently projected stagnation of total liquid supplies in 2016 is not good enough to tighten the market (it is just reducing the oversupply to some 0.5 million b/d on an annual average).
Tuesday, 13 October 2015 www.jbcenergy.com Slide 11
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16
Non-OPEC NGLs, other & global processing gains
OPEC NGLs & other liquids
Non-OPEC Crude
OPEC Crude
Total liquids supply change annual average
Total Liquids Supply Y-o-y Changes [million b/d]
Key Challenges - Supply
Heavy oil producers have added massive volumes to global crude markets since 2014
Tuesday, 13 October 2015 www.jbcenergy.com Slide 12
-2,000
-1,000
0
1,000
2,000
3,000
4,000
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
Venezuela Iran
Iraq Canada
Colombia Brazil
Rest of the World
Crude Supply Growth (y-o-y) ['000 b/d]
Since 2014, supply additions of key heavy oil producers have risen strongly
Source: Various, JBC Energy
Key Challenges - Supply
Volatility in crude markets creates opportunity, with the flexibility to process a wide range of crudes adding meaningfully to refining margins
Tuesday, 13 October 2015 www.jbcenergy.com Slide 13
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
5% Maya
5% of Most Attractive Crude
The Benefit of Being Flexible [$/bbl]
Instead of simply adding 5% Maya to our NWE crude basket, we added the most attractive crude out of the following group:
Boscan, Maya and Merey
Source: Platts, JBC Energy
Total margin benefit over the period Jan-14 through Sept-15: $0.35 per barrel
Oil Demand
After a year of strong demand growth (especially for gasoline), we see the pace of demand growth coming down, while gasoline and middle distillates should grow in a more balanced fashion
Tuesday, 13 October 2015 www.jbcenergy.com Slide 14
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15 Jun-15
LPG Naphtha Gasoline Jet/KeroGas Oil/Diesel Fuel Oil Other products Total
World - Oil Demand Growth (3-Month Moving Average) ['000 b/d]World - Oil Demand Growth (3-Month Moving Average) ['000 b/d]
Source: IEA, JODI, National Statistics, JBC Energy calculations , SuDeP
Based on observed monthly statistics, as available. Missing data estimated, extrapolated, or substituted with SuDeP.
All data from September 2015 onwards is estimated.
Oil Demand
We see only about 40% of world oil demand susceptible to price changes – with most of gas oil/diesel not falling into this group. The spike at the beginning of the year was largely driven by one-off factors.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 15
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16
EUROPE NORTH AMERICA C&S AmericaOECD ASIA China IndiaOther Non-OECD Asia MIDDLE EAST AFRICA
Gas Oil-Diesel - Oil Demand Growth ['000 b/d]
Source: IEA, JODI, National Statistics, JBC Energy calculations
Based on observed monthly statistics, as available. Missing data estimated, extrapolated, or substituted
with SuDeP. June figures are based on available preliminary information and JBC Energy estimates.
Oil Demand
The bulk of this growth comes from Turkey (and Poland) and a highly dieselised transportation sector there, with the baseline effect kicking in and concerns over the general economic development we expect some months of flat growth to only pick up in H2 2016 again.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 16
-350
-250
-150
-50
50
150
250
350
Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15
LPG Naphtha Gasoline Jet/KeroGas Oil/Diesel Fuel Oil Other products Total
Selected Central European Countries - Oil Demand Growth ['000 b/d]
Source: IEA, JODI, JBC Energy calculations
Includes Austria, Czech Republic, Hungary, Poland, Slovakia,
Slovenia, Turkey and Ukraine.
Oil Demand
In fact, outside Europe gas oil/diesel demand growth was non-existent over the last half year.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 17
-1,000
-500
0
500
1,000
1,500
Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16
Europe Rest of the World
Gas Oil-Diesel - Demand Growth (3-Month Moving Average) ['000 b/d]
Source: IEA, JODI, National Statistics, JBC Energy calculations, SuDeP
Based on observed monthly statistics, as available. Missing data estimated, extrapolated, or substituted
with SuDeP. All data from September 2015 onwards is estimated.
Forecast
Key Challenges - Demand
We think that gasoline demand growth will come down sizably in the coming months as a period of 12 strong months is already behind us (baseline effects) and specifically the US gasoline growth boom comes to an end.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 18
-1,000
-500
0
500
1,000
1,500
2,000
Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16
EUROPE NORTH AMERICA C&S America
OECD ASIA China India
Other Non-OECD Asia MIDDLE EAST AFRICA
Gasoline - Oil Demand Growth ['000 b/d]
Source: IEA, JODI, National Statistics, JBC Energy calculations
Based on observed monthly statistics, as available. Missing data estimated, extrapolated, or substituted
with SuDeP. June figures are based on available preliminary information and JBC Energy estimates.
Key Challenges - Demand
Longer-term outlook for gasoline has improved, with the recent VW related diesel scandal clearly having the potential to cause further demand shifts to gasoline
Tuesday, 13 October 2015 www.jbcenergy.com Slide 19
0
5,000
10,000
15,000
20,000
25,000
30,000
WORLD NORTH AMERICA
OtherRef FuelBunkerIndustryPetchemPowerAgricultureRes/CommTransport
Mogas - Demand by Sector ['000 b/d]
0
5,0 00
10, 000
15, 000
20, 000
25, 000
30, 000
WORLD NORTH AMERICA
20202015
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
WORLD NORTH AMERICA
Demand Change
Key Challenges - Competition
The fast pace of Russian refining throughput growth seen over the last years has been slowing lately, while the focus is on conversion units
Tuesday, 13 October 2015 www.jbcenergy.com Slide 20
0
2
4
6
8
-0.8
-0.4
0.0
0.4
0.8
Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15
Crude exports
Refinery throughput in Russia
Refinery throughput (outright) - right scale
Y-o-Y Changes of Russian Crude Exports and Refinery Throughput [million b/d]
Source: Russian Ministry of Energy
Key Challenges - Competition
Gasoline-focussed projects are coming onstream around the world with a particular focus in Russia. Conversion and VDU capacity additions have led to a marked shift in Russian product yields this year, a trend we expect to continue next year
Tuesday, 13 October 2015 www.jbcenergy.com Slide 21
-4
-3
-2
-1
0
1
2
3
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15
Jet/Kero Fuel Oil Gas Oil/Diesel Gasoline
Y-o-y Changes in Selected Russian Product Output Shares [percentage points]
Source: Russian Ministry of Energy, SuDeP
2016
Historical figures are 3-month moving averages
Key Challenges - Competition
Pressure on gasoil/diesel to persist, especially if Middle Eastern plants were to maximise their throughput (instead of favouring crude exports)
Tuesday, 13 October 2015 www.jbcenergy.com Slide 22
-400
-200
0
200
400
600
800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Avg 10-14 2012
2013 2014
2015 2016
Middle East - Gasoil/Diesel Balance ['000 b/d]
Source: JBC Energy estimates, IEA, JODI, national statistics
Key Challenges - Competition
Available data suggest that Saudi Arabia has limited crude intake at older refineries; possibly either to keep crude exports stable or because the older refineries are in a relatively poor state (see 2013 runs).
Tuesday, 13 October 2015 www.jbcenergy.com Slide 23
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
YASREF SATORP Other Refineries
Saudi Arabia Crude Runs ['000 b/d]
SATORP and YASREF runs are JBC estimates based on company and news reports
Source: JODI, Aramco Report, JBC Energy
Key Challenges - Competition
An emerging tightness in the Asian market. Strong gasoline demand growth has forced Chinese refiners to shift yields quite strongly and further increases might be more difficult to implement (blending component imports).
Tuesday, 13 October 2015 www.jbcenergy.com Slide 24
20.0%
21.0%
22.0%
23.0%
24.0%
25.0%
26.0%
27.0%
28.0%
29.0%
-300
-200
-100
0
100
200
300
400
500
600
700
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
Gasoline Demand Growth (y-o-y) Gasoil Demand Growth (y-o-y)
Gasoline Yield - rhs
China - Product Demand Fundamentals (3 MAvg) ['000 b/d]
Source: NBS, JBC Energy
Key Challenges - Competition
The combination of refinery revamps, demand developments and seasonality should eat into the import demand of key South American players early next year. As for Brazil, we still have to see whether the reported near-disappearance of imports is more than a short-term blip.
Tuesday, 13 October 2015 www.jbcenergy.com Slide 25
0
100
200
300
400
500
600
700
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16
Brazil
Ecuador
Colombia
Selected CSA Implied Product Imports (Demand - Crude Intake) 3M Avg. ['000 b/d]
Cartagena & Esmeraldas revamp
Source: JODI, IEA, ANP, JBC Energy calculations
Brazil demand excludes hydrous ethanol
Key Challenges – Refining
2014 and 2015 have seen low capacity additions and have clearly tightened refined product markets; the outlook is roughly balanced between capacity and demand, speaking in favour of solid margins in the years ahead
Tuesday, 13 October 2015 www.jbcenergy.com Slide 26
-500
0
500
1,000
1,500
2,000
2014 2015 2016 2017 2018 2019 2020
Chart Title
Europe FSU Asia
Middle East Africa North America
C&S America Total Demand Growth
Annual CDU Capacity Increase ['000 b/d]
Key Challenges – Refining
Lower demand growth over 2013/2014 has seen many Asian refining projects getting cancelled or postponed. Vertically integrated players in C&S America have also scaled back refining projects
Tuesday, 13 October 2015 www.jbcenergy.com Slide 27
-800
-600
-400
-200
0
200
400
2014 2015 2016 2017 2018 2019 2020
Chart Title
EUROPE FSU EAST ASIA
MIDDLE EAST AFRICA NORTH AMERICA
CENTRAL & SOUTH AMERICA
Annual CDU Capacity Increase: Current Estimate vs Nov-14 ['000 b/d]
Key Challenges – Refining
The amount of effectively available spare capacity to meet product shortages in international markets is much smaller than largely perceived – just about 3 million b/d
Tuesday, 13 October 2015 www.jbcenergy.com Slide 28
Key Challenges – Refining
High margins were required to bring the effective utilisation levels in Europe to above 90% and satisfy global demand
Tuesday, 13 October 2015 www.jbcenergy.com Slide 29
75%
80%
85%
90%
95%
100%
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
Refining Margin (NWE)
Refinery Utilisation
Refining Margins and Effective Utilisation [$/bbl; %]
Utilisation was adjusted for maintenance in order to reflect "effective" utilisation levels
Source: IEA, Platts, JBC Energy
Outlook
Good margins should keep runs high in Q4, leading to further product stockbuilds. After crude runs rose by+1.8 million b/d this year, limited capacity additions and the likely impact of stronger turnarounds should keep upticks in crude runs in check next year ( +0.65million b/d)
Tuesday, 13 October 2015 www.jbcenergy.com Slide 30
0
50
100
150
200
250
300
350
400
68,000
70,000
72,000
74,000
76,000
78,000
80,000
82,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Capacity Additions 2016 - rhs 5-Year Avg
2012 2013
2014 2015
2016
Crude Intake: WORLD ['000 b/d]
Source: IEA, JODI, Euroilstock, JBC Energy estimates
Outlook
Maintenance levels more closely matching previous years could pressure European crude runs by up to 400,000 b/d next year
Tuesday, 13 October 2015 www.jbcenergy.com Slide 31
0
500
1,000
1,500
2,000
2,500
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
Estimate Known
Last year 3-Year Average
Total European (NW Europe & Med) Refinery Maintenance & Outages ['000 b/d]
Offline refining capacity figures will be subject to changes as refinery turnaround plans are reported
and additional information becomes available
Source: JBC Energy estimates based on various official and industry sources
Outlook
Crude in take growth should stabilse in the coming years, after a very strong year 2015
-1,000
-500
0
500
1,000
1,500
2,000
2013 2014 2015 2016 2017 2018 2019 2020
FSU Central & South AmericaNorth America AfricaMiddle East OECD AsiaNon-OECD Europe OECD EuropeNon-OECD Asia Total
Y-o-y Change in Refinery Crude Intake by Region ['000 b/d]
Tuesday, 13 October 2015 www.jbcenergy.com Slide 32
Thank you!