Panorama 2007: Refining and Petrochemicals

The year 2005 saw a new improvement in refining margins that continued during the first three quarters of 2006. The restoration of margins in the last three years has allowed the refining sector to regain its profitability. In this context, the oil companies reported earnings for fiscal year 2005 that were up significantly compared to 2004, and the figures for the first half-year 2006 confirm this trend. Despite this favorable business environment, investments only saw a minimal increase in 2005 and the improvement expected for 2006 should remain fairly limited. Looking to 2010-2015, it would appear that the planned investment projects with the highest probability of reaching completion will be barely adequate to cover the increase in demand. Refining sector should continue to find itself under pressure. As for petrochemicals, despite a steady up-trend in the naphtha price, the restoration of margins consolidated a comeback that started in 2005. All in all, capital expenditure remained fairly low in both the refining and petrochemicals sectors, but many projects are planned for the next ten years. (author)