LONDON and HOUSTON, Texas, Oct. 20, 2003 (PRIMEZONE) -- EyeforEnergy: U.S. petroleum refiners are facing a host of pressures and opportunities that experts predict will fundamentally transform the industry yet again before the end of the decade.
Pending challenges include new and anticipated environmental regulations, changes in the quality and availability of crude supplies, expected competition from alternative fuels, and logistical complications in responding to regulations that will vary state by state and change year by year. Experts predict that only the most agile, strategically driven companies will prosper.
"The phase-in of legislation requiring reductions in sulfur content alone is expected to prompt fundamental shifts in the industry and its margins," says Richard Brook, Partner at EyeforEnergy. "Couple the legislative changes with shifts in where oil production is concentrated, the types of oil available to be refined, and the markets where consumption is growing the fastest and it's easy to see that the industry is on the verge of another major period of evolution."
Meeting the challenges is expected to force some marginal players out of the business, further consolidating U.S. refining capacity in the hands of a few. According to RAND Corporation, just 58 companies currently operate 149 refineries in the United States, down from 189 firms just 22 years ago. The plants operate at 92% of capacity, up from 78% in 1985.
The U.S. Energy Information Administration estimates that between 50,000 b/d and 70,000 b/d of U.S. refinery capacity will be lost each year through 2007 as refiners choose to shut down rather than upgrade older plants.
But Fitch Ratings has predicted the upheaval spells opportunity for those agile and strategic enough to navigate through the complications. The combination of tighter supplies and ever-increasing demand should spell higher margins for those refiners that remain in the business. As companies jockey for position in the changing market, the nation's remaining refining capacity is expected to consolidate in even fewer hands as companies increasingly specialize in search of the greatest returns.
Plotting a wise course through the complications of this rapidly changing market will require careful planning. Refiners, marketers, retailers, distributors and suppliers to the industry will gain the insight needed to profit from the emerging shakeup at the North American Petroleum Refining Outlook 2004 conference March 1-2 in Houston.
Topics on the agenda include:
- Strategies for profiting from projected demand trends. - Strategies for maintaining a strong balance sheet in a period of high capital investment. - Logistical strategies for profiting from a patchwork of phased-in environmental requirements that vary state by state and change year by year. - New and emerging market opportunities to stabilize profitability. - Strategies for profiting from the growing price differentials between light and heavy crudes from various world geographies. - The impact of continued mergers, acquisitions and divestitures and expectations for increased specialization within the industry.
The conference is organized by EyeforEnergy, a division of London-based First Conferences, a world leader in informative conferences on the cutting edge of emerging issues.
To reserve your spot for this important event, visit www.eyeforenergy.com/uspetroleum/index.shtml.
This information is provided by RNS
The company news service from the London Stock Exchange