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Why oil and gas companies are interested in petrochemicals

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Language: en

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there's a number of reasons why oil
00:00:01.490 00:00:01.500 companies are so interested in
00:00:02.869 00:00:02.879 petrochemicals if we look back
00:00:06.099 00:00:06.109 petrochemicals were a reform really
00:00:08.810 00:00:08.820 strongly financially since 2014-2015 the
00:00:14.629 00:00:14.639 drop in the oil price meant companies
00:00:16.760 00:00:16.770 that had petrochemicals were very very
00:00:18.620 00:00:18.630 profitable so it's an attractive sector
00:00:20.929 00:00:20.939 to be such the first thing it's
00:00:23.179 00:00:23.189 attractive miss second thing really
00:00:25.490 00:00:25.500 comes around the energy transition the
00:00:30.320 00:00:30.330 outlook we have is that petrochemicals
00:00:32.150 00:00:32.160 growth globally will be very strong and
00:00:35.000 00:00:35.010 be much stronger than transport fuels so
00:00:38.119 00:00:38.129 if you have a refinery or you're looking
00:00:40.639 00:00:40.649 at crude oil production petrochemicals
00:00:43.069 00:00:43.079 is a growing part of that demand barrel
00:00:45.350 00:00:45.360 and so companies want to have a position
00:00:47.750 00:00:47.760 in that and capture some of that margin
00:00:51.610 00:00:51.620 lots of lots of companies now are aware
00:00:54.560 00:00:54.570 of the energy transition if you take the
00:00:57.529 00:00:57.539 extreme case of the energy transition
00:00:59.240 00:00:59.250 that means transport fuels will decline
00:01:00.670 00:01:00.680 so if you have the concept of declining
00:01:03.889 00:01:03.899 demand for road fuels then
00:01:05.660 00:01:05.670 petrochemicals is a potential outlet for
00:01:08.590 00:01:08.600 feedstocks
00:01:14.249 00:01:14.259 petrochemicals there are many different
00:01:16.779 00:01:16.789 types it's a sector that covers many
00:01:19.359 00:01:19.369 different areas
00:01:20.080 00:01:20.090 some things are commodities or more like
00:01:22.599 00:01:22.609 commodities some things are very
00:01:23.559 00:01:23.569 specialized if we just focus on the
00:01:25.749 00:01:25.759 commodities the issue is is really one
00:01:28.630 00:01:28.640 of scale so whilst the industry needs
00:01:31.449 00:01:31.459 somewhere like three to four steam
00:01:33.730 00:01:33.740 crackers a year to be built to be built
00:01:35.639 00:01:35.649 the Napster demand petrochemical sector
00:01:38.469 00:01:38.479 is much much smaller than gasser than
00:01:40.419 00:01:40.429 the gasoline sector so if all of a
00:01:42.760 00:01:42.770 sudden refiners choose to invest in
00:01:46.120 00:01:46.130 petrochemicals there's a risk they over
00:01:48.309 00:01:48.319 build if everybody doesn't think at the
00:01:49.870 00:01:49.880 same time there's a risk they actually
00:01:53.039 00:01:53.049 over build and reduce margins the
00:01:55.690 00:01:55.700 petrochemical sector so investments need
00:01:58.330 00:01:58.340 to be considered well-timed
00:02:00.339 00:02:00.349 need to be advantage locations and
00:02:02.919 00:02:02.929 understand how to mark you
00:02:06.300 00:02:06.310 petrochemicals because it's very
00:02:08.199 00:02:08.209 different from selling and marketing
00:02:10.470 00:02:10.480 transporters well there's always that
00:02:12.400 00:02:12.410 there are a huge regional differences if
00:02:16.449 00:02:16.459 we look at where the demand growth is
00:02:18.610 00:02:18.620 for petrochemical use it's very much
00:02:20.349 00:02:20.359 it's very much Asia one of the
00:02:23.379 00:02:23.389 challenges Russia Russia has
00:02:25.680 00:02:25.690 considerable resources ask consider
00:02:28.270 00:02:28.280 amounts of gas it has the potential to
00:02:30.550 00:02:30.560 supply low-cost ething the challenge
00:02:32.710 00:02:32.720 Russia has is really the logistics of
00:02:35.379 00:02:35.389 how it moves to produce the finished
00:02:38.890 00:02:38.900 petrochemicals to the end use market in
00:02:41.110 00:02:41.120 a way that's this low-cost so the
00:02:43.690 00:02:43.700 challenge is where do you locate these
00:02:45.400 00:02:45.410 facilities if they are far away from the
00:02:47.830 00:02:47.840 coast actually some of the advantage on
00:02:50.500 00:02:50.510 feedstock may not be able to be captured
00:02:52.390 00:02:52.400 because of the challenges of logistic
00:02:54.819 00:02:54.829 that's been a feature of Russia for many
00:02:57.159 00:02:57.169 years and it's something that needs to
00:03:00.039 00:03:00.049 be it needs to be overcome

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