|SWith refinery profits down dramatically in 2009, both
independent and integrated refiners are decreasing refining capital
expenditures to avoid financing projects with debt.
|SThe status of at least half of the planned and approved
projects are described with words such as:
|–Delayed 1 to 2 years…
|–Project suspended indefinitely…
|–Will re-evaluate before a final investment decision…
|–Project awaiting improved market conditions
|SOf over 800 thousand barrels per day of expansion planned
for the next 4 years, over half are being delayed, suspended, and are in
jeopardy of ever being completed.
|SPADD 2 projects that are tied to Canadian oil sands supply
by some form of supply agreement or partnership are more secure, but there
are also delays in these projects.
|SWill margins and light-heavy price differences
rebound? Yes, to some extent, but
probably not quickly. The heavy crude
supply picture in the last slide does not argue for a quick rebound in
light-heavy differentials. To increase
those differentials, we need to see high crude prices, more oil sand
production, and a poor market for residual fuel.