|SWhile we already provided some glimpses beyond what we were
seeing in 2007, this slide steps back to focus on the refinery outlook
concerns at that time.
|SAn issue being raised frequently was – will refinery
capacity keep up with demand? Can we
build it fast enough.
|SU.S. refiners’ optimism was also still strong, and
investment plans added up to about 1 million barrels per day of new capacity
over a 5 year period, including some increase due to capacity creep (small
increases in capacity that are made in conjunction with other projects). But some issues were starting to
develop. Costs for construction were
high, and biofuels use was increasing, causing some companies to pull back
|SEuropean refiners focused on investments to deal with their
growing need for distillate fuels.
Many projects did not need crude distillation capacity expansion,
although some did include increased distillation capacity – particularly in
Southern Europe. The projects being
planned were generally upgrading projects that would reduce residual fuel
production and increase distillation production, leaving gasoline production
|SMost of the world’s capacity expansion plans were in the
Middle East and Asia, where expansions were targeting the high demand growth
of those areas primarily. Upgrading
projects were also being planned to make more use of heavy crude oils.