OPEC thinks downstream oil sector is the most vulnerable

The downstream sector is the most vulnerable in the oil industry, Safar A. Keramati, Senior Refinery and Products Analyst, Organization of Petroleum Exporting Countries (OPEC) said.
In a presentation in Abuja, Nigeria, Keramati said the downstream sector -- which comprises of refining marketing and circulation -- has been facing strong challenges all over the world. He said the refining sector in the United States, Europe, and Japan faces stagnant demand as well as overcapacity as a result of the low patronage from the market.

Keramati said other challenges of the downstream oil sector include low merging across the globe, a slowing investment rate, and aging equipment. He said OPEC has medium- and long-term plans in the downstream consistent with its overall efforts to bring stability to the market.
OPEC Member Countries are planning nearly a 50 % increase in distillation and condensate splitter capacity, which would bring the combined capacity to 17.7 mm bpd by the end of 2011 -- a relatively short time span considering the usual lead times required for refinery projects.

These projects will at times require willingness on the part of international oil companies to participate and, on the part of consuming nations, readiness to provide the necessary permissions to become operational.
Meanwhile, OPEC Secretary-General Abdalla El-Badri has called on Nigeria and other OPEC members to work together to ensure that the Kyoto Protocol on Climate Change is sustained.