Prospects of the Refining Industry in

North America Europe and Asia

Oil & Money October 2013

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The Context

• Important phase of industry transition

• Competitive dynamics similar to other major industrial business

- Cost of Production

- Supply Chain Management & Feedstock Costs

- Flexibility

- Access to Market

- Higher Level of Government Intervention

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Key Trends (1 of 2)• Led by Non OECD economies, Global Oil demand likely to grow 3

million barrels per day in the period 2013-15.

• Net refining capacity additions of similar volume, but forces significant

transition.

- New capacity additions of circa 5 million barrels per day

- NGLs & Bio Fuels growth to reduce the call on refinery

• US revolution & competitive surge.

• Middle Distillates over Gasoline.

• Changes in Refinery ownership.

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Key Trends (2 of 2)

• Indian medium term demand growth slows; Exports likely to

rise with commissioning of Paradeep (East Coast).

• Strong Chinese demand growth, but backed by matching

refining capacity additions.

• Surge in complex export oriented Refineries in the Middle

East

• Pressure likely to increase on the least efficient refineries

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Success Factors

The right ‘Formula’ generates consistently good performance

- Technology

- Scale & Flexibility

- Access to Advantaged Feedstock

- Access to Markets

- Efficiency

- Working Capital & Risk Management