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Saras says European refiners need to be flexible

01 Jun 2017 14:57 (+01:00 GMT)
Saras says European refiners need to be flexible

Dubrovnik, 1 June (Argus) — European crude refiners need to be more flexible in order to avoid further rationalisation, Italy's Saras said.

"The outlook is not so bright for European refiners," Saras' chief executive Marco Schiavetti said at the Argus Mediterranean storage conference today.

He said "competitive disadvantages", such as higher energy and regulatory costs faced by European refineries in comparison to their global competitors, are here to stay. At around $1-2/bl such costs are huge, not marginal, said Schiavetti. The effect of these costs are compounded further in the Mediterranean region by the lower complexity and smaller size of refineries.

Further rationalisation will take place in Europe, said Schiavetti, with refineries converted to oil storage facilities, used for producing more niche products such as biofuels, or bought by trading firms.

Schiavetti said that to avoid this refiners need to be more flexible with their feedstocks and product yields, and need to improve trading operations. Saras utilised around 20 different crudes at its 300,000 b/d Sarroch refinery during 2010-14, but in the last two years this has increased to more than 40 different crudes.

"Operational excellence on its own is not enough, a commercial orientated approach is needed," said Schiavetti.