The role of innovation as a key to future success of oil industry
Transcript of The role of innovation as a key to future success of oil industry
The role of innovation as a key to future success of oil industry
► MOL GROUP
Jaroslav KOŠŤÁLIK Regulatory and Public Affairs Director, SLOVNAFT
Bratislava 6,1 Mt
Schwechat 9,6 Mt
Ingolstadt 12 Mt
Vohburg 5 Mt Burghausen
3,4 Mt
Leuna 10,7 Mt
Schwedt 10,5 Mt
Litvinov 5,2 Mt
Kralupy 3 Mt
Rijeka 4,5 Mt
Sisak 2,3 Mt
Bosanski Brod 2 Mt
Novi Sad 2,6 Mt
Pancevo 4,8 Mt
Petrom Pitesti 3,5 Mt
Lukoil 3,5 Mt Petrom Ploiesti 4,5 Mt
Rafo Onesti 3,5 Mt
Drogobich 3,8 Mt
PKN Plock 13,5 Mt
Százhalombatta 8,1 Mt
Mozyr 15,5 Mt
LOTOS 6,2 Mt
Key refining capacities in Central Europe, oil processing capacities in millions tonnes / year
Mantova 2,6 Mt
radius 500 km
SLOVNAFT – reliable supplier of the regional markets Exports – key driver of Slovnaft´s results
Max. Refining Capacity 6,1 mn t/a
Oil processing ´13 5,8 mn t/a
Key products ´13 motor fuels 4,57 mn t/a plastics 330 kt /a chemicals 300 kt /a Employees ´13 3 300 + 1700 (in filling stations)
Turnover ´13 4,7 bn EUR
,
Slovnaft - MOL refining assets Refineries in Slovakia and Hungary among the best refineries in Europe
Net Cash Margin ranking of European, North African and FSU refineries in 2011-2012 How much can refineries earn from converting crude oil into products?
USD per processed barrel of oil
HFO 1%
Gasoline Diesel Naphtha
Source: WoodMac
Refining and petrochemical industry in Europe under heavy pressure declining demand, new alternatives & growing competition from USA, ME, FSU and Asia
15% of refineries in Europe already shutdown, next 25% of refineries under the risk of closure till 2035
Oil consumption EU, mn t / ysource BP, statistical review 2013
611
722
580600620640660680700720740
1998 2000 2002 2004 2006 2008 2010 2012
European Union
Source: Bloomberg, refining capacities in ths / y
59%
41%86%
14%
1995 2005
Change of the production structure towards more valuable light products
present
SLOVNAFT INNOVATION story – from an average production portfolio to excellent one
,
Products with low market value
(heavy fuel oils, bitumen, sulphur etc)
Products with high added value
(motor fuels, chemicals, plastics)
Production structure, %
,
Integration of all activities, processes and optimisation of use of resources within the Group maximizes its overall performance and profitability
Effective supply chain management is besides modern refining technology another key pillar of the Slovnaft – MOL – INA leadership in oil industry
Refining & Marketing
Supply Refining Logistics Sales
R & D
Production
Petrochemicals
Sales
Supply Chain Integration
250
50
10
Eastern Europe EU presentstandards
EU standardsfrom 2009
Huge past investments spent not only for production portfolio modification….
Desulphurisation of fuels
Biocomponents mixing and production
Lowering GHG emissions, solving old environmental burdens
Soil & water protection, water treatment, waste recycling
Other past major projects: Desulphurisation
kg of sulphur in 1 mn kg of fuel
Polypropylene production modernisation and expansion
Sale channels investments
BIO trends EUR bn 2+
New Products
Recent development of premium diesel fuels with improved low temperature properties and engine parameters Five new products were developed. Two end-products were launched: EVO Arctic type diesel fuel for Slovnaft Service Stations and a modified polyethylene and polypropylene in answer to customer requests for improved processing.
Actual investments worth 500 mEUR aimed at maintaining high complexity, market positions and preserving industry leaderhip
New polyethylene plant & reconstruction steam cracker higher capacity, lower energy consumption, less env. burden, new market possibilities
EUR 300 m
Modernisation & cap. increase of power plant less dependence on ext. sources, less env. burden,
elimination of nonmarketable oil residuum
EUR 150 m
EUR 60 m
ADRIA
New route for alternative oil deliveries
oil security for Slovakia and region
On customer orientated modern sales increasing sales potential and customers´ satisfaction
Innovation and EU regulatory measures
KEB – climatic and energy package adopted by EC and EPaC in 2009 (20-20-20) Directive no. 2009/30/EC on engine fuel quality, aimed at monitoring and reduction of greenhouse gas emissions from fuels (road transport and inland waterway transport) –(FQD) Directive no. 2009/28/EC on renewable energy sources– promotion of use of energy from renewable resources– (RED) Directive no. 2009/29/EC on the greenhouse gas emission allowance trading – (ETS) Directive no. 2009/31/EC on geological storage of carbon dioxide - (CCS) Decision of EPaC no. 406/2009/EC on the effort of member states to reduce greenhouse gas emissions by 2020 - (non-ETS)
Innovation and EU regulatory measures
• Directive on implementation of infrastructure for alternative fuels, approved by the European Parliament and the Council It includes an extensive portfolio of measures to promote the alternative
• fuel market in Europe (CNG. LNG, hydrogen and other fuels) It sets out the obligation to build filling station infrastructure, e.g.
• necessary average distance between CNG and LNG filling stations on main European roads
It sets out the obligation of member countries to report on the level of implementation of national measures every three years It declares aid for research and innovations of motor vehicles powered by alternative fuels and relevant infrastructure, including adoption of common technical standards
Playing field for refineries and the requirements
Gradual reduction of the volume of CO2 emission allowances Gradual reduction of emission ceilings of pollutants, SO2,NOx Achievement of the target for share of energy from renewable
resources by substitution of fossil fuels by bio fuels and renewable energy sources
Obligation of bio-component addition to fossil fuels Reduction of sulphur, aromates and other components Requirement of adding bio-components produced from raw-
materials complying with set criteria and indirect soil utilization Requirement of reduction of emissions resulting from crude oil
extraction
CONCLUSION
Maintaining competitiveness of the oil refinery sector under global geopolitical
and economic free market conditions is a great challenge for research and
innovations in all sectors referred to herein, including technical and
technological progress in crude oil processing !
► MOL GROUP
Thank you for attention !
Sources: BP, Shell, EIA, IEA, Bloomberg, Reuters, MF Dnes, E15, Patria Online, OPEC, The Economist, Citibank, CMAI, Nexant Parlamentní listy.cz, MOL Group