PetroChina Drop Europe betting oil refinery fear of "chicken ribs"

Europe, which has not built a new refinery for 30 years, is about to usher in one of China's most lucrative businesses. PetroChina (601857. SH) recently announced that it plans to set up a joint venture with two companies of the UK's large petrochemical enterprise, the INEOSGROUPHOLDINGSPLC group, in the first half of this year.　　To carry out related trade activities and refining operations with the Scottish Grangemouth (Grangemouth) refinery and the French Lavalle (Lavéra) refinery. When the international energy giants such as Chevron have decided to evacuate the "highland" of Europe, what is the reason for PetroChina to "kill in"?　　In the face of Europe's high operating costs, industry experts say the results may not be positive in terms of economic success or failure. According to the PetroChina announcement, the transaction is of great significance for the company to optimize its resources and market allocation globally, and to build European oil and gas Operations center in the European high-end market. After the successful trading, these two refineries can continue to form an integrated advantage with the chemical business of the British Rexroth group.　　It is understood that the British Rexroth is Britain's largest chemical and private companies, the world's third largest independent chemical company, annual sales reached about 50 billion U.S. dollars, but the financial crisis after the heavy debt. Grangemouth refinery is located at the Fox Bay, Scotland, can directly use crude oil and natural gas from the North Sea, crude oil daily processing capacity of 210,000 barrels, to Scotland, northern England and Northern Ireland to provide refined oil. France Lavalle Refinery is located in the Mediterranean coastal oil trade zone, near the port of Marseille and crude oil transportation terminals, crude oil daily processing capacity of 210,000 barrels, can be piped to France, Switzerland and southern Germany to provide refined oil.　　The oil processing capacity of the two refineries reached about 10.5 million tons each year, which belongs to the large scale projects of tens of millions of tons.　　Feng Sun, an analyst at Xiang-Fortune securities, said Europe could be said to be the hardest place for Chinese oil companies to reach, after China's three biggest oil companies failed to reach Europe.　　However, in the case of PetroChina betting on the European refining market, industry insiders expressed concern that the European refining market strategic position, although important, but the operating costs are high, investment prospects are not optimistic, but easy to become "chicken ribs." CNOOC Energy Economics Research Institute an expert in the "First financial daily" interview that PetroChina chose to enter the European refining market may have two reasons, first of all, due to the excessive saturation of China's domestic refining market, heavy capacity surplus, due to the historical reasons for industry development, PetroChina's downstream refining business is less competitive than another giant, Sinopec (600028). SH), while at the same time facing the CNOOC (00883. HK) competition with the joint venture, which has led PetroChina to seek profits in the overseas refining market.　　On the other hand, PetroChina wants to take the opportunity to expand its international footprint and participate in the global oil market. At the same time, the person pointed out that, with the European concept of energy conservation, the use of refined oil is declining year by year. In addition, as many international oil giants entrenched in Europe, resulting in the local refining market competition more excitingStrong, refinery profits are even more meager. According to the person, Europe has not built new refineries for 30 years, and the existing ones are exiting. Dan-Wen in the United States has sold all the refineries in Europe, and Chevron is preparing to quit.　　Mainly because the resource countries vigorously use their upstream resources to develop refining business, such as Saudi Arabia, Kuwait and other countries to the United States, Korea and China to build refineries, and they are more competitive than the international oil giants. The development path chosen by the international oil giants is to gradually shrink downstream and focus on the most core upstream business of exploration and development. However, in the same absence of oil resources, PetroChina is taking the opposite path. "PetroChina's choice must have its own strategic considerations, but in terms of economic success or failure, the results are indeed not optimistic." said the expert.