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Refineries of the future: critical decisions post-COVID
The global COVID-19 pandemic caught the oil and gas industry unprepared. Inventory levels increased forcing refineries to slow down or shut down certain assets. However, beyond the pandemic, research suggests that demand for petrochemical based products is likely to grow significantly over the next 10-30 years, with the International Energy Agency predicting that petrochemicals are likely to account for "over a third of the growth in oil demand to 2030, and nearly half to 2050, ahead of trucks, aviation and shipping" 1.
Accordingly, the way forward for refiners is to diversify the value chain via petrochemical production. This will enable higher returns in the near-term and improved flexibility to meet market demand for petrochemical products over the longer term.
(1) IEA (2018), The Future of Petrochemicals, IEA, Paris https://www.iea.org/reports/the-future-of-petrochemicals. All rights reserved.