Global fuel refining shifts to Middle East

JUBAIL - Agence France-Presse

As high oil prices and improved efficiency force refineries in the U.S. and Europe towards closure, the industry is shifting toward the Middle East and Asia in a move fueled by a thirst for energy among emerging economies.

China and India in particular are driving the demand, with multiple refineries cropping up in China and the Gulf and Indian energy group Reliance, for example, running two giant refineries capable of processing a total of 1.2 million barrels of crude oil per day. In eastern Saudi Arabia, state oil group Aramco -- the world’s largest -- and French counterpart Total are putting the final touches on their Jubail site, which will open next year as one of the world’s biggest refineries. The refinery, located in the desert about 30 kilometers from the Persian Gulf, will be able to process 400,000 barrels of crude oil per day and will be fully operational by the end of 2013.

For Total, the project “is very important for our future, because we were everywhere in the Middle East, except here, and it’s a way of paving the way for the company,” Total’s head of the refining and chemicals division, Patrick Pouyanne, said on a tour of the site this week.

Total’s expansion to Saudi Arabia comes as the energy group and others reduce their presence in Europe, with Total closing its Flanders plant in northern France in 2010 and Swiss refiner Petroplus shuttering its Reichstett plant last year.

Since 2003, Total has slashed its refining capacity on the continent by 24 percent, while Anglo-Dutch oil giant Shell and British energy group BP have reduced theirs by 40 percent.