More than
100 delegates gathered for a one and a half day highly focused conference in
Thessaloniki, convened by the Institute of Energy for SE Europe (IENE) on March
30-31, which dealt with the current issues faced by refineries and oil
marketing companies in the region. Twenty speakers and panelists for 12
different countries actively participated in the five sessions which formed this
unique event which was fully backed by
Hellenic
Petroleum S.A., the region’s petroleum market leader. Following opening
speeches by Mr. Grigoris Stergioulis, CEO of Hellenic Petroleum, and the Chairman
of Greece’s Oil Marketing Companies Association, Mr. John Aligizakis, the
conference delegates attended presentations contributed by Dr. Leo Drollas, a
well known international analyst based in London, and by John Cooper the
Director General of Fuels Europe which is the petroleum industry’s Brussels based
body. In between them Drollas and Cooper provided the
expert background which proved immensely helpful in understanding the oil
market’s prevailing dynamics and organization
The
refinery trends in SE Europe where examined in a two hour long session moderated
by Dr. Hans Hutta of the ICM in Vienna with the participation of Mr. Avner
Maimon, CEO
of Bazan Group
in Israel, Mr. Vladimir Gagic, Director of
Refining Block, NIS
jsc of Novi Sad
in Serbia, Mr. Laurentiu Pachiu
Founder Partner and Member of
the Board of Energy Policy Group in Romania
, Mr. Diomidis Stamoulis,
Senior Director, Strategic
Planning of Industrial Activities and Participations of Hellenic Petroleum SA
in Greece
, Mr.
Alexandru Maximescu, Public and Regulatory Affairs Director Manager of OMV
Petrom in
Romania
and Mr. Petros
Papasotiriou, Managing Director of the engineering firm Asprofos SA in Greece.
One of the
key findings of the session was that the SE European refineries are mostly
underutilized, with the exception of Bosnia. Increasing refinery throughput is
difficult as only a small part of the region’s crude is directed to petroleum
products. Most processed crude goes into gasoline and heating oil derivatives,
with the market for these products limited in both size and margins. Operational
efficiencies in refineries in the West Balkans are also lacking. SEE refineries
generally have inadequate capabilities in global crude trading and rely heavily
on Middle East and Russian oil. These refineries produce limited amounts of
value-added petrochemical and lubricant products and do not have the advanced
equipment to be found in refineries in neighbouring EU countries.
These
findings suggest that within the next 3-5 years, the bulk of the region’s major
refineries will need to change their operating models, undergo regional
consolidation or close down. Another important finding of the conference was
the realization that due to a very special set of circumstances, which were
fully analyzed and discussed among delegates and panelists, the SE European
refinery scene is undergoing a renaissance, in stark contrast with development
in Central and Western Europe and USA where closures and mothballing has been
the order of the date. Upgrading and revamping of refinery complexes in Greece,
Bulgaria, Romania and Serbia appear to be the order of the day while a new
refinery is actually being built in Turkey.
The
regulatory framework and investment needs and new business opportunities were also
discussed in a special session which followed the one on refining trends. Mr.
Ilia Gjermani, Head, Regulatory and Management, Ministry of Economy, Trade and
Energy, Albania, Mr. Adam Howard, Principal Banker Natural Resources, European
Bank for Reconstruction and Development, UK and Mr. Roman Matkiwsky, Director
Energy & Infrastructure, Black Sea Trade & Development Bank, Greece
were the main contributors while Mr. Christos Dimas Chairman, of the Hellenic-Russian
Chamber of Commerce and Chairman of the Geopolitics Committee & Member of
the BoD, IENE was the session’s moderator.
The
conference concluded with a panel on Fuels Marketing, Storage and
Transportation which was moderated by Mr. Nikola Radovanovic Chief Legal
Officer of NIS, Serbia’s leading oil group. Mr. Roberto Karahannas, General
Manager, Domestic & International Retail of Hellenic Petroleum SA, who was
the key note speaker, presented the key challenges facing oil marketing in the
region, based on his extensive experience in dealing with six different
national markets (Greece, Cyprus, FYROM, Montenegro, Bulgaria and Serbia). Mr.
Dinos Leukaritis, CEO of Petrolina of Cyprus and Mr. Alexis Athanasopoulos, Head
of Regulatory Affairs of EKO in Bulgaria and Chairman of the Oil Refining,
Storage and Retail Committee of IENE were co panelists.