Anglo-Dutch oil company Royal Dutch Shell PLC (RDSA) said Tuesday it would carefully reassess its downstream portfolio due to overcapacity in the refining industry and the growth potential for petrochemicals in Asia .

"Industry refining margins in 2010 are likely to remain fundamentally weak because of the expected ongoing global excess product inventory, particularly for middle distillates," the company said in its annual report.

Shell said margins may recover slightly in the second half of this year as the global economy improves.

The company said it expects global output growth, an indicator of future demand for its products and services, to recover after last year's decline.

"But the recovery is likely to be slow and uncertain given the depth of contraction in 2009," Shell said.

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