BP Downstream Business CEO Sail: Global Refining And Chemical Integration Period BP Continues To Increase Electrification.

"In the future, we expect that the capacity of the global refining and chemical industry will be rationalized gradually and enterprises must have more competitive assets. The integration of industries will take place anywhere in the world, including China.

Recently, BP downstream business CEO came to China and accepted media coverage including our correspondent. He said that Australia has begun such an integration, "this is a very important signal, any enterprise wants to compete in this industry, must strive to enhance competitiveness." He said.

Just last week, BP announced the signing of a memorandum of understanding with Zhejiang Petrochemical Company Limited ("Zhejiang petrochemical"). It will jointly build and operate an acetic acid plant with an annual output of one million tons in the East China region with a 50:50 investment ratio.

The new plant will be located in the petrochemical and petrochemical production integrated system Park of Zhejiang Petrochemical Company in Zhoushan, which will also be the largest acetic acid production facility in the world in BP. "Both sides can play their respective advantages in this cooperation." He said, "the factory building in the future will also be the most advanced in the world, or the most advanced facility in China."

In addition to announcing new investments, BP announced in 2018 that China's gasoline and retail terminals were overweight, and 1000 new gas stations were built in 5 years. "The most important problem now is land grant." He said, "increasing China's retail network is still an important part of our business. We need to speed up the expansion of our services in various provinces."

Integration of global refining and chemical business

In the past two years, China's overall refining capacity has been expanded unprecedentedly.

According to the "domestic and foreign oil and gas industry development report" released by PetroChina Research Institute in 2018, with the local private large-scale refinery projects being put into operation one after another, the processing capacity of crude oil in the whole country will increase by 32 million tons / year in 2019, and the total refining capacity of the whole country will reach 8.63 billion tons / year; the excess capacity will increase to about 120 million tons / year, up by 1/3 over the same period last year.

The new refining capacity in 2019 mainly came from Zhongke refining, Zhejiang petrochemical and Shandong local refineries. Among them, Zhongke refining and chemical production capacity of 10 million tons / year, Zhejiang Petrochemical (phase I) is 20 million tons / year. The new production capacity of Shen Chi chemical company in Shandong's local refinery is 5 million tons / year, Xinyue's Sinopec and Xintai Petrochemical have increased 3 million 500 thousand tons / year respectively.

By contrast, this year's elimination capacity is only 10 million tons / year, far less than the new capacity. "There is no doubt that there is excess capacity." "Refining and refining business is a global business and needs to be viewed from a global perspective," said fan.

He believes that following the arrival of the IMO2020 new deal, global shipping will usher in a series of regulation to control sulfur emissions. Low sulfur fuel will replace high sulfur fuel and become the mainstream product in the future market. "Therefore, in the next two years, I think the profit margin of global refining and chemical industry will continue to grow." He said.

At the same time, the oil refining industry will usher in a more rational development. "This trend of rationalization is likely to happen in China, and enterprises with less competitive strength will be eliminated." "All enterprises, including Europe, Asia, especially Japan and South Korea, must enhance their competitiveness in the future," he said.

For BP, in addition to maintaining the multi product line and scale effect of traditional refining and chemical enterprises, more attention should be paid to the advantages of raw materials. "We must operate in a more reliable way, do better in business, and compete in a more long-term way, so that we will be more competitive." He said.

Electrification transformation speed up

As an international energy enterprise with more than 100 years of history, BP also needs to continue its electrification transformation in the face of increasingly global exclusion of fossil energy.

"There is no doubt that China plays a crucial role in the process of energy transformation." "By 2040, 20% of the world's energy demand will come from China," he said.

In August 1st this year, BP and dripping announced that the two sides would form a joint venture to build a new energy vehicle charging infrastructure in the world's largest electric vehicle market. The new joint venture will build a new energy vehicle charging station network across the country.

The joint venture will provide services for dripping users and the vast number of owners by building independent, reliable and high quality new energy vehicle charging stations. In the future, the two sides also plan to expand the joint venture business into loyalty plans, convenient services and other vehicle services.

The first charging station, equipped with 10 60-120KW fast charging piles, has been put into operation in Guangzhou, Guangdong province. The charging station will become the first charging station to be transferred to a joint venture after the establishment of a joint venture. Follow up, joint venture will rapidly expand the construction and operation of more charging network. It is reported that there are two charging stations in service.

He said that in order to rapidly expand the scale of the charging network, the charging station could not be used as the supporting facilities of BP's gas station, but also needed some hubs and some centers. At present, BP has been able to achieve 350 kilowatts of charging speed, but subject to policies and regulations and other factors, the corresponding technology has not been applied to the above charging stations.

In addition, due to the fact that electric vehicles have not yet been thoroughly popularized and so on, according to statistics from China, the average utilization rate of service piles in China is only one digit. "What can be disclosed is that our utilization rate of charging stations is much higher than the average value of the whole industry in these two pilot stations, and it is also higher than our commercial hypothesis level." "For BP, it's not enough to get the average return on the industry," he said.