1、NoImageRoland Berger&Partners Ltd.International Management ConsultantsBarcelona Beijing Berlin Brussels Bucharest Budapest Buenos Aires Delhi Detroit Dsseldorf Frankfurt HamburgHelsinki Hong Kong Kiev Kuala Lumpur Lisbon London Madrid Milan Moscow Munich New York ParisPrague Riga Rome So Paulo Shang
2、hai Stockholm Stuttgart Tel Aviv Tokyo Vienna ZurichLON-P-04358-001-02-50-08v3.pptSector Sketch and SWOT Analysis of the Dutch Oil Sector Final Presentation Dutch Ministry of Economic AffairsOil DivisionThe Hague,3rd February 2019第1页，共38页。LON-P-04358-001-02-50-08v3.ppt-2-NoImageA conflict appears to
3、 be emerging between the traditional Dutch economic strengths and more recent environmental concernsDutch economic prosperityOil industry focussed on exportsFounded on tradingMotor of Rotterdam trading strengthDutch environmentLegitimate environmental concernsHigh population density low-lying-vulner
4、able to Global warming Global warming Congestion NoiseExport industry must be internationally competitive to surviveTough environmental stanceConflict第2页，共38页。LON-P-04358-001-02-50-08v3.ppt-3-NoImageContentsPageA.Extracts from Sector SketchB.Feedback from oil and chemical company interviewsC.SWOT An
5、alysisC.1.StrengthsC.2.WeaknessesC.3.OpportunitiesC.4.ThreatsD.Recommendations47111217232631第3页，共38页。LON-P-04358-001-02-50-08v3.ppt-4-NoImageA.Extracts from Sector Sketch第4页，共38页。LON-P-04358-001-02-50-08v3.ppt-5-NoImageThe Dutch oil industry has traditionally been strong and internationally orientat
6、edRefining and ChemicalsTradingPorts Only 15%of total oil supply destined for home market Accounts for 9%of EU refining capacity Key synergies with and supply to Dutch chemicals industry Benelux chemical cluster is second largest in Europe Rotterdam worlds leading port for 30 years Road,rail,inland
7、waterway and pipeline connections to many major markets Major oil trading market in the EU time zone and one of the big 3 globally(Rotterdam,Houston,Singapore)第5页，共38页。LON-P-04358-001-02-50-08v3.ppt-6-NoImageEach sector in the oil industry faces important issues affecting its competitive positionOil
8、 refining Increasing costs of environmental compliance Mergers/alliances change the competitive scene Overcapacity and low returnsStorage Supports the international business Fosters independent traders Overcapacity and low returnsTrading Strong role of refining companies Dependent on critical mass o
9、f Rotterdam marketBunkering Important fuel oil outlet for refiners Refiners becoming dominantPipelines Pipelines and waterways key to Rotterdam logistical advantage Dominated by private or consortium owned pipelinesChemicals Important synergies with oil sector Sector entering downturn Long-term grow
10、th potential第6页，共38页。LON-P-04358-001-02-50-08v3.ppt-7-NoImageB.Feedback from oil and chemical company interviews第7页，共38页。LON-P-04358-001-02-50-08v3.ppt-8-NoImageEnvironmental and clean-up regulations were central to views expressed by most intervieweesRole of the NetherlandsDecisionmaking bodiesLand
11、 releaseCurrent situationIndustry viewpointAlternative approachGoes ahead of competing countries on environmental issuesThis undermines competitive position of oil and chemical industriesLead by influencing EU consensus rather than by exampleSignificant regional and national variation on environment
12、al regulationsCompetition to be greenerVariation prevents the existence of a level playing fieldPlace environmental decision making and implementation in the hands of one bodyClean-up costs are a formidable exit barrierLand can be released if economically viableCosts of clean-up should be balanced a
13、gainst cost of land reclamationHowever,the governments willingness to discuss and reach consensus was appreciated第8页，共38页。LON-P-04358-001-02-50-08v3.ppt-9-NoImageAll interviewees recognised the World Class infrastructure of Rotterdam,although there are three major contentious issuesPort feesCommonca
14、rrier pipelineMaasvlakte 2Current situationIndustry viewpointAlternative approachHarbour dues based on tonnage rather than services usedRotterdam is more expensive than Antwerp,Le Havre or Hamburg.The oil industry subsidises the container industryBase charges more on services than on tonnage basisNo
15、 common-carrier pipeline existsMay be economically viableConsider common carrier where extra flexibility needed,but compensate owners of pipelines for investment and riskPositive discussion likely:new land reclamation at high costExtra land will favour chemical sectorThe oil industry does not requir
16、e extra landEnsure proper funding for Maasvlakte 2:No burden on oil industry第9页，共38页。LON-P-04358-001-02-50-08v3.ppt-10-NoImagePressure for rationalisation is likely to coincide with timing of investment to meet future fuel specificationsOvercapacityFuture fuel specificationsCurrent situationIndustry
17、 viewpointDespite recent closures,there remains up to 15%overcapacity As many as 13 EU refineries need to close Issue complicated further by recent mergers Clean-up costs remain the biggest barrier to exit;social costs are also significantTarget specifications for 2019 require 40 bn investment acros
18、s the EUOf the Dutch refineries,only Esso and Shell are well placed to meet 2019 specs without major investment第10页，共38页。LON-P-04358-001-02-50-08v3.ppt-11-NoImageC.SWOT Analysis第11页，共38页。LON-P-04358-001-02-50-08v3.ppt-12-NoImageC.1.Strengths第12页，共38页。LON-P-04358-001-02-50-08v3.ppt-13-NoImageThe Dutc
19、h oil sector is large and well concentrated,accounting for 9%of EU refining capacity(compared to 4.5%consumption)EuropoortPernisNoImageCrude Capacity(b/d)NerefcoShellEssoTotalKPIS&H374,000400,000180,000148,00070,00010,000BotlekVlissingen+xAmsterdamEuropoort79,500KochEuropoortSource:Ministry of Econo
20、mic Affairs第13页，共38页。LON-P-04358-001-02-50-08v3.ppt-14-NoImageAll elements of the oil sector are closely integratedChemical clusterRefiningInternational trading portOpen and co-operative governmentStorage and BunkeringServices,utilities and contractors第14页，共38页。LON-P-04358-001-02-50-08v3.ppt-15-NoIm
21、ageThis integration is supported by world class infrastructureHarbours and terminals Deep water harbours,particularly Rotterdam Direct accessibility for the worlds largest tankers High volume capacity and short turn-around time Extensive barge handlingPipelines Supply Belgium and Germany with crude
22、and products Connections to major chemical clusters in and beyond the Netherlands More than 1100km network within Rotterdam linking producers and storage companiesRoad and Rail Considerable infrastructure currently in place Major investment programme in progress第15页，共38页。LON-P-04358-001-02-50-08v3.p
23、pt-16-NoImageThe Dutch ports,particularly Rotterdam,benefit from advantageous locations Close to North Sea oil fields Natural port for ME crudes destined for NW European market Holland one of the most densely populated European countries Population of 160 million within 500km radius Navigable inland
24、 waterways to major markets第16页，共38页。LON-P-04358-001-02-50-08v3.ppt-17-NoImageC.2.Weaknesses第17页，共38页。LON-P-04358-001-02-50-08v3.ppt-18-NoImageOvercapacity has led to low profitability in the Dutch oil sector and increasing pressure for rationalisationRefiningStorageOvercapacity in Holland reflects
25、the trend in EU as a wholeExport refineries with low conversion capacity are vulnerable(although speciality niches help profitability)Long term structural overcapacityRecent mergers and alliances create an uncertain outcome for Dutch oil第18页，共38页。LON-P-04358-001-02-50-08v3.ppt-19-NoImageOf the Nethe
26、rlands refineries,only Shell and Esso have the up-grading flexibility to meet future demands with only limited investmentSource:IEA;Dutch Ministry of Economic Affairs,RB&P analysisFCC equivalent conversion capacity(%distillation capacity)Distillation capacity MT/yearNoImage12%25%99%3.820.07.4918.737
27、%KPI EuropoortTotal/DOW VlissingenEsso RotterdamShell PernisNerefco(BP/Texaco)Europoort34%EU Refineries average66%38%Germany40%United Kingdom24%France23%BelgiumAverage Conversion Capacities54%The Netherlands第19页，共38页。LON-P-04358-001-02-50-08v3.ppt-20-NoImageIn addition,the Netherlands attempts to le
28、ad rather than go with European environmental legislationEU has set new product specificationsButNo level playing field for refinery emissions atEU levelEnforcement of regulations stricter in NetherlandsInconsistencies between National,Regional and Municipal authoritiesDutch Oil Sector第20页，共38页。LON-
29、P-04358-001-02-50-08v3.ppt-21-NoImageThe cost of clean-up regulations in Rotterdam is distorting the incentives for the oil industry to release unused landbutThe Lose-Lose outcome can only change to Win-Win by altering the incentives for land releaseClean-up costs in EU are between NLG 100m-NLG 400m
30、 per refinery(NLG 60-120/m2)Even where plants have closed,oil industry has incentive to retain land and pay rent rather than pay immediate clean-up costSimilar economics constrain release of surplus land from storage terminalsProjected shortage of land for expansion is driving Maasvlakte 2 projectCo
31、st of land reclamation is expensive and will be borne by taxpayer initially(NLG 500/m2)第21页，共38页。LON-P-04358-001-02-50-08v3.ppt-22-NoImageGovernment policy is seen to focus solely on Rotterdam,partly as a consequence of Main Port PolicyVlissingenOnly one jetty terminal(up to 120,000 dwt)Isolated fro
32、m natural gas pipelinesWhen chemical companies found Rotterdam unfavourable,Antwerp was chosen above other Dutch portsAmsterdamGrowth limited by water depth/ship sizeLack of refining limits synergies between oil and chemicals第22页，共38页。LON-P-04358-001-02-50-08v3.ppt-23-NoImage C.3.Opportunities第23页，共
33、38页。LON-P-04358-001-02-50-08v3.ppt-24-NoImageThere are opportunities for new businesses or substantial extensions to existing activitiesEnergyPipelinesElectricity co-generationLow level heat collection and distributionCO2 collection for greenhousesCommon carrier to reduce transport costs and meet en
34、vironmental aims Ethylene pipeline for chemicalsHigh value-added productionStorageUpgrade products for refineries unable to meet environmental specsHigh quality product strategy for export to premium marketsPush for higher share of chemicals growthUse excess storage to hold strategic stocks for whol
35、e EU第24页，共38页。LON-P-04358-001-02-50-08v3.ppt-25-NoImageOvercapacity is a long-term problem that needs to be addressed by industry but may be helped by Government assistanceFocuses investment on areas of strengthThere is potential for individual plant closuresRecent mergers/cluster approach may lead
36、to new combinationsOpportunityActionAimStrongest units operate near fuel capacityLand would be made available for port expansionGovernment Introduce incentives for clean-up of former or surplus sitesBest use of unused landCompanies optimise within international networksFocus on strong competitive un
37、itsGovernment sponsor discussion on optimisationAlternative for uncompetitive units第25页，共38页。LON-P-04358-001-02-50-08v3.ppt-26-NoImage C.4.Threats第26页，共38页。LON-P-04358-001-02-50-08v3.ppt-27-NoImageThe greatest threat is that pressure to adopt the highest environmental standards will hit the oil indu
38、stry too hard,and erode public supportOver-zealous environmentalism could break the Dutch oil industryNetherlands is much tougher on policing common environmental rules than other EU states Pressure groups and Municipalities compete to appear greenerImplementation methods are not seen as consistent
39、with the true needsOil may no longer be seen as a contributor to society第27页，共38页。LON-P-04358-001-02-50-08v3.ppt-28-NoImageHigh costs associated with Rotterdam are currently outweighed by advantages.Shifts in the labour rate-productivity balance could change thisPort dues on tonnage basis has led to
40、 highest crude import costs in EuropeHigh construction costsOne of the highest labour rates in EuropeHigh social costsCompetitive logisticsProximity to market placeHigh labour productivitySkilled workforce/trading experienceLow port land rentals第28页，共38页。LON-P-04358-001-02-50-08v3.ppt-29-NoImageExte
41、rnal competition may increase or become distortedEU CompetitionGlobal CompetitionCheaper services at competing portsPetropreneurs buy cheap assetsEU member states or unions support own weaker refineriesMiddle East oil product and base chemical exportsChemical growth attracted to US by lower costs第29
42、页，共38页。LON-P-04358-001-02-50-08v3.ppt-30-NoImageSubstitution and new technology could cause a surprise drop in oil demand,but no significant change likely before 2019TransportCommon rail technology will make diesel substantially more efficientHybrid enginesBiomass ethanol could substitute mogas and
43、dieselFuel cell technology no significant impact before 2019Increase in diesel market share may distort refinery economicsLPG/CNG substitution of mogas and dieselThe current very low crude oil prices will delay any substitution effectsOther usesGas(from Russia/North Sea)will substitute heating oil i
44、n Belgium and GermanyRenewable fuels in export markets FO for electricity GO home/commercial heating LFO for industry第30页，共38页。LON-P-04358-001-02-50-08v3.ppt-31-NoImage D.Recommendations第31页，共38页。LON-P-04358-001-02-50-08v3.ppt-32-NoImageFour key issues need to be addressed to ensure long term intern
45、ational competitiveness of the oil industryLong term competitivenessStable industrial policyAffordable environmental policyAction on infrastructure costsOptimisation of oil industryThere is also scope for streamlining procedures and encouraging new value-added activities第32页，共38页。LON-P-04358-001-02-
46、50-08v3.ppt-33-NoImageA stable,visible government policy for the oil sector needs to be agreed,and external trends regularly monitored Seek consensus onenvironment trade-off size of oil industry type of oil activitieslocation and logistics corridors Publicise agreed vision Own plans Linkages with ow
47、n international networks Implications of locations Concrete ides Implications of increase or decrease in oil industry presence VROM part of consensus Local authorities brought into consensus and location planningLong term policy development Evaluate international oil industry trends Provide own info
48、rmation and benchmarks on competitiveness of Dutch oil industry Benchmark cost infrastructure and charges VROMCompare other EU states environment regulationsRegular feedbackMinistry of Economic AffairsOil IndustryPortsOther第33页，共38页。LON-P-04358-001-02-50-08v3.ppt-34-NoImageEnvironmental principles f
49、or oil should balance the need for competitiveness with Dutch environment needs Agree approach with VROM Monitor proposals that add extra cost above competitorsEnsure only implemented if environment impact high Review existing targets for oil industry Seek changes if undue competitive penalty Provid
50、e credible estimates of compliance costs Provide comparisons with competing areasAffordable environment policyFlexible implementation VROM Only act ahead of competitor nations for clear benefit VROMRetain flexible mechanisms for implementation Consider use of trading rightsAt same time,continue to e
