Depending on who you believe, global refining is heading for choppy waters, while oilcos are apparently 'losing interest' in lubes.
The comments come from commentary in Forbes' blog and from a very pointed analysts call from Fuchs' CEO. In the former, Bain's analyst Andy Steinhubl states that the move from US-driven markets to the developing nations has significant implications for oil and gas producers.
Shrinking US demand, combined with volatile demand elsewhere and high oil and environmental regulation costs, means a need for oil companies to re-assess their stragies if they are going to capitalise on the change in market dynamics, according to Steinhubl. There is also additional pressure on the majors from the national oil companies which are starting to grow their own refining capacities.
The key elements to success would appear to involve strong, well managed strategic partnerships between national and international oilcos; getting the portfolio right, including the development of biofuels and minimising costs through operating excellence.
Meanwhile the waters were stirred up further by comments from Fuchs CEO, Stefan Fuchs, who believes the global lubes industry is undergoing a major sea change through private investment. Fuchs suggests that the traditional majors may be "losing interest" in lubricants, marked by the rise of private equity purchases such as Berkshire Hathaway's purchase of Lubrizol last year.
Fuchs stated: “The lubricant world is changing. There are big vertically integrated companies from the developing markets that want to grow globally. They are the sleeping giants that have enormous financial resources in the new markets.”
In announcing positive Q1 profits, Fuchs itself is set to focus on higher-margin products and eyeing potential acquisitions.