Downstream bottlenecks set to persist until 2007: OPEC sec-gen

Johannesburg (Platts)--28Sep2005

Bottlenecks in the global refining system that have contributed to
current high oil prices are set to persist until at least 2007, OPEC's acting
secretary-general Adnan Shihab-Eldin said Wednesday.

     Addressing the World Petroleum Congress in Johannesburg, South Africa,
Shihab-Eldin said that while crude markets were well supplied, there was
tightness across the general supply chain. Furthermore, he said, there was "no
sign of improvement before at least 2007."

     Shihab-Eldin stressed the importance of upgrading refineries so that they
could process more sour crude. Failure to do this will mean that the
downstream problems will "remain a source of volatility for years to come," he
said, explaining that while 2006 will see some new light sweet crude capacity
coming on stream, the bulk of new capacity being developed will be sour and
heavy.

     OPEC capacity is set to rise from 32.5-mil b/d now to more than 38-mil
b/d in 2010, Shihab-Eldin said, adding that this figure excluded what could
amount to a "sizeable" increase from Iraq.

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