BP 2011 Annual Report Download - page 102

100 BP Annual Report and Form 20-F 2011
Business review
The table below summarizes BP’s petrochemicals production capacity, at 31 December 2011.
Petrochemicals production capacitya b
Geographical area Site Product
Group interest
%
BP share of
capacity
thousand tonnes
per year
US
Cooper River Purified terephthalic acid (PTA) 100.0 1,345
Decatur PTA 100.0 1,026
Paraxylene (PX) 100.0 1,101
Naphthalene dicarboxylate 100.0 29
Texas City Acetic acid 100.0c583c
PX 100.0 1,271
Metaxylene 100.0 123
5,478
Europe
UK Hull Acetic acid 100.0 544
Acetic anhydride 100.0 157
Ethylidene diacetate 100.0 4
Belgium Geel PTA 100.0 1,330
PX 100.0 631
GermanydGelsenkirchen Olefins and derivatives 50.0 to 61.0 1,837b
e
Mülheim Solvents 50.0 130b
4,633
Rest of World
China Caojing Olefins and derivatives 50.0 3,230b
Chongqing Acetic acid 51.0 217b
Esters 51.0 52b
Nanjing Acetic acid 50.0 274b
Zhuhai PTA 85.0 1,564f
Indonesia Merak PTA 50.0 253b
South Korea Ulsan Acetic acid 51.0 267b
Vinyl acetate monomer 34.0 65b
Malaysia Kertih Acetic acid 70.0 391b
Kuantan PTA 100.0 610
Taiwan Kaohsiung PTA 61.4 847b
Taichung PTA 61.4 474b
Mai Liao Acetic acid 50.0 181b
8,425
Total BP share of capacity at 31 December 2011 18,536
a Petrochemicals production capacity is the proven maximum sustainable daily rate (MSDR) multiplied by the number of days in the respective period, where MSDR is the highest average daily rate ever
achieved over a sustained period.
b Includes BP share of equity-accounted entities, as indicated.
c Group interest is quoted at 100%, reflecting the capacity entitlement which is marketed by BP.
d Due to the integrated nature of these plants with our Gelsenkirchen refinery, the income and expenditure of these plants is managed and reported through the fuels business.
e Group interest varies by product.
f BP Zhuhai Chemical Company Ltd is a subsidiary of BP, the capacity of which is shown above at 100%.
Outlook
In 2012, we expect the overall economic environment to be challenging,
with below-average growth. Emerging economies are likely to drive
growth, while developing countries are expected to lag behind. We expect
that refiners will continue to operate with excess capacity globally, despite
the announced shutdown of refineries in the US East Coast and Europe.
The RMM in 2012 is expected to remain in a range of $8-12 per barrel. We
expect the differential between WTI and Brent crude to eventually return to
lower levels as additional US pipeline capacity is brought online. The level
of BP’s refinery turnaround activity is expected to be broadly similar in 2012
compared with 2011.
We expect the marketing environment for lubricants to remain
challenging given the outlook for global economic growth. Longer term
however, we expect to see growth in global lubricants demand through to
2020 as a result of continued growth in the number of vehicles, continuing
industrialization in emerging markets, and expanding world trade. This
growth is expected to be concentrated in non-OECD markets. Lubricants
demand is also expected to continue to shift towards higher quality,
premium products as new vehicles adopt advanced, smaller, more efficient
engines placing greater demands on lubricant performance.
In the petrochemicals industry, we expect significant new capacity to come
onstream in acetic acid and PTA in 2012, 7% and 15% of global capacity
respectively. Demand is expected to remain robust in 2012, but not
sufficient to absorb the additional capacity, hence we expect the margin
environment to be weaker in 2012 than in 2011.
Our priorities in 2012 remain consistent with those in 2011 and
2010. We will continue to focus on delivering safe, reliable and compliant
operations, improving the performance of our integrated FVCs, and driving
further cost efficiencies across all our businesses. We intend to increase
our investment levels slightly in 2012 versus 2011 and 2010, focusing
on key safety and operational integrity priorities, maintaining our quality
manufacturing and marketing portfolio, strengthening our US East of
Rockies FVC business through the Whiting refinery modernization project,
and continuing to grow our advantaged petrochemicals business in China.
We intend to continue to upgrade our portfolio through investments in
advantaged assets and the completion of our divestment programme,
including the US southern west coast FVC and the Texas City refinery,
announced in February 2011.