How oil prices could be a boon for petroenergy producers
Petrochemical industries are being squeezed by the recent price decline of oil, which has plunged to a three-year low.
The drop has pushed the world’s largest petrocompany into an uncertain future, as the global market for petrostates, which use petroelectricity to clean up oil spills, is also in flux.
The global petro industry was worth $19.2 trillion in 2013, according to the World Bank, and according to a study by the International Monetary Fund, there is $1.7 trillion in debt on the books of petro-companies worldwide.
With oil prices down by more than 50% since June, petro companies have been looking for new ways to grow their business, including partnering with the United States on a deal to develop and supply petrocoke, the primary fuel for hydraulic fracturing (fracking), a technique to crack rock formations and release trapped oil and gas.
The deal between PetroChem and US-based BASF has been widely reported in the media, but in an interview with Bloomberg News on Thursday, the president of Petrochem’s Petrochemical Operations in the United Arab Emirates, Ahmad Alhaji, said he had no plans to partner with BASF in the future.
“The oil market is the most challenging in terms of price and supply and demand,” Alhajo said.
“I can’t imagine what the future holds.
There are other countries that can offer us the same resources.”
BASF declined to comment on the talks with Petro Chem, but Alhaji told Bloomberg he would not “leave” the company, which he called a “global player” in petro chemicals.
Petro chemical is one of the worlds largest producers of petrostats, which are used to clean the toxic, smelly oil and chemicals from oil spills.
The petro chemical industry has struggled to cope with a price drop that has wiped out much of its profits, as it has been forced to make significant investments in upgrading its infrastructure to prevent further accidents.
The company was founded in 1975 by the Saudi royal family, and has become one of Arabia’s largest oil companies.
As the Saudi-owned company continues to struggle to find profitable markets, it is looking for ways to expand its business.
BASF recently partnered with the British oil company BP, and BP’s subsidiary Total in June announced plans to begin production of petrocarbons, which include natural gas liquids.
Total, which is owned by France’s Total SA, also plans to start production of natural gas petrostated in 2019, a move that could be welcomed by the US shale gas industry.
While the shale gas boom is expected to spur economic growth, it has created new risks for petropollution producers.
Petropolluted oil can be as toxic as heavy metals, and some have already been found to be harmful to human health.
As petro energy markets continue to decline, the company may look to expand into other forms of petroleum.
“If you look at how the petro sector is going, the market for oil has been a bit of a roller coaster ride, but it has finally come back,” Al Haji said.