French oil, gas and petrochemicals
Oil and gas
In July last year, the French cabinet approved a long delayed energy bill that will be used to encourage energy efficiency. The bill is expected to become law early this year and the legislation poses some upside risk to BMI’s gas consumption outlook. Natural gas could indeed become an attractive option as a backup to intermittent renewables.
BMI has lowered its gas consumption forecast to account for revised data from the EIA and a bearish economic outlook, however, the overall trend remains the same as the company anticipates moderate growth in demand from the latter end of the forecast period. France is anticipated to have significant unconventional deposits of gas.
Petrochemicals
During 2014, BMI reported that the French petrochemicals sector began a slow recovery, however, the company does not envisage a return to prerecession production volumes following a series of plant closures throughout the value chain. Total is yet to complete facility shutdowns with the planned closure of ethylene and propylene operations at its plant in Carling. This, once complete, will remove 400 000 tpy of ethylene capacity. Total has also announced plans to spend 160 million Euro on polymer upgrades at the site before 2016 with the creation of a new thermoplastics unit.
BMI has reported that other French producers are likely to shift from high volume basic chemicals and petrochemicals to high value niche products in an effort to improve their competitive edge in the face of an onslaught of low cost US and Middle East rivals. BMI has also said that it remains sceptical that any major improvements in French exports will prove sustainable due to obstructive bureaucracy, high labour costs and the inflexible labour market that lies at the heart of ongoing competitive issues. However, while improving regional growth dynamics appear to be slowly driving the French economy into positive growth territory, the lack of reform efforts undertaken so far imply that the economy will struggle to regain export competitiveness in the foreseeable future, according to BMI.
Edited from report briefs by Claira Lloyd
Read the article online at: https://www.oilfieldtechnology.com/hydraulic-fracturing/17022015/oil-gas-petchem-france/
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