COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 03.04.1996 
COM(96) 143 final 
WORKING DOCUMENT OF THE COMMISSION 
on 
Report on the Situation of Oil Supply, Refining and Markets in the European 
Community 

- 1 
Report on the Situation of OU Supply. Refining and Markets in the European 
Community 
(Working Document of the Commission) 
CONTENTS 
REPORT 
ANNEXES: 
General Economic Context 
B 
B.l 
B.2 
B.3 
C 
C.l 
C.2 
C.3 
D 
D.l 
D.2 
D.3 
D.4 Crude Oil Supply 
Global Energy Reserves 
Global Oil Supply 
European Union Crude Oil Supply 
Oil Product Demand and Supply 
Global Context 
European Union Oil Product Demand 
European Union Oil Product Supply 
Environment 
Political and Economic Context 
Current and Proposed Measures 
Implications for Downstream Economics and Decision-Making 
Environmental Outlook 
E 
E.l 
E.2 
E.3 
F 
F.l 
F.2 
F.3 
F.4 Oil Refining 
Refinery Numbers, Capacity and Utilisation 
Refining Margins and Profitability 
Refining Outlook 
Oil Product Marketing 
Marketing Sub-Sector Definition 
Retail Statistics 
Retail Market Shares and Profitability 
Harmonisation Questions 
Glossary of Terms 
Charts and Tables 
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Report on the Situation of Oil Supply, Refining and Markets in the European 
Community 
(Working Document of the Commission) 
REPORT 
Background to the Report 
The Oil Industry 
Refining Profitability 
Marketing 
Environmental Issues 
Security of Supply 
Internal Market 
Conclusions CONTENTS 
REPORT 
Background to the Report 
The European Commission has been preparing regularly Reports for the Council on the 
situation of oil supply, refining and markets in the European Union since the late 1970's as a 
result of the oil price shocks. These have covered such developments as the problems of 
overcapacity, changes in demand structure and stricter environmental requirements. The last 
such Report was prepared in 1992 following the Gulf Crisis, in the form of a Communication 
to the Council [COM (92) 152]. 
The Council adopted a number of conclusions in response to the paper on 30 November 1992 
which have influenced the work of the Commission. The strategic importance of a competitive 
refining industry to the stability of the product markets and Community supply security was 
acknowledged. The importance of the environment was stressed and close consultation with 
industry was recommended on possible environmental measures and the costs to producers and 
consumers thereof Since then the Auto Oil Programme, which represents a new form of in 
depth cooperation between the Commission and industry has been started. The first proposals 
concerning both fuel specifications (gasoline and diesel) and motor vehicle emission standards 
resulting from this initiative are now being discussed. 
The review of the current restrictions on the use of fuel oil in power generation (Directive 
75/405/CE), which has resulted in the proposal in the White Paper - An Energy Policy for the 
European Union [COM (95) 682] to withdraw the Directive, was another of the Council 
recommendations. Support for the Producer Consumer Dialogue was stressed, and the 
Commission has remained active in this, and indeed co sponsored the International Energy 
Conference in Puerto La Cruz, Venezuela in September 1995 which brought together 
Ministers from producer and consumer countries to discuss energy issues in which they share a 
common interest. The Council reaffirmed the need for the Commission to continue to 
undertake these regular reviews and noted the importance of them to the Community when 
discussing energy policy. 
The present Report is based on the mandate in the Council Conclusions 10369/92 of 30 
November 1992 in which the Commission, 'is encouraged to regularly analyse the situation in 
the oil markets and in the refining sector in the Community and in which the Commission is 
asked to, 'carry out in depth consultations with the oil industry prior to the introduction of 
environmental protection measures, particularly with a view to the influence of these on the 
cost for producers and consumers of such measures'. The Report has been prepared taking into 
account developments which have taken place in the sector since 1992, and the recent White 
Paper on Energy Policy which develops an approach based on three main pillars of energy 
policy for the Community, namely competitiveness, the environment and security of supply, 
which are all relevant for this sector. 
5 The objective of the Report, is therefore to identify and explore the key issues concerning the 
sector (oil supply, refining, and marketing) notably refining industry performance, the 
environment, security of supply and the Internal Market and where appropriate comment on 
the implications for the Community. 
6 The Report is the product of extensive analysis of the sector which has been undertaken 
following lengthy consultations with individual oil companies, industry associations and input 
from national administrations. The principal points and conclusions to emerge from that 
analysis are presented here covering the major issues and conclusions and in a series of annexes 
which deal with the issues in more depth within the overall general economic context. 
The Oil Industry 
7 Oil is by fer the largest component of gross energy consumption in the Community. 
Consumption in quantitative terms is expected to increase over the next 25 years despite a 
marginal decline in its percentage share from 42% to between 36% and 38%. These figures are 
taken from the 2020 Study prepared as part of the White Paper on Energy Policy; discussions 
on how these can be reconciled with the Community's international obligations with regard to 
greenhouse gas emissions will take place in more specific fora dedicated to this issue. The 
Community is the largest world net importer of crude oil Its total product imports and exports 
are approximately equal and it is characterised by its open trade policy. 
8 The Oil sector represents a major partner in the Community economy. Accordingly, the 
successful performance of its different segments (notably Refining and Marketing) has been and 
will continue to be of strategic importance for the Community in the field of energy, and both 
economically and socially. The sector is currently going through a period of change with the 
possibility of new alliances and joint ventures as enterprises adapt to changing trading 
conditions in the Community and new market opportunities, particularly in Asia. 
9 The Report concentrates mainly on downstream Refining and Marketing in the Community. 
These two activities have been considered as broadly separate although the proximity of 
individual refineries to particular markets, which reflects the importance of distribution costs, is 
also a factor. Oil companies are often vertically integrated, from Exploration and Production 
(Upstream) to Refining and Marketing (Downstream), and in some cases have large Chemicals 
activities as well ITie financial performance of the integrated whole is often considered to be a 
measurement of the health or profitability of the industry and some recent consolidated profit 
announcements have been good. However, it is important to consider each activity separately 
as there are opportunities to participate in only one part of the chain, for instance exploration 
companies, refining companies and marketing companies. These compete within particular 
sectors hence each individual activity has to be considered on a stand alone basis. 
10 The refining sector has consistently provided the Community with secure supplies of oil 
products, such as transport and heating fuels, at competitive prices whilst at the same time 
improving its environmental performance. However, the Report reveals some trends in refining 
profitability which might impact negatively on industry's capacity to continue this role which 
requires ongoing investment, given that increasingly there are opportunities outside the 
Community which may prove to be more attractive as investments than those within the 
Community. 
Refining Profitability 
11 The refining sector has suffered from poor profitability for some time. Margins on the most 
basic of the refining processes, the initial processing by distillation, are currently virtually nil 
whilst the margins achieved on upgrading processes which improve the intermediate products, 
such as catalytic reforming and cracking, remain too low. Individual refineries may be able to 
cover operating costs, but to sustain industrial development in the sector it is not sufficient to 
merely cover cash costs. 
12 The three principal elements of the problem are outlined below. On the refining and demand 
side there are two factors, that of excess refining capacity and that of the product mix, notably 
the relative demand for gasoline and diesel On the supply side there has been a change in the 
crude supply structure to Community refineries towards lighter crudes. These create their own 
particular problems, and when combined have also affected price differentials between products 
as explained below. The regulatory framework within which the industry operates has also had 
a crucial effect (environmental legislation, fiscal regimes on oil products). 
13 Excess refining capacity takes two forms, firstly there is an excess of crude oil distillation 
capacity relative to the amount of crude oil processed. Secondly, there is an excess of 
conversion capacity which converts the low-value fuel oil produced in the crude oil distillation 
process to lighter higher-value products such as gasoline. 
14 In this respect it is worth mentioning that the apparent contradiction of high reported utilisation 
rates and excess capacity can be explained by poor quality utilisation data. Percentage rates for 
utilisation are computed based on the initial nominal quoted capacity of a refinery, and over 
time the operator is often able to improve on this by making technical improvements to 
processing equipment as technology advances. However, these 'capacity creep' increases are 
not necessarily publicly available for competitive reasons and there is actually more surplus 
capacity than as demonstrated by the data. 
15 The excess of crude oil distillation capacity as already stated is long-standing, and while the 
industry has made strenuous efforts over the last fifteen years to reduce it, an excess, albeit 
diminishing^ persists. The situation is not helped by the above 'capacity creep' increases which 
are also achieved in conversion plant. 
16 The excess of conversion capacity has arisen because of over-investment in recent years. This 
has happened mainly for two reasons. First of all the change in product mix demand. A 
different fuel mix between diesel and gasoline from that which was actually experienced was 
forecast - underestimating the growth in demand for diesel and overestimating the growth in 
demand for gasoline (demand for the latter actually fell). 
17 Secondly, on the supply side it was forecast that the crude oils available over the period would 
on average become heavier whereas they in fact became lighter. This in turn was the result of a 
lightening in the 'basket' of crude oils placed for sale by Saudi Arabia in order to maximise their 
oil revenues, and far better than expected production levels of North Sea crude which is 
generally light. This was made possible by cost reductions and technological advances in the 
upstream sector. Overall less rather than more conversion processing capacity has therefore 
been required as refining lighter crudes produces more lighter products. 
18 Finally, there has also been the major impact which regulatory factors have had. There has been 
an increase in the cost of environmental protective measures, which is not immediately 
recoverable in product prices in the present market conditions. High clean up costs and the 
unpredictability of rates of fiscal duties have also had an impact on refining investment 
decisions. 
19 The combination of these three elements has several consequences. In the short term there has 
been a 'mismatch' between refining capacity and product demand which has led to reduced 
differentials between light and heavy products which have led in turn to poor returns on 
investment. Refiners are reluctant to close refineries given the high clean-up and social costs. 
Instead, they are tempted to adopt a "wait and see' approach as long as operations are cash 
positive or to try to sell refineries, even at very low prices, rather than close them. 
20 The tendency for producer involvement downstream, which is welcomed as a demonstration of 
commitment to the Community market provides a pool of potential purchasers who may be 
governed by different strategic principles, and willing to enter the sector, particularity when 
refineries are available on attractive terms. There are likely to be further closures but even when 
refineries are closed there is no guarantee that margins will improve as the capacity may 
effectively be replaced by imports. 
Marketing 
21 The situation of the marketing sector varies across the Community but overall is in substantially 
better condition than is refining. Structural differences of historic origin play a major role as do 
the different levels of upstream and downstream integration of the participants in the respective 
market areas. There is a general trend across the Community for the number of retail sites to 
decrease with a corresponding increase in average volumes sold per site. However the pace of 
this restructuring across individual Member States differs depending on a number of factors. 
22 The advance of the hypermarkets at the expense of traditional operators in a number of 
Member States has also been significant. For the moment, this appears to be to the advantage 
of the consumer in terms of the significantly lower prices that are on offer but it is causing the 
traditional operators and notably the refiners to suffer a material drop in profits in those 
markets most effected. This in turn damages the ability of the operators to maintain capital 
expenditure on improving retail outlets in those markets and may lead to more retail site 
closures. Secondly, some operators are swapping retail outlets in order to reinforce their 
presence in particular areas. This often leads to a reduction in unit costs which may be shared 
with consumers provided there remains sufficient competition. These developments affect the 
overall structure of the market and accordingly the role of the traditional operator is changing. 
Given the scale of change and the importance of the sector these trends both require 
monitoring. 
Environmental Issues 
23 There is a great deal of concern across the Community about the environment and in particular 
air quality. Citizens are demanding improvements and indeed specific committments in this 
respect were made in the Framework Convention on Climate Change. Environmental 
legislation, particularity with regard to the downstream sector, is complex. Environmental 
measures cover the operating arrangements in the refining process itself^ product specifications 
and emission limiting equipment in the distribution chain. However improving for instance fuel 
specifications is not an isolated activity and requires close cooperation with other industrial 
sectors. This has been the case with the Auto-Oil Programme and its search for the right 
balance between the most cost effective measures. 
24 The Auto-Oil Programme is a tripartite initiative on air quality, emissions, fuels and engine 
technologies by the Commission, the Refining industry (EUROPIA) and the Motor industry 
(ACEA). The objective was defined as being to provide policy-makers with an objective 
assessment of the most cost-effective package of measures including vehicle technology, fuel 
quality, as well as local measures, necessary to reduce emissions from the road transport sector 
to a level consistent with the attainment of the new air quality standards being developed for 
adoption across the Community. 
25 Specific measures are often introduced on a step by step basis and at any given time industry is 
commissioning new equipment in response to earlier legislation, planning how to meet the 
future targets specified in existing legislation and involved in discussions on how further 
improvements may be made. These measures demand heavy expenditure by the industry in 
refineries and in storage and distribution plant, and each new protective measure, such as a 
further lowering of emission levels is generally proportionally more expensive than the last as 
the technical challenges of even greater improvements increase correspondingly. Some 
estimates of the potential costs are included in Table D5 in the Annex. 
26 The whole Community benefits from improved air quality and in view of the magnitude of the 
investments required and the long term nature of the refining industry there is an obvious need 
for consistent and predictable regulatory measures based on a cost effectiveness approach to 
ensure that these benefits can be realised. 
Security of Supply 
27 Security of Supply remains a major issue, as outlined in the White Paper on Energy Policy, 
although the risk of any serious threat to the Community's security of oil supply in the short 
term is considered to be low. Conditions have changed substantially from the crisis/sub-crisis 
situations which existed some twenty years ago when crude and product supply sources and 
markets were much less diversified, transparent and efficient than they are today. 
28 Nevertheless because the Community will continue to depend heavily on imported crude oil 
there is an ongoing need for vigilance in both the short and long term More than three quarters 
- 8 -
of proven world oil reserves are located in potentially unstable areas from a political and/or 
economic point of view and this highlights the continuing requirement for measures, adapted 
where necessary to changing market circumstances, to meet the possibility of sudden supply 
disruptions which would be highly damaging for the world and Communiiy economies. 
Considering the fact that secure refined oil product supplies represent an indispensable element 
of the socio-economic wellbeing of our population the existence of a strong and competitive 
refining sector in the Community is of strategic importance. 
29 Good producer-consumer relations need to continue to be developed in order to protect the 
current stability, and the dialogue and alignment of interests via mutual investment and 
operational arrangements should continue. Improvements in technology which make 
exploitation of new provinces possible will contribute to this and further improve the 
diversification of supply. Upstream investment possibilities in both OPEC and non OPEC 
producer countries are now beginning to open up for Community companies and producer 
investment in the Community downstream sector is continuing. Such moves consolidate the 
mutual interest that both parties have in the successful performance of the oil sector as a whole 
and are to be welcomed as long as they are based on market principles. 
Internal Market 
30 The Internai Market in the Oil Sector is relatively well developed and transparent compared to 
other energy sectors. Many of the developments in the refining sector stem from the feet that 
the Internal European Market is part of the wider world market with global competition. It is 
clear that very little rate approximation between Member States has taken place since 1 January 
1993. As outlined in the White Paper on Energy Policy this is an area where progress is 
difficult, given the wide range of interests and views but efforts continue in order to remove 
distortions. 
31 Similarly in the field of product technical normalisation there still remain across the Community 
many instances of differing norms in essentially similar products which may not allow the full 
benefits of the Internal Market to be realised. 
Conclusions 
32 A healthy oil sector underpins social and economic progress in the Community, provides the 
necessary security of supply at competitive prices and can support improvements in 
environmental protection. The security of oil supplies at reasonable prices to the Community is 
largely dependent on the smooth functioning and stability of the international oil market. Hence 
there is the need to continue to foster and develop a policy of dialogue and cooperation with 
the Community's main oil suppliers and competitors on the international market and to enforce 
and promote the Energy Charter Treaty. 
33 It is of prime importance that a good climate for investment be developed. While the industry 
as a whole shows today a generally good financial performance mainly due to its vertical 
integration and diversification of activities the fact is that the Community refining sector has 
over the last few years experienced a period of very poor refining profitability, the reasons for 
which result from market circumstances as well as from regulatory factors. 
34 This situation is likely to lead in the short term to a restructuring process resulting in the 
closure or sale of refining capacity which to a certain extent has already started. However, it is 
not possible to predict exactly where or when, or even how much capacity will be involved 
because of the wide range of factors involved across the Community. To the extent that 
rationalisation will occur in the sector the Commission emphasises that, as in the 1980's, 
individual refiners must remain responsible for taking decisions about capacity closures. These 
decisions should take place in the most cost effective way and satisfy the competition rules of 
the Treaty. The Commission will continue to monitor the situation and discuss with industry 
and Member States. 
35 It is in the Community's long term interest to have a strong technologically advanced refining 
industry. It contributes to security of supply, competitiveness in general, and that of the sector 
itself and the petro-chemical sector phis the associated service and equipment supply industries 
in particular, and of course to employment in the Community. It must also be recognised that 
there is growing competition for investment from regions outside the Community where new 
markets are growing and strengthening. 
36 Environmental policy and the necessary legislation required to bring about the desired 
improvements in air quality_will continue to impact on the sector, particularly because of the 
magnitude of the investments required. Its importance will continue to influence activities both 
in the refining and marketing areas. Measures should be coherent within a consistent and 
predictable framework based on a rigorous cost-effectiveness approach. 
37 The Commission recognises that, although Member States have generally increased their rates 
of excise duty, very little rate approximation has occured. The Commission has launched a 
wide ranging consultation process, before considering what, if any, proposals are necessary in 
order to improve the functioning of the Internal Market. In addition the Commission 
recommends further study of possible improvements in the field of product technical 
normalisation. 
38 The Commission will undertake regular analyses of the oil and refining and marketing industry 
in the Community including an improvement of the accuracy of our understanding of the 
refining capacity situation and utilisation rates, recognising the importance of these for the 
formulation of energy policy and the succesful implementation of the White Paper on Energy 
Policy. 
10 
ANNEXA 
General Economie Context 
The strong recovery in the Community economy in 1994 gave way to a marked slowing of the 
rate of expansion during 1995. Output growth which had reached 4% during parts of 1994 is for 
1995 as a whole likely to be of the order of 2.5%. The outlook for 1996 is now less favourable 
than previously anticipated and it now seems likely that growth will be below 2%. However, the 
main forces determining the growth outlook for the European economy are favourable to a 
renewed pick-up in the rate of expansion in economic activity during the year and although the 
average for the year is likely to be below that of 1995, the underlying trend would, in contrast, 
be positive. 
The main positive growth forces include: 
- the world economy outside the Community is set to expand at a healthy pace; 
- the fundamentals of the Community economy in terms of low inflation, moderate wage 
pressures and sound investment profitability are favourable; and 
- monetary policies have eased. 
Outside the Community economic activity has been expanding at a strong pace since 1992. 
There has been a renewed dynamism of world trade as the emerging markets in Asia and Central 
and Eastern Europe rapidly integrate into the world economy and the benefits of the trade 
liberalising measures agreed in the GATT Uruguay round begin to be felt. The rapid pace of 
export market growth appears to have slowed down but the outlook for the external 
environment remains relatively favourable. 
- 11 
ANNEXE 
Crude Oil Supply 
B. 1 Global Energy Reserves 
Following the oil shocks of 1973 and 1980, long run adjustments have now been made and 
energy supply and demand have achieved a new balance. As a result, global energy reserves 
are considered adequate and are unlikely to pose a physical constraint in the medium term. 
Proven oil reserves are some 43 years (Chart B.l). This is certainly the lowest 
resources/production ratio (proven reserves to current rate of production) among the fossil 
fuels, although these oil reserves are equivalent in energy terms to the gas reserves (ca. 135 
billion tonnes oil equivalent (btoe)). However, new discoveries and higher recovery rates 
from existing fields -have matched or exceeded consumption for many years - proven 
reserves have trebled since the mid-1960s. In geopolitical terms, it is of the utmost 
importance to note that 65 % of the reserves are held in the Middle East, a further 11% in 
Venezuela and Mexico and 6 % in the CIS (Chart B.2). 
World proven reserves of solid fuels (at present rates of production) extend to over 200 
years. Proven gas reserves extend to some 65 years. These have been growing recently in 
parallel with the big increase in demand for this fuel. 70 % of world gas reserves winch are 
located in the CIS or the Middle East, much of which are within range to economically 
supply western or central Europe. 
There is uncertainty about the impact of the changing shift in world demand for oil. Oil 
demand will grow strongly, particularly in China, India and other fast-developing Far East 
countries. So although there is unlikely to be a shortage of oil in the medium term, there 
could be growing competition from the emerging economies, particularly as both the US 
and Europe face increasing dependency on imported energy. 
B.2 Global OU Supply 
From the mid-1980s, OPEC had regained some of the share lost to new non-OPEC 
production following the oil price shocks of the 1970s. However, in recent years, 
technology and cost reduction advances in oil exploration and production, notably in the 
North Sea region, have resulted in OPEC taking a lower than expected share of the growing 
demand for oil (Charts B.3 and B.4). 
Demand for oil is forecast to continue to rise, very gradually tightening the global 
supply/demand balance. As well as increasing the requirement for non-OPEC crudes, 
12 
supplies from OPEC countries are bound to increase, particularly from the high-reserve 
countries of the Middle East and from Venezuela. There is already available some 2-3 mb/d 
of spare production capacity, mainly in the Gulfj without taking into account potential Iraqi 
production of ca.2 mb/d. 
Between 1985 and 1994, world crude prices (as represented by Brent crude in current 
money terms) averaged about $20/bbl compared to nearer $40/bbl between 1975 and 1985. 
Over the past three years, the average has been nearer $ 17/bbl (Chart B.5). Conventional 
wisdom has it that oil prices can be expected to increase in real terms, albeit only very 
moderately, over the next ten to fifteen years. Even against this background of a tightening 
supply/demand balance, crude oil prices are expected to rise only moderately for a number 
of reasons: 
(i) Technology-Driven Reduction in Exploration and Production Costs 
Many of the larger non-OPEC producing regions are mature developments, with 
reserves well on their way to depletion. Oil in the lower 48 states of the USA (Le. 
excluding Alaska) has been exploited more thoroughly and for longer than almost 
anywhere else in the world. Even Alaskan oil, although discovered more recently, 
feces a future of declining production. The fall in oil prices in the mid-1980s had 
contributed to this trend by making some of this non-OPEC oil production 
uneconomic. However, many mature non-OPEC areas have been undergoing a revival, 
or at least have not declined by as much as expected. The technical response of the oil 
industry to the challenge of extracting oil economically at lower oil prices has exceeded 
expectations. 
There has been a significant reduction in cost of finding and extracting oiL Although 
there have been man-power reductions to improve productivity, technology has played 
the greater part. Exploration techniques have become more efficient and drilling 
technology improvements have considerably enhanced the productive capacity of oil 
fields. Small, formerly uneconomic, oil fields in the North Sea can now be exploited 
using specialist production vessels; horizontal drilling has become a widespread 
technique in only a few short years as a method of significantly enhancing oil field 
production capability. At the same time, many governments have improved their fiscal 
regimes in order to encourage oil exploration and production. Estimates for the cost-
reductions vary, but it is possible that finding costs could have halved over the past 
decade. Once developed, technology developments cannot be undone. Nor will 
technology stand still: even if future progress does not match that of the recent past, 
further developments will serve to dampen future oil price rises. 
(ii) Increasing Global Reserves 
Reserve additions have been replacing oil at least as fast as it is being used. Yet large 
areas of the world have still to be exploited or even remain unexplored. Potential new 
oil provinces include the west of the Shetland Islands, the Barents Sea, the Alaskan 
13 
National Wildlife Reserve, the South Atlantic and South-East Asia. Although 
obviously not an inexhaustible resource, the reserve base of oil does not seem to be a 
problem for some considerable time to come. However, it should again be noted that 
the traditional OPEC oil producers are expected to remain the predominant owners of 
global reserves. 
(iii) The Changing Influence of OPEC 
OPEC recognises that not only should prices preferably be moderate, but that stable 
prices would be in their long-term interest. As history has demonstrated, oil price 
shocks only choke off demand. Based on this experience, OPEC is in future likely to 
adopt a more market-orientated approach to pricing and supply, allowing prices to be 
driven by supply/demand factors. 
(iv) Re-integration of the World Oil Industry 
The growing participation of producer countries in EC downstream activities has over 
the last few years been followed by the opening-up by most of these countries of their 
upstream sector to consuming countries' companies. This process of re-integration is 
likely to continue and expand worldwide and will assist the stabilisation of world oil 
markets. 
(v) Increased Sophistication of Oil Markets 
Oil markets have become increasingly sophisticated in their operations. They have 
become much more transparent thanks to the information technology revolution and 
the underlying trends driving markets are now far better understood. That is not to say 
that there will not be volatility - after all, volatility is the basis upon which markets 
make their money. But the prospect of sustained oil price crises, induced by non-
transparency of the driving forces, have become less. 
(vi) Government Action to Facilitate Emergency Supply 
Effective measures now exist at global level, notably the IEA, and at regional levels, 
such as the EU, to face potential supply disruptions. The Gulf War was a good 
reminder to the world that these measures exist and can work. At both the IEA and EC 
levels, efforts are being made to keep these measures in line with changing market 
circumstances. 
(vi) Alternatives to Oil 
It is worth considering the alternatives to oiL hi twenty years, oil has been effectively 
ousted from much of the steam generation sector (in particular for electricity 
production) in the developed world, first by coal, then by nuclear. Now it is the turn of 
natural gas. Over the next ten to fifteen years Europe's demand for gas could increase 
14 
by 40 %, with half of the increase being for the power generation sector. Although oil 
will retain its near monopoly of the transport sector, it will have to fight for a dwindling 
share of static markets - not an environment for price increases. In the long term 
renewable sources of energy such as solar, wind, biomass, biofuel and geothermal 
which produce little or no pollution will constitute the main sustainable energy source 
and the Commission, as mentioned in the White Paper on Energy Policy, will come 
forward with a strategy for further development in the form of a Communication. 
B.3 European Union Crude Oil Supply 
B.3.1 Reserves 
Europe has significant coal resources although these will be decreasingly exploited. Oil and 
gas reserves, although modest by world standards, are expected to remain a significant 
indigenous energy resource. 
Total Western European proven oil reserves are less than half of the gas reserves (2.2 billion 
tonnes (bt) versus 4.9 btoe of gas). Most of those reserves are under the North Sea. EC oil 
reserves are 0.9 bt with almost all of the rest of European reserves being held by Norway. 
The European reserves to production (R/P) ratio is just 8 years, although reserves are being 
replaced almost as fast as they are being used so, taking probable reserves into account, the 
actual life will be considerably longer. 
B.3.2 Production 
Energy production in the EC can be expected to peak around 2000 after which all of the 
primary fuels, except renewable energies, are forecast to decline modestly. By 2005, EC 
energy production is unlikely to have fallen below that of 1992. 
EC North Sea oil production peaked in the mid-1980s and fell back quite rapidly over the 
following few years. However, production has actually been increasing since 1991 as 
technological advances in exploration and production as well as more favourable tax 
regimes have allowed new smaller fields to be brought on-stream economically while 
enhancing recovery from existing fields. As a result, decline is not expected to set in again 
until the late-1990s. 
B.3.3 Import Dependency 
Europe has been deficit in energy for many years, in spite of a long established and 
substantial domestic coal industry, and, in more recent years, the development of major oil 
and gas reserves in North-West Europe and a major nuclear power industry. Rising EC 
15 -
energy demand and declining domestic primary energy production will result in an 
increasing reliance on imports from third countries, notably the Middle East and the CIS. 
The dependency of the EC on imported energy (Le. energy imports as a percentage of gross 
inland energy consumption) currently stands at around 48 %. Although only slightly higher 
by 2000, dependency could reach 55 % by 2005, accelerating thereafter. 
The main change in import dependency is in coal - as domestic production declines, EC 
imports have risen from 29 % of consumption in 1990 to around 44 % at present and are 
expected to be 50 % by 2005. 
Gas dependency is around 40 % and the strong demand growth forecast for the next ten 
years increases that figure to over 55 % by the middle of the next decade. 
The dependency of the EC on imported oil is already high (Chart B.6). Imports accounted 
for nearly 80 % of consumption in 1990, although the recent strong performance of EC 
North Sea production has actually reduced the figure slightly. Including Norway, this figure 
drops to 60 %. With the projected long-term downturn in EC crude oil production 
expected to have only just started by 2005, and the expected continued modest growth in oil 
product demand in prospect, EC import dependency may be expected to rise to 83 % by 
around 2005. 
B.3.4 Crude Quality 
Until relatively recently, circa 1993, the quality of the crude oil barrel (that is, the overall 
mixture of crude oils) processed in European refineries had been getting progressively 
heavier. Production of domestically produced crudes, which tend to be relatively high 
quality, had fallen while imports of heavier crudes had increased. This exacerbated the 
impact on refining of the rising demand for high quality products for transport and resulted 
in significant refinery investment in new plant to convert heavy oil fractions into lighter ones. 
However, from 1993 onwards the average gravity of the EC crude slate has changed 
significantly due to the factors mentioned below. (Chart B.7 illustrates the trends in the 
average gravity of crude oil supply pre- and post-late 1993.) 
Over the past two years, North Sea oil production has enjoyed a revival. Consequently, the 
total level of oil imports into Europe has fallen slightly. Net crude oil imports into the EC-12 
in 1994 were 27 mt, or 6V2 %, lower than in 1992. 
The quality of imported crudes has changed too. OPEC crudes tend to be heavier, but not 
only has their share of global oil supply fallen somewhat over the past couple of years, but 
the overall quality has improved too. This is the result of a specific strategy by Saudi Arabia 
to maximise exports of higher value light grades in place of medium and heavy grades as far 
as possible in order to compensate for the substantial fall in oil revenues experienced since 
16 -
the 1986 price fàlL This has included the development by Saudi Arabia of recently 
discovered oilfields containing very light crudes. 
Finally, global supplies of condensates and natural gas liquids (NGLs) have been rising for 
some years. Blended with crude oil or directly imported as refinery feedstock, they have had 
the effect of Hghtening the global supply barrel. 
The unexpected hghtening of the EC crude supply barrel mentioned above is one of the 
main causes of the present poor profitability of EC refineries. 
The future direction of the quality of crude oils processed by EC refineries is difficult to 
forecast. In the very long-term, the vast reserves of medium and high gravity crudes held by 
the countries of the Middle East will eventually supply an increasing share of EC 
requirements as domestic reserves are depleted. In the near term, the supply barrel may well 
remain of a higher quality than had previously been expected. 
B.3.5 Supply Security 
For the moment, there is generally little cause for concern as to both the current and future 
outlook for security of oil supply. Conditions have changed substantially from the crisis/sub-
crisis situations which existed some twenty years ago when both crude and product supply 
were much less diversified than they are today (Tables B. 1/2/3/4/5/6). 
Moreover, there is the potential for an excess of oil supply over demand for some years to 
come. Nevertheless, the underlying assumptions as to the stability of crude oil supply 
sources should be subject to continual review. Indeed, as has already been indicated, more 
than three-quarters of world oil reserves are located in potentially unstable areas from a 
political and/or economic point of view. These will remain the dominant source of EC 
supply in the future. 
There is therefore an ongoing need for the EC to see to it that good producer-consumer 
relations are fostered by a process of dialogue and alignment of interests via investment and 
operational arrangements. Upstream investment possibilities for EC companies in producer 
countries are now opening up, and the developments that producer country companies have 
been pursuing in the EC downstream sector in recent years are continuing. Such moves 
consolidate the mutual interest that both parties have in the successful performance of the oil 
sector as a whole. Instances of this process are: 
• The development of co-operation in the energy field between the Gulf Co-operation 
Council (GCC) countries and the EU, as found in the progressive vertical integration of 
respective GCC and EC industries where EC downstream investment is undertaken by 
GCC companies while upstream investment is undertaken in GCC countries by EC 
companies 
- 17 
• The Commission's co-sponsorship of the Fourth International Conference on Energy in 
Puerto la Cruz, Venezuela on 25/27th September 1995 
• The Commission's participation in the Barcelona Conference of 27/28th November 
1995 on Euro-Mediterranean Co-operation 
• The establishment of the European Energy Charter which will provide a context within 
which investment by EC companies in the exploitation of the hydrocarbon resources of 
the CIS and CEEC may be undertaken with confidence 
Further attention needs to be given as to how best to facilitate this process of dialogue, 
hence the need for the EC as the world's largest oil importer to support and promote the 
political dialogue between producers and consumers following the new impetus given by 
France and Venezuela at the Paris conference in July 1991. 
Having sought to promote supply security via appropriate political arrangements as 
described above, there remains an ongoing need to ensure that there are in place adequate 
arrangements for the management of crisis situations via the maintenance of stock 
obligations and other co-ordinating activity. In this connection, there is broad satisfaction as 
to the complementarity of IEA and EC systems and the continuing efforts of both 
institutions to keep the necessary arrangements in line with the changed situtation of the oil 
markets and, particularly as far as the EC is concerned, to adapt the existing crisis legislation 
to the functioning of the internal market. 
A further issue to emerge in the context of supply security is the general question of crude 
oil supply logistics. The EC must have regard to the continuity of its long-term crude oil 
supply and be vigilant as to new opportunities to ensure its access to the supply 
arrangements that are evolving as a result of new crude oil production sources and changing 
political circumstances. Examples in this connection would include the new pipeline 
networks that are being developed or mooted in respect of new CIS production, notably 
from the Caspian Sea, and the re-opening of the ADRIA pipeline in Croatia, as well as the 
possibilities that are being considered in respect of Russian oil exports in the context of 
Trans-European Network support, as provided for in the Treaty. 
18 -
ANNEXC 
Oil Product Demand and Supply 
C.l Global Context 
World energy consumption more than doubled over the last three decades, reaching 8.4 
btoe in 1990. Between 1974, the year following the first major oil price shock, and 1992, 
the annual rate of growth was almost 2 %. Growth has recently ceased because of declining 
consumption in the former communist countries, but, as these economies recover, the 
underlying trend will be restored and demand for energy can be expected to grow again. 
The IEA estimate that energy could grow at 2 % or more each year over the next 10 to 15 
years. 
As regards the split by type of EC-15 1995 gross primary energy consumption of 1369 
mtoe, oil predominates with 574 mta, representing a share of 43 %, with gas coming some 
way behind in second place with 277 mtoe (20 %). While by 2005 oil consumption rises to 
606 mta, its share drops to 39 %, principally in favour of gas and renewables. (Charts C.l 
and C.2 respectively show the position for each year.) 
Overall OECD oil growth is forecast at around 1 % pa. between 1992 and 2010 by the 
BEA Outside the OECD, while energy growth in the countries of the CIS and Central and 
Eastern Europe takes some years to recover (but is still forecast to increase at an average of 
0.6 % p.a. between 1992 and 2010), the developing world will achieve growth rates of as 
high as ca. 4 % p.a., hi quantitative terms the forecast OECD growth of 1% is considerably 
larger than that of the developing world's 4%. In particular, the developing countries of the 
Pacific Rim, led by China and the "tiger" economies of South Korea, Taiwan, and the 
ASEAN countries, as well as Latin America, will be foremost in this growth. 
In the OECD, oil will continue to be increasingly concentrated in the growing transport 
sector, offsetting declining demand in other sectors. In the developing world demand will 
grow in all sectors because of the burgeoning need for energy in general and the lack of 
suitable alternatives to oil in many parts of the world. Transport sector growth will be the 
strongest. Although world oil demand will continue to increase, it will be outstripped by the 
other main primary energy sources, particularly gas. While losing share, oil will remain the 
most important source of world energy. 
C.2 EC Oil Product Demand 
C.2.1 EC Oil Product Demand Statistics 
19 
There has been a flattening-off in overall demand in recent years, while relatively modest 
growth (ca. 0.5 % p.a.) is expected over the next ten. (Chart C.3) illustrates the expected 
evolution of EC-15 oil demand, including the barrel split, over the period 1990-2005, the 
projections from 1995 on being based on the Commission's latest base case.) 
The Western European demand barrel has become steadily lighter over the last twenty 
years, with the most pronounced growth being observed in middle distillates, followed in 
turn by gasolines and other products. (Chart C.4 demonstrates this evolution in percentage 
terms. Chart C.5 provides a further demonstration of how the barrel hghtening has been 
predominantly in the direction of middle distillates since 1990 and also shows how this is 
expected to continue for a further ten years, albeit at a decreasing rate after 2000.) 
EC-12 oil demand was 494 mt in 1994, excluding some 35 mt of fuels for marine bunkers. 
At these levels oil accounts for some 43 % of total EC energy consumption. Gasoline (Le. 
aviation and motor gasolines phis light chemicals feedstock) accounted for 27 % of total EC 
oil demand, middle distillate (jet and heating kerosines, and gas and diesel oils, including 
marine bunker fuel) for 44 %, fuel oil (industrial and power station fuel plus marine bunker 
fuel) for 18 %, and other products (refinery gas, liquefied petroleum gas, solvents, 
petroleum coke, lubricants, bitumen and waxes) for 11 %. 
It is to be noted that the share of light products has been increasing steadily since the oil 
price shocks of the 1970s caused demand for heavy fuel oil to decline in the face of 
competition from other energy sources while the demand for gasoline, kerosene and diesel 
for transport has risen. More recently, and unexpectedly, the demand for diesel has 
continued to grow steadily at the expense of gasoline. 
C.2.2 EC Demand Outlook 
Commission forecasts predict that the overall level of demand for energy in the European 
Union will increase slowly but steadily over the next ten years, rising at around 1 % per 
annum 
As a result of the "dash for gas", mainly in the power generation sector, natural gas is 
expected to be the fastest growing fuel - demand could rise at over 3 % p.a.. Nuclear and 
renewables will grow too while coal declines. Oil is forecast to rise only modestly - around 
0.5% p.a.. 
While there is a possibility that the Directive 75/405/EEC banning the use of oil in power 
generation will be repealed, it is expected that oil demand for this use will fall. There is, 
however, some growth expected in the sectors of final demand - mostly transport fuels. Oil 
will retain the greatest share of total EC primary energy. By 2005 it is still expected to 
account for around 40 % of total energy consumed. 
20 
Oil demand growth will be concentrated in the non-substitutable transport and non-energy 
uses. Regionally, most of the growth is in Southern Europe, where there is more scope for 
increases in oil use as a result of stronger economic growth. Competition with gas will be an 
important factor, particularly where Heavy Fuel Oil (HFO) is being displaced for power 
generation (notably Italy) and where gas is being introduced as a new fuel (Greece, 
Portugal, Spain and parts of Scandinavia). 
Overall, the demand barrel is expected to continue to lighten. In common with the 
worldwide trend, although not as strong as the trend in the developing world, growth is 
expected in the middle of the barreL The products involved are kerosene for aviation uses 
and particularly diesel for transport, more than offsetting continuing decline in space heating 
uses of these fuels. 
Gasoline demand may grow slightly, mainly in Southern Europe, but the continuing trend 
towards diesel-fuelled passenger cars is expected to limit growth, unless there are taxation 
changes to equalise excise taxes on the two fuels on an energy basis. This would still not 
reverse the trend completely though as there are still operating efficiency advantages in 
using dieseL Current concerns about particulate emissions by diesel vehicles should be 
technically resolvable. 
The residual end of the barrel is expected to decline since fuel oil faces both environmental 
regulation and competition from natural gas. Nonetheless, a not insignificant proportion of 
residuals are used for purposes where substitution is not straightforward, HFO for marine 
bunkers, bitumen, lubricants and petroleum coke. These uses account for around 40 % of 
residuals in Europe are likely to grow in line with the economy. 
EC Oil Product Supply 
The 1994 mass balance of EC-12 oil product supply was as follows: total EC-12 product 
demand of 494 mt and non-EC-12 exports (including bunkers) of 110 mt were met by 517 
mt of net refinery production, non-EC-12 imports of 76 mt and EC-12 stocks and other 
changes of 11 mt. 
The ELPs own refining industry provides the overwhelmingly greater proportion (86 %) of 
overall product supply. While overall net imports of oil products are approximately zero 
(Chart C.6), this is made up of significant net exports of gasoline (15 mta), which have been 
increasing strongly over recent years, balanced mainly by net imports of fuel oil and naphtha 
(Charts C.7/8/9). Sources of product imports are widely diversified (Table B.2). 
21 
ANNEXD 
Environment 
D. 1 Political and Economic Context 
Protection of the environment is an EC objective of major political and economic 
significance. In Chapter XVI of the EC Treaty is set out the policy on the environment 
which the Commission has to promote. 
There is a great deal of concern across the Community about the environment and in 
particular air quality. Citizens are demanding improvements and indeed specific 
committments in this respect were made in the Framework Convention on Climate Change. 
The whole Community in general will benefit from improved air quality. For the energy 
sector in particular, environmental measures will have far-reaching effects, and is to be 
regarded as one of the key issues for the oil industry, having impacts on both the refining 
and the marketing sectors. 
D.2 Current and Proposed Measures 
The impacts of both current and proposed measures relate to operating arrangements in the 
refining process itself^ to new tighter product specifications, and to emissions-limiting 
equipment in the distribution system. 
The current EC directives in regard to pollutants in various oil products have given rise to 
tighter specifications in respect of sulphur, benzene and lead levels as set out in Tables 
(D. 1/2/3). 
In addition, there now exists a directive adopted by the Council in 1994 on the control of 
volatile organic compound (VOC) emissions resulting from the storage of petrol and its 
distribution from terminals to service stations (the so-called 'Stage T Directive - 94/63/EC). 
This Directive is a first step in the implementation of a strategy to achieve an overall 
reduction in VOC emissions throughout the EC. It applies to the operations, installations, 
vehicles and vessels involved in the storage, loading and transport of petrol from one 
terminal to another or from a terminal to a service station. 
The Auto Oil Programme and possible future measures arising are outlined in section D.4.2. 
below. 
22 
D.3 Implications for Downstream Economics and Decision-Making 
Current measures and proposals are already involving the industry in heavy expenditure 
which they are concerned will not be recovered in oil product prices. The implied 
investment, including expenditure incurred to date, for the downstream oil sector in respect 
of existing and potential EC environmental measures is substantial Table D.5 quotes 
estimates made by the industry and other sources as to the ranges of expenditure to be 
expected. 
The amount of middle distillate desulphurisation capacity already installed as a result of the 
measures is considerable, namely 155 mta of capacity by 1994 (Table D.6 gives the 
breakdown by country) compared with total middle distillate demand of 225 mt. 
A further potential economic implication is that the obligatory clean-up costs which are 
imposed on refiners who close plant are impacting on refinery closure decisions in that they 
raise substantially the cost of so doing. In accordance with the 'polluter pays' principle, 
operators who shut down refineries, depots, retail sites or other installations are required to 
clean up the site to specified acceptable standards. The costs to be incurred are potentially 
substantial - for a medium-sized refinery these could typically lie in the range ECU 60m -
ECU 80m, and for a retail site be in the order of ECU 200,000. 
D.4 Environmental Outlook 
D.4.1 Possible Future Measures 
It is clearly a complex matter to assess all of the technical and non technical environmental 
options that are available in respect of measures that could be applied in the refining sector, 
having regard to their economic aspects in terms of cost effectiveness and implications for 
competiveness, as well as geographical considerations. 
There has, however, evolved over the last few years a new approach to the formulation and 
selection of oil sector-related environmental measures. These are now aimed at achieving 
the new air quality targets for 1999/2005 in regard to emissions of pollutants Nox, S02, 
CO, particulate matter, lead, ozone, benzene,hydrocarbons, cadmium, arsenic, nickel and 
mercury. 
With regard to a second round of reductions in permitted VOC emissions, the Commission 
services are reflecting on the most cost-effective ways and means to achieve these, either via 
technical adaptations at service stations (the so-called Stage II measures which some 
Member States have already decided upon) or via the installation of large carbon canister in 
cars. 
23 
D.4.2 The European Auto Oil Programme 
Further environmental measures are in prospect. A major initiative on the part of the 
Commission in conjunction with the EC oil (EUROPIA) and motor manufacturing (ACEA) 
industries was launched in July 1993 with the objective of improving air quality. This 
initiative forms part of the Commission's new strategy in regard to vehicle emissions which 
is based on a multifaceted, coherent approach to pollution-reduction measures to be 
implemented by the year 2000. The initiative is called the European Auto Oil Programme 
(EAOP), and the strategy is fully in line with the Commission's Fifth Environmental Action 
Programme, which places particular emphasis on cost-effectiveness analyses. 
The intent of the EAOP is to identify which new measures may be required to meet air 
quality targets the development of which are based on a rational approach via the reduction 
of emissions in the most cost-effective way. These measures identified by the EAOP will 
form the basis for the next step in the new European legislation on both emissions and fuel 
qualities. 
The European auto oil programme has also identified improved inspection/maintenance 
schemes and a number of non-technical measures (eg road pricing, restriction of traffic in 
certain areas and scrappage schemes) as important elements of national policies to comply 
with future air quality objectives. However, the nature of most non-technical measures does 
not lend itself to regulation on an EU but rather on a national/local level. 
To date, four parts of the EAOP have been finished, namely: 
(i) the European Programme on Emissions, Fuel and Engine Technologies (EPEFE), 
(ii) the Air Quality Study of conditions in seven European cities, 
(iii) the monitoring of the quality of fuel available on the market, and 
(iv) the cost-benefit analysis of the technical and non-technical measures proposed for the 
achievement of the required air quality standards. 
The main aim of the EPEFE research test programme was to establish the relationship 
between engine technology, fiiel quality and emissions. The results of the programme have 
seived in assessing the emission reductions which can be achieved through changes in th 
equality of fuel. 
This excellent example of co-operative effort on the part of the Commission and the oil and 
motor manufacturing industries is expected to lead shortly to the establishment of sets of 
specifications to come into force in 2000 in respect of the properties of motor fuels which 
will bring about significant reductions in the emission levels of pollutants produced in their 
use and manufacture. As well as meeting environmental requirements, the new sets of 
24 
specifications will be consistent with the need to retrict the cost of resulting measures to 
manageable levels, and with other social and economic needs of EC countries. 
D.4.3 Industry Proposals on a Cost-Benefit Approach to Commission Measures 
The oil industry are proposing that the cost-benefit approach adopted in the EAOP be used 
as the basis for a much more thorough and comprehensivety global approach (called Energy 
Impact Assessment - EnergXA) in respect of Commission proposals which potentially will 
have direct or indirect repercussions on the energy sector. The approach proposed would 
take into account all impacts on energy and related activities in the cost-benefit assessments 
of proposed EC measures, amongst which they make mention of those relating to the 
environment. The assessments should involve a comprehensive and objective cost-benefit 
analysis, quantitative and qualitative, in relation to the impacts that proposed Commission 
measures would have on the realisation of EC energy policy objectives. This approach 
merits further examination by the Commission services. 
25 
ANNEXE 
Oil Refining 
E. 1 Refinery Numbers, Capacity and Utilisation 
E.l.l Definitions of Capacity Types 
Two of the principal elements of the refining process need to be defined in order to be able 
to discuss and understand adequately the economics of the refining sub-sector. 
The first is the crude oil distillation process, which is that part of the refining process 
relating to the initial processing of the crude oil, that is the primary distillation process, with 
the plant itself known as the crude distillation unit (CDU). Generally, when people refer to 
'refining capacity1, 'CDU capacity1, or 'straight-run' capacity, it is this capacity that they 
mean. 
The second covers upgrading processes, which improve the quality and value of 
intermediate products of the refining process. Such processes include those which improve 
distillates (like catalytic reforming), and conversion processes (like catalytic cracking). 
Conversion processes convert fuel oil manufactured in the initial cmde oil distillation 
process, or other intermediate products of the refining process which have a fuel oil value, 
to middle and light distillate products, thereby enabling refiners to match product output 
more closely with demand. Conversion is often quoted in terms of the equivalent catalytic 
cracking (CCU) capacity needed to produce the same amount of distillate, catalytic cracking 
being one of the commonest examples of conversion plant. Others include hydrocracking, 
residue cracking, combination cracking, visbreaking, coking and alkylation. 
The terminology presented in these definitions is used throughout this document. 
E.1.2 Refinery Numbers 
There were 93 refineries in the EC-12 at end-1994 following a long period of closures since 
1980 when there were 141. The total numbers of refineries plus primary distillation capacity 
and details on refinery complexity at the beginning and end of the period plus 1988 are 
given in Table E. 1. 
While the overall number of refineries has declined over the period, it may be seen that the 
number of complex refineries has actually increased (from 55 to 66), with decreases in semi-
26 
complex refineries (from 24 to 13) and in simple refineries (from 62 to 14), thus 
representing a significant increase in the complexity of total EC refining capacity. 
Following the closures, only three refineries with a capacity of less than 1 mta remain. In 
addition, some refineries are poorly located and, together with the low-capacity refineries, 
are in the current margins climate consequently suffering from particularly poor profitability. 
E.1.3 Trends 
Total EC-15 crude oil distillation capacity as reported by Member States for 1994 was 637 
million tonnes per annum (mta), of which 560 mta was utilised. This represented a 
utilisation rate of 87 % and followed the more or less steady rise in utlisation observed since 
1985 when utilisation was only 63 %. This increase reflects the programme of crude 
distillation capacity reductions undertaken by many refiners over the period, in part 
accounted for by the closures of complete refineries mentioned earlier. Table E.2 sets out 
the situation at 1.1.1995 for each Member State in respect of capacities of both crude 
distillation and conversion plant, while crude distillation capacities, throughputs and 
utilisation are plotted on Chart E. 1 for the period 1985-95. 
The crude oil distillation capacity figures, on which the utilisation rates are calculated, do 
not however include an adequate allowance for both the so-called 'capacity creep' which has 
been taking place over recent years and which describes small but ongoing expansions of 
existing nominal nameplate capacity as reported, and capacity which has been taken out of 
service but is available at relatively short notice. Hence the utilisation rates are over-stated, 
falling even further short of total utilisation than the figures indicate. 
Conversion plant capacity for the EC-15 area amounted to 199 mta (in terms of catalytic 
cracking equivalent) in 1995, up 50 mta or 35 % compared with 1985 (Table E.3/Chart 
E.2). This figure represents 31 % of total CDU capacity. This strong growth in conversion 
capacity reflects the industry's expectations at the time as to future gasoline demand growth 
and an increasingly heavy crude supply slate. These expectations were vindicated up until 
the early nineties when gasoline growth flattened off and the crude slate started to lighten 
(see Charts B.7, C.3 , C.4 and C.5, presented in earlier Annexes). The general consensus in 
industry is that the conversion capacity in place was nevertheless utilised as although 
margins were low they were still sufficient to cover cash variable costs. 
E.2 Refining Margins and Profitability 
E.2.1 Margins Definitions 
27 
Refinery profit margins are defined as 'gross margins' for the purposes of this document. 
That is, they are the difference between the proceeds derived from oil product sales and the 
cost of crude oil feedstock, divided by the amount of crude oil processed. 
E.2.2 Observed Margins 
Chart E.3 sets out refining profit margins expressed in US dollars per barrel of crude oil 
processed which have been earned over the period 1988-94 in North-West Europe (NWE) 
and in the Mediterranean (Med). For NWE, they are plotted for both 'Straight-Run 
Refiners1 (that is, the 'straight-run margin', defined broadly as that earned by refiners 
running only ciude distillation phis catalytic reforming plant) and for 'Upgrading Refiners' 
(that is the 'upgrading margin' defined as that earned by those refiners running crude 
distillation phis catalytic cracking, gas-oil desulphurisation and catalytic reforming plant). 
For the Med, they are plotted for 'Upgrading Refiners' only. 
As an initial observation, it may be seen that while there has recently been little difference 
between typical upgrading margins in NWE and the Med, over the period 1992-94 Med 
margins were higher by up to circa $0.6/bbL Secondly, it may also be seen that both 
straight-run and upgrading margins have fallen since peaking in 1991, reaching levels of 
circa $0/bbl and $1.8/bbl in 1995. 
It is estimated that upgrading margins would have to reach significantly higher levels on a 
sustained basis before refiners would earn adequate returns on the upgrading investments 
they have made in recent years. Chart E.3 demonstrates that upgrading margins have only 
once - in early 1991 during the Gulf crisis - reached such levels, and then only for a few 
months. 
E.2.3 Explanation of Trends 
The refining sub-sector of the EC downstream oil industry has been experiencing for some 
time what must now be regarded as chronically weak margins. At the same time, there has 
developed a surplus of motor gasoline manufacturing capacity and a tightness in diesel fuel 
supply. 
This situation has come about as a result of: 
(i) the evolution of the economic recession as reflected in a flattening off in overall EC oil 
product demand, in particular in gasoline, 
(ii) an ongoing EC excess crude oil distillation capacity to refine crude oil relative to oil 
product demand. 
(iii) an unforeseen increase in the availability of light crude oils from the North Sea and 
Saudi Arabia which has made it possible to manufacture additional light product 
28 -
without having to utilise all of the available refinery conversion plant (originally 
installed by the industry in the expectation of a growth in heavier crude supply which 
would have given rise to a light product deficit) (Chart E.4 demonstrates the effect of 
this development on both crude and product price differentials), 
(iv) the switch in road transport fuel demand from motor gasoline to diesel, driven in part 
by fiscal disparities in many Member States between diesel and gasoline which have 
boosted diesel demand at the expense of gasoline, and 
(v) an increasing number of environmental constraints, in particular the introduction of 
unleaded gasoline, necessitating investment in additional refinery plant to improve 
quality, which has given rise to a non-intended addition to light product rnanufacturing 
capacity. 
Despite the large reductions in crude distillation capacity which were facilitated over the 
eighties, the over-capacity situation remains and seems unlikely to disappear for some time 
without further plant closures. The further reduction of both crude distillation and 
conversion capacity appears therefore to offer one contribution to the resolution of this 
problem 
Some refiners have responded by closing further crude oil distillation capacity or in some 
cases by selling out complete refineries to purchasers whose economics are dictated by the 
strategic objective of entering new markets. Overall, however, there have been insufficient 
reductions in crude oil distillation to tighten oil product supply and thus boost straight-run 
margins to acceptable levels. 
In addition, no conversion capacity has been closed, and consequently there has not been 
the tightening in the availability of light distillates that would be necessary to boost 
upgrading margins. 
There has been only one outright refinery closure recently, (capacity approximately 5m toe) 
largely because refiners have been reluctant to take such strategically significant decisions, 
given their one-way character and the heavy environmental and social charges that would be 
incurred. 
The necessary reductions in crude distillation capacity have not yet happened because of the 
uncertainty as to if/when demand will pick up again, the ongoing trend to reduce costs 
which has allowed refiners to remain cash-positive, and the reluctance of individual refiners 
to face the strategic and operational implications as well as the substantial costs of refinery 
closures. 
As a result of the situation in both crude distillation and conversion, refiners, most of whom 
have at least a partial conversion capability, are trapped between having cash margins which, 
although low, are positive on the one hand but which do not offer adequate returns on 
conversion plant investment on the other. 
- 29 -
Given all the above actors, the industry is faced with an unusual degree of uncertainty as to 
the prospects for the sector and is therefore adopting a "wait-and-see" position vis-à-vis 
decisions on capacity. Table E5 gives details of net expansion and reduction in capacity 
which, at the beginning of 1995, had already been advised. Table E6 gives details of OPEC 
foreign refining capacity at the end of 1995. 
E.2.4 Effects on Refining Profitability of International Trade 
The overall oil product trade balance of the EC has improved considerably over the last few 
years (Charts C.6/7/8/9, presented in earlier Annexes). Some concern remains, however, 
that any reductions that are achieved in EC refining capacity could be off-set by increased 
imports, thus preventing any improvement in margins. 
It should be noted in this connection that the Generalised System of Preferences (GSP) 
provisions which have in recent times favoured oil product imports from some countries are 
shortly to become more severe, in line with the original intention of the GSP system which 
was to favour investment in the Less Developed Countries (LDCs). 
Imports could become an important factor with either the rising oil product self-sufficiency 
of Far Eastern countries which may have the effect of deflecting exports from Middle 
Eastern refineries to the EU, or with increasing oil product exports from the CIS. In regard 
to the latter, the likely evolution of the downstream interactions between the EC on the one 
hand and the CIS and CEEC on the other continues to be unclear, given the uncertain pace 
and direction of developments there. In the short to medium term, there is a consensus that 
changes are unlikely to have any ongoing major impact on downstream oil supply 
economics. In the longer term, it is felt likely that the CIS and CEEC will invest in refinery 
plant so as to match their product output more closely with domestic demand, thereby 
allowing their crude oil production to be exported as crude rather than product, a more 
profitable option than their current practice of exporting product surpluses on to 
international markets. 
In the USA, the moves to introduce Reformulated Gasoline in an attempt to reduce noxious 
emissions have had implications for EC refiners in that some have had at least temporarily as 
a result of supply logistical changes enforced on US importers to reduce exports of motor 
•gasoline to the USA. Some countries and companies argue that the new regulations, 
introduced in 1995, have favoured US refiners. The situation is, however, evolving and it 
remains to be seen whether the effects on EC refining profitability will prove to be material 
in the longer run. 
E.3 Refining Outlook 
30 
There is a consensus that the outlook for the sector is characterised by an unusually high 
degree of uncertainty, the consequence of which is to hobble the commitment of the 
industry to the sector as a whole. This is being manifested in a "wait-and-see' approach on 
the part of most industry players in regard to strategic decisions. 
More specifically, it is widely accepted by operators that there is a need for further refinery 
closures before margins can be expected to be restored to acceptable levels in the short to 
medium term, although it remains a possibility that the capacity surplus currently observed is 
merely temporary in character. 
It is also accepted, however, that further closures may prove difficult to achieve. This is so 
because of the heavy costs of closure. 
A further factor thought to be inhibiting refinery closure decisions is the question of the 
clean-up costs that would generally be incurred, as referred to earlier. Rather than close 
refineries which are unprofitable, it is believed that owners are instead being tempted to 
maintain them on a 'tick-over' basis, minimising investment while manufacturing such 
quantities and qualities of product as will leave them cash-positive. This course of action 
merely contributes to the general over-supply situation. In these circumstances, as an 
alternative to bearing the costs of closure, some refiners may well, for strategic or other 
reasons, be tempted to sell to purchasers whose strategic intentions and/or economic 
circumstances make such deals attractive to them Moreover, the new owners would have a 
low level of invested capital to remunerate and thus be in a position to operate profitably at 
margins which only covered operating costs, thereby directly weakening further refining 
margins throughout the sector as a whole. 
Accordingly, refiners are keeping their investments - other than obligatory care-and-
rnaintenance or that required for statutory reasons - on hold, given the absence of any 
prospect of improvement in the near or even the medium term With obligatory investment, 
refiners are fearful that they will not earn adequate returns, all of which is producing a "wait-
and-see' mood in the industry. 
Against this background, there is also the competition that other parts of the world present 
in regard to attracting industry investment. Better returns may be available elsewhere. 
International oil companies may concentrate their scarce capital resources in non-EC areas 
whose refining industries may well become more competitive and efficient than the EUs, as 
they argue, with corresponding consequences for the EC economy as a whole. 
31 -
ANNEX F 
Oil Product Marketing 
F. 1 Marketing Sub-Sector Definition 
The marketing sub-sector comprises the transportation from the refineries by ship, road, rail 
or pipeline to customers. Delivery to customers is sometimes direct, but more usually it is 
undertaken via intermediate storage depots used as a base for more local distribution. In the 
case of motor gasoline and diesel fuel, most customers obtain their product supplies via 
retail networks of service (that is, filling) stations, which in many cases are owned or 
franchised by the companies which own the refineries. Competitive pressures are such that 
operators seek to offer a higher quality of service vis-à-vis their competitors. 
F.2 Retail Statistics 
Since 1985 the number of service stations throughout the EC has been steadily declining. 
Total station numbers in the EC-15 now stand at 122,900, being a 23 % reduction on the 
158,700 in operation in 1985. (Table F. 1 gives details of the evolution of site numbers over 
the period in each Member State, while Chart F. 1 plots the evolution across the EC as a 
whole.) 
These reductions in site numbers have happened as operators have sought to increase fuel 
volumes sold per station and thus reduce unit costs. (Chart F.2 plots the evolution of 
volumes sold per site for the EC-12.) A factor in the evolution of the retail sector has in 
recent years been the rapid expansion in some countries of sales through hypermarkets, 
which have largely been at the expense of those of the traditional oil companies. 
F.3 Retail Market Shares and Profitability 
There has been a marked trend in retail market shares over the last ten years, with the 
traditional integrated oil majors and independents alike losing ground to the hypermarkets as 
well as to the so-called national oil companies and operators owned by producer country 
interests. 
The hypermarkets have been seen to make most progress in France and the UK which they 
are continuing to achieve via a policy of severe price competition. In this way the 
competitive structure of the motor fuels market is undergoing significant change. 
32 
As a response to this development, there has in recent times been an increasing trend to 
market rationalisation by integrated companies in motor fuel sales, where via a policy of 
selective swaps and disposals of retail filling stations, companies have focused their sales in 
particular geographical areas. While marketing is generally in better shape than refining, 
there is no doubt that in some areas the serious inroads hypermarkets are making into the 
business activity previously regarded as the province of the traditional oil companies are 
affecting the economics of the marketing sub-sector. 
F.4 Harmonisation Questions 
Fiscal disparities within many Member States between diesel and gasoline duties have 
boosted diesel demand at the expense of gasoline, and have thus exacerbated the mis-match 
between EC refinery output and demand (Table E.4). 
Moreover, fiscal disparities between Member States in respect of the same products have 
not permitted the abolition of tax frontiers, are producing cost, market and competitive 
distortions, and have given rise to problems of fraud. Given that it has been requested by the 
representatives of both industry and national administrations in discussions on fiscal issues in 
Lisbon on 13th/15th November 1995, the harmonisation of fiscal duties is now established 
as a necessary element in meeting the objectives of the Treaty in respect of the internal 
market. 
On product standards, there is currently across the EC as a whole a proliferation of oil 
product specifications in respect of automotive fuels arising from the often relatively slight 
differences to be found in different Member States in the specifications for essentially similar 
products. Some operators argue that standardisation of such product specifications 
throughout the EC would allow considerable simplification of their logistical arrangements, 
thus facilitating cost reductions which could at least in part be passed on to consumers. On 
the other hand, others view such variations in specifications as providing the context for 
normal competition on quality. 
33 
ANNEX G 
Glossary Of Terms 
The following definitions of terms used may be helpful, particularly for those who do not 
have specialist knowledge of the oil industry. It is presented alphabetically for ease of 
reference. 
'ACEA': Association des Constructeurs Européens d'Automobiles. 
'ASEAN1: Association of South-East Asian Nations 
'BAT: Best Available Technology. 
W: Barrel, being a measure of volume used in the oil industry. 1 cubic metre equals 6.29 
barrels. A metric tonne of crude oil contains about 7.33 barrels. 
•bn': Billion. 
Irt': Billion metric tonnes. 
'btoe': Billion metric tonnes of oil equivalent. 
'Capacity creep': An industry term used to describe the slow but steady expansion in actual 
capacity compared with the nominal capacity of plant that normally comes about as a result 
of ongoing improvements made by operators to plant, for example by way of the removal of 
bottlenecks in the flow of process liquids, etc. 
'CEEC: The Central and Eastern European Countries - that is the former Soviet satellite 
countries of Central and Eastern Europe, plus the Baltic states. 
'CIS': The Commonwealth of Independent States - that is the countries of the former Soviet 
Union. 
'Conversion capacity/plant' is a sub-category of upgrading capacity/plant (see below). 
Conversion plant converts fuel oil, or other intermediate products of the refining process 
which have a fuel oil value, to middle and light distillate products, thereby enabling refiners 
to match product output more closely with demand. 
'Crude oil': Mineral oil as found in its naturally-occurring state underground or under the 
sea-bed. 
34 
'Crude oil quality1: Crude oils have a number of different qualities of significance for refiners, 
among the more important and best known being sulphur content and gravity. In layman's 
terms, the gravity describes the Ughtness/heaviness of the crude, the fighter the crude the 
greater the proportion of fighter, and therefore generally more valuable, products which may 
be distilled from it without recourse to expensive conversion processes (see 'Conversion 
capacity/plant' above). Accordingly, fighter crudes tend to command higher prices. Another 
point to note is that fighter crudes tend to, but do not always, have a lower sulphur content 
and therefore do not require to the same extent desulphurisation treatment which adds to 
refining costs, a point of increasing significance given tightening sulphur specifications. 
Where this is the case the market value of the crude is increased further. 
'Downstream oil sector1: The downstream sector of the oil industry comprises: 
(i) the transportation and storage arrangements involved in the supply of crude oils and 
partially refined oils to refineries, 
(ii) the refining process itseh; and 
(iii) the transportation, storage, distribution and sales arrangements involved in moving 
finished oil products from refineries to customers. 
The activities involved in (i) are often referred to simply as 'supply1, those in (ii) as 'refining', 
and those in (iii) as 'marketing'. We have adopted this simplified terminology throughout the 
Report except where otherwise indicated. 
The 'supply1 activities undertaken in (i) include the movement of crude oils via ship and/or 
pipeline and/or storage tankage to refineries. 
'Refining' activities listed in (ii) include the refining of both crude and partially refined oils 
(taken from one refinery to another for further processing) in a complex sequence of 
chemical processes and blending operations. These ultimately produce a wide range of 
finished oil products for use by customers in a variety of applications, such as in fuel for 
transport or heating, feedstock for the chemicals industry, road-making materials, 
lubrication and others. 
'Marketing' activities described in (iii) involve the transportation from the refineries by ship, 
road, rail or pipeline to customers. Delivery to customers is sometimes direct, but more 
usually it is undertaken via intermediate storage depots used as a base for more local 
distribution. In the case of motor gasoline and diesel fuel, most customers obtain their 
product supplies via retail networks of service (that is, filling) stations, which in many cases 
are owned or franchised by the companies which own the refineries. 
'EC: European Community, taken throughout this Report to include all fifteen Member 
States unless indicated to the contrary. 
35 
'ECU: European Currency Unit. 
'EUROPIA': European Petroleum Industry Association. 
'Fuel oil': The heavier products which are manufactured from crude oil in the initial 
distillation process. These are used in the production of heavy finished products for burning 
in power stations, ships' boilers, etc. 
'FSU: Former Soviet Union. 
'GSF: Generalised System of Preferences 
'HFO': Heavy fuel oiL 
'kPa': Thousands of Pascals. 
'LDCs': Less Developed Countries 
'Light distillate': The fighter products which are manufactured from crude oil in the initial 
distillation process. These are used in the production of light finished products such as 
motor gasoline, feedstock for the chemicals industry, etc. 
'Med': Mediterranean. 
'Middle distillate': The products of medium weight which are manufactured from crude oil in 
the initial distillation process. These are used in the production of finished products such as 
automotive gas oil (that is, diesel fuel) and heating gas oil (that is, domestic heating fuel). 
'mt': Million metric tonnes. 
'mta': Million metric tonnes per annum. 
'm3': Cubic metre. 
'NGLs': Natural gas liquids. 
'NWE': North-West Europe. 
'p.a.': Per annum. 
'ppm1: Parts per million. 
'Refining': The chemical and physical processes involved in separating the hydrocarbon 
compounds found in crude oil together with the conversion of some of them into other 
36 
hydrocarbon compounds so that they may be blended together into a range of usable 
finished products. 
'Residue': Fuel oil and other heavy intermediate products manufactured in the initial 
distillation phase of the refining process. 
'R/P: Reserves to production (ratio - used in regard to oil and gas reserves). 
'Straight-Run Products' are those manufactured in the primary distillation process. 
'TPA': Third Part Access. 
"tpa1: Tonnes per annum. 
'Upgrading capacity/plant' is a term used to describe processes which improve the quality 
and value of intermediate products of the refining process. 
'VOC: Volatile organic compound. 
37 
Index to Tables and Charts 
Tables B. 1 Evolution of Crude Oil Trade 
B.2 Evolution of Product Trade 
B.3 Evolution of Gasoline Trade 
B.4 Evolution of Naptha Trade 
B.5 Evolution of Gas/Diesel Oil Trade 
B.6 Evolution of Residual Fuel Oil Trade 
Charts B. 1 World Proven Oil Reserves 
B.2 Distibution of World Reserves 
B.3 World Oil Supply 
B.4 OPEC Share of World Production 
B.5 Crude Oil Prices 
B.6 Oil Import Dependency 
B.7 Average API Values 
C. 1 Gross Energy Consumption EU 15 1995 
C.2 Gross Energy Consumption EU15 2005 
C.3 Oil Product Demand EU15 
C.4 Oil Demand Barrel Shape 
C.5 Incremental Oil Product Demand EU 15 
C.6 Total Product Trade EU12 
C.7 Gasoline Net Exports EU 12 
C.8 Gas Oil Net Exports EU12 
C.9 Fuel Oil Net Exports EU12 
Tables D. 1 Maximum Sulphur Contents - Gas Oil 
D.2 Maximum Lead Contents - Petrol 
D.3 Maximum Lead Contents - Unleaded Petrol 
D.4 Not used 
D.5 Environmental Investment Costs 
D.6 Desulphurisation Capacity 
E. 1 Refinery structure Evolution 
E.2 Refining Capacity EU 15 
E.3 Conversion Capacity EU 15 
E.4 Taxes and Duties EU 15 
E.5 Further net expansion or net reduction in capacity EU 15 
E.6 OPEC Foreign Refining 
Charts E. 1 Distillation Capacity Utilisation EU 15 
E.2 Refining Upgrading Capacity EU 15 
E.3 Refining Margins 
E.4 Brent/Dubai & Leaded Gasoline/Fuel Oil Price Differentials 
Table F.l Number of Petrol Retail Outlets EU 15 
Charts F. 1 Marketing of Oil Products EU15 
F.2 Average throughput per Service Station EU 12 
EU - 12 - Evolution of crude oil * trade 1985 - 1990 - 1994 
1985** 
Mta 1990 
Mta 1994 
Mta 
TOTAL IMPORTS 
EXTRA - EU imports 
(1 +2 + 3 + 4) 
1. OECD countries 
of which : 
. Norway 
OPEC countries 
of which : 
Algeria 
Iran 
Iraq 
Kuwait 
Libya 
Nigeria 
Saudi Arabia 
Venezuela 
Ex - USSR 
4. Other countries 
of which : 
• Egypt 
. Mexico 
TOTAL EXPORTS 
NET IMPORTS/(EXPORTS) 377.0 
312.6 
25.4 
23.2 
206.0 
18.3 
25.6 
• 24.8 
9.9 
37.7 
38.8 
28.4 
10.3 
27.5 
53.7 
11.7 
18.3 100.0 
66 
6 
8 
8 
3 
12 
12 
9 
3 
17 
4 
6 
87.4 
289.6 467.5 
428.4 
46.6 
43.8 
253.5 
19.0 
54.0 
21.3 
10.9 
51.1 
26.1 
51.9 
8.0 
61.2 
67.1 
11.1 
17.0 
67.8 
399.7 
* Refinery Feedstocks and NGL included. 
** For 1985, EU - 12 does not include ex-GDR. 100.0 
11 
10 
59 
4 
13 
5 
3 
12 
6 
12 
2 
14 
16 
3 
4 502.0 
455.2 
82.5 
80.1 
253.9 
18.2 
45.8 
13.6 
49.6 
32.5 
82.8 
7.5 
66.7 
52.1 
8.2 
10.2 
96.1 
405.9 100 
18 
18 
56 
4 
10 
3 
11 
7 
18 
2 
15 
11 
2 
2 
Sources : IEA Statistics and Eurostat TABLE B.l •7 
EU-12-' Evolution of all petroleum products trade 1985 - 1990 - 1994 
TOTAL IMPORTS 
EXTRA - EU imports 
(1 +2 + 3 + 4 + 5+6) 
1. OECD countries 
of which : 
Norway 
Sweden 
. United States 
OPEC countries 
of which : 
Algeria 
Kuwait 
Libya 
Saudi Arabia 
Venezuela 
Ex - USSR 
Romania 
5. Other Eastern Europe 
countries 
6. Other countries 
of which : 
• Egypt 1985 * 
Mta 
166.4 
91.7 
17.3 
2.7 
4.5 
6.9 
28.6 
8.6 
6.7 
2.7 
3.0 
4.5 
22.5 
4.0 
6.0 
13.3 
0.5 100 
19 
3 
5 
8 
31 
9 
7 
3 
3 
5 
25 
4 
7 
14 
1 1990 
Mta 
179.5 
89.2 
24.6 
6.3 
5.5 
8.1 
28.4 
7.7 
5.3 
5.2 
6.6 
2.6 
17.8 
2.4 
5.2 
10.8 
0.5 100 
27 
7 
6 
9 
32 
) 
9 
6 
6 
7 
3 
20, 
3 
6 
12 
1 1994 
Mta 
165.4 
76.0 
20.4 
6.6 
5.4 
6.5 
22.2 
8.4 
0.7 
4.0 
4.4 
3.2 
10.4 
0.9 
1.2 
20.9 
2.1 100 
27 
9 
7 
9 
29 
11 
1 
5 
6 
4 
14 
1 
2 
27 
3 
TOTAL EXPORTS 
of which : 
, United States 123.4 
9.8 157.5 
12.6 165.6 
12.1 
NET IMPORTS/(EXPORTS) 43.0 22.0 (0.2) 
For 1985, EU - 12 does not include ex-GDR. 
Soi ircpc • IPA Çtotictirc inH Fiiro<;tat TART.R R? Z 
EU - 1? - Evolution of total gasoline trade 1985 - 1990 - 1994 
TOTAL IMPORTS 
EXTRA - EU imports 
(1 +2 + 3 + 4 + 5 +6) 
1. OECD countries 
of which : 
Norway 
. Sweden 
. United States 
OPEC countries 
of which : 
Algeria 
Kuwait 
Libya 
Saudi Arabia 
Venezuela 
Ex - USSR 
Romania 
5. Other Eastern Europe 
countries 
6. Other countries 
of which : 
• Egypt 1985 * 
Mta 
17.2 
4.4 
1.5 
0.1 
0.5 
0.1 
0.4 
0.1 
0.1 
0.2 
0.0 
1.0 
0.7 
0.8 100 
34 
2 
11 
2 
9 
2 
2 
5 
0 
23 
16 
18 1990 1994 
Mta 
28.4 
7.9 
2.7 
1.2 
0.5 
0.4 
1.7 
0.6 
0.2 
0.2 
0.6 
0.0 
0.8 
0.4 
0.5 
1.8 Mta 
100 
34 
15 
6 
5 
22 
8 
3 
3 
8 
0 
10 
5 
6 
23 22.5> 
5.1 
2.3| 
0.9! 
0.9| 
0.0' 
0.3! 
O.2! 
0.01 
0.1 
0.1 
0.0' 
2.4 
O.Oi 100 
45 
18 
18 
0 
6 
4 
0 
2 
2 
0 
47 
0 
TOTAL EXPORTS 
of which : 
. United States 
NET IMPORTS/(EXPORTS) 23.9 
5.9 35.3 
5.1 
(6.7) (6.9) 37.5i 
1 
1 
6.81 
(15.0) 
For 1985, EU - 1 2 does not include ex-GDR. 
Sources : IEA Statistics and Eurostat TABLE B.3 3 
FM - 12 - Evolution of naphtha trade 1985 - 1990 - 1994 
TOTAL IMPORTS 
EXTRA - EU imports 
(1 +2 + 3 + 4 + 5 +6) 
1. OECD countries 
of which : 
Norway 
Sweden 
. United States 
OPEC countries 
of which : 
Algeria 
Kuwait 
Libya 
Saudi Arabia 
Venezuela 
3. Ex - USSR 
4. Romania 
5. Other Eastern Europe 
countries 
6. Other countries 
of which : 
• Egypt 1985 
Mta 
TOTAL EXPORTS 
of which : 
. United States 21.9 
16.5 
2.7 
0.5 
0.2 
0.2 
6.5 
2.9 
1.4 
1.1 
0.5 
0.0 
4.8 
0.8 
1.7 
0.3 
12.0 
1.0 100 
16 
3 
1 
1 
40 
18 
8 
7 
3 
0 
29 1990 1994 
Mta 
10 
2 24.3 
16.5 
3.1 
0.5 
0.2 
0.6 
7.2 
2.2 
2.1 
1.3 
1.3 
0.2 
2.9 
0.3 
0.0 
3.0 
0.3 
14.7 
0.7 Mta 
100 
19 
3 
1 
4 
43 
13 
13 
8 
8 
1 
18 
2 
0 
18 
2 22.8" 
13.9| 
1.6] 
0.4! 
0.3! 
0.1 
7.5! 
4.1 
0.5; 
1.0] 
1.8Î 
0.0| 
0.3! 
O.O; 
O.o! 
4.5J 
O.9! 
13.4-1 
0.51 100 
12 
3 
2 
1 
54 
29 
4 
7 
13 
0 
2 
0 
0 
32 
6 
NET IMPORTS/(EXPORTS) 9.9 9.6 9.4i 
* For 1985. EU - 12 does not include ex-GDR. 
Sources : IEA Statistics and Eurostat TABLE B.4 4 
Fil - 12 - Evolution of qas/diesel oil trade 1985 - 1990 - 1994 
1985 
Mta 1990 
Mta 1994 
Mta 
TOTAL IMPORTS 
EXTRA - EU imports 
(1 +2 + 3 + 4 + 5+6) 
1. OECD countries 
of which : 
Norway 
. Sweden 
. United States 
OPEC countries 
of which : 
Algeria 
Kuwait 
Libya 
Saudi Arabia 
Venezuela 
3. Ex - USSR 
4. Romania 
Other Eastern Europe 
countries 
Other countries 
of which : 
• Egypt 59.4 
34.1 
5.1 
1.3 
2.1 
0.9 
9.6 
3.4 
2.8 
0.7 
0.6 
1.2 
11.3 
5.5 
2.6 
0.0 100 
15 
4 
6 
3 
28 
10 
8 
2 
2 
4 
33 
16 
0 55.6 
30.7 
6.5 
2.4 
2.4 
0.8 
7.8 
2.6 
2.1 
1.6 
1.1 
0.4 
9.5 
1.5 
2.6 
2.8 100 
21 
8 
8 
3 
26 
8 
7 
5 
4 
2 
31 
5 
8 47.7 
20.2 
6.5 
2.5 
2.4 
0.8 
2.8 
1.1 
0.2 
0.7 
0.7 
0.0 
6.0 
0.4 
0.4 
4.1 100 
32 
12 
12 
4 
14 
5 
1 
3 
3 
0 
30 
2 
2 
20 
TOTAL EXPORTS 
of which : 
. United States 33.7 
0.3 40.5 
1.8 48.7 
1.5 
NET IMPORTS/(EXPORTS) 25.7 15.1 (1.0) 
* For 1985. EU - 12 does not include ex-GDR. 
Sources : IEA Statistics and Eurostat TART F R S S 
Fil - 12 - Evolution of residual fuel oil trade 1985 - 1990 - 1994 
TOTAL IMPORTS 
EXTRA - EU imports 
(1 +2 + 3 + 4 + 5+6) 
1. OECD countries 
of which : 
Norway 
Sweden 
. United States 
2. OPEC countries 
of which : 
Algeria 
Kuwait 
Libya 
Saudi Arabia 
Venezuela 
3. Ex - USSR 
4. Romania 
5. Other Eastern Europe 
countries 
6. Other countries 
of which : 
• Egypt 1985 * 
Mta 
45.3 
25.4 
3.2 
0.2 
1.4 
1.4 
9.1 
0.6 
2.3 
0.5 
1.1 
3.3 
5.1 
2.4 
5.6 
0.1 100 
13 
1 
6 
6 
36 
2 
9 
2 
4 
13 
20 
22 
0 1990 1994 
Mta 
40.2 
21.2 
4.5 
0.9 
2.1 
0.3 
7.6 
0.6 
0.9 
1.8 
1.8 
1.9 
4.1 
0.1 
1.7 
3.2 
0.2 Mta 
100 
21 
4 
10 
1 
36 
3 
4 
8 
8 
9 
19 
1 
8 
15 42.1 
21.5] 
4.0| 
1.3! 
1.5] 
0.7I 
7.5| 
l.o! 
1.5] 
0.8! 
3.0] 
3.7! 
0.3| 
0.5] 
5.5! 
1.1 100 
19 
6 
7 
3 
35 
5 
7 
4 
14 
17 
1 
2 
26 
TOTAL EXPORTS 
of which : 
. United States 33.3 
1.6 38.5 
3.6 37.81 
i 
i 
2.8' 
NET IMPORTS/(EXPORTS) 12.0 1.7 4.3i 
For 1985. EU - 12 does not include ex-GDR. 
Sources : IEA Statistics and Eurostat TABLE B.6 0 
WORLD PROVEN CONVENTIONAL OIL RESERVES 
AT CURRENT MARKET PRICES 
u u a CO 
s 1100 
1000 i 
900 1 
800 H 
700 H 
600 H 
500 H 
400 H 
300 H 
200 H 
100 i 
Source: BP Statistical Review MM Proven Reserves R/P Ratio 
CHART B.l 
^P 
DISTRIBUTION OF WORLD OIL RESERVES 
END 1994 
Middle East 
66% 
Total Reserves = 137 Bn. tonnes Asia & Australasia 
4% 
Africa 
6% 
North America 
3% 
Latin America 
13% 
OECD Europe 
2% 
Former Soviet Union 
6% 
Source: BP Statistical Review CHART B.2 
^ 
WORLD OIL SUPPLY 
70 
5 60 -f 
50 4 
40 4-
30 4-
20 4 
10 + 
0 OPEC Supply 31.5 Mb/d 
Non-OPEC Supply 17 Mb/d 
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 
CHART B.3 
-$ 
OPEC SHARE OF WORLD OIL PRODUCTION 
CRUDE OIL PRICES 
1970 to 1994 
90% 
30% 
20% 
0% OIL IMPORT DEPENDENCY 
EUROPEAN UNION 15 
1990 1992 
Source: European Commission Estimates 1995 2000 
®EU HEU plus Norway] 2005 
CHART B.6 
^ 
AVERAGE API VALUES OF CRUDE OIL SUPPLIES 
IN THE EU 1985 - 1995 
38 
37 
36 
35 
34 
33 
32 JLU.ll.LLL ll|lllllllllllllll L | I I I ' !l|limilllll|lllllllllll|l Ill III I I II 
JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN JAN 
I 85 I 86 I 87 1 88 I 89 I 90. I 91 ! 92 I .93 I 94 I 95 
Source : Crude Oil Register 
CHART B.7 
w 
GROSS ENERGY CONSUMPTION 1995 
EUROPEAN UNION 15 
RENEWABLES 
50/0 74 Mt0e 
NUCLEAR 
15% 
205 Mtoe 
277 Mtoe 
TOTAL = 1369 Mtoe 
SOLIDS 
17% 574 Mtoe 
239 Mtoe 
CHART C.l 
< 
GROSS ENERGY CONSUMPTION 2005 
EUROPEAN UNION 15 
TOTAL 1521 Mtoe RENEWABLES 
7o/o 102 Mtoe 
NUCLEAR 
14% 
212 Mtoe 
606 Mtoe 
SOLIDS 
16% 237 Mtoe CHART C.2 
700000 Oil Product Demand 
European Union 15 
600000 + 
500000 
400000 + 
300000 
200000 + 
100000 + • rm 
wM 
mszzi. HI 
1992 1993 1994 1995 
Source: Commission Estimates 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 
CHART C.3 d Others • Fuel oil S Middle distillates H Gasolines 
Ç* 
Demand Barrel Shape - W. Europe 
12000 INCREMENTAL OIL PRODUCT DEMAND 
European Union 15 
loooo 4 
8000 H 
6000 
4000 •] 
2000 
•2000 Excludes LPG and Refinery Gases 
95/92 
Source: Commission Estimates 2000/95 2005/00 
^Gasolines S Middle distillates • Fuel oil DOthers CHART C.5 
«•o 
Total Products Trade 
European Union 12 
1980 1982 
Source: IEA 1984 1986 1987 1988 1989 1990 1991 1992 1993 
Imports • Exports 1994 
CHART C.6 
IV 
Net Exports Mt Gasoline Net Exports 
European Union 12 Consumption Mt 
1980 1982 1984 1986 1987 1988 1989 1990 
Source: IEA [MiNet Exports -*-Consumption] 1991 1992 1993 1994 
CHART C.7 
o 
Net Exports Mt Gas Oil Net Exports 
European Union 12 Consumption Mt 
* r 200 
1980 1982 
Source: IEA 1984 1986 1987 1988 1989 1990 1991 1992 1993 
mmi Net Exports —X—Consumption 1994 
CHART C.8 
R> 
Net Exports Mt Fuel Oil Net Exports 
European Union 12 Consumption Mt 
1980 1982 
Source: IEA 1984 1986 1987 1988 1989 1990 1991 1992 1993 1994 210 
Ë212Î Net Exports —*— Consumption! CHART C.9 
So 
5o 
Maximum Sulphur Contents for Gas Oil TABLE D.l 
Directive Product % Sulphur Content 
fby weight] 
93/12/EEC Automotive </= 0.2% by 01.10.1994 
of 23.03.1993 Gas Oil </= 0.05% by 01.10.1994 
93/12/EEC Non- </= 0.2% by 01.10.1994 
of 23.03.1993 Automotive 
1 Gas Oil 1 
Maximum Lead Contents for Petrol TABLE D.2 
Directive Product Lead Content fgms/litrel 
85/210/EEC Unleaded </= 0.013 g/1 by 01.04.1990 
of 20.03.1985 Petrol 
85/210/EEC Leaded </= 0.15 g/1 by 01.01.1986 
of 20.03.1985 1 Petrol [ 
Maximum Benzene Content of Petrol TABLE D.3 
Directive Product Benzene Content 
. fby volume] 
85/210/EEC Petrol </= 5% from 01.10.1989 
of 20.03.1985 1 1 
^ 
TABLE D.5 
ENVIRONMENTAL INVESTMENT COSTS 
Measure Investment Cost 
(ECUbn) 
Some Recent Measures: 
Reduction of sulphur level in gasoline to 0.05 % 2.5 
Reduction of sulphur level in diesel to 0.05 % 3 - 5 . 
Reduction of hydrocarbons (VOC) emissions by Stage-I 0.8 
(Costs for changing from top to bottom loading excluded) 
Total Some Recent Measures: 6.3 - 8.3 
Potential Measures: 
Reduction of benzene level in gasoline to 1 % 6-7 
Reduction of gasoline volatility (RVP) by 10 kPa 1.5 
Reduction of sulphur level in gasoline to 200 ppm 1 
Reduction of sulphur level in gasoline from 200 to 50 ppm 4 
Reduction of sulphur level in diesel to 200 ppm 6 
Increase of diesel cetane number to 52 1.5-2 
Increase of diesel cetane number from 52 to 58 15 
Reduction of diesel FBP (T95: 340 °C) 3 
*8-10 38-39.5 
Reduction of sulphur level in inland heavy fuel oil to 1 % 7-12 
Reduction of sulphur level in bunker fiiel to 1.5 % for 30 % of 1.5-2.5 
demand 
Application of strict BAT to refinery emissions over existing 8-10 
measures 
Reduction of hydrocarbons (VOC) emissions by Stage II 1-1.5 
Reduction of sulphur level in heating gas oil to 0.1% 1.5-2 
Total Potential Measures: 27 - 29 57.0 - 67.5 
Grand Total All Measures: 63.3 - 75.8 
Source: Industry Figures and ^Commission updates based on 
latest available Auto Oil Programme Results 
Xh 
EU-15 DESULPHURISATION CAPACITY 
OF MIDDLE DISTILLATES 
(million metric tons/year) 
1.1.1995 
BE 12.4 
DK 2.4 
.DE 27.8 
EL 3.8 
ES 16.4 
FR 24.0 
IR 0.3 
IT 27.1 
NL 15.2 
PO 2.6 
UK 23,4 
SF 3.7 
SV 6.3 
OS 4.2 
EU 169.6 
Sources : EC Regulation 1056/72 & 
National Administrations 
TABLE D.6 
EU-12 REFINERY STRUCTURE EVOLUTION 1980-1988-1995 
Number & Capacity of Refineries by Type 
(Situation at 1st January) 
Refinery 
Type 
S l ni p 1 e 1980 
No Primary 
Distil. 
Capacity 
mta % 
62 249 27 
Semi-
complex 24 148 16 1988 
No Primary 
Distil. 
Capacity 
mta % 
16 
20 43 7 No 
89 15 14 
13 1995 
Primary 
Distil. 
Capacity 
mta % 
37 
52 6 
9 
Comple x 55 523 57 58 460 78 66 506 85 
Total 14-1 920 100 
of which: 
Refineries 
>1 mta 129 915 94 592 100 
90 590 93 595 100 
90 593 
Refinery type definition : 
Simple'refinery : primary distillation plus, where 
appropriate, reforming and hydrodesulphurization 
'Semi—complex'refinery : 'simple'plus visbreaking and/or 
other thermal cracking 
'Complex'refinery : 'simple' or 'semi-complex'plus catalytic 
cracking,hydrocracking and/or coking 
Source : Commission - DGXVII-B2 
TABLE E.l 
2G 
REFINING CAPACITY IN THE E.U. AT 1.1.1995 
(capacity in service in million tons per annum) 
ATMOS. REFOR. HYDRO. CAT. THERM. VIS- COKING 
DIST. CRACK. CRACK. CRACK. BREAK. 
BE 34.5 4.7 - 5.9 - 4.2 
DK 9.2 1.4 - - 1.9 2.2 
DE 113.1 17.6 8.6 15.4 3.9 10.9 5.0 
EL 18.2 2.1 1.3 3.0 2.6 
ES 60.0 8.0 0.7 8.4 - 8.4 1.5 
FR 90.4* 11.0 0.8 18.2, ' - 8.1 , -
IR 2.8 0.6 - - -
IT 102.3 12.0 7.1 * 14.7 6.2 15.9 2.6 
NL 59.6 7.3 5.1 7.5 3.1 4.1 2.1 
PO 14.4 2.2 0.5 1.7 - 1.4 
UK 90.7 16.4 2.5 23.7 2.2 3.1 3.3 
SF 11.0 2.1 1.1 2.7 - 1.9 
SV 21.0 3.2 - 1.5 1.4 2.3 
OS 10.0 1.4 - 1.3 0.3 1.0 
EU 637.2 90.0 27.7 104.0 19.0 66.1 14.5 
* of which 5.9 mta in reserve, immediately useable 
Sources : National Administrations & EC Regulation 1056/72 
TABLE E.2 
EU-15 - CONVERSION CAPACITY 
(million metric tons/year) 
CAT. CRACKING 
VISBREAKING 
HYDROCRACKING 
THERM. CRACK. ) 
COKING ) 
FLEXICOKING ) 
TOTAL CAPACITY' 
CATC RACK. EQUIV* 
AS % CDU CAPACITY 1985 
88.0 
52.0 
11.0 
27.8 
178.8 
146 
. 21 1990 
88.2 
63.8 
23.2 
28.0 
203.2 
171 
28 1995 
104.0 
66.1 
27.7 
33.5 
231.3 
199 
31 
* Ratios used are : Vis breaker 0.33 --. Hydrocracker 1.3 -
Thermal Cracker 0.65 - Coker 1.7 
Sources : National Administrations & EC Regulation 1056/72 
TABLE E.3 
TAXES AND DUTIES AT FEBRUARY 1996 - ECUS 
1.VAT(%) 
Premium gasoline 
Unleaded gasoline 
Automotive dieseloil 
Heating gasoil 
LPG (Vehicles) 
LPG (Heating) 
Heavy fueloil HTS 
Heavy fueloil BTS CD 
3 a 
5) 
<u 
CO 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 
21.0 w 
ro E 
c 
«J 
O 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 -a c 
CO 
c o 
a; 
Û 
15.0 
15.0 
15.0 
15.0 
15.0 
15.0 
15.0 
15.0 ÛJ 
18.0 
18.0 
18.0 
18.0 
18.0 
18.0 
. 18.0 
18.0 c 
Q. 
«/) 
16.0 
16.0 
16.0 
16.0 
16.0 
16.0 
16.0 
16.0 4) 
O 
C 
20.6 
20.6 
20.6 
20.6 
20.6 
20.6 
20.6 
20.6 XJ c ra a) 
21.0 
21.0 
21.0 
12.5 
21.0 
12.5 
12.5 
12.5 .5 
19.0 
19.0 
19.0 
19.0 
19.0 
10.0 
10.0 
10.0 5 o 
JO 
E 
0) 
X 
15.0 
12.0 
15.0 
12.0 
6.0 
6.0 
12.0 
12.0 •o 
c 
J2 
a> 
z 
17.5 
17.5 
17.5 
17.5 
17.5 
17.5 
17.5 
17.5 JC 
o 
55 
0) 
O 
20.0 
20.0 
20.0 
20.0 
20.0 
20.0 O 
Q. 
17.0 
17.0 
5.0 
17.0 
17.0 
5.0 
5.0 Ê o 
to 
. 22.0 
22.0 
22.0 
22.0 
22.0 
22.0 a> o> c 
> 
CO 
25.0 
25.0 
25.0 
25.0 
25.0 
25.0 17.5 
17.5 
17.5 
8.0 
17.5 
8.0 
17.5 
17.5 
2.EXCISETAX(1000L 08.02.96 
Premium gasoline 
Unleaded gasoline 
Automotive dieseloil. 
Heating gasoil 
LPG (Vehiclas) (4) 
LPG (Heating) (T) 
Heavy fueloil HTS (T)" 
Heavy fueloil BTS (T) 546.0 
485.3 
302.0 
14.2 
0.0 
18.1 
19.4 
6.5 0.0 
448.5 
300.4 
241.4 
208.5 
315.5 
284.5 
284.5 573.0 
519.9 
328.9 
42.4 
169.8 
265 
15.9 
15.9 410.6 
358.9 
248.9 
135.8 
582 
12.9 
42.0 
42.0 408.7 
375.3 
272.5 
79.5 
31.5 
7.4 
13.6 
13.6 616.9 
576.2 
354.4 
78.0 
68.2 
0.0 
24.3 
18.0 380.6 
349.3 
302.5 
50.2 
69.4 
22.9 
17.8 
17.8 537.3 
494.2 
361.3 
361 3 
157.3 
173 7 
43.5 
21.8 415.9 
361.7 
263.3 
5.4 
56.8 
0.0 
14.2 
6.5 608.7 
542.0 
327.1 
81.6 
29.1 
0.0 
31.5 
31.5 430.2 
300.7 
79.0 
104.8 
0.0 
37.7 495.1 
457.8 
326.1 
89.0 
0.0 
28.1 
12.8 548.0 
291.2 
36.5 
0.0 
0.0 
36.9 479.1 
291.4 
189.3 
162.4 
131.3 
213.3 463.3 
406.2 
406.2 
27.6 
333.6 
0.0 
21.6 
21.6 
DAN MARK: 
Fuel oil lourd - Depuis le 1er Janvier 1993, le montant de la taxe récupérable par le secteur industriel s'élève à 1820 CD par tonne. 
Heavy fuel oil - As from 1 January 1993 the tax récupérable by the industrial sector amounts to 1820 CD per ton. 
Premium gasoline - Cancelled as from 1/1/96 
(1) ROYAUME-UNI: par/by tonne 
Exchange rates as at 08.01.1996 
1 ECU = 13.2595 OS. 38 7384 BEF, 1.88485 DM, 7.29054 DKR, 158 542 PTA, 5.7135 FMK. 6 46731 FF, .844401 UKL, 309.318 DRA. 
.818238 IRL, 2068.64 LIT, 38.7384 LUF, 2.11041 HFL, 195.925 ESC, 8.6825 SKR 
?0 TABLE E.4 
EU-IS DISTILLATION CAPACITY UTILIZATION* 
EVOLUTION 1985-1994 
MIO TONS 
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 
Dist.Capacity(mio t) 
•*— Utilization rate(%) Crude Intake(mio t) 
crude onl}7, mid year capacity 
o CHART E.l 
EU-15 REFINING UPGRADING CAPACITY 
IN CAT. CRACKING EQUIVALENT 
1985 
1990 
1995 28 
31 21 146 
171 
199 
35 30 25 20 15 10 5 
% 
% OF CDU CAPACITY 0 40 80 120 160 200 
MIO/TONS YEAR. 240 
M CAT. CRACKING EQUIV. 
Sources : Nat. Admin. & EC Reg.1056/72 
CHART E.2 
REFINING MARGINS 1988-1995 
NW EUROPE & MEDITERRANEAN ZONES 
10 
9 
8 
7 
6 
5 
4 
3 
2 
1 
0 
-1 
-2 $/bbl (Quarterly Average) 
"*— IEA-NWE-BRENT 
-*- WMC-NWE-ARAB L +- IEA-NWE-HYDROSKIM 
-0- WMC-MED-ARAB L 
12341234123 4 12341234123412341234 
I 88 I 89 I 90 I 91 I 92 I 93 I 94 I 95 I 
WMC : Wood Mackenzie 
CO CHART E.3 
BRENT/DUBAI & LEADED GASOLINE/FUEL OIL 
PRICE DIFFERENTIALS 
14 barrel 
* 
Brent/Dubai Differ. ~*~ Gasoline/FO l%s Dif. 
** * 
*** . * 
** 
* * 
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT 
I 92 I • 93 I 94 I- 95 
Source : IEA Monthly Oil Market Report 
Oo CHART E.4 
FUTURE NET EXPANSION OR NET REDUCTION 
IN THE REFINING CAPACITY OF THE EU-15 
(thousand metric tons/year) 
After or date 
1995 1996 1997 not defined 
ATMOS. DIST. - 2400 - 2300 + 4400 + 1600 
REFORMING + 100 
HYDROCRACK. - 280 + 700 
CAT. CRACK. + 580 + 1800 + 4700 
THERM. CRACK. + 273 
VISBREAKING - 300 + 100 
COKING + 1000 
DESULPHURIS. +6672 +17029 + 1805 + 1040 
OF MID. DIST. 
SOURCE : EC REGULATION 1056/72 -
QUESTIONNAIRES OF BEGINNING 1995 
TABLE E.5 
3e! 
OPEC FOREIGN REFINING 
Net Share in thousand barrels/day as of end 1995 
Asia/ 
Pacific Western 
Europe USA Total 
(3 reg.) 
Iran 
Kuwait 
Libya 
Saudi Arabia 
U.A.E 
Venezuela 
Total OPEC 
Total of the region 
OPEC share 
in the region 32 
152 
184 
14 803 
1.2% 210 
234 
50 
142 
230 
866 
14 151 
6.1% 300 
750 
1 050 
15 354 
6.8% 32 
210 
234 
502 
142 
980 
2 100 
44 308 
4.7% 
Source : DGXVII on the basis of OPEC 
official data & press articles 
TABLE E.6 
IN U lYJLO JUJU Wl 1 JU1 HWL 1VJUJL Z\JLJU W ^J 1 JUJU lOJLIN lllJU JU ^ JL^ 
(in thousand of units at year end) 
TABLE F.l Source : National Statistics BE 
DK 
DE 
EL 
ES 
FR 
IR 
IT 
NL 
PO 
UK 
SF 
sv 
OS 
EU 1985 
7.3 
3.6 
19.8 
6.8 
5.2 
34.6 
3.4 
36.4 
8.1 
1.9 
21.1 
2.0 
4.4 
4.1 
158.7 1987 
6.7 
3.4 
20.8 
6.3 
5.2 
31.1 
3.3 
34.7 
7.6 
1.8 
20.2 
2.0 
4.3 
4.1 
151.5 1989 
6.5 
3.2 
19.9. 
6,4 
5.3 
27.7 
3.2 
33.9 
6.9 
1.8 
19.8 
1.9 
4.2 
4.0 
144.7 1991 
6.0 
2.9 
18.9 
6.4 
5.7 
22.6 
2.7 
30.4 
6.0 
1.8 
19.3 
2.0 
4.0 
3.9 
132.6 1992 
5.7 
2.9 
18.8 
6.5 
5.8 
21.2 
2.8 
30.1 
5.6 
2.0 
18.5 
1.9 
3.8 
3.8 
129.4 1993 
5.5 
2.8 
18.5 
6.6 
6.3 
19.8 
2.8' 
29.9 
5.1 
2.1 
18.0 
1.9 
3.8 
3.7 
126.8 1994 
5.4 
2.7 
18.3 
6.8 
6.6 
19.1 
2.7 
28.8 
4.1 
2.3 
17.0 
1.9 
3.6 
3.6 
122.9 
MARKETING OF. OIL PRODUCTS IN THE EU-15 
NUMBER OF PETROL RETAIL OUTLETS 85-94 
180 
160 
140 
120 
100 
80 
60 
40 h 
20 Thousand of units at year end 
0 =^^W 
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 
158.7 157.3 151.5 147.7 144.7 138.6 132.6 129.4 126.8 122.9 
Source : National Statistics 
CHART F.l 
EU-12 EVOLUTION 1906-1994 OF AVERAGE 
THROUGHPUT PER SERVICE STATION 
MILLIONS OF LITRES PER ANNUM 
1986 1987 1988 1989 1990 1991 1992 1993 1994 
Source : Wood Mackenzie 
CHART F.2 


ISSN 0254-1475 
COM(96) 143 final 
DOCUMENTS 
EN 12 
Catalogue number : CB-CO-96-172-EN-C 
ISBN 92-78-02657-3 
Office for Official Publications of the European Communities 
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