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Downstream Oil & Gas: Refining & Petrochemicals

Downstream players in the energy industry face some of the biggest challenges they’ve seen in decades. Although headlines may focus on volatile energy prices, downstream companies face a host of other risks. Topping the list are ongoing developments in industry restructuring, deregulation, and corporate consolidation. In this environment, what’s needed to stay competitive is a long-term strategy for improving operational efficiency, reducing costs, and protecting revenues and margins.

The Future of Profitability in the Refining Sector

In the coming decades, the outlook for refining will depend on five key drivers:

Adopting Digital Tools and Capabilities

Achieving Operational Excellence

Advanced Analytics in Planning and Scheduling Processes

Maintenance Digitization

Optimizing Trading and Supply Chains



Disruptions and Opportunities in the Petrochemical Supply Chain

  • Sustainability. Sustainability challenges are a top global priority, strongly influencing government regulations and consumer demand patterns. As we increasingly move toward a “circular economy,” end users and chemical players are pushing for change. Such a shift will have a significant impact on packaging, for example, and making strategic choices now will help companies come out ahead.
  • Digitization. Leading chemicals organizations have begun to adopt digitization, but the industry overall is lagging and there’s huge potential for those that take advantage of digital disruption. The approach to transformation requires a focus along three fronts. First, put digital to work to transform the core of the business. Second, find new offerings that can be built through digital. And third, enable teams so that they can execute digital strategies effectively over the long term.
  • Geostrategic Change. The chemicals industry in the Middle East is transitioning to higher-value products and focusing less on exports. China is also reframing its chemicals industry to be more focused on high-value products, and to be cleaner and more efficient. These trends, along with tariff shifts and changes to NAFTA and other trade agreements, will have an impact on the flow of goods and pricing across the value chain.
  • New Manufacturing Materials & Methods. Polymer 3D printing is expected to grow to a $180 billion industry by 2035, presenting challenges and opportunities to the business models of resin companies as they consider materials suppliers and partners in manufacturing and design.
  • Alternative Routes to Olefins. A reshaped fuel landscape changes feedstock economics, making methane-based routes to olefins more feasible—potentially reshaping the global supply curve and regional plays for ethylene and derivatives.
  • Refining Landscape. MARPOL bunker fuel regulations will lead to a shift in refinery output, potentially impacting propylene supply. Further, a decline in gasoline demand will lead to excess naphtha and the potential for refinery shutdowns. (See above for more on the refining landscape.)

Meet Some of BCG’s Experts in Downstream Oil & Gas

BCG has experience with more than 200 oil and gas downstream clients around the world over the past five years. We’ve had an on-the-ground presence in all key downstream segments and experience in international growth strategies, cost optimization, profit improvement, and organization and change management.

Learn More About Refining & Petrochemicals

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Energy’s Comeback Kids

Volatile oil prices, regulatory uncertainty, and new technologies have hit the oil and gas and utility sectors hard, but six companies have managed to thrive. Find out how.

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