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NGL production has grown by close to 10% every year since 2010. Total NGL production is forecast to reach 1.48 million b/d by 2020 and will help Russia achieve its production target. This slide pack covers our outlook for Russian NGLs.

This insight is an update on our previous refinery closure threat analysis, completed end 2014. The industry has changed significantly since then as we have witnessed some very strong refining margins in Europe. But is this sustainable and what does it mean for future refinery closures in the region? In the insight, we analyse how the margin environment has changed, future risks and any upside for European refining. We also briefly look at other refineries in the Atlantic basin, which may also be at risk of closure. We then analyse in detail refineries in seven regions in Europe and discuss which assets are most at risk of closure.

The low oil price and favourable margin environment in 2015 provided a window of opportunity for companies looking to divest European downstream assets, with stronger margins arguably attracting more buyers and better prices. Therefore 2015 saw a continuation of the high level of 2014 downstream M&A activity, particularly in the fuels marketing sector. The most prominent recent trends once again emerged from the 2015 transactions: the majors divesting non-core marketing assets, mostly to downstream-focussed specialist independents and traders looking at expanding their presence in these markets.

After a sustained period of acquisition-led growth, LUKOIL has shifted focus to improving the performance of its existing downstream assets. It has concluded deals to optimise its European portfolio by divesting fuels marketing businesses in a number of Eastern European countries where it had failed to gain critical mass, also purchasing small retail chains in the Benelux to support its refinery. However, LUKOIL still retains a large product surplus in its European downstream operations.