![]() The heightened long-term uncertainty in the future of refining is creating more sellers than buyers and thus a decline in transaction values across geographies. Energy transition trends, including higher electric vehicle adoption in many markets and higher compliance costs from environmental regulations, are reducing growth opportunities for the sector. The worldwide view on the outlook for this sector is increasingly bearish. Visit our Energy Solutions page What is driving the global decline in transaction values? This is in line with the pre-pandemic trend, indicating a renewed wave of refinery transactions. ![]() In 20, the average transaction rate of refinery assets-as measured by both the number of refineries and capacity-showed strong recovery, with 25 refineries changing ownership, representing 2.5 million barrels per day of capacity (Exhibit 1). While the number of global refinery transactions took a dip in 2020 with the onset of the COVID-19 pandemic, there is still significant interest in these assets. Transaction volumes recover post-pandemic but at lower values In this article, we explore trends in refinery transactions, the short- and long-term opportunities for investors, and what to keep in mind when deciding whether to invest. And when the push for green fuels outweighs the need for refined oil products, these refineries could have a second life as green manufacturing facilities such as renewable diesel or sustainable aviation fuel (SAF) facilities. With the world still relying heavily on crude oil refining for fuel supplies, the next decade will likely see continued profits in this sector. ![]() On a stage set for change, what is the rationale for investing in the refining sector now?įor a few bold investors, refineries can still be a strategic investment generating short-term profits while providing opportunities for securing green assets in the long term. Despite uncertainties surrounding the long-term future of refineries in a transitioning world, many refineries continue to be acquired but at lower values than in the past. In today’s rapidly changing energy landscape, refinery transactions have become a focal point of investment discussions. ![]()
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