Karambir Anand, Partner, EY
Karambir Anand is a Partner with the Transactions Advisory group at EY based in Singapore. Karambir focuses on management consulting in Growth Strategy, M&A Advisory, Merger Integration, Commercial Due Diligence and Carveouts.
Karambir works with several of the leading multinational and National Oil & Gas companies in the region. Karambir also advises private equity companies on investing in the energy business. Karambir has presented and moderated at several of the past ARTC meetings.
Q1. How do you feel that Asia’s refining sector has evolved over the last 12 months?
2016 has been an exciting year for the Refining Industry – with its fair share of ups and downs. While China’s scale stays significant, its 2016 demand slowed down. India and Indonesia have shown healthy products demand growth. Refiners have maintained good margins due to lower crude prices and a tight supply demand balance. The big change that has affected everyone has been the opening up and now tightening of export quotas for China’s teapot refineries – an area to look out for in 2017, given its potential impact on Refining margins across the region.
Q2. What do you see as the single biggest challenge facing Asia’s refining sector today?
The continual challenge for Asian refiners is to manage profitability in an increasingly complex and volatile environment. Refineries here will be seeing higher Crude oil input costs and pressure on product pricing due to overcapacity.
The recent OPEC agreement is making Crude oil prices move upwards (especially in Asia – due to restricted OPEC supply). In addition, surplus products capacity in China, India and ME will mean that refineries will be under pressure to maintain low prices. Finally, Asian refineries ran flat out in 2015 and 2016 to take advantage of lower prices and will need to plan maintenance shutdowns in 2017 –reducing the overall output.
We see 2017 a lot more challenging compared to 2015 and 2016 – when lower crude prices provided some margin support.
Q3. What do you see as the biggest opportunity for Asia’s refining sector in the next 12 months?
Global Demand outlook continues to look strong – with Asia driving a bulk of the growth. So Asian
refiners need to double down and maintain their focus on fulfilling demand growth profitably. Refineries need be heavily cost focussed and be nimble in taking advantage of changes in local demand trends as well as manage diverse crude slates to reduce sourcing costs. Refineries would need to focus on investments in technology – especially with the growing adoption of Internet of Things to improve operations and uptime. All this will need to happen with increasing pressure on refineries to be more environmentally conscious – be it managing Resources like Water or responding to low sulphur fuel quality needs of the transportation sector.
Q4. Why do you think events such as ARTC 2017 are important? What do you find most beneficial about attending?
ARTC presents the Refining Industry stakeholders (Refiners, Vendors, Regulators, Service providers) a forum to meet and exchange knowledge and experiences – and get a 360 view of the state of the industry.
Karambir will be speaking on Day 1 of ARTC 2017 on ‘Panel discussion: Investment in Indonesia’s downstream industry’.