16. EXPORT POTENTIAL OF UPEC SOURCE REFINERIES

TOTAL PRODUCT EXPORTS FROM OPEC ARE EXPECTED TO REACH 2.5-3.5 MILLION B/D IN 1987 DEPENDING ON UTILIZATION FACTORS.

O THE CHANGING COMPOSITION OF EXPORTS ARE OF CRITICAL
IMPORTANCE TO THE CONSUMERS. 1987 COMPOSITION FOR THE
PERSIAN GULF IS 570 MBD LIGHT DISTILLATES, 795 MBD
MIDDLE DISTILLATES, AND 525 MBD FUEL OIL AND OTHER PRO-
DUCTS.

O A TOTAL OF 1.9 MMBD OF PRODUCT EXPORTS ARE EXPECTED
FROM GCC NATIONS. ADDING POSSIBLE CHANGES IN IRAN AND
IRAQ, THE TOTAL MAY REACH 2.1 MMBD BY 1987.

OIL PRODUCTS AVAILABLE FOR EXPORT FROM THE GULF, 1987/88

('000 B/D, ROUNDED FOR LARGE AMOUNTS AND TOTALS)

17. COMPARATIVE ECONOMICS

O FAVORABLE FINANCING TERMS IN SOME GULF NATIONS HAVE

ENCOURAGED THE CONSTRUCTION OF SOPHISTICATED FACILITIES
THAT HAVE A HIGHER-VALUED OUTPUT SLATE THAN OECD
NATIONAL AVERAGES.

O LOW COST GAS RESOURCES (50/MILLION BTUS) ALLOW THE
GULF NATIONS TO DO HIGH-ENERGY PROCESSING (HIGHER BTU
INPUT/BBL THAN THE U.S.) AT LOWER COSTS THAN ELSEWHERE.

O THE BIGGEST IMPEDIMENT TO GULF PRODUCT EXPORTS ARE HIGH
PRODUCT TRANSPORT COSTS. THESE ARE IN SOME CASES OVERCOME
BY THE HIGH-VALUE YIELD PATTERNS AND LOW PROCESSING COSTS
IN THE GULF.

O AT OFFICIAL PRICES, OECD REFINERS HAVE NEGATIVE MARGINS.
SAUDI REFINERIES HAVE NEGATIVE MARGINS IN SOME MARKETS,
BUT SHOW A PROFIT IN OTHERS. KUWAIT, BECAUSE OF ITS
HIGH-VALUE OUTPUT, SHOWS GOOD MARGINS IN ALL EXPORT MARKET!
THESE RESULTS INDICATE THAT GULF REFINERS IN GENERAL WILL
NOT NEED TO DISCOUNT THEIR CRUDES TO EXPORT REFINERIES TO
BE COMPETITIVE IN THE EXPORT MARKET.

O WITH ACTUAL PRICES FOR OECD REFINERS, THE U.S. AND THE
SAUDI REFINERY MOST LIKELY TO EXPORT TO THE U.S. (YANBU)
ARE ON AN EQUAL COMPETITIVE FOOTING. NONETHELESS, THE
U.S. IS ALWAYS THE LEAST PROFITABLE MARKET FOR THE GULF
REFINERS.