OPEC chief: Profits should go to refining

Oil companies should use their current high profits to increase their refining capacity and help ease pressure on oil prices, an OPEC official said Oct. 30.

“This is a chance for them to invest,” said Adnan Shihab-Eldin, acting secretary-general of the Organization of Petroleum Exporting Countries.

Several major oil companies reported surging third-quarter profits earlier in the week.

“We’ve been saying this past year that refining has to increase,” Shihab-Eldin said on the sidelines of a conference on long-term issues of energy supply being held in the Italian town of Rimini. “There needs to be more refining and upgrading.”

Concerns about refining capacity, heightened by the devastation hurricanes Katrina and Rita caused in the U.S., pushed the price of oil beyond US$60 a barrel.

Prices have since pulled back, though concerns remain about the pace of recovery and whether supplies will be adequate going into the Northern Hemisphere winter, when demand for heating oil peaks.

Asked when global demand for oil could surpass production, Shihab-Eldin said that was a distant prospect.

“I think its decades away,” he said, “at least three or four decades.”

—The Associated Press