PETROCHEMICAL

The petrochemicals industry is competitive, involves significant technological innovation, is capital intensive and operates in a global product market. In terms of production volumes the industry represents approximately 10% of the total petroleum industry. On the basis of product value, however, the petrochemicals industry represents a larger share of the total industry, reflecting the higher value of petrochemical products compared to fuels.
Historically the industry evolved out of technological innovation in the developed industrialised economies. Until the last quarter of the twentieth century production of petrochemicals was concentrated in Western Europe, the United States and Japan. Over the last few decades, however, production in areas with competitively priced feedstocks has increased dramatically. New production capacity has been built in the Middle East and Asia. This new capacity employs the latest technologies on the largest scales with some of the cheapest available feedstocks and, as a result, has changed the competitive landscape of the industry. Many older facilities using higher cost feedstocks have not been able to compete and hence there have been site closures especially in the more established and mature European markets.
A variety of different organisations operate in the industry. There are specialist chemical companies which purchase raw materials to produce a wide range of commodity and speciality petrochemicals. The major oil and gas companies are also large petrochemicals producers and have been at the leading edge of many technological developments in the industry. In addition, the national oil companies have become increasingly active in petrochemicals production.​​​​​​​