Foreword - May

Time to be cautiously optimistic?

Philippe Mellier.jpg

We fully appreciate how tough last year was for your businesses. 2015’s challenges were very different from those presented by the demand crisis that followed the 2008 downturn, but that does not mean they were any less difficult to deal with.

All of us involved in the industry’s upstream and midstream experienced the financial impacts of extreme inventory indigestion and many different views were expressed on what needed to be done.

And whether or not everyone agrees with the details of each of the actions taken, or the specific timing of those actions, I would like to state just how proud I am of how we all responded. The industry needed demonstrable leadership and it required all of us to play our part.

We all had to take difficult decisions, considering trade-offs between what was right for our businesses and what was right for the industry.

We all had to absorb the impact of negative trading conditions in the short-term so as to protect the industry’s long-term interests. And we all had to employ our hard-earned experience and expertise to navigate through some very difficult times.

After such a difficult year, it seems that there are some reasons to be cautiously optimistic in early 2016, and we may be starting to recover some of the lost momentum. But of course, these initial positive signs must not be viewed as grounds for complacency. In fact, this is possibly the most crucial point as we now stand at a crossroads. The midstream trading environment remains delicate, the recovery remains a work in progress and our actions in the near future remain crucially important.

Just as we have needed to take great care with our actions in response to the recent challenges, we must be equally watchful as things begin to improve. And while we may have seen a few encouraging signs, if there’s one thing we can be sure of in the year ahead, it’s that we will experience volatility.

There continues to be uncertainty regarding the macroeconomic outlook, currency pressures have the potential to weigh on downstream demand in a number of locations and we will need to see how retail restocking appetites develop.

In this uncertain world we need to focus on both supply and demand in order to get things fully back on track. Our 2016 strategy therefore comprises important points on how we intend to supply you, as well as how we intend to improve pull-through from the consumer end of the value chain.

Philippe Mellier

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