The Italy oil and gas downstream market is expected to register a CAGR of less than 1.0% during the forecast period of 2020–2025. Factors, such as increasing production of oil, are expected to boost the need for the Italian oil and gas downstream market during the forecast period. However, competition from refineries around the world, especially China, led to a slowdown in the sector, with many refineries not able to utilize full capacity.

  • The refinery capacity in the country remained stagnant during the 2015-2018 period. Most of the country depends on oil and gas for its primary energy source. Investment in the sector may lead to growth in the industry.
  • Italy has a proven gas reserve of around 1.6 trillion cubic feet of natural gas and 0.4 thousand million metric ton of crude oil, as of 2018. Exploration and production of fossil fuel may lead to a boom for the downstream industry as the transportation cost of oil imports would reduce.
  • Oil production is expected to drive the market during the forecast period. The country depends primarily on imports for the supply of fossil fuels to meet the required energy consumption in the country.



Key Market Trends

Oil Refining Capacity to Dominate the Market

  • In Italy, the capacity of the refineries remained stagnant, over the period of 2015-2018, at 1,900 thousand barrels per day, in 2018. The size remained unchanged because no expansion or construction of refineries has taken place.
  • The acquisition of Augusta refinery from ExxonMobil subsidiary by the Sonatrach, in 2019 is expected to reinforce the refining system of Sonatrach with an additional refining capacity of 10 million metric ton per year of refining and storage capacity.
  • In the period between 2010 and 2018, the number of refineries situated in Italy decreased gradually from 16 to 11 refineries. The substandard refineries usually lost out to the international competition, especially due to the refineries in Asia.
  • In Italy, natural gas production decreased by 1.6% to 4.46 million metric ton of oil equivalent (Mtoe) in 2018 from 4.53 Mtoe in 2017. Consumption of natural gas decreases to 59.5 million metric ton of oil equivalent (Mtoe) in 2018 from 61.5 Mtoe in 2017. Decreasing demand for gas and a decrease in production are restraining the growth in the market.
  • The Italy refinery capacity is expected to remain stagnant during the forecast period due to international competition and little investment in the expansion and construction of refineries.



Increasing Oil Production to Drive the Market

  • In Italy, oil production increased by 12.9% to 4.7 million metric ton of oil equivalent (Mtoe) in 2018 from 4.1 Mtoe in 2017. Consumption of oil decreased to 59.0 million metric ton of oil equivalent (Mtoe) in 2018 from 60.2 Mtoe in 2017. The increasing production of oil is boosting the growth of the market.
  • Italy is heavily dependent upon other countries for its oil and gas. In 2018, most of Italy’s natural gas imports came from Russia through pipelines across Ukraine and from Southeastern Europe. Natural gas sent by pipeline from Russia accounted for about 45% of Italy’s total natural gas imports in 2018.
  • In 2018, the largest refinery in the country was the Sarpom Trecate, Novara Refinery owned mostly by Esso Italiana Srl, a subsidiary of Exxon Mobil Corporation. It has a capacity of 200,000 barrels per day.
  • Hence, the Italian oil and gas downstream market is expected to increase slightly over the forecast period due to an increase in the production of oil.



Competitive Landscape

The Italian oil and gas downstream market is consolidated. The major companies include Esso Italiana Srl, Eni SPA, PJSC Lukoil Oil Company, Total SA, and Anonima Petroli Italiana.

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