US dispersant makers unlikely to see spill sales backlash - execs

11 May 2010 23:09  [Source: ICIS news]

HOUSTON (ICIS news)--Chemical dispersant makers such as Nalco with products used in Gulf oil spill recovery efforts are unlikely to face market criticism for sales gained from the tragedy, chemical executives said on Tuesday.

“In all fairness to Nalco, analysts have said this won’t add much to earnings,” said Nick Kob, a business development manager for Huntsman.

“It’s not like they’re gouging,” he continued. “They’re selling it for what they sell it for, and just happen to have a huge demand right now. We don’t see them as gouging or pilfering the market.”

Kob spoke at the Informex Specialty Chemical Conference in Houston in a panel discussion on finding new markets for products.

Jeff Gates, director of marketing for international fine and specialty chemical group Syrgis, referenced DuPont in the early 20th century as an example of a chemical company that lost a public relations battle in the aftermath of a disaster.

“Any time you play with a disaster like that, there is DuPont,” Gates said. “DuPont used to sell black powder in World War I, and they got a nasty name because they went to both parties and made money, and then had to exit the business.”

But Gates said he saw no activity in the modern marketplace mirroring that example. Moreover, given the complexity of product sales and number of challengers, strategies built around such tragedies as the Gulf spill would be unsuccessful, he noted.

“Spills are not something you can put into a forecast,” Gates said. “Because of that, you can’t build a business around it.”

While agreeing the broader market impact would be small, a principal scientist with Netherlands-based producer DSM warned that the relatively new nature of deepwater drilling meant that such a situation would likely be repeated.

“Unfortunately, it’s going to happen again,” said DSM’s David Ager. “It’s just a matter of when.

“But I don’t think you should let tragedy get in the way of doing what you’re doing," he continued. “How big is that market, really?”

Ana Nielsen, the director of exploration and production (E&P) technology for BP, was present during the discussion. BP operated the Deepwater Horizon offshore rig in the Gulf of Mexico that exploded on 20 April and later sank, spilling an estimated 5,000 bbl/day of oil.

She said that BP was looking for all the help it could find.

“I think this has been as open a process as any I can remember,” Nielsen said. “Whoever has suggestions or things that can help us, we’ll listen.”

For more on BP, DSM, DuPont or Huntsman visit ICIS company intelligence
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By: Ben DuBose
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