Petro-Canada CEO sees strong refining margins

NEW YORK (Reuters) - Petro-Canada (PCA.TO: Quote, Profile, Research, Stock Buzz) expects North American refining margins to stay strong over the next four to five years as gasoline supplies remain tight, the company's chief executive said on Tuesday.

CEO Ron Brenneman said supply has not kept up with demand because no new refineries have been built in North America for 30 years, and incremental expansions have not picked up the slack.

Still, he said Petro-Canada was not considering building a new refinery because high gasoline prices and use of alternative fuels will eventually lead to flattening demand.

"If you're a refiner and you're thinking like we are, you're reluctant to add capacity because to do that you'd have to be anticipating that this demand growth keeps going," Brenneman said, speaking at the Reuters Global Energy Summit in New York.

"If you're not adding capacity you're keeping the market fairly tight. So we're quite bullish on the refining business generally, partly because that's the way we see the next four to five years going."

He also said environmental equipment and upgrades that allow refineries to process heavier oil have made them increasingly complex and more likely to require maintenance.

"The market now is extremely tight, so if you have a hiccup in any significant refining center ... those show up in the marketplace right away," Brenneman said.

(For summit blog: summitnotebook.reuters.com/)