Essar Energy Plc has said that margins at its Stanlow refinery fell by more than a third due to weak diesel and jet fuel prices.
In its interim management statement for the quarter ending 30th June, Essar Energy said Stanlow earned US$ 4.86 on turning every barrel of crude oil into fuel as compared to US$ 7.53/bbl gross refining margin.
‘Current Price GRM was impacted during the quarter by generally lower industry margins, weaker diesel and jet prices relative to gasoline, and higher residues production relating to the stabilisation of the revised refinery configuration following the closure of the lubes plant in February 2013’.
The company additionally indicated that work is underway to improve margins at Stanlow.
Petrochemicals maker Petkim posted a net profit of 1.15 million Turkish lira (US$ 595 000) in the second quarter, despite forecasts that it would lose 9 million lira.
Turkey’s sole petrochemical company managed to record profit thanks to low naphtha prices, production optimisation and the positive impact of market oriented and the positive impact of market oriented sale policies on profit margins.
However, despite returning to profit, Petkim’s sales fell 18% to 930.3 million lira.
Volatility in demand produced the drop in turnover, Petkim General Manager, Sadettin Korkut, said in a statement on 16th August.
Amid controversy over a decision to relocate a proposed Rs 37 229 crore oil refinery, the Rajasthan government now faces the task of meeting the 9 million t unit’s huge water requirements.
Rajasthan has to guarantee five to six million gal/d of water for the refinery.
The Rajasthan government and Hindustan Petroleum Corporation Ltd (HPCL) signed an agreement in March to set up the refinery, which will process oil from Cairn India’s fields in the state and other crudes.
The Rajasthan refinery will need a cross country pipeline to be built to carry oil from the west coast, which will shrink margins.
Also in India, the United Workmen Union has decided to launch a non-cooperation movement in September in protest against the irregularity of payment and other facilities given to contractual workers of the Guwahati Refinery.
The Union is additionally asking the State government to revoke the Essential Service Maintenance Act (ESMA). They have alleged that the tripartite agreement between the United Workmen Union, Contractors Association and the Guwahati Refinery authorities is not being followed properly.
‘According to the agreement, the wages of refinery workers were to be increased after every six months, at par with the price rise of essential commodities.
Until a year after the agreement, the refinery authorities provided this increased amount through the contractors. But later on, the exercise was left entirely on the contractors and most of them have not provided the increased sum to the workers’ said Biren Kalita, President of the Union.
Taiwan’s Kuokuang Petrochemical Technology Co has scrapped plans to set up an integrated refining and petrochemical complex in Pengerang in the Malaysian state of Johor due to poor project economics.
‘It was meant to be using naphtha as a feedstock to produce ethylene, but because of the rise of shale gas as an alternative, the costs will be too high (to compete with other projects) and we won’t be able to export the products’ outlined an official from Kuokang shareholder state owned CPC Corp.
Kuokuang has submitted an environmental impact assessment report for the project to the Malaysian government in May, but the company’s shareholders had already completed their feasibility study by then and decided not to proceed with the project.
‘This has nothing to with Malaysia but is based solely on the fact that the project would not be economically feasible’.
‘Right now we are waiting for the results of the report and the EIA process to be concluded. We had not proceeded beyond that so our costs were limited to just the feasibility study. We did not secure any land’, the official said.
The Energy Ministry has asked refineries to boost their LPG production capacity in order to offset supply shortage following the temporary shutdown of PTT’s gas seperation plant Unit 5 in Map Ta Phut, Rayong.
The Ministry has requested the cooperation of the refineries in reducing their LPG supply to the petrochemical sector, which will also be asked to use naphtha as a raw material, instead of LPG.
Unit 5 of PTT’s gas separation plant is expected to take between three and five month before if can resume operation, after it was struck by lightning.
The shutdown will result in the loss of between 70 000 and 75 000 t/month of LPG, which represents up to 25% of the country’s overall production capacity (300 000 t).
A rally in the Saudi stock exchange is partly driven by the market’s recent break above 8000 points.
‘Market has broken the 8000 mark and investors are willing to take increasing bets in many sectors including petrochemicals and banks’, said John Sfakianakis, chief investment strategist at Saudi investment firm MASIC.
Tadawul All Share Index (TASI) extended gains to hit a new 59 month high on 18th August, boosted by banks and petrochemical shares.
‘There are selective stocks in both of these sectors that are still seen as a strong buy and investors are taking positions’.
The benchmark index climbed 0.3% to 8156.77 points, its highest level since September 2008. The market has risen 20% year to date.
The petrochemical sector index rose 1.1%, and the banking index 0.23%.
Edited from various sources by Emma McAleavey.
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