Byco looks to export excess furnace oil to minimise losses
Company produces only 20,000 bpd out of capacity of 155,000 bpd
Company produces only 20,000 bpd out of capacity of 155,000 bpd. PHOTO: FILE
KARACHI:
As local refineries are on the brink of shutdown due to growing inventory of furnace oil, Byco Petroleum Limited is in touch with potential buyers overseas in an attempt to export excess fuel oil to different countries in the short run, even at a loss.
Despite available capacity of 155,000 barrels per day (bpd), Byco is producing only 20,000 bpd as it cannot sell the excess oil anywhere, leading to under-utilisation of the refinery.
“We’re running at 20,000 barrels per day because we don’t have anywhere to put the excess furnace oil,” Byco Petroleum General Manager Shehryar Ahmad told journalists during a visit on Thursday to the single point mooring (SPM) facility of the refinery.
Oil sales plummet to decade low at 1.33m tons in Nov
He said “in emergency situation, we’re thinking of exporting, even at a loss” primarily to countries like the United Arab Emirates (UAE), Singapore and China.
However, it was not a permanent solution, which was why technologies like coker and fluid catalytic cracking (FCC) units, which convert the fuel into diesel and gasoline, were being adopted, but they required a massive investment and a long time period, he added.
“We’re planning to launch it, if not in a year, it could take months or so. But it cannot be done immediately, which is why we’re looking at exporting the excess furnace oil.”
Talking about the import of fuel oil that was being produced locally as well, Ahmad said the import of the refined product would be more expensive whereas if it was produced domestically, the country’s foreign exchange reserves would be saved.
He said refineries helped the government add to the tax collection as last year they had paid Rs180 billion in taxes.
The government should give protection or some preferential treatment to the local refineries rather than stopping power plants from purchasing oil from them, he said, adding, “It should let the market decide, which will take the right decision.”
12b lost as crucial LNG shipment cancelled
Despite the government ban on import of furnace oil, tons of imports took place in the last couple of months, the company’s general manager said. “Around 160,000 tons were imported in October and November and they should be questioned with whose permission they did all this,” he remarked.
Moreover, banning imports was not enough as it had already reached the market and “unless power plants are allowed to buy furnace oil, we will not be able to produce anything, if someone doesn’t buy it,” he added. Other than that, the Oil Companies Advisory Council (OCAC) had sent a recommendation to the government asking it to allow the power plants purchase of a minimum quantity on a daily basis, Ahmad said.
“If that minimum purchase is permitted, it will all be normal. But there is no development yet,” he said.
Published in The Express Tribune, December 14th, 2018.
As local refineries are on the brink of shutdown due to growing inventory of furnace oil, Byco Petroleum Limited is in touch with potential buyers overseas in an attempt to export excess fuel oil to different countries in the short run, even at a loss.
Despite available capacity of 155,000 barrels per day (bpd), Byco is producing only 20,000 bpd as it cannot sell the excess oil anywhere, leading to under-utilisation of the refinery.
“We’re running at 20,000 barrels per day because we don’t have anywhere to put the excess furnace oil,” Byco Petroleum General Manager Shehryar Ahmad told journalists during a visit on Thursday to the single point mooring (SPM) facility of the refinery.
Oil sales plummet to decade low at 1.33m tons in Nov
He said “in emergency situation, we’re thinking of exporting, even at a loss” primarily to countries like the United Arab Emirates (UAE), Singapore and China.
However, it was not a permanent solution, which was why technologies like coker and fluid catalytic cracking (FCC) units, which convert the fuel into diesel and gasoline, were being adopted, but they required a massive investment and a long time period, he added.
“We’re planning to launch it, if not in a year, it could take months or so. But it cannot be done immediately, which is why we’re looking at exporting the excess furnace oil.”
Talking about the import of fuel oil that was being produced locally as well, Ahmad said the import of the refined product would be more expensive whereas if it was produced domestically, the country’s foreign exchange reserves would be saved.
He said refineries helped the government add to the tax collection as last year they had paid Rs180 billion in taxes.
The government should give protection or some preferential treatment to the local refineries rather than stopping power plants from purchasing oil from them, he said, adding, “It should let the market decide, which will take the right decision.”
12b lost as crucial LNG shipment cancelled
Despite the government ban on import of furnace oil, tons of imports took place in the last couple of months, the company’s general manager said. “Around 160,000 tons were imported in October and November and they should be questioned with whose permission they did all this,” he remarked.
Moreover, banning imports was not enough as it had already reached the market and “unless power plants are allowed to buy furnace oil, we will not be able to produce anything, if someone doesn’t buy it,” he added. Other than that, the Oil Companies Advisory Council (OCAC) had sent a recommendation to the government asking it to allow the power plants purchase of a minimum quantity on a daily basis, Ahmad said.
“If that minimum purchase is permitted, it will all be normal. But there is no development yet,” he said.
Published in The Express Tribune, December 14th, 2018.