PARCO willing to invest in Pakistan Refinery

Development subject to company’s upgrade potential.

KARACHI: The Pak Arab Refinery (Parco) has expressed willingness to invest in Pakistan Refinery Limited (PRL) if the latter has the potential to be upgraded, it was announced on Monday.

Parco has sought permission to carry out technical, financial and legal due diligence to evaluate upgradation opportunities at PRL for possible future investment, PRL said in a disclosure notice.

But it was not mentioned what exactly are the upgradation possibilities Parco is looking at. Like other refineries upgrading their plants, PRL is also investing $400 million in Isomerisation, a chemical process that transforms compounds into isomeric forms and diesel de-sulphurisation units.



The Isomerisation unit processes naphtha into petrol as part of an import substitution initiative. PRL, the 47,000 barrels a day oil refinery located in Karachi, has been in financial dire straits because of fluctuations in international refining margins.

By June 30, 2014, PRL’s accumulated loss had increased to Rs3.48 billion, which has wiped off its entire equity. It closed the last fiscal year with a loss of Rs863 million.

Nevertheless, PRL has been able to continue its operations without any interruption on basis of good cash flows and better management. It was also able to expand its credit lines from banks during last fiscal year.

Published in The Express Tribune, November 11^th, 2014.

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