Page 9 - NorthAmOil Week 33 2021
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NorthAmOil PERFORMANCE NorthAmOil
Citgo posts first profit in seven quarters
US
CITGO Petroleum, the US refining business of Venezuela’s state-owned PdVSA, has reported a narrow second-quarter profit of $3mn. Earnings before interest, taxes, depreciation, and amorti- sation (Ebitda) came in at $214mn for the quar- ter, while adjusted Ebitda was $208mn.
The result marks the company’s first profit in seven quarters – the last time it reported a profit was in the third quarter of 2019. It is up from a net loss of $5mn in the second quarter of 2020.
As well as facing challenges related to last year’s downturn amid the coronavirus (COVID- 19) pandemic, the company has been struggling since it lost access to Venezuelan oil owing to US sanctions. However, in the second quarter of this year, Citgo benefited from exports rising and the utilisation rate at its refinery in Lemont, Illinois hitting 97%.
The profit was also achieved despite the fact that Citgo – along with much of the US refin- ing industry – was affected by the outage on the Colonial Pipeline following a cyberattack. The company noted that its teams in Houston and
Lake Charles had been forced to adjust opera- tions in real time during the outage, reducing output.
“Given the multiple challenges we have faced during 2020 and the first half of 2021, this return to profitability is particularly satisfying – espe- cially given the slow margin recovery we are experiencing due to the lingering effects of the pandemic,” said Citgo’s president and CEO, Car- los Jordá.
“The Colonial outage was of course unex- pected, but the Citgo team responded with agil- ity and professionalism,” he added.
Despite reduced refining margins and the Colonial disruption, Citgo reported utilisation rates of 87% at its Lake Charles refinery.
The company’s total refinery throughput was 732,000 barrels per day (bpd), up from 575,000 bpd a year ago, while its exports rose from 87,000 bpd to 130,000 bpd.
The result comes as Citgo continues to bat- tle against possible seizure by creditors seeking to collect on unpaid debts incurred by PdVSA and Venezuela.
BPCL steps up US crude imports
US-INDIA
INDIA’S state-run Bharat Petroleum Corpora- tion Ltd (BPCL) is increasing its purchases of US crude oil to meet rising domestic fuel demand, Reuters reported this week.
The country’s second largest refiner has purchased about 9mn barrels of US crude for delivery in August, September and October, the newswire said on August 17, citing two unnamed sources. Commodities trader Vitol is understood to have sold 1mn barrels of US crude to BPCL for October delivery.
BPCL purchased 17mn barrels of US crude in the first seven months of the year, the sources said. Attractive pricing for the WTI Midland grade, with rates approaching their lowest level in a year earlier this month, is believed to have influenced BPCL’s purchases strategy.
Domestic fuel demand, meanwhile, has picked in the wake of the country’s various pan- demic restrictions having been eased in recent months. Fuel consumption climbed 7.9% year on year in June to 16.83mn, according to Petro- leum Planning and Analysis Cell (PPAC) data published on August 9.
One of Reuters’ sources said India’s largest refiner state-run – Indian Oil Corp. (IOC) – had been buying US spot cargoes since
April. However, the downstream giant is now understood to be looking for West African barrels.
Although average US oil exports slipped to 2.4mn barrels per day in the week to August 6 – their lowest level since February 2019 – mar- ket observers remain upbeat about the sector’s short-term prospects.
“We are positive that the ongoing revival of US crude to Asia should continue in the upcom- ing weeks,” Reuters quoted JBC Energy as saying in a note this week.
India has been striving to diversify its oil import basket this year in the wake of crude pro- duction curbs imposed by OPEC+ to support international prices.
India had a very public disagreement with Saudi Arabia in the opening months of this year, with the then Minister of Petroleum and Natural Gas Dharmendra Pradhan repeatedly criticising OPEC+’s unwillingness to deliver oil price stabil- ity at a time when the global economy was trying to find its feet.
The official repeatedly warned that India would diversify its imports as well as speed up its adoption of alternative energy supplies if pro- duction cuts were not eased.
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