Page 8 - MEOG Week 17

MEOG FInanCe & InVestment MEOG
Tupras downgrades forecasts as refinery closure rumours swirl
tUrkey
tUPRAS, turkey’s largest refiner, has revised its forecasts for 2020 downwards in light of devel- opments related to the coronavirus (COVID-19) pandemic and the collapse in world oil prices.
The revisions came as S&P Global Platts on April 22 quoted trading sources as saying that tupras’ Izmir refinery in Aliaga is likely to halt production due to weak demand caused by the coronavirus outbreak, according to trading sources. It said tupras declined to comment.
In a statement to the Istanbul stock exchange, the company amended its 2020 refinery produc- tion expectation from 28mn tonnes to 24mn tonnes and its sales forecast from 29mn tonnes to 25mn tonnes.
tupras added that it anticipated an 80-85% utilisation rate, compared with 95%-100% previously.
“the net refining margin expectation has been revised from 4.5$ – 5.5$/barrel to 3$ – 4$/ barrel,” tupras added in the filing.
the refiner also reduced its investment
forecast to $125mn from $200mn. however, it did not provide any profit projection for this year. The company said that it assumed that the pandemic’s negative impact on crude oil and petroleum product demand would start to decrease by June and that normal economic
activity would resume starting from August. tupras operates four refineries in turkey, namely Izmir, Izmit, kirikkale and Batman, which produces mostly low grade non transport
fuels.
Meanwhile, Socar is reportedly maintaining
full production levels at its StAR refinery at Ali- aga in turkey on the Aegean coast, although with an altered product portfolio.
“For the time being production volumes are unchanged but we don’t know how long that will continue, we’ll have to see what happens,” a Socar spokesman told S&P Global Platts.
he confirmed that jet production has been halted and diesel production increased to compensate.™
PerFormanCe
Saudis begin curbing
oil output ahead of
OPEC+ start date
saUdI arabIa
SAUDI Aramco began reducing oil production earlier this week ahead of the May 1 start date for OPEC+ output cuts, according to a Saudi indus- try official familiar with the matter.
Aramco has started to curtail production from about 12mn barrels per day to achieve the agreed level of 8.5 mn bpd, the person said, ask- ing not to be named discussing private informa- tion. The country joins fellow OPEC members kuwait, Algeria and Nigeria in kicking off cuts early.
The Organisation of Petroleum Exporting Countries (OPEC) and its allies - 23 nations in all - agreed this month to slash global supply by 10% in an effort to balance a market hit by the coronavirus (COVID-19) crisis. Although the cutbacks will amount to an unprecedented
9.7mn bpd, crude prices have continued to slide as worldwide lockdowns wipe out demand.
Aramco is likely to be pumping at its targeted level slightly ahead of May 1, the person said. Rather than an effort to kick-start the output cuts, the gradual reduction reflects the several days that Aramco needs to adjust production safely. The company said it couldn’t immediately respond to a request for comment.
kuwait said two days ago it had started cut- ting oil output early, as it “felt responsibility to respond to market conditions.” Algeria also said this week that its supply curbs would start imme- diately. Meanwhile, Nigeria said it intended to cut production regardless of the May 1 start date because it has no more storage space available, the Premium times reported.™
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w w w . N E W S B A S E . c o m Week 17 29•April•2020