BYCO planning to be a leader in Furnace oil in Pakistan and Middle East
Petroleum Marketing Business of BYCO is making strategic steps which may help this company to emerge as a leader in oil marketing sector in the wake of sluggish approach of other refineries towards International Maritime Organization (IMO) 2020 regulations, industry sources said.
BYCO, Attock Refinery Ltd, National Refinery Ltd (NRL) and Pakistan Refinery Limited (PRL) have constituted a working group in order to negotiate with government of Pakistan and catch-up with the challenges faced by the Industry. In addition, BYCO is also aggressive expansion in the downstream sector by enhancing storage capacity of petroleum products across the country.
At a time when IMO-2020 regulations are impeding growth of the Pakistani Refineries and posing threat to the very existence of this sector, BYCO is coming out well and recent rally in the BYCO is hinting that a lot which may have been privy to “close circles” is now getting into …gallerias and side-discussions.
Bulls are galvanizing BYCO’s USP that it produces RON 92 standard petrol (MS), as it has catalytic converter which is serving as a premium pricing factor in relevance to other refineries.
BYCO is planning to install desulphurization (DS) unit which would convert the existing loss making furnace oil (FO) of 3.5% sulphur content into Very Low Sulphur Furnace Oil (VLSFO) of 0.5%. VLSFO is the highest margin product these days which could potentially help the company earning $10-15/bbl in GRMs (in a period of approx. 1.5 years post completion of project) as compared to a loss of $20-25/ bbl in case of sale of FO at the moment. This project could finally resolve the prevailing crisis of furnace oil for the company.
Byco is also expected to export FO to Middle East on a regular basis which will help them to increase utilization levels. This will make Byco the first and the only refinery in the country to export FO so far to date. There are talks of a long term contract in this regard along with supply of VLSFO (post completion of the DS project) to Vitol. Note that due to low demand of FO, refineries have been running at very low utilization levels.