Oil prices fall impacted refineries profits – Official

KUWAIT, Jan 31 (KUNA) — The fall of oil prices have significantly impacted refineries’ profits as the cost of refining an oil barrel ranges between USD four to seven in accordance with the refinery’s type and operation’s costs, an executive official said Sunday.
The refineries’ profits depend on products’ prices as the refinery sector has experienced a notable improvement in the past two months due to prices improvement, (Eng.) Mohammad Ghazi Al-Mutairi, Chief Executive Officer at Kuwait National Petroleum Company (KNPC) stated to reporters following a celebration held by the Oil and Gas World Magazine on issuing its annual report (Kuwait 2016).
In general, oil prices improvement would remarkably affect and improve the refinery sector, he noted, adding that KNPC is moving on with implementing capitalist and strategic projects despite consecutive decreases in prices. “These pre-studied projects pose a strategic importance and to continue with their implementation on time is a must,” said Al-Mutairi.
Oil prices fall can negatively affect some other non-strategic projects, which can be re-evaluated, he said, noting, however, that prices fall has no effect on strategic projects, including workflow and implementation as Al-Zour Refinery, Petrochemical Complex, and the storage facility for liquefied natural gas (LNG) are fine examples.
Refineries’ profit depends on the difference between refined petroleum products’ price and oil barrels prices, Al-Mutairi said, indicating that products demand is the main core for making the refineries’ profit margin.
He also mentioned that some of the most prominent materials produced by the refineries, and depend on making profits in them, are the liquids produced for petrochemicals such as the petroleum naphtha.
Meanwhile, KNPC is to establish KPRC Company to be the ninth affiliated company of oil sector companies and responsible for Al-Zour Refinery project, Petrochemical Complex, and the storage facility for liquefied natural gas (LNG), noting that the new company’s workload will be significant, qualifying it to be independent to manage such projects. (end) asj.abd.ma