11 November 2008 10:01 [Source: ICIS news]
SINGAPORE (ICIS news)--Philippine oil major Petron Corp is on track to commission its benzene, toluene and mixed-xylene (BTX) unit in Bataan early next year, in line with the company’s strategy to diversify its business, said a company official on Tuesday.
"We commissioned the polypropylene (PP) units in April. The BTX unit, we will commission in the first quarter of 2009," said the company source.
Petron’s $300m petrochemical project, which includes the Petro Fluidised Catalytic Cracking unit with conversion capacity of 19,000 bbl/day, the 140,000 tonne/year PP recovery unit and the BTX unit, has eluded the credit crunch since funding had been secured about two years ago, the source said.
The feedstock units are located at Petron’s 180,000 bbl/day refinery in Limay, Bataan.
Petron had started exporting PP this year but the new business's impact on earnings may still be minimal and not easily quantifiable going into next year amid falling prices, the source said. "It depends on prices at markets," said the official, adding that Petron’s near-term outlook appeared "cloudy."
Petron reported a 67% decline in third quarter net profit to Philippine pesos (Ps) 461m ($9.44m) as "margins contracted as domestic prices of refined products fell much faster than the company’s crude costs," the company said in a statement last week.
Sales rose 59% to Ps85.10bn as fuel prices remained relatively high during the period compared to a year ago, although they have come off significantly from the $147/bbl peak in July.
For the nine-month-to-September period, Petron’s net profits fell 32.2% to Ps2.78bn even as sales rose 42% to Ps216.43bn.
"Continued volatility in oil prices is expected in the remainder of the year, clouding the company’s income for the fourth quarter," it said in a recent statement.
"Hopefully, we won’t see a repeat of the third quarter (profit falls)," said Laura Dy-Liaco, Philippine-based analyst at brokerage ATR Kim Eng. "There might be some pressure in the short-term ... but long-term (prospect) looks promising."
The company's earnings would be difficult to predict given the wild swings in crude prices, said Dy-Liaco, adding that she was still reviewing her profit forecasts for Petron.
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