Argentina YPF refinery to operate at reduced capacity until 2015

10 May 2013 22:23  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--The damage caused by an April fire at Argentina’s largest oil refinery will reduce crude processing capacity until 2015 and may lead to increased fuel imports, refinery owner Yacimientos Petroliferos Fiscales (YPF) said on Friday.

The incident at the La Plata refinery in Buenos Aires province severely damaged the facility’s Coke A and Topping C distillation unit, and has reduced capacity from 188,000 bbl/day to current levels of 100,000 bbl/day, YPF said during an earnings call with investors.

According to the company, a new Topping C unit will be operational within a few weeks, while a new coking facility currently under construction is expected to come online in 2015.

“Technical evaluations are being carried out with the objective to determine both the date of commissioning of Topping C as well as the reduced operational capacity, as Coke A will not be recovered,” said YPF chief financial officer Daniel Gonzalez.

“Our preliminary estimate is that processing capacity will be approximately 150,000 bbl/day with Coke A not in operation,” said Gonzalez.

According to YPF estimates, disruption to the refinery’s operations will reduce output this year by approximately 1.4m cubic metres (mcm).

“This will be composed by 70% of high value products, 20% of light products and 10% of heavy products,” Gonzalez said.

The executive said the company might have to import some of these products to make up for reduced production and to satisfy domestic demand.

“But we may also be able to export some crude oil surpluses from time to time,” he added.

YPF reported late on Thursday that its net income in the first quarter fell by 2.8% year on year to Argentinian pesos (Ps) 1.26bn ($241.4m, €185.9m), mainly due to the impact of deferred income tax of Ps481m.

Revenues in the January-to-March period were up by about 25% to Ps18.63bn from Ps14.85bn a year ago, driven by increased domestic sales of liquid fuels and higher prices for gasoline and diesel.

However, sales of chemical products fell both in the domestic and external markets, decreasing by 19.5% and 9.1%, respectively, compared to the prior-year quarter.

Meanwhile, crude oil production in the first quarter of 2013 slipped 0.7% from a year earlier, while gas output fell by 3.7%, the company said.

Despite the dip in output, Gonzalez said that the company stands by its goal of boosting oil and natural gas production by 4% and 1%, respectively, during 2013.

YPF has vowed to increase output after the company was renationalised by Argentina President Cristina Fernandez de Kirchner’s government in May 2012 following a dispute with former parent company Repsol over under-investment and dwindling production.

($1 = €0.77; $1 = Ps5.22)

By: Simon West

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