BCP plans 16-day refinery shutdown

Bangchak Petroleum Plc (BCP), the majority state-owned oil refiner, will shut down a refinery unit for maintenance from Dec 12-27, reducing output to 60,000 barrels per day from 80,000.

Vice-president Watcharapong Saisuk said the shutdown is also to connect a US$378-million petroleum upgrade unit. "The shutdown will not affect our sales this year. We will offset [the output decline] with the startup of the upgrade unit, which can produce refined oil with higher margins [than] diesel and petrol."

Bangchak expects overcapacity to prevent the sector from booming next year with a global rebound and that many oil refineries may suspend some production.

The company is considering hedging between 40% and 50% of total oil output next year to avert price fluctuations.

This year BCP has hedged 50-60%, which has helped earn an average gross refinery margin of nearly $7 per barrel, above the industry average of $3-4.

BCP shares closed yesterday at 13.80 baht, down 10 satang, in trade worth 25.62 million baht.