Company News

Byco plans to list two more firms on PSX

Thursday June 21, 2012

Source : BusinessRecorder

Byco Group plans to list two more of its companies - Byco Oil Pakistan and Byco Terminal Pakistan on Pakistan Stock Exchange Limited (PSX). Byco Oil Pakistan is the group's new refinery set up with a refining capacity of 120,000 barrels per day while Byco Terminal Pakistan Limited is the country's first single-mooring floating jetty.

The group's first company - Byco Petroleum Pakistan Limited was already listed at the Pakistan Stock Exchange Limited. "I can't tell you the date of listing of our two companies at this stage. But we are considering our options of how to go about it," Byco's Chief Executive Officer Amir Abbassciy told Business Recorder here on Wednesday.

"We have so far invested over $850 million in Byco. With the new refinery going into operational soon, we will become the country's largest oil company", he said. About investment and business opportunities in Pakistan, he said, "We are confident and upbeat about our investments and business opportunities in Pakistan".

"We must invest in our country to send a positive signal to the outside world that Pakistan still offers excellent returns on investment," he said. "I am following the path laid down by our founder chairman late Pervez Abbasi who always preferred investment in the domestic industries."

He pointed out that Byco Industries Inc, which is the parent company, holds 100 percent of Byco Oil Pakistan Limited, setting up the country's largest refinery and which also owns 87 percent shares of Byco Petroleum Pakistan Limited. He said that by setting up country's first Single Point Mooring (SPM) Buoy facility for offloading imported crude oil and deficit petroleum products, Byco has achieved yet another milestone. The facility will allow the handling of imported crude oil and other petroleum products through the SPM - an open sea anchorage with sub-sea and sub soil pipelines connecting it to the on-shore facilities.

He said that single point mooring's certification would be carried out in July by a world renowned company that will allow the company to bring out first oil tanker on the SPM in August this year. "Earlier, our oil tankers with imported oil used to come at Port Qasim where only 60 to 65 thousand metric tons ships can berth as it has a relatively narrow and shallow channel and no night navigation facility", he said. "With our own floating jetty near our oil refineries, we can now be operational round the clock and can bring the ships of upto 125,000 tons capacity instead of just 60 to 65 thousand metric tons", he added.

He pointed out that the company's imported crude and oil was being offloaded at Port Qasim and stored in PSO facility and transported to their refinery, which used to cost the company $7.7 per ton. Aafter the SPM becomes operational, this cost would come down to around $3.15 per ton, resulting in substantial savings for Byco. "This project would also bring economies of scales for Byco in a true sense". "SPM is also very important from strategic point of view as we have provided the country with a third entry point of petroleum products after Karachi Port and Port Qasim", he said. "We already have 144,000 tons of crude oil storage facility as well as 66,000 tons of storage facility for diesel and furnace oil built at our refineries," he said.

He pointed out that the mechanical completion of new refinery would be achieved by June end, while commissioning of the refinery would take place in July that would enable them to process their first crude oil consignment at new refinery in the third quarter of 2012.

Once the new refinery is operational Byco will account for over 38 percent of the country's installed refining capacity, fed by a dedicated SPM. "We have planned to run the new refinery at the capacity of 72,000 thousand barrels a day in first year and we would subsequently increase its throughput to optimum level in next year," he added.

He said that Byco's refineries were completely self-sustainable in terms of power and water supply, as they have installed their own power generation, besides having a 2.2-million-gallon water processing plant.

"After making our new refinery operational, we would focus our attention on our petrochemical complex. It would have a capacity to process 27,700 barrel of naphtha a day," he said. It would be the first Petrochemicals Complex in Pakistan to produce petrochemical products such as benzene, mixed xylene, para xylene, ortho xylene c9 + and raffinate to meet the country's deficit requirements of these products. "Currently, we spend huge foreign exchange for importing these products into the country."

"With our new refinery becoming operational, the import of crude oil would certainly increase but it would subsequently decrease the import of finished petroleum products hence would save millions of dollars of foreign exchange every month," he said.

The total refining capacity in the country is around 12.25 million tons whereas total demand stands at 20.5 million tons. "Our new refinery would bring this refining capacity to around 18 million tons", he said.

About oil marketing business, he said currently Byco has 218 outlets across Pakistan. "We plan to add at least 50 more stations in coming years". He said that more important is not the numbers of sites, but the location of the sites and the quality of the products available at a station. "We are working very hard to maintain good quality of products and services at our current sites and we are one of the few companies which have invested in mobile laboratories, placed in Karachi, Lahore and Islamabad/ Rawalpindi which routinely check the quality of fuels being sold at our stations," he said.

Talking about circular debt he informed that 5.8 billion rupees is payable by PSO to Byco Petroleum. Byco Oil Pakistan Ltd and Pakistan State Oil have now signed a product sale and purchase agreement which will ensure guaranteed sale of 65 percent of Byco's new refinery's production of various petroleum products to Pakistan State Oil.

This sale of petroleum products from Byco to PSO will substitute equivalent volume of imports being presently made by PSO particularly of products such as PMG, HSD and HSFO. A unique feature of this agreement is that Byco will make sales to PSO against a confirmed letters of credit.

The agreed payment arrangements will benefit the Refinery to ensure timely collection of its dues which will greatly help in reducing the element of circular debt, while it will help PSO in availability of petroleum products locally ie without the exposure of foreign exchange. Abbassi lauded the vision of Federal Minister for Petroleum Dr Asim Hussain and said that he "is always accessible to industry players, understands the industry's issues and toils hard to overcome issues which confront the industry".

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