Shell Refining Co posts loss in Q1

Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Wednesday, 15 May 2013 19:10
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KUALA LUMPUR (May 15): Shell Refining Company (Federation of
Malaya) Bhd was sent into red in its first quarter by shrinking oil refining
margins and lower product prices.
In a filing with Bursa Malaysia, the oil and gas (O&G) company reported
a net loss for its first quarter ended March 31, 2013 (1QFY13) which
amounted to RM24.51 million on a revenue of RM3.61 billion.
In the previous corresponding quarter, Shell made a net profit of
RM14.62 million with a higher turnover of RM3.7 billion.
“The decrease (in revenue) is attributable to lower product prices in the
first quarter of 2013,” said Shell in the filing.
Meanwhile, it said its loss was mainly due to weak refining margins.
“The refinery processed 9.4 million barrels of crude oil (in 1QFY13),
higher by 6% as compared to the first quarter of last year.”
On its prospects, Shell said the global economy’s recovery remains
uncertain and refining margins are expected to be continuously under
pressure.
It also said it had successfully commissioned Project Hijau with no
safety-related incidents and achieved its first commercial production in
February this year.
“Project Hijau enables the company to produce more valuable products by upgrading lower value fuel oil into diesel. The
refinery will also have a higher flexibility in our crude intake, and in particular it allows us to process cheaper sour crude which
will reduce our cost,” said Shell.
Thus, the company said its refinery will be in a better position to manage weak margin challenges.