South Korean refiner S-Oil said it would run its crude distillation units (CDUs) at its 580,000 bpd Onsan refinery at 100% capacity until August as it expected margins to recover. This decision was taken despite the largest loss in the company’s history due to the coronavirus pandemic in the first quarter of 2020. S-Oil ran those CDUs at about 94% of capacity in the January-March period despite the demand collapse.
S-Oil’s step contrasts that of other Asian major refiners which cut run rates and move maintenance schedules forward due to dwindling demand caused by the COVID-19 pandemic. For instance, South Korea's largest refiner SK Innovation moved up a turnaround project next month and may lower runs at its 840,000 bpd Ulsan refinery to 60%-70% in June and July from 85% in March and April.
S-Oil posted an operating loss of KRW1 trillion ($818 million) in the first quarter, compared to a KRW270.4 billion profit in the same quarter last year. Its refining business recorded a KRW1.19 trillion ($973 million) during the quarter, while the petrochemical business generated KRW66.5 billion ($54 million). To address the current economic downturn, the company slashed its spending by 25% to KRW489.8 billion ($400 million) and issued bonds worth KRW680 billion ($556 million) in March.
S-Oil plans to shut the 76,000 b/d No. 2 residual fluid catalytic cracker (RFCC) in Onsan for maintenance in June and July. It will also perform turnarounds at its PP and PO units in June and July.
