BAKU, Azerbaijan, June 1
By Leman Zeynalova – Trend:
Refinery operators should take three main steps to mitigate the negative impact of coronavirus, Trend reports citing GlobalData.
The company believes that to this end, refinery operators 1) may look at building a robust business continuity and contingency plan to ensure minimal impact on critical operations; 2) identify and resolve immediate challenges posed by COVID-19 to the company’s stakeholders; 3) focus more on remote operations through automation and digitalization and less on employee intensive operations to tackle any such situations in future.”
The company said that stringent travel restrictions worldwide have wiped out the market for fuel transportation and long storage durations have led to the deterioration of products such as gasoline and jet fuel, as well as increased inventory costs for refiners. “As a result, refiners across the world have been hit hard and forced to cut production rate despite falling and attractive crude prices.”
The company points out that in the wake of the COVID-19 outbreak and plunging fuel demand, global refinery operators had no option other than to under-utilize their refinery capacities, delay maintenance activities, slash capital expenditure, and stall avoidable projects to conserve cash and tide over the current depressed market scenario.
“Some of the examples of refiners forced to take such drastic actions include Marathon Petroleum’s suspension of operations in its Gallup refinery and reduced scale of operations in two more refineries (Carson and Martinez) in the US. Similarly, Total has suspended two of its refineries in France - initially for scheduled maintenance and later indefinitely postponed their restart due to prolonged fall in fuel demand. Meanwhile, SK Innovation Co is likely to cut operating rates at its 840,000 barrels per day (bpd) plant in South Korea by approximately two thirds and Reliance Industries has reduced crude processing by almost a quarter,” said GlobalData.
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