Staff Report:
Attock Refinery (ATRL) has set a target to export around 100,000 tons furnace oil during the financial year 2025.
ATRL exported 80,000 tons of furnace oil in FY24. For FY25, the company has set a target to export around 100,000 tons.New discoveries of oil, gas in country with SIFC’s support
Attock Refinery (ATRL) held its Corporate Briefing Session (CBS), during which the management discussed its financial results and future outlook.
Regarding the Refinery Policy, management highlighted a delay in the execution of agreements due to a sales tax issue. They explained that prior to the budget for FY25, petroleum products were classified under the zero-rated category. However, after the budget, they were moved to the exempted category, preventing refineries from claiming input sales tax adjustments.
The refinery sector has taken this issue to the SIFC, which has given the petroleum industry a deadline to resolve it by November 10, 2024. Management is confident that the sales tax issue will be resolved and that the agreement will be signed.
The upgrade project will boost PMG production by 25% and ensure compliance with Euro-V specifications.
The upgradation cost is expected to be lower than initially projected, as the company conducted its feasibility study at an interest rate of 18%, which has since decreased to 15%. The project will be financed with 30% equity and 70% debt.
The company has cash and cash equivalents of Rs 80 billion as of September 2024. Management mentioned that there is no cap on dividend announcements.
Regarding rumors surrounding the potential sale of ATRL, management has declined to comment.
GRMs for 1QFY25 stand at US$9/bbl, compared to US$14/bbl in FY24 and US$18/bbl in FY23. Historically, these GRMs have ranged from US$18/bbl to US$1/bbl, and at times even negative.
ECC has approved the diversion and allocation of 50,000 bpd of Southern Crude. The additional cost will be incorporated into the IFEM.
ATRL is the only company capable of managing heavy crude oil. Furnace oil accounts for 15-17% of ATRL’s total production in volumetric terms.
ATRL is generally in favor of deregulating petroleum prices, provided that local refinery volumes are prioritized over imports. If deregulation occurs, there will be no IFEM, which will benefit ATRL due to its strategic location.
