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Byco Petroleum Pakistan limited – past and present feat

The company was formed in January 1995 as a public listed company. It started its first oil refinery with a capacity of 30,000 barrels a day at Hub, Balochistan with commercial production starting from July, 2004. The capacity was later enhanced by 5000 barrels a day during the 2010 turnaround, making the total capacity to 35,000 barrels a day.

The company is engaged in the refining of various petroleum products including Liquefied Petroleum Gas, Light Naphtha, Heavy Naphtha, High Octane Blending Component, Motor Gasoline, Kerosene, Jet Fuels, High Speed Diesel and Furnace Oil.

In 2007, it launched its fuel marketing activities managed by the Petroleum Marketing Business (PMB), formerly known as Oil Marketing Unit. This segment has grown remarkably over the past few years. The firm enjoys presence in both mid-stream and downstream sector of the oil business now.

In addition, a new company Byco Oil Pakistan Limited was set up in 2008 for setting up 120,000 barrels a day refinery. It was completed in December 2012 and is the largest refinery in the country. However, the refinery stayed shut for a couple of years.

Byco Isomerisation Pakistan (Private) Limited (BIPPL) is a wholly owned subsidiary of Byco Petroleum Pakistan Limited. The isomerisation plant has a capacity of processing 12,500 barrels per day. Located in Balochistan, the plant is used for converting light Naphtha into premium Motor Gasoline. It also converts the hazardous unsaturated compounds to non-hazardous saturated compounds, making Motor Gasoline from Isomerisation Unit more environments friendly.

According to the firm’s latest annual reports, Byco Petroleum Pakistan Limited today represents the country’s largest refining complex of 155,000 barrels per day with backward and forward integration in the form of Single Point Mooring (SPM) facility and oil marketing license respectively.

Shareholding at Byco petroleum

Over 90 percent of Byco Petroleum Pakistan Limited is held by Byco Industries Incorporated, located in Mauritius, whereas banks and financial institutions hold around 4.66 percent with general public accounting for 3.22 percent holding in the company.

Byco Industries Incorporated (BII), Mauritius is the ultimate Parent company. All Byco companies that existed previously have been merged into one entity – Byco Petroleum Pakistan Limited. The High Court of Sindh in January, 2017 approved the merger of Byco Oil Pakistan Limited and Byco Terminals Pakistan Limited with and into Byco Petroleum Pakistan Limited.

Historical performance

Over the years, Byco Petroleum’s financial performance has improved where gross margins have steadily increased, while net margins too have come out into the profitable zone.

In the fiscal year 2015 was extremely challenging for the entire oil sector and especially for the refineries that witnessed a sharp decline in crude and product prices, which continued throughout the first half of the year.

During the initial six months of year, prices dropped by approximately 55 percent amidst the global supply glut in the oil markets. However, fiscal year 2015 turned out to be the year where the firm turned to profits.

During the year, Byco Petroleum Pakistan Limited witnessed increased volumes, but revenues suffered at the expense of low oil prices. The company enhanced its oil marketing business by expanding its retail outreach.

Improvement in gross profit however, came from increase in sales volume coupled with increased level of production that resulted in high absorption rate of manufacturing overheads and improved marketing margins.

Moreover, an effective supply chain management coupled with a lower inventory holding period allowed the company to curtail its inventory losses.

Challenges in two years

Fiscal year 2016 was another challenging year for the oil sector as declining price trend continued to persist. Byco witnessed a fall in revenues by 16 percent year-on-year. However, volumes continued to move up, high sales volume, import of products at competitive pricing and improved marketing margins lifted the earnings up staggeringly when compared to fiscal year 2015.

Fiscal year 2017 was a year where the firm’s earnings went up by over 50 percent, year-on-years. The year also marks the bringing back of the 120,000 bpd refinery into operations, which added the charm to the firm’s profitability.

During the year, Byco Petroleum Pakistan Limited issued AAA rated Sukuk certificates worth Rs 3.2 billion to raise capital for a few of the expansion plans, which were oversubscribed.

Fiscal year 2017 also marks the year where declining oil price trend came to an end. These along with higher sales volumes, especially those of Motor Gasoline, were the growth factors for Byco. Also better refining and marketing margins and import of products at competitive pricing helped the company.

The firm continued to increase its penetration in retail sector through its 300 retail stations across the country. Byco Petroleum Pakistan Limited also for the first time in Pakistan, brought crude vessel of over 102,000 metric tonnes at its SPM facility — largest crude vessel ever berth in any port of Pakistan.

Despite a 50 percent increase in earnings, the firm’s EPS declined due to the issuance of 5.1 billion shares in respect of the merger of BOPL and BTPL. However, the EPS is expected to improve in the future with the operations of a larger refinery.

 

Highest sales record

Pakistan’s only vertically integrated oil company, Byco Petroleum Pakistan Limited has set a number of records for the month of April 2018. The company has sold more gasoline, diesel, furnace oil, and liquid petroleum gas in April 2018 than ever before.

Additionally Byco’s SPM has handled more crude in April than ever before with 296,000 metric tonnes handled in one month. Byco’s refinery similarly achieved a new milestone of processing nearly 290,000 metric tonnes, or almost 75,000 barrels per day, of crude oil in April. April also saw Byco’s liquid port set a company record for a single month by handling 295,988 tonnes of crude oil.

April turned out to be Byco’s strongest month to date in terms of total sales from the refinery which climbed to 317,902 tonnes. Sales of LPG, Motor Spirit (MS), High-Speed Diesel (HSD) and Fuel Furnace Oil (FFO) increased to 6,421 tonnes, 43,191 tonnes, 135,980 tonnes and 111,855 tonnes respectively in April. The numbers depict record levels of upliftment for a single month for each of the four refined products.

Additionally, the daily upliftment of MS came in at 2,157 tonnes on 22 April, which was a company record for a single day. April set a new record for total crude oil refined by Byco; the company processed 289,385 tonnes, or 74,743 barrels per day, of crude oil, more than ever before. The record-breaking operational performance for the month of April shows that Byco’s management remains committed to maintaining a relentless focus on improving the turnover and profitability of the company.

Largest catalytic reformer launched

Byco, Pakistan’s only vertically integrated oil company has launched Pakistan’s largest catalytic reformer, enabling the company to refine an additional 24,000 barrels of crude oil per day, raising Byco’s production of 92 RON premium motor gasolines fivefold.

To celebrate this momentous achievement with every Pakistani, Byco is launching a campaign across Pakistan to share its delight with the whole nation. A consumer promotion titled ‘Jashan Manao, Do Rupay Bachao’, has been launched at every one of Byco’s 321 retail outlets.

Byco’s limited time offer gives its gasoline consumers Rs2 discount on every litre of petrol. Only Byco is able to afford such a deep discount since Byco is giving its marketing margin to the retail end consumer.

Byco is the only refinery in Pakistan producing 92 RON premium quality motor gasoline, the minimum quality standard set by the Government of Pakistan. To celebrate Byco’s major production enhancement, we have decided to share our delight with our customers by offering an unprecedented discount all across Pakistan at Byco’s 321 retail outlets.

Through this campaign we are hopeful that more customers become loyal Byco clients who see us as their preferred brand for all their fuel needs.

Gasoline production five times up

Pakistan’s Byco Petroleum has raised gasoline production five times to 1,500 tonnes per day following the commissioning of a gasoline-making unit, a company statement said this month. It did not elaborate on when the catalytic reformer, which converts 24,000 barrels per day (bpd) of heavy naphtha into gasoline, was commissioned.

However, it added that the total gasoline production at 1,500 tonnes per day was derived based on Byco Petroleum’s current combined level of crude processing at its two refineries at 75,000 bpd. The total design production capacity of the two refineries is 155,000 bpd, said the statement on Byco’s website.

Aiming big

Byco might just be getting ready to become the country’s largest fuel maker. While local print media seems oblivious, Byco will restart its largest oil refinery that closed down almost two years ago after a fire, BOPL’s CEO told Bloomberg in a recent interview.

Byco Oil Pakistan Limited (BOPL) is owned by Byco Industries Incorporated (BII), Mauritius, which is the ultimate parent company. BOPL owns a major shareholding in Byco Petroleum Pakistan Limited (BPPL), which is a listed company in Pakistan.

Recall that BOPL’s 120k barrel-per-day refinery has been shut since October 2015 –only three months after it was inaugurated – when a fire damaged its crude oil heater.

Initially, the damage was thought to be minor and the refinery was expected to resume production very shortly, but it extended to almost two years. While such big complexes do carry risks, an almost two-year period of quietness has been a long time.

All Byco companies have finally been merged into one entity, with Byco Petroleum Pakistan Limited absorbing its holding and subsidiary companies. The High Court of Sindh in January, 2017 approved the merger of Byco Oil Pakistan Limited and Byco Terminals Pakistan Limited with and into Byco Petroleum Limited.

Byco Petroleum Pakistan Limited already has a 35,000-barrel-per-day (bpd) refinery and an OMC with 261 retail outlets across the country. It seems that the restoration of the 120K refinery is just in time to bring synergetic benefits to the group in the form of economies of scale and value chain integration.

With petroleum volumetric sales not taking a breather, and the demand expected to increase especially for the transportation and the trucking sector as CPEC progresses, Byco’s integration and restoration will bear fruits for the group; not to forget that positives of the refinery addition to an economy where imports override consumption.

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