Bangchak Corporation Plc (BCP), a mostly state-owned energy company, expects bright business prospects in the third quarter this year, thanks to higher global oil prices and more demand for its unconverted oil.
Chaiwat Kovavisarach, president of BCP, said the Dubai reference price in the third quarter is estimated at between US$60-70 per barrel, which is likely to make the company have oil inventory gain.
Despite lockdown measures currently in place in many Asian countries, oil prices are expected to resume to high levels because of an easing of lockdown measures in the European Union and North America.
The company's shift of refined oil production from jet fuel to unconverted oil is also going in the right direction. Unconverted oil, also known as UCO, is used as a feedstock for wax and solvent production. These are currently enjoying strong demand in the global market.
The change in the oil production plan followed a plunge in fuel jet sales during the lockdown period.
BCP has increased UCO production capacity to 10% from 5% since early this year.
The company expects it will gain more gross refinery margin this year, said Mr Chaiwat.
It also plans to save more money in its maintenance programme for oil refinery facilities by reducing a scheduled maintenance period from every year to every three years.
According to BCP, its oil trade business in the third quarter is expected to have an earnings before interest, tax, depreciation and amortization (Ebitda) in the range of $8-10 million, an increase from $6 million in the same period last year.
The expected drop in oil retail sales by 10% in the third quarter will not affect BCP's capital spending plan to expand its businesses.
The firm will continue to increase the number of its petrol stations to 1,310 by the end of this year, up from 1,247 at present.
BCP has also launched what Mr Chaiwat called a "unique design service station" campaign to give its filling stations a facelift.
The number of renovated stations under the campaign will increase to 61 this year, up from 39 stations at present.
