Pakistan Oil & Gas_Cracks remain supportive – CAPEX plans present hefty burden, (AKD Daily, Nov 09, 2020)
AKD Daily
Pakistan Oil & Gas: Cracks remain supportive – CAPEX plans present hefty burden
- POL product cracks retained strength in the second half of Oct’20, despite underlying crude benchmarks inching higher (14th-27th Oct’20 Arab Light average at US$40.1/bbl up ~1% over previous 14 days) indicative of stabilizing global economic conditions, taking HSD/MS crack to Arab Light to average US$+2.25/+3.9/bbl, well above 4MFY21 averages (US$+1.7/+1.8/bbl) and noticeably lower for HSD YoY (US$+11.5/+3.4/bbl avg. during 4MFY20)
- HSFO cracks witnessed a major upswing, ~79% over 29th Sept-13th Oct to US$-0.7/bbl (vs. 4MFY21/CY20TD avg of US$-5.0/-7.1/bbl), where bunker fuel demand has remained unexpectedly buoyant (despite IMO-2020 implementation), where ship-owners have favored the installation of scrubbers to utilize high Sulphur FO as opposed to using (more expensive) low Sulphur fuel alternatives.
- Global crude prices had moved lower on expected US political deadlock and resulting negativity on growth, reversing significantly following indications from Russia of OPEC+ maintaining its production ceiling into CY21, with KSA affirming its stance on deeper cuts, while supportive crude draws from the US lent support to crude prices
- During the last month a number of refineries have conducted analysts briefings, where managements laid out planned Catalytic Converter (CCR or FCC in case of BYCO) diesel hydro de-sulphurising (DHDS) investments with hefty price tags (US$234-500mn, avg. of US$359mn) which seem difficult for the sector to undertake on internal cash flows alone.
AKD Research
Byco Petroleum Pakistan Limited is engaged in the production, marketing and sale of petroleum products. The Company is involved in the businesses of oil refining, petroleum marketing, chemicals manufacturing and petroleum logistics. The Company operates two business segments: Oil Refinery Business and Petroleum Marketing Business. The Oil Refinery Business segment is engaged in crude oil refining and selling of refined petroleum products to oil marketing companies. The Petroleum Marketing Business segment is engaged in trading of petroleum products, procuring products from oil refining business, as well as from other sources. It offers liquid fuels, including gasoline, jet fuel, ultra winterized diesel, furnace oil and bunker fuel; gaseous fuels, including compressed natural gas and liquefied petroleum gas, and lubricants. The Company's subsidiaries include Byco Terminals Pakistan Limited and Byco Isomerisation Pakistan (Private) Limited.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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