31-12-04 Bangchak Petroleum Plc (BCP) said it wants to take out a combined loan of $ 190 mm from local banks to fund the planned construction late 2005 of a new oil refining plant. The new plant will be in service from late 2007 onwards, BCP managing director Anusorn Saengnimnual told.
"Currently, BCP has completed conducting a feasibility study on the plan. BCP is due to be able to design next year a construction blueprint on the new plant and is set to start building the new plant late next year. As of currently, BCP has been in negotiating with several Thai commercial banks on the conditions attached to the loans," Anusorn told.

That is regarded as a sizable investment so far by BCP, which has only completed late last year restructuring its debt incurred from the 1997 economic crisis, said Anusorn. Currently, BCP refines 120,000 bpd of oil, said Anusorn. Anusorn said about 30 % of BCP’s total refined oil output is bunker oil, adding the bunker oil profit margin is less than those from other types of refined oil products.
Anusorn said BCP is currently seeking a loan from local lending sources to finance BCP’s planned construction of the new refining plant. Anusorn said the overall costs for the new refining plant construction are regarded as huge because of the rises in the prices of steel and production machinery.

Recently, the company said it expects its earnings before interest, tax, depreciation and amortisation (Ebitda) in 2004 to stand above 5 bn baht, a sharp surge from the 1.5 bn baht it reported last year. BCP acting president Pichai Chunhavajira said his firm’s Ebitda increase was boosted by the company’s business and financial restructuring schemes.
BCP is the owner of a 120,000-bpd oil refining plant. The firm reorganised its business structure at the end of 2003 and the fruitful outcome will be gradually realised.

According to Pichai, BCP projects that its Ebitda in the fourth quarter of 2004 will stand at more than 1 bn baht. He said this is based on the price of crude oil, which has fallen at a faster rate than than that of refined oil, making a substantial price difference between crude and finished oil.
Pichai said he projects that oil refining fees will increase in 2005 on the back of continuous world economic growth and the limitation in the number of existing oil refinery plants. He cited the lack of new oil refinery construction projects at present and said any that are scheduled will take at least five to six years to complete.

He added that BCP plans to spend about $ 200 mm to develop its oil refining production lines with the aim of reducing the production of bunker oil which has relatively lower oil refining fees.
BCP wants to refine more diesel, which will help increase its oil refining fee to $ 6-$ 7 a barrel, the same level as that of other oil refineries.