OMV's 200,000 bpd Schwechat oil refinery is running at 20% capacity with repairs to fix a crude distillation unit set to take several weeks at least, OMV Chief Executive Alfred Stern told Reuters.
On June 3, two people were injured when a part at a crude oil distillation unit exploded at the refinery towards the end of a planned turnaround that has put a stop to output at the site since April 19. It was the biggest incident at a refinery OMV has had to deal with and requires dozens of people to fix the 40-meter high unit at the refinery next to Vienna Airport, Stern said.
OMV will learn over the next couple of weeks how long repairs might take, but was expecting the outage to last at least "several weeks", he added. "The main distillation unit is a big part (of the refinery), we also have a smaller one. The rest of the refinery has resumed operations but at a significantly smaller capacity - at around 20% of the overall production capacity," Stern said in an interview.
The outage happened while global refinery margins and prices at petrol pumps across the world are at record levels on the back of soaring post-pandemic demand and shrinking refining capacity. On Wednesday, U.S. President Joe Biden even demanded oil companies explain why they aren't putting more gasoline on the market. OMV has been using its own stockpiles and public reserves to cover the shortfall to its customers.
But it will also have to buy additional refined products such as diesel and jet fuel from European countries like Germany or Romania, and the Middle East, for example Abu Dhabi, via the ports of Trieste or Koper, Stern added. The additional cost to OMV will be buffered partially by its insurance coverage.
Stern said some airlines are now filling up before they return to Austria "to reduce demand and relax the situation", whereas before the accident they would have waited until they arrive at Vienna Airport. Stern said he expected OMV's refinery margins to be higher than last year - alongside refinery margins across the globe amid high demand and tight fuel supply - high energy costs and more expensive crude oil were eating into some of those profits.
As per MRC, OMV reported utilization of 83% at its European refineries in H1, 2021, down by 3% on the year yet "relatively resilient in light of the COVID-19 impact". It expects the utilization rates at its European refineries to remain at the 2020 level this year. Last year its refineries reported 86% utilization. The company's refineries in Europe ran at 85% utilization in Q2, up from 81% in the year-ago quarter.
As MRC wrote before, OMV is investing EUR40 million (USD48 million) to expand and modernize a steam cracker and associated units at its refining and petrochemicals complex at Burghausen, Germany. The upgrade will increase the site’s ethylene and propylene production capacity by 50,000 metric tons/year. Following a planned turnaround of the refinery, the revamped cracker and petchem units are expected to start operations in the third quarter of 2022. Initial groundwork is already underway ahead of the upgrade.
OMV produces and markets oil and gas, innovative energy and high-end petrochemical solutions – in a responsible way. With Group sales of EUR 23 bn and a workforce of around 20,000 employees in 2019, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies.
mrchub.com