SEOUL: South Korea’s S-Oil says it sees regional refining margins in 2023 remaining elevated over pre-2022 levels, though the company posted a loss in the fourth quarter of 2022 on a fall in oil prices during the period.

The company expects “regional refining margins to maintain an elevated level in 2023 over pre-2022 levels amid ongoing refinery shortages, despite demand growth woes” in an earnings statement.

The refiner, whose largest shareholder is Saudi Aramco, added it anticipates the European Union’s import ban on Russian refined products, China’s domestic demand recovery after reopening and global jet fuel demand to additionally support refining margins throughout 2023.

However, the company posted an operating loss of 157 billion won (US$127.38mil or RM543.3mil) in the fourth quarter, swinging to a loss from a year earlier, because of a one-off impact from the company taking a loss on its inventories after oil prices dropped during the period.

Solid contributions from refining and lube margins continued during the period, it added in an earnings statement.

For the September-December period, the refiner operated the crude distillation units at its 669,000-barrel-per-day (bpd) refinery in the south-eastern city of Ulsan at 93.8% of capacity, up from 91.6% in the previous quarter.

The refiner said it plans to carry out maintenance for its No. 3 crude distillation unit and No. 2 residue fluidised catalytic crackers in 2023. In November, Saudi Aramco, S-Oil’s largest shareholder, announced a US$7bil project to build a refining complex in Ulsan.

 - Reuters