MUSCAT: Duqm Refinery and Petrochemical Industries Company LLC (OQ8) has announced revenues totaling $1.97 billion during 2023, representing the first year of operations since its establishment as a greenfield refinery at the Duqm Special Economic Zone on Oman’s southeastern coast.

The joint venture – a 50:50 partnership of OQ Group of the Sultanate of Oman and Kuwait Petroleum International of Kuwait – also recorded operating expenses (Opex) amounted to $186.2 million for the year.

The revelations came in the inaugural edition of OQ8’s Sustainability Report 2023, issued here on Thursday. Commenting on the company’s performance for the year, David Bird – CEO, stated: “The year 2023 embarked on a very exciting transition from project completion to an operating business, receiving the first crude oil shipments and exporting our first products of Naphtha on April 14th. Our vision to become a world-class business guides our endeavours, particularly in pursuing ESG (Environment, Social, and Governance) ambitions.”

Receiving its first crude shipment on January 9, 2023, OQ8 commenced operations on March 23 when the processing capacity was around 177,000 barrels per day (bpd), representing 77% of its full capacity of 230,000 bpd. The first export of refined products – a 9500 m3 shipment of naphtha – took place on April 14, it said.

A notable highlight of the year was the start-up of a pipeline of healthy revenues following the commencement of exports of various refined petroleum commodities and byproducts to markets across the globe.

“As we progressed towards 2023, we witnessed remarkable operational and financial performance across all our operations. Notably, our refinery’s operational and commercial activities commenced in the first quarter, which contributed significantly to the company’s financial results and boosted our overall productivity. This year marks the beginning of revenue generation, driven by solid operational execution and favorable market conditions,” OQ8 stated in the Sustainability Report.

Refined products marketed during the year comprised: Naphtha (5,851K barrels), Diesel (8,419K barrels), Jet A1 (3,190K barrels), LPG (574K barrels), and Pet Coke (916K barrels). Earnings from these exports amounted to just under $50 million in June, eventually rising to a high of $552 million in December 2023.

At full capacity in a normal year of operations, however, OQ8 is designed to produce 746K of Naphtha, 430K of Jet A1, 1,163K of Diesel, 55K of LPG, 157K of Pet Coke and 30K of Sulphur. Sales of these commodities are handled via offtake arrangements overseen by OQ Trading and Kuwait Petroleum International. Import markets encompass North and South America, Europe, Asia, Middle East, and Africa, according to the company.

As for the refinery’s feedstock requirements, 35% of the volume is shipped from Mina Al Fahal (Muscat) in the form of Oman Export Blend, while the remaining 65% is delivered from Kuwait’s Mina Al Ahmadi. Other local entities that play a key role in enabling OQ8’s normal operations are: Oman Tank Terminal Company (OTTO), which has earmarked 4.5 million barrels of storage capacity at its Ras Markaz complex; OQ Gas Networks, which provides gas to operate the refinery’s main processing units; and Marafiq, which caters to the plant’s water and energy requirements.

Furthermore, in keeping with its commitments to In-Country Value (ICV) development, OQ8 procured goods and services worth around $105 million from local suppliers in 2023, representing a 38.5% jump over the previous year’s share. Procurements of around $6 million were directly sourced from Riyada cardholders, it added.

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