S-Oil’s second quarter results for its base oil and lubricants segment were steady, while petrochemicals income offset unimpressive returns from refining, said K.D. Gang, S-Oil’s treasurer, at a shareholder presentation last week. The company put it down to fluctuating crude prices over the past two quarters
Saudi Aramco is the majority shareholder in S-Oil, having bought a 35% interest in 1991 then increased its stake to 65% in 2014. S-Oil operates a refinery in Onsan, South Korea, which produces 15,000 metric tons per year of API Group I base oil, 1.15 million t/y of Group II and 822,000 t/y Group III.
Second-quarter operating income for base oil was ₩145.8 billion (U.S.$ 105.4 million). This the company says is attributable to turnarounds and inspections at major global suppliers and the demand for Group II materials. The company predicts the third quarter will see base oil spreads decrease in line with slowing seasonal demand.
“We forecast these fundamentals to remain healthy and stay above pre-pandemic averages as constant demand growth for premium products under restricted capacity expansion has been keeping the market tight for years,” S-Oil President Jong-Bum Ahn told shareholders.
Luberef, another Aramco base oil refiner located in Yanbu, Saudi Arabia, is also seeing its value cool slightly. On Sunday, it ended the day’s trading with a small decrease in its stock price, settling at SAR131.6 ($35) a share, 0.30% under its opening price.