Firstly, Orpic is continuing to perform extremely well; despite the market noise you have heard regarding oil prices. I want to say that although 2015 has seen a 40 per cent reduction in oil prices, Orpic’s performance and profitability depends on our refinery margins, not crude prices.
Today, Orpic is buying crude oil and other products at international prices and selling them to the local and global market at international prices. This is therefore closely linked to the movement of world crude oil prices, petroleum products, and petrochemicals. From this diversity of products, we can add value locally to supply the domestic market and meet ever-growing demand.
Secondly, we are an ambitious company with competitive growth plans underway, valued at over $8 billion.
With our performance in good shape, it is the perfect opportunity to realize our ambitious, but strategic growth plans.
Orpic’s current plant and refinery operations, coupled with its strategic growth projects, including the Sohar Refinery Improvement Project, the Muscat Sohar Product Pipeline and the Liwa Plastics Industries Complex are not only expected to generate significant dividends for shareholders, but will further diversify Orpic’s product mix, intensify Orpic’s downstream business operations, and increase the impact of Orpic’s contribution to the Oman economy.
As Orpic delivers on its strategic growth plans to revolutionize the way it operates, and pursue ambitious plans to provide fuels, feedstock, chemicals and petrochemicals to Oman and the world, the focus on higher standards of efficiency, lower costs, eliminating hazards, improving environmental and socio economic impacts, and serving the Sultanate with pride will carry forward – building momentum and strength.
Orpic’s Sohar Refinery Improvement Project (SRIP) is a multibillion-dollar capital investment for Orpic, which is scheduled for commissioning in 2016. It is being delivered in response to the need to upgrade Orpic’s refining capability in order to further maximize the value of Omani crude oil. SRIP adds five new units, improving Sohar Refinery’s ability to process heavier Omani crude oil.
Muscat Sohar Product Pipeline and Al Jifnain Terminal Project are being delivered by Orpic Logistics – a joint venture partnership between Orpic and Spain’s Compania Logistica de Hidrocarburos (CLH). It will connect Orpic’s Mina Al Fahal refinery in Muscat with its Sohar refinery here, via a two-way, 290 km, multi-product pipeline to an intermediate distribution and storage facility in Al Jifnain.
The Liwa Plastics Industries Complex is the biggest of the three major projects being executed by Orpic over the next three years. More than anything else, it will transform Orpic from a refinery operation to a dynamic and flexible petrochemicals producer.
Upon commissioning of Orpic’s Liwa Plastic Industries Complex project, Oman will be a producer of polyethylene, along with extra quantity of polypropylene. This is a significant strategy for Orpic and the petrochemical sector in Oman, as this will allow Orpic to increase the horizon of polymer products, and open new markets both in Oman and abroad.
With Liwa Plastic Industries Complex forecast to produce around one million tons of polymers annually, Orpic will be in a strong position to compete in the international polymer market, and at the same time improve value optimization within Oman, by converting the natural gas to plastics.
Lastly, but certainly not least, our vision and values are more than just words. People, performance and profit for the Sultanate are what drive us every day to do our best and succeed. Our commitments to the communities where we operate, job-creation, in-country value and so on are all very real and tangible actions we take to ensure the country is benefiting from our operations.
