Fluctuating crude oil prices, leading to narrowing profit margins in the refining industry, have created financial pressure on oil and gas corporations worldwide. Many refineries have been forced to restructure or temporarily suspend operations, resulting in sharp declines in revenue and profits, and facing the risk of bankruptcy. In this challenging context, Binh Son Refining and Petrochemical Joint Stock Company ( BSR ) has thoroughly implemented volatility management solutions in its production and business operations to weather the market downturn.
BSR has quickly adapted and responded to the decline in oil prices in order to withstand and overcome the current difficult period. BSR has developed and implemented a volatility management strategy, focusing on maintaining operational flexibility, optimizing available resources, saving costs, enhancing market forecasting, developing response scenarios, and flexibly and promptly adjusting production plans to suit market changes.
Regarding crude oil sources and input materials, BSR is intensifying its efforts to find and process new types of oil, especially imported oil, in order to enhance the plant's flexibility. In addition, BSR has taken advantage of market opportunities and selected opportune times for bidding to increase its ability to purchase imported crude oil and to explore new oil types.
BSR continues to seek opportunities to import processing components to increase economic efficiency. Research into VGO/Residue processing (intermediate components) aims to ensure the capacity of the RFCC unit in cases where oil processing has low residue. Simultaneously, BSR has also implemented trials and put into use new types of catalysts and additives to increase competitiveness and optimize production.
BSR always encourages its employees to develop initiatives and innovations to improve production and business efficiency and reduce costs. |
Regarding product mix optimization, BSR has successfully researched and implemented measures to increase the production of high-value products such as ADO, Jet-A1, PP, and increased the ratio of Mogas 95/Mogas 92 gasoline from the initial design of 40%/60% to over 70%/30%. BSR continues to implement improvement solutions to increase the proportion of Mogas 95 gasoline, aiming to increase its market share in Mogas 95 gasoline production in the coming years.
In its product sales operations, BSR regularly assesses and analyzes market conditions to develop appropriate solutions, proactively building preventative measures to mitigate the impact of downward oil price adjustments, such as: increasing operating capacity, quickly selling products, maintaining reasonable inventory levels to minimize the risk of inventory devaluation, boosting sales, and applying flexible sales policies.
In addition to solutions related to crude oil and the market, maintenance is organized regularly, efficiently, and cost-effectively, ensuring safe operation and stable performance of the plant. The focus is on increasing the rate of preventive maintenance and minimizing maintenance and repair time; enhancing capabilities and increasing the application of scientific and technological solutions to contribute to improved labor productivity, safety and reliability of plant equipment/operation, and product quality, thereby reducing production costs.
BSR's product export port. |
BSR is actively implementing comprehensive and effective risk control solutions at the refinery; researching and implementing solutions to minimize plant maintenance costs; changing operating modes; researching and developing the production and application of new chemical and petrochemical products, advanced materials, and clean fuels from domestic sources… In particular, in management, BSR aims to participate in new business areas, including crude oil and petrochemical product trading; providing services, including operation and maintenance, overall maintenance management, project management, safety management, quality assurance/quality control (QA/QC), and training. BSR regularly updates and improves its risk management and governance systems… in accordance with legal regulations and the company's development strategy. BSR is stepping up its digital transformation efforts to promote the implementation of development strategies, risk management, smart manufacturing models, and ensure the efficiency of the company's core operations.
Regarding the practice of saving and combating waste, BSR has issued the 2024 Program on Saving and Combating Waste, the Directive on improving production and business efficiency in the last months of the year to complete the 2024 Management Plan, and the Directive on implementing waste prevention and control in the new context, setting the goal of striving to optimize and reduce production and business costs by at least 10%-15% compared to the plan (excluding crude oil costs and depreciation of fixed assets).
Maintain safe and stable plant operation and promote scientific and technological research.In accordance with the Government's directive on ensuring national energy security and preventing fuel shortages, while simultaneously fulfilling its business functions, BSR has operated the Dung Quat Refinery flexibly. The processing units have been operated at optimal capacities, with a suitable product mix to meet market demand. This has contributed to minimizing the negative impacts of the fuel market.
BSR also places great emphasis on research and development of new products, especially those in high demand and with high prices. Over the past period, BSR has optimized its efforts to increase market share for these new products. Specifically, BSR has developed and commercially launched 14 new products, including 6 new PP plastic resin products (T-3045, T-3050, I3085, I-3150, BOPP, TF4035) and 8 fuel products, of which 3 are specialized fuels for defense (JetA-1K, ADO-L62, A83 gasoline), 1 is marine fuel (Marine FO), and 4 other products are feedstocks for petrochemicals: Treered-LCO, Full Range Naphtha, RFCC Naphtha, and Mixed C4.
The spirit of solidarity and corporate culture at BSR are always highly valued. |
Energy saving efforts have implemented over 70 technical improvement solutions, significantly enhancing energy efficiency throughout the Dung Quat Refinery. Specifically, the Energy Intensive Index (EII), which characterizes the plant's energy efficiency, decreased significantly from 118% before 2015 to 104%-106% in 2020-2023, and further decreased to approximately 100% after the 5th major maintenance period. Internal energy consumption correspondingly decreased from over 7.4% to 6.8%. According to a Solomon Islands assessment report, a 1% reduction in the EII is equivalent to a saving of approximately US$2.6 million per year.
By implementing a comprehensive set of solutions to manage fluctuations in its production and business operations, BSR expects to maintain stability in production, minimize risks from volatile and sharply declining oil prices, and seize and capitalize on opportunities when the market shows signs of recovery.
Thanh Hieu
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