KARACHI, Aug 29: The completion of ‘Lube Revamp Project’ of National Refinery Limited (NRL) is a major event about which the chairman in his last quarterly report had stated: “Progress on revamp project is satisfactory. The best estimation for completion and commissioning remains third quarter of 2005”.

The NRL chairman’s review on the accounts for the quarter ended on March 30, 2005 had also noted: “The expected enhanced production of base oils from the revamp would not only further enrich refinery economics but also bring substantial savings in foreign exchange for the country.”

For the first three quarters of the current year (July-March 2004-05), NRL posted an after tax profit amounting to Rs2.24 billion, producing earning per share (eps) at Rs33.56, which was about twice the net earnings of Rs1.16 billion or eps of Rs17.41 reported in the corresponding period of the previous year.

Analysts believe that National Refinery has an edge over other refineries since it is the sole lube producer in the country. Unlike other refineries, which only have the fuel section, NRL boasts also a lubricants section with two lube refineries.

An analyst explained that lube business was vital because lubricants fetched the highest per unit margin among all energy and non-energy products. “Quite understandably, therefore, company embarked upon the project of lube refinery expansion,” he said.

The Lube Revamp Project was undertaken with the technical assistance of Exxon Mobil. On completion of the project, the production capacity of the second lube refinery would enhance by 14,800 tons per annum (tpa) and the total lube capacity would rise from 176,00 to 191,000 tons per annum.

NRL was privatized in May this year. Attock Oil Group of Companies (AOGC) bought the company by making the highest bid of Rs16.415 billion for 51 per cent shares at the rate of Rs483 per share.

While the full year financial figures of NRL are being awaited, Pakistan Refinery Limited (PRL) has already come up with its results for the year ended on June 30, 2005, posting an after tax profit at Rs1.7 billion, as compared to the after tax profit of Rs734 million the previous year.

With a phenomenal rise in world oil prices, refineries have come into the lime light. President Pervez Musharraf on Friday had observed that Pakistan must establish oil refineries at Gwadar to refine oil of Gulf countries for international market. “There is a big gap between demand and supply of refined oil. Therefore, I think, Pakistan must go very strongly towards establishing oil refineries,” the president had said.