logo

To facilitate an assessment of the impact of changes in global raw material and product prices on the refinery’s profitability, Grupa LOTOS S.A.  resumed publishing the model refining margin and provided an updated margin calculation model, adapted to the new product yield structure and reflecting the increased complexity of crude oil processing following completion of the Effective Refining Project (the EFRA Project) as well as a number of minor projects improving crude conversion efficiency, including the Hydrogen Recovery Unit.

The revised model margin calculation methodology is as follows:

The mathematical formula for Grupa LOTOS S.A.’s model margin is as follows:


Model refining margin [USD/bbl] = revenue (products from 94% of crude processed = 23% gasoline + 63% diesel oil + 8% heavy fuel oil) - costs (100% of crude processed + cost of natural gas used)

 

The model is based on simplified assumptions, i.e.:

The margin model only presents a hypothetical profitability of the refinery operating within a specific technological setup, based on prices from NWE markets published by Refinitiv. In consequence, the presented margin amount does not represent the actual refining margin generated by Grupa LOTOS S.A.’s refinery, whose operations are subject to seasonality and optimisation. The new model refining margin replaces the previous margin, published from January 1st, 2016 to September 31st, 2019. 

The comparison of Grupa LOTOS’s previous model refining margin (excluding the EFRA Project) and the Company’s new model margin (including the EFRA Project) as well as the effect of the change in the model refining margin calculation methodology are presented in the table below:

 model margin [USD/bbl] Oct-19   Nov-19 Dec-19  Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20
previous (excluding EFRA) 9,0   3,6  4,4  5,5  5,4  9,6  11,4  1,3  -0,7  1,1  1,2  0,3  1,4 1,1   1,2
now (including EFRA) 13,4   7,9  8,4  8,5  8,0  11,9  13,3  2,7  0,4  2,4  2,3  1,0  1,3  1,1  1,4

 

Difference (delta) between the Company's previous refining margin and the current margin following the launch of the EFRA Project units (USD/bbl)

wykres z korytarzem.EN

 Model refining margin for 2021 in USD/bbl

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
 1.9  2.8 3,39