Due to the launch of the EFRA Project units and the changing production volumes, starting from 4Q 2019, the model refining margin ceases to reflect the profitability of the refinery and reflect the yield structure. For this reason the Company suspended the publication of a model refining margin. The model margin calculation methodology was updated once the refinery’s operations with the EFRA units have stabilised.
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)
Model refining margin for 2019 in USD/bbl (suspended)
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 6.14 | 7.11 | 7.55 | 5.60 | 5.50 | 6.16 | 8.60 | 7.15 | 8.55 |
Model refining margin for 2018 in USD/bbl
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 5.84 | 6.54 | 6.90 | 7.45 | 7.34 | 7.27 | 7.69 | 8.96 | 5.59 | 7.42 | 10.21 | 7.32 |
Model refining margin for 2017 in USD/bbl
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 7.03 | 7.68 | 7.36 | 8.03 | 6.70 | 6.94 | 7.43 | 7.92 | 10.40 | 8.55 | 7.08 | 5.36 |
Model refining margin on a quarterly basis in USD/bbl
| 1Q 2015 | 2Q 2015 | 3Q 2015 | 4Q 2015 | 1Q 2016 | 2Q 2016 | 3Q 2016 | 4Q 2016 | 1Q 2017 | 2Q 2017 | 3Q 2017 | 4Q 2017 |
1Q 2018 |
2Q 2018 |
3Q 2018 |
4Q 2018 |
1Q 2019 |
2Q 2019 |
3Q 2019 |
| 9.38 | 8.08 | 7.41 | 6.21 | 6.51 | 6.49 | 6.01 | 8.24 | 7.34 | 7.14 | 8.57 | 7.07 | 6.40 | 7.29 | 7.47 | 8.47 | 6.98 | 5.76 | 8.10 |
Model refining margin for 2016 in USD/bbl
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 7.25 | 6.12 | 6.17 | 6.07 | 6.23 | 7.09 | 5.27 | 5.55 | 7.31 | 8.86 | 8,59 | 7.15 |
Model refining margin for 2015 in USD/bbl
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 8.77 | 8.99 | 10.32 | 7.87 | 7.49 | 8.73 | 6.79 | 8.51 | 7.08 | 5.85 | 8.60 | 4.45 |
Model refining margin for 2014 in USD/bbl
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 5.25 | 5.52 | 4.29 | 6.40 | 4.09 | 4.44 | 6.14 | 6.87 | 7.86 | 6.87 | 8.29 | 6.83 |
Model refining margin for 2013 in USD/bbl
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 5.82 | 8.30 | 7.95 | 7.33 | 4.97 | 5.70 | 4.48 | 3.91 | 4.54 | 5.55 | 5.24 | 5.68 |
Historical model refining margin reflected the refinery’s profitability based on prices from the NWE market, published by Thomson Reuters, taking into account the aggregation of product groups into publicly available price indices, on which the majority of the Company’s sales are based.
Historical model margin was calculated for a yield structure estimated in the averaged scenario (excluding annual seasonality) of the refinery’s typical operation.
Assumptions: throughput equivalent to 95% capacity utilisation; 100% feedstock is Urals crude, whose value is determined as the sum of Dtd Brent price and the Urals vs Brent spread.
The margin calculation was built around the presented yield structure, with the following price indices assigned:
- 14.14% gasoline (PRM UNL 10 ppm ARA);
- 4.24% naphtha (Naphtha CIF NWE);
- 4.53% LPG (50% Propane FOB NWE, 50% Butane FOB NWE);
- 49.57% diesel oil (ULSD 10 ppm CIF NWE);
- 5.34% jet fuel (Jet CIF NWE);
- 18.11% heavy fuel oil (HFO 3.5%S ARA);
- 4.07% refinery’s own consumption.
In the calculation, the historical margin was reduced by the estimated model cost of natural gas used per model barrel of crude processed, calculated as the product of 0.075 and the gas index quoted on the Day-Ahead Market of the Polish Power Exchange (TGEgasDA index), converted into USD/MWh (based on YTD 2016 data).
Considering that the historical model did not account for differences in selling prices on different geographical sale markets, the presented margin amount was an estimate rather than the actual refining margin generated by Grupa LOTOS S.A.’s refinery.