Japanese refiner Cosmo Oil plans to cut its refinery runs during August and September by nearly 47,000 b/d to 412,000 b/d, compared with around 460,000 b/d for the same period last year.
The run cuts are a continued response to Japan's weak demand for refined products. Cosmo estimates its average run rates will be 74.2pc during the two-month period.
The reduction will drag down Cosmo's runs during its fiscal April-September first half to 425,000 b/d, down by 12,000 b/d against a year previously.
Cosmo may have to consider permanent cuts in its refining capacity if it is to meet Japan's new regulations forcing refiners to upgrade their plants' ability to turn fuel oil into higher-value fuels. Cosmo's ratio of residual fluid catalytic cracking or coking capacity against total crude refining capacity stands at only 4.5pc, with Tokyo wanting to improve the proportion to around 13pc by April 2013. The cost of achieving this is likely to be prohibitive for Cosmo given the weak profitability of Japan's refining industry, with domestic oil product demand at the weakest level in 40 years.
The run cuts are a continued response to Japan's weak demand for refined products. Cosmo estimates its average run rates will be 74.2pc during the two-month period.
The reduction will drag down Cosmo's runs during its fiscal April-September first half to 425,000 b/d, down by 12,000 b/d against a year previously.
Cosmo may have to consider permanent cuts in its refining capacity if it is to meet Japan's new regulations forcing refiners to upgrade their plants' ability to turn fuel oil into higher-value fuels. Cosmo's ratio of residual fluid catalytic cracking or coking capacity against total crude refining capacity stands at only 4.5pc, with Tokyo wanting to improve the proportion to around 13pc by April 2013. The cost of achieving this is likely to be prohibitive for Cosmo given the weak profitability of Japan's refining industry, with domestic oil product demand at the weakest level in 40 years.
