Modernization of “LUKOIL Neftohim Burgas JSC” refinery
enhanced the plant’s efficiency amid systemic struggles of the European
refining industry and the forced shutdowns of numerous plants in
adjacent countries.
In the context of intensifying global competition oil
refineries have invested in product and plant innovation, and
optimization of production processes to ensure the output of superior
quality products, attuned to market demand, whilst simultaneously
minimalizing costs. However, certain features within the EU have meant
that local refineries are having a harder time competing globally.
The majority of the European oil refining plants were
constructed soon after the Second World War and were designed to meet
the high demand for petrol. The ensuing popularity of diesel has meant
that its share has now grown to over 75%, which is virtually unique
among major markets.
As a result, European petroleum refining industry’s
margins almost halved, before a slight recent recovery. But margins went
up also in the competing regions. To cope with this reality, European
plants should be focused on costs optimization and investments in
refinery adaptation. However, years of low margins and demands on
investments for standards compliance means many refineries lack the
means to invest in competitiveness. 16 oil refineries went into
liquidation in the EU since 2008, and a further dozen refineries are
expected to be closed by 2020.
Moving forward
The EU petroleum refining sector will endure through
strong businesses being able to modernize their capacities to anticipate
the changes in the demand and environmental requirements. Of these,
large and advanced oil refineries will be the most successful.
Bulgarian “LUKOIL Neftohim Burgas JSC” falls into that
category. This is the only refining plant in Bulgaria and the largest
one on the Balkan Peninsula.
The plant refines a broad range of crude oil brands into
various products that are then delivered to domestic and international
markets.
LUKOIL has recently completed an extensive modernization
project of the refinery, which started in 2012 with the signing of the
project implementation agreement with the Italian subsidiary of Technip.
The share of high quality diesel production has been
raised to 1,2 million tons per year, as were the shares of other
valuable light fractions and low-sulphur (<1%) fuels, the production
of high-sulphur fuel oil has been terminated altogether, the overall
crude oil conversion rate went up to 90% from 75%.
At $1,5 billion, this project became the largest recent investment in the Bulgarian economy.
In May 2015, at its opening ceremony Vagit Alekperov,
LUKOIL’s CEO: “The commissioning of this complex will make the company’s
facilities in Bulgaria one of the most advanced both in Europe and the
whole world”.
Similar refining facilities currently exist in only seven countries.
A socially positive enterprise
Around 5000 people are directly and indirectly employed by
the “LUKOIL Neftohim Burgas JSC” refinery, of which some 1400 work at
the refinery itself. Specially designed comprehensive benefits packages
offer improved healthcare, reward experience and encourage lifelong
learning among other things. Salaries levels are among the highest in
the country.
The plant’s social care is not reserved to its employees
only. Over the past 9 years the company has spent more than $ 14,2 mln
charity.
For example, kindergartens and schools on the territory of
Burgas and Kameno urban areas were renovated under the plant’s
patronage. It promoted such initiatives as: “Bicycle town – the model of
urban mobility”; “Cultural and historical heritage of the St. Anastasia
Island and the city of Burgas”; among others.
Corporate social responsibility, in the experience of
“LUKOIL Neftohim Burgas JSC” can be an effective complement to public action in solving some of its more pressing challenges.
https://neurope.eu/article/investing-in-the-future/