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Brightoil provides update on various business units

Brightoil provides update on various business units

02 Aug 2018

Hong Kong-listed Brightoil Petroleum (Holdings) Limited Wednesday provided an update for its Upstream, International Trading and Bunkering, Marine Transportation, and Zhoushan Oil Storage and Terminal Facilities business units.

The Wednesday update was after an earlier announcement in the same week, where it introduced plans to sell the assets and/or shareholding of Zhoushan Oil Storage and Terminal Facilities, and 15 marine shipping vessels (VLCC, Aframax, Barge) of the Group.

Brightoil’s upstream business noted constructions of onshore projects related to the Dina 1 and Tuzi gas fields nearing completion and coming into commercial production period.

The annual gas production for the 2017 financial year reached a record at approximately 1.0 billion cubic meters, and is expected to reach approximately 1.2 billion cubic meters for the 2018 financial year.

The company’s International Trading and Bunkering (ITB) unit, meanwhile, is being merged with its e-commerce platform for transparent and light-asset operations.

“The trading sector has exited the oil terminal facilities business outside China and is actively researching, developing and promoting the bunkering online platform,” it says.

“Two e-commerce versions are expected to be launched in the financial year of 2019.

“In addition, in response to IMO’s new low-sulphur regulations effective from 2020, ITB team is in active discussion with international oil majors, Chinese national oil companies and regional refineries to seek responding solutions and to prepare for the new low-sulphur era.”

The Marine Transportation division has maintained the vessels’ operation rate at above 95% between January to June 2018.

Interestingly, Brightoil was able to secure its fuel costs at USD300/MT in January and February 2018 and in other period (April to June 2018) at USD415/MT.

“Ships materials procurement has been benefited from working with the shipping e-commerce team to achieve good quality with low costs,” it adds.

The Zhoushan Oil Storage and Terminal Facilities business unit pointed out Phase 1 of its construction, which provides approximately 1.94 million cubic meters of capacity and a 13-berth terminal, to be completed and put into operation by end-2018 or early 2019.

“The construction project encountered delays from its initial schedule due to innate unpredictable factors, including that the construction is on outlying islands, and that the topography and geological factors are relatively complex,” it notes.

“However, the various departments of the company have expedited the construction work; it is expected the project will be completed and commence operation as soon as practicable.”

Moving forward, Brightoil says it is currently awaiting the result of an independent investigation in order to resume work by the Audit Committee to complete the company’s review first, followed by the audit and publication of the 2017 Annual Results and the 2018 Interim Results.

“As this time, as the Review has not been completed, there is not enough information for the Company to set down a time schedule for the completion of relevant audit,” it says.

Trading in Brightoil’s shares on the Hong Kong Stock Exchange was suspended since 3 October, 2017 and is expected to remain suspended until further notice.