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Exclusive-OMV’s Schwechat oil refinery at 20% capacity after accident
Global Banking & Finance Review®
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By Alexandra Schwarz-Goerlich
(Reuters) – OMV’s 200,000 barrel per day Schwechat oil refinery is running at 20% capacity with repairs to fix a crude distillation unit set to take several weeks at least, OMV Chief Executive Alfred Stern told Reuters on Wednesday.
On June 3, two people were injured when a part at a crude oil distillation unit exploded at the refinery towards the end of a planned turnaround that has put a stop to output at the site since April 19.
It was the biggest incident at a refinery OMV has had to deal with and requires dozens of people to fix the 40-metre high unit at the refinery next to Vienna Airport, Stern said.
OMV will learn over the next couple of weeks how long repairs might take, but was expecting the outage to last at least “several weeks”, he added.
“The main distillation unit is a big part (of the refinery), we also have a smaller one. The rest of the refinery has resumed operations but at a significantly smaller capacity – at around 20% of the overall production capacity,” Stern said in an interview.
The outage happened while global refinery margins and prices at petrol pumps across the world are at record levels on the back of soaring post-pandemic demand and shrinking refining capacity.
On Wednesday, U.S. President Joe Biden even demanded oil companies explain why they aren’t putting more gasoline on the market.
OMV has been using its own stockpiles and public reserves to cover the shortfall to its customers.
But it will also have to buy additional refined products such as diesel and jet fuel from European countries like Germany or Romania, and the Middle East, for example Abu Dhabi, via the ports of Trieste or Koper, Stern added.
The additional cost to OMV will be buffered partially by its insurance coverage.
Stern said some airlines are now filling up before they return to Austria “to reduce demand and relax the situation”, whereas before the accident they would have waited until they arrive at Vienna Airport.
Stern said he expected OMV’s refinery margins to be higher than last year – alongside refinery margins across the globe amid high demand and tight fuel supply – high energy costs and more expensive crude oil were eating into some of those profits.
(Writing by Shadia Nasralla, Editing by Louise Heavens)
A crude distillation unit is a key component in oil refineries that separates crude oil into different fractions based on boiling points, enabling the production of various petroleum products.
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