TAIF-NK JSC maintains stable position in oil products market in 2020
The global crisis, aggravated by the epidemic of the new coronavirus COVID-19, which has engulfed the world, has dealt a powerful blow to the economy of all states without exception. Among the most affected industries — the oil and oil refining industries. Read how one of the flagships of the Russian oil refining, TAIF-NK JSC, finished the year 2020 in the context of the pandemic and economic lockdown in the material of Realnoe Vremya.
2020 in Russia and in the world
The COVID-19 pandemic has become a shock to the global economy and had a key impact on the dynamics of the global oil market.
In the oil industry, at the end of 2019, supply exceeded demand, which led to lower prices for both oil and refined products.
With the development of the pandemic, the situation in the global market only worsened. Looking ahead, it can be noted that the volume of processing of oil and gas raw materials in Russia at the end of 2020 and in comparison with 2019 decreased by 5,4% and amounted to 270 million tonnes, which corresponds to the level of 2011. Russian refineries produced only 38,4 million tonnes of gasoline, which is by 4,5% less than a year earlier. Diesel fuel production amounted to 78 million tonnes, which is also less than in the previous reporting period. However, here the drop was not so significant and amounted to about 0,5%.
It would seem that the figures on the volume of exports of petroleum products looked encouraging against the background of falling production. In comparison with 2019, the decrease was only 0,8%. But due to the weakening of the ruble and the general decline in prices for the refinery products themselves, export revenue in the Russian oil refining industry as a whole collapsed by almost a third. This has seriously affected the economic efficiency of the refinery.
Production performance indicators of TAIF-NK JSC
Despite the current negative situation in the global and domestic economy, TAIF-NK JSC not only continued its work but even increased the depth of processing and production of light oil products.
“By the results of 2020, the volume of processed raw materials amounted to 7,3 million tonnes (12th out of 39 main refineries in Russia according to Info TEK magazine). The total capacity utilisation was 91,3% (10th with an average utilisation in the industry of 82,3%). The depth of processing of oil raw materials of TAIF-NK JSC for the first time exceeded the psychological mark of 80% and amounted to 81,5% (a year earlier it was 73,4%).
The company reduced the production of dark petroleum products due to their use as raw materials at the HRCC. This not only improved the structure of output, but also achieved new record levels. The production of light oil products increased from the previous 63,9% to 76,1%, which gave an increase to last year's result of 0,3 million tonnes. Such indicators were achieved taking into account the operation of the Heavy Residue Conversion Complex in 2020 in the mode of integrated testing. With further stable operation of the complex, the expected production of light oil products will be more than 90%. This was told to Realnoe Vremya by Director General o “TAIF-NK JSC Maksim Novikov.
At the moment, the range of products produced by TAIF-NK JSC includes 49 items, where the main types are diesel fuel and straight-run petrol, motor petrol, liquefied petroleum gases, jet engine fuel and bitumen.
According to the results of 2020 and taking into account the work of the HRCC, TAIF-NK JSC produced by 19% more diesel fuel than in 2019, and the total volume reached 2,9 million tonnes. It was produced 1,6 million tonnes of straight-run gasoline, 0,5 million tonnes of motor fuel.
As before, the company provides consistently high quality products that meet the most stringent international standards, specifications and regulations.
The production of the new type of EURO 6 diesel fuel produced by the HRCC has been mastered. Currently, the declaration of conformity of TAIF-NK EURO 6 diesel fuel with the requirements of TR TS 013/2011 is being registered.
In 2020, the winners and diploma holders of the Republican and All-Russian competitions of the programme '100 Best Goods of Russia' were fuel for jet engines of the Tatarstan brand, as well as oil road bitumen of the BND 70/100 brand. This is despite that Tatarstan's crude oil, which is tied in price to Urals oil, is significantly inferior in quality: it contains less light fractions, more sulphur, chemical aggressive, heavy and high-viscosity compounds, which significantly increases the volume of operating costs and the rate of equipment wear, and this, in turn, significantly affects the financial results of the enterprise.
The priority for TAIF-NK JSC has always been and remains the sale of petroleum products. First of all, to supply the domestic domestic market. The total volume of products produced last year was 7,2 million tonnes. Of these, 3,8 million tonnes were sold in Russia, including using exchange trading instruments: St. Petersburg International Commodity Exchange (SPIMEX), and Onlinecontract electronic trading platform.
Out of the remaining volumes of products produced, 3,1 million tonnes were sold in the markets of the far abroad, and 0,3 million tonnes — in the markets of the near abroad and the CIS countries.
Financial results for 2020
Negative economic and epidemiological factors significantly affected the financial and economic results of the oil refining industry in general and TAIF-NK JSC in particular.
Lower prices for manufactured products, falling demand and the depreciation of the national currency led to a decrease in the company's revenue. By the results of 2020, it amounted to 147 billion rubles, which is by 29% less than in 2019. The company's net loss amounted to 24,9 billion rubles. However, half of this loss was caused by the depreciation of the ruble in the global financial market.
The company maintained its economic stability thanks to its assets, the size of which actually remained at last year's level — 148,4 billion rubles.
Despite the negative profit, TAIF-NK JSC fully fulfilled its obligations both to its employees and to the budgets of all levels. Tax payments by the results of 2020 amounted to 22,2 billion rubles (including 1,3 billion rubles to the budget of Tatarstan), which is only by 2,3 billion rubles less than the year before.
“The decrease in tax payments was due to a decrease of customs payments payable to the budget of the Russian Federation by 9,8 billion rubles. In turn, the reason for this was the reduction in both the rates of export duties on petroleum products as part of the phased completion of the “tax maneuver” in the industry by 2024 and the current oil prices due to the global decline in oil consumption," explained Maksim Novikov, the director general of TAIF-NK JSC.
He also noted that at the same time, the company's excise tax payments to the budget of the Russian Federation increased by 6,8 billion rubles due to the reverse effect of the damping surcharge to the reverse excise tax on crude oil.
The company of high social responsibility
Even in the most difficult times of economic lockdown, TAIF-NK continued not only to implement the company's strategic development programme, but also took an active part in social and environmental projects. Last year, the company spent 2,7 billion rubles on environmental protection, labour protection and industrial safety, as well as on protecting the company's employees from the spread of coronavirus infection.
“It is very important that in such a difficult time, TAIF-NK JSC was able to preserve the main asset of the company — a highly professional workforce, without which the continuous operation of complex and high-tech production is impossible. To take care of the health of the staff and prevent the spread of the new coronavirus, in March 2020, operational headquarters were established at all TAIF-NK JSC plants to monitor the epidemiological situation. The company strictly complies with the regulations of the Russian Federation, the Republic of Tatarstan and the recommendations of Rospotrebnadzor. Thanks to the steps taken, we managed to prevent the spread of COVID-19 among the company's employees," said Maksim Novikov, the director general of the company.
Thanks to prompt and competent actions in this difficult time for the entire Russian economy, TAIF-NK JSC managed to maintain all social guarantees and benefits for employees. Over 4,2 billion rubles was allocated for social expenditures, including charitable and sponsorship activities, investments in the company's personnel, financing of mortgage programmes, contributions to the Pension Fund and medical and social insurance funds during 2020.
The company is confident that the efforts made to preserve the production and financial potential, positions in the industry, as well as the projects currently being implemented and planned for the coming years, will allow TAIF-NK JSC not only to improve the economic situation, but also to significantly increase the efficiency of the company and the implementation of all strategic tasks for further development.