May 29, 2012:

Oil Refineries (ORL), Israel's biggest refinery, said on Tuesday its quarterly loss narrowed as stronger refining margins and higher fuel prices helped its bottom line. The company, a subsidiary of conglomerate Israel Corp , is taking steps to improve efficiency, including the merger of several subsidiaries, upgrading equipment and switching its own production plant to natural gas. Oil Refineries had been suffering due to a reduction in refining margins in part due to the economic downturn and debt crisis in Europe.

"The start of 2012 continued to be characterised by extreme volatility and a range of unforeseeable events in the global fuel and refining industry," said outgoing Chairman Yossi Rosen. Its new hydrocracker for the production of clean fuels, in which it invested $391 million, is expected to be activated in the third quarter. This will improve margins by increasing the production of more profitable products. "We ascribe great importance to the hydrocracker project and its successful and timely activation. This has considerable significance for the company's profitability in view of its complexity and advanced technology," Rosen said.

Rosen on Tuesday said he was stepping down as chairman towards the end of the third quarter after five years in the job. He will continue to serve as chairman until a successor is found. ORL earlier in the day also said it had agreed to supply the Palestinian Authority with fuel products for two years at $1.9 billion a year starting this October. Oil Refineries had a first-quarter loss of $6 million compared with a loss of $13 million a year earlier. Revenue rose 19 percent to $2.45 billion. Its adjusted refining margin was $4 a barrel, up from $3.4 a year ago and compared with the average Mediterranean Ural Cracking Margin quoted by Reuters of $3.0 per barrel.

By Reuters