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Wed 20 Jan 2010 12:37 AM

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Aramco-Sumitomo JV narrows Q4 loss after launch

Net loss attributed to 'improved margins of petrochemical and hyrdocarbon products'.

Saudi based Rabigh Refining and Petrochemical Co (PetroRabigh) said on Tuesday it narrowed its net loss by 64.1 percent in the fourth quarter, which saw the commercial launch of its $10.1 billion complex.

The joint venture of Saudi Aramco and Japan's Sumitomo Chemical made a net loss of $86.3 million in the three months to end December, down from $240.72 million a year earlier, it said in a statement.

It attributed the narrowing of the loss to "improved margins of petrochemical and hydrocarbon products and the recognition of feedstock adjustment".

State controlled Aramco and Sumitomo Chemical each have a 37.5 percent stake in joint venture with the rest publicly held.

Chief Executive Ziad Al Labban told Reuters in November that the company could make a profit in the fourth quarter of 2009 if refining margins improve fast enough.

A month later, he said margins had not yet started to improve unlike prices of petrochemicals.

The global crisis has depressed demand for petrochemical products, leading global petrochemical players to post lower margins this year.

The gloom did not spare petrochemical firms based in the Gulf Arab region - where access to cheap feedstock means wider margins than elsewhere.

PetroRabigh inaugurated its giant complex in November and commissioned all the production units in December.

"December 2009 was the first month where the company realized ... (a) net profit," it added.

For all of 2009, the company lost $0.43 per share, or a total of $381.29 million, up 12.3 percent from a net loss per share of $0.38 in 2008.

Operating loss slid 7.1 percent in 2009 to $322.63 million, it added.

PetroRabigh, which caters mainly to the Saudi market and areas such as Europe and North Africa, can process 400,000 barrels of crude per day, accounting for about 19 percent of Saudi Arabia's total refining capacity.

It can produce an annual 18 million tonnes of refined products and 2.4 million tonnes of petrochemical products. (Reuters)

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