Refining margins have not yet started to improve, unlike the prices of petrochemicals, the chief executive of Saudi Arabia's Rabigh Refining and Petrochemical has said.

'Refinery margins are still no where close to the levels they were at in 2007,' Ziad al-Labban told Reuters in an interview.

Profit levels have not improved due to oversupply, he said.

'The margins have been squeezed and hopefully with the return of the global economy, demand will pick up again and suck this oversupply and margins will improve,' he added.

Labban was more optimistic about petrochemical prices and demand.

'Now on the petrochemical side, prices have improved and they are not yet at levels they were, but they are moving in the right direction,' he said.

The growth of petrochemicals demand will be coming from the Far East, India and China, Labban said, adding that China is leading in terms of demand.

PetroRabigh, a Saudi-based joint-venture with Sumitomo Chemical, is currently producing 42,000 barrels per day 95-octane gasoline and 15,000 bpd of 91-octane, all used for domestic consumption, he said.

The fluid catalytic cracking (FCC) unit at the 400,000 bpd Rabigh refinery is expected to be operating at full capacity in the next few days.

Saudi Arabia has offered unusually high volumes of A962 cracked fuel oil due to an outage in the FCC unit.

The FCC unit, which has a capacity of 92,000 barrels per day (bpd), was producing gasoline at a capacity of around 42 per cent, Labban said.

The outage was due to a leak in the hydrogen production unit, he said, adding that a dryer had also had to be replaced.

This has been done and the hydrogen unit has been put on stream, he said.

PetroRabigh can produce an annual 18 million tonnes of refined products and 2.4 million tonnes of petrochemical products. – Reuters