The cost overrun is due to the union conflict that prevented the start of maintenance works according to the original schedule, and extended the work period by 90 days.
Maintenance works at the refinery The Tile, the main plant of the National Administration of Fuels, Alcohol and Portland (Ancap) in Uruguay, They would be completed by the second half of April, when the facilities return to full operation. After a stoppage that will end up lasting seven months, of which there was no activity for two due to the union conflict in the state company, the lost profits for the delay was 135 million dollars.
That Ancap would allocate a large amount of money to the technical maintenance stop in La Teja, it was already known since the start date of the work was agreed. Already in April of last year there was talk of an estimated loss of around 180 million dollars due to the pause in production and the fuel import to supply the internal market; and of a indebtedness of 300 million dollars to finance the necessary works at the refinery.
However, the conflict with the workers over the Portland, which delayed the start of maintenance for almost two months despite the fact that the plant was paralyzed on September 4, according to the original schedule, generated extraordinary expenses for the public company: between 65 and 70 million dollars, as confirmed to El País by the president of Ancap, Alejandro Stipanicic.
Delays and costs in maintenance outages
It should be noted that in addition to the delays due to conflicts with the union, other factors were added that extended the stoppage period: preparatory work—planned to begin in June—that began the same day as the maintenance work; construction license; and delays for the week following Christmas, Carnival and Tourism. With these issues, the refinery has delayed the start of its production until the end of March, but the plant is not expected to be fully operational until the second half of April.
This means, in total, about 90 additional days of extension of the stoppage than originally planned. Something that, inevitably, generates higher costs for Ancap: According to official estimates confirmed by Stipanicic, the lost profits —what the refinery stops earning in terms of refining margin— would reach 135 million dollars for the days of delay directly associated with the union conflict.
The projection arises from the calculation of a daily production of 50,000 barrels per day at a margin of 30 dollars per barrel.
To this, in any case, we must add the effective loss due to the initially estimated downtime, of 180 million dollars; and the payment of a bonus of 65,000 pesos for each worker in the event that the work is completed in less than 130 days.
Source: Ambito
