HAIFA, Israel, March 26, 2012 /PRNewswire/ --
Oil Refineries Ltd. (TASE: ORL.TA) ("Oil Refineries Ltd" or the "Company") is pleased to report that on March 26 2012 it entered into an Agreement with an international company (the "Counterparty") as follows:
1. The transaction will allow the Company, over a five year period, to have available access to up to 2 million barrels ( app. 270,000 tons) of different grades of crude oil owned by the Counterparty by exchanging them also for similar quantities of different grades owned by the Company. The Company will pay the Counterparty periodically a fee for this service. As part of the Agreement, the Company will make certain deposits with the Counterparty, depending on the various grades of crude oil held by the Counterparty.
2. In order to comply with its obligations under the Agreement, the Counterparty will store crude oil at facilities of an infrastructure supplier pursuant to an agreement with the infrastructure supplier.
3. In connection with the Agreement, the Company has granted the Counterparty a put option to sell the Company crude oil at the end of the Agreement with the sale price being equal to a variable crude index-based spot market price determined at maturity.
4. In connection with the Agreement, the Company has agreed to conditional obligations towards each of the Counterparty and the infrastructure supplier for certain risks and costs related to this arrangement.
5. Each of the Counterparty and the Company may terminate this arrangement under certain circumstances prior to the completion of the five-year term. If the Company terminates the arrangement, it may be required to pay a termination fee to the Counterparty.
6. The Agreement will enable the Company, during its implementation, to reduce overtime the quantity of crude oil its holds and therefore to optimize its operational inventory management
About Oil Refineries Ltd.
Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries in the Eastern Mediterranean area and integrates, on-site, petrochemical businesses. ORL runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 7.4, providing a variety of quality products used in industrial operation, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lube-Oils (through Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit http://www.orl.co.il.
ORL is controlled by the Israel Corporation Ltd. and Israel Petrochemical Enterprises Ltd., both public companies whose shares are traded on the Tel Aviv Stock Exchange.
The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's reports.
Chief Economist and Head of Investor Relations
Contact [email protected]
Investor Relations Contact:
Ehud Helft / Porat Saar
Tel. (US) +1-646-233-2161 / (Int.) +972-52-776-3687
SOURCE Oil Refineries Ltd