Morning, everyone. [Non-English content] . Welcome to the SPRC analyst meeting, where today we will share our performance for the first quarter of 2023. My name is Joanie Shaw. I am the Investor Relations Manager, and I will be your meeting moderator today. First, I would like to introduce you to the SPRC management that is in attendance with us today. Mr. Robert Dobrik, CEO.
Hey, guys. [Non-English content] .
Next, we have [Non-English content] Nutsara Somkiatweera, CFO.
Okay. [Non-English content] .
[Non-English content] Sakchai Thamsuruk, Supply & Planning Manager.
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During the meeting today, we will refer to the presentation, and it is also available on our website. [Non-English content] Rob will start us off with a performance review. Then we will be following that with a financial performance from [Non-English content] Nutsara, and then [Non-English content] Sakchai will share the market update. [Non-English content] Rob will wrap us up with our prepared comments that will take about 30 minutes, and then we will move to the Q&A session. If you have a question, please post your question in the chat or use the raise a hand feature in Teams, and we will call on you accordingly. With that, I will hand the session over to our CEO, [Non-English content] Rob.
Well, thank you, Joanie. Thank you for everybody for joining us today. We are excited to provide you an update on our first quarter results, and really provide an overview highlight of our performance through the first quarter. In general, at a very high level, it was a solid quarter, and I think you will see that reflected in both the operating performance and the financial results. Let us go to the next slide if we can. Just once again, we continue to stay focused on being incident, injury, and hopefully we are beyond getting infection-free, but that continues to pop in on us every now and then. Our total days away from work, we have not had an incident since 2013, approaching well over 34 million man-hours since our last significant event in that regard.
We continue to really focus on being safe, reliable and make sure that we actually have that predictable, reliable performance each and every day. In regards to the utilization, once again, generally a solid quarter. We did have a minor upset in the end of January, early part of February, just about a three-day event, which took away from our top-end performance. But still, I would argue is generally first [quarter] performance in both utilization and operational availability. It is a pretty dynamic space, and we continue to look for creative ideas to optimize margins. It is not always about maximizing throughput, but maximizing the value we create with the configuration that we have as far as the refinery. We have continued to look for ways to bring in perhaps some slightly different crews, try some different things.
Atmospheric residue is an area where we saw some incremental value, ways to top up and utilize the plant more effectively. Really some different ways we benefit by importing gasoline components to ultimately increase our production. Finally, just really trying to drive to where the market is telling us we need to be in the moment, which was obviously through the first quarter of the year, really primarily maximizing the middle distillates through that period. We will provide you a bigger overview of the overarching market conditions and through the first quarter and beyond. [Non-English content] Sakchai will provide that further. I would like at this time perhaps just to turn it over to [Non-English content] Nutsara to comment on the bottom line financials. [Non-English content] Nutsara, if I could turn it over to you.
Thank you, [Non-English content] Rob. My section will be on the financial performance for the first quarter, and we have a very good. Actually, our first quarter is still a good quarter for SPRC in term of financial performance. First, looking at the gross refining margin, our market margin is $6.3, which increased from prior quarter. This is because of the better crack spread in term of the gasoline, driven by the limited export from China and also from the demand increasing in the gasoline. Also, caused by the reduction in the crude premium during the quarter, that you can see the trend. Crude premium keep declining. Also, we have the crude and product optimization to increase our margin, like we call BLIP program, to improve better yield for the refinery. Our margin increased from prior quarter.
During the quarter, the oil price stay around, the Dubai price stay around at $80, so we have a slight stock gain of just like $7 million during the quarter. Our accounting margin and marketing margin is market margin is almost the same as our $6-$7 a barrel. On the operating expense, we still have maintained cost control in term of the operating expense and still at low level of around $2 a barrel, which is competitive and comparing to other refinery.
This is excluding the oil spill expense, which you can see in the financial statement that we released yesterday, that we still incur oil spill expense around THB 3 million in the first quarter of this year. That number including the provision regarding the claim that we announced earlier, that we already reviewed with [inaudible], we think that this is the best estimate of the number of the provision that we make in the financial statement. In term of the net income, we have positive income of $37 million U.S. during the quarter. This is driven by the strong margin that we still earn during the quarter of $6.3 a barrel.
On the equity, net interest-bearing debt to equity ratio, we are maintaining the low level of debt at $230 million U.S. or equivalent to 0.2 IBD per equity ratio, which is at low level comparing to our peer. This is because of our working capital management, that we try to manage our working capital to reduce our debt level. I pass to [Non-English content] Sakchai for the market update.
Okay. [Foreign language] [Non-English content] Nutsara. On the market update, I think let's start with the global crude oil supply and demand. In general, I think the view does not change. But inside, I think that there are some adjustment, but the projection is still the same, that toward the end of the year, we expect the supply and demand get to be balanced toward the end of the year. The thing that we see, beginning of the year, I think we will project a good demand growth in 2023, this year, about close to 2 MMbpd . Majority is happen in Asia. I think into more detail, I think it's 40%- 50% is it [inaudible].
I think along the year, few thing happened, mainly actually the economy concern deriving from the bank crisis and other thing that happened, start to put some fear, some concern into the market. Also, actually, they have been start to get some adjustment in term of the demand growth as well. I think that in general, people still, even we see short term that the crude oil price is start to drop recently because of the concern from the economy side. But the fundamental of the supply also start to expect to see tighten, towards second half of the year. That mainly because of the OPEC. Actually, as we see a decline in OPEC cut, it's continued to happen, include Russia, which is included as the OPEC+ in there.
With OPEC have very clear intent that they want to keep the market balance and get up to the price that they want to see, probably as we talked before, I think above $80 per barrel. Along the year, if the demand still have a concern or dropping down, we expect to see a reaction from OPEC start to put more action into the picture. That probably, if the demand, actually fundamental demand is keep going, we expect to see a more tighter market in term of the crude supply towards second half of the year. That include the new capacity that adding into the world of close to 1 million bbl a year. That expect to come more towards second half of the year. Also the seasonal maintenance, which is expect to end by the end of second quarter.
Move up into Q3, Q4, more run expect to see. Probably the OPEC cut probably keep the market, keep the supply tighter towards second half of the year. Margin, I think [Non-English content] Nutsara already report out that in Q1, we got a slightly better than Q4 last year. It's a drive, a combination of lower crude oil premium and also slightly better on the gasoline crack and lower freight cost as well give us a good margin in Q1 this year. But thing to mention is probably is the strong optimization that happened at the refinery as well, keep us a really strong margin for Q1. Next slide.
In term of the overall inventory with this, the fundamental of the probably this is the fundamental of the product price, that we look at the global inventory, I think all of the indicator still indicate that we still got a low inventory after the COVID period. Light distillate is still low and majority is in U.S., which is hold a big chunk of the inventory of the light distillate. Middle distillate, even though it start to come back, but it's still on the very low inventory compared to a five-year average. Fuel oil is still on the bottom. But if you flip into Asia, I think Asia, which is a smaller size of the inventory, if you look at the number, it's a really big difference. We talk about in the range of 10-20 compared to the global, which is kind of 200 million-300 million.
In Asia, it's a small chunk of inventory. When something happens, we start to see a really significant movement happen. The light distillate actually going up since last quarter, since end of last year, but still support. I think we're still going forward, typically still get a support from U.S. demand and also the summer in the northern hemisphere that just probably about to come. Going forward, I think the light distillate inventory in Singapore, I think expect to stay a bit down because of the demand pull from locally and also from U.S. I think middle distillate is the one that probably really, typically in Asia, we got long in middle distillate. So we need to really have the outlet for the middle distillate. But so far, I think we got quite a limited outlet on the middle distillate.
But some good news that we have during this time is probably the seasonal turnaround is about to kick in, and the peak of the maintenance will happen in June. So with that effect, that should really make the inventory of the middle distillate stay in the same at the current level, and does not really push down the price much more than today. The fuel oil, actually, we got really strong support from China, really. Even we got the flow from the West, but China also absorbed a lot of fuel oil into their upgraded units. So that lets see if the fuel oil crack is in the better crack spread if you look at the crack today. Next slide [Non-English content] . Yep. So back into the crack spread. In term of the crack spread, we see better crack spread of the gasoline.
As I mentioned, I think, moving toward into Q2 and Q3, we still got really a good support account for the gasoline crack to stay at least across to this level because of U.S. market and also the summer in northern hemisphere will drive the demand and also seasonal turnaround. Typically, going into driving season, the inventory on U.S. side is supposed to be higher than today. But this year, I think, probably similar to last year, that we enter into driving season with low inventory. So that a good support to maintain the gasoline track, not to go low. Diesel and jet, I think diesel right now, we got quite a limited outlet from Asia Pacific because typically, we can move the cargo going to the west side and mainly Europe.
But today, I think with the freight cost and with the new capacity that add into the market from Middle East actually really support that market for the moment. So, we start to see some inventory build up in this region. As I said, I think the thing that we are actually expect to see is the seasonal turnaround that happened in May and June. Also, I think, when I mentioned about the 2 million demand growth in this year, about 50% of the demand growth is happening jet. Jet demand is as in the, what do you call it, in the progress to grow up in term of the demand to get back to the pre-COVID level, which is that about close to 1 MMbpd growth. But currently, I think it is still just probably close to 50%.
So toward the end of the year, we start to see the jet demand probably kick in more, and that should help the, what do you call it, the surplus of the middle distillate in this region. I think fuel oil crack is actually moving into the good direction because of the support demand for China, that really import more of the fuel oil to really use as a feedstock. Include SPRC, we also use the state-run fuel oil to put into our cracker, into the crude unit and into the cracker to really upgrade the molecule. Even though we see the crack coming off, I think the other thing that really the good indicator is actually the crude oil premium also coming off in the same direction.
So that, at the end of the day, should keep the refinery margin at a certain level that still incent the refinery to keep running, even though we need to do some adjustment on the crude throughput to maximize the profit. Next, [Non-English content]. For the optimization that we made, as [Non-English content] Rob mentioned before, I think, on the crude oil side, we bringing in some new feedstock on top of what we optimize on the Middle East. The Middle East still telling us that the light crude is the most economic crude to go, and the light crude for Middle East is still the target for us. If you look at the crude oil price, I think the light crude and the medium, the pricing difference is really narrow account.
That why it drive us to go for light crude at the moment, together with other feedstock that we bring it in. We bring it in the atmospheric residue, we bring it in the crude form, Far East, some of them that we see econ, and then we also bringing in the crude form from Mediterranean as well, from Kazakhstan. When we see more econ to process, but the main diet is still Middle East light crude that we see more economic. The optimization in term of the barrel, you can see that we step up the production of jet in line with the demand growth of the jet, as I mentioned.
Also, we start to see, we call the [inaudible] start to turn into positive right now, so that really moving toward the right direction that we start to make more jet in step with the demand growth. In term of the gasoline, we still optimize the gasoline, and we still use the synergy. Even though the gasoline crack is getting better, but the middle distillate crack is still higher than gasoline. We're still doing a synergy with our partner to send the feedstock to maximize the middle distillate production by sending the feedstock across, and then try to make a bit more middle distillate from the synergy. Fuel oil and asphalt is the area that we optimize. I think starting with crude, we run lighter crude, so expect to see a lower fuel oil.
But as I mentioned, I think, the fuel oil does not really go low even we upgrade into the upgrading unit and also really making more asphalt because asphalt is really give us a very good margin. We maximize asphalt during this period. But if you ask about why we see more fuel oil, that because of the atmospheric residue that we bringing in. And the feedstock that we bringing in is really generate more fuel oil, but it still give us the good economy to do because it's pricing our fuel oil. So even we make more fuel oil, but the benefit, we pay our fuel oil price, but we get the benefit by making a lighter product. But at the end of the day, we make a bit more fuel oil.
The domestic sale, I think in Q1, we placed a lot of barrel into the domestic market. I would say every product, I think it's gasoline, it's jet, and diesel, all of the production that we have and we produce actually has been placed into the domestic market. Very small portion that we export is just a little fuel oil and some C4. We can say that we nearly 100% that we supply into the domestic market for this quarter. Yeah, in general, even the market actually look into more challenge coming into Q2. We still get some hope that because of the seasonal turnaround, we probably expect to see a better margin, going forward into May and June.
Probably Q3 maybe is a bit of a challenge, but we probably still try to maintain our competitive advantage by maximizing the efficiency that we can do, optimizing the barrel that is make the more profit that we supposed to make and stay reliable. But one thing to be made is the point that even though the new capacity is coming in this year from Middle East, from the declaration that we look at from the published data, it seem to be the large chunk of the new capacity that come into the market, come into the growth. Even though we probably need to utilize this new capacity for a while, and that expect to be maybe by October 2024, after that, we didn't see any new capacity declared.
Also it does not make good economic sense to build a new capacity into the world because of the peak fuel and peak oil in the next 10, 15 year. That why it's harder to justify to adding new capacity. That why the golden period is still waiting for us in the medium term in after 2024 second half or even 2025 onward. That still confirm that we're still seeing a golden period waiting for us, at least in the medium term before the energy transition kick in. That's all from me. Back to Robert.
Yeah. Thank you, [Non-English content] Sakchai. Good summary. Look, we're continuing to look holistically at opportunities. We obviously announced late last year and executed early this year the ability to extend our value chain as kind of a measured step. We recognize this is just the start. We're looking at a host of other opportunities, many of which are really just continue to drive for what I characterize as quick payout, high return- type positioning adjustments with some of our mix. Thinking more from what I characterize more like a minimum functional objective mindset is try not necessarily go for everything, but get to those really value-added projects that can really drive quick returns.
So that's probably our mindset through up preparation for the turnaround. Holistically, we're stepping back, though, and looking at a long-range asset strategy, and that work is in flight to really understand how we want to position ourselves longer term with both how do we run the refinery, but how do we participate in the energy business sustainably over the next 20 years. That work's in flight, and I hope to be able to provide an update around some of that a bit further at perhaps our next quarterly sharing. We recognize the future is lower carbon, so how do we, once again, figure out the right recipe and the right partnerships to be a part of that future? Maybe I'll just leave it at that and then maybe go to our closing slide.
Look, I think as [Non-English content] Sakchai, all of us have reinforced, we work really hard to be boring. What I mean by that is reliable, predictable, safe each and every day. Each and every task, each and every day to make sure that we can continue to deliver products, and we make sure everyone goes home safely. We're constantly looking for ways to optimize our mix. We're not afraid to try bringing in slightly different crudes or perhaps reconfiguring the plant configuration to maximize whatever the dynamic is in the period in question.
We've tried to do a variety of things, increasing our asphalt production as you saw in terms of the slide [Non-English content] Sakchai just showed, and bringing in some different feedstock. But ultimately, that whole exercise is really around extracting maximum value at any moment. Our teams are constantly challenging themselves to really go after new ideas.
They're constantly bringing new opportunities to us, and we try to incorporate those in a fairly timely manner. I think we have a history of being very cost-conscious, and that hasn't left our purview. We are constantly looking for understanding where we spend our money and be very thoughtful about where we do and how we do it. Like I finally said, is evaluating future opportunities. We do have the 2025 turnaround coming at us, and so there are a few things we have to try and position ourselves to execute in that window. But it's really kind of starting separating those activities from the next generation opportunities to really position ourselves for energy transition and a much more sustainable future. Looking ahead, simple recipe. Stay reliable, focus on making sure no one gets hurt.
Bottom line improvement program, find those opportunities to just increase value each and every way. Once again, operational excellence really around reinforcing that reliability dimension. Then just continue to maximize synergies. We're early days with the fuels acquisition. We're still going through the "separation process" that Chevron's going through their separation process. We're starting to have dialogue around a variety of synergy opportunities, and we're just trying to find the right moment to start to act on those. But obviously, we don't get the acquisition till the end of the year, so we have to work collaboratively with the seller to pursue some of those as when appropriate. Finally, we're looking to make sure that we optimize our cash flow and facilities to be able to fund all the opportunities we have, both this near term but purchase the opportunities that follow.
Finally, our focus, the SPM is a significant detractor from perhaps even higher margins, obviously. That remains a focus for us. We've been out in the field these past few months, actually conducting maintenance activities, inspection and maintenance activities, and that'll probably continue into next month or so. In parallel, we're working with the regulator to make a case for a resumption of operation and generally being met with at least some support to try and do that. We'll see what the future holds.
There's a lot of parties that have perspectives, but we'll look to try and move that forward in the coming weeks and months so we can get that back in operation and restore the margins, but also do it in a safe and thoughtful, prudent manner so we're not just racing to put that back in operation, but make sure we understand the full set of conditions that are out there, and that's the point of the inspection and maintenance activities that are underway as we speak. With that, I think we'll turn it back to perhaps Joanie.
If not, we will go ahead and wrap up the session today. I want to thank you all for your time and for your participation. We appreciate your interest and your engagement with SPRC on today's call. We do have some information on this slide for you to provide feedback or to follow up with us if you have any additional questions. Please do so. With that, we thank you.