Israel's Oil Refineries posted sharply lower quarterly net profit on Sunday, due to a decline in refining margins. Oil Refineries, Israel's largest refining and petrochemical group, posted third-quarter net profit of $25 million compared with $100 million a year earlier. Revenue rose to $1.71 billion from $1.45 billion.

The company said its adjusted refining margin was $1.7 per barrel, the same as the average Mediterranean Ural Cracking Margin quoted by Reuters. The margin was $8.1 a barrel in the third quarter of 2009.

"Despite the weakness in the fuel markets, there is an impressive strengthening of the petrochemical markets, particularly in the area of polymers," CEO Yashar Ben Mordechai said in a statement.

"Moreover, we are beginning, following the reported period, to see signs of stronger refining margins in the Mediterranean basin."

Oil Refineries noted the price of oil rose in the third quarter, reaching $81 per barrel by the end of the quarter.

It said significant progress was made in connecting a natural gas pipeline to the company's facilities. The project, expected to be completed by the end of the year, will allow Oil Refineries' facilities to run on natural gas and yield operational efficiencies.