CNPC increases production

MOSCOW (MRC) -- China National Petroleum Corporation (CNPC) posted a rise in output during 2013, driven mainly by an increase in overseas production, said Upstreamonline.

China's Xinhua news agency reported the company's output had risen 10.2%, compared to 2012, to 306.65 million tonnes of oil equivalent.

It added that the increase was largely due to an 18.1% increase, year-on-year, from overseas production which totalled 123 million tonnes of oil equivalent.

CNPC is planning to further increase production this year to 329.67 million tonnes of oil and gas Xinhua reported, citing CNPC general manager Liao Yongyuan.

The news agency also reported that trade volumes from CNPC's operating centres in Europe, Asia and North America increased 10.9%, compared to 2012, to USD266 billion in 2013. As MRC wrote before, Moody's Investors Service has changed the outlook of China National Petroleum Corporation's (CNPC) from positive to stable.

China National Petroleum Corporation (CNPC) is the largest oil & gas company in China in terms of reserves and production. It is wholly owned by the government, and is the largest state-owned enterprise in terms of assets, and second-largest in terms of revenue. Its oil & gas reserves of 23 billion boe and production of 1.67 billion boe also position it among the top five integrated oil and gas companies in the world.
MRC

BP predicts slowdown in global energy demand

MOSCOW (MRC) -- Global energy demand continues to grow but that growth is slowing and is mainly driven by emerging economies, led by China and India, according to Hydrocarbonprocessing.

The fourth annual edition of the BP Energy Outlook 2035 includes the oil company’s view of the most likely developments in global energy markets further 2035, based on up-to-date analysis. The outlook reveals that global energy consumption is expected to rise by 41% from 2012 to 2035?compared to 55% over the past 23 years (52% over the past 20 years) and 30% over the past 10 years.

Also, 95% of that demand growth is expected to come from the emerging economies. Energy use in the advanced economies of North America, Europe and Asia as a group is expected to grow very slowly and to decline in the later years of the forecast period.

Shares of the major fossil fuels are converging with oil, natural gas and coal; each is expected to make up around 27% of the total energy mix by 2035. The remaining shares will come from nuclear, hydroelectricity and renewables. Among the fossil fuels, natural gas is growing fastest hydrocarbon; it is increasingly being used as a cleaner alternative to coal for power generation as well as in other sectors.

Oil is expected to have slowest growth trend of the major fuels to 2035, with demand growing at an average of just 0.8%/yr. Nonetheless, the demand for oil and other liquid fuels will be 19 million bpd higher in 2035 than 2012. All of the net oil demand growth is expected to come from outside the OECD nations. Oil demand growth from China, India and the Middle East will account for almost all of net demand growth. Growth in the supply of oil and other liquids (including biofuels) to 2035 is expected to come primarily from the Americas and Middle East.

Natural gas is expected to be the fastest growing of the fossil fuels, with demand rising at an average of 1.9%/yr. Non-OECD countries are expected to generate 78% of demand growth. Industry and power generation account for the largest increments of new demand. LNG exports are expected to grow more than twice as fast as gas consumption, at an average of 3.9%/yr, and accounting for 26% of the growth in global gas supply to 2035.

Shale gas supplies are expected to meet 46% of the growth in gas demand and account for 21% of world gas and 68% of US gas production by 2035. North American shale gas production growth is expected to slow after 2020 and production from other regions to increase, but in 2035, North America is still expected to account for 71% of world shale gas production.

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items. As MRC wrote before, the board of Rosneft has approved deals to sell refined products to BP worth more than USD6 billion. This comes on top of a prior agreement to sell oil worth USD5.3 billion to BP.
MRC

Fitch affirms JSC SIBUR at 'BB+' with stable outlook

MOSCOW (MRC) -- Fitch Ratings has affirmed Russia-based petrochemical group JSC SIBUR Holding's (SIBUR) Long-term Issuer Default Rating (IDR) at 'BB+' with stable outlook, according to the agency press release.

SIBUR Securities Limited's five-year USD1,000m notes, guaranteed by SIBUR and due 2018, have also been affirmed at senior unsecured 'BB+'. The Short-term IDR has been affirmed at 'B'.

Although agency expects poor market conditions in synthetic rubbers to translate into weaker results than forecasted under our previous 2013 base rating case, the ratings continue to be supported by SIBUR's leading position in the Russian petrochemicals sector, its diversified portfolio and its access to competitively priced feedstock. This in turns underpins its strong operational cash flow generation over the cycle.

The group's ratings are constrained by higher-than-average systemic risks associated with the Russian business and jurisdictional environment. Excluding these risks, SIBUR's credit profile is assessed at the 'BBB' category.

SIBUR continues its evaluation on the ZapSib-2 multi-billion-dollar project, which would entail the construction of an integrated production complex in Tobolsk, with 1.5mtpa ethylene, 1.5mtpa polyethylene (PE) and 0.5mtpa polypropylene (PP) capacity. The final investment decision was recently postponed to no earlier than end-1H14. The project's characteristics, including its size, implementation schedule and financing structure, could have a significant impact on the company's leverage and coverage metrics, and thus remain one of our key rating issues.
MRC

Exports of PC chips from Russia fell by 35% in 2013

MOSCOW (MRC) -- Exports of Russian polycarbonate (PC) to foreign markets fell in 2013 by 35% from 2012. Last year's exports reached 19,000 tonnes, according to MRC DataScope.
The Chinese market is the main destination for Russian PC exports. Nearly 16,000 tonnes of material were shipped to this market in 2013, which accounted for 83% of the total exports.

Thus, reduced by 33% from the year earlier PC shipments to China had a decisive impact on the overall exports. PC chips accounted for the main part of supplies.

Asian injection moulding PC market allows Russian material to compete in the market, because it steadily offers much higher prices compared to export prices of domestic producers. Spot offers for injection moulding grades in China ranged USD2,485-2,700/tonne CIF China in 2013.

MRC

PP imports to Russia decreased by 21% in 2013

MOSCOW (MRC) - Significant growth of polypropylene (PP) production in Russia noticeably reduced PP imports in 2013. The largest reduction in imports occurred for homopolymer PP, according to MRC DataScope.

The launch of two new productions in Omsk and Tobolsk in 2013, as well as a substantial increase in production at Neftekhimia, Kapotnya and Stavrolen, Budennovsk allowed Russian producers to reduce significantly the volume of PP imports in the domestic market. Total PP imports to Russia in 2013 fell to 217,000 tonnes, compared with 276,100 tonnes a year earlier. Expectedly, the greatest reduction in imports occurred for homopolymer PP.

The structure of PP imports last year was as follows. Russia's imports of homopolymer PP was 88,500 tonnes in 2013, compared with 137,600 tonnes in 2012. Imports declined in all sectors of consumption because of the improved supply from Russian producers.

Total imports of block copolymers of propylene (PP-block) rose to 56,500 tonnes in 2013, from 54,500 tonnes in 2012. PP-block imports grew due to the increased purchases from the consumers of extrusion copolymers, whereas imports of injection copolymers remained unchanged.

Imports of PP random copolymers fell to 38,600 tonnes in 2013, from 50,200 tonnes in 2012. Russian producers managed to reduce the dependence of imports in all consumption sectors, the largest decline occurred for injection moulding sector (down 39% to 6,000 tonnes) and pressure pipes (down 26% to 18,300 tonnes).

Imports of other polymers of propylene in 2013 actually stayed at the level of 2012 - about 33,400 tonnes.

As reported previously, Poliom (Omsk) has launched 180,000 tonnes/year PP production in early February 2013. Tobolsk-Polymer (SIBUR) launched its 500,000 tonnes/year PP production capacities in late May 2013. Total PP production capacities in Russia increased twofold and exceed 1.3 mln tonnes.


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