Romania to have another go at privatising Oltchim

MOSCOW (MRC) -- Romania announced on August 12 that it is to make another attempt to sell off Oltchim in December, after two previous attempts ended in failure, as per Businessnewurope.

Oltchim’s administrators - Rominsolv and BDO Business Restructuring - announced in a statement posted on the Bucharest stock exchange’s website that a new attempt to sell off the company has been scheduled for December 15. It will be the third attempt at privatization.

Bucharest first tried to sell off Oltchim, one of the largest chemicals companies in southeast Europe, in 2012. Following that failure, and a restructuring, another doomed bid to offload the company came in early 2014.

In the wake of the second scrapped sale, administrator Gheorghe Piperea told journalists in June that Oltchim’s management team would be given six months to reduce losses and make it more attractive for investors. Bucharest now clearly hopes this will bring the lengthy saga to an end. Piperea also indicated in early summer that a Chinese consortium - comprising Baota Petrochemical and Junlun Petroleum - will have the first option to buy.

The first attempt to sell off the company ended in farce. A deal struck with the winning bidder - former journalist and owner of the OTV television station Dan Diaconescu - was cancelled after he failed to come up with the EUR45m he had agreed to pay for a 54.8% stake in the company. Diaconescu, who had no experience of running a chemicals company, was selected over Germany’s PCC SE and two local industrial companies, because of the high price he offered.

Shortly after his bid was selected, Diaconescu demanded new terms, including a guarantee that the state would pay salary arrears for Oltchim workers and public-sector creditors would refrain from forcing it into insolvency.

At the urging of the International Monetary Fund (IMF), Oltchim was declared insolvent in January 2013. The Romanian economy ministry then restructured the company, creating the Oltchim SPV, a special purpose vehicle that owns Oltchim’s core assets valued at EUR305.2m. Despite this, the second attempt to sell in early 2014 also flopped. An initial deadline of January 28 was postponed by two months; a third deadline put back to June then expired with still no bidders coming forward.

That lack of interest is perhaps not so surprising. The company on the block is currently operating at just 25% of capacity, although there are plans to open additional facilities, which will bring production up to 40% by December. However, its not just at company level that a sale is vital.

The restructuring and sale of state owned companies is a major part of Romania’s commitment to the IMF, which approved a EUR1.98bn stand-by arrangement with Bucharest in September. A pledge to accelerate the privatisation process is a leading edge of the agreement. The government has had mixed success in offloading major state owned enterprises thus far, however.
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Ukraine moves closer on Russia sanctions

MOSCOW (MRC) -- Ukraine's parliament has reportedly backed the first reading of a bill to impose sanctions on Russian companies and individuals, stoking fears among European gas suppliers that their supplies from Gazprom through Ukraine could be hit in the coming winter, said Upstreamonline.

Ukrainian Prime Minister Arseny Yatseniuk said last week that the sanctions could be imposed against 172 citizens of Russia and other countries and against 65 Russian companies, including Gazprom, "for financing terrorism".

Kiev said that European energy companies may need to agree major contract revisions when buying Russian gas under the proposals, which are due for a second reading on Thursday, according to Reuters reports.

Ukraine’s gas grid Naftogaz said the sanctions could see a new setup where European companies buy the gas at the Russian border from Gazprom and transit it through Ukraine using a different operator.

Russia is Europe's biggest gas supplier, meeting almost a third of the region's demand, around half of which flows to European clients via Ukraine.

The EU’s energy commissioner Gunther Oettinger said that changing European gas contracts could not be done in the short term but would need to be discussed at a trilateral meeting of the European Commission, Ukraine and Russia envisaged for the Autumn.

Russian gas flows to Ukraine have been halted three times over the past decade, affecting supplies to the EU, by contract and pricing disputes between Moscow and Kiev.

Russia halted gas supplies destined for Ukrainian customers in June because of a row over pricing, but Russian gas transit through Ukraine to Europe has been unaffected so far.

As MRC wrote before, the United States in mid-July imposed its most wide-ranging sanctions yet on Russia's economy, including Gazprombank and the Rosneft Oil Co, and other major banks and energy and defense companies.

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Exports of Russian EPS fell by a quarter

MOSCOW (MRC) -- Exports of Russian expandable polystyrene (EPS) to foreign markets dropped from January to July 2014 by 25% year on year, according to MRC ScanPlast.

Overall, Russia exported 10,500 tons of EPS over the stated period versus 14,000 tons a year earlier. SIBUR remained the main exporter. Plastik (Uzlovaya) also shipped its material to foreign markets, the plant's exports totalled 138 tonnes.

Ukraine remained the main consumer of Russian EPS. The Ukrainian market accounts for about 95% of the total Russia's exports.

The reduced presence in foreign markets was caused by increased shipments to the domestic market on the back of strong demand for Russian EPS in the first half of 2014, and it was not connected with the situation in Ukraine.

Demand from foreign markets remained strong, however, SIBUR met increased demand of local customers.
As reported earlier, higher domestic supplies resulted in reduced EPS imports. EPS imports to Russia dropped over the first seven months of 2014 by 9% year on year.

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ExxonMobil announces changes in managerial personnel

MOSCOW (MRC) -- Exxon Mobil Corporation’s board of directors has elected David S. Rosenthal as vice president and controller and Jeffrey J. Woodbury as vice president of investor relations and secretary, effective 1 September, reported the company on its site.

Rosenthal, 58, is currently vice president of investor relations and secretary. He began his career with Exxon in 1979 as a financial analyst at Exxon Chemical Americas in Houston, Texas.

Woodbury, 54, is currently vice president of safety, security, health and environment for Exxon Mobil Corporation. He joined Exxon Corporation in 1983 as a reservoir engineer in Los Angeles, California and held various technical, planning, operations and management positions with Exxon Company USA, Esso Australia and ExxonMobil Production Company.

As MRC wrote before, in March 2014, ExxonMobil Chemical announced that it will build facilities to manufacture premium halobutyl rubber and Escorez hydrogenated hydrocarbon resin at its recently-expanded petrochemical complex in Singapore. Engineering and procurement activities have begun, with construction expected to begin in the second half of 2014 and completion anticipated in 2017.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
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PTT Global Chemical to shut LDPE plant for maintenance in Thailand

MOSCOW (MRC) -- PTT Global Chemical is in plans to shut its low density polyethylene (LDPE) plant for maintenance turnaround, as per Apic-online.

A Polymerupdate source in Thailand informed that the plant is planned to be shut in end-August 2014. It is likely to remain shut for around one month.

Located at Map Ta Phut in Thailand, the plant has a production capacity of 300,000 mt/year.

We remind that PTTGC is likely to shut down its I4-No.2 cracker for maintenance turnaround in late September 2014. It is likely to remain off-stream for around one month. Located at Map ta Phut, Thailand, the cracker has a production capacity of 400,000 mt/year.

As MRC reported earlier, last year, Indonesian state-owned energy company Pertamina signed an agreement to purchase petrochemical products from Thailand’s PTT Global Chemical. The agreement serves as a pre-marketing strategy for Pertamina and PTT’s joint Indonesian petrochemical business. Under the agreement, PTT will deliver at least 5,000 tonnes of polyethylene (PE) and polypropylene (PP) products each month to Pertamina for sale in Indonesia.

Recently, Pertamina and PTTGC have announced that they would start joint shipments of PE to the Indonesian market from 1 July 2014. However, they will postpone their shipments to Indonesia till August.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
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