Fire at Chevron refinery in Richmond, California, no threat to locals

MOSCOW (MRC) -- Large flames and a cloud of smoke can be seen over the Chevron oil refinery in Richmond, California. Company and fire officials say the flare is no cause for alarm.

The blaze, which is visible for miles, has caused uncertainty within the local community. Many citizens took to social networks to try and find out more information about whether the refinery was on fire.

Local residents said the smell coming from the refinery was not pleasant.

Contra Costa County health officials said in a statement on Twitter that a hazardous materials team is on scene monitoring, but that residents were not being advised to shelter in place.

Chevron, which owns the refinery, says the flames were caused by flaring and that the situation was under control. The oil company released a statement saying:

“We had a process unit that needed to be depressurized, creating a visible flare. The flare is part of our safety system which enables to safely shut down a unit,” CBS reports.

The refinery in the Bay Area has been the scene of multiple fires in the past. In 2012, local residents were told to stay indoors after hazardous material was released into the atmosphere following a blaze at the oil facility.

One local resident, Julius Bailey, said his throat had started burning and his eyes began itching. After seeing a doctor, he said, "They told me I'm not going to die, but it sure feels pretty serious,” according to CBS.

There were no fatalities following that fire in 2012, though one worker required medical treatment for burns to his wrist.

In August 2013, the city of Richmond filed a law suit against Chevron for alleged negligence as a result of the 2012 fire. They said the oil company was guilty of “willful and conscious disregard of public safety.”

The local authority also said that the fire at the facility was the result of "years of neglect, lax oversight and corporate indifference to necessary safety inspection and repairs," as reported by CBS.

The Chevron refinery is particularly big and important to the West Coast market, said Tom Kloza, chief oil analyst at Oil Price Information Service.

It produces about 150,000 barrels of gasoline a day – 16 percent of the region's daily gasoline consumption of 963,000 barrels, he said, AP reported.
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MOSCOW (MRC) -- BASF and Gazprom has agreed that they will not complete the asset swap, which was planned for the end of the year, reported BASF on its site.

"We regret that the asset swap will not be concluded. We will continue our cooperation of over 20 years with Gazprom in our existing joint ventures," said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE. "Our strategy in the oil and gas business remains unchanged: we will continue focusing on profitable growth at the source in our targeted oil and gas-rich regions in Europe, North Africa, Russia, South America, and the Middle East."

The natural gas trading business will continue to operate as a 50-50 joint venture between Gazprom and BASF Group company Wintershall. Wintershall Noordzee B.V. will remain a 100% BASF Group company.

In the asset swap, it was originally planned that two additional blocks of the Achimov formation of the Urengoi natural gas and condensate field in western Siberia would be jointly developed by Gazprom and Wintershall, a 100% subsidiary of BASF. In return, Wintershall would have transferred the jointly operated natural gas trading and storage business to Gazprom. Gazprom would have also received a 50% share in the activities of Wintershall Noordzee B.V., which is active in the exploration and production of oil and gas in the southern North Sea (Netherlands, UK and Denmark). Together the activities that would have been divested contributed around EUR12 billion to sales and about EUR500 million to EBITDA of the BASF Group in 2013.

BASF is the world’s leading chemical company. Its portfolio ranges from chemicals, plastics, performance products and crop protection products to oil and gas. BASF had sales of about EUR74 billion in 2013 and over 112,000 employees as of the end of the year.

Gazprom is the largest extractor of natural gas and one of the largest companies in the world.
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MOSCOW (MRC) -- Across the Gulf, petrochemical companies' earnings are set to suffer following the deep decline in oil prices. However, heavy state spending means most firms in other sectors in the region are likely to do just fine, said Tradearabia.

Petrochemical product prices are closely linked to oil prices, while regional producers buy subsidised feedstock, so higher crude prices provide them with better margins; cheaper oil removes that advantage.

The damage to petrochemical firms will be most keenly felt in Saudi Arabia, because such firms account for about a third of the Saudi stock market's capitalisation. In the past three months, analysts have slashed their average earnings growth forecast for the Saudi petrochemical sector this year to 13 per cent from 25 per cent.

They do not see much of a slowdown for other Saudi sectors, however. Their forecast for earnings growth across the entire stock market has dropped only slightly, to 12 per cent from 17 per cent; most of that fall is due to petrochemicals.

The two largest GCC economies, Saudi Arabia and the UAE, will probably run budget deficits. But the huge fiscal reserves that they have built up over the last several years mean they will easily be able to keep spending high.

According to Thomson Reuters data, analysts have only marginally changed their average forecasts for 2015 corporate earnings in the UAE and Qatar over the last three months. Saudi Arabia has seen a significant downgrade, but that is almost entirely due to the petrochemical sector.

Corporate earnings in the GCC's two smallest states may be hit hard by oil at USD70. Bahrain was already running a budget deficit when oil was above USD100; Oman is now almost certain to slip into the red, and its fiscal reserves are relatively small.

Spending cutbacks therefore look likely in both countries. Last week, an advisory body to Oman's government suggested sweeping spending cuts and tax rises to cope with cheaper oil.

The outlook for the total value of 2015 Saudi cororate earnings has been cut by four per cent, mostly because of petrochemicals but also because of a shock restatement of earnings at telecommunications operator Etihad Etisalat (Mobily) in early November.

The corporate earnings in other big GCC markets, where petrochemicals have smaller weightings, are likely to suffer less. Over the last three months, analysts polled by Reuters have actually increased their average forecast for the combined 2015 earnings of Dubai's 13 leading listed companies by three per cent.

As MRC wrote before, Saudi Aramco announced that its downstream investments would exceed USD100 billion over the next decade, as global demand for oil rises by a quarter in the next 25 years.

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MOSCOW (MRC) -- Bharat Petroleum (BPCL) on Wednesday said it will invest Rs 4,588 crore (USD741.44 million) to diversify into the petrochemicals business, a move that will help the state-run refiner boost margins by expanding beyond refining and retailing, said Businesstoday.

BPCL will produce niche petrochemical products, that are predominantly imported into the country, at its Kochi refinery using propylene that will be available once the ongoing refinery expansion is completed, the company said in a statement.

The state-run company plans to boost capacity at its Kochi refinery to 310,000 barrels per day (bpd) from the current 190,000 bpd by May 2016.

The project proposal will now be submitted for obtaining environmental clearance and the petrochemical unit is expected to come on stream during financial year 2018-2019, BPCL said.

As MRC wrote before, Technip has been awarded a contract by Air Products for a new industrial gas complex in Kochi, India. The contract covers project management, as well as engineering, procurement and construction management (EPCM) services for the new industrial gas complex for Bharat Petroleum Corporation Limited – Kochi Refinery (BPCL-KR) located in the state of Kerala.

Bharat Petroleum Corporation Limited (BPCL) is an Indian state-controlled oil and gas company headquartered in Mumbai, India. Bharat Petroleum owns refineries at Mumbai, Maharashtra and Kochi, Kerala (Kochi Refineries) with a capacity of 12 and 9.5 million metric tonnes per year.

MRC

MOSCOW (MRC) -- Ashland Inc. announced it has completed the sale of its elastomers business, based in Port Neches, Texas, to Lion Copolymer Holdings, LLC., said the company in its press release.

Financial terms were not disclosed.

The elastomers business, which primarily serves the North American replacement tire market, accounted for approximately 18 percent of Ashland Performance Materials' USD1.6 billion in sales in fiscal 2014. Ashland operates a 250-person manufacturing facility in Port Neches that serves elastomers customers.

"We are pleased with the value we received for the business and believe this transaction represents a good strategic fit for Lion," said James J. O'Brien, Ashland chairman and chief executive officer.

As MRC informed before, in August 2014 Ashland Inc.completed the previously announced sale of Ashland Water Technologies to a fund managed by Clayton, Dubilier & Rice (CD&R) in a transaction valued at approximately USD1.8 billion. Net proceeds from the sale totaled approximately USD1.4 billion, which primarily will be used to return capital to shareholders in the form of share repurchases.

Ashland Inc. is a global leader in providing specialty chemical solutions to customers in a wide range of consumer and industrial markets, including architectural coatings, automotive, construction, energy, food and beverage, personal care and pharmaceutical. Through our three commercial units - Ashland Specialty.
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