Lotte to buy Samsung chemical assets

MOSCOW (MRC) -- South Korean conglomerate Lotte Group will acquire Samsung Group's chemical businesses for more than 3 trillion won (USD2.63 billion), reported Reuters citing unnamed sources.

The newspaper said Lotte Group affiliate Lotte Chemical Corp will acquire various assets, including a 31% stake in Samsung Fine Chemicals and 90% of Samsung SDI Co Ltd's chemicals business.

Samsung SDI said it is in talks with Lotte Chemical for a potential sale of its chemical business without disclosing further details. Lotte Group, South Korea's fifth-largest conglomerate, declined to comment, while Lotte Chemical and Samsung Group did not immediately comment.

Samsung Fine Chemicals could not be reached for comment.

Samsung Group has been exiting non-core businesses since last year, when the company said it would sell stakes in four affiliates in the defense and chemical sectors to Hanwha Group, another local conglomerate.

Other affiliates such as Samsung Electronics Co Ltd and Samsung Electro-Mechanics Co Ltd are getting out of businesses with dim growth outlook, as well.

As MRC wrote previously, in November 2014, South Korea's Samsung Group said it is selling stakes in four chemical and defence firms for 1.9 trillion won (USD1.72 billion) to Hanwha Group. In March 2015, South Korea's Fair Trade Commission (KFTC) gave conditional approval to Hanwha's proposed acquisition of Samsung General Chemicals.

The Lotte Group currently has a presence in Indonesia via its subsidiary, Honam Petrochemicals, which acquired Malaysia’s polyolefin major Titan Chemicals in July 2010. Included in the acquisition was Titan’s Indonesian subsidiary - PT Titan Petrokimia Nusantara (TPN), which has a polyethylene (PE) production capacity of 450,000 tonnes/year.
MRC

MOSCOW (MRC) -- PetroChina Co, the country’s biggest oil and gas producer, posted an 81% slump in third-quarter profits, missing estimates, as a plunge in crude prices punished revenues, said Thestar.

Net income was 5.2 billion yuan (USD818mil), or 0.03 yuan per share, compared with 27.9 billion yuan, or 0.15 yuan, a year ago, the Beijing-based company said in a statement to the Shanghai Stock Exchange.

That compares with a 10.9 billion yuan average of four analyst estimates compiled by Bloomberg.

PetroChina relies on oil and gas production for most of its revenue, and the tumble in crude prices since last year has taken a toll on the explorer's profit-making abilities.

Sales dropped 29% to 427 billion yuan in the third quarter.

The company’s realised crude price fell 49% to USD51.16 a barrel in the first nine months, according to the statement, while oil and gas output rose 3.6% to 1.1 billion barrels of oil equivalent.

The company produced about 3.6m tonnes of ethylene in firth nine months, representing a 2.5% decline in output compared with the same period last year, while its synthetic resin output edged up 0.2% over the same period to 5.9m tonnes, it said.

As MRC informed before, PetroChina plans to spend more than 10 billion yuan (USD1.6 billion) on shale gas last year. PetroChina's decision to triple its shale gas spending from expenditures on the unconventional fuel over the past few years comes just months after Sinopec lifted hopes that China is near a breakthrough by announcing a commercial find.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC

MOSCOW (MRC) -- Phillips 66, an energy manufacturing and logistics company, announces third-quarter earnings of USD1,578 million, compared with earnings of USD1,012 million in the second quarter of 2015. Adjusted earnings were USD1,647 million, an increase of USD645 million from the last quarter, said the company in its press release.

Phillips 66's Midstream third-quarter adjusted earnings were USD91 million, an increase of USD43 million from the second quarter.

Phillips 66’s Transportation business generated earnings of USD77 million during the third quarter, an increase of USD12 million from the second quarter. Improved earnings were due to lower operating costs and increased equity earnings primarily driven by higher volumes.

Adjusted earnings from the NGL business were USD32 million for the third quarter. The USD24 million increase from the prior quarter was largely related to higher realized margins, as well as inventory gains.

For the third quarter of 2015, the company’s equity investment in DCP Midstream, LLC (DCP Midstream) had an adjusted loss of USD18 million, compared with a USD25 million adjusted loss in the prior quarter. DCP Midstream's improved results were primarily due to higher natural gas and natural gas liquids marketing margins, as well as the second-quarter loss on the sale of its interest in the Benedum gas processing plant, partially offset by lower commodity prices.

The Chemicals segment reflects Phillips 66's equity investment in Chevron Phillips Chemical Company LLC (CPChem). Third-quarter Chemicals adjusted earnings were USD272 million, compared with earnings of USD295 million in the second quarter.

During the third quarter, CPChem's Olefins and Polyolefins business contributed USD261 million to Phillips 66's Chemicals earnings. This was a decrease of USD6 million compared with the prior quarter, as higher sales volumes and lower operating costs primarily due to lower turnaround activity were more than offset by insurance recoveries recognized in the prior quarter and lower ethylene margins. Global utilization for O&P was 94 percent, up from 91 percent in the second quarter.

CPChem's Specialties, Aromatics and Styrenics business contributed USD17 million of adjusted earnings in the third quarter, a decrease of USD21 million from the prior quarter. The decrease was primarily due to lower earnings at CPChem's SA&S equity affiliates, as well as lower volumes.

Refining adjusted earnings were USD1,052 million in the third quarter, compared with $604 million in the second quarter.

The increase in earnings was largely driven by improved realized gasoline and secondary product margins, as well as higher volumes. Global realized margins improved USD2.26 per barrel, while market capture increased to 72 percent, compared with 62 percent in the prior quarter.

As MRC informed earlier, Phillips 66 and Chevron Phillips Chemical are teaming up with the Sweeny Independent School District in Texas to help fund the creation of a petrochemical academy.

Phillips 66 Company is an American multinational energy company headquartered in Westchase, Houston, Texas. It debuted as an independent energy company when ConocoPhillips executed a spin-off of its downstream and midstream assets. Taking its name from the 1927 "Phillips 66" trademark of ConocoPhillips predecessor Phillips Petroleum Company, Phillips 66 began trading on the New York Stock Exchange on May 1, 2012, under the ticker PSX. The company is engaged in producing natural gas liquids (NGL) and petrochemicals. The company has approximately 14,000 employees worldwide and is active in more than 65 countries.
MRC

MOSCOW (MRC) -- Chevron Corp, the second-largest U.S.-based oil producer, posted a 64 percent drop in quarterly profit on Friday as cost cuts failed to offset tumbling crude and natural gas prices, said Businessinsider.

"We are focused on improving results by changing outcomes within our control," CEO John Watson said in the earnings statement. "Operating and administrative expenses are 7 percent lower than last year, and we expect further reductions in the quarters ahead."

The company reported net income of USD2.04 billion, or USD1.09 per share, compared with USD5.59 billion, or USD2.95 per share, in the year-ago period.

Production fell 1 percent to 2.5 million barrels of oil equivalent per day (boe/d).

The stock was up by about 1% premarket. Over the past 12 months, it's fallen 22%.

The poor results came as no surprise given that oil prices have plummeted to under USD50 a barrel from levels of more than USD100 in the summer of 2014.

Chevron also said it planned to cut 6,000 to 7,000 jobs.

As MRC informed earlier, Chevron Phillips Chemical in 2014 announced the construction of a world-scale ethylene cracker in Baytown, Texas, two world-scale polyethylene reactors in Old Ocean, Texas and the start-up of the world’s largest 1-hexene facility in Baytown.

Chevron Phillips Chemica, headquartered in The Woodlands, Texas (north of Houston), US,l is one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, piping, and proprietary plastics. Chevron and Phillips 66 each own 50% of Chevron Phillips Chemical.
MRC

MOSCOW (MRC) -- China Petroleum & Chemical Corp.’s third-quarter profit plummeted 92%, as lower oil prices and production dwarfed an increase in refining revenue, as per Hydrocarbonprocessing.

Net income at Asia’s biggest refiner, known as Sinopec, was 1.64 billion yuan (USD258 million), or 0.013 yuan a share, compared with 19.3 billion yuan, or 0.165 yuan, a year earlier, the Beijing-based company said in a statement to the Shanghai Stock Exchange on Thursday. That compares with the 4.27 billion yuan average of three analyst estimates compiled by Bloomberg.

Higher refining revenue was swamped by a drop in oil prices. Brent, the benchmark for more than half of the world’s crude, averaged about USD51/bbl in the third quarter, compared with more than $103 a year ago. Prices have slumped more than 45% in the past year amid a global glut that the International Energy Agency estimates will remain until at least the middle of 2016.

"We thought Sinopec would have better leverage in refining to counter the crude-price drop," said Lawrence Lau, a Hong Kong-based analyst at BOC International Holdings. "Inventory losses could be a reason for the sharp profit decline and it may help Sinopec in the fourth quarter if the crude price rebounds."

Sinopec carries a two-month inventory as it takes that much time to get imported crude into its refinery, said Lau, who had projected a 70% profit decline for the company in the third quarter. Oil prices during the the period were 19% lower than the preceding quarter.

Operating profit during the first nine months of the year dropped 35% to 49.5 billion yuan, according to the statement, which didn’t give quarterly operational figures. Oil and natural gas output fell 1.8% to 350.8 million bbl of oil equivalent, while the company’s realized oil price dropped 48% to USD48.91/bbl from January to September.

We remind that, as MRC wrote before, Sinopec Zhenhai shut its high density polyethylene (HDPE)/linear low density polyethylene (LLDPE) swing plant for maintenance turnaround in April 2015. It remained off-stream for around two months. Located at Ningbo in China, the plant has a production capacity of 450,000 mt/year.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC