CSPC shut down PP & PE units in China on serever cold weather

MOSCOW (MRC) -- CNOOC and Shell Petrochemicals Co (CSPC) has shut its polypropylene (PP), high density polyethylene (HDPE) and low density polyethylene (LDPE) plants, as per Apic-online.

A Polymerupdate source in China informed that all the units were taken off-stream over the weekend on account of severe cold weather. The plant is likely to remain shut for about 7-8 days.

Located in Nanhai, Guangdong province of China, the PP plant has a production capacity of 260,000 mt/year, HDPE plant has a production capacity of 240,000 mt/year and LDPE plant has a production capacity of 250,000 mt/year.

As MRC wrote previously, in the second half of October 2015, CSPC shut its naphtha cracker for a maintenance turnaround. The plant remain off-stream for around 7 weeks. Located at Huizhou in Guangdong province, China, the cracker has a production capacity of 950,000 mt/year.

CNOOC and Shell Petrochemicals Company Limited (CSPC) was established in late 2000. It has built and now operates a world-scale petrochemical complex in the Daya Bay Economic and Technological Development Zone, Huizhou, Guangdong Province. The joint venture partners are Shell Nanhai BV, a member of the Royal Dutch Shell Group, with a 50 per cent stake, and CNOOC Petrochemicals Investment Limited (CPIL), also with 50 per cent. CPIL is owned by China National Offshore Oil Corporation (CNOOC) (90%) and Guangdong Guangye Investment Group Company Limited(10%).

As an integrated petrochemical complex, the major facilities of the complex include 11 process units, steam and power generation and other utility provisions, storage and handling and shipping facilities, as well as environmental protection facilities. The heart of the complex is a world-scale cracker producing 950,000 tons per annum ethylene and 500,000 tons per annum propylene. In total, the complex produces some 2.7 million tons per annum of ethylene and propylene's derivative products to supply the domestic market.
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Poland PKN Orlen posts Q4 net loss, considers strategy review

MOSCOW (MRC) -- Poland's top refiner PKN Orlen may review its strategy and long-term financial targets to adjust to market conditions, the company said on Thursday after it posted a fourth-quarter net loss of USD20 million, said Reuters.

PKN's 2014-2017 strategy assumed its average annual EBITDA LIFO - or earnings before interest, taxes, depreciation and amortization, excluding the impact of oil prices changes - would be 5.1 billion zlotys (USD1.2 billion).

Last year, PKN's EBITDA LIFO came to 7.74 billion zlotys. According to the strategy, PKN Orlen plans to increase its dividend per share every year by 2017.

PKN said its fourth-quarter net loss of 81 million zlotys, which was below analyst expectations, was the result of bigger than expected charges on assets due to falling oil prices, though this was partly offset by higher refining margins.

The company said it had to write off 400 million zlotys from the value of its Canada's assets in the quarter.

Analysts polled by Reuters expected the state-run group to post a net profit of 134 million zlotys. The forecasts varied significantly due to different estimates of the charges it would book and the revaluation of its oil inventories.

In the fourth quarter of 2014, PKN Orlen posted a 1.2 billion zlotys loss due to huge impairment charge, a slump in the value of oil reserves and higher financial costs.

PKN said it expected its oil refining margin to fall in 2016 from $8.3 per barrel in 2015. It also expected Brent crude oil prices to be comparable to last year, when they fell 47 percent to USD52.4 per barrel. In 2015 the company refined 30.9 million tons of oil, mostly from Russia.

The group's adjusted operating profit in the fourth quarter was 919 million zlotys, below the 1.28 billion zlotys expected by analysts but above 444 million last year.

PKN also said it planned to increase investment to 4.8 billion zlotys in 2016 from to 3.2 billion last year.

As MRC reported earlier, in mid-June 2013 PKN Orlen offered for sale a second PLN 200m tranche of its bonds and expects the proceeds from the entire bond issue programme to reach approximately PLN 1bn. This move was done in response to the enormous interest in PKN Orlen bonds on the part of investors, who subscribed to the entire PLN 200m of the first series of bonds in just two days.

Polski Koncern Naftowy ORLEN S.A. (PKN Orlen) is a Polish oil and gas coSolvents plant shut bympany. It has a lot of petrol stations in Poland, Germany, Czech Republic, Lithuania and Slovakia. It is the biggest company in Poland and one of the biggest oil and gas companies in Europe. Polish group PKN Orlen PKNA is a majority owner - 63% of czech polyolefins manufacturer Unipetrol.
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Valero earnings plunge 74% in fourth quarter

MOSCOW (MRC) -- Valero Energy Corp. said its fourth-quarter earnings fell 74%, hurt by a hefty charge and a sharp decline in its ethanol business caused by falling prices, while operating income in its refining business was flat, said Marketwatch.

Shares fell 0.6% after hours, after dropping 2.2% to USD64.53 in regular trading, as per-share earnings, excluding certain one-time items, and revenue beat expectations.

For the latest quarter, Valero’s refining business’s adjusted operating earnings were unchanged at USD1.5 billion.

In the ethanol segment, adjusted operating profit slumped to USD37 million from USD154 million on weaker margins as selling prices declined but corn prices remained relatively stable.

Overall, Valero VLO, -1.26% reported a profit of USD298 million, or 62 cents a share, down from USD1.16 billion, or USD2.22 a share, a year earlier. Excluding one-time items such as a USD790 million inventory-related charge, per-share earnings from continuing operations fell to USD1.79 from USD1.83. Revenue slumped 33% to USD18.78 billion.

Analysts polled by Thomson Reuters expected per-share profit of USD1.45 and revenue of USD16.75 billion.

As MRC reported earlier, in November 2015, a gasoline-producing fluidic catalytic cracking unit was not running after a fire broke out Sunday at Valero Energy Corp's 335,000 barrel per day (bpd) Port Arthur, Texas, refinery. The fire was stemmed from a hole in the FCCU's fractionator, the sources said.

Valero Energy Corporation is a Fortune 500 international manufacturer and a marketer of transportation fuels, other petrochemical products, and power. It is based in San Antonio, Texas, United States. The company owns and operates 16 refineries throughout the United States, Canada, United Kingdom, and the Caribbean with a combined throughput capacity of approximately 3 million barrels (480,000 m3) per day, 10 ethanol plants with a combined production capacity of 1.2 billion US gallons (4,500,000 m3) per year, and a 50 megawatt wind farm.
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Sinopec production declined in 2015

MOSCOW (MRC) -- Chinese state-controlled energy giant China Petroleum & Chemical Corp. said that oil and gas production slipped nearly 2% in 2015 amid sharply falling domestic production from aging fields, said The Wall Street Journal.

In a filing to the Hong Kong stock exchange late Wednesday, the company, known commonly as Sinopec, also said diesel output dropped 5.67% to about 70 million metric tons last year as weak industrial activity weighed on demand in the world’s second-largest economy.

Gasoline output rose 5.39% to about 54 million tons, Sinopec said, as more Chinese first-time drivers took to the nation’s roads.

The latest Sinopec operating statistics underscore why China’s state-owned oil companies have been on a quest to buy resources around the world in recent years. Sinopec’s domestic oil production fell nearly 5% to about 296 million barrels last year, making the company increasingly reliant on oil produced overseas to fuel its refineries.

The company, China’s second-biggest oil and gas producer by volume, also said natural-gas production rose 2.6% last year to 735 billion cubic feet.

As MRC informed earlier, in December 2015, China Petroleum and Chemical Corp. (Sinopec), completed its 10-percent minority investment in Russian petrochemical company Sibur to serve as a strategic investor.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally.
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BG shareholders strongly back merger with Shell

MOSCOW (MRC) -- BG Group shareholders overwhelmingly approved Royal Dutch Shell's USD52 billion takeover on Thursday, clearing the way for the two firms to create the world's biggest trader of liquefied natural gas (LNG), said Shell on its site.

BG will now merge with Shell on Feb. 15, nearly two decades after the company was born from British Gas and just a few months after it reached record oil and gas output thanks to new projects in Australia and Brazil.

At a meeting in London, 99.53% of BG shareholders voted in favor of the merger, a day after 83% of Shell's shareholders approved the deal first announced on April 8 last year.

Shell shareholders are putting their faith in CEO Ben van Beurden's decision to focus the Anglo-Dutch company's operations in liquefied natural gas (LNG) and deep water oil production over the coming decades as the industry undergoes one of its worse downturns in decades.

Once the two companies merge, Shell will start a complex integration process that will include thousands of job cuts, tens of billions of dollars in asset sales and the harmonizing of the companies' trading and production operations as they overlap in many parts of the world.

Shell has promised to find USD3.5 billion from cost savings and overlaps by 2018, from various areas including its corporate, administrative and IT operations.

BG was created in 1997 when British Gas split into two separate companies. In 2000, another change saw the creation of BG Group, focused on international oil and gas production.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
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