PetroChina says 60%-70% profits decline in 2015

MOSCOW (MRC) -- Chinese oil giant PetroChina Co. says it expects little rebound in global oil prices this year as jockeying for position among top oil producers intensifies, said The Wall Street Journal.

China’s biggest oil and gas producer by volume has been perhaps the hardest hit among China’s three main state-owned oil and gas companies. PetroChina said Friday that it expected net profit to have fallen 60%-70% in 2015 compared with a year earlier.

"In 2016, the market of international oil and gas is expected to continue to slump," PetroChina said late Friday in a statement to the Hong Kong stock exchange. "The market competition will be further intensified."

The preliminary results, if confirmed, are in line with the company’s 68% drop in profit in the first three quarters of 2015, and underscore how PetroChina is struggling to protect margins as oil prices sag. Investors have punished the company’s stock, whose value in Hong Kong fell by nearly 50% over the past year.

PetroChina reiterated its pledge to cut costs this year as well as diversify its income sources. It hasn’t provided details on projected capital expenditure cuts or production levels for 2016. PetroChina’s state-controlled oil rival Cnooc Ltd. said this month it would slash capital spending by 44% this year.

As MRC reported earlier, on 9 April 2015, PetroChina Co. passed Exxon Mobil Corp. as the biggest energy company by market value for the first time since 2010. Exxon’s capitalization was USD352.6 billion compared with PetroChina’s USD352.8 billion as of 1:36 p.m. on Thursday, 9 April, in Shanghai. The Chinese company’s A shares surged about 61 percent the past year, versus Exxon’s 14 percent drop. PetroChina was larger by value most recently at the close of trading on June 25, 2010.

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

Petrobras to reduce investment plan by 5%

MOSCOW (MRC) -- Petroleo Brasileiro SA will cut its 2016-2020 investment plan by 5% to USD93 billion as the state-run oil company contends with dwindling oil prices and a massive corruption investigation, said Reuters.

The embattled Brazilian company, known as Petrobras, could reduce its investments even further if a series of planned debt-reducing asset sales are completed, the paper reported without citing sources.

The press office of Petrobras did not respond immediately to an emailed request for comment.

The company, which has a USD130 billion debt pile, has already cut its investment plans to USD98.4 billion from USD130.3 billion and last month had its Moody's credit rating reduced to non-investment grade.

The potential for a boost from big oil discoveries off the coast of Brazil appear to have faded, meanwhile, with the company's announcement of on Friday of a 20 percent cut to its oil and gas reserves.

As MRC informed earlier, Petroleo Brasileiro SA agreed to sign a naphtha supply contract with Braskem SA, Latin America's largest petrochemical producer, for five years. Under terms of the deal, which was announced in a securities filing, Braskem will pay the equivalent of 102.1% of the benchmark ARA price for naphtha, a petrochemical feedstock.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

China Ningbo Mitsubishi PTA unit restart hampered by frozen pipes

MOSCOW (MRC) -- China’s Ningbo Mitsubishi Chemical Company (NMC) has delayed the restart of its purified terephthalic acid (PTA) plant, industry sources told TPS.

"(The plant's) pipes had frozen, and it could mean they might only restart by January 28, or this weekend" the source told TPS.

A cold wave descended upon China last week, dropping temperatures below zero degrees Celsius.

The company's plant in Ningbo, Zhejiang province, has a nameplate capacity of 600,000 mt/year, but usually operates at a rate of 700,000 mt/year. The plant was originally intended to restart on January 25 after a 10-day turnaround, which began on January 14.

Based on TPS estimates, assuming the plant runs at a rate of 700,000 mt/year, a 11-day halt in production would result in a stoppage loss of 21,095 mt of PTA or 21 standard size parcels.

Ningbo Mitsubishi's plant is a joint venture between China’s CITIC Group (10%) and Ningbo PTA Investment Company (NPI, 90%)). The stakes in NPI is split between Mitsubishi Chemical Company (61%), Itochu (35%) and Mitsubishi Corp (4%).

As MRC informed previously, Mitsubishi Chemical shut down its No. 2 naphtha cracker on January 22, 2016, owing to a technical glitch. The exact duration of the outage could not be ascertained. Located in Kashima, Japan, the plant has an ethylene capacity of 526,000 mt/year and propylene capacity of 260,000 mt/year.

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
MRC

JUPC brings forward maintenance for No. 1 MEG unit in Jubail

MOSCOW (MRC) -- Saudi Arabia's Jubail United Petrochemical Company (JUPC), a wholly-owned subsidiary of Sabic, has brought forward scheduled maintenance on its No. 1 monoethylene glycol (MEG) unit, industry sources told TPS.

Maintenance on the company's No. 1 MEG unit, which has an annual capacity of 700,000 mt/year, has been pushed earlier to start somewhere within H2 February and H1 March. The unit, located in Saudi Arabia's Al-Jubail industrial city, was originally scheduled to undergo maintenance in H2 March.

According to sources, the plant is expected to be down for about 50 days. Assuming it runs at 100% capacity, this could result in a stoppage loss of 95,890 mt of MEG, or 95 standard-sized parcels.

SABIC holds a 75% stake on JUPC, which was established in 2001. The company has three petrochemical production facilities in Jubail making ethylene, propylene, ethylene glycol and linear alpha olefins (LAO).

We remind that, as MRC informed previously, in October 2015, Sabic announced a restructuring to make itself more agile and cost-efficient, following a comprehensive review of the challenges facing the Middle East’s biggest petrochemicals company. The new organizational structure should be in place by January 1, the company said in its statement then. Sabic’s innovative plastics unit will be broken up and reallocated to other divisions, including chemicals and polymers and a new unit called specialties.

Saudi Basic Industries Corporation (Sabic) ranks among the worldпїЅs top petrochemical companies. The company is among the worldпїЅs market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
mcplast.com

Lotte and LG cut MEG operating rates at Daesan units due to technical issues

MOSCOW (MRC) -- South Korea's LG Chemical and Lotte Chemical reduced their operating rates for monoethylene glycol (MEG) production facilities in Daesan last week due to technical problems, a company source from LG told TPS.

"Both plants have lowered rates to 80% due to steam problems," the source said.

The source said it was likely that both factories will resume maximum capacity by the end of the month.

LG Chemical's plant in Daesan has an annual production capacity of 108,000 mt /year, while Lotte's affected line makes 400,000 mt of MEG year. Lotte's separate 300,000 mt/year line at the same compound was unaffected.

As MRC wrote before, 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.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.
MRC