Lotte vice chairman found dead amid probe, suicide suspected

MOCOW (MRC) -- One of the top executives at South Korea's Lotte Group was found dead on Friday, a suspected suicide, hours before he was to be questioned by prosecutors conducting a criminal probe into the country's fifth-largest conglomerate, as per Reuters.

Lotte Group confirmed the death of Vice Chairman Lee In-won, which comes after the group was riven by a family succession feud last year and subjected in June to widespread raids by government prosecutors.

Lee had been with the group for 43 years and was the most senior executive outside the Shin family that controls the conglomerate, or chaebol. He was a longtime CEO of Lotte Shopping, one of the group's biggest businesses.

The police said Lee's body was found on Friday morning under a tree along a walking and cycling path near Seoul. They said he had left home around 10 p.m. on Thursday. A four-page note was found in the executive's car parked nearby.

Lee was also engaged in finding new growth opportunities for Lotte, the group said.

A prosecution team of about 200 people raided Lotte offices in June, looking into a possible slush fund as well as breach of trust involving transactions among the group's companies, sources said at the time.

Lee, who was 69, had been scheduled to appear before prosecutors on Friday morning, a Lotte official said.

Park Ju-gun, head of corporate analysis firm CEO Score, said Lee's death was likely to hamper the investigation.

"Lee's standing within Lotte was almost on par with that of the owner family members," he said.

The investigation into Lotte had already exacted a devastating toll on its business, which ranges from hotels to retail to chemicals.

Thus, in June, its Lotte Chemical Corp unit withdrew from bidding for U.S.-based Axiall Corp, citing its difficulties in South Korea. Rival Westlake Chemical Corp ended up with a USD2.33 billion deal for Axiall.

Lotte Co., Ltd. is a multinational conglomerate with headquarters in South Korea and Japan. Lotte was first established in June 1948 in Tokyo, by Shin Kyuk-ho (also known as Takeo Shigemitsu). With the money he earned in Japan, Shin expanded to his home country, South Korea with the establishment of Lotte Confectionery in Seoul on April 3, 1967. Lotte eventually grew to become South Korea's eighth largest business conglomerate. Lotte Group consists of over 60 business units employing 60,000 people engaged in such diverse industries as candy manufacturing, beverages, hotels, fast food, retail, financial services, heavy chemicals, electronics, IT, construction, publishing, and entertainment.
MRC

MOSCOW (MRC) -- Saudi Aramco may want to reduce its stake in proposed upgrades to a refinery at Cilacap, Indonesia, including eventual increases in petrochemical capacity, IHS Energy understands. Aramco, under a joint agreement with state-owned energy company PT Pertamina (Jakarta, Indonesia), will own 45% of the Cilacap unit but it is understood that Aramco may want to pare its proposed stake down to 30-35%, with Pertamina holding the rest if no other investors step in, said Chemweek.

Ji Yang Lum, IHS Energy senior research analyst says that Pertamina would still move forward with the Cilacap upgrade despite the increased financial burden from a reduced Aramco stake. Pertamina finance director Arif Budiman said earlier that the project would be financed through internal cash flow and that the company had invited local and foreign bankers to help finance the project.

Indonesia’s interim energy and mineral resources minister Luhut Pandjaitan told The Jakarta Post on 24 August that the reason for Aramco wanting to reduce its stake “could be entirely finance-related” but Pertamina was still able to handle the heavier burden. Aramco had not officially expressed its intention to lower its stake.

The USD5.5-billion Cilacap upgrade was originally expected to begin in October 2018 and be completed in 2022, when the refinery would increase its production capacity from 340,000 barrels per day (b/d), to 370,000 b/d. The 9% increase in refining capacity will be followed by increases in efficiency and production capacity at the refinery's petrochemical unit. Capacity would increase from a combined 300,000 metric tons per year, to 600,000 metric tons per year of aromatics and 160,000 metric tons per year of polypropylene. Pandjaitan told the press that the government would try to convince Aramco to speed up the project so that the refinery can become operational in 2021.

As informed earlier, Saudi Arabian Oil Co. and Saudi Basic Industries Corp. are one step closer to building their first plant to process crude directly into chemicals, cutting out a link in the production chain from hydrocarbons to the finished products that go into plastics and other consumer goods.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) -- LyondellBasell Industries has retained Bank of America Merrill Lynch to help with the potential sale of its 263 Mbpd refinery in Houston, according to two people familiar with the talks, reported Reuters.

The move comes after the Dutch chemical company fielded inquiries from at least four possible suitors, the sources said. The process is expected to start in earnest after the US Labor Day holiday in early September, one of the two sources said.

The Houston unit is a significant Gulf Coast refinery that can run a wide variety of crude oils, from light Bakken to heavier grades out of Canada. A sale could bring increased competition among Gulf Coast refiners as two of the potential bidders have no presence in the US refinery row.

Valero Energy Corp, Saudi Aramco, Cenovus Energy Inc. and Suncor Energy Inc. are among the companies that have expressed interest in the refinery, said the sources, who requested anonymity because they are not authorized to discuss the talks.

Canadian energy firms Suncor and Cenovus do not have any refineries in the Gulf Coast, and the Houston unit would give them a place to process heavier Canadian crudes they produce.

A LyondellBasell Industries spokeswoman said in an email Thursday: "We believe that in the longer term, the refinery may be more valuable as part of a larger refining system. We are exploring all options. However, no decisions have been made."

Earlier this year, LyondellBasell Industries Chief Executive Bob Patel told attendees at an industry conference that he expected the refinery would eventually be put on the selling block, but did not offer any time frame.

"In the longer term, I can't help but think it's more valuable as part of a refining system than as part of a chemical company," Patel said.

Lyondell management has consistently described the Houston refinery as a primary source of feedstocks for the company's petrochemical plants, three of which are in industrial suburbs of Houston.

In 2005, Lyondell and minority partner Citgo Petroleum Corp. put the refinery up for sale to end a partnership that had unraveled after 12 years.

The bids for the plant reached between USD5 B and USD6 B before the sale was canceled and Lyondell bought out Citgo's minority stake for USD2.1 B, or USD19,000/bbl of crude oil refining capacity.

Since that time, US refinery values have fallen drastically with plants selling for less than USD5,000/bbl.

As MRC informed before, Showa Denko K.K., JX Nippon Oil & Energy Corp. (JX), and LyondellBasell Group have reached final agreement concerning the sale and purchase of LyondellBasell’s shares in SunAllomer Ltd. (SunAllomer), a joint venture (JV) company among the three parties for the development, production and sale of polypropylene (PP) and PP-based advanced materials. Specifically, SDK Sunrise Investment (SSI), owned by SDK and JX, will purchase LYB’s 50% stake in SunAllomer effective August 31, 2016. After the acquisition, an absorption-type merger of SSI and SunAllomer will take place on November 1, 2016 with SunAllomer as the surviving company.

LyondellBasell is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell manufactures products at 57 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels. Hostacom and Hifax are trademarks owned by LyondellBasell. The manufacturing facilities in India are owned and operated by Basell Polyolefins India Pvt. Ltd., a wholly-owned subsidiary of LyondellBasell.
MRC

MOSCOW (MRC) -- Integrated Refinery and Petrochemical Co (IRPC), a PTT Plc subsidiary, has shut its polypropylene (PP) unit for a maintenance turnaround, reported Apic-online.

A Polymerupdate source in Thailand informed that the company has halted operations at the unit early this week. The plant is expected to remain shut for around 15 days.

Located in Rayong province of Thailand, the PP unit has a production capacity of 175,000 mt/year.

The company also operates two more PP units at Rayong province having a production capacity of 150,000 mt/year each.

As MRC informed previously, in late January 2016, IRPC shut down its PP plant for a 10-day maintenance turnaround. Located in Rayong province of Thailand, the PP plant has a production capacity of 300,000 mt/year.

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.
MRC

MOSCOW (MRC) -- In the first half of 2016, SIBUR demonstrated strong financial results despite the general decrease of prices for its energy products, said the company on its site.

Its revenue increased by 8.1% year-on-year to RR 196.1 billion attributable to strong results demonstrated by petrochemicals product group. The producer's revenue from sales of basic polymers increased by 14.2% year-on-year to RR 29.1 billion. Its revenue from sales of plastics and organic synthesis products increased by 7.3% year-on-year to RR 33.3 billion. Revenue from sales of synthetic rubbers increased by 13% year-on-year to RR 19.7 billion attributable to the increase of sales volumes following the completion of thermoplastic elastomers homologation with key clients. Revenue from sales of petrochemical products increased by 11.2% to RR 96.6 billion.

Negative pricing trends in hydrocarbons fully offset the positive effect from sales volumes growth. As a result, our revenue from sales of energy products remained largely flat year-on-year at RR 88 billion.

SIBUR's EBITDA increased by 1.2% year-on-year to RR 65.4 billion attributable to the increase of petrochemicals segment EBITDA by 36.8% year-on-year to RR 39.6 billion that compensated for the decline in feedstock & energy segment EBITDA by 23.7% year-on-year to RR 29 billion. The EBITDA composition rebalanced with the contribution of petrochemicals segment taking over the feedstock & energy segment first time in the history of SIBUR. Our total EBITDA margin decreased to 33.3%.

In the first half of 2016, SIBUR's profit increased threefold year-on-year to RR 63.3 billion. Distributable profit3 decreased by 14.7% to RR 29 billion. The company's capital expenditures increased three times year-on-year to RR 83.6 billion as we continued the active implementation of ZapSibNeftekhim in the first half of 2016.

As MRC informed earlier, Bashneft and SIBUR signed a long-term contract for the supply of paraxylene, which is the main raw material for the production of terephthalic acid (PTA). The new contract, concluded on former principles of formula-based pricing, is a continuation of the long-lasting partnership between SIBUR and Bashneft to supply paraxylene to Polief from the aromatic hydrocarbons manufacturing complex of the Branch Bashneft-Ufaneftekhim.

SIBUR is a uniquely positioned vertically integrated gas processing and petrochemicals company. We own and operate Russia’s largest gas processing business in terms of associated petroleum gas processing volumes and are a leader in the Russian petrochemicals industry. As of 31 March 2014, SIBUR operated 27 production sites located all over Russia, had over 1,400 large customers engaged in the energy, chemical, fast moving consumer goods (FMCG), automotive, construction and other industries in approximately 70 countries worldwide and employed over 27,000 personnel.
MRC