US fines ExxonMobil over Ukraine-related sanctions violations

MOSCOW (MRC) -- The US Treasury Department on Thursday said it was fining global oil company Exxon Mobil Corp $2 MM for violating sanctions on Russia in May 2014, as per Reuters.

The heads of the company's US subsidiaries signed eight documents between May 14 and May 23, 2014 with Igor Sechin, the head of Russia's largest oil producer, Rosneft, Treasury's Office of Foreign Assets Control said in a statement on its website.

Sechin had been blacklisted by the United States just weeks earlier.

The Treasury unit, which enforces sanctions, found ExxonMobil had not voluntarily self-disclosed the violations, "and that the violations constitute an egregious case."

Rex Tillerson, ExxonMobil's chief executive at the time of the dealings, is now US secretary of state. The State Department referred questions about the fine and Tillerson's knowledge of the dealings to Exxon Mobil.

Exxon said it fully complied with sanctions guidelines in 2014 from former President Barack Obama's administration that ongoing oil and gas business activities with Rosneft were allowed, but not personal dealings with Sechin.

The oil company cited a May 2014 Treasury Department spokesman's comments that BP Plc Chief Executive Bob Dudley - an American citizen - would be allowed to remain on Rosneft's board so long as he did not discuss personal business with Sechin.

The Treasury Department "is trying to retroactively enforce a new interpretation of an executive order that is inconsistent with the explicit and unambiguous guidance from the White House and Treasury issued before the relevant conduct and still publicly available today," ExxonMobil spokesman Alan Jeffers said in a statement.

On April 28, 2014, the Treasury announced it was sanctioning Sechin as part of a package of measures aimed at pressuring Russia over its intervention in Ukraine, and said he had shown "utter loyalty to Vladimir Putin," Russia's president.

As MRC wrote previously, in 2015, U.S. oil and gas major ExxonMobil has asked the Russian government to reimburse taxes worth "several billion roubles" it says it overpaid on a project in the far east of Russia. ExxonMobil believes it overpaid profit taxes on its Sakhalin-1 oil and gas project. Russia reduced the profit tax in 2009 to 20 percent but ExxonMobil continued to pay at the earlier level of 35 percent after the project broke even in 2008. ExxonMobil owns 30 percent in Sakhalin-1.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

May PP imports into Belarus increased to 8,300 tonnes from 7,800 tonnes a month earlier, local companies raised their purchasing of all PP grades. Overall imports of propylene polymers reached 38,000 tonnes in January-May 2017, compared to 36,000 tonnes a year earlier. Demand for all PP grades increased, but propylene copolymer accounted for the greatest growth.

The supply structure by PP grades looked the following way over the stated period.

May imports of homopolymer PP to the Belarusian market rose to 5,500 tonnes from 5,400 tonnes a month earlier, shipments of injection moulding homopolymer PP from Europe increased. Overall shipments of homopolymer PP exceeded 25,600 tonnes in the first five months of 2017 versus 25,200 tonnes a year earlier. Russian producers, with the share of 86% in the total shipments, were the key suppliers of homopolymer PP.

May imports of propylene copolymers to Belarus exceeded 2,700 tonnes, compared to 2,400 tonnes a month earlier, purchasing of PP in Europe increased. Thus, overall imports of propylene copolymers reached 12,240 tonnes in January-May 2017, whereas this figure was 10,800 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Saudi International Petrochemical Co (Sipchem) said on Wednesday its methanol affiliate will start receiving supplies of carbon dioxide feedstock from Saudi Aramco Shell Refinery (SASREF) in the first quarter of 2019, reported Reuters.

Sipchem said the long-term agreement is designed to improve efficiency at its plant in Jubail.

In December, the International Methanol Co (IMC) signed a contract with South Korea's eTEC E&C for work costing $144.6 MM expected to be completed in the fourth quarter of 2018.

The IMC-65% owned by Sipchem, with the rest owned by a group of Japanese companies - has an annual production capacity of 967,000 t of methanol.

Sipchem said in the statement on Wednesday the positive financial impact from the supply agreement will start from the first quarter of 2019.

As MRC wrote previously, on July 26, 2014, Sipchem commenced trial runs at a new ethylene vinyl acetate (EVA)/low density polyethylene (LDPE) swing plant. Located in Jubail Saudi Arabia, the plant has a production capacity of 200,000 mt/year.

Established in 1999, Saudi International Petrochemical Company (Sipchem) manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer. Besides, it has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene, and semi conductive compound that are scheduled to start in 2013.
MRC

MOSCOW (MRC) -- India on Wednesday approved a plan to sell federal government's stake in state-refiner Hindustan Petroleum Corp to explorer Oil and Natural Gas Corp, a source said, in a bid to create oil giants to compete with global rivals, as per Hydrocarbonprocessing.

Indian government owns 51.1% stake in HPCL.

"ONGC has forwarded a proposal to acquire HPCL. Process for in-principle approval for this proposal has been initiated," Oil Minister Dharmendra Pradhan told lawmakers earlier on Wednesday.

As MRC reported earlier, state-owned refiner HPCL is building a new 9 mln tpa refinery-cum-petrochemical complex at Pachpadra in Rajasthan and a petrochemical complex at Kakinada in Andhra Pradesh as part of a Rs 61,000-crore expansion.

Hindustan Petroleum Corporation Limited (HPCL) is an Indian state-owned oil and natural gas company with its headquarters at Mumbai, Maharashtra and with Navratna status. HPCL has about 25% marketing share in India among PSUs and a strong marketing infrastructure. The Government of India owns 51.11% shares in HPCL and others are distributed amongst financial institutes, public and other investors.
MRC

MOSCOW (MRC) -- Vietnam's prime minister has approved a plan for the country's total crude oil and oil product stocks to be at least 90 days' worth of net imports by 2020, as per Hydrocarbonprocessing.

The southeast Asian country joins developing nations such as China and India in establishing an oil buffer that will enhance their energy security as imports have jumped while domestic production is on the decline.

The 90-day net import level is a standard set by the International Energy Agency for its OECD members.

Vietnamese refineries will be required to maintain crude stockpiles equivalent to 15 days of their processing capacity and 10 days of oil products output, a government statement said on Friday. These would be equivalent to 30–35 days of Vietnam's net imports, it said.

The government said it planned to keep commercial oil stockpiles stable at 35 days of net imports while crude and oil products reserves at import terminals and those held by trading companies are expected to reach 20 days of the country's net imports by 2025.

The statement did not provide details on where the oil reserve storage facilities are located.

Vietnam has imported 280,492 t of crude oil in the first half of this year, up 1.6% from a year earlier, according to government data.

The country's two refineries are estimated to meet about two-third of Vietnam's demand when its second refinery starts operations later this year.

We remind that, as MRC reported earlier, the commercial start-up of Vietnam's new USD7.5 B Nghi Son oil refinery will be delayed to 2018, from an initial expected start-up in the third quarter of this year. Japan's Idemitsu Kosan and Kuwait Petroleum International each own 35.1% of Nghi Son Refinery and Petrochemicals, while PetroVietnam has 25.1% and Mitsui Chemicals 4.7%.
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