Oil rallies 2% as Saudi promises to cut exports

MOSCOW (MRC) — Oil rose by more than 2% on Tuesday after Saudi Arabia vowed to reduce exports from next month and OPEC called on members to boost compliance with agreed output cuts to help curb oversupply and support flagging crude prices, said Reuters.

Brent crude futures rose USD1.01 to USD49.64 a barrel by 1342 GMT. U.S. West Texas Intermediate futures also rose by USD1.01 to USD47.35 a barrel.

At a meeting in the Russian city of St. Petersburg on Monday, the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers discussed extending their deal to cut output by 1.8 MMbpd beyond March 2018, if necessary.

Saudi Energy Minister Khalid al-Falih said that his country would limit its crude exports to 6.6 MMbpd in August, almost 1 MMbpd lower than the same month a year earlier. "But the most concrete indication coming out of the meeting was that Nigeria would agree to implement production adjustments," Vienna-based consultancy JBC Energy said.

Nigeria voluntarily agreed to join the deal by capping or cutting its output from 1.8 MMbpd once it stabilizes at that level. But in a sign that production from the OPEC member remains susceptible to disruptions, Royal Dutch Shell's Nigerian subsidiary said on Monday it had shut its 180,000 bpd Trans Niger pipeline because of a leak on July 21.

Ministers at the meeting also highlighted the importance of compliance. Russian Energy Minister Alexander Novak said an additional 200,000 bpd of oil could be removed from the market if there were 100% compliance with the OPEC-led deal.

OPEC said stocks held by industrial nations had fallen by 90 MMbbl in the first six months of the year but were still 250 MMbbl above the five-year average, which is the target level for OPEC and non-OPEC members.

"In our view ... these meetings were aimed at saving face and diverting the market's attention away from Iraq's poor compliance, shale's resilience and Libya's and Nigeria's markedly higher output," Barclays said.

Prices were also supported by a warning from Halliburton's executive chairman that growth in North America's rig count was "showing signs of plateauing", representing a possible threat to continued increases in US shale oil production.

China's crude imports will exceed 400 MMt (8 MMbpd) this year and are likely to grow by a double-digit percentage next year, a Sinopec Group executive said.
MRC

MOSCOW (MRC) — Cal/OSHA and Chevron have reached a settlement agreement for a comprehensive plan that will improve safety at the Chevron Richmond refinery and for surrounding communities, said Hydrocarbonprocessing.

The agreement meets and exceeds California's landmark regulation to reduce risk at refineries, which was approved by the Occupational Safety and Health Standards Board in May and is currently pending approval by the Office of Administrative Law.

"The settlement requires Chevron to exceed current and upcoming requirements and to use new and innovative methods recently developed by engineering experts in the petroleum refining industry to ensure the safe operation of process safety equipment," said Cal/OSHA Chief Juliann Sum. "This means safer operations at the refinery, which will help protect refinery workers and those who work and live nearby."

The agreement resolves Chevron's appeal of citations issued by Cal/OSHA on January 30, 2013, following an investigation into a fire that occurred at the Richmond refinery on August 6, 2012. Cal/OSHA cited Chevron for 17 workplace safety and health violations, including six serious and nine willful in nature. During the settlement negotiations, Cal/OSHA received input from the United Steelworkers and the US Environmental Protection Agency.

The negotiated settlement requires Chevron to institute the following extraordinary measures to ensure process safety at the Richmond refinery: Replace all carbon steel piping that transports corrosive liquids with chrome-alloy piping, which has better corrosion resistance, at an estimated cost of USD15 million. This exceeds current and upcoming workplace safety requirements for refineries.

Develop and implement criteria and procedures, at an estimated cost of $5 million, to monitor equipment to alert operators when equipment should be replaced. This is a new and innovative practice recently developed by refinery engineering experts.

As MRC informed earlier, the US Supreme Court on Monday handed a victory to Chevron Corp by preventing Ecuadorean villagers and their American lawyer from trying to collect on an USD8.65 billion pollution judgment issued against the oil company by a court in Ecuador.

MRC

MOSCOW (MRC) - PTT Global Chemical (PTTGC) is likely to shut its No. 1 high density polyethylene (HDPE) plant for maintenance, as per Apic-online.

A Polymerupdate source in Thailand informed that the plant is expected to be shut towards end-August 2017, for a period of around 2 weeks. Earlier the plant was supposed to start maintenance in mid-August 2017.

Located at Map Ta Phut in Thailand, the HDPE plant has a production capacity of 250,000 mt/year.

As MRC informed before, PTT is on track to start commercial operations at its new 400,000 mt/year metallocene C6 linear low density polyethylene plant at Map Ta Phut, Thailand, in the first quarter of 2018. PTT will start up the plant by the end of this year.

PTT currently has a total capacity of 800,000 mt/year of HDPE, 300,000 mt/year of low density polyethylene (LDPE) and 400,000 mt/year of LLDPE at the same site.

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) -- DuPont Co. got a boost from U.S. farmers as it closes in on the historic USD75 billion merger with Dow Chemical Co. next month, reported Bloomberg.

Seed sales climbed in the second quarter as DuPont introduced new varieties of soybeans in North America, while pesticide revenue jumped on demand for new fungicides and insecticides, the company said in a statement Tuesday.

DuPont is benefiting as North American farmers sow a record soybean crop after enduring years of low corn prices. U.S. growers are on course to increase soybean acreage 7 percent this year, according to the Department of Agriculture. Seed gains drove an 11 percent increase in farm-related earnings, accounting for more than half of total profit at DuPont.

Chief Executive Officer Ed Breen is poised to close the merger of equals with Dow next month after prior delays in gaining antitrust clearances pushed back the original completion date from December 2016. Breen struck the deal in December 2015, the month after taking the helm at Wilmington, Delaware-based DuPont.

"We are down to literally the last yards here to punch the ball into the end zone," Breen said on an earnings conference call. "We will close the merger in August."

The companies are awaiting final antitrust approvals from the European Commission and Brazil, Breen said.

Breen, who is also DuPont’s chairman, will be CEO of the merged company, to be called DowDuPont Inc. Dow’s chairman and CEO, Andrew Liveris, will be chairman.

The companies have won antitrust approvals from every major jurisdiction where they operate by promising a series of divestitures. DuPont is selling some pesticide assets to FMC Corp., while Dow will unload some corn-seed assets in Brazil to a Chinese investment fund. The asset buyers still need to be approved by some regulators before the deal can close.

Dow and DuPont are planning to split the merged company into three within 18 months of closing, with the first spinoff set to be a materials-science company that will retain the Dow name.

The other two post-split companies will focus on agriculture and specialty products. The companies have said DowDuPont will reconsider which businesses will constitute each spinoff after investors including Third Point raised concerns that proposed materials-science and specialty companies aren’t sufficiently focused.

DuPont is an American chemical company that was founded in July, 1802. The company manufactures a wide range of chemical products, leading extensive innovative research in this field. The company is the inventor of many unique plastics and other materials, including neoprene, nylon, Teflon, Kevlar, Mylar, Tyvek, etc. DuPont was the developer and main producer of Freon used in the production of refrigeration equipment.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) — Vietnam's fuel imports may drop as the effects of a tax cut on sales of gasoline and diesel fuel from the country's Dung Quat oil refinery start to be felt as earlier term contracts expire, as per Timesofindia.

Vietnam's government allowed Dung Quat's operator Binh Son Refining and Oil Co, starting on Jan. 1, to lower its tariff on domestic gasoline sales to 10% from 20% while the tax on other oil products including diesel was lifted, Binh Son Chief Executive Officer Tran Ngoc Nguyen said on Monday.

The reduction allowed Binh Son to match the current 10% tax on gasoline imports from South Korea established under a free-trade agreement (FTA) and the tax-free status for diesel sales from countries in the Association of Southeast Asian countries (ASEAN) under a different FTA.

"Before January, taxes on Binh Son's oil products are always ... higher than imported products, making our product prices high and they cannot be sold," Nguyen told Reuters.

The lower taxes are expected to reduce imports of gasoline and diesel into Vietnam, denting overall profit margins for the oil products, four fuel traders told Reuters on Monday.

While the tax reduction was effective from January, local importers had already agreed to long-term fuel contracts with Binh Son in December, meaning they missed the lower taxes, the four traders said. The tariff reductions were announced in September but would only apply to contracts signed in 2017, said Nguyen.

Dung Quat's full-year production this year is expected to reach 6.1 MMtpy, equivalent to about 122,000 bpd, nearly 20% higher than its initial target as a result of the lower taxes, said Nguyen.

The refinery, currently Vietnam's only operating refinery, has a total capacity of 6.5 MMtpy. From 2024, the gasoline sales tax will be lifted in line with other free-trade agreements signed by Vietnam, said Nguyen.

As MRC informed earlier, Binh Son Refining and Petrochemical is in June took a polypropylene (PP) plant off-stream for a maintenance turnaround of around 7 weeks. Located in Vietnam,the plant has a production capacity of 150,000 mt/year.

MRC