Shell Q2 earnings climb on strong revenue growth

MOSCOW (MRC) -- Royal Dutch Shell plc reported that its second-quarter income attributable to shareholders climbed 31 percent to USD1.55 billion from last year's USD1.18 billion. Basic earnings per share grew 27 percent to USD0.19 from USD0.03 last year, said the company on its website.

On current cost of supplies or CCS basis, earnings attributable to shareholders soared to USD1.92 billion from USD239 million a year ago. Basic CCS earnings per share were USD0.23, higher than USD0.03 last year.

Adjusted CCS earnings were USD3.60 billion, compared to USD1.05 billion last year. Adjusted basic CCS earnings per share were USD0.44, compared to USD0.13 a year ago.

Global liquids realised price climbed 16 percent and Global natural gas realised price grew 31 percent.

Shell Chief Executive Officer Ben van Beurden said, "Shell's strong results this quarter show that we are reshaping the company following the integration of BG.... The external price environment and energy sector developments mean we will remain very disciplined, with an absolute focus on the four levers within our control, namely capital efficiency, costs, new project delivery, and divestments. I am confident that we are on track to deliver a world-class investment to our shareholders."

Looking ahead, for the third quarter, the company expects Integrated Gas production volumes to be positively impacted by some 60 thousand boe/d mainly associated with the start-up of Gorgon, partly offset by higher expected maintenance in the LNG plants.

Compared with last year, Upstream earnings are expected to be negatively impacted by a reduction of some 190 thousand boe/d associated with completed divestments and others.

Earnings are expected to be positively impacted by some 90 thousand boe/d associated with restored production in Nigeria; however, security conditions remain sensitive.

As MRC informed earlier, Royal Dutch Shell will be spending up to USD1 B a year by 2020 on projects within its new energies division.

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.
MRC

MOSCOW (MRC) -- Essar Projects India Ltd. (EPIL), an EPC contractor, announced the successful testing and commissioning of the coke drum structure package (CDSP) for Bharat Petroleum Corporation Limited’s Kochi Refinery (BPCL-KR), said Hydrocarbonprocessing.

The contract value of this package is Rs. 645 crores. The CDSP is part of BPCL-KR’s Integrated Refinery Expansion Project that will increase its operating capacity to 15.5 MMtpy from 9.5 MMtpy. Upon completion, BPCL-KR will transform into a facility adhering to global standards and will produce eco-friendly petrol and diesel complying with Euro IV and V norms. It will also contribute towards making South India self-sufficient in products, such as liquefied petroleum gas (LPG), motor spirit (MS) and high speed diesel (HSD).

The project entailed transportation of over dimensional consignments like coke drums and coke fractionator, in modular form through narrow roads and assembling them within the limited space at site. Thereafter, each coke drum weighing around 600 mt with a length of 42.5 m and a 9.2-m diameter was lifted and erected using heavy cranes at an elevation of almost 32 m. Furthermore, the erection work for all four coke drums was completed within a record time of 20 days during the monsoon season in Kerala.

With a 3.84 MMtpy capacity of delayed coker unit, the CDSP mainly consisted of EPC works for four coke drums, coke fractionator column including internals, coke cutting system including pumps; coke drum top and bottom heading/un-heading system; switch valves, hydro cyclone, elevators and clear water tanks; civil works of coke pit, maze, bridge crane, elevator; and associated auxiliary equipment/facilities including piping, electrical and instrumentation.

As MRC wrote previously, BPCL plans to spend USD6.75 B through 2022 to raise refining capacity by 62% to meet rising fuel demand in the world's fastest growing major economy.

Bharat Petroleum Corporation Limited is an Indian state-controlled oil and gas company headquartered in Mumbai, Maharashtra. The Corporation operates two large refineries of the country located at Mumbai and Kochi.
MRC

MOSCOW (Market Report) -- Negotiations over August shipments of Russian polyvinyl chloride (PVC) began in the middle of the week. After two months of cuts, local producers still hope to achieve an increase of up to Rb2,000/tonne in August prices of resin, according to ICIS-MRC Price report.

The summer of 2017 turned out to be atypical for the Russian PVC market, contrary to the past years' experience, local producers had to reduce their contract prices of suspension PVC (SPVC) in June-July under the pressure of oversupply and weak demand. The situation had changed in favour of producers by the last month of summer. Negotiations over August contract prices of Russian PVC began on July 26, and many market participants said producers suggested to agree deals up by Rb1,000-2,000/tonne from the previous level.

Scheduled shutdowns for maintenance at two plants work in producers' favour. Thus, Bashkir Soda Company (the plant's annual production capacity - 240 tonnes) took off-stream its production capacities for a two-week turnaround on 15 July. SayanskKhimPlast shut down its production (the plant's annual capacity - 280,000 tonnes) for a one-month maintenance on 24 July. And, although some producers and converters have sufficient stocks of PVC, the scheduled outages at two production facilities will still affect the balance of the Russian market.

The fact of a sharp increase in export prices of acetylene PVC in China and the weakening of the rouble against the dollar was also in favour of Russian producers. Since mid-July, there has been a shortage and an increase in prices of calcium carbide (one of the main feedstocks for PVC production) in China and, as a consequence, a major rise in domestic prices of resin, which affected export prices.

Chinese producers were virtually the main foreign SPVC suppliers to the Russian market this year. Imports reached its peak in May (11,200 tonnes) and were 6,600 tonnes for incomplete July. Prices are expected to go down further in August, as export prices in China made imports of this resin unprofitable.

A slight oversupply of PVC were still felt in the Russian market, but the sport market has already begun to respond to higher prices in China.

Deals for August shipments of Russian PVC were discussed in the range of Rb64,000-66,000/tonne, including VAT and delivery, for deals up to 500 tonnes. Deals for K70 PVC were negotiated in the range of Rb64,000-68,000/tonne, including VAT and delivery.
MRC

MOSCOW (MRC) -- Evonik is investing an amount in the upper double-digit million euro range in the expansion of its fumed silica capacities in Antwerp, Belgium, said the company on its web-site.

The production complex is scheduled to become operational in the summer of 2019. Typical applications of these specialty silica, which Evonik markets under the name AEROSIL, include coatings and paints, modern adhesive systems, transparent silicones as well as non-flammable high-performance insulation materials.

"The investment is a good fit for our strategy to concentrate more on distinct specialty chemicals businesses and to gradually create a more balanced portfolio," says Christian Kullmann, Chairman of the Evonik Executive Board. Silica are part of “Smart Materials”, one of Evonik’s four strategic growth engines with above-average market growth and margin potential. "With this investment in the silica business, which has low cyclicality, we are consistently following our growth course and solidifying our position as a leading global provider. Following the planned takeover of the Huber silica business and the continuous expansion of precipitated silica capacity, the AEROSIL® expansion in Antwerp is the next logical step," Kullmann notes. With this investment Evonik is executing a further project within the scope of its defined investment budget.

The global market for fumed silica shows growth rates exceeding 4 percent, which outpaces the global economy as a whole. The market for applications in specialty silicones, adhesives for wind turbines and in the area of non-flammable high-performance insulation is posting above-average development. "By expanding our capacities in Antwerp, we want to support the market growth for fumed silica in Europe and other important export markets, while at the same time boosting our integrated European silica-silane production," explains Johannes Ohmer, member of the Board of Management of Evonik Resource Efficiency GmbH. Thanks to its central location in Europe and modern harbour, Antwerp offers ideal framework conditions.

Based on the new AEROSIL expansion, Evonik will be able to supply customers not only with hydrophilic but also hydrophobic silica from Antwerp in the future. A modernization of the silane capacity is intended to secure the raw material supply for the AEROSIL production as well as for silanes used in tire production. AEROSIL is generated as fumed silica from the high temperature hydrolysis of silanes in a hydrogen flame.

Evonik is a leading global manufacturer of silica. In addition to the fumed silica AEROSIL and the precipitated silica ULTRASIL and SIPERNAT, Evonik also produces matting agents made from silica under the brand name ACEMATT. Overall, the global annual production capacity of Evonik for precipitated and fumed silica as well as matting agents reaches 600,000 metric tons.

As MRC informed earlier, in September 2016, Evonik Industries officially broke ground in Marl for construction of a new production plant for specialty polyamide 12 (PA12) powders. The specialty chemicals company will thus increase annual capacity for its VESTOSINT brand of PA12 powders by 50%. The amount invested lies in the mid-double-digit million euro range. The new plant is scheduled to come on stream at the end of 2017.

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Profitable growth and a sustained increase in the value of the company form the heart of Evonik’s corporate strategy. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world.

MRC

MOSCOW (MRC) -- LyondellBasell, one of the world's largest plastics, chemicals and refining companies, has announced the final investment decision to build the world's largest propylene oxide (PO) and tertiary butyl alcohol (TBA) plant in the Houston area, said the producer in its press release.

The project is estimated to cost approximately USD2.4 billion, representing the single-largest capital investment in the company's history. At the peak of construction, the project is expected to create up to 2,500 jobs and approximately 160 permanent positions when operational.

LyondellBasell has made the final investment decision to build the world’s largest PO/TBA plant at its Channelview Complex in Texas. The USD2.4 billion project is the company’s single largest capital investment to date and upon completion will produce an anticipated 1 billion pounds of propylene oxide and 2.2 billion pounds of tertiary butyl alcohol annually.

"This world-scale project is a key part of our organic growth strategy which is designed to meet rising global demand for both urethanes and cleaner-burning oxyfuels while creating real, long-term value for our shareholders," said Bob Patel, CEO of LyondellBasell. "Our investment in this plant combines the best of both worlds: our leading PO/TBA process technology with proximity to low-cost feedstocks, which gives LyondellBasell a competitive advantage in the global marketplace for these products."

"We are pleased that LyondellBasell continues to view the Houston area as important to their global operations, creating jobs and opportunities for Houstonians," said Bob Harvey, president and CEO of the Greater Houston Partnership. "This new project further advances Houston's position as a global hub of petrochemical manufacturing, leveraging Houston's strategic access to the Americas and top markets around the world."

Once in operation, the plant will produce an anticipated 1 billion pounds (470,000 metric tons) of PO and 2.2 billion pounds (1 million metric tons) of TBA annually. PO is used in the manufacture of bedding, furniture, carpeting, coatings, building materials and adhesives, while the TBA will be converted to two ether-based oxyfuels, methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE). Both MTBE and ETBE are high-octane gasoline components that help gasoline burn cleaner and reduce emissions from automobiles.

LyondellBasell plans to sell the PO and derivative products to both domestic and global customers, while the oxyfuels will be primarily sold into Latin America and Asia. A portion of the TBA will remain in the domestic market in the form of high purity isobutylene which is used in tires and lubricants.

The majority of the products will be exported via the Houston Ship Channel.

The PO/TBA project will have a split facility design to optimize product balances and realize synergies between LyondellBasell sites. The proposed location for the PO/TBA plant is the LyondellBasell Channelview Complex located in Channelview, Texas. The associated ethers unit, which will convert TBA to oxyfuels, is proposed for the company's Bayport Complex near Pasadena, Texas.

The company has completed front-end engineering design work and received the required environmental permits. Site preparation is underway and construction is expected to begin during the second half of 2018. It is anticipated the project will be completed by the middle of 2021. Final site selection is contingent upon final approval of certain economic incentives by the state of Texas.

The PO/TBA project is part of LyondellBasell's USD5 billion organic growth program taking place on the U.S. Gulf Coast. LyondellBasell recently completed ethylene expansion projects at the company's La Porte, Channelview and Corpus Christi sites in Texas, finalizing a multi-year plan to increase annual ethylene capacity in the U.S. by 2 billion pounds (900,000 metric tons).

Additionally, as MRC informed before, LyondellBasell began construction of a world-scale polyethylene (PE) plant at its La Porte Complex, which utilizes the company's proprietary Hyperzone PE technology and will more than double that site's PE capacity to 2 billion pounds (900,000 metric tons) per year upon completion in 2019.

LyondellBasell is one of the world's largest plastics, chemical and refining companies. The company 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.
MRC