North American exodus at PetroChina sparks speculation of company shift

MOSCOW (MRC) — A flurry of departures across the US and Canadian units of Chinese state energy firm PetroChina Co Ltd have sparked speculation that the oil trader is reducing its presence in North America, even though the company says it is committed to the region, said Hydrocarbonprocessing.

More than 30 people in its Houston and Calgary offices have left PetroChina since 2016, including heads of desks in crude, financial, natural gas and chemical trading, the company confirmed to Reuters. Sources say that PetroChina had approximately 150 to 200 people at its peak two to three years ago, and now has between 100 and 150.

Nearly a dozen sources in New York, Calgary, Houston and Singapore, including current and former employees, told Reuters the departures suggest a shift in mindset among firm management, and there are concerns about a broad pullback from its presence in North America.

The sources interviewed, which also includes several who do business with the firm, said North American offices may have expanded too quickly. Mark Jensen, spokesman for PetroChina International America, said the company is committed to business throughout the Americas. He previously said the company and its subsidiaries have restructured the organization where necessary over the last several months, and that the departures do not represent a change in strategy in the region.

A Beijing-based company executive, who has direct knowledge of the firm's global operations, said "poor performances or missing profit targets" was the main reason behind the staff departures. The official, who asked not to be named as he not authorized to speak to the press, said there will be some restructuring in some of the business divisions, particularly natural gas.

"The company believes natural gas shall have good potential to expand, both in terms of scale and profit targets," he said. The restructuring could start after Petrochina's new chairman, a fuel marketing veteran who took over the top job last April, tours North American offices, likely later this year, added the source.

In the last several years, PetroChina built itself into one of the largest oil traders in North America, hiring top talent with the goal to compete with trading giants Vitol SA, Trafigura and Mercuria Energy Group, industry participants said.

The departures have been notable ones, including John Mee, director of financial crude trading; Jie Wang, president in Calgary; and Eric Dixon, domestic head of physical crude onshore, among others. The company has also lost a number of key staff in other departments, including in legal and accounting. One source said that the company is not currently looking to replace the majority of those positions.

Sources interviewed said management's mindset over the last year has shifted toward tightening credit limits and shifting away from sources of activity common among oil traders operating in North America. For instance, PetroChina appears to be shifting away from trading volumes on pipelines—which accounts for the lion's share of crude trading in the United States—and favoring more vessel-based cargo trading, two sources familiar with PetroChina said.

In Houston, there are no longer any proprietary traders, according to two of the sources Reuters interviewed. The company did not respond to a specific request for comment regarding the shift to waterborne trading or proprietary trading.

The departures come after major losses in commodities markets in the first half of 2017, as hedge funds and banks saw some of their worst results in years due to a lack of overall volatility and an unexpected sell-off in crude. The firm has gotten rid of individual bonuses and is now using a team bonus plan across Canada, the United States and China, according to two of the sources spoken to by Reuters. The company did not respond to a request for comment on this.

PetroChina is not set for a full retreat from the region, sources say. The company has certain commitments in the region, including a long-term contract on Royal Dutch Shell Plc's Zydeco pipeline through 2019. In addition, PetroChina's parent, China National Petroleum Corp, will need to keep its options open to import US crude oil, sources said.
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MOSCOW (MRC) -- Thai Polyethylene Co a subsidiary of Siam Cement Group has undertaken an emergency shutdown at its No.2 high density polyethylene (HDPE) plant at Map Ta Phut, said Apic-online.

A Polymerupdate source in Thailand informed that the company has halted operations at the plant last week. The unplanned shutdown is expected to remain in place until end-September 2017.

Located in Map Ta Phut, Thailand, the No. 2 HDPE plant has a production capacity of 180,000 mt/year.
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MOSCOW (MRC) -- PETRONAS has restarted a No.1 low density polyethylene (LDPE) plant following an unplanned shutdown, as per Apic-online.

A Polymerupdate source in Malaysia informed that the company has resumed operations at its plant last weekend. The plant was shut due to feedstock supply issue caused by an unplanned outage at the upstream cracker.

Located at Kerteh in Terrenganu, Malaysia, the No. 1 LDPE plant has a production capacity of 255,000 mt/year.
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MOSCOW (MRC) -- Shin-kong Synthetic Fibers Corp. is scheduled to begin operations at several new engineering plastics production lines in Taiwan in the first quarter of 2018, the Taipei Times reported, as per Apic-online.

The new engineering plastics lines "would help boost the company's annual production capacity from 50,000 tons now to 110,000 tons next year," said the report citing Shinkong Synthetic Fibers President Samson Luo.

In addition, the company is considering increasing engineering plastics capacity in the next three years at its facility in Thailand. No other details were given.
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MOSCOW (MRC) -- Royal Vopak and its joint venture partners, Dialog and the state government of Johor Darul Ta'zim, plan to expand their independent liquid storage terminal in Pengerang, Johor, Malaysia, said Apic-online.

The terminal, Pengerang Independent Terminals Sdn Bhd (PITSB), will be expanded by 430,000 cu m to a total capacity of 1.7-million cu m. Subject to final formalities, the expansion is expected to be commissioned progressively from the first quarter of 2019.

PITSB provides storage, blending and distribution services for crude oil and clean petroleum products. The expansion relates to the storage of clean petroleum products.

A total of 24 new tanks will be built, ranging from 10,000 cu m to 25,000 cu m. In addition, an extra berth will be taken into operation, bringing the total number of operating berths to six.

The terminal is connected via pipelines to the Pengerang Terminals (Two) Sdn Bhd (PT2SB), which will be serving Petronas' Refinery and Petrochemical Integrated Development (RAPID) project currently being built within the Pengerang Integrated complex.

PITSB is owned 45.9% by Dialog, 44.1% by Vopak and 10% by the state government of Johor Darul Ta'Zim. Vopak also owns a 25% stake in PT2SB.
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