Lukoil chief says sanctions may last a decade

MOSCOW (MRC) -- Sanctions against Russia are likely to stay in place for at least the next 10 years, the country’s second-largest oil company has said, at a time of sharply deteriorating relations between Moscow and the west, as per FT.

Russian oil and gas companies should prepare for long-term restrictions, Lukoil’s chief executive said, while also backing the extension of a deal between Russia and Opec to reduce crude output if oil prices fall below USD50 a barrel.

"Our current strategic plan for the next 10 years is that sanctions will remain in place," Vagit Alekperov told the Financial Times. "I don’t perceive that sanctions will be removed in the coming years, and even (when they are) it will be a lengthy and very complicated process."

Mr Alekperov is Lukoil’s largest shareholder and owns about a quarter of the shares, having founded the company from state oil assets during the break-up the Soviet Union. With daily production of 1.8m barrels, it is Russia’s largest private oil producer and second only to Kremlin-controlled Rosneft.

Washington, Brussels and other western capitals have imposed financial and technology-sharing sanctions on many Russian energy companies, including Lukoil, in response to Moscow’s 2014 invasion of Ukraine and annexation of Crimea.

Despite hopes in Moscow that Donald Trump’s entry into the White House would usher in better relations, allegations of Russian interference in the 2016 election have only increased distrust between the two countries.

"Three years ago I was in Washington and met the gentleman in charge of the US sanctions department. That was at the beginning of the events related to Ukraine," Mr Alekperov said in an interview. "And he said: 'If Russia does this and that, then we will do that and this'. And so I told him: ‘My country is never going to leave you unemployed."

The 67-year-old praised a landmark agreement between oil cartel Opec and Moscow last year that cut oil output and helped raise crude prices to about USD55 a barrel, describing it as a “new instrument that has been established that can impact the (oil) price, a control system".

Mr Alekperov echoed remarks by Russian president Vladimir Putin last week that the deal could be extended past its March 2018 expiry date.

“If the price is less than USD50, then we must go for an extension. If it is USD55, then there is no need. Just a gradual withdrawal," he said.

“The most important thing for now is to not allow another time of $100 a barrel, that would be major trouble for the industry. We want to have a predictable level of USD55-USD60 at least for the 10 years to come and keep both consumers and producers happy."

As MRC informed earlier, in February 2017, The Antimonopoly Committee of Ukraine gave permission for the mediated purchase of plant Karpatneftekhim from the Russian group Lukoil to the Ukrainian. The Antimonopoly Committee gave permission for the purchase of a 75% stake in Lukoil Chemical B.V. (Netherlands), which owns 100% of LLC "Karpatneftekhim" (Kalush, Ivano-Frankivsk region).

Lukoil is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. Lukoil structure includes one of the largest Russian petrochemical plant - Stavrolen.
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Solvay introduces advanced UV stabilizer for thermoplastic polyolefin and reinforced plastics

MOSCOW (MRC) -- Solvay has presented its latest stabilization technology, CYASORB CYXTRA V9900 stabilizer to enable TPOs and reinforced plastics to meet government mandates for increased fuel economy and reduced CO2 emissions, as per the company's press release.

The new regulations have created greater demand by the automotive industry for these materials to satisfy increasingly stringent performance requirements for weatherability.

Solvay’s next-generation CYASORB CYXTRA V9900 stabilizer meets all worldwide automotive UV weathering specifications. It also surpasses key automotive requirements such as low VOC emission, low fogging, low odor, and no interference with paint adhesion, and it provides a lower "cost-to-stabilize" benefit.

"The US Corporate Average Fuel Economy (CAFE) standard increases the mileage of new car models from 39 to over 50 miles per gallon by 2025, while in Europe OEMs must reduce CO2 emissions for new cars to 95 g/km on average from 2020," said Andrea Landuzzi, Global Marketing Director, Additive Technologies, for Solvay’s Technology Solutions global business unit. "The automotive industry is quickly turning to TPOs and CFRP to help them develop lighter, more fuel efficient automobiles with lower emissions.Solvay is committed to proactively engaging with our customers to understand their product specifications and help them - through our additive technology - to translate those specifications into successful products and applications."

While many stabilizers commercially available today offer some level of plastic protection, Solvay’s advanced CYASORB CYXTRA V9900 stabilizer takes protection a step further by delivering an optimal balance of processing and cost efficiencies with a high degree of performance durability, making it possible to deliver advanced solutions for plastics to meet tomorrow’s needs today.

CYASORB CYXTRA V9900 stabilizer joins Solvay’s world-class UV stabilizer portfolio, which includes CYASORB CYNERGY SOLUTIONS V Series stabilizers that protect the physical properties and aesthetics of automotive TPOs against UV light exposure, extreme temperatures and other environmental factors. These advanced stabilizer solutions can enhance TPO performance in a broad range of automotive applications, including bumpers, door panels, seat back covers, pillar moldings, door trims, instrument panels, head and side impact areas, fender liners and flares, tail light housings and cowl vents.

As MRC informed earlier, in late 2016, Solvay completed the sale of its 70.59% stake in Solvay Indupa to Brazilian chemical group Unipar Carbocloro, following the approval earlier this month of the Brazilian antitrust authority CADE.

Besides, in early July 2016, Solvay completed the divestment of its shareholding in Inovyn (London), bringing to an end Solvay's chlorvinyls joint venture with Ineos. Solvay received exit cash proceeds amounting to EUR335 million (USD370.7 million). The dissolution of the jv follows regulatory clearances from the relevant authorities.

Inovyn was formed on 1 July 2015 as a jv between Ineos and SolVin, a subsidiary of Solvay. Solvay and Ineos signaled their decision to end their chlorvinyls jv in March this year.

Solvay is headquartered in Brussels with about 27,000 employees spread across 58 countries. It generated pro forma net sales of EUR10.9 bn in 2016, with 90% made from activities where it ranks among the world’s top 3 players.
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Total enters the petroleum product retail sector in Mexico

MOSCOW (MRC) -- Total has entered into an agreement with GASORED, a group of service station owners, to rebrand a network of around 250 service stations in and around Mexico City under the Total brand, asper Hydrocarbonprocessing.

Present in Mexico since 1982, Total is aiming to capitalize on the deregulation of the country’s fuel sales and supply market to significantly expand its activities there. “We are pleased with this commercial agreement with GASORED. Strengthening our presence in Mexico, Latin America’s second-largest market for petroleum products, is in line with our strategy of enlarging our network in growth regions,” said Momar Nguer, President of Marketing & Services at Total.

The first Total-branded stations will open by the end of the year, with deployment continuing in 2018 and 2019. The Total-branded outlets will offer consumers and business customers the company’s full lineup of fuels and lubricants, as well as a broad range of products and services.

As MRC informed before, The Linde Gases Division in Germany and Total Raffinerie Mitteldeutschland based in Leuna are extending their existing partnership by a further 15 years. Signed in Leuna in June 2017, the contract is worth approximately EUR 1 billion and is due to take effect on 1 January 2018. This new deal propels the two-decade partnership between both companies towards a long-term future.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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Iraq Luaibi orders work to reopen oil pipeline to Turkey

MOSCOW (MRC) -- Iraq plans to reopen a crude oil pipeline from the Kirkuk oilfields to Ceyhan in Turkey, the oil ministry said in a statement on Tuesday, a route partly still in use by the Kurdistan Regional Government (KRG), reported Reuters.

Iraq largely stopped sending oil through the Kirkuk-Ceyhan pipeline in 2014 after the region was overrun by Islamic State militants. Recaptured by US-backed Iraqi forces over the past 2 yr, there have been some intermittent flows.

il minister Jabar al-Luaibi has asked state-owned North Oil Co., the State Company for Oil Projects and the state pipeline company to quickly begin work to restore full operation of the pipeline, the ministry said.

North Oil Co.’s production has been completely allocated to supplying Mosul and other areas recaptured from Islamic State, and none has been exported for several months.

Iraq hopes to raise its exports through the pipeline to their previous level of between 250,000 bpd and 400,000 bpd, the statement said.

The move comes as the Iraqi government and the KRG remain at loggerheads over a Kurdish independence referendum held last month, which delivered an overwhelming “yes” vote to break away from Iraq.

The KRG operates a pipeline that connects to the twin Kirkuk-Ceyhan pipeline at Khabur on the border with Turkey.

Luaibi met the Turkish ambassador on Monday in Baghdad to press for increased cooperation between the countries, the oil ministry statement said.

Turkey has threatened to shut the KRG-operated pipeline at Baghdad’s request. Russia, whose companies are heavily involved in the KRG oil industry, said on Oct. 4 that shutting the pipeline would be in nobody’s interest.

We remind that, as MRC informed before, in March 2017, China Petroleum and Chemical Corp started operating a major crude oil pipeline that connects eastern Jiangsu province with refineries in south China. The pipeline, which spans 560 kilometers, runs at an annual capacity of 20 MMt, Sinopec said.
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Most US oil executives see prices below USD60/bbl through 2018

MOSCOW (MRC) — Nearly two-thirds of US oil executives see crude oil prices remaining below USD60/bbl through 2018 and not hitting USD70/bbl until at least the next decade, according to a survey published on Wednesday by consultancy Deloitte Services LP, said Reuters.

The survey, based on a poll of 250 executives at companies that produce, transport and refine oil and natural gas, reflects a shift from last year when many respondents forecast commodity prices would rise and capital spending budgets grow. US oil prices fell slightly on Wednesday to USD50.79/bbl.

This year's more dour view, especially among shale industry managers, comes as executives are focusing on cost controls and returns and have largely stopped looking for a rise in commodity prices. This new paradigm is encouraging shale producers to base executive compensation on the best uses of capital, a strategy designed to keep costs low. "The bottom line is that companies should focus on cost discipline and operational efficiency," said Andrew Slaughter, head of Deloitte's Center for Energy Solutions.

"The new reality seems to have set in; waiting for a significant price recovery may be a long haul." Half of executives polled said they expect capital spending to drop next year, and nearly 60% said they expect a decline in the number of drilling rigs active across the United States.

Production in the shale industry requires constant investment to keep up with well decline rates. Those polled said they expect to maintain or increase current production levels into 2018, though a drop in spending could prevent any sizable increase in US output, helping to resolve a global supply and demand imbalance.

That would fit well into a plan by the 14-member Organization of the Petroleum Exporting Countries, which on Wednesday forecast higher demand for its oil in 2018 and a worldwide supply deficit. In a wary sign for oilfield service providers, including Halliburton Co and Baker Hughes, roughly half of those surveyed by Deloitte expect service costs to slip next year. Greater well efficiency and new technologies—long touted by industry executives as a cure-all for low prices—were seen as having less of an impact on costs.

The mood among executives was less pessimistic for natural gas prices, with those polled saying they expect prices to rise above USD3/MMBtu into next year. Natural gas futures rose 1.5% on Wednesday to USD2.93/MMBtu.
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