Kuwait Energy in merger talks with London-listed SOCO International

MOSCOW (MRC) - SOCO International, an oil and gas exploration and production company listed on the London Stock Exchange, said on Monday it was evaluating a merger with Middle East oil and gas firm Kuwait Energy, as per Hydrocarbonprocessing.

Its statement confirmed a Reuters report earlier on Monday that the two companies were in merger talks. A merger would provide a way for the Kuwaiti company to go public after it failed last year to complete an initial public offer of its shares on the London exchange, through which it hoped to raise about USD150 million.

SOCO, which has a market capitalisation of about USD500 million, said discussions with Kuwait Energy's newly constituted board were preliminary and no deal terms had been agreed. "SOCO confirms that, in the context of its stated objective to strategically reshape its business and grow its portfolio, it is evaluating a potential merger of equals with Kuwait Energy," the company said in a statement issued via the London Stock Exchange. Kuwait Energy declined to comment on the merger discussions.

SOCO's shares rose as much as 15 percent on news of merger talks and were up 9.9 percent at 123.4 pence at 1224 GMT.

Kuwait Energy has assets in Iraq, Oman, Egypt and Yemen. SOCO has a very different geographic exposure, with interests in Vietnam, Congo and Angola but no major assets in the Middle East.

Thomas Streater, head of investment research at MB Commodities Capital in Dubai, said the merger could benefit both companies.

"With volatile oil prices, it makes sense for small oil companies to merge as getting bigger scale gives them balance sheet to face volatility. SOCO would get a portfolio of low cost, attractive assets, and for Kuwait Energy it would be a way to monetise some of their holdings," he said. Streater added that Kuwait Energy's portfolio was quite attractive "but assets are in Iraq so straight away from an IPO perspective it’s seen as too risky. With the merger, the company’s shareholders will probably get SOCO stock, and then they’ll be able to sell at a later stage."

SOCO had USD132 million in cash as of September last year. Kuwait Energy had USD43 million in cash at the end of September.
MRC

MOSCOW (MRC) -- Jacobs Engineering Group Inc. has been awarded a contract to complete a front end engineering design (FEED) study for a propane dehydrogenation (PDH) plant located at the existing Borealis production site in Kallo, Belgium, as per Hydrocarbonprocessing.

The contract award follows the successful completion of the feasibility study for the plant. When complete, the new PDH plant will have a targeted annual production capacity of 740 kilotons, making it one of the largest and most efficient facilities in the world.

As part of the FEED study, Jacobs is preparing the basic design package for both the inside battery limit areas as well as the outside battery limit areas of the new PDH plant. The FEED phase is scheduled for completion by mid-2018.

As MRC informed earlier, in April 2016, Borealis AG and PAO Gazprom, the world's gas major, signed a Memorandum of Understanding. The document reflects the parties' interest in evaluating opportunities to develop joint gas chemical projects in Russia.

Borealis is a leading provider of innovative solutions in the fields of polyolefins, base chemicals and fertilizers. With headquarters in Vienna, Austria, Borealis currently employs around 6,500 and operates in over 120 countries.
MRC

MOSCOW (MRC) - Saudi Arabia has changed the status of its national oil giant Aramco to a joint-stock company as of Jan. 1, in a key step for an initial public offering (IPO) planned for later this year, said Reuters.

The sale of up to 5 percent of Saudi Aramco, expected to go ahead in the second half of 2018, is a centerpiece of Vision 2030, an ambitious reform plan to reduce the dependence of the Saudi economy on oil. The plan is championed by Saudi crown Prince Mohammad bin Salman.

The change, which was published in a cabinet decree in the kingdom’s official bulletin on Friday, is a requirement for local companies in Saudi Arabia ahead of listing, a senior Aramco source, who declined to be named, told Reuters.

"As a customary step in the preparation process for a Saudi IPO, Saudi Aramco has converted to a joint stock company," the source said.

"This establishes the framework to allow future investors to hold shares in the company alongside its shareholder, the government." But it is an important step as it shows the IPO process, which could be the biggest in history raising up to USD100 billion, is moving ahead despite market speculation it could be delayed or totally shelved.

Prince Mohammad told Reuters in October it was still on track for 2018. Aramco has a fully paid capital of 60 billion riyals (USD16.00 billion) divided into 200 billion ordinary shares, according to the company’s bylaws published in the official bulletin.

The firm’s board will have 11 members and the power to list the company in domestic and international markets, it said. The government will propose 6 members of Aramco’s board, but shareholders with a more than 0.1 percent stake will have the right to propose a member to the general assembly.
MRC

MOSCOW (MRC) -- Sinopec Shanghai Petrochemical has taken off-stream a high density polyethylene (HDPE) plant, reported Apic-online.

A Polymerupdate source in China informed that the company has taken off-line its plant on January 2, 2018 owing to technical issues. Further details of duration of shutdown could not be ascertained.

Located at Shanghai in China, the plant has a production capacity of 250,000 mt/year.

As MRC informed previously, on 8 March, 2016, Sinopec Shanghai Petrochemical undertook an emergency shutdown at its low density polyethylene (LDPE) unit in China, owing to a technical glitch. It remained off-line for around 2 days. Located at Shanghai in China, the company operates two LDPE units with a production capacity of 100,000 mt/year each.

China Petroleum & Chemical Corporation, or Sinopec Limited is a Chinese oil and gas company based in Beijing, China. It is listed in Hong Kong and also trades in Shanghai and New York . Sinopec is the worlds fifth biggest company by revenue.
MRC

MOSCOW (MRC) - Imports of polyethylene (PE) in Kazakhstan increased by 27% in the eleven months of 2017 compared to the same period of 2016 and amounted to about 112,000 tonnes. Shipments of all PE grades increased, according to MRC DataScope.

November PE imports to Kazakhstan rose to 12,000 tonnes from 8,500 tonnes a month earlier, local companies significantly increased their purchasing of high density polyethylene (HDPE) in Russia and Uzbekistan. Total PE imports into the country were about 112,000 tonnes in January - November 2017, compared with 87,900 tonnes in the same time a year earlier. Purchasing of all PE grades rose, with HDPE accounting for the greatest increase. The structure of PE imports by grades looked the following way over the stated period.
November HDPE imports to Kazakhstan grew to 9,600 tonnes from 6,600 a month earlier. Local companies managed to increase PE purchasing in Russia after several months of severe restrictions from local producers because of shutdowns for maintenance, as well as increased delivery from Uzbekistan. Thus, overall HDPE imports reached 86,000 tonnes in the first eleven months of 2017, up by 31% year on year.

November purchases of LDPE by local companies increased to 1,700 tonnes from 1,700 tonnes in October, Russian producers raised their shipments slightly. Overall LDPE imports into Kazakhstan totalled about 19,700 tonnes over the stated period, up by 13% year on year.

Purchasing of linear low density polyethylene (LLDPE) by local companies was 6,300 tonnes in the first eleven months of 2017, compared to 4,800 tonnes a month earlier.

MRC