Troubled Noble Group says goodbye to global oil trading

MOSCOW (MRC) - Noble Group is closing down its London oil desk and winding down its Asia oil operations, sources familiar with the matter said, as heavy losses and high debt force what was once Asia's biggest commodities trader to restructure, said Hydrocarbonprocessing.

The closures follow the sale of its larger U.S. oil trading business to Vitol, announced in October, and a nine-month loss of some $3 billion reported in November. Since then, Noble has been winding down its remaining oil trading operations in London and Singapore, with many key traders leaving to join competitors. "That (U.S. oil business) comprised the material share of Noble's oil business. The rest ... has either closed or is in the final process of sale," a source familiar with the matter said. A spokeswoman for Noble Group declined to comment.

The company, which had a market capitalisation of USD6 billion in early February 2015, was plunged into crisis after a report by blogger Iceberg Research later that month questioning its accounting. Noble stood by its accounts and rejected the report's allegations but coupled with a major commodities downturn, the firm was unable to recover investor confidence. Its market value has shrunk to around USD215 million.

The closure of its London and Singapore desks marks an effective exit from the oil trading business. In 2016, the number of employees at NCFL (Noble Clean Fuels Ltd) in London was 25, down from 35 the year before. The Singapore-listed company, founded in 1986 by Richard Elman, is returning to its roots as a hard commodities business in Asia, mainly involved in coal marketing, a business that is partly financed by Mercuria Group. A source in Asia said that the firm was winding down some old contracts with only a handful of employees left.

Traders said that they have not seen activity from the company in several months and its head of crude, Chris McAleese, left late last year. He was hired about a year ago to rebuild the business during a brief upswing in the company's finances. Noble's star gasoline trader in the United States, Dimitri Sinenko, was poached by Gunvor at the end of last year. Two distillate traders recently moved from the London office to Unipec and a crude trader went to Trafigura. From Noble's Singapore oil desk, a senior crude trader just moved to Statoil and Morten Buur-Jensen became Singapore managing director of Africa-focused oil trader Mocoh in November.
MRC

MOSCOW (MRC) -- Oil exports from Iraq's southern Basra ports rose to a record high of 3.535 MMbpd in December 2017 from 3.5 MMbpd the previous month, two oil officials said Reuters.

Southern exports are on the rise as Iraq seeks to offset the halting of shipments from its Kirkuk oilfields in the north in mid-October after Iraqi forces took back control of fields from Kurdish fighters.

The bulk of Iraq's oil is exported via the southern terminals.

The December figure for southern exports beat the previous record of 3.51 MMbpd set in December 2016, the last month before an output cut agreement led by the Organization of the Petroleum Exporting Countries took effect.

Rising output from small oilfields developed by the state-run Basra Oil Company helped push up December exports, an oil official told Reuters.

The increase last month, though, has not completely offset the halt of shipments from the north.

"Our plan is to keep boosting exports from the southern oilfields to make up for the lost Kirkuk shipments," said another oil official with the state-run Basra Oil Company.

Iraq is OPEC’s second-largest producer after Saudi Arabia with an output capacity of 4.8 MMbpd which Baghdad aims to increase to 5 MMbpd.
MRC

MOSCOW (MRC) - German drugs and pesticides group Bayer on Wednesday said it was selling more of its stake in chemicals group Covestro, aiming to raise about 1.5 billion euros (USD1.8 billion) in an accelerated bookbuilding process, said Reuters.

Bayer has said it wants to fully dispose of its holding in Covestro, which it demerged in 2015, in the medium term. It has raised 4.7 billion euros in four previous placements.

Credit Suisse (CSGN.S) and Goldman Sachs (GS.N) are acting as joint bookrunners for the overnight placement, which is aimed at institutional investors and marks the fifth time in 10 months that Bayer has moved to sell Covestro stock.

About 18 million shares will be placed at 86.25-88.46 euros apiece for proceeds of 1.55-1.59 billion euros, one of the banks said in a note to investors. Bayer has agreed to a 90-day lockup period.

Based on Covestro’s current market value, this would amount to as much as 8.9 percent, which would bring Bayer’s direct stake, currently at 24.6 percent, to below 16 percent. The Bayer Pension Trust holds a further 8.9 percent stake.

Covestro shares were 1.9 percent lower in late trading in Frankfurt (1COV.F), while those of Bayer (BAYGn.F) were down 1.3 percent.
MRC

MOSCOW (MRC) -- The dramatic recovery of Libya’s oil production sector was one of 2017’s most notable developments, said Yourpetrochemicalnews.

The years of debilitating civil conflict following the Muammar Ghadaffi era had destroyed the country’s crude oil output capability, leading to severe loss of foreign exchange earnings and questions over Libya’s future as a credible oil market player. What a difference a year can make.

Libyan crude oil output leapt to 962,000 bpd in October 2017, up from 390,000 bpd in 2016, and is poised to surpass 1 million bpd in 2018. With crude oil prices recovering as well, the impact on Libyan finances has been equally dramatic.

The achievement is striking, and has earned Libya’s National Oil Co. (NOC) plaudits, and its mercurial chairman, Mustafa A Bulgasm Sanalla, the coveted Petroleum Economist’s CEO of the Year award for 2017. Libya’s gas production also made great strides in 2017, with first gas from the Bouri field. Italian firm Eni’s Bahr Essalam concession is expected to follow suit and deliver first output in 2018.

The optimistic backdrop has started to support external operators’ confidence in Libya’s progress back to normality.

Germany’s Siemens gave a clear sign of growing investor confidence with contracts to build two gas-fired plants for power utility General Electric Company of Libya (GECOL), adding 1,300 MW of new capacity to Libya’s power generation fleet.

The success in bringing the oil and gas sectors back on to an even keel has added stability to feedstock supplies, and has had the added benefit of improving the investment climate for foreign companies, and rehabilitation work needed to repair any damaged infrastructure can now be offered to overseas contactors with some confidence.
MRC

MOSCOW (MRC) -- Soaring global demand for memory chips and petrochemicals helped South Korea's exports surge 8.9% in December, lifting its 2017 shipments to the highest on record in value terms, reported Reuters.

Exports for the year as a whole jumped USD573.9 B or 15.8%, data showed in early 2018, making last year the best since relevant data began to be compiled in 1956.

The government is expecting still-solid but more modest export growth of 4% this year. With the economy riding the global trade boom, South Korea's central bank raised interest rates for the first time in more than 6 yr in November.

"Downside risks for South Korea are the won's strength, rising interest rates and oil prices. They are the new three risks," trade minister Paik Un-gyu said in a statement.

A further wild cards will be trade talks with the United States, which is keen to revise a 2012 deal to reduce its trade deficit with South Korea. Talks began on Jan. 5.

December's 8.9% expansion slightly underperformed the 10.3% growth forecast by economists in a Reuters poll and eased from 9.5% in November.

But six of the nation's major export products, including semiconductors, petrochemical products, computers posted double-digit expansion from a year earlier, even as the month had two fewer working days than in December 2016.

Imports jumped 13% December from a year earlier, beating the 12.1% expansion seen in the survey and 12.7% in the previous month.
MRC