Shell buying spree cranks up race for clean energy

MOSCOW (MRC) -- Royal Dutch Shell has spent over USD400 million on a range of acquisitions in recent weeks, from solar power to electric car charging points, cranking up its drive to expand beyond its oil and gas business and reduce its carbon footprint, as per Reuters.

The scale of the buying spree pales in comparison to the Anglo-Dutch company's $25 billion annual spending budget. But its first forays into the solar and retail power sectors for many years shows a growing urgency to develop cleaner energy businesses.

The investments are not limited to renewables such as biofuels, solar and wind. Shell, as well as rivals such as BP , Exxon Mobil and Chevron, are betting on rising demand for gas, the least polluting fossil fuel, to power the expected surge in electric vehicles in the coming decades.

To that end, Shell agreed in December to acquire independent British power provider First Utility for around USD200 million, according to several sources close to the deal. The value of the acquisition had not been previously disclosed. Shell declined to comment.

With First Utility, the company hopes to find an outlet for its gas supplies via the retail power market, betting on rising demand as drivers charge electric vehicles at home.

Earlier this month, the company ventured back into solar after a 12-year hiatus when buying a 43.86 percent stake in Silicon Ranch Corporation for USD217 million. In the last three months of 2017, Shell also invested in two projects to develop charging stations for electric vehicles across Europe's highways. It has also signed agreements to buy solar power in Britain and develop renewables power grids in Asia and Africa.

According to analysts at Bernstein, Big Oil has invested over USD3 billion on renewables acquisitions over the past five years, most of which went towards solar.

"Green" merger and acquisition (M&A) activity today averages 13 percent of total energy M&A activity, they said. "However greater scale is needed for the majors to effectively operate and leverage their trading skills in this market, necessitating more M&A," they said in a note.

Other companies have also made investments. BP got back into solar power with a USD200 million investment in solar generator Lightsource late last year, six years after exiting the sector with a large writedown. Total bought battery maker Saft for USD1 billion in 2016.

As MRC wrote before, Royal Dutch Shell could usurp its largest rival Exxon Mobil as the energy sector's biggest cash generator after higher oil and gas prices combined with an improved performance lifted its 2017 revenue.

Royal Dutch Shell, commonly known as Shell, is an Anglo–Dutch multinational oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom.Created by the merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading, it is the fourth largest company in the world as of 2014, in terms of revenue, and one of the six oil and gas "supermajors".
MRC

Eni/Total find natgas off Cyprus in field close to Zohr

MOSCOW (MRC) -- Italy’s Eni and France’s Total have discovered a promising natural gas field off Cyprus, Eni said on Thursday, saying the find looked geologically similar to the mammoth Zohr field off Egypt, reported Reuters.

Further analysis was required to determine the range of gas volumes and define further exploration and appraisal operations, Eni said.

“Calypso 1 is a promising gas discovery and confirms the extension of the ‘Zohr like’ play in the Cyprus Exclusive Economic Zone (EEZ),” Eni said in a statement.

The Italian oil and gas group reported the Zohr discovery in 2015. Located in the Egyptian offshore Shorouk block about 190 km north of Port Said, Zohr holds an estimated 30 trillion cubic feet of gas, the largest ever discovered in the Mediterranean.

We remind that, as MRC informed previously, in June 2016, ENI announced that it could not reach an agreement with the US private equity firm SK Capital to sell a majority stake in ENI’s chemicals subsidiary Versalis (Milan) and had terminated the discussions.

ENI is an Italian multinational oil and gas company headquartered in Rome. It has operations in in 79 countries, and is currently Italy's largest industrial company with a market capitalization of EUR68 billion (USD 90 billion), as of August 14, 2013. The Italian government owns a 30.3% golden share in the company, 3.93% held through the state Treasury and 26.37% held through the Cassa depositi e prestiti. Another 39.40% of the shares are held by BNP Paribas.
MRC

Clariant expands operations at Coatzacoalcos, Mexico plant

MOSCOW (MRC) -- Clariant International Ltd said that it has completed the project to expand its industrial facility in Coatzacoalcos, Veracruz, and increased production capacity by around 15 percent, said Worldofchemicals.

This investment in the expansion of the plant was made to strengthen the group's ability to serve industrial and consumer markets - not only in Mexico but around the world, especially in the Americas. The expansion project in Coatzacoalcos took approximately two years to complete, concluding within the planned timeframe and budget and with zero accidents. Included amongst the benefits it is bringing to the local communities is the creation of indirect service jobs in areas such as transportation and maintenance, among others.

Since its inaugural in 2002, the Coatzacoalcos plant has continuously been expanded over the last 15 years. It currently occupies an area of 76,000 square meters, has over 100 employees and manufactures a wide variety of Clariant products.

"To make progress on our way to becoming a leading speciality chemicals company, Clariant focuses on the allocation of investments in areas with excellent growth potential. One of these important strategic markets in the Americas is Mexico, particularly due to its growth potential, its export strength and our highly motivated and qualified workforce," said Hariolf Kottmann, CEO of Clariant.

"We have a strong presence in Mexico, with production plants, laboratories, and sales offices located in Santa Clara (Mexico state), Puebla, and Coatzacoalcos, which provides solutions to multiple industries and we continuously invest in new technologies to better meet the needs of our customers," added Fernando Hernandez, country head of Clariant Mexico.
MRC

KBR to use PCMAX technology for new polycarbonate project in China

MOSCOW (MRC) -- KBR Inc (KBR) has been awarded both a license and engineering (LBED) and a proprietary equipment supply contract by Cangzhou Dahua New Materials Co Ltd (CDNM) to build a new polycarbonate plant in Cangzhou City, China, as per Worldofchemicals.

Under the terms of the two contracts, KBR will provide its proprietary PCMAX technology, basic engineering design package and proprietary equipment supply for a 100,000 metric tonnes per annum single train plant in Cangzhou. CDNM intends to expand annual production at a later stage to 200,000 metric tonnes.

The plant will utilize KBR's phosgene-based interfacial polycarbonate PCMAX technology. KBR's unique PCMAX technology offers a wide range of high-quality product grades with minimal capital investment.

KBR globally licenses and designs polycarbonate synthesis and compounding plants as well as complementary phenolic technologies, including phenol/acetone, and bisphenol-A (BPA). KBR's integrated phenolics offering provides advantages in raw materials, utilities, OPEX and maintenance costs.

"KBR has been our most trustworthy partner for decades. The polycarbonate market in China is booming, and we believe that by choosing KBR's advanced technology, we can achieve the best quality of products and place ourselves in the leading position in this new market," said Xie Huasheng, chairman of CDNM.

"We are extremely pleased and honoured to be CDNM's strategic partner. China is one of our most important markets and KBR is excited to be a part of this significant project," said John Derbyshire, president, KBR technology and consulting.
MRC

China rebuffs U.S. criticism of relations with oil-rich Venezuela

MOSCOW (MRC) - China's support for Venezuela has benefited ordinary people and been broadly welcomed, the foreign ministry said on Monday after the U.S, as per Reuters.

Treasury accused China of aiding Venezuelan President Nicolas Maduro's government with murky oil-for-loan investments. In a Friday speech at the Center for Strategic and International Studies, the U.S. Treasury's top economic diplomat, David Malpass, said China's focus on commodities and opaque financing deals had hurt, not helped, countries in the region. His attack on China's role in aiding the Venezuelan government came a day after U.S. Secretary of State Rex Tillerson, ahead of a five-day tour of Latin America, raised the prospect of a military coup in the oil-rich country.

Speaking in Beijing, Chinese Foreign Ministry spokesman Geng Shuang said financial cooperation between the two countries was set by companies and financial bodies in both nations on commercial, win-win principles. Loans were totally in accordance with international standards and benefited local people, he added. "What the United States said is baseless and extremely irresponsible," Geng said. Cooperation between China and Venezuela had supported the building of more than 10,000 low-cost houses, electricity generation and the cost of household appliances for three million Venezuelan homes on low incomes, he added. "China-Venezuela cooperation has favourably promoted Venezuela's socio-economic development and has been welcomed and supported by all levels of society," Geng said. "A stable Venezuela accords with the interests of all sides."

China last week said the United States was disrespecting Latin America after Tillerson warned countries in the region against excessive reliance on economic ties with China.

The Trump administration has imposed individual and economic sanctions on Venezuela's government for rights abuses and corruption. Maduro has accused Washington of seeking to oust him to improve access to the OPEC nation's oil wealth.

China and Venezuela have a close diplomatic and business relationship, especially in energy. China has repeatedly brushed off widespread condemnation from the United States, Europe and others about the situation in the country. China has said it is confident in Venezuela's ability to properly handle its debts. Venezuela has borrowed billions of dollars from Russia and China, primarily through oil-for-loan deals that have crimped the country's hard currency revenue by requiring oil shipments to be used to service those loans.
MRC