In Aramco IPO, China talks crucial for choice of listing venue

MOSCOW (MRC) -- Saudi Arabia wants to complete talks with strategic investors such as China, Japan and South Korea before deciding where to list shares in state oil company Saudi Aramco, reported Reuters with reference to three sources familiar with the discussions.

The decision shows the initial public offering (IPO), which could be the biggest in history, is becoming an increasingly difficult balancing act for Riyadh.

Saudi officials have said the government plans to sell up to 5 percent of Aramco shares on one or more foreign exchanges in addition to Riyadh.

U.S. President Donald Trump has urged Riyadh to list Aramco on the New York stock exchange, and British Prime Minister Theresa May has called for it to be in London. But Riyadh also has to take into account views over where the shares should be listed from the countries expected to be Aramco's biggest cornerstone investors - those who commit in advance to invest a fixed amount of money or for a fixed number of shares.

Sources close to the IPO said decisions must be taken by March if the IPO is to be carried out in October or November, and otherwise could be delayed until a year later.

"Everyone is talking about venues for the listing and why they haven't been chosen yet. Indeed, you have Trump encouraging Aramco to list in New York and May encouraging to list in London. But that is only the tip of the iceberg," said a senior Saudi source close to the IPO process. "Aramco is also holding talks with cornerstone investors, who often express their views on where Aramco should list. And hence Aramco and the Saudi government need to think how to get the best value out of all this, how to get the best strategic arrangements out of this."

Asked whether a decision on where to list Aramco would be made only when talks with strategic investors are over, Aramco told Reuters: "This is speculative and we decline to comment."

Asia has become the biggest and most important buyer of crude oil from Aramco and the giant oil firm wants to secure Asian markets for the long-term as it faces competition from suppliers such as Russia and the United States. The sources said some cornerstone investors were keen to see Aramco listed on Asian and Saudi exchanges rather than in New York or London.

"Bankers have been emphasizing to Aramco the importance of securing cornerstone investors first before moving forward with a decision on the listing. Asian cornerstone investors are most logical as that is where the oil flows to," a Gulf-based banker familiar with the IPO preparations said.

Aramco's IPO is part of a drive by the Saudi government to reduce the economy's reliance on oil and transform the kingdom.

Crown Prince Mohammed bin Salman, who unveiled the Vision 2030 reform plan in April 2016, has suggested Aramco could be valued at as much as USD2 trillion.

The IPO could raise over USD100 billion if Aramco goes ahead with plans to list 5 percent and cornerstone investors could buy a big part of it, sources told Reuters. "If the IPO is going to be done in the second half of the year, then the government really does need to have a decision... They will have to get the prospectus out by the beginning of the second quarter," said a second senior source familiar with the IPO preparations. "If you are going to do it, you might as well do it now," the source said, referring to a rise in oil prices to USD70 per barrel.

Prices have doubled from their lows of 2015-2016 as Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, and non-OPEC Russia reduced output to help prop up prices in 2017-2018.

Washington has been a longstanding political ally of Riyadh and New York offers the best liquidity of all exchanges but has stricter disclosure requirements than the London or Hong Kong exchanges.

Saudi Arabia is also considering listing Aramco shares on the local stock exchange, Tadawul, but there are concerns that this could damage the market.

The second source said international exchanges such as such as London, New York and Hong Kong were still being analysed but options also included making Hong Kong the only listing abroad, or listing on Hong Kong plus private placements with cornerstone investors.

A third industry source familiar with the IPO said Riyadh wanted a decision taken by March on where to list the shares so that Aramco could be listed on at least the local bourse by October.

A fourth industry source said the official announcement may not come until October, when Saudi Arabia is due to host a major investment conference.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) - Exxon Mobil Corp said on Friday that it expects global oil demand to drop sharply by 2040 if regulations aimed at limiting the impact of greenhouse gas emissions on climate are fully implemented, as per Hydrocarbonprocessing.

Under this scenario, Exxon projected world oil consumption will drop 0.4 percent annually to 2040 to about 78 million barrels per day (bpd). That is about 25 percent below current levels, which the U.S. Energy Information Administration puts at 98 million bpd.

The findings were contained in a report produced after Exxon's shareholders supported a climate-impact resolution last year and Exxon's board approved a plan to analyze the effects. Exxon's climate-impact report comes roughly three years after almost 200 nations met in Paris to set a goal of limiting the rise in the world's average surface temperatures. President Donald Trump has since pulled the United States out of the Paris climate accord, and it was unclear whether Paris accord policies would be fully implemented around the world.

The study added weight to arguments that laws and regulations to limit the rise in global temperatures to below 2 degrees Celsius (3.6 degrees Fahrenheit) from pre-industrial levels will succeed in curbing fossil fuel consumption.

But Exxon stopped short of laying out how efforts to limit carbon emissions could impact its business, data long sought by some shareholders. In a separate report published on Friday that did not take into account climate legislation, Exxon forecast population growth will drive oil demand higher by about 20 percent by 2040.

Exxon's study saw demand for natural gas, considered a cleaner-burning fuel than oil, growing 0.5 percent per year to about 445 billion cubic feet per day under the same scenario. Demand for power generated by solar panels, wind turbines and other renewable sources is expected to rise 4.5 percent annually through 2040 under this scenario, Exxon said.

The report followed years of pressure by investors and environmental activists urging the company to describe the potential impact of a warming climate on its operations. Last year, their climate-impact resolution was backed by 62 percent of shares voted at Exxon's annual meeting.
MRC

MOSCOW (MRC) -- Maire Tecnimont S.p.A. has announced that its main subsidiaries Tecnimont S.p.A. and KT-Kinetics Technology S.p.A. - have signed with the Client SOCAR (State Oil Company of Azerbaijan Republic) Heydar Aliyev Baku Oil Refineryan EPC contract (Engineering, Procurement and Construction)as an important part of the execution of the Modernization and Reconstruction works for the Heydar Aliyev Baku Oil Refinery, in Azerbaijan, as per Hydrocarbonprocessing.

Overall contract value equals to approximately USD 800 million.

The scope of the project entails the installation of several new grass root process units, the relevant utilities and storage with the final aim to upgrade the refinery facilities to be capable of processing 7.5 MMTPA of crude oil, while meeting quantity and quality requirements of products both to feed Azerikimya revamped petrochemical plant and to produce Euro V quality automotive transportation fuels. Among the new process units in the scope it is worth mentioning a Naphtha Splitter, a Diesel Hydrotreater Unit, an Isomerization Unit, a Hydrogen Production Unit, two PSA Units, a C4 Hydrogenation Unit, a MTBE Unit, a Sour Water Stripper Unit with Sulphur Recovery Unit.

Process technologies involved are coming from the major refining Licensors including KT-Kinetics Technology, part of Maire Tecnimont Group.

The project is expected to be completed within 41 months from the signing date.

The project is a major milestone for Maire Tecnimont Group’s Oil & Gas business since it represents a flagship award in downstream refining. Moreover, it confirms the orientation of the Group to leverage its distinctive competencies, technological know-how and synergies between its EPC contractors.

Pierroberto Folgiero, Maire Tecnimont Chief Executive Officer, commented: "After our two strategic petrochemicals projects in Azerbaijan, this contract enables Maire Tecnimont Group to consolidate the fruitful relation with SOCAR also in the refining business, supporting the strategy of integration with the petrochemical business. We are truly honored to keep on supporting such a prestigious client in the development of the Country’s hydrocarbons downstream sector."

Rovnag Abdullayev, President of SOCAR, said: "Today we made one more step toward the production of high-quality diesel, gasoline and other fuels of Euro-5 standards. Maire Tecnimont is one of the global leading companies. Cooperating with the world’s leading companies will enable us to supply high-quality fuel to Azerbaijan’s domestic market and increase the export revenues in the years ahead."

As MRC informed before, Italian Maire Technimont and Azerbaijan’s SOCAR-Polymer signed an EUR350 mln-agreement on construction of Sumgayit polypropylene (PP) plant at the Azerbaijan-Italy business meeting on 15 April, 2015.

SOCAR, which is keen on expanding operations in the retail oil products market abroad, is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan

MOSCOW (MRC) -- Some traders increased prices for polypropylene (PP) in mid January in the Russian market. Other suppliers also announced roubles (Rb) 2,000/tonne increase in PP prices from 1 February, as per ICIS-MRC Price Report.

PP prices have rapidly increased in the foreign markets since January, which affected the Russian market. SIBUR, which sells PP from its four subsidiaries, announced a 2,000/tonne increase in homopolymer PP prices since mid January. Other Russian producers have announced similar increases in PP prices, effective from 1 February.

PP demand was low due in January on the back of the seasonal factor, and this circumstance limited the growth of prices in the market. The first days of February also do not show an increase in demand, and new prices for polypropylene are taken quite seriously by converters. Moreover, there is a small excess of supply in the market, in particular homopolymer PP.

Some suppliers announced February price offers for Russian homopolymer PP raffia in the range of Rb91,000-93,500/tonne CPT Moscow, including VAT. The low end for homopolymer PP was at Rb92,000/tonne CPT Moscow, including VAT, on average up by Rb2,000/tonne from the January level.

Supply of extrusion PP block copolymers and injection moulding PP random copolymers remained tight in the market of copolymer propylene market. Some producers planned to increase the supply of the extrusion PP block copolymers by the middle of February in the domestic market, while the situation with injection moulding PP random copolymers will improve not earlier than in March.
MRC

MOSCOW (MRC) -- With less than a month to go until Opening Ceremony, the PyeongChang Organizing Committee for the 2018 Olympic and Paralympic Winter Games is gearing up to host the world in February 2018 for the Olympic Winter Games PyeongChang 2018. A range of technology solutions from The Dow Chemical Company were used in several venues, including Modular Houses and the Olympic Village, according to GV.

Dow’s solutions were applied to help reduce energy usage while making accommodations comfortable for athletes, attendees, media and drivers.

With average February temperatures just above freezing, effective insulation is essential in PyeongChang. Polyisocyanurate (PIR) panels incorporating Dow Papi polymeric MDI are used to insulate the walls and roofs of the Modular Houses that will accommodate drivers, who will be responsible for transporting people around the Olympic host city. The Modular Houses are built from manufactured panels consisting of boards, insulation and foam. Constructed within hours, rather than days, for less than half the usual cost, these energy-efficient structures help protect the environment as they require roughly half the energy compared to standard EPS (expanded polystyrene), and are 98 % recyclable, said Dow.

Finally, the Modular Houses have been weather-sealed with durable, fire-resistant Dow Corning 1001 Perimeter Silicone Sealant, which is inherently impervious to damaging ultraviolet (UV) light from sun, and, when cured, is stable at temperatures from -40 C (-104 F) to 150 C (302 F).

"We’ve worked with South Korean partners such as SY Panel to create the next generation of cost-effective, sustainable Modular Houses using state-of-the-art insulation technology," said Phillip Oh, Asia-Pacific commercial director for Dow Olympic & Sports Solutions. "Here at PyeongChang 2018, it is making a big impact on the built environment."

Housing in the Olympic Village is also weather-sealed using Dow Corning 1001 Perimeter Silicone Sealant. The finishing on the interior walls will combine three different Dow technologies, to create a wall putty that leaves a smooth, durable wall surface ready for painting: Acrysol rheology modifiers to help create a high-performance rheology profile; water-based Primal acrylic low VOC and low odor emulsion polymers to offer water whitening resistance, improved washability, and enhanced film formation; and Walocel cellulosic will facilitate a variety of desired performance characteristics, including good adhesion, extended durability and open time and lower maintenance costs, said the company.

In addition, Dow said that it is also contributing to a more comfortable sleeping environment: Some of the mattresses in the Olympic Village employ Dow Voranol technology in the slab foam to help the athletes get the quantity, and quality, of sleep that they need. Outside of the Olympic Village, Voranol technology is also employed in a number of mattresses in hotels across the host city.

"By collaborating with Alfome we are able to help offer athletes the foundation for a good night’s rest by contributing to a more comfortable sleeping environment," said Oh. "Voranol technology helps improve foam shape upon compression to create comfortable, breathable, flexible mattresses that stay cool to the touch and with reduced odor and emissions."

Dow is a subsidiary of DowDuPont Inc., a holding company comprised of Dow and DuPont with the intent to form three independent, publicly traded companies in agriculture, materials science and speciality sectors.

We remind that, as MRC wrote previously, as part of DowDuPont Materials Science Division’s ongoing commitment to provide customers with greater access to expertise and products, the company announced in January 2018 that the technologies of Dow Corning Polyurethane Additives (PUA) will be incorporated into the Dow Polyurethanes portfolio under the Vorasurf polyurethane additives brand name. Vorasurf polyurethane additives will serve the ComfortScience, InsulationScience and DurableScience markets of Dow Polyurethanes, helping to meet growing demand for products like bedding, spray foam and footwear.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC