OMV pays USD578m for Shell upstream business in New Zealand

MOSCOW (MRC) -- Royal Dutch Shell Plc is selling its upstream assets in New Zealand to Austria’s OMV AG (OMVV.VI) for USD578 million, as per Reuters.

“Today’s announcement is another step towards reshaping and simplifying our company,” Shell’s Integrated Gas & New Energies Director Maarten Wetselaar said.

Thursday’s agreement includes the sale of Maui, Pohokura and Tank Farms. After deal closure, Shell Taranaki and Shell New Zealand employees will become a part of OMV New Zealand, Shell said.

“This acquisition is an important step to develop Australasia into a core region in line with our new strategy,” OMV CEO Rainer Seele said.

Shell has sold or agreed to sell over USD25 billion of assets as part of a three-year program to dispose of USD30 billion by the end of 2018, following the acquisition of BG Group in 2016.

Shell sold its stake in Kapuni gas field, New Zealand’s second-largest, for an undisclosed price in 2017.
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MOSCOW (MRC) -- Seven firms have submitted bids to buy a majority stake in Zambia's sole 24,000 barrel per day Indeni Petroleum Refinery, an executive at the agency handling the bidding said, as per Reuters.

Zambia Development Agency (ZDA) procurement specialist Mwila Kapita said Glencore Energy UK Ltd, Vitol SA, China Petroleum Technology and Development Corporation and Philia Trading were among the firms that had submitted bids.

The others are Joint Stock Company Global Security of Russia, Sahara Energy Resources Limited and a consortium of Beijing Huiersanji Green Chem Company Limited and AVIC International Holding.

Zambia is looking for a strategic partner to work with Indeni Petroleum Refinery, built in 1973. The oil company is currently 100 percent owned by the state-controlled Industrial Development Corporation (IDC) Limited.
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MOSCOW (MRC) - Traders are storing gasoline on tankers off Europe's coast as they struggle to contain a steady rise in supplies since the start of the year that has weighed on prices, as per Reuters.

The unusual move reflects a recent weakening in the margin refiners make from converting crude oil into the road fuel as stocks in the Amsterdam-Rotterdam-Antwerp refining and storage hub in recent weeks reached their highest level since July 2016, according to data from PJK International.

At least three 90,000 tonne tankers have been booked in recent weeks to store gasoline for up to 60 days off the Dutch coasts - Maersk Producer, Phoenix Dream and Maersk Promise, according to traders and shipping data.

Gunvor had booked the three cargoes, the sources said. Traders said the drop in current gasoline prices had tipped the northwest European market into a contango that made it worthwhile to put cargoes of summer-grade gasoline into storage.

Medium-range tanker freight rates have also fallen, making it cheaper to book these ships, ship brokers said. The stored fuel is believed to be summer-grade gasoline which will be kept until demand revives in the United States, which switches from winter-grade on May 1, traders said.
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MOSCOW (MRC) -- MOL Group (Budapest, Hungary) and JSR Corp. inaugurated a new synthetic rubber plant in Tiszaujvaros, Hungary, which will produce 60,000 metric tons per year (m.t./yr) of solution polymerization styrene-butadiene rubber (S-SBR), as per Chemengonline.

The most important feedstock of S-SBR is butadiene, which is produced by MOL at an adjacent plant commissioned in 2015. S-SBR is highly valued worldwide as a raw material for fuel-efficient tires.

MOL and JSR Corporation reached an agreement in 2013 to establish a joint venture with 51% held by JSR and 49% by MOL. The construction of the plant started in 2015.

"MOL has further extended its petrochemical value chain with one of the world’s most innovative products. We are proud that year after year MOL is able to produce more specialized and more profitable products. There is a lot of work ahead of us, but we are well on track to reach our strategic goal and become a leading chemical company in Central Eastern Europe by 2030," said Zsolt Hernadi, Chairman-CEO of MOL Group.
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MOSCOW (MRC) -- Saudi Aramco, the world’s largest producer of oil, is seeking majority ownership of the proposed 3-lakh-crore refinery-cum-petrochemical complex on the Indian west coast, marketing rights over entire fuel and petrochemicals produced at the complex and an assurance the refinery would mostly use Saudi oil, multiple people familiar with the matter said, as per Hydrocarbonprocessing.

Saudi Aramco is engaged in an intense negotiation with Indian state firms over its participation in the 60 million tonnes a year refinery that is proposed to be built in the Ratnagiri district of Maharashtra.

Indian Oil Corporation currently owns 50% in the world’s biggest greenfield refinery project, with the balance stake being equally split between Bharat Petroleum and Hindustan Petroleum.

The state-run firms are seeking a strategic investor and have been talking to Aramco for several months.

"They have just drawn the starting line. Only after the negotiations have concluded, you would know what Aramco has finally got," said a person familiar with the negotiations between state firms and Aramco.

"Giving Aramco the majority stake is just out of the question. If we can’t have the majority stake in our own project, on our own land, then where," said one person with knowledge of the negotiations. "The demand on sourcing of crude can be considered since India already uses Saudi oil a lot but the refinery can’t be solely dependent on oil from just one country."

Another proposal seeking rights to market fuel and petrochemicals produced at the proposed complex will also go through hard negotiations, people said.

Saudi Aramco didn’t comment on the details of the negotiation.

But in an emailed response to ET’s query, it said: "Saudi Aramco views India as an important strategic market and is a reliable and leading supplier of crude oil to India. We are looking at various opportunities in India which includes refining. We are in discussions with Indian counterparties in these potential ventures and hope to progress our cooperation and partnership further."

India, the third-largest oil importer in the world, presents a key market for Aramco, the biggest exporter of crude in the world. Of late, Saudi Arabia’s hold in the Indian market has weakened though, with Iraq having overtaken it to become India’s top crude oil supplier in 2017-18.Besides, the collapse of crude oil since mid-2014 and a growing chorus that the world will never run out of oil has shifted the balance of power towards heavy consumers like India and China, and intensified competition among oil producers.

This also prompted Russia’s Rosneft, a competitor for Aramco in global market, to buy a 20 MT refinery in India last year in order to secure a reliable consumer base.

Aramco, which is planning a public offer and aiming for a USD2 trillion valuation, is hoping to obtain a slice of rapidly expanding Indian refining and petrochemicals business.

As MRC wrote before, in November 2017, Saudi Aramco and SABIC signed a memorandum of understanding (MoU) to develop a fully integrated crude oil to chemicals (COTC) complex in the Kingdom of Saudi Arabia, which governs the execution of the front-end engineering design (FEED) before a final investment decision is made. The COTC complex is expected to process 400,000 bpd of crude oil, which will produce approximately 9 MMt of chemicals and base oils annually and is expected to start operations in 2025.

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.
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