Petrobras suspends asset sales after court decision about privatization - filing

MOSCOW (MRC) -- Brazil’s state-run oil company Petroleo Brasileiro SA said in a securities filing last Tuesday it suspended some asset sales after a Supreme Court decision ruled privatization processes must be approved by the nation’s Congress, reported Reuters.

While evaluating what legal actions to take, Petrobras decided to suspend the sale of its refineries, of the gas pipeline company Transportadora Associada de Gas and also of the Araucaria fertilizer factory.

As MRC wrote previously, in October 2017, Petrobras’s minority stakes in Braskem and Deten Quimica was excluded from Petrobras’s divestment program, according to a government decree published in Brazil’s Official Gazette. The decree prevented Petrobras from immediately selling its minority stake in Braskem, which had been announced last year. A new decree will be required to release the stock sale.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

ExxonMobil, ENI, CNPC to develop and operate two Mozambique LNG trains

MOSCOW (MRC) -- Mozambique Rovuma Venture, a JV of ExxonMobil, Eni and CNPC, has submitted the development plan to the government for the first phase of the Rovuma LNG project, which will produce, liquefy and market natural gas from the Mamba fields located in the Area 4 block offshore Mozambique, as per Eni's press release.

The plan details the proposed design and construction of two liquefied natural gas trains which will each produce 7.6 million tons of LNG per year.

ExxonMobil will lead construction and operation of natural gas liquefaction and related facilities on behalf of the joint venture, and Eni will lead construction and operation of upstream facilities.

As the Rovuma LNG project progresses, every effort will be made to actively build the local workforce and supplier capabilities in Mozambique.

"We are excited to be progressing the Rovuma LNG project, working with the government and leveraging the expertise and capabilities of all of the partners," said Liam Mallon, president of ExxonMobil Development Company.
"The Rovuma LNG Project is moving forward swiftly," said Stefano Maione, Eni’s executive vice-president for the Mozambique Program. "The size of the project makes it not only an important investment in the country, but also supports economic growth and opens new opportunities for Mozambicans."

A final investment decision by the Area 4 joint venture parties is scheduled in 2019, with LNG production expected to commence in 2024.

Marketing activities are progressing, with negotiations on sales and purchase agreements underway, targeting completion in parallel with the development plan approval process.

Rovuma LNG is operated by Mozambique Rovuma Venture S.p.A., an incorporated joint venture owned by ExxonMobil, Eni and CNPC, which holds a 70 percent interest in the Area 4 concession alongside its partners Galp, KOGAS and Empresa Nacional de Hidrocarbonetos E.P. (ENH), each of which hold a 10 percent interest.
MRC

Kumho Petrochemical increasing capacity of synthetic rubber production in Ulsan

MOSCOW (MRC) -- Kumho Petrochemical has begun adding lines for acrylonitrile butadiene latex (NB latex) at its facility in Ulsan, South Korea, in order to increase synthetic rubber production capacity to 550,000 t/y, reported Apic-online with reference to a local source citing the company.

The expansion, scheduled for completion in March 2019, will help solidify the company's position as the "world's number one NB latex maker," said the report quoting a company official.

As MRC informed before, in H1 2016, Kumho P&B Chemicals (KPB) completed its phenol, acetone and cumene capacity expansion. KPB is one of the largest producers of benzene derivatives such as phenol, bisphenol-A (BPA), acetone and cumene in South Korea.

Before the expansion, the company operated two phenol/acetone units in Yeosu that were able to produce 380,000 mt/year of phenol 450,000 mt/year of BPA, 235,000 mt/year of acetone and 430,000 mt/year of cumene. With the completion of the capacity expansion, the company had added 300,000 mt/year of phenol, 470,000 mt/year of cumene and 185,000 mt/year of acetone by June 2016.

KPB is an offshore joint venture created by the joint investment of South Korea’s Kumho Petrochemical and Japan’s Nippon Steel Chemical Company in 1976.
MRC

Angarsk Polymer Plant shut its PE production

MOSCOW (MRC) -- Angarsk Polymer Plant (part of Rosneft) has shut down its low density polyethylene (LDPE) production for a scheduled maintenance, according to the ICIS-MRC Price report.

The plant's customers said Angarsk Polymer Plant took off-stream its LDPE production capacities for the scheduled turnaround on 2 July. The outage will not be long and will last approximately until 10 August. The plant's annual production capacity is 80,000 tonnes.

This is the second shutdown for maintenance at Russian LDPE plants in July. As it was reported earlier, Gazprom neftekhim Salavat shut down its LDPE production for a turnaround on 1 July. The outage lasted for 30 days. The plant's annual production capacity is 45,000 tonnes.

Angarsk Polymer Plant (controlled by Rosneft through OOO Neft-Aktiv) is the only petrochemical full-cycle plant in Eastern Siberia. The bulk of the produced ethylene is used by the plant for the production of LDPE, styrene monomer (SM) and polystyrene (PS). Straight-run gasoline and hydrocarbon gases, mainly produced by OAO Angarskaya NHK, are the feedstocks for the plant.
MRC

Viability of Argentine biodiesel industry hinges on EU sanctions

MOSCOW (MRC) -- Argentina’s biodiesel industry is at risk after the European Union threatened to impose tariffs on imports from the South American country, following accusations that the nation unfairly subsidized its biofuel sector, reported Reuters.

The threat of tariffs has halted Argentine biofuel sales to the EU, industry sources told Reuters, adding that imposing a tax would leave 85 percent of the country’s biofuel exports without a viable market and may force suppliers to close shop.

Boasting major producers like Cargill and Bunge, Argentina is a leader in biodiesel exports. But the sector has suffered trade sanctions in the past after being accused of illegally benefiting from subsidized soybeans.

"It is very likely that Europe could apply anti-subsidy sanctions in two or three months. In that scenario, there is a high probability that production lines would stop," said Claudio Molina, Executive Director of the Argentina Association of Biofuels and Hydrogen.

The industry had previously avoided EU sanctions by redirecting its biodiesel shipments to other markets. But the sector, which recorded 1.2 billion dollars in revenue last year, can no longer redirect exports to the United States.

In late 2017, Washington imposed tariffs and stopped Argentine biodiesel imports after similar accusations of subsidies and “dumping."

The EU’s threat has already put a damper on sales to Europe, trimming Argentina’s biodiesel exports to no more than 700,000 tons this year, down from 1.65 million tons shipped in 2017, according to Argentina’s Chamber of Biofuels (CARBIO).

"Europe is a threat to us," CARBIO President Luis Zubizarreta said, adding that biodiesel plants can barely operate without the European market.

The EU’s investigation into the alleged subsidies began four months after it lost a case at the World Trade Organization in which it accused Argentina of dumping. Following the WTO ruling, the EU revoked duties that had blocked Argentine biodiesel imports to Europe for three years.

"It’s a bad situation since the chances that we will recover those external markets is low," said an industry source who asked not to be named.

In May, the Argentine government raised export taxes on biodiesel to 15 percent from 8 percent. The increase may also prove to hurt the industry, according to Zubizarreta.

The investigation could drag on for over a year, and sources say the EU is expected to levy provisional rates on biodiesel in the second half of 2018, contributing to a pessimistic outlook for the industry. Molina believes increasing domestic consumption may be the industry’s best option.

Argentine law currently mandates fuel providers use a 10 percent mixture of biodiesel in all diesel fuel sold to the public. The country used 1.17 million tons of biofuel last year, according to government data.

Increasing that mix to 12 percent while also using more biodiesel in power plants, public transport, and agricultural machinery could cover up to half of Argentina’s annual production capabilities of 4.4 million tonnes within three years, Molina said.

However, plans to raise mix quotas for publicly consumed biodiesel do not yet exist, a government source told Reuters.

"Sustaining the industry with an internal market of 1.1 million tonnes is practically impossible. If we do not have new export markets, we are just around the corner from starting to shut down production lines," said a source at a biodiesel exporting firm who wished to remain anonymous.
MRC