South African watchdog approves Glencore bid for Chevron assets

MOSCOW (MRC) -- South Africa’s competition watchdog approved Glencore’sroughly USD900 million bid for Chevron’s local and Botswana assets on Thursday, bolstering its chances of scuppering a rival bid from China’s Sinopec, reported Reuters.

Chevron agreed last year to sell its stake to state-owned Sinopec before miner and commodities trader Glencore swooped in after reaching a deal with minority shareholders, who backed it and exercised preemptive rights on the sale.

At stake is a 75 percent share in Chevron’s South African subsidiary that runs a 100,000-barrels-per-day oil refinery in Cape Town, a lubricants plant in Durban and 820 petrol stations and other oil storage facilities.

The sale also includes 220 convenience stores across South Africa and Botswana.

For Glencore, the deal would secure the trader’s first refining asset since it ventured into downstream investments. For Sinopec, it would mark its second major refinery investment as the company looks to expand overseas amid a saturated home market.

Both deals have now been given the green light from the Competition Commission subject to several conditions that include the preservation of jobs after the deal.

It is now up to the Competition Tribunal, which makes the final ruling on deals, to decide whether to accept the Commission’s recommendations. The Tribunal has already approved Sinopec’s bid.

As MRC informed earlier, in July 2016, USD36.8bn expansion of the Tengiz oilfield in Kazakhstan, the largest investment by private sector oil companies this decade, was given the go-ahead by Chevron of the US, bucking the trend of delays and cancellations resulting from the slump in crude prices since mid-2014.

Chevron Corporation is an American multinational energy corporation. One of the successor companies of Standard Oil, it is headquartered in San Ramon, California, and active in more than 180 countries. Chevron is engaged in every aspect of the oil, natural gas, and geothermal energy industries, including hydrocarbon exploration and production; refining, marketing and transport; chemicals manufacturing and sales; and power generation.
MRC

MOSCOW (MRC) -- Total has accepted an offer from INEOS Styrolution, the leading global styrenics supplier, to acquire its polystyrene business in China, as per the company's press release.

It includes in particular two facilities with a production capacity of 200,000 tons per year each, located in Ningbo, Zhejiang Province, and in Foshan, Guangdong Province.

In a highly competitive polystyrene market, Total considered it did not have the required critical mass in China, unlike its positions in Europe and the United States.

"The sale is in line with our active portfolio management strategy" commented Bernard Pinatel, President, Refining & Chemicals at Total. "Our polystyrene business will be now focused on Europe and North America, two markets where we are the No. 2."

INEOS Styrolution has made clear commitments to maintain the business and jobs and meet commitments to customers. The transaction is subject to the approval of the relevant regulatory authorities.

The Ningbo plant produces 200,000 tons of polystyrene a year and has 54 employees. It also includes a unit that manufactures polypropylene compounds for automotive parts. After the closing of the transaction, the polypropylene compounds production will be exclusively dedicated to Total.

The Foshan plant produces 200,000 tons of polystyrene a year and has 86 employees.
MRC

MOSCOW (MRC) -- A slight shortage of natural pipe high density polyethylene (HDPE) was seen in August in the Russian market. The supply will became tighter in September, producers will increase prices further, according to the ICIS-MRC Price Report.

Tight supply of pipe HDPE in the Russian market began to be felt in the first month of the summer and continued until August. During the summer months, there was a period of active growth in polyethylene prices. The availability of raw materials in the market will deteriorate sharply in September due to plans of key suppliers of this polyethylene.

Negotiations on the September prices of Russian pipe HDPE have begun this week, market participants said, the price rise of Rb10,000/tonne is being discussed.

A sharp deterioration in the supply of pipe polyethylene in the Russian market in September will be a result of several factors. First, the key supplier of black PE100 - Kazanorgsintez will shut its capacity for almost three-week maintenance works from 25 September. Secondly, the customers of the enterprise said, the key supplier of natural pipe HDPE - Gazprom Neftekhim Salavat - shifted to the production of injection moulded HDPE in the last days of August, and will return to the production of pipe PE only in October. It is also very likely that Stavrolen will not produce pipe polyethylene in September.

The situation can be mitigated at the end of September-October by Nizhnekamskneftekhim, which plans to return to the production of HDPE, including pipe, from 20 September.

So, the price of natural pipe HDPE in the Russian market grew to Rb113,000-114,000/tonne FCA, including VAT.
Prices of black PE 100 exceeded Rb114,000/tonne CPT Moscow, including VAT. Negotiations on September deliveries of black PE100 started this week, negotiators said that suppliers intend to achieve a price increase of Rb10,000/tonne in comparison with the level of August.
MRC

MOSCOW (MRC) - China’s independent refiners have ramped up their foreign oil buying after returning from prolonged summer maintenance to gear up for rising winter fuel demand, a sign that the financial pain from taxes and higher crude prices have ebbed for now, as per Hydrocarbonprocessing.

The pick-up in imports by private refiners often called "teapots", has boosted the physical prices of Middle Eastern and Russian oil to their highest in months.

Their return to the market also comes as margins have improved after their extended shutdowns helped drain a glut of diesel and gasoline, boosting domestic fuel prices.

The independents imported 6 million tonnes, or 1.4 MMbpd of crude in August, up 40 percent from July and 10 percent higher from the same period last year, Thomson Reuters Oil Research and Forecasts data showed. Their July purchases were the second-lowest on record for data going back to October 2016, as refiners shut or suspended operations due to a toxic mix of sinking diesel demand, higher crude prices and new tax rules.

The calculation does not include purchases from large private refiners Hengli Petrochemical and Rongsheng Group. The teapots account for about one-fifth of the nearly 9 MMbpd of crude oil imported into China, the world’s biggest oil importer.

"Our bookings of heavy crude increased in August and September as we came back from a 20-day-long maintenance in July," said a manager with a Dongying-based independent refiner who declined to be identified as he is not authorized to speak to the media.

"Margins have been negative for a while, but we finally booked profit in August," he said, adding that higher refined products prices encouraged more refineries to return from maintenance.

Sustained buying from China’s independents will add to global demand at the same time there are looming supply disruptions expected from major producers such as Venezuela and Iran. The surge in demand should boost benchmark futures prices. It will also allay worries about weaker demand as China’s economic growth has stumbled.

"Crude demand in September will further pick up from August because independents are going to ramp up for winter production in the fourth quarter," said Zhou Guoxia, an analyst with oil consultancy JLC, adding that the industry has been haunted by tight credit and more scrutiny on their tax practices.
MRC

MOSCOW (MRC) -- Idemitsu Kosan Co has taken off-stream its styrene monomer (SM) plant for a maintenance turnaround, as per Apic-online.

A Polymerupdate source in Japan informed that the company has commenced turnaround at the plant on August 24, 2018. The shutdown is likely to last for around five weeks.

Located in Tokuyama, Japan, the SM plant has a production capacity of 340,000 mt/year.

As MRC wrote previously, Japan's Idemitsu Kosan shut its naphtha cracker for a maintenance turnaround in Japan from September 20, 2017, to end-October 2017. Located at Chiba in Japan, the cracker has an ethylene production capacity of 375,000 mt/year.

Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC