Stalled Aramco IPO sets back deal-making at Motiva

MOSCOW (MRC) -- Saudi Aramco’s delayed initial public offering is shelving major North American expansion plans at its US refining subsidiary Motiva Enterprises LLC, sources said, at a time when its rivals grew their market share, as per Hydrocarbonprocessing.

After dissolving a partnership with Royal Dutch Shell PLC two years ago, Motiva set out to rebuild and boost market share in the Americas. It evaluated deals for LyondellBasell Industries NV's Houston refinery, with the Caribbean government of Curacao, and considered expanding its sole U.S. oil refinery.

But none of those came to pass as the company feared it might pay too much for acquisitions or become too exposed to disruptions by expanding its sole U.S. refinery, the people said. As a result, Motiva has slipped to 11th place from ninth among the top U.S. refiners by capacity since striking out on its own, according to U.S. government data, as other refiners inked deals to take advantage of the shale boom.

"They were very handicapped by the fact that the kingdom was contemplating the IPO,” a refining consultant to Motiva said, speaking on condition of anonymity as the talks were private. “What they told us was ‘until this gets done or resolved, we cannot do anything."

Saudi Aramco did not want Motiva to enter deals that could hamstring its IPO or raise questions about its strategy, leaving Motiva unable to expand, the people said. Plans for the Aramco IPO were shelved last year for the foreseeable future, sources told Reuters in 2018. Saudi Energy Minister Khalid al-Falih said in January the kingdom would still go ahead, and list the company by 2021.

A Motiva executive said the company has not given up on increasing its U.S. processing might. “We don’t comment on anything specifically, but we do want to increase our refining capacity,” said Todd Fredin, the company’s head of supply, trading and logistics. A spokeswoman for Motiva declined to comment on past or potential acquisitions and expansion plans. Saudi Aramco declined to comment.

Vision 2030, the Saudi Crown Prince’s signature economic program designed to lessen the kingdom’s reliance on oil, also undercuts the need for U.S. expansion, said Andrew Lipow, president of refining consulting firm Lipow Oil Associates.

"They are in the process of trying to look toward 2030, and adding assets outside of Saudi Arabia” is not as critical anymore, he said. “A refinery in the United States doesn’t create jobs in Saudi Arabia."

Rivals have used acquisitions and expansion to boost their share of the U.S. market. Marathon Petroleum Corp last year acquired the fifth largest U.S. refiner Andeavor for USD23 billion.
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MOSCOW (MRC) -- Naphtachimie has restarted its ethylene cracker following an unplanned outage, according to Apic-online.

A Polymerupdate source in Europe informed that the company has resumed operations at the cracker on March 18, 2019. The cracker was shut owing to the power failure on March 8, 2019.

Located at Lavera in France, the cracker has a ethylene production capacity of 800,000 mt/year and propylene production capacity of 555,000 mt/year.

As MRC informed earlier, in May 2016, Naphtachimie declared a force majeure on ethylene production from its plants in Lavera, France. The FM was declared owing to an ongoing nationwide strike against proposed labour reforms by the French government.
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MOSCOW (MRC) -- Sika AG said that it is expanding production capacity in Senegal, West Africa, by opening a mortar production facility at its existing factory in Dakar, said Worldofchemicals.

The plant will initially manufacture tile adhesives, grouts, concrete repair and waterproofing mortars and at a later stage cementitious flooring solution.

Two years after the establishment of the new national subsidiary, and one year after opening a concrete admixtures plant, Sika is now starting to produce mortar products in Senegal. With its expansion strategy, Sika aims to further increase its market share in the booming construction market, one of the country's key economic sectors. Senegal has one of the strongest growth rates in sub-Saharan Africa. Its economy grew by 7 percent in the past year. Average growth of 6 percent is forecast for the construction market over the next few years.

"Our growth strategy in Africa has paid off, and we are achieving above-average growth rates. Over the last four years alone, we have increased sales on the African continent by more than 21 percent per year. In West Africa, Senegal is one of the fastest-growing countries with large investment projects in the areas of infrastructure, transport, energy, and oil. We want to position Sika in these major projects and bring the best products, systems, and services to our customers,” said Ivo Schadler, EMEA Regional Manager.
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MOSCOW (MRC) -- Workers at a 400,000 barrel per day refinery will go on strike if Shell does not meet their demands for a pay raise before Thursday night, Dutch labor union FNV, asper Hydrocarbonprocessing.

Workers at Royal Dutch Shell’s Pernis refinery in the Netherlands will determine the shape and timing of possible actions at the beginning of next week, FNV spokesman Egbert Vellenberg said.

As it was written earlier, in the Netherlands, a consortium of world-leading companies comprising Air Liquide, Nouryon (formerly AkzoNobel Specialty Chemicals), Enerkem and the Port of Rotterdam – has announced that Shell will join as a partner in Europe’s first advanced waste-to-chemicals facility in Rotterdam, the Netherlands. Shell, Air Liquide, Nouryon, Enerkem– well, perhaps SANE is the right acronym, and there’s something right in that. Shell will become an equal equity partner in the proposed commercial-scale waste-to-chemicals project, which will be the first of its kind in Europe to make valuable chemicals and biofuels out of non-recyclable waste materials.
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MOSCOW (MRC) -- The Mexican government will invite four companies to bid in a restricted tender to build the new Dos Bocas refinery for state oil company Pemex, reported Hydrocarbonprocessing with reference to Energy Minister Rocio Nahle.

Dos Bocas would be Pemex’s seventh domestic refinery and is intended to help wean Mexico off growing fuel imports, a major campaign promise of President Andres Manuel Lopez Obrador, who took office in December.

Firms, including US-based Bechtel and KBR, Italy’s Eni Saipem, Japan’s Chiyoda Corporation, and Mexico’s ICA Fluor , were mentioned as “proposed companies for the restricted tender” in a Pemex presentation about the refinery from late last year seen by Reuters.

The energy minister added that the names of the companies selected by the government would be made public later on Monday during an event to mark the anniversary of the 1938 nationalization of the country’s oil industry and the birth of Pemex.

Nahle said that the refinery, slated to be built in the Gulf Coast state of Tabasco, has already been granted all required government permits, including for construction.

Lopez Obrador, who favors a more state-centric energy model, has been a sharp critic of the previous government’s constitutional reform that ended Pemex’s decades-long monopoly and allowed private and foreign oil companies to operate exploration and production projects on their own.

The 2019 budget for Petroleos Mexicanos, as Pemex is formally known, calls for spending almost USD2.5 billion on the Dos Bocas refinery, which aims to be able to process 340,000 barrels per day of heavy crude.

That processing capacity would make the new refinery Pemex’s biggest.

Government officials estimate the total cost of the refinery at between USD6 billion and USD8 billion.

As MRC wrote before, in June 2018, Petroleos Mexicanos disclosed the results of the bidding process for the rehabilitation and commissioning works to be carried out on the H-Oil Plant located in the Miguel Hidalgo refinery in Tula, in the state of Hidalgo.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
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