Refinery in Turkey at full capacity in May, adding to Urals shortage

MOSCOW (MRC) -- Azerbaijan’s state-owned SOCAR plans to reach full oil refining capacity of 200,000 barrels per day at its Turkish STAR plant in May, three industry sources said, adding to shortages of Russian Urals crude in southern Europe, said Hydrocarbonprocessing.

STAR, SOCAR’s $6 billion Turkish oil refinery launched last year, can process Russia’s flagship Urals blend, Iraqi Kirkuk and similar grades but has only bought Russian crude so far, according to industry sources and Refinitiv Eikon data.

"STAR is working in a test mode so far, in April we will supply it with the same amount of oil as in March,” a source in SOCAR Turkey told Reuters. “Yet in May, the plant will start processing oil at its full capacity."

According to data from Refinitiv Eikon and trading sources, STAR processed around 700,000 tonnes of oil, or 166,000 barrels per day, in March. A second source, familiar with the plant’s plans, confirmed STAR is due to process 200,000 bpd next month.

The SOCAR Turkey source said STAR planned to continue processing solely Urals in the coming months, as in the past. This means that STAR alone will consume almost a half of the Urals grade offered in the Mediterranean, Reuters calculations showed.

Urals differentials in the Mediterranean have traded at a premium to dated Brent in January-February and reached the highest premium since 2013 earlier this year due to limited exports of the grade and a shortage of sour grades due to a lack of Iranian crude because of sanctions.

And as the sanctions waivers by the United States on Venezuelan oil sales expire later in April, demand for Urals, coupled with the need for more volumes at STAR, is going to tighten Russia’s oil supply in southern Europe, traders say.

The SOCAR Turkey source said thus far, the company regards Urals price as acceptable but if it rises any further, it may consider buying other oil grades. SOCAR did not reply to a Reuters request for a comment.
MRC

MOSCOW (MRC) -- ExxonMobil said it made a new oil discovery offshore Guyana at the Yellowtail-1 well, marking the 13th discovery on the Stabroek Block, reported Reuters.

The discovery adds to the previously announced estimated recoverable resource of approximately 5.5 billion oil-equivalent barrels on the Stabroek Block. Yellowtail-1 is the fifth discovery in the Turbot area, which ExxonMobil expects to become a major development hub.

"Similar to the Liza area, successive discoveries in the Turbot area have continuously grown its shared value," said Mike Cousins, senior vice president of ExxonMobil Exploration and New Ventures. "Our success here can be attributed to our industry-leading upstream capabilities, the strength of our partnerships and our ongoing commitment to growing Guyana’s offshore potential."

Yellowtail-1 encountered approximately 292 feet (89 meters) of high-quality oil bearing sandstone reservoir and was drilled to a depth of 18,445 feet (5,622 meters) in 6,046 feet (1,843 meters) of water. The well is located approximately 6 miles (10 kilometers) northwest of the Tilapia discovery. The Noble Tom Madden began drilling the ellowtail well on March 27. It will next drill the Hammerhead-2 well.

Exploration and development activities continue at other locations on the Stabroek Block. The Stena Carron is currently completing a well test at the Longtail-1 discovery and upon completion will next drill the Hammerhead-3 well. Later in 2019, the Stena Carron will drill a second well at the Ranger discovery. The Noble Bob Douglas drillship is currently completing development drilling operations for the Liza Phase 1 development. ExxonMobil is also evaluating plans to add another exploration drillship, bringing the number of drillships offshore Guyana to four.

ExxonMobil has previously said there is potential for at least five floating production, storage and offloading (FPSO) vessels on the Stabroek Block producing more than 750,000 barrels of oil per day by 2025. Startup of the Liza Phase 1 development is on track to begin by the first quarter of 2020 and will produce up to 120,000 barrels of oil per day utilizing the Liza Destiny FPSO, which is expected to arrive in country in the third quarter.

Liza Phase 2 is expected to startup by mid-2022. A final investment decision is expected soon subject to government and regulatory approvals. Upon approval, the project plans to use the Liza Unity FPSO to produce up to 220,000 barrels per day. Sanctioning of a third development, Payara, is also expected in 2019, with startup projected for 2023.

The Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 percent interest.

As MRC informed before, in October 2017, ExxonMobil Chemical Company commenced production on the first of two new 650,000 tons-per-year high-performance polyethylene (PE) lines at its plastics plant in Mont Belvieu, Texas. The full project, part of the company’s multi-billion dollar expansion project in the Baytown area and ExxonMobil’s broader Growing the Gulf expansion initiative, will increase the plant’s polyethylene capacity by approximately 1.3 million tons per year.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) - Imports of suspension polyvinyl chloride (SPVC) into Ukraine decreased by 44% in the first three months of this year, compared to the same period in 2018 and reached about 11,600 tonnes. Also during the period under review, export sales of Ukrainian PVC decreased, according to MRC DataScope.

Last month's SPVC imports to the Ukrainian market dropped to 3,700 tonnes from 4,100 tonnes in February, with US resin accounting for the main decrease. Overall SPVC imports reached 11,600 tonnes in January-March 2019, compared to 20,500 tonnes a year earlier. A temporary decrease in the capacity utilisation of Karpatneftekhim due to a fire in ethylene production did not lead to an increase in import volumes. At the same time, the reduction in production volumes led to a decrease in export sales by 2%.

Structure of PVC imports into Ukraine over the reported period was as follows.
Last month's SPVC imports to the Ukrainian market dropped to 3,700 tonnes from 4,100 tonnes in February, with US resin accounting for the main decrease. Overall SPVC imports reached 11,600 tonnes in January-March 2019, compared to 20,500 tonnes a year earlier.

A temporary decrease in the capacity utilisation of Karpatneftekhim due to a fire in ethylene production did not lead to an increase in import volumes. At the same time, the reduction in production volumes led to a decrease in export sales by 2%.
MRC

MOSCOW (MRC) -- Saudi Aramco, the world’s largest crude oil producer, is in "serious discussions" to acquire up to a 25% stake in Reliance Industries’ refining and petrochemicals businesses, reported Reuters with reference to the Times of India.

A minority stake sale could fetch around USD10 billion to USD15 billion, valuing the Indian company's refining and petrochemicals businesses at around USD55 billion to 60 billion, the report said.

The agreement on valuation could be reached around June, the Indian newspaper reported, citing people with knowledge of the development. Goldman Sachs is said to have been mandated to advise on the proposed deal, the report added.

Aramco’s interest in the operator of the world’s biggest refining complex comes after Saudi Arabia’s Crown Prince Mohammed bin Salman’s visit to Delhi in February when he said he expected investment opportunities worth more than USD100 billion in India over the next two years.

Separately, Saudi Aramco’s Chief Executive Officer Amin Nasser had met Reliance Chairman Mukesh Ambani to discuss the Saudi state-owned company’s businesses including crude, chemicals and non-metallics.

Aramco and Reliance were not available for comment outside business hours.

As MRC wrote previously, in October 2018, Saudi Aramco signed a long-term deal with Zhejiang Rongsheng to supply crude oil to the Chinese company’s new refinery in eastern China.

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) -- Celanese Corporation, a global chemical and specialty materials company, has announced that its board of directors has approved a 15 percent increase in the company's quarterly common stock cash dividend, as per the company's press release.

The dividend increased from USD0.54 to USD0.62 per share of common stock on a quarterly basis and from USD2.16 to USD2.48 per share of common stock on an annual basis. The new dividend rate will be effective immediately.

"Today's announcement marks the tenth consecutive year of dividend increases, reinforcing our commitment to consistent dividend growth as one element of our strategy to maximize shareholder value creation. Over the most recent three-year period, we have increased the dividend by 72 percent, exceeding the commitment we made in 2017. Looking forward, we have a high degree of confidence in our ability to grow earnings and cash flow to support continued annual increases in the dividend in line with our earnings growth," said Mark Rohr, chairman and chief executive officer.

The company also declared a quarterly cash dividend of USD0.62 per share on its common stock, payable on May 9, 2019 to stockholders of record as of April 29, 2019.

As MRC informed earlier, Celanese Corporation has increased April list and off-list selling prices for Vinyl Acetate Monomer (VAM) sold in Europe, Middle East, Africa, Asia and the Americas. The price increases below were effective for orders shipped on or after 20 March, 2018, or as contracts otherwise allow, and are incremental to any previously announced increases. Thus, VAM prices rose, as follows:

- by EUR100/mt - for Europe, Middle East & Africa;
- by USD0.05/lb - for the USA and Canada:
- by USD110/mt - for Mexico & South America;
- by USD100/mt - for Asia outside China (AOC):
- by CNY800/mt - for China.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700employees worldwide and had 2018 net sales of USD7.2 billion.
MRC