Bayer Q1 net income falls by 36,5%

MOSCOW (MRC) -- Bayer AG’s earnings report gave Chief Executive Officer Werner Baumann a welcome boost as he prepares for a key meeting Friday where some investors will vent concerns about the troubled Monsanto acquisition, said the company.

The agriculture unit posted a 5.5% jump in first-quarter sales after adjusting for currency and portfolio changes, the company said as it reported earnings for the group that beat analysts’ estimates. Bayer rose as much as 4.5% in Frankfurt, its biggest gain since early January.

Monsanto’s growth rate is welcome news for Baumann, coming despite flooding in the U.S. Midwest that hurt rivals including DowDuPont Inc. and the impact of China trade tensions on the U.S. soybean sector. He’s heading into Bayer’s annual general meeting as the German company faces a broad set of challenges, led by the mounting number of lawsuits alleging that its Roundup weedkiller is linked to cancer.

The earnings beat is a temporary distraction from the Roundup woes, according to Michael Shah, an analyst at Bloomberg Intelligence. It’s a “much-needed boon to sentiment, yet it’s likely to be short-lived,” he said in a note.

The surprise sales jump at Monsanto came from, among other things, a strong performance in cotton seeds, according to Dennis Berzhanin, an analyst at Pareto Securities. On the pharma side, top-selling treatments Xarelto and Eylea — which face loss of patent protection next decade — both achieved sales growth of more than 15%. Quarterly profit was 2.55 euros a share, while analysts had estimated 2.48 euros a share. Even so, Bayer held to its group earnings target and 4% sales growth forecast for 2019.

Buying Monsanto was supposed to secure Bayer’s position in the rapidly consolidating agrochemicals market and deter outside forces from trying to split up the company, which sells everything from aspirin and cancer medicines to shoe inserts and soybean seeds. Now, investors are hoping to find out if and when the company will set aside money to settle the mountain of U.S. lawsuits surrounding Roundup, also known by its chemical name, glyphosate.

The company was facing suits from 13,400 U.S. plaintiffs as of April 11, about 20% more than in late January. That figure suggests that settlement terms could exceed $6 billion, which will continue to scare potential shareholders and as well as credit investors who want to see Bayer reduce its debt, according to Bloomberg’s Shah.
MRC

MOSCOW (MRC) -- Ube Industries, Ltd. announced that its consolidated subsidiary, UBE Corporation Europe S.A.U. (UCE), has acquired Spanish compound manufacturer Repol S.L. and has entered into an agreement for the transfer of shares, as per Hydrocarbonprocessing.

Repol operates a compound business in Europe using nylon 6, nylon 66, polypropylene, polyacetal, and other resin raw materials. These products are mainly used for automobiles but are also broadly used in industrial materials and for the electrical and electronics industries.

Under the agreement for the transfer of shares, UCE acquired a majority of the shares of Repol at the end of March 2019.

Ube Industries has positioned the nylon 6 business as an active growth business and is currently strengthening the nylon 6 business in the market for extrusion applications, where the company has a competitive edge. At the same time, Ube Industries is expanding the scope of the nylon 6 business in the market for injection applications.

The acquisition establishes a complementary relationship in the nylon 6 business while also giving Ube Industries access to Repol’s compound technologies and product development capabilities for non-nylon resins. Additionally, Repol’s recycling technologies are anticipated to be an asset to future business development amid tightening environmental regulation of plastic packaging materials.

UCE operates an existing compound plant and through the acquisition, Ube Industries gains an additional base of operations in Europe, which is leading the world in the use of plastics for vehicle weight reduction. Ube Industries will also seek to realize synergies with its existing manufacturing operations in Japan and Thailand. This will further accelerate the development of the company’s compound business for injection applications in the automotive sector and other industries, not only in Europe but extending to the Transatlantic region and Asia.

As MRC reported earlier, in December 2017, Ube Industries, JSR Corp. and Mitsubishi Chemical Corp. (MCC) received European Commission (EC) approval for the planned integration of their acrylonitrile butadiene styrene (ABS) subsidiaries.
MRC

MOSCOW (MRC) -- Petrofac has secured a number of new awards and contract extensions, with a combined value of more than GBP23 million, to provide training solutions for key National Oil Company and International Oil Company clients in Oman, the UAE and Iraq, as per Energyvoice.

In Oman, these include two new awards for the provision of HSE and Technical training solutions and a contract extension for the provision of assessment services.

A new contract has also been awarded in the Sultanate for the delivery of an internationally accredited operations and maintenance training programme through the world-class Takatuf Petrofac Oman (TPO) training centre in Muscat, which Petrofac and its partner Takatuf Oman opened in late 2018 to provide training for the country’s next generation of workforce for the industry.

In the UAE, where Petrofac has operated for more than 30 years, with around 4,000 employees in-country, a contract has been secured for the provision of on-the-job technical training and other specialised services to support a client’s oil and gas training facility.

In Iraq, where Petrofac is committed to contributing to the continuous development of the Iraqi workforce and has delivered more than 50,000 in-country delegate training days since 2010, a contract has been renewed to deliver training solutions.

Karim Osseiran, Global Head of Petrofac’s Training Services business, commented: “These contract awards demonstrate the continued expansion of our differentiated training services offering in key countries, where supporting the national workforce development agenda is core to our approach. Petrofac has a strong track record in delivering large scale projects and solutions focused on the transfer of knowledge and technology, that have significant contribution to delivering in-country value.”
MRC

MOSCOW (MRC) -- Oil and gas producer Occidental Petroleum Corp made a USD57 billion bid for Anadarko Petroleum Corp, topping Chevron Corp’s USD50 billion offer and setting up the first hostile takeover battle for a major oil company in years, as per Hydrocarbonprocessing.

The surprise $76-per-share bid comes after Occidental had been trying to woo Anadarko and had made two other proposals since late March. A deal would make Occidental the largest producer of oil in west Texas’s Permian basin, where production has boomed in recent years.

The bid pushed Anadarko shares up more than 14 percent in premarket trading to USD73, well above the $65 per share offered by Chevron. Occidental shares fell about 6 percent to USD58.73. Occidental boosted the cash portion of its offer to 50 percent, up from two earlier offers. Chevron’s offer comprised 25 percent cash and 75 percent stock.

A deal would boost Occidental’s production in the lucrative Permian to 533,000 barrels of oil equivalent production per day, the company said.

"We’ve studied this very diligently," said Vicki Hollub, Occidental’s chief executive, adding the deal would boost cash flow and allow Occidental to raise its dividend over time. “We’re the partner of choice,” she said. Still, Occidental has lost 7 percent of its value since it first disclosed its interest in Anadarko.

“This is not a smart move on part of Occidental given the difference of size between the two companies,” said Raymond James analyst Muhammed Ghulam. “Chevron is much bigger and has the resources to combine the two companies, and has significant deep water experience,” Ghulam said, referring to Anadarko’s deep water Gulf of Mexico assets.

A merger would help lower costs for Anadarko’s shale operations in Texas and Colorado, boosting returns. Occidental also brings project management expertise to assure Anadarko’s liquefied natural gas project in Mozambique gets built on time and on budget, Hollub said. Anadarko plans to reply to the offer today, a spokesman said.

In a letter to Anadarko’s board, Occidental described two prior purchase proposals, each of “significantly higher value” than that made by Chevron. Its offer would require shareholder votes by Occidental and Anadarko holders.

Anadarko would also be liable to pay Chevron a USD1 billion break-up fee if its board chooses Occidental’s offer. “It is unfortunate that Anadarko agreed to pay a break up fee of USD1 billion, representing approximately USD2 per share, without even picking up the phone to speak to us after we made two proposals during the week of April 8,” Hollub wrote in a letter to Anadarko’s board on Wednesday.

Analysts have said they expect the industry to consolidate more as small oil producers, who revolutionized the sector through advances in horizontal drilling and hydraulic fracking, have had to cut spending as investors press for higher returns and their stock prices languish. The Permian produces about 4 million barrels per day and is expected to hit 5.4 million bpd by 2023, according to IHS Markit, more than the total production of any OPEC country other than Saudi Arabia.

Occidental’s USD76 per share offer comprises $38 in cash and 0.6094 of its shares. The offer represents a premium of 19 percent to Anadarko’s closing price on Tuesday and 62 percent to the closing price on April 11, the day before Chevron made its bid.

Under Chevron’s USD65 per share bid, Anadarko shareholders are set to receive 0.3869 shares of Chevron and USD16.25 in cash for each Anadarko share.
mrcplast.com

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) announced, that it has signed another significant long-term sales agreement with an important end-user consumer - the Indian Oil Corporation (IndianOil) - for its high-quality base oil, ADbase, according to Hydrocarbonprocessing.

Ahmad Bin Thalith, Acting Senior Vice President of Refined Products Sales, in ADNOC’s Marketing, Supply and Trading directorate, said: "The signing of this important sales agreement, with another major base oil consumer in a large and growing market, is testament to the quality and reliability of ADNOC’s Group III base oil, ADbase. We look forward to working with IndianOil and to increase the supply of ADbase to the Indian market, which continues to see strong demand for high quality base oil and finished lubricants."

IndianOil is one of the world’s largest companies, ranked 137 on the Fortune 500 list. It is the largest seller of finished lubricants in the Indian market with an approximate volume of 450,000 tons per annum. The total Indian market for finished lubricants is 2 million tons and is growing at the rate of 2.4% per annum. IndianOil will use the ADbase oils to manufacture high end engine oils for India’s growing automotive sector.

"IndianOil is a long-standing partner of ADNOC and we look forward to building on and strengthening the links between our two companies. The high quality of ADNOC’s ADbase product, combined with strong logistics support and the proximity of the UAE to India, was key in our decision to sign this agreement," Subimal Mondal, Executive Director (Lubes) at IndianOil said.

The signing of this agreement follows a recent signing with Xiamen Sinolook Oil Company to supply ADbase into China, and the 2017 and 2018 exclusive agreements with Penthol C.V., and Chemlube for the supply of ADbase into the United States of America and Europe.

ADNOC Refining, an ADNOC subsidiary, produces up to 500,000 metric tonnes per year of Group III base oil and around 100,000 metric tonnes per year of Group II base oil, at its Ruwais refinery. Murban, Abu Dhabi’s light, high paraffinic crude is used as feedstock for ADNOC’s Base Oil plant, which ensures a consistent, high quality product.

ADbase has a high Viscosity Index (VI) making it an ideal lubricant component, ensuring efficiency and fuel economy for high performance engines, while meeting ever stringent environmental regulations.

ADNOC has already completed API SN approval, GM Dexos 1, ILSAC GF-5, and 0w-20 for full synthetic motor oils, and is actively working with additive companies to achieve Original Equipment Manufacturers (OEM) and European Automobile Manufacturers Association (ACEA) formulation approvals.

As MRC reported earlier, in May 2018, ADNOC unveiled plans to invest AED 165 billion (USD45 billion) alongside partners, over the next five years, to become a leading global downstream player, enabling it to further stretch the value of every barrel it produces to the benefit of ADNOC, its partners and the UAE.

ADNOC is now accelerating this transformation by unveiling its plans to become a leading global downstream player. The new strategy will be supported by ADNOC’s 45 year plus legacy of a unique and open approach to partnerships, built on the UAE’s bedrock values, reliability and attractiveness. ADNOC will again look to create long term downstream partnerships, providing access to the most attractive parts of the energy value chain, to redefine ADNOC’s future growth.
MRC