SABIC Q1 net profit drops 38 pct, cites lower selling prices

MOSCOW (MRC) -- Saudi Basic Industries Corp (SABIC), the world’s fourth-biggest petrochemicals company, reported a 38 percent drop in first-quarter net profit due to lower average selling prices, missing analysts’ expectations, said Reuters.

SABIC made a net profit of 3.41 billion Saudi riyal (USD909 million) in the three months to March 31, down from 5.51 billion riyals in the year-earlier period, the company said in a bourse statement on Sunday.

Analysts expected SABIC to make a net profit of 3.98 billion riyals in the first quarter, according to the average of estimates of five analysts polled by Refinitiv.

SABIC said average prices decreased by 8 percent quarter-on-quarter, driven by slowing global demand, a slow start to the year and relatively high level of inventories.

It expected SABIC’s performance to be in line with trends in the global petrochemical industry, even though it cautioned that global economic growth will be lower this year.

The company’s results are closely tied to oil prices and global economic growth because its products - plastics, fertilisers and metals - are used extensively in construction, agriculture, industry and the manufacturing of consumer goods.

Saudi national oil giant Aramco last month reached an agreement with the Public Investment Fund to buy its controlling stake in SABIC for USD69.1 billion.
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MOSCOW (MRC) -- Employees of Royal Dutch Shell ended a strike in the Netherlands after unions agreed to a new wage offer by the oil and gas company, said Reuters.

Strikes which started on April 8 at the 400,000 barrel per day Pernis refinery, Europe’s largest, and the Moerdijk plants will be suspended while union members vote on final approval of the offer put forward by Shell, union CNV said.

"Shell has offered an improved and ultimate proposal for the Collective Labour Agreement (CLA) for Pernis and Moerdijk to the unions," a Shell spokesman said late on Thursday.

“Higher than initially planned, the headroom was found by extending the CLA to 3 years,” he added.

The Shell offer includes a pay rise of 3 percent in 2019, 2 percent in 2020 and 2.5 percent in 2021, the spokesman said. An additional merit-based increase of 1.5 percent per year will be available during the three years.

Shell said it expected the unions to end the strike on Friday afternoon.
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MOSCOW (MRC) -- Nigeria and Saudi Arabia plan to draft a memorandum of understanding on an oil and gas partnership that could lead to the construction of a new refinery and investments in liquefied natural gas, reported Reuters with reference to Nigeria’s petroleum ministry.

Nigeria imports the bulk of its petrol, despite being Africa’s biggest crude oil producer, due to its dilapidated refineries. Last month, Nigeria’s state oil company said it was in talks with different consortiums to overhaul its refineries and save billions of dollars on fuel imports.

Nigeria’s petroleum ministry, in a statement issued days after oil minister Emmanuel Kachikwu held talks with Saudi energy officials, said an early draft of a memorandum of understanding would be ready in the first week of May.

"Areas of interest will cover the existing refinery revamp, building of a brand new refinery, LNG investments and product supply trading in crude and refined products," the ministry said in the statement.

It added that Saudi energy minister Khalid Al-Falih had reiterated the possibility of establishing an independent refinery in Nigeria, considering it the best hub from which to reach other African countries.

Saudi Aramco is expanding its downstream operations such as refining and petrochemicals production as part of its drive to become the world’s largest integrated energy firm.

As MRC informed earlier, Saudi Aramco will acquire Royal Dutch Shell’s 50 percent stake in the Saudi refining joint venture SASREF for USD631 million. The purchase, which is part of Aramco’s strategy to expand its downstream operations, will be completed later this year.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco"s value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
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MOSCOW (MRC) -- Hungarian energy group MOL has temporarily suspended accepting crude oil through the Druzhba pipeline, it said adding, however, that the move did not affect its refineries, reported Reuters.

"Thus far the quality of the crude oil coming through the pipeline has been in accordance with the regulations, however we have decided to temporarily suspend the takeover of the crude oil," it said in an email.

Poland, Germany and Slovakia have suspended imports of Russian oil via the Druzhba pipeline, citing poor quality and triggering a rare crisis oversupply from the world’s second-largest crude exporter.

The quality problem arose last week when an unknown Russian producer contaminated oil with high levels of organic chloride, which is used to boost oil output but must be separated before shipment as it can destroy refining equipment.

"Contaminated crude oil cannot enter our refinery,” MOL said. “The suspension does not impact the operation of MOL’s refineries since we can supply them through the Adria Oil Pipeline as well as from our already existing supplies."

MOL added that it was in talks with relevant authorities and international partners to get crude oil transport back to normal as soon as possible.

As MRC informed previously, in April 2019, MOL Group announced that it had signed a sales-purchase agreement to acquire Aurora, a recycled plastic compounder with production plants located nearby automotive manufacturing and plastics conversion clusters in Baden-Wurttemberg, Germany. Aurora is a medium-size German company, headquartered in Neuenstein, with a unique and lean closed loop concept assuming collection of post-industrial plastic waste, regrinding and compounding. The company’s portfolio largely consists of engineering plastics and polypropylene recyclate-based compounds.
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MOSCOW (MRC) -- Dow has announced plans to expand its alkoxylation capacity at its existing facility in Tarragona, Spain directly benefiting the Europe, Middle East, Africa and India region, as per Hydrocarbonprocessing.

This low capital intensity, high return, incremental investment builds on the previously announced alkoxylation capacity expansion on the U.S. Gulf Coast, to support growing demand and advance Dow’s leading positions in attractive consumer, industrial, and infrastructure markets growing above GDP.

"New Dow’s more focused, agile, and market-oriented structure enables deeper collaboration with customers and faster response to market opportunities and capacity constraints," said Ester Baiget, business president of Dow Industrial solutions. "This new capacity optimizes our existing asset infrastructure to enable growth at our customers. It is a true testament to our dedication and passion for seeking solutions that will benefit our customers, our markets and the communities in which we live and work."

Dow’s versatile alkoxylation franchise upgrades basic chemical building blocks in order to produce safe ingredients for cosmetics, household and industrial cleaning, paints and many other products for everyday use. This incremental investment will expand Dow’s production of high-quality lubricants, defoamers, specialty surfactants and ethoxylates.

As MRC reported earlier, in June 2018, The Dow Chemical Company (Dow) announced its plan to invest in an alkoxylation facility on the US Gulf Coast. Upon completion, this new facility will support global growth in Dow’s core end-markets related to infrastructure and home and personal care, as well as additional end-markets where Dow continues to strengthen its position for the TRITON, TERGITOL, ECOSURF and CARBOWAX SENTRY brands.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
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