ADNOC and Pertamina sign comprehensive strategic framework in oil and gas development

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) has signed a Comprehensive Strategic Framework (CSF) with Indonesia’s energy company, PT Pertamina (Persero) to explore opportunities for collaboration across the oil and gas value chain in the United Arab Emirates, Indonesia and globally, reported Reuters.

The signing of the agreement took place in the presence of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Force and His Excellency, Ir. H. Joko Widodo, President of Indonesia.

His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Nicke Widyawati, President Director & CEO of Pertamina signed the agreement.

As part of the CSF, ADNOC and Pertamina will evaluate collaboration opportunities across the upstream, midstream and downstream sectors. The scope of projects under consideration includes participation in the UAE’s upstream oil and gas sector, as well as refining and petrochemicals, LNG, LPG, aviation fuel and fuel retail opportunities in Indonesia. In addition, the two partners will explore other forms of strategic collaboration with respect to opportunities across transportation, trading and storage in the UAE, Indonesia and globally.

Pertamina is the state-owned energy company of Indonesia. The company operates an integrated business in the energy sector in Indonesia and is expanding its overseas presence. The company produces and distributes energy products such as fuel, lubricants, LPG, LNG, and petrochemicals. Currently, Pertamina owns six oil refineries in Indonesia with a combined production capacity of 1.1 million barrels of oil per day (mmbpd). At the same time, the company is developing renewable energy from many potential resources in the country.

H.E. Dr. Al Jaber said: "We are pleased to sign this agreement with Pertamina today, building on the strong existing relationship between our two countries. Indonesia has a thriving industrial base and is a rapidly growing market for energy. We see significant opportunity for collaboration between our two companies and the development of projects that meet our joint strategic objectives."

He added: "This collaboration with Pertamina further demonstrates ADNOC’s drive to unlock value from across our entire portfolio and our ambition to expand our international investments to become a truly global energy company."

Nicke Widyawati said: "Pertamina plans to develop an additional 1 mmbpd of refining capacity through the Refinery Development Master Plan (RDMP) and Grass Root Refineries (GRR) projects. Therefore, partnership with ADNOC will be an important milestone for Pertamina to secure energy supplies from overseas. ADNOC’s interest to participate in Indonesia’s oil and gas landscape is monumental to support Pertamina in ensuring the availability and accessibility of energy for Indonesian people."

Working groups from each side will be meeting over the coming months to evaluate and shortlist key areas for strategic collaboration across both companies’ extensive asset and project portfolios. It is expected that specific collaboration options will be agreed for execution by the end of 2019.

This new partnership marks another step in ADNOC’s group-wide transformation and value creation program that addresses the evolving energy and petrochemicals landscape and ensures ADNOC remains a resilient and flexible company able to take full advantage of emerging market opportunities and trends. The Group’s transformation is driven by an expanded approach to strategic partnerships and co-investments as well as the more proactive management of ADNOC’s portfolio of businesses, assets and capital.

As for Pertamina, the collaboration supports its ambition to embark into the global energy arena and acts as a stepping stone to achieve greater competitiveness to compete with international energy players.

As MRC informed earlier, last week, ADNOC said its Ruwais Refinery West Cracker is offline for maintenance.
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Total plans USD5 billion of asset sales to future-proof business

MOSCOW (MRC) - French energy giant Total will sell about USD5 billion of assets, mostly from its exploration and production business as it sharpens its focus on low-breakeven projects that can weather weak oil prices, said Reuters.

The announcement followed a 19% drop in second-quarter adjusted net profit to USD2.9 billion, which it attributed to unfavorable market factors including low oil prices, sharp declines in gas and sliding refining margins.

Chief Executive Patrick Pouyanne pointed to continuing volatility in markets. Though Brent crude averaged USD69 a barrel in the second quarter, up 9% on the previous three months, natural gas prices fell 36% in Europe and 26% in Asia, he said.

The company has been on an acquisitions spree as Pouyanne has overseen its expansion in gas and electricity in particular and said it is now preparing for the future by focusing on core strengths in the gas and deep offshore segments.

Though gas prices tumbled, Total said operating cash flow before working capital changes in its gas, renewables and power business surged 42% thanks to 8% production growth and a 10% increase in liquefied natural gas (LNG) sales.

Total’s Paris-listed shares were down 1.6% by 1405 GMT.

Total said its strategy would be complemented by the sale of assets that only break even at high oil and gas prices, such as the recent disposal of mature assets in the British North Sea.
MRC

SIBUR reports H1 2019 results

MOSCOW (MRC) -- SIBUR Holding, an integrated petrochemicals company, today publishes its operational and financial results for the three and six months ended 30 June 2019 in accordance with International Financial Reporting Standards (IFRS), said the company.

Revenue increased by 3.3% year-on-year to RUB 266.3 billion due to an increase in all reporting segments.
EBITDA decreased by 3.4% year-on-year to RUB 86.1 billion mainly due to a decrease in Plastics, Elastomers and Intermediates EBITDA.

EBITDA margin totaled 32.3%, remaining at a consistently high level relative to industry average. Net profit increased by 69.2% to RUB 77.6 billlion, largely on the back of the revaluation of the Company’s FX-denominated debt.

Total debt increased by 10.6% to RUB 367.6 billion with Net debt/EBITDA ratio standing at 1,76х.

At the ZapSibNeftekhim complex, the main construction and installation works have been completed, commissioning is in progress: test volumes of polypropylene are being supplied to customers, the first batches of polyethylene have been received.

Fitch Ratings has upgraded SIBUR’s long-term issuer default rating (IDR) to ‘BBB-’ from ‘BB+’. The Outlook is Stable.
In July, SIBUR and Gazprom Neft have consolidated 100% of the authorized capital in Poliom, a polypropylene plant in Omsk.

SIBUR and Sinopec signed a distribution agreement to supply polyethylene to China from SIBUR’s ZapSibNeftekhim plant, and a Term Sheet regulating key principals of a potential joint venture (JV) for development and operations of the Amur Gas Chemical Complex (AGCC). Subject to SIBUR's final investment decision, Sinopec is expected to participate at a 40% share stake in the JV (June 2019).

In 2018, SIBUR reported revenue of USD 9.1 billion and EBITDA of USD 3.2 billion. Over the past 10 years, SIBUR has implemented a number of large-scale investment projects worth more than 850 billion rubles. Each year, the Company spends no less than 70% of its EBITDA to finance the investment program, while maintaining a balanced debt burden.

SIBUR is the leader of the Russian petrochemical industry and one of the largest companies globally in this sector. It has more than 26,000 employees. The Company’s unique vertically integrated business model allows it to create highly competitive products consumed in the chemical, fast moving consumer goods (FMCG), automotive, construction, energy and other industries in 80 countries worldwide.
MRC

Indonesia, UAE firms sign agreements worth USD9.7 B

MOSCOW (MRC) -- Companies in Indonesia and the United Arab Emirates have signed agreements worth a total of USD9.7 billion during an official visit of Abu Dhabi crown prince to the Southeast Asian country, reported Reuters with reference to the Indonesian government.

Sheikh Mohammed bin Zayed al-Nahyan met with Indonesian President Joko Widodo at the presidential palace in Bogor, south of the capital Jakarta.

On the sidelines of the visit, Abu Dhabi National Oil Company (ADNOC) signed an agreement with Indonesia's state-owned energy company PT Pertamina for oil and gas collaboration in both countries and globally, which has a potential value of USD2.5 billion, the foreign ministry said in a statement.

ADNOC said the deal covered projects in the UAE' upstream oil and gas sector as well as refining and petrochemicals, LNG, LPG, aviation fuel and fuel retail opportunities in Indonesia.

Indonesia's Chandra Asri Petrochemical also signed an agreement with Abu Dhabi's state fund Mubadala and Austrian energy firm OMV to explore opportunities in petrochemicals, the three companies said in a joint statement.

The foreign ministry said the three were exploring the development of a naphtha cracker and petrochemical complex, with a potential value of USD6 billion.

Indonesia's Maspion Group signed two preliminary agreements with Dubai state-controlled DP World to develop a container terminal and industrial logistics park in Gresik in East Java, the ministry and DP World said, valuing the deal at USD1.2 billion.

It will have a capacity equivalent of 3 million 20-foot shipping containers.

Construction is expected to start later this year with operations commencing in the first half of 2022, DP World said in a statement.

One of the world's largest port operators, DP World's concession at the Surabaya Container Terminal ended in April.

Both leaders also talked about increasing investment in Indonesia's tourism sector and allowing Indonesian state construction firms to participate in projects in the UAE, according to the ministry statement.

President Widodo, after winning an election in April, has pledged more investment opportunities to create jobs in Southeast Asia's largest economy.

Sheikh Mohammed's visit could net USD10-USD15 billion in deals and partnerships, Jakarta's envoy to the UAE Husin Bagis was quoted as saying by UAE state news agency WAM.

As MRC informed earlier, last week, ADNOC said its Ruwais Refinery West Cracker is offline for maintenance.
MRC

New Pevalen Pro plasticizer gives flexible PVC an environmental boost

MOSCOW (MRC) -- Perstorp, the global leader in pro-environment polyols, is launching a new renewable polyol ester (non-phthalate) plasticizer Pevalen Pro, as per the company's press release.

It will make flexible PVC an even more attractive choice of plastic, based on a significantly lower carbon footprint versus competing materials and technologies. Pevalen Pro not only gives PVC an environmental boost as a renewable true non-phthalate plasticizer but also provides superior performance properties.

Jenny Klevas, Perstorp Global Marketing and Product Manager for the polyol ester plasticizer platform, explains: "Brand owners and consumers are searching for new plastics and materials with a sustainable profile and low carbon footprint. We believe that flexible PVC with Pevalen Pro is the perfect combination as it offers precisely what they are looking for, that being a high-performance product with a significantly better environmental footprint."

Perstorp launched Pevalen, a true non-phthalate plasticizer in 2014 as a premium performance alternative to phthalates, especially in sensitive and close-to-people applications where health concerns were, and are, in focus. Pevalen provides PVC producers with not only a cost-effective but also a low environmental impact solution, due to its plasticizing efficiency (less material required), faster processing (less energy), low volatility, high UV stability (prevents premature aging) and unbeatable softness for long-life performance. The launch of Pevalen Pro this year represents a timely and significant contribution to lowering the carbon footprint of PVC, underlining its importance as a sustainable plastic.

Plastics have received much negative press, but plastic remains a highly beneficial material in many aspects including safety, cost-efficiency and durability. The over-reliance on single-use plastics is genuinely a cause for environmental concern, but by contrast, PVC is already a very sustainable plastic material. Indeed, PVC has one of the smallest shares of carbon atoms, and being lightweight, flexible and durable, promotes sustainability through its properties, giving products a longer- and often maintenance-free - lifetime use.

PVC is also a recyclable material if made the right way, which the proactive Vinyl Plus initiative, to which Perstorp belongs, is focussing upon. This PVC industry-funded commitment to sustainable development aims to increase the recycling capacity of PVC and improve the overall sustainability performance.

Plasticizers are critical to flexible PVC, and the environmental attractiveness of PVC can be significantly increased by using the right one. It is in this context that Pevalen Pro is being launched to unlock further pro-environmental gains.

Currently, Pevalen has a clear cradle-to-gate sustainability advantage over leading plasticizer competitors, such as DINP, DOTP and DINCH, based on GWP (Global Warming Potential). As plasticizers make up a significant part of PVC (up to 40% in some applications) the potential for producers to lower their carbon footprint is already available today by using Pevalen. That pro-environmental advantage grows significantly by choosing the new renewable Pevalen Pro and it will be initially available with up to 40% renewable content, with the long-term potential of becoming fully renewable. This will be beneficial to all actors in the value chain and especially to brand owners in the main sensitive and close-to-people areas, such as coated fabrics, artificial leather, flooring, wall covering, automotive interiors and sports and leisure products.

Pevalen Pro is a direct replacement for Pevalen with no compromise on quality and performance, making it very easy to switch to. The renewable grades are made under the Mass Balance concept and backed by third-party ISCC Certification, which guarantees that the bio-based input is sustainably sourced and lives up to the requirements set for a more liveable future.

Future Pevalen Pro grades will offer even higher levels of renewable content with the longer-term aim of helping Perstorp customers to transform to 100% renewable grades. Jenny Klevas concludes: "Pevalen Pro is another important step on our journey to becoming Finite Material Neutral, and with Pevalen Pro we can help our customers to make high-performance sustainable PVC products."

As MRC informed earlier, in December 2017, Perstorp launched world first portfolio of renewable polyols. Thus, Perstorp announced world’s first portfolio of renewable alternatives to the essential polyols Pentaerythritol (Penta), Trimethylolpropane (TMP), and Neopentyl glycol (Neo).

Perstorp is one of the world leaders in various sectors of the specialty chemicals market, it's pioneer in formalin chemistry, plastics and surface materials. Perstorp was founded in 1881 and is controlled by PAI partners,a major European private equity company. The company has around 1,500 employees in with 22 production plants in Europe, Asia and North America.
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