Exxon agrees USD4 billion sale of Norway oil and gas assets

MOSCOW (MRC) - Exxon Mobil has agreed to sell its Norwegian oil and gas assets for up to $4 billion, ending its production in a country where it started operations more than a century ago, three sources familiar with the matter told Reuters.

U.S. oil major Exxon said in June it was looking to sell its Norwegian upstream portfolio, which comprises minority stakes in more than 20 fields, operated by local producer Equinor (EQNR.OL) and Anglo-Dutch oil major Royal Dutch Shell.

Norwegian daily Dagens Naeringsliv reported after the Reuters report that the buyer was Var Energi, citing anonymous sources. The deal was due to be announced at the end of September, it added. An Exxon spokeswoman said: “As a matter of practice, we don’t comment on commercial discussions." Var declined to comment.

Shares in Exxon, the world’s biggest publicly traded oil company, rose 1.7% to a session high in New York after Reuters reported a sale had been agreed.

The Irving, Texas-based company has held talks in recent weeks with a number of interested parties including Oslo-listed companies Equinor, Aker BP (AKERBP.OL), and DNO (DNO.OL), Stockholm-listed Lundin Petroleum (LUPE.ST) as well as Var Energi, backed by Italy’s Eni (ENI.MI), and private equity firm Hitech Vision, industry sources said.

Equinor, Lundin and DNO were not immediately available to comment. The three sources told Reuters that Exxon had closed the sale process in recent days with one buyer after agreeing on the terms of a sale.

Exxon hired investment bank Jefferies to run the sale process, banking sources told Reuters last month. Jefferies declined to comment.

In 2017, Exxon’s net production from fields off Norway was around 170,000 barrels of oil equivalent per day, according to its website.

The sale, if approved by regulators and completed, comes after Exxon focused in recent years on growing its onshore U.S. shale production, particularly in the Permian basin, as well as developing huge oil discoveries in Guyana.

Oslo-based consultancy Rystad Energy said in a note in June that as of Jan 1, 2019, Exxon held 530 million barrels of oil equivalent on the Norwegian Continental Shelf.

“The profile is mature and declining, but nevertheless sizeable in terms of current production. A portfolio generating high cash flow and with limited tax balances, given the Norwegian fiscal regime with 90% nominal tax relief on investment, will be highly attractive for any E&P company without sufficient revenue,” Rystad analyst Simon Sjothun said.

Exxon is also considering selling its assets in the British North Sea after more than 50 years, industry sources told Reuters last month.

MRC

Trinseo raised September PC prices in Europe

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced a price increase for all polycarbonate (PC) grades, as per the company's press release.

Effective September 3, 2019, or as existing contract terms allow, the contract and spot prices for the products listed below increased as follows:

- CALIBRE PC resins - by EUR100 per metric ton.

As MRC informed earlier, Trinseo also raised its prices for all PS grades in Europe on 1 September 2019, as stated below:

- STYRON general purpose polystyrene grades (GPPS) - by EUR100 per metric ton;
- STYRON and STYRON A-Tech high impact polystyrene grades (HIPS) - by EUR100 per metric ton.

According to ICIS-MRC Price report, July imports of PC granules and compounds to Russia, excluding deliveries from Belarus, were 2,3400 tonnes, compared to 1,840 tonnes a month earlier and 1,070 tonnes in July 2018. Last month's imports of PC granules, excluding Belarusian shipments, were 1,940 tonnes (extrusion grade PC - 1,290 tonnes, injection moulding PC - 580 tonnes, blow moulding PC - 80 tonnes) versus 790 tonnes in July 2018. In June 2019, imports of PC granules reached 1,350 tonnes. Shipments of PC granules, excluding imports of Sabic material from Belarus, rose in January-July 2019 by 87% year on year to 9,140 tonnes from 4,890 tonnes a year earlier.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
MRC

Sanctions choke Irans crude sales, but oil product exports booming

MOSCOW (MRC) -- While U.S. sanctions on Iran’s oil industry have slashed the OPEC member’s crude exports by more than 80%, oil product sales from the Islamic Republic remain strong at nearly USD500 million a month, shipping data and Reuters calculations show, as per Hydrocarbonprocessing.

Sanctions have barely affected Iran’s exports of oil products, primarily fuel oil used for power generation and shipping as well as liquefied petroleum gas (LPG) used as cooking gas and petrochemical feed.

Iran’s product exports reached their highest level in August, oil minister Bijan Zanganeh was quoted as saying by a lawmaker after a parliamentary meeting on Aug. 27. “In exports of products we have no problem,” Zanganeh was cited as saying.

Consultancy FGE estimates Iran’s product exports at 400,000-500,000 barrels per day, exceeding the top end of crude export estimates by other analysts of some 400,000 bpd for July.

Refinitiv Eikon data shows Iran exported more than 230,000 bpd of fuel oil in August, all to the United Arab Emirates, slightly above July’s figure of 220,000 bpd. At current prices, and assuming Iran is not selling at a big discount, such sales generate over USD300 million a month.

Data intelligence firm Kpler says Iran exported 514,000 tonnes of LPG in July, or nearly 200,000 bpd, worth over USD180 million at market prices. This compares with 579,000 tonnes in June. China accounted for more than 95% of Iranian LPG exports in June, according to Kpler.

Samantha Hartke, head of natural gas liquids and LPG at consultancy Energy Aspects, said her firm did not expect Chinese imports of Iranian LPG to abate given China’s new petrochemical capacity is creating significant demand for the feedstock.

“The irony is: if not for the U.S.-China trade war, the U.S. would have greatly benefited from this uptick in Chinese demand as a means of mopping up its overabundance of LPG supplies, thanks to shale,” she added. Unlike crude oil, where the ultimate buyer is a refinery, fuel oil and LPG can find their way to potentially thousands of small-scale industrial or residential buyers, Iman Nasseri, managing director for the Middle East with FGE, told Reuters.

“The market for these two products is so vast that finding and targeting those individuals is not easy,” he said. In July, Grace 1, a jumbo tanker laden with Iranian crude, became the most-watched ship in the world after the British navy seized it off the coast of Gibraltar on suspicion of carrying oil to Syria.

The tanker has changed its name to the Adrian Daria since being released by Gibraltar and is in the eastern Mediterranean. Oil products, like crude, fall under U.S. sanctions.

“Non-U.S. persons engaged in this sanctionable conduct could be sanctioned themselves and be subject to blocking by the U.S.,” Erich Ferrari, a Washington-based attorney who specializes in sanctions law, told Reuters. Iran’s oil ministry did not immediately respond to a Reuters request for comment.
MRC

Shell delays US Lake Charles LNG export project to 2025

MOSCOW (MRC) -- Royal Dutch Shell, one of the world’s largest liquefied natural gas (LNG) suppliers, has asked US regulators to extend the time by which it should complete an LNG export project in Louisiana by five years to 2025, reported Reuters with reference to regulatory filings.

The project, a 50-50 venture with US midstream company Energy Transfer, envisaged converting an existing import and regasification facility in Lake Charles into a multi-train, 16.45 million tonnes per year (mtpa) facility.

The delay takes a major U.S. export project out of the race to achieve a final investment decision (FID) in time to start operations during an anticipated supply downturn in 2023-2024.

About a dozen projects in North America, mostly in the Gulf of Mexico, are vying for FID this year or early next year to start production in time to hit that sweetspot. But the more get approved, the less likely other projects are to go ahead as the expected dearth turns into oversupply.

The delay is due to Shell’s takeover of the project after its USD53 billion acquisition of BG Group in 2016 prompted it to re-evaluate and strike new agreements, the Anglo-Dutch company said in a letter dated last Friday to the Federal Energy Regulatory Commission.

It said following this process, the project plans had not changed but a new 50-50 ownership structure with Energy Transfer had been struck and Shell had committed to taking 50% of the export capacity.

"Under the new Project Framework Agreement, ET and Shell have established a detailed process for the development of the Project which includes milestones that are expected to result in the Project sponsors reaching FID as early as the end of 2020," it said in the letter.

"Completion of construction of the LNG export terminal facility is expected to occur as early as the second half of 2025."

We remind that, as MRC wrote before, in May 2018, China National Offshore Oil Corporation (CNOOC) and Shell Nanhai B.V. (Shell) officially started up of the second ethylene cracker at their Nanhai petrochemicals complex in Huizhou, Guangdong Province, China.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

R Kesavan takes over as Finance Director of HPCL

MOSCOW (MRC) -- R Kesavan takes over as HPCL's Finance Director Mumbai (Maharashtra): R Kesavan on Thursday took over as the Finance Director at Hindustan Petroleum Corporation Ltd (HPCL), as per EnergyWorld.

He is also the Chief Financial Officer at the government-owned oil and natural gas company, according to a statement.

Kesavan was earlier Executive Director of HPCL's Corporate Finance division for over four years. He is a fellow member of the Institute of Chartered Accountants of India (ICAI).

Kesavan brings with him three decades of experience in corporate accounts, audit, treasury management, risk management, budgeting, pricing, corporate strategy and margin management.

As MRC reported before, in August 2018, L&T Hydrocarbon Engineering (LTHE), a wholly-owned subsidiary of engineering giant Larsen & Toubro, announced it had won an onshore Engineering Procurement and Construction (EPC) contract from HPCL-Mittal Energy (HMEL), a joint venture between Hindustan Petroleum Corporation Limited and Mittal Energy Investment. Under the contract, LTHE would set up seven cracker furnaces at the Bathinda refinery in Punjab. The order for setting up the furnaces of 1,200 kilo-tonne per annum (KTPA) dual-feed cracker unit is part of HPCL-Mittal Energy's Guru Gobind Singh Polymer Addition project.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Hindustan Petroleum Corporation Limited (HPCL) is an Indian state-owned oil and natural gas company with its headquarters at Mumbai, Maharashtra and with Navratna status. HPCL has about 25% marketing share in India among PSUs and a strong marketing infrastructure. The Government of India owns 51.11% shares in HPCL and others are distributed amongst financial institutes, public and other investors.
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