ExxonMobil announces oil discovery offshore Guyana

MOSCOW (MRC) -- ExxonMobil said it made an oil discovery on the Stabroek Block offshore Guyana at the Tripletail-1 well in the Turbot area, as per Hydrocarbonprocessing.

The discovery adds to the previously announced estimated recoverable resource of more than 6 billion oil-equivalent barrels on the Stabroek Block.

Tripletail-1 encountered approximately 108 feet (33 meters) of a high-quality oil-bearing sandstone reservoir. Tripletail-1, drilled in 6,572 feet (2,003 meters) of water, is located approximately 3 miles (5 kilometers) northeast of the Longtail discovery. After completion of operations at Tripletail, the Noble Tom Madden drillship will next drill the Uaru-1 well, located approximately 6 miles (10 kilometers) east of the Liza field.

"This discovery helps to further inform the development of the Turbot area," said Mike Cousins, senior vice president of exploration and new ventures at ExxonMobil. "Together with our partners, ExxonMobil is deploying industry-leading capabilities to identify projects that can be developed efficiently and in a cost-effective way."

Exploration and development activities are moving forward elsewhere on the Stabroek Block offshore Guyana. The Stena Carron drillship is currently drilling the Ranger-2 well and upon completion will conduct a well test at Yellowtail-1. The Noble Bob Douglas drillship is currently completing development drilling operations for the Liza Phase 1 project. ExxonMobil will add a fourth drillship, the Noble Don Taylor, in October 2019 as we continue to optimize our drilling plans based on well results and ongoing study of the basin.

The Liza Phase 1 development remains on schedule to start up by early 2020 and will produce up to 120,000 barrels of oil per day utilizing the Liza Destiny floating production storage and offloading (FPSO), which arrived in Guyana on August 29, 2019.

ExxonMobil approved funding for the Liza Phase 2 development after it received government and regulatory approvals in May 2019. Expected to startup by mid-2022, the project plans to use the Liza Unity FPSO to produce up to 220,000 barrels of oil per day. Pending government approvals, a third development, Payara startup could be as early as 2023 and production would reach an estimated 220,000 barrels of oil per day.

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.

We remind that, as MRC wrote previously, in July 2019, ExxonMobil started production on a new high-performance polyethylene line at its Beaumont, Texas polyethylene (PE) plant. The expansion increases plant production capacity by 65 percent or 650,000 tons per year, bringing site capacity to nearly 1.7 million tons per year.

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.

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

Trump administration approves biofuel quota boost

MOSCOW (MRC) -- U.S. President Donald Trump has tentatively approved a plan to increase the amount of biofuels that oil refiners are required to blend each year to compensate for exemptions handed out to small refiners by the Environmental Protection Agency, two sources familiar with the matter said, as per Hydrocarbonprocessing.

The plan is intended to address a major source of anger in U.S. farm country as Trump seeks to hold favor in the Midwest ahead of next year’s election, but it is likely to upset the oil industry, another important political constituency, underscoring the pitfalls of U.S. biofuel policy.

Under the plan, the U.S. EPA will calculate a three-year rolling average of total biofuels gallons exempted from the mandates under its Small Refinery Exemption program and add that figure to its annual biofuel blending quotas each year, the sources said. For 2020, that figure would be 1.35 billion gallons, according to a Reuters calculation.

That would come in addition to a tentative agreement to boost next year’s blending volumes by 1 billion gallons, including 500 million gallons for conventional biofuels like corn-based ethanol and 500 million gallons for advanced biofuels like biodiesel, the sources said.

A court in 2016 ruled that the Obama administration illegally lowered the mandate by 500 million gallons, and part of the current proposed addition would satisfy the decision.

As a result, if the Trump administration followed through on the plan, next year’s total blending mandate would come out to about 22.4 billion gallons, from just over 20 billion in the EPA’s current proposal, according to the Reuters calculation.

The EPA has until the end of November to finalize its 2020 biofuel volumes mandates.

Under the Renewable Fuel Standard, oil refiners are required to blend increasing volumes of biofuels like corn-based ethanol into their fuel each year, to help farmers and reduce imports, but small refining facilities in financial straits can seek waivers.

Trump inserted himself into negotiations between the rival oil and corn industries after his administration recently granted 31 oil refiners exemptions to their blending requirements, infuriating corn farmers and ethanol producers who say the program undermines demand for ethanol at a time the industry is already suffering from a loss of foreign markets.

He and senior administration officials have held a series of meetings with biofuel company officials, chief executives from Marathon Petroleum Corp and Valero Energy Corp, and lawmakers from key farm states including the Republican senators Joni Ernst and Chuck Grassley.

Trump was expected to meet with senators representing oil-producing states on Monday to continue discussions on the issue, sources said.

It was unclear if Trump would secure the backing of the oil industry for the plan without granting it any concessions.

One idea that Trump discussed during the meeting with Marathon and Valero last week to help refiners was to potentially cap the price of blending credits refiners must earn or purchase to comply with the RFS, sources familiar with the matter said.

Senators including Pennsylvania's Pat Toomey and Texas's Ted Cruz sent a letter to Trump on Thursday, asking any increase to biofuel volumes be accompanied by safeguards against higher credit prices.
MRC

Covestro to sell European polycarbonate sheets business to Serafin Group

MOSCOW (MRC) -- Covestro has signed an agreement with Serafin Group for the sale of Covestro’s European polycarbonate sheets business, which comprises manufacturing units in Belgium and Italy, central management operations and sales support in Europe, as per Eppm.

The business generates total revenues of around €130m with products mostly used in industrial protection, construction systems or signage applications. The decision was made as part of Covestro’s ongoing portfolio optimisation process, which includes the divestment of all polycarbonate sheets businesses. The sale of the European outlets thus concludes the previous divestments of the respective facilities in North America and India in 2018, and the conversion of its production in Guangzhou, China, into a specialty films site.

After a thorough evaluation, Covestro has decided that the sheets business no longer fits in the strategy of its polycarbonates segment, which will continue to focus on differentiated applications.

Covestro and Serafin have agreed not to disclose financial details of the transaction, and completion is subject to the approval of the relevant authorities. The closing is expected for the fourth quarter of 2019.

The Munich-based Serafin Group concentrates on investments in established, small and mid-sized companies in industrial business sectors. Based on the strong market position of the polycarbonate sheets business, Serafin aims to strengthen the business as a mid-sized company with high flexibility and a strong customer orientation.

The operations, which involve 250 employees, will be maintained at all sites. Covestro will continue to serve as a key raw materials supplier for the foreseeable future.
MRC

Saudi attack leads to biggest oil supply loss

MOSCOW (MRC) -- An attack on Saudi Arabian oil facilities has caused the biggest supply disruption in absolute terms in the last five decades, reported Reuters with reference to International Energy Agency figures.

Saturday's attack will cut the kingdom's output by 5.7 million barrels per day (bpd), according to a statement from state-run oil company Saudi Aramco. It is not yet known how long it will take to restart the production.

Before this, the biggest known disruption, of 5.6 million bpd, was prompted by the 1979 Iranian revolution. The chart shows the current loss against selected earlier disruptions, according to International Energy Agency figures.

In percentage terms, the Iranian loss was larger as 5.6 million bpd amounted to about 9 percent of world demand at that time, while the Saudi disruption amounts to over 5% of current oil consumption.

Saudi Aramco emergency crews contained fires at its plants in Abqaiq and Khurais, as a result of terrorist attacks with projectiles. These attacks resulted in production suspension of 5.7 million barrels of crude oil per day.

After visiting the incident locations, Amin H. Nasser, Saudi Aramco President & CEO, said: "We are gratified that there were no injuries. I would like to thank all teams that responded timely to the incidents and brought the situation under control. Work is underway to restore production and a progress update will be provided in around 48 hours."

The company will release additional information as it becomes available.
MRC

U.S. biodiesel production capacity data

MOSCOW (MRC) -- The U.S. Energy Information Administration (EIA) released its first annual U.S. Biodiesel Plant Production Capacity Report, as per Hydrocarbonprocessing.

The report includes the total biodiesel production capacity for all operating plants in both million gallons per year (gal/y) and barrels per day (b/d) as of January 1, 2019. The names of the reporting plants are organized by Petroleum Administration for Defense Districts (PADD). Like the Ethanol Plant Production Capacity Report, EIA plans to update the report annually.

Annual production capacity refers to the volume of fuel that can be produced in a calendar year under normal operating conditions, assuming normal downtime for maintenance. Reported production capacity totals include all active plants, which includes those that are temporarily inactive.

Active plants are those plants that have produced or sold biodiesel during the reporting month. Temporarily inactive plants are those plants that have not produced or sold biodiesel during the reporting month but have not permanently ceased operations. Plants may report as temporarily inactive when they are down for maintenance or idled during times of low operating margins.

The 2019 U.S. Biodiesel Plant Production Capacity Report shows 102 operating biodiesel plants with 2.6 billion gal/year in biodiesel production capacity, or 167,000 b/d. More than half of the nation’s biodiesel production capacity is in the Midwest (PADD 2) region, led by states such as Iowa, Missouri, and Illinois. Of the top 15 biodiesel-producing states, 9 are located in the Midwest.
MRC