Israel Oil Refineries Q3 profit falls on lower refining margin

MOSCOW (MRC) -- Israel’s Oil Refineries (ORL) reported a 56% drop in quarterly net profit on weakness in its polymers business and as refining margins fell, said Hydrocarbonprocessing.

ORL, Israel’s largest refining and petrochemicals group, earned USD7 million in the third quarter, down from USD16 million a year earlier.

Its adjusted refining margin was USD6.3 a barrel in the quarter, compared with Reuters’ quoted Mediterranean Ural Cracking Margin of USD3.3 a barrel and USD8.1 a year earlier.

Revenue rose 5% to USD1.62 billion.

The company said it will pay a USD50 million dividend, the same as the second quarter. ORL is controlled by Israel Corp, which holds a 33.1 percent stake.

As MRC informed earlier, Israel’s Oil Refineries (ORL) reported lower quarterly net profit, saying timing differences on the value of its inventory offset higher refining margins. ORL, Israel’s largest refining and petrochemicals group, earned USD63 million in the third quarter, down from USD74 million a year earlier.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

ORL, Israel’s largest refining and petrochemicals group, said at this stage it was unable to predict the results of the investigation and its implications for ORL and Gadiv.
MRC

MOSCOW (MRC) -- China’s crude oil throughput in October rose 9.2% from a year earlier to the second-highest on record, as refineries in the world’s second-biggest oil consumer and top importer ramped up output after returning from plant maintenance, said Hydrocarbonprocessing.

Last month, crude processing volumes were 57.84 million tonnes, or about 13.62 million barrels per day (bpd), below the record of 13.75 million bpd reached in September, data from the National Bureau of Statistics showed.

"Most of the refineries have resumed operations from maintenance and have kept a relatively high processing rate in order to meet their annual production targets," said Wang Zhao, an analyst with China-based Sublime Information Co. The launch of two large-scale refineries by privately owned Hengli Petrochemical and Zhejiang Petrochemical along with the start up of an expansion at a PetroChina refinery also pushed crude runs higher last month.

Faced with a slowing economy and tepid demand for refined oil products, however, the hefty crude throughput may increase a fuel surplus in China and encourage refiners to boost product exports in coming months. China’s crude oil imports in October rose to a record high of 10.72 million bpd, which is expected to be processed at refineries over November and December.

Average refining margins in China fell to around 200 yuan (USD28.60) a tonne in October from nearly 300 yuan a tonne in August, Wang said, adding that he expected processing profits to shrink further in November. Asia’s top refiner Sinopec posted a 35% fall in third-quarter net profit versus a year earlier due to China’s narrowing refining margins.

For the first 10 months of the year, crude throughput rose 6.4% from a year earlier to 537.1 million tonnes, or about 12.9 million bpd, the data showed. The statistics bureau data also showed that China’s crude oil output in October held flat from a year earlier at 16.11 million tonnes, or about 3.79 million bpd, the lowest daily output so far this year.

Natural gas production jumped 8.2% from a year ago to 14.6 billion cubic meters (bcm) amid Beijing’s push to boost domestic supply. In the first 10 months of 2019, crude output climbed 1.1% from a year ago to 159.25 million tonnes, and gas output rose 9.3% to 142.3 bcm.

China’s state planner expects natural gas output to top 170 bcm in 2019, up 11 bcm from last year.

As MRC informed earlier, Russia's output of chemical products dropped in September 2019 by 2.4% month on month. However, production of basic chemicals increased by 3.6% in the first nine months of 2019, according to Rosstat"s data. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Thus, 200 ,000 tonnes of ethylene were produced in September, compared to 255,000 tonnes a month earlier. Kazanorgsintez and Stavrolen capacities were shut for maintenances in September. Thus, 2,256,000 tonnes of this olefin were produced in January-September 2019, up by 0.7% year on year.
MRC

MOSCOW (MRC) -- ExxonMobil Corp is seeking a potential buyer for its roughly 60,000 barrel per day Billings, Montana refinery, reported Reuters with reference to three sources familiar with Exxon’s plans.

Representatives for large refiners, including Valero Energy Corp and Marathon Petroleum Corp, have toured the refinery, two of the people said, speaking on condition of anonymity because the process is private.

Ultimately a smaller refiner could be a more likely buyer of the plant, one of the sources said.

Exxon and Valero could not immediately be reached for comment. A spokesman for Marathon declined to comment, but pointed to recent comments from Chief Executive Gary Heminger that the company is mulling portfolio optimization and divestitures.

Exxon was said to discuss plans to sell the plant to PBF Energy in 2016, Reuters reported at the time. In those talks, Exxon wanted to unload both the Billings plant and its Joliet, Illinois refinery to PBF, but the smaller refiner wanted only the Billings plant, scuttling the deal, according to people familiar with the plans.

Four years ago, Exxon was asking about USD500 million for Billings. The plant is still expected to fetch the same amount, the sources said.

Exxon is looking to unload the refinery to direct investment towards its three Gulf Coast refineries at Baytown and Beaumont, Texas and Baton Rouge, Louisiana.

As MRC informed before, ExxonMobil Corp’s Baytown, Texas, chemical plant returned to normal operations on Tuesday after a malfunction in the polypropylene (PP) production area.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP 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

MOSCOW (MRC) -- Evonik Industries is expanding its capacities for organic dispersions for heat sealing applications in Darmstadt (Germany), said the company.

The significant plant expansion is scheduled for completion by second half of 2021. Organic dispersions for heat sealing applications, which Evonik markets under the brand name DEGALAN, are ideally suited for formulating high-quality heat seal lacquers and ensure secure sealing in combination with smooth peeling properties for food and beverage packaging. DEGALAN organic dispersions provide direct adhesion to aluminum and PET lidding materials for environmentally friendly packaging solutions, like mono material packaging with recyclability property.

"This capacity expansion is a clear commitment to proving the flexible packaging industry with best in class liquid coating technology – especially by offering new solutions with direct adhesion to multiple substrates. Furthermore, we strengthen our position in the market by developing new products meeting customers or regional specific requirements," says Roberto Vila-Keller, head of Business Line Coating & Adhesive Resins.

"After thorough investigation, we concluded that Darmstadt is the right location for this plant expansion project. The investment will contribute to make even better use of existing facilities. In addition, well-trained employees with their local process know-how and many years of specific experience in the construction, operation and maintenance of the existing technology are another decisive advantage for us," says Dr. Peter Neugebauer, Business Director Specialty Acrylics, Coating & Adhesive Resins.

Last year Linde and Evonik entered into strategic partnership for membrane-based natural gas processing.

As MRC informed earlier, PSC TAIF-NK, a wholly owned subsidiary of TAIF Group of Kazan, Tatarstan, Russia, has let a construction-related contract to Linde Group, Munich, for two hydrogen plants at its 7 million tonnes/year Nizhnekamsk refinery. The contract is valued at about ?120 million, according to Linde.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evonik’s corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.
MRC

MOSCOW (MRC) -- US crude oil output will average a record 13.03 million b/d this month, crossing the 13 million b/d threshold a month earlier than expected as domestic production climbs to 13.41 million by November 2020, reported S&P Global with reference to the US Energy Information Administration's statement Wednesday.

"The US remains on course to set new crude oil production records this year and next," EIA Administrator Linda Capuano said in a statement.

In its Short-Term Energy Outlook, EIA said it expects US crude oil production to grow faster than forecast a month earlier, but overall production growth will be slow compared to recent years.

For example, EIA forecasts US oil output to increase by 380,000 b/d over the next year, compared to 1.03 million b/d of growth from November 2018 to November 2019 and 1.93 million b/d of growth from November 2017 to November 2018.

Overall, EIA forecasts crude oil production to average 12.29 million b/d this year, up from 10.99 million in 2018 and 30,000 b/d more than the agency forecast last month for 2019. EIA forecasts US crude output to average 13.29 million b/d in 2020, up 120,000 b/d from last month's forecast for 2020.

EIA's crude oil price forecasts remained relatively unchanged from last month.
MRC