BP warns coronavirus could hit global oil demand growth by 40%

MOSCOW (MRC) -- BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent this year, putting pressure on Opec producers and Russia to curb supplies to keep prices in check, reported Financial Times.

Brian Gilvary, the UK oil major’s chief financial officer, said 300,000-500,000 barrels a day were at risk this year - a big chunk of 1.2m b/d growth initially expected by the company and global energy agencies.

Mr Gilvary added that BP was closely watching "whether Opec balances or not" by enacting production cuts with allies including Russia to bring Brent crude prices "back to the USD65 a barrel range".

His remarks come as Opec and Russia discuss emergency cuts in oil production after the crude price entered a bear market by falling more than 20 per cent in recent weeks to below USD55 a barrel.

The falling price presents an additional challenge for BP just as Bernard Looney, its head of exploration and production, takes over as chief executive on Wednesday from Bob Dudley, who leaves the company after nearly 10 years at the helm.

BP’s earnings - like its rivals in the US and Europe - have been under pressure as increased production failed to offset lower energy prices, leading to a 26 per cent drop in fourth-quarter profits.

In the three months to December 31, underlying replacement cost profits - BP’s definition of net income and the measure tracked most closely by analysts - were USD2.6bn, versus USD3.5bn in the same period in 2018. However, the results exceeded analysts’ estimates of slightly less than USD2.1bn.

However, BP’s confidence about its ability to generate more cash grew after the completion of a USD1.5bn share buyback programme, new asset disposal targets and falling debt levels led it to raise its dividend by more than 2 per cent to 10.50 cents.

Its shares rose nearly 5 per cent in early London trading.

"It’s a relief for me that we have got the balance sheet trajectory to where we want it to go, which sets us up with a strong foundation for a new chief executive," Mr Gilvary said.

BP reported full-year profits of nearly USD10bn in 2019, down from USD12.7bn the year before.

The company’s results followed disappointing earnings from Royal Dutch Shell, ExxonMobil and Chevron, as an energy price slump and contracting chemicals industry margins hit the oil and gas sector. France’s Total will report on Thursday.

BP is reconfiguring its portfolio of assets as part of a broad USD10bn divestment programme to strengthen its balance sheet after a blockbuster deal to acquire mining group BHP’s shale assets in 2018.

Divestment proceeds tallied USD800m in the fourth quarter and BP said it was ahead of its USD10bn target for the end of 2020. It planned a further USD5bn in sales by mid-2021, which it said would enable it to pay down debt after the BHP deal.

Gearing - which BP defines as net debt divided by the sum of net debt plus equity - fell to nearly 31 per cent in the fourth quarter, from close to 32 per cent in the previous three months. BP said it would move towards the middle of the 20 to 30 per cent range in 2020.

Oil and gas production for the quarter was up nearly 3 per cent compared with last year at 2.7m barrels of oil equivalent a day.

Operating cash flow was USD7.6bn in the fourth quarter, excluding Gulf of Mexico oil spill payments. These payouts are expected to be less than USD1bn in 2020.

BP’s capital expenditure is expected to remain towards the lower end of its USD15bn-USD17bn range for 2020, in line with 2019.

As MRC informed before, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.
MRC

MOSCOW (MRC) -- Dow introduces first solventless silicone conformal coating with UV and moisture dual cure for high-volume electronics manufacturing, said the company.

Dow introduced today at IPC APEX EXPO 2020 new DOWSIL™ CC-8030 UV and Moisture Dual Cure Conformal Coating, the industry’s first solventless silicone conformal coating with an ultraviolet (UV) and moisture dual cure system for high throughputs. This new environmentally responsible silicone technology promotes sustainability, health and safety while reducing processing costs through automated spraying and fast, energy-efficient UV curing. Other silicones support UV curing, but none are conformal coatings with a low enough viscosity for spray coating and with a secondary moisture cure for shadowed areas. The new DOWSIL™ product also offers more reliable protection against stress and thermal cycling versus competitive materials.

Brian J. Chislea, senior electronics application engineer at Dow, will discuss the new DOWSIL™ CC-8030 UV and Moisture Dual Cure Conformal Coating during two poster sessions at IPC APEX EXPO. The first session is scheduled for today, Tuesday, Feb. 4, from 10:00 to 10:30 a.m. Pacific Standard Time (PST). The second is scheduled for Wednesday, Feb. 5, from 4:30 to 5:00 p.m. PST.

"Dow has long been an innovative leader and developer of leading-edge conformal coating technologies that address our customers’ most pressing needs,” said Chislea. “DOWSIL™ CC-8030 Coating is an excellent example of this. “By listening closely to our customers, we responded with this first-of-its-kind material that can help electronics manufacturers meet their sustainability and productivity goals, and more."

DOWSIL™ CC-8030 UV and Moisture Dual Cure Conformal Coating is an environmentally progressive solution for protecting rigid printed circuit boards (PCBs), sensitive electronic components and fine-pitch designs from environments with airborne contaminants. This high-performance silicone conformal coating is formulated without benzene, toluene, ethylbenzene or xylene (BTEX) solvents. The new DOWSIL™ Conformal Coating also has a low modulus for delicate components and high elongation for reliable protection against stress. To provide an even greater level of PCB protection, DOWSIL™ CC-8030 UV and Moisture Dual Cure Conformal Coating can be applied in multiple layers. Compared to leading acrylated urethane UV cure coatings, the new silicone-based Dow technology provides superior protection against thermal cycling.

As MRC informed earlier, Dow Chemical, the world's petrochemical major, has put order controls in place for vinyl acetate monomer (VAM). The letter dated January 8 said, effective immediately, volumes will be based on previous monthly averages of purchased volumes, or limited to monthly maximum volumes specified in contracts. The letter does not provide details about how long the order control will be in place.

VAM is the main feedstock for the production of ethylene-vinyl-acetate (EVA).

According to MRC's DataScope report, November EVA imports to Russia dropped by 8,9% year on year to 3,440 tonnes from 3,780 tonnes in November 2018, and overall imports of this grade of ethylene copolymer into the Russian Federation decreased in January-November 2019 by 18,9% year on year to 35,95 tonnes (44,330 tonnes in the first eleven months of 2018).

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC

MOSCOW (MRC) -- Union workers at Exxon Mobil Corp’s Baytown, Texas, refinery rejected a contract extension in voting completed, reported Reuters with reference to said sources familiar with the vote.

Members of the United Steelworkers (USW) local 13-2001 in the refinery and laboratory voted down the three-year extension because it included a 6-month expansion of the current four-year period that starting workers must wait before their pay reaches parity with veteran hourly employees, the sources said.

An Exxon spokesman was not available on Sunday night. USW representatives were also unavailable.

USW-represented workers in the adjoining Exxon Baytown chemical plant accepted the extension, according to the sources.

"The refinery and lab were unwilling to sell out future new hires for a USD2,000 one-time, lump-sum bonus," said one of the sources. "It would have cost new hires a lot of money over the course of their career."

The contract proposal would raise pay by 3.5% in the first year and 4% in the second year. In the third year, the increase would match the pay hike in the new national agreement the USW will negotiate for oil industry workers with energy companies in January 2022, according to the sources.

The current contract for workers at the Exxon Baytown refinery and laboratory expires on May 15.

The 560,500 barrel-per-day Baytown refinery is Exxon’s largest in the United States.

As MRC wrote previously, in late September 2019, ExxonMobil Corp shut its 369,024 barrel-per-day (bpd) crude oil refinery in Beaumont, Texas because of flooding from Tropical Storm Imelda. The company also operates a cracker with a capacity of 830,000 mt of ethylene and 195,000 mt of proplyelen per year, low density polyethylene (LDPE) plant with a capacity of 236,000 mt per year and linear low density polyethylene (LLDPE) plant with a capacity of 727,000 tonnes per year in Beaumont.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

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) -- Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), a subsidiary of Royal Dutch Shell plc announced that it has formally closed on the sale of Shell's Martinez Refinery in California to PBF Holding Company LLC (PBF), a subsidiary of PBF Energy, Inc., in exchange for USD1.2 billion which includes the refinery and inventory, according to Hydrocarbonprocessing.

The deal also includes crude oil supply and product offtake agreements, and other adjustments.

Shell is proud of the relationship built and maintained with the city and people of Martinez over the many years it has operated side-by-side with the Martinez community making several notable achievements on safety, reliability, performance, and community involvement.

As MRC informed earlier, Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).

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

MOSCOW (MRC) -- The European Parliament has recently voted to ban single-use plastics across the board in an attempt to stop the unending stream of plastic pollution making its way into the oceans, reported Plastemart with reference to BBC News.

Such plastic products include things like straws, plates, cups and cotton buds, and can take several centuries to degrade in the oceans where they are increasingly observed to be consumed by marine life. According to the European Commission, such plastics make up 70 percent of all marine litter.

A ban was proposed in May after the public outcry and awareness over the issue reached a new zenith. A vote at the European Parliament was held earlier this week, with a huge majority of MEPs - 571 yays to 53 nays, with 34 abstentions - agreeing to enforce the ban by 2021.

The ban is, at a glance, comprehensive. Aside from the 2021 complete ban on plenty of single use products, the use of plastics for which no alternatives currently exist - mostly food packaging - will have to be cut down by 25 percent by 2025. Beverage bottles will also required to be collected and recycled at a rate of 90 percent by 2025. Cigarette butts, remarkably resilient components of plastic pollution, will have to be reduced by 50 percent by 2025, and 80 percent by 2030.

As researchers scramble to work out precisely what negative effects it may afflict on those that inadvertently eat them - especially marine mammals, many of which can suffer from just consuming one small fragment of plastic - news reports keep cropping up that remind us that we are increasingly reaping what we sow. Just in the last week or so, it was confirmed that plenty of table salt contains microplastics, as does human poop.

Things clearly can’t stay the same, and an increasingly multidisciplinary approach to dealing with the problem is at least appearing to gain steam. There are, in crude terms, three major prongs to this: engineering, political action, and public awareness.

This latest move seems to be a rare political action that might end up making a difference. Although plenty of national governments appear to want to do something, what usually happens is dissenting, powerful voices manage to weaken proposals that otherwise might provide an effective, united front.

Back in December 2017, for example, a UN resolution was tabled that aimed to prevent any plastic from entering the waterways of the world. Originally legally enforceable, protestations from the US rendered it non-mandatory and far less sweeping in its scope. At the G7 summit in Quebec this summer, a similar agreement was put forward. Although it focused on the wider issue of ocean health, it also made a point about the importance of scaling back the use of plastics that inevitably end up in the sea. The US and Japan, sadly, failed to sign on to that section of the blueprint.

The politics as to why various nations prefer not to pull their weight are complex, and worthy of writers with more specialized expertise than myself. The perception of who is to blame, and who should handle the problem, certainly plays a role, though.

China, until recently a bit of a dumping ground for much of the world’s potentially recyclable rubbish, no longer accepts the world’s non-industrial waste. Plastics that were once repurposed are now being sent to landfills. Somewhat happily accepting so much waste for a fairly long period of time, the Chinese government has now decided that it shouldn’t keep taking on yang laji - "foreign trash."

Lest we forget, the plastic manufacturing industry is a colossus that has a huge influence over countries’ various decisions over plastic. Certainly, public awareness of the problem is a good thing - even if things like bans on plastic straws are probably misleading the public as to the true scale (and causes) of the crisis – but individual action will only go so far. Unless there’s an industry-wide change, vast quantities plastic will still make it into the oceans.

That’s where engineering comes into the story. There are research groups all over the world currently working on ways to rid ourselves of single-use plastics once and for all, with some projects showing more promise than others. There are some that suspect that making plastic 100 percent recyclable is the way forwards, and proof-of-concept, low-energy intensive plastics that can achieve this have been invented. Others suspect that biodegradable plastics, those that break down quickly after use and can’t pollute, may be our best bet.

It must be stressed that such projects are still very much early days endeavors, so right now, it seems clear that stopping plastic getting into the oceans in the first place is of the utmost importance. Based on the track record of such actions, it's understandable to have a bit of healthy skepticism about the EU's approval of a sweeping ban. After all, it's not clear how enforcable it will be at present - and the proof, as they say, is in the pudding.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC