BP chief financial officer Brian Gilvary retires and be succeeded by Murray Auchincloss

MOSCOW (MRC) -- The board of BP p.l.c. has recently announced that Brian Gilvary, BP chief financial officer (CFO), has decided to retire from the company and step down from the BP board on 30 June 2020, as per the company's press release.

Gilvary has had a 34-year career with BP, including over eight years as CFO.

He will be succeeded by Murray Auchincloss, currently CFO of BP’s Upstream segment, who will take up the role of BP CFO and join the board on 1 July 2020. Gilvary and Auchincloss will work together between now and the end of June to ensure an orderly transition.

BP chairman Helge Lund said: "We will miss Brian’s financial stewardship and strategic insights. He is one of the architects of today’s BP, key to its transformation into a safer, simpler and stronger company. After a thorough selection process, the board is pleased to have chosen Murray as BP’s next CFO. With his international financial and commercial experience and a deep understanding of the whole group, he will play an important role as BP continues to develop in a fast-changing energy market. On behalf of the board, I would like to thank Brian for all he has done for BP and look forward to welcoming Murray to the board."

Bob Dudley, BP group chief executive said: "I have worked closely with Brian for more than two decades and have always valued his financial expertise, strategic guidance and his unwavering dedication to the company. It is difficult to overstate the contribution he has made to BP: few CFOs have faced challenges of the scale that he has, and far fewer have managed them as successfully. As now we both approach retirement, I will miss working with him."

Bernard Looney, currently chief executive Upstream and BP group chief executive from 5 February 2020, said: "All of us at BP will greatly miss Brian’s clarity of thought, his candour and his commitment to the company. I appreciate that he has agreed to stay in post until mid-year to ensure a successful handover to Murray. I have worked side-by-side with Murray for many years and have the utmost confidence in his ability to step into this critical role."

Gilvary joined BP in 1986 with a PhD in mathematics from the University of Manchester. After a variety of commercial and financial roles internationally in BP’s upstream, downstream and trading businesses, he became chief executive of BP ‘s integrated supply and trading function in 2005 and in 2010 deputy CFO and head of finance. He became BP CFO and joined the board in January 2012.

During his time as CFO he has managed some of the most complex issues to face BP: leading the rebuilding and strengthening of the group’s finances and the resolution of complex litigation after the Gulf of Mexico oil spill; managing the impacts of the oil price crash of 2014/15; and playing an integral role in evolving BP’s position in Russia.

As MRC reported 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

Chevron Venezuela sanctions waiver extended to April 2020

MOSCOW (MRC) -- The US Treasury Department has recently extended for three months a sanctions waiver to Chevron and four US oil services companies allowing them to continue work in Venezuela, reported S&P Global.

Some within the Trump administration had pushed to allow the waiver to expire in order to ramp up pressure on Venezuela's Maduro regime. The waiver, which was scheduled to expire on January 22, now expires on April 22.

The three-month extension of the waiver was announced by Treasury after midnight Saturday.

The waiver allows Chevron, Halliburton, Schlumberger, Baker Hughes and Weatherford International to continue certain work with PDVSA, outside of US sanctions.

This will be the third three-month extension of that waiver, initially issued in January 2019, when the bulk of US sanctions on Venezuelan oil flows went into effect.

The waiver has been extended based on the argument that the presence of US companies is necessary to prevent the complete collapse of Venezuela's oil sector, easing an expected recovery once President Nicolas Maduro was forced out of power.

In a recent note, analysts with ClearView Energy Partners wrote that Maduro's persistent hold on power and his latest efforts to take over the National Assembly weaken the argument for allowing the waiver to stay in place. And, with a US presidential race approaching, the Trump administration may be "increasingly wary of the appearance of going soft on Maduro by offering sanctions leniency," these analysts said.

Some analysts claimed that Venezuela's oil output, which averaged 720,000 b/d in December, according to the latest S&P Global Platts OPEC survey, could plunge below 300,000 b/d if the waiver was allowed to expire. Others had argued that if Chevron and other US companies were forced out of Venezuela, Russian and Chinese firms would simply take over that work.

"If Chevron is forced to leave Venezuela, non-US companies will fill the void and oil production will continue," Ray Fohr, a Chevron spokesman, told S&P Global Platts earlier this month.

As MRC wrote earlier, Venezuela’s Petropiar facility, a joint venture between state oil company PDVSA and Chevron Corp, was once again operating last month as a crude upgrader after several months working as a less complex blending facility.

We remind that in March 2018, Chevron Phillips Chemical Company LP successfully introduced feedstock and commenced operations of a new ethane cracker at its Cedar Bayou facility in Baytown, Texas. At peak production, the unit will produce 1.5 million metric tons/3.3 billion lbs. per year.

Besides, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC

BP bucks oil industry gloom

MOSCOW (MRC) -- BP Plc surprised investors with a slight increase in its dividend, bucking the trend in what has otherwise been a bleak earnings season for Big Oil, reported Bloomberg.

In the final set of results for retiring Chief Executive Officer Bob Dudley, the London-based company offered some respite for investors who received nothing but bad news from BP’s peers. Big payouts, whether as dividends or buybacks, are the only thing attracting many investors to the industry in a world increasingly aware of the impact of fossil fuels on climate change and falling energy prices.

Last week Royal Dutch Shell Plc slowed the pace of its share buybacks due to weak macroeconomic conditions, while Exxon Mobil Corp. and Chevron Corp. failed to impress.

"We remain confident in delivering the 2021 free cash flow targets and divestment proceeds, and expect to continue to reduce net debt and gearing,” Dudley said on an analyst call on Tuesday. This underpins the company’s “ongoing commitment to sustainably growing distributions to shareholders over the long term," he added.

BP shares rose 4.4% to 472.75 pence as of 11:38 a.m. in London, the biggest increase since September.

"BP’s results have come in slightly better than expected, but they are still a reflection of the challenging environment for oil and gas companies," said Stuart Lamont, an investment manager at Brewin Dolphin Ltd.

Fourth-quarter adjusted net income was USD2.57 billion, exceeding even the highest analyst estimate. That compares with profit of USD3.48 billion a year earlier. The company’s dividend for the period will rise 2.4% to 10.5 cents a share.

Big Oil offers generous returns, but analysts are beginning to question the affordability of these payouts due to high levels of debt, volatile markets and investor pressures to invest in clean energy. BP’s gearing - a measure of debt to equity - remained above its target of 30% at the end of 2019.

BP is reducing its debt burden in part by selling unwanted assets. It has announced USD9.4 billion of deals since the start of 2019, putting it well on course to complete the targeted USD10 billion of sales in the two years to 2020, Chief Financial Officer Brian Gilvary said. It announced a further USD5 billion by mid-2021.

BP's preferred measure of debt - gearing - fell slightly during the fourth quarter, though still above its 30% target.

In an interview with Bloomberg TV, Gilvary promised a "major de-leveraging of the balance sheet" this year. BP has so far only received about a quarter of the proceeds from its 2019 divestments, so receipt of the remaining funds will accelerate the repayment of debt this year, he said. "We are very confident that today’s dividend is sustainable."

BP completed its share repurchasing program, buying USD1.5 billion of stocks in the fourth quarter. The program has offset the dilution from paying dividends in shares, know as a scrip, since the third quarter of 2017 and is on a much smaller scale than Shell’s buybacks.

BP also enjoyed its best year trading oil and natural gas since 2009, helping it weather the impact of lower energy prices and weak refining and chemical margins. Like its peers, the company doesn’t disclose the how much money it makes from its trading business, but insiders put the profitability in a good year in the order of a couple of billion dollars.

Oil and gas production increased in the quarter as maintenance season came to an end, with output 2.7% higher than a year earlier at 3.781 million barrels of oil equivalent a day, including the contribution of barrels from strategic partner Rosneft PJSC.

Bernard Looney takes over as the company’s CEO on Wednesday. Dudley is credited with saving BP from the brink of collapse following the 2010 Deepwater Horizon catastrophe in the Gulf of Mexico, which killed 11 people and caused the biggest offshore oil spill in US history. His departure is part of a wider changing of the guard, with Gilvary handing over the role to Murray Auchincloss before he retires on June 30.

Looney’s task will be to convince investors and the wider public that BP is doing enough to tackle climate change. Last week, the Church of England Pension Board launched a passive index, which includes oil and gas companies, aligned with the goals of the Paris Agreement on climate change. Shell and Madrid-based Repsol made the index. BP and its American peers did not. Looney is set to outline his ambitions for the company on Feb. 12.

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

Botswana to accelerate USD4 B coal-to-liquid refinery project

MOSCOW (MRC) -- Botswana, which has some of Africa’s largest coal reserves, wants to cut harmful carbon emissions but is committed to using its resources for a new coal-to-liquid (CTL) refinery set to come onstream by 2025, reported Hydrocarbonprocessing with reference to the mines minister's statement.

State-owned firm Botswana Oil (BOL) issued a tender three years ago seeking investors to build the plant, estimated then to cost around USD4 billion, as the diamond-rich southern African country seeks to secure its energy supplies.

"It (CTL plant) is still in its infancy stage, but we believe now it will be accelerated," Lefoko Maxwell Moagi, minister of mineral resources, green technology and energy security, told Reuters on the sidelines of the Mining Indaba investment conference in Cape Town.

Moagi described Botswana’s 212 billion coal reserves as "God’s gift" and said the CTL project, as well as a 100 megawatt pilot coal bed methane project, were two projects Botswana would fast-track.

"We believe coal has also got a beneficial way of being exploited without adding to the carbon footprint. We can convert it in coal-to-liquids, we can convert it to gas, we can do a lot of things with coal and these are the things we will be exploiting fully," Moagi said.

Asked about funding challenges for any future coal-related projects amidst a global pushback from banks and investors, Moagi said some banks, which he did not name, as well as Chinese firms remained potential financiers.

Moagi said the government had held preliminary discussions with Sasol, a recognized leader in CTL technology and whose Secunda refinery currently supplies South Africa with millions of liters of synthetic fuel each year.

Sasol did not immediately respond for comment.

Last year, Shumba Energy formed a joint venture with two Chinese companies to build a separate coal-to-liquids plant at a cost of between USD1.5 billion and USD2 billion.

Moagi said the government also expected to finalize power purchase agreements this year for a planned new 100MW pilot power plant using coal bed methane, gas trapped in underground coal seams.

Tlou Energy and Sekaname, a subsidiary of Kalahari Energy, have been shortlisted to develop the project.

"The project is at an advanced stage because what we needed to do is to make sure the power purchase agreements are finalised and we hope that this year it will be finalised," Moagi said.

He said the government expected the coal bed methane project to come onstream by 2022.

As MRC wrote before, Sasol announced that its world-scale US ethane cracker reached beneficial operation on 27 August 2019. Sasol’s new cracker, the heart of its Lake Charles Chemicals Project (LCCP), is the third and most significant of the seven LCCP facilities to come online and will provide feedstock to our six new derivative units at the company's Lake Charles multi-asset site.

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).
MRC

PPG completes acquisition of Italian firm

MOSCOW (MRC) -- PPG says it has completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products, according to Chemweek.

Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January.

ICR was founded in 1961 and employs about 180 people.

As MRC wrote previously, Russia's output of chemical products dropped by 3.2% in November 2019 month on month. However, production of basic chemicals increased by 3.6% in the first eleven 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. Last month, 255,000 tonnes of ethylene were produced versus 210,000 tonnes in October; by November, Russian producers had completed all their scheduled works. Thus, 2,721,000 tonnes of this olefin were produced in January-November 2019, up by 0.3% year on year.

Ethylene is the main feedstock for the production of polyethylene (PE).

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.

ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.
MRC