Petrobras puts Para-Maranhao exploration blocks up for sale

MOSCOW (MRC) -- Brazilian state-led oil company Petrobras put two exploration blocks in the highly prospective Para-Maranhao Basin that holds similarities to major equatorial margin discoveries off the coasts of Guyana and Suriname further to the north, Petrobras said in a sales offer sent out to potential investors Tuesday, reported S&P Global.

Petrobras plans to sell its 100% stake in the BM-PAMA-3 concession and 80% stake in the BM-PAMA-8 concession. Chinese state-run oil company Sinopec retains the remaining 20% stake in the BM-PAMA-8 concession and could exercise its preferential right to buy Petrobras' stake, according to the teaser.

The latest sales offer represents a rapid expansion of the volume of oil and natural gas exploration and production assets, with Petrobras adding four other separate assets up for sale since January 1 amid uncertainties about how much the company will raise from the sale of eight of its 13 refineries. Petrobras targeted $20 billion-$30 billion worth of asset sales over the next five years under its 2020-2024 investment plan, but company officials said that additional oil fields could be added to raise more cash if needed.

Petrobras previously put the Golfinho and Camarupim fields up for sale in January, then this week put its 62.5% operating stake in the Papa-Terra Field on the auction block. Chevron also agreed to tag along and sell its 37.5% minority stake, the company said late Monday.

The asset sales are part of a broader overhaul of Petrobras' exploration-and-production portfolio, with the company previously putting more than 100 mature onshore and shallow-water offshore fields on the auction block. Some of the areas were sold previously or remaining in the sales process, but Petrobras has now moved to include higher-quality mature assets in the deep waters of the Campos Basin that still hold some upside.

Petrobras wants to move away from many of its heavy oil legacy assets, except for massive fields such as Roncador and Marlim, to focus on development of the larger subsalt fields, where a single well can average more than 40,000 barrels of oil equivalent.

The BM-PAMA-3 concession is currently in the discovery evaluation phase, with Petrobras studying the Harpia find, the company said. Under terms of the existing concession contract, potential investors will need to commit to drilling a single well, with a formation test contingent on results of the exploration well, Petrobras said.

The BM-PAMA-8 concession, meanwhile, is divided into the PAMA-M-192 and PAMA-M-194 blocks, according to Petrobras. The concession is currently in the second exploration phase, with the winning bidders required to commit to drilling a single well in the PAMA-M-192 block, Petrobras said.

Interested bidders must be qualified or able to qualify as an A operator under criteria established by the National Petroleum Agency, Petrobras said. The deadline for submitting qualification documents and confidentiality agreements is February 28, Petrobras said.

As MRC wrote earlier, the chief executive of Brazilian state-run oil firm Petroleo Brasileiro said in December 2019 he wants to sell the company's stake in petrochemical company Braskem within 12 months.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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 Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

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 in Europe, as per the company's press release.

Effective February 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below increased as follows:

- CALIBRE PC resins - by EUR150 per metric ton.

As MRC informed earlier, Trinseo last raised its prices for all PC grades in Europe on 1 January 2020 also by EUR150 per metric ton.

According to MRC's ScanPlast report, Russia's estimated PC consumption (excluding imports and exports to/from Belarus) totalled 78,500 tonnes in 2019, up by 15% year on year (68,100 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

MOSCOW (MRC) -- Brazilian state-run oil firm Petrobras expects to increase its equity value by roughly 45% by 2021, in large part by cutting costs and divesting non-core assets, it said in a presentation released, reported Reuters.

Capital expenditure from 2020 to 2024 will be concentrated in Brazil’s offshore "pre-salt" formation, with a special emphasis on its Buzios field, Petroleo Brasileiro SA, as the firm is formally known, said.

As MRC wrote earlier, Petrobras has recently announced the binding phase for the sale of three refineries in Brazil, according to a securities filing on Friday. The refineries are located in the states of Amazonas, Ceara and Parana. The largest of the three, REMAN, in Amazonas, has a 46,000 barrel a day processing capacity, according to the filing.

We also remind that the chief executive of Brazilian state-run oil firm Petroleo Brasileiro said in December 2019 he wants to sell the company's stake in petrochemical company Braskem within 12 months.

Besides, Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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 Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Olin (Clayton, Missouri) reports a fourth-quarter net loss of USD77 million, swinging from a profit of USD53 million in the year-ago period on weak demand and falling prices, according to Chemweek.

Sales totaled USD1.387 billion, down 15% year over year (YOY) from USD1.635 billion. Earnings per share came to a 49 cent loss, missing the average analyst estimate of an 11 cent loss as compiled by Refinitiv (New York).

Olin’s chairman, president, and CEO John E. Fischer says 2019 as a whole was difficult for the company. The chlor-alkali products and vinyls business reported weaker demand from urethane, agricultural, refrigerant, alumina, and pulp and paper customers, while the epoxy business saw weaker demand from automotive, electrical laminate, and industrial coatings customers. Olin’s caustic soda pricing during 2019 declined about 24% from 2018, while ethylene dichloride pricing declined about 30% and hydrochloric acid pricing about 40%. Epoxy resin prices dropped roughly 20% globally.

"Olin continues to face a challenging pricing environment as we enter 2020," says Fischer. "As an example, Olin’s caustic soda and ethylene dichloride pricing in January 2020 is expected to be approximately 15% lower than the average 2019 price. We expect the cost containment and productivity initiatives from 2019, coupled with ongoing efforts in 2020, to provide a partial offset to this challenging product pricing environment."

Sales in the chlor-alkali products and vinyls segment totaled USD762 million, down 22% YOY from USD981 million. Earnings came to USD33 million, down 77% from USD146 million. Olin cites lower caustic soda and ethylene dichloride pricing for most of the decline.

Sales in the epoxy segment totaled USD470 million, down 8% YOY from USD509 million. Segment earnings came to USD15 million, down 21% from USD19 million. Lower product prices were only partially offset by higher resin volumes and lower feedstock benzene and propylene costs.

Sales in the Winchester ammunition segment totaled USD155 million, up 6% YOY from USD146 million, and earnings came to USD7 million, up 63% from USD4.3 million.

As MRC informed before, Olin Corporation announced in December 2019 that it plans to permanently shut down a chlor alkali plant with a capacity of 230,000 tons and its Vinylidene Chloride (VDC) production facility, both in Freeport, Texas. These closures are expected to be completed before the end of 2020.

According to MRC's ScanPlast report, Russia's consumption of caustic soda increased to 1,071,500 tonnes in 2019, up by 10% year on year (975,600 tonnes). Imports of caustic soda into Russia were 32,300 tonnes in 2019, up by 61% year on year (20,000 tonnes). Exports of caustic soda from Russia decreased to 245,400 tonnes in 2019, down by 7% year on year (263,600 tonnes). Production of caustic soda in the country totalled 1,289,400 tonnes in 2019, up by 1% year on year (1,278,900 tonnes).

Olin Corporation is a leading vertically-integrated global manufacturer and distributor of chemical products and a leading US manufacturer of ammunition. The chemical products produced include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach and hydrochloric acid. Winchester's principal manufacturing facilities produce and distribute sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
MRC

MOSCOW (MRC) -- The European Investment Bank (EIB) has granted Cepsa EUR60m to develop a petrochemical sustainability reserach and development (R&D) initiative, said the company.

This investment will be used to install a technology system created by Cepsa and to create a specialised technology company called Universal Oil Products to produce linear alkylbenzene (LAB).

The EIB-financed investment will be used to install the Detal system, a state-of-the-art technology created by Cepsa and specialised technology company UOP (Universal Oil Products) to produce linear alkylbenzene (LAB), the most commonly used raw material for the production of biodegradable detergents internationally. This technology improves the efficiency of the manufacturing process and cuts CO2 emissions and water and electricity use. It also optimises the production process as it both reduces waste and enables much of it to be reused. Lastly, this technology delivers major safety improvements.

The EIB will monitor the implementation of this project, which Cepsa plans to complete in mid-2020, as part of its goal to move towards a more efficient and sustainable productive model.

The agreement was made possible by the Investment Plan for Europe, which enables the EIB to support investments fostering innovation, economic growth and employment. During the implementation phase, Cepsa estimates that this project will create around 250 (mostly local) jobs, peaking at 400 jobs, and will help to safeguard Cepsa's 3 600 direct and 2 600 indirect positions in Andalusia.

LAB is the most common raw material used to produce biodegradable detergents and cuts emissions as less water and electricity is used, while in the production stage waste is reduced and much of it can be reused.

Cepsa anticipates that the project will be completed by mid-2020.

The grant – signed in Madrid by EIB vice president Emma Navarro and Cepsa's CEO Philippe Boisseau ­– was provided as part of the Investment Plan for Europe, which enables the EIB to support investments fostering innovation, economic growth, and employment.

Phenol is the main raw material component for the production of bisphenol A (BPA), which, in turn, is used to produce polycarbonate (PC).

As MRC informed earlier, Cepsa Quimica (Shanghai), a joint venture between Spanish petrochemical company CEPSA and Japanese Sumitomo Corp, resumed production at a phenol and acetone plant in Shanghai (Shanghai, China) on December 16. This enterprise with a capacity of 250 thousand tons of phenol and 150 thousand tons of acetone per year was closed on December 10 due to repair work on the gas pipeline in Shanghai Caojing Chemical Industry Park, where this plant is located.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to\\from Belarus) fell in January-November 2019 by 14% year on year to 70,700 tonnes (62,000 tonnes a year earlier).
MRC