Petrobras to hire emergency workers as strike hits day 10

MOSCOW (MRC) -- Brazilian state-led oil company Petrobras was cleared by a local labor court judge to hire emergency workers to maintain operations while unionized oil workers remained on the picket line for a 10th consecutive day, reported S&P Global with reference to the company and unions' statement Monday.

"Petrobras is in the process of immediately hiring people and services under an emergency to guarantee the operational continuity of its units during the strike," the company said in a statement. The emergency contracts started Friday, Petrobras said.

The latest turn in the ongoing labor dispute came despite a court order last week that forced unions to maintain at least 90% of unionized workers on the job or risk facing a fine of more than USD100,000/day. According to the injunction, the judge dismissed claims by oil workers that Petrobras had failed to adhere to the terms of a new collective bargaining agreement signed in November. All of the unions agreed to the deal, the judge ruled, and not enough time had passed for Petrobras to not live up to terms of the agreement.

The Oil Workers Federation, or FUP, said in a separate statement that necessary work crews remained on the job, but that Petrobras officials denied the union entrance to operational units to make a head count. Union officials said that Petrobras was using the strike movement as a way to hire strike breakers.

"Management's contradictions are evidence of the political treatment given to the oil workers strike in order to criminalize the movement," FUP said in a statement Monday. "That puts at risk the safety of workers and installations in announcing the hiring of scabs."

The emergency workers, however, will be technically qualified to carry out the required work, Petrobras said.

Oil workers across Brazil started a series of work actions commonly referred to as a "warning strike" on Saturday, February 1. Workers failed to show up for shift changes or carried out work-to-rule actions, but the walkout was not aimed at affecting production at offshore platforms and refineries, according to the union.

union wants Petrobras to halt the planned layoff of more than 1,000 workers at a fertilizer plant in Parana state. Petrobras is exiting the fertilizer business and has tried for years to sell or lease the existing facilities without success. The layoffs will go into effect Friday, union officials said.

A total of 40 production platforms, 11 refineries and 18 oil and refined-product terminals were adhering to the strike as of Monday morning, FUP said.

The strike has not affected output or domestic refined-product supplies, Petrobras said. Many of the biggest floating production, storage and offloading vessels, or FPSOs, handling output from the subsalt region are leased or operated by third-party companies such as SBM Offshore and Japan's Modec, so similar recent walkouts have had little impact on production.

"Units are operating under adequate conditions, with reinforcement from contingency teams when necessary," Petrobras said. "There are no impacts on production at this time."

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

Lanxess names new head of its Saltigo subsidiary

MOSCOW (MRC) -- The Saltigo subsidiary of Germany-based specialty chemical maker Lanxess will have a new CEO by this summer, said the company.

Michael Zobel, currently the head of Lanxess’ high performance materials (HPM) business unit, will take over the management of Saltigo from Torsten Derr on June 1.

Saltigo is part of Lanxess’ advanced intermediates segment. The company, which is headquartered in Leverkusen, Germany and has production facilities in Leverkusen and Dormagen, Germany, employs around 1,200 staff internationally.

Derr, who has headed Saltigo since April 2016 and previously held various positions at Bayer and Lanxess since 1998, will be taking up the position of chairman of the board of management of SGL Carbon SE.

Prior to leading Lanxess’ HPM business, Zobel held various positions at Bayer and at Lanxess.

The name of Zobel’s successor as head of the HPM business unit will be announced at a later date.

As MRC informed earlier, Vinmar Polymers America will distribute Lanxess Corp.'s high-performance plastics to customers in North America.

Earlier, Covestro closed the sale of its European polycarbonates (PC) sheets business to the Munich-based Serafin Group effective January 2, 2020. This includes key management and sales functions throughout Europe as well as production sites in Belgium and Italy.

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).

LANXESS is a leading specialty chemicals company with sales of EUR 7.2 billion in 2018. The company currently has about 15,500 employees in 33 countries and is represented at 60 production sites worldwide. The core business of LANXESS is the development, manufacturing and marketing of chemical intermediates, additives, specialty chemicals and plastics.
MRC

BP downstream chief Erginbilgic to leave company

MOSCOW (MRC) -- BP downstream CEO Tufan Erginbilgic is to leave the company, the UK oil and gas major said Friday, in an early change at the top after new CEO Bernard Looney took up his post last week, reported S&P Global.

BP did not name a replacement, saying in a statement that Erginbilgic had "decided to leave the company" at the end of March 2020 and that a successor would be announced separately.

Looney praised the outgoing executive's record and BP said Erginbilgic had delivered over USD5 billion in underlying annual earnings growth since taking up the role in 2014.

"Under Tufan's leadership, BP's downstream has been at the heart of our return to growth; what he has achieved in this time is extraordinary," Looney said. "He has transformed the business, leading a team that has delivered impressive results time and again. I have always appreciated his strategic thinking, expertise and understanding of the business and will miss having him on the team."

Erginbilgic, who has been with BP since 1997, said he was "very proud of what we have achieved together in the downstream. We have gone through an incredible transformation, delivered against our clear strategy and built a strong platform for continued growth."

BP reported sharply weaker adjusted earnings in its downstream segment in the fourth quarter, and noted ongoing tough conditions in the current quarter.

Looney is due to set out some of his goals at an event with journalists on February 12.

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

Somalia president signs new petroleum bill into law

MOSCOW (MRC) -- Somali President Mohamed Abdullahi Farmajo has signed landmark petroleum legislation into law to help open up a new frontier market, reported Reuters with reference to the oil ministry's statement.

The upper house of Somalia’s parliament in January approved the petroleum law aimed at providing a regulatory framework that will help attract investment in exploration by major oil companies.

"The Petroleum Law demonstrates the capacity of the Somalian people to unite in an historic effort to work together to build an equitable, prosperous and peaceful nation," Farmajo said in a statement.

The new law establishes revenue-sharing between the central government and states as well as a legal framework for an industry the country hopes will bring jobs and investment after decades of conflict.

Plagued by civil strife, Somalia currently does not produce any oil but production could transform the economy as seismic data has shown there could be significant oil reserves offshore.

The government hopes the petroleum law will entice big oil companies like ExxonMobil and Shell to return to the country where they held legacy blocks from the 1990s.

Last October, the two companies paid USD1.7 million owed to Somalia for leasing these offshore blocks, although operations there remain suspended.

"The opportunities for the international exploration and development majors are enormous, with Somalia having the potential to become one of the most significant hydrocarbon plays in offshore East Africa," Abdirashid Mohamed Ahmed, the Minister of Petroleum and Mineral Resources, said in the statement.

We remind that, as MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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

Dow to expand Fort Saskatchewan ethylene plant

MOSCOW (MRC) -- Dow plans to install a new furnace in its steam cracker at Fort Saskatchewan, Alberta, Canada, increasing its ethylene capacity, currently 1.42 million metric tons/year (MMt/y), by 130,000 metric tons/year, as per Chemweek.

Dow will split the cost of the project and the incremental volume equally with an unnamed regional customer, according to CEO Jim Fitterling, who announced the news this morning during the company's fourth-quarter earnings call. Start-up is slated for the first half of 2021.

"This expansion leverages our unique cost-advantaged feedstock position in western Canada," Fitterling said. "The additional ethylene will be consumed by existing polyethylene assets in the region, making the investment immediately accretive once it comes online."

Fitterling also said Dow will soon begin commissioning two new furnaces at its Texas-9 steam cracker at Freeport, Texas, with start-up planned for the middle of the second quarter. The facility's ethylene capacity, currently 1.5 MMt/y, will increase to 2 MMt/y, the largest in the world.

There are three polyethylene producers in western Canada. Dow has three linear low-density polyethylene (LLDPE) lines totaling 705,000 metric tons/year of capacity at Fort Saskatchewan, and at Red Deer, Alberta, the company has a 75,000 metric tons/year LLDPE line and two high-density (HDPE) lines totaling 755,000 metric tons/year.

Nova Chemicals has four LLDPE lines totaling 1.482 MMt/y of capacity and a 50,000 metric tons/year HDPE line at Joffre, Alberta. Nova also operates two ethylene plants at Joffre, one with 810,000 metric tons/year of capacity, and another, co-owned equally with Dow, totaling 635,000 metric tons/year.

Celanese EVA Polymers has three low-density (LDPE) plants totaling 168,000 metric tons/year at Edmonton, Alberta, as well as a 105,000 metric tons/year ethylene–vinyl acetate (EVA) plant.

As MRC informed before, on 9 September 2019, Dow Chemical began major maintenance on the LHC 1 cracker at Terneuzen, Netherlands. More than 1,500 extra employees from various external companies carried out maintenance work in the subsequent period.

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).

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC