Petrobras hits new production record amid 'pre-salt' boom

MOSCOW (MRC) -- Brazil’s Petrobras hit a new production record in the fourth quarter, of over 3 million barrels of oil equivalent per day (boepd), thanks largely to the ramp-up of platforms in the prolific pre-salt formation, said Reuters.

In a securities filing, Petroleo Brasileiro SA, as the company is formally known, said it produced 3.025 million boepd, up 5.1% from the third quarter and 13.7% from the fourth quarter last year. In December, the company said, it hit 3.8 million boepd, an all-time monthly record for the firm.

In the filing, the company attributed the monthly records to the ramp-up of several platforms, including the P-67 and P-69 platforms in the Lula field. More generally, the company has benefited from a shift in focus to the offshore “pre-salt” formation, where billions of barrels of oil are located beneath a layer of salt under the ocean floor.

Oil and natural gas production in the pre-salt reached 1.533 million barrels per day (bpd) in the fourth quarter, the company said, up 12.1% from the third quarter and up some 46.4% from the year-ago period.

In the filing, Petrobras maintained its guidance for 2020 production at 2.7 million boepd. The firm has said that reflects expected maintenance stoppages and sagging production at some legacy fields, though the market widely viewed that production target as surprisingly low when it was divulged in November, given the company’s current output.

Petrobras produced an average of 2.77 million boepd in 2019, up 5.4% from 2018.

As in previous quarters, production at onshore and shallow-water fields, as well as deepwater “post-salt” fields, fell sharply, thanks to divestments and a shift in investments to the pre-salt.

Post-salt oil production fell 14.2% in the fourth quarter from the year-ago period to 680 million bpd, while shallow-water production fell 29.8% to 59 million bpd.

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) -- The United States is not concerned by the prospect of further output cuts by OPEC and its allied oil producers, reported Reuters with reference to US Energy Secretary Dan Brouillette's statement.

A technical panel that advises the Organization of the Petroleum Exporting Countries and its allies, led by Russia, have proposed an additional output cut of 600,000 barrels per day (bpd), three sources told Reuters last week.

The group of producers, known as OPEC+, has already been implementing cuts of 1.2 million bpd since January 2019 to reduce the global supply glut and prop up crude prices. OPEC is meeting next month in Vienna.

"We’re not concerned about the decision that OPEC may make, and whatever decision they make will be good for them and we appreciate what they’re doing," Brouillette told reporters on the sidelines of a conference at the U.N. nuclear watchdog’s headquarters in Vienna.

"They’re going to meet and they’re going to make a determination and a decision that’s best suited for them, but I think their ability to impact oil prices in the manner in which they did, you know, three, four, five decades ago is just fundamentally different," Brouillette said.

He also said that while liquefied natural gas (LNG) prices are the lowest they’ve been in years, "the future is still bright for LNG".

Global LNG prices have plunged to fresh record lows as the outbreak of coronavirus has cut demand for gas in China amid a glut in supply.

Prices have been collapsing for months on mild winter weather in Europe and Asia, record gas stockpiles in Europe and lower economic growth due to the US-China trade war.

US gas producers are counting on LNG exports growing spectacularly in the coming years to absorb record amounts of gas associated with oil output from shale formations like the Permian Basin in West Texas and North Dakota’s Bakken field.

"There’s a tremendous amount of demand for LNG around the world. Conversations with China have gone well... and I fully expect that in the course of the next few months you’ll see additional agreements not only in China but in Europe," Brouillette said.
MRC

MOSCOW (MRC) -- Azerbaijani SOCAR AQS LLC and American Halliburton have agreed to establish a joint venture to provide a broad suite of oilfield products and services in Azerbaijan, SOCAR AQS reported, said Azernews.

It was noted that the joint venture will be based in Baku, and will focus its business development and operations both on onshore and offshore Azerbaijan.

SOCAR AQS and Halliburton expect to finalize the joint venture and begin operations in the second quarter of 2020 subject to the agreement and finalization of terms and conditions.

“Combining our unrivalled knowledge, experience and infrastructure in Azerbaijan with Halliburton’s strength as a global leader in oilfield services, creates a strategic platform for our businesses to work together and grow operations in Azerbaijan,” said CEO of SOCAR AQS Ramin Isayev.

Ahmed Kenawi, Halliburton's senior vice president for Europe, Eurasia, and sub-Saharan Africa, noted that cooperation supports the country's strategy to localize high-quality technology services.

“By aligning with SOCAR AQS, we believe the planned joint venture will be uniquely positioned to bring world-class offerings to meet the region’s growing demands in oilfield products and services,” he noted.

SOCAR-AQS LLC was established in 2007 between SOCAR and Absheron Drilling Company to provide drilling and well services. The shareholders are SOCAR, Nobel Oil Services and Absheron Qazma.

Currently, SOCAR AQS conducts drilling operations in four oil and gas fields in the Caspian Sea, including six drilling rigs on five platforms available in the Gunashli, Umid, Bulla and Western Absheron fields.

The company successfully implements drilling works in Turkey in the frame of Expansion of Tuz Golu underground gas storage project, as well as implements the activities under the relevant agreements, expanding its geography in Ukraine and Bangladesh.

SOCAR AQS is a member of International Association of Drilling Contractors (IADC) since 2009. It has been awarded a Certificate of Integrated Drilling and Wells Services API Spec Q2 - Quality Management System. The company is the first and only enterprise in the region to receive API Spec Q2 certification. In November 2018, SOCAR AQS joined the UN Global Compact.

As MRC informed earlier, SOCAR Polymer plans to reach the design load for low-pressure polyethylene (HDPE) no earlier than 2023. In 2019, SOCAR Polymer is expected to produce 48.2 thousand tons of low-pressure polyethylene and 110 thousand tons of polypropylene. In 2020, these indicators will amount to 97.4 and 140 thousand tons, respectively. In 2023, the company is expected to be able to reach its design targets and produce 120 thousand tons of polyethylene and 170 thousand tons of polypropylene. Thus, the production of HDPE relative to 2019 will grow by 2.5 times, polypropylene - by 54%.

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

MOSCOW (MRC) -- A fire at Exxon Mobil Corp’s 502,500 barrel-per-day Baton Rouge refinery in Louisiana was extinguished by the refinery’s fire team on Wednesday, reported Reuters with reference to sources familiar with the matter.

The company earlier said the fire was contained in the area it occurred and there were no reported injuries with all personnel accounted for.

Exxon is monitoring air quality in the refinery and surrounding areas, company spokesman Jeremy Eikenberry said in an emailed response.

The company operates a cracker at this site with the annual production capacity of 1 mln tonnes of ethylene и 575,000 tonnes of propylene, which was shut for maintenance on 11 February 2019 to mid-Apirl 2019.

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.

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.

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

MOSCOW (MRC) -- Tosoh reports an 8.4% decline in sales for the company's fiscal nine months, which ended on 31 December, to Yen 591.8 billion (USD5.45 billion), according to Chemweek.

The fall is attributed to lower sales prices, the result mostly of a decline in the price of naphtha and worsening conditions in overseas markets, it says. Net income was Yen 46.2 billion, down 18% year on year (YOY), while operating income fell 17.3% YOY to Yen 65.8 billion.

Sales for the company’s petrochemical segment decreased 13.5% YOY to Yen 125.1 billion, with operating income declining 24.9% to Yen 9.2 billion. Shipments of ethylene, propylene, and cumene rose in line with an increase in production volumes due to no plant maintenance being scheduled for the fiscal year, says Tosoh. Product prices, however, were down because of the decline in naphtha prices and worsening overseas trade conditions, it says.

Exports of polyethylene resin for use in photovoltaic cell encapsulating films increased and product prices fell, reflecting the lower naphtha prices. Chloroprene rubber exports, primarily to Asia, also declined, according to the company.

Tosoh's chlor-alkali segment saw operating income fall 33.2% YOY to Yen 21.8 billion, with sales down 12% YOY to Yen 223.7 billion. Stagnation in domestic demand led to a decrease in caustic soda shipments in the domestic market, it says. Additionally, caustic soda export prices declined in line with worsening market conditions overseas. Shipments of vinyl chloride monomer fell because of a drop in production and declining market conditions overseas led to a reduction in product prices. Rising polyvinyl chloride resin production volume resulted in increased shipments, while prices fell for methylene di-para-phenylene isocyanate, says the company.

Operating income at Tosoh's specialty segment decreased 20.4% YOY to Yen 15.4 billion, while sales of specialty products dropped 5.7% YOY to Yen 139.5 billion. Ethyleneamine shipments declined owing to stagnant demand, with poor trade conditions impacting ethyleneamine prices. Shipments mostly to Europe of packing materials for liquid chromatography decreased. Diagnostic-related product shipments, especially of in vitro diagnostic reagents bound for Europe, the US and China also fell. The company adds that shipments of silica glass reduced amid inactivity in the semiconductor market. Shipments of electrolytic manganese dioxide for dry cells also decreased.

The company’s other business unit is engineering.

Tosoh has maintained its forecast for the fiscal year ending 31 March 2020. The company expects its full-year net profit to be Yen 57 billion, while its guidance for operating income stands at ?84 billion. Full-year net sales are projected to be Yen 800 billion.

As MRC wrote previously, Tosoh Corp restarted its 527,000 tpa naphtha cracker in Yokkaichi, central Japan in mid-April 2016, after planned maintenance. The cracker was shut on March 8, 2016. The company runs two low-density polyethylene (LDPE) lines with a combined production capacity of 56,000 mt/year and a 43,000 mt/year LDPE/ ethyl vinyl acetate (EVA) swing plant at the same site. It also runs 120,000 mt/year high density polyethylene (HDPE) plant.

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).

Tosoh is one of the largest chlor-alkali manufacturers in Asia. The company supplies the plastic resins and an array of the basic chemicals that support modern life. Tosoh's petrochemical operations supply ethylene, polymers, and polyethylene.
MRC