BP appoints chairman and president of BP America

MOSCOW (MRC) -- BP announced that David Lawler, CEO of BPX Energy (Denver), will add to his portfolio the responsibilities of chairman and president of BP America, succeeding Susan Dio on 1 July 2020, said Chemweek.

Lawler will become BP's chief representative in the United States. With 13,000 employees and USD30 billion invested since 2016, BP has a larger economic footprint in the US than anywhere else in the world, the company says. In 2019, these businesses accounted for a third of BP's global revenue.

Lawler will take the helm as BP embarks on a new ambition to become net zero by 2050 or sooner and to help the world get to net zero. Bernard Looney, BP CEO said, "Beyond a track record of delivering strong safety, environmental and commercial results, [Lawler] brings an authentic and inspiring leadership style. His curiosity and willingness to do things differently will be essential as we reinvent BP and reimagine energy for people and our planet."

Lawler has served as CEO of BPX Energy since 2014. In 2018, he led the USD10.5 billion acquisition and integration of BHP's American shale assets, BP's largest acquisition since buying Arco in 1999. In addition to focusing investment on the highest quality barrels – aimed at delivering returns and cash flow rather than production volumes alone – Lawler's team also developed oilfield infrastructure to lower operational emissions and eventually eliminate routine flaring in the Permian Basin.

We also remind that, 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 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

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) -- Russian emergency services are working June 4 to contain a major fuel spill at a power plant near the city of Norilsk after President Vladimir Putin declared a statement of emergency following the leak, said S&P Global.

Products spilled from a reserve fuel tank on May 29, resulting in damage both onshore and offshore in the local area. The tank contained 21,163 mt of diesel, Sergei Lipin, head of plant owner NTEK, a subsidiary of Norilsk Nickel said June 3, during a government meeting on the spill.

Oil spills are a frequent occurrence in Russia. Natural resources supervisor Rosprirodnadzor estimates that in 2019 there were 819 oil spills, covering a total area of 93.6 hectares.

Russia's emergencies ministry is currently trying to localize the spread of the spill, install oil booms and collect oil products, contaminated water and soil, emergencies minister Evgeny Zinichev said during the government meeting, according to a statement on the Kremlin website. He added that 100 mt of oil products and contaminated soil have already been collected.

Rosprirodnadzor estimates that the contamination includes 6,000 mt of oil products onshore and a further 15,000 mt in the water.

The clean-up operation, which began June 1 is hampered by the region's remote location, and a lack of access roads or river navigation options. Zinichev also said that the ministry was not informed until 2 days after the incident occurred.

Natural resources minister Dmitry Kobylkin said the clean up operation will likely include reagents and burning spilled fuel. "We must try to extract the fuel as much as possible, mix it with the appropriate chemical reagents, and, where that is completely difficult, probably to burn something. But such a bonfire on such an area, of such an amount, will be a big problem, in my opinion," he said.

Energy Minister Alexander Novak suggested Russian oil companies could provide support in managing the spill. Russia's Investigative Committee is launching an investigation into the incident.

As MRC informed earlier, the Russian energy ministry expects the global oil market to balance in June or July as a result of rising consumption, as well as the drop in production in OPEC+ and other countries.

As MRC informed earlier, China's crude oil imports from Russia rose 17.7% year on year to 7.2 million mt or 1.76 million b/d in April, resulting in Russia overtaking Saudi Arabia to become the country's top supplier in the month.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

MRC

MOSCOW (MRC) -- Tropical Storm Cristobal forced ports to close in three states in Mexico's Bay of Campeche area June 3, although there has been no major impact on oil, gas or power generation infrastructure, reported S&P Global.

Ports in the states of Veracruz, Tabasco and Campeche have been closed to all ships, said the head of Mexico's civil protection agency, David Leon, in a press conference.

Northern ports in the state of Veracruz remained open, including the ports of Veracruz and Tuxpan, according to a Mexico-based oil broker.

All relevant oil and gas infrastructure is working without disruption due to emergency protocols put in place by Pemex, the state oil company, said Leon. Power generation plants of state utility CFE in the area were also operating normally, he said.

The 220,000 b/d Minatitlan refinery, located in Veracruz, is operating normally, although still below capacity, a source at the plant said.

It was not clear what impact the storm has had on petroleum terminals in the area. Major Mexican oil facilities such as the Dos Bocas marine terminal will likely face loading delays. Other facilities in the storm's path include the Villahermosa terminal, Campeche terminal and Progreso terminal, and Pajaritos terminal.

The Pajaritos terminal and the Tuxpan terminal are the two main loading destinations for US refined products exports into Mexico, according to Kpler vessel tracking software.

However, exports to Mexico have slowed since March as the coronavirus has reduced fuels consumption in Mexico.

Kpler showed very few clean or dirty tankers in the area June 3.

Campeche is also one of the most active oil and gas exploration and production regions in the country.

Pemex was not immediately available for comment.

Cristobal, which was formed with the remnants from storm Amanda, showed maximum sustained winds of 60 mph June 3, according to the US National Hurricane Center, which issued a tropical storm warning for area ports.

The storm is currently on track to head north into the US Gulf of Mexico, home to roughly 1.9 million b/d of crude production, according to the US Energy Information Administration. The storm is expected to weaken before it makes landfall in Louisiana by late June 6.

Offshore oil and gas producers said they are monitoring the storm, and BP has already started to reduce output in preparation.

"With forecasts indicating that Cristobal will begin moving north across the Gulf of Mexico later this week, BP has begun removing offshore personnel and ramping down production at BP's operated facilities Thunder Horse, Atlantis and Na Kika," said BP spokesperson Jason Ryan. "Non-essential personnel are being evacuated from BP's operated Mad Dog platform but production remains unaffected at this time."

Other producers were beginning to reduce personnel as well.

"To ensure the safety of our people and protection of the environment, we are removing non-essential personnel from some of our central GOM facilities," Occidental Petroleum said in a prepared statement. "All of our facilities in the Gulf remain operational at this time."

Likewise, Royal Dutch Shell said it has activated its hurricane team and is closely monitoring the storm.

"We will be reducing personnel on board some assets as work activities and conditions allow," said Shell spokeswoman Cynthia Babski. "There are no planned impacts to production at this time."

Gas liquefaction terminals in Louisiana and Texas are also monitoring Cristobal to determine if they need to implement contingency plans.

At Cheniere Energy's Sabine Pass in Cameron Parish, Louisiana, the operator has emergency preparedness and response plans that it will activate if necessary, spokeswoman Jenna Palfrey said.

In Hackberry, Louisiana, south of Lake Charles, current operations of Trains 1 and 2 as well as commissioning activities underway for Train 3 have not been interrupted at Sempra Energy's Cameron LNG, spokeswoman Anya McInnis said. Maintenance on Train 3 unrelated to the storm continued.

Operators have already been pulling forward maintenance, shutting down units and working to control costs as they seek to manage lower production and trade flow due to the coronavirus pandemic.

Feedgas flows to US Gulf Coast LNG export terminals rose approximately 600 MMcf/d to 3.8 Bcf/d on June 3 versus the day before, but flows are still down substantially from a week earlier amid weak global demand.

With the volume of cargo cancellations reported for July approximately double the count for June, and questions about the extent of a possible recovery in August, the US market is expected to face pressure for the foreseeable future. Decisions on whether to sanction new projects are likely to see further delays.

As MRC reported earlier, Royal Dutch Shell Plc restarted the crude distillation unit, coker and gasoline-producing cat cracker at its 225,300 barrel-per-day (bpd) Norco, Louisiana, refinery. Shell is restarting the hydrocracker, while the reformer and naphtha hydrotreater will remain shut for previously planned work, the sources said. The coker is scheduled to undergo planned work beginning next week, but is expected to remain in operation.

We also remind that 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 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- The Federal Energy Regulatory Commission has dismissed a complaint filed by BP Energy alleging Natural Gas Pipeline Company of America acted improperly by forcibly bundling a systemwide gas transportation service option as a condition of BP exercising its right of first refusal to bid on continuing firm service, reported S&P Global.

The dispute involves the reach of FERC rules meant to protect an existing firm customer's need to continue its historical transportation service.

FERC sided with the pipeline company Wednesday in finding that BP was seeking to alter existing service rather than preserve it. The right of first refusal "does not afford the firm shipper a right to change the essential character of its service, as BP seeks to do here," FERC concluded in a Wednesday order (RP20-481).

BP had contended that NGPL, in violation of its tariff and FERC rules, "required BP to take its 'optional' (systemwide) service to retain capacity subject to a regulatory right of first refusal, even though NGPL's own notice of released capacity stated the current capacity holder my elect to match the bids with or without the (systemwide) option."

BP said it had preferred to continue primary point capacity without systemwide service that provided access to secondary points throughout its system.

The net effect of NGPL's approach was to increase the cost of its exercise of its right of first refusal for a single contract by about USD7.5 million over the life of the contract, BP argued in its January 31 compliant.

Tenaska Marketing Venture also weighed in in support of the complaint.

NGPL for its part countered that BP was trying to use the right of first refusal to change its existing service, contrary to FERC rules, the pipeline's tariff and BP's contract. It argued that BP exercised its right to match the highest bid to keep its firm service with the systemwide option but now sought to downgrade that service.

BP was using the process to get a different service at a rate below the highest bid received, NGPL asserted.

FERC ultimately concluded that the systemwide option was "essential" to BP's existing firm service, which had a higher maximum reservation rate reflecting the right to secondary access points.

Language in the tariff does not provide BP with a right to discontinue a fundamental part of its existing service that includes a systemwide options while keeping a firm transportation service through a right of first refusal, FERC said.

"Rather, this language ensures that a historical shipper without the (systemwide) option in its existing service may not be compelled to add the (systemwide) option in order to match a competing bid in the (right of first refusal) process," FERC said.

As MRC informed before, BP has entered into an agreement to license its latest generation technology for the production of purified terephthalic acid (PTA) to China’s Dongying Weilian Chemical Co., Ltd. Weilian Chemical is a subsidiary of Dongying United Petrochemical Co., Ltd, one of the leading manufacturers and distributors of petroleum and petrochemical products in China. Weilian Chemical intends to build a 2.5 million tonnes per annum PTA production unit at the Dongying Port Economic Development Zone in eastern Shandong province, adding to Dongying United Petrochemical’s existing refineries and paraxylene (PX) facilities portfolio.

PTA is used to produce polyethylene terephthalate (PET), which, in its turn, is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

According to MRC's ScanPlast report, April total estimated PET consumption virtually did not change year on year, totalling 60,840 tonnes (in April 2019 - 60,980 tonnes). 235,160 tonnes of PET chips were processed in Russia in January-April 2020.

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) -- OPEC and its allies have coalesced around a one-month extension to their 9.7 million b/d collective production cuts beyond June, with key members Saudi Arabia and Russia aligned, though the date of a meeting to finalize a decision remains in flux, reported S&P Global with reference to people involved in the talks.

OPEC kingpin Saudi Arabia is insisting on firm commitments from other members to stick to their production quotas, and those who have violated their caps are being pressured to overcomply in the coming months to make up for their excess barrels, OPEC+ sources told S&P Global Platts.

The OPEC+ alliance had floated moving forward the meeting to June 4 from its previously scheduled June 9-10, but no announcement has been made as the compliance discussions continue.

"Hopefully the [earlier] meeting will happen, but it's not yet decided," a source said.

Without an extension, the 9.7 million b/d in cuts are scheduled to roll back to 7.7 million b/d starting July 1 through the end of 2020.

Oil prices have rebounded -- with front-month ICE Brent futures rising above USD40/b in early trading June 3 -- but are still far below desirable levels for many OPEC+ members, and with the global economy only just starting to recover, many members have pushed to maintain the deeper cuts.

Under the proposed one-month extension, OPEC+ ministers would meet monthly to review compliance and market conditions, the sources said.

Several of the six secondary sources used by OPEC to monitor output, including S&P Global Platts, have yet to report their May production figures.

But preliminary production and export data released by some countries have indicated uneven compliance so far, with Russia exceeding its cap by 100,000 b/d and Iraq reporting exports that nearly match its production quota.

Saudi Arabia itself, along with Gulf allies the UAE and Kuwait, have pledged additional cuts below their quotas for June, though it was unclear whether the countries would continue their overcompliance in an extension.

As MRC informed previously, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, 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 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC