OMV lowers oil price assumptions to reflect increased pace of energy transition

MOSCOW (MRC) -- OMV (Vienna, Austria) says it has cut its forecast price for Brent crude oil to USD60 per barrel (bbl) to reflect the increasing pace of the worldwide energy transition towards lower-carbon energy sources, said Chemweek.

"The revised oil price planning assumptions reflect our believe that the pace of transition to a lower carbon world will accelerate," it says. OMV will "reposition our portfolio towards products which are also essential in a widely decarbonized world” and make itself “less vulnerable to the long-term oil price development."

The recent acquisition of a controlling 75% ownership interest in Borealis "extends OMV’s value chain towards high-value chemical products” and is “an important milestone for this ambition," says Reinhard Florey, OMV’s CFO.

The updated price forecast is expected to result in non-cash net impairments of tangible and intangible assets of around EUR600 million (USD704 million) post-tax in the company’s upcoming financial results for the third quarter, it says.

The company has reduced its long-term Brent oil price assumption to USD60/bbl from USD75/bbl. For 2021, it expects COVID-19 to continue to have a macroeconomic impact and has confirmed its oil price forecast for next year of USD50/bbl. For 2022 and 2023 it has lowered its oil price expectations to USD60/bbl from USD70/bbl and USD75/bbl, respectively.

For the period 2024-2029, OMV says it will assume a Brent price of USD65/bbl, down from USD75/bbl previously, with the newly assumed price then expected to "gradually decline" to USD60/bbl until 2035. From 2035 onwards it will use an oil price forecast of USD60/bbl, it says. All assumptions for the years 2025 onwards are based on 2025 real terms, it adds.

The company has also reiterated its commitment to the Paris climate agreement, as part of which it recently set itself the ambition of achieving net-zero operations by 2050 or before.

As MRC informed earlier, in March 2020, OMV signed agreement to increase its shareholding in Borealis to 75%, repositioning in a low-carbon world.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

OMV (Osterreichische Mineralolverwaltung AG) is an Austrian oil company, the largest in Central Europe. Headquarters - in Vienna.
MRC

MOSCOW (MRC) -- Total Lubrifiants, a leading player in the global lubricants market, announced the acquisition from Houghton International of its aluminum hot rolling oil (AHRO), steel cold rolling oil (SCRO) and tinplate rolling oil (TPRO) activities in the North American and European Economic Area markets, said Chemweek.

The transaction includes the associated technical support services in both regions. The sale was a condition set by the U.S. Federal Trade Commission and the European Commission to approve the Quaker Chemical and Houghton International merger to push through. Quaker Houghton, the newly combined entity, said it received approximately USD37 million from Total S.A. The revenue of the divested product lines was approximately USD50 million, Quaker Houghton added.

"We believe that this acquisition will create value both for Total and our customers from these industries. It will strengthen our position in the industrial lubricants market, which is an important part of our strategic vision for the future," said Philippe Charleux, senior vice president, Lubricants & Specialties at the Marketing & Services Division of Total.

"Geographically we are strengthening our strong presence in Europe and expanding our activities and market penetration in North America, especially the U.S.A."

With this specially formulated range of hot and cold rolling oils, cleaners and accompanying fluid management services, Total is broadening its product portfolio to offer customers a fully integrated solution.

As MRC wrote before, in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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

According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

1. Oil refiners worldwide struggle with weak demand, inventory glut

MOSCOW (MRC) - Global oil refiners reeling from months of lackluster demand and an abundance of inventories are cutting fuel production into the autumn because the recovery in demand from the impact of coronavirus has stalled, according to executives, refinery workers, and industry analysts, Reuters. Refiners cut output by as much as 35% in spring as coronavirus lockdowns destroyed the need for travel. As lockdowns eased, refiners increased output slowly through late August. But in top fuel consumers the United States and elsewhere, refiners have been decreasing rates for the last several weeks in response to increased inventories, a sustained lack of demand, and in response to natural disasters.

MRC

MOSCOW (MRC) -- Celanese Corporation, a global technology and specialty materials company, and a global leader in vinyl acetate ethylene (EVA) emulsions, has announced an increase in its September prices of vinyl acetate-based emulsions sold in the Americas, as per the company's press release.

The price increases below are effective for orders shipped on or after 15 September 2020, or as contracts otherwise allow, and are incremental to any previously announced increases.

Thus, prices of EVA emulsions rose, as follows:

- by USD0.03/lb - for the USA and Canada;
- by USD66/mt - for Mexico & South America.

As MRC reported earlier, Celanese also raised its September prices of EVA emulsions for China by CNY300/mt and for Asia outside China (AOC) - by USD50/mt, as well as for Europe, Middle East and Africa - by EUR50/mt.

According to MRC's DataScope report, June EVA imports to Russia fell by 22,5% year on year to 2,940 tonnes from 3,800 tonnes a year earlier, and overall imports of this grade of ethylene copolymer into the Russian Federation dropped in January-June 2020 by 8,16% year on year to 17,440 tonnes (18,980 tonnes a year earlier).

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of USD6.3 billion.
MRC

MOSCOW (MRC) -- Shanghai SECCO has restarted its polypropylene (PP) plant following an unplanned outage, according to Apic-online.

A Polymerupdate source in China informed that, the company resumed operations at the plant on September 16, 2020. The plant was shut for unplanned maintenance on September 11, 2020.

Located at Shanghai, China, the PP plant has a production capacity of 280,000 mt/year.

According to MRC's ScanPlast report, PP shipments to the Russian market reached 654,600 tonnes in the first seven months of 2020 (calculated using the formula: production minus exports plus imports and without the producer's inventories as of 1 January, 2020).

Shanghai SECCO is owned by Sinopec Petrochemical, Sinopec Shanghai Petrochemical and Sinopec Shanghai Gaoqiao Petrochemical, with 30%, 20% and 50% holdings respectively.
MRC