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MOSCOW (MRC) -- Irving Oil is reducing
its contract and plant workforce at Canada’s largest oil refinery due to
challenges caused by the coronavirus pandemic, the company said, as per Hydrcoarbonprocessing.
The Canadian oil giant is cutting its contract workforce at its 320,000
barrel per day refinery in St. John, New Brunswick to 225 from 1,000 in the
first quarter of 2021. An additional 60 Saint John refinery employees were cut
on Thursday, representing 7% of the refinery workforce, the company
said.
“The COVID-19 pandemic has had extreme and serious impacts on our
business and our industry,” Irving Oil President Ian Whitcomb and chief brand
officer Sarah Irving said in a joint statement, citing the collapse in demand
for refined products, market volatility, poor margins and the economic
downturn.
Last year, Irving said it would lay off 250 people, or 6% of
its global workforce, due to demand disruption caused by the coronavirus
pandemic. A resurgence of coronavirus cases across the world has complicated an
uneven recovery in consumption for liquid fuels that is estimated to have fallen
by 9 million barrels per day in 2020, according to the U.S. Energy Information
Administration.
U.S. refining margins were below USD10 - the threshold
above which most refiners make money - for the majority of the fourth quarter of
2020. Margins have since risen to about USD12.70 on Thursday, though refinery
utilization is off about 10% year on year.
Refiners across the globe have
been scaling back contract workers as they defer maintenance projects as a
result of the coronavirus pandemic. Companies, many of them lumbered with high
debts, slashed all but the most essential work.
U.S. oil refiners such as
CVR, Hollyfrontier and PBF Energy also cut salaried employees last year due to
economic strain caused by the coronavirus pandemic.
We remind that the
COVID-19 outbreak has led to an unprecedented decline in demand affecting all
sections of the Russian economy, which has impacted the demand for
petrochemicals in the short-term. However, the pandemic triggered an increase in
the demand for polymers in food packaging, and cleaning and hygiene products,
according to GlobalData, a leading data and analytics company. With Russian
petrochemical companies having the advantage of access to low-cost feedstock,
and proximity to demand-rich Asian (primarily China) and European markets for
the supply of petrochemical products, these companies appear to be
well-positioned to derive full benefits from an improving market environment and
global economy post-COVID-19, says GlobalData.
We also remind that in
December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on
potential investments in Uzbekistan including a major expansion of
Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed
construction of a new gas chemicals facility. The signed cooperation agreement
for the projects includes “the creation of a gas chemical complex using
methanol-to-olefins (MTO) technology, and the expansion of the production
capacity of the Shurtan Gas Chemical Complex”.
Ethylene and propylene are
feedstocks for producing polyethylene (PE) and polypropylene
(PP).
According to MRC's DataScope report, PE
imports to Russia decreased in January-November 2020 by 17% year on year and
reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the
greatest reduction in imports. At the same time, PP imports into Russia
increased by 21% year on year to about 202,000 tonnes in the first eleven months
of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase
in imports. |
