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Irving cuts contract, refinery workforce at Saint John plant

January 27/2021

MOSCOW (MRC) -- Irving Oil is reducing its contract and plant workforce at Canadas 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 Uzbekneftegazs 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.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, ethylene, propylene, neftegaz, petrochemistry.
Category:General News
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