Israel Oil Refineries reports Q4 loss, sees improving margins in 2021

MOSCOW (MRC) -- Israel’s Oil Refineries (ORL) swung to a loss in the fourth quarter, hit by the coronavirus pandemic, and said it had saw signs of recovery so far in 2021, said Hydrocabonprocessing.

ORL, Israel’s largest refining and petrochemicals group, said it lost USD68 million in the October-December period compared with zero profit a year earlier. Revenue dipped 39% to USD952 million. Its adjusted refining margin was USD4.3 a barrel in the fourth quarter, compared with USD5.2 a year earlier but above Reuters’ quoted Mediterranean Ural Cracking Margin of a negative USD0.1. ORL said that since the start of 2021, refining and polymer margins have risen sharply.

"In March, the volume of orders was a sign of a return to routine in the consumption of diesel and gasoline in the Israeli market,” said CEO Moshe Kaplinsky, adding that ORL continued to supply essential products to factories, and the medical, food, high-tech and agricultural industries throughout 2020.

ORL said it was in the process of formulating a strategic plan that will focus on strengthening core areas, along with a gradual transformation in the refining of fuels and production of polymers. Its fixed expenses declined by USD21 million last year, while implementing an early retirement plan that is expected to reduce wage costs in coming years.

ORL also said it projects saving as much as USD45 million on natural gas purchases in 2021.

As MRC informed earlier, Israel’s Oil Refineries (ORL) reported lower quarterly net profit, saying timing differences on the value of its inventory offset higher refining margins. ORL, Israel’s largest refining and petrochemicals group, earned USD63 million in the third quarter, down from USD74 million a year earlier.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

South Korean top two refiners to shut crude units in March

MOSCOW (MRC) -- South Korea's top two refiners SK Energy and GS Caltex plan to shut one crude processing unit each in March to April for regular maintenance, said an official from SK Innovation and two trade sources, said Hydrocarbonprocessing.

The official from SK Innovation, which owns SK Energy, said on Tuesday that they have routine maintenance scheduled for their No.4 crude distillation unit (CDU) in Ulsan between mid-March and mid-April. The CDU has a capacity of 240,000 barrels per day (bpd).

Separately, GS Caltex planned to shut its No. 4 330,000 bpd CDU at Yeosu during March to April, the sources said. GS Caltex declined to comment.

SK Energy has five CDUs at its refinery in the southeastern city of Ulsan, with a total refining capacity of 840,000 bpd, while GS Caltex has an overall refining capacity of 800,000 bpd.

As MRC wrote previously, SK Global Chemical restarted its naphtha cracker in late January 2018 after a brief but unplanned shutdown earlier in the day. The 660,000 tonnes-per-year (tpy) naphtha cracker began to operate normally the following day. Located in Ulsan, South Korea, the No. 2 cracker has a production capacity of 690,000 mt/year.

SK Global Chemical also operates a smaller 200,000 tpy cracker at the site.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

ExxonMobil to cut 7% of Singapore workforce amid unprecedented market conditions

MOSCOW (MRC) -- ExxonMobil Corp plans to cut its workforce in Singapore, home to its largest oil refining and petrochemical complex, by about 7% amid the “unprecedented market conditions” resulting from the COVID-19 pandemic, reported Reuters with reference to the company's statement.

About 300 positions out of 4,000 current jobs will be impacted by the end of 2021, the company said in a statement.

The Singapore layoffs come weeks after Exxon announced its plan to close its 72-year-old Altona refinery in Australia and convert it to an import terminal. The top US oil producer, once America’s most valuable company, posted a historic annual loss for 2020 after the coronavirus pandemic slashed energy demand.

Exxon’s announcement also follows European major Royal Dutch Shell’s decision in November to cut 500 staff and halve its crude processing capacity in Singapore as part of a global strategy to reduce carbon emissions.

Exxon Mobil’s Singapore complex has the capacity to refine about 592,000 barrels per day of oil and includes its biggest integrated petrochemical production site.

The city-state will remain a strategic location for the company, it said.

“This is a difficult but necessary step to improve our company’s competitiveness and strengthen the foundation of our business for future success,” said Geraldine Chin, chairman and managing director, ExxonMobil Asia Pacific Pte Ltd.

Last year, Exxon said it remained committed to a multi-billion dollar expansion at the Singapore complex amid an ongoing review of its projects globally.

As MRC wrote before, ExxonMobil's recent operational shutdowns include polyethylene (PE) facilities amid power outages prompted by the deep freeze that has enveloped the US Gulf Coast. "This event has caused widespread power outages across Texas and Louisiana" Feb. 15," the letter, dated Feb. 16, said. "As a consequence, several ExxonMobil Chemical operations have experienced loss of power and other key utilities, impacting our ability to resume full operations." ExxonMobil operates three PE units in Mont Belvieu, Texas, with combined capacity of 880,000 mt/year, according to S&P Global Platts Analytics.

Exxon is among many petrochemical producers that shut Feb. 14 and subsequent days because of sustained extreme sub-freezing temperatures in the region. ExxonMobil previously confirmed Feb. 16 that the company had shut all refining and chemical operations at its Baytown and Beaumont, Texas, complexes. Ethylene produced at Baytown feeds the Mont Belvieu PE operations.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased.

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.
MRC

COVID-19 - News digest as of 03.03.2021

1. Hempel earnings slip on COVID-19 disruption

MOSCOW (MRC) -- Hempel (Lyngby, Denmark) reports 2020 net profit of EUR43 million (USD52 million), down from EUR50 million in the previous year, on revenue of EUR1.54 billion, up slightly from EUR1.53 billion, according to Chemweek. The company says it achieved organic sales growth of 3.2% last year, building on momentum from 2019, despite an overall declining worldwide market for coatings.



MRC

Crude rises after protracted sell-off, markets brace for OPEC+ meeting

MOSCOW (MRC) -- Crude oil futures ticked up during the mid-morning trade in Asia March 3 as the market regained its footing after an overnight sell-off, with investors attention now focused on the upcoming OPEC+ meeting, reported S&P Global.

At 11:07 am Singapore time (0307 GMT), the ICE Brent May contract was up by 32 cents/b (0.51%) from the March 2 settle to USD63.02/b, while the April NYMEX light sweet crude contract was up by 26 cents/b (0.44%) to USD60.64/b.

Both markers have been on a downward trajectory since late last week, falling 5.16% and 5.95% from the Feb. 25 settle to close at USD62.70/b and USD59.75/b respectively on March 2.

The slight rise in prices comes as investors carry out bargain hunting activities to take advantage of low prices following the protracted sell-off, even as uncertainty over the upcoming OPEC+ meeting continues to grip the markets, potentially leading to unpredictable price movements.

"There is been an uninterrupted sell-off in crude since last week, as the market has progressively priced-in the return of supply following the US deep freeze, and for the rest of this week, there will be volatility in the market as the market awaits the OPEC+ meeting and grapples with erratic US stocks data," Vandana Hari, CEO of Vanda Insights told S&P Global Platts on March 3.

Market analysts generally expect the March 4 OPEC+ meeting to conclude with the coalition easing production quotas by up to 500,000 b/d from April onwards, and with Saudi Arabia choosing not to extend its unilateral 1 million b/d output cut. Both these outcomes could see up to 1.5 million b/d of oil returning into the market.

"If the total figure is between 1-1.5 million b/d, prices will move on after the OPEC+ meeting and start tracking the bubbling optimism over the economic climate and over rising oil demand," said Hari.

Meanwhile, API data, released on March 2, showed a massive 7.36 million barrel build in US crude inventories during the week ended Feb. 26. The impact of the build in US crude inventories however was somewhat offset by large draws in US product inventories, with gasoline inventories and distillate inventories plummeting 9.93 million barrels and 9.053 million barrels respectively.

Market participants will now be looking towards more comprehensive inventory data from the US Energy Information Administration, scheduled to be released later on March 3.

As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.

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 ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC