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

Low-cost oil will remain central to the fuel mix - ADNOC CEO

MOSCOW (MRC) -- Low-cost oil will be needed even as the world is in an energy transition, Sultan Ahmed Al Jaber, reported Reuters with reference to chief executive of Abu Dhabi National Oil Company (ADNOC) and minister of state for the United Arab Emirates' statements at CERAWeek by IHS Markit.

"The world will still need oil and gas for many decades to come, no question about that," he said. Oil demand will rebound led by recovery from the coronavirus pandemic in China and India, he said.

ADNOC has cut its operating costs by operating with more technological efficiency, he said.

As MRC reported previously, in early May, 2020, Abu Dhabi National Oil Company (ADNOC) began a gradual restart of its Ruwais oil refinery complex after a scheduled maintenance shutdown. The Ruwais complex, which has capacity of 835,000 barrels per day, was shut down early this year, the ADNOC spokesman said.

And in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

Texas petrochemical restarts continue slowly after freeze

MOSCOW (MRC) -- Texas petrochemical producers continued on March 1 restart efforts at plants shut during sustained sub-freezing temperatures the week of Feb. 15, with much attention focused on bringing olefin plants back online to provide critical feedstocks for derivatives, reported S&P Global.

"It's going to be a while" before production chains resume normal output, a market source said, noting that inspections involve a process of discovery "to determine if everything is okay."

Multiple sources noted that process has been deliberate given the sheer magnitude of pipes and equipment exposed to frigid temperatures that rarely hit the region for at least 72 hours straight as they did the week of Feb. 15.

"Many complexes are interdependent operations, so they have to start up sequentially," a source noted. If one unit in such a production chain is unable to restart at the same time, others have to wait.

"It is what it is and you've got to be patient," the source added.

At its height, the freeze took about 75% of 40 million mt/year of US ethylene capacity offline, with the vast majority along the Texas Coast. Some has resumed operations, while others remain shut amid inspections or have faced ups and downs during restart efforts, market sources said.

As MRC wrote before, Exxon Mobil Corp has restarted the gasoline-producing and diesel-producing units at its 369,024 barrel-per-day (bpd) oil refinery in Beaumont, Texas. Almost all of the refinery’s units have restarted since being shut by freezing weather on Feb. 15. The 120,000-bpd gasoline-producing fluidic catalytic cracker (FCC) and 65,000-bpd diesel-producing hydrocracker restarted on Saturday.

ExxonMobil's 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.

Ethylene is the main feedstock for the production of PE.

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