ExxonMobil topped Wall Street quarterly earnings estimates

MOSCOW (MRC) -- ExxonMobil Corp on Friday topped Wall Street quarterly earnings estimates with its first profit in five quarters, boosted by higher oil prices and strong chemicals margins, said Hydrocarbonprocessing.

Earnings from Exxon and rivals this year have been rising with crude oil prices, up by a third this year, as a global oil surplus from the pandemic drains and fuel demand recovers. The swing to a profit comes as European rivals also posted results that exceeded pre-pandemic levels.

Quarterly results show Exxon’s deep cost cuts have allowed it to turn the corner on last year’s historic annual loss and deliver strong cash flow need to reduce debt. Exxon is fighting a hedge fund’s over board seats and its fossil fuel direction. Net income was USD2.73 billion, or 64 cents per share, in the first quarter, compared with a loss of $610 million, or 14 cents per share, a year earlier.

Adjusted earnings of 65 cents per share beat analyst expectations of 59 cents, according to Refinitiv IBES data. Improving economies are helping drive product demand, said Chief Executive Darren Woods on a call with analysts. “Thanks to our efforts over the last few years, we are a stronger company with an improving outlook,” Woods said.

Chemical earnings were the largest factor in first quarter results with a profit nearly 10 times the year-ago level and the strongest in at least five years. That business has been soaring on high prices and demand for plastics. Exxon’s deep cost cutting also boosted earnings. Exxon’s capital spending fell to USD3.1 billion, the lowest in nearly two decades. Expense cuts helped lift cash flow to USD9.3 billion, the highest since 2018.

When the company set spending plans in November, it was “difficult to call what this year was going to look like,” Woods said in an interview. “We tended to back-end load the plan recognizing that the economic recovery we anticipated would occur over the course of 2021 and gain momentum as we headed in to the second and third quarters,” Woods said.

It still expects to spend near the low end of its USD16 billion to USD19 billion estimates for new projects, he said. The Irving, Texas-based company last year cut $8 billion from operating expenses and vowed to reduce operational spending by another USD3 billion by 2023.

Shares, which have climbed 35% since January, were down 1.7% at USD57.96 on Friday alongside oil prices and other oil and gas companies. Exxon covered its spending and dividend with cash flow for the first time since the third quarter of 2018. Net debt declined for the first time in several quarters, said analyst Biraj Borkhataria of RBC Europe Limited.

But free cash flow yield, estimated at 9% this year, “remains well below peers even in a bullish macro scenario,” Borkhataria said. Exploration and production, Exxon’s largest business, earned USD2.6 billion in the first quarter on higher oil prices, compared with a profit of USD536 million a year earlier.

Its chemicals business posted the best quarter since at least 2012, earning USD1.4 billion on better margins, up from a USD144 million profit a year ago. Exxon’s chemicals business was once a profits engine but had faltered prior to the pandemic. The company appears to be “righting the ship,” said Peter McNally, analyst at Third Bridge Group.

Refining lost USD390 million, compared with loss of USD611 million last year, on winter storm shutdowns impacts and fuel demand. With product sales down 8% from last year, Exxon needs “volume uptick to get any kind of profit recovery” in refining, McNally said.

As per MRC, ExxonMobil is to shut its aromatics plant in Rotterdam-Botlek, Netherlands, for a six-week maintenance in March-April 2021. This turnaround is part of a larger repairs program at ExxonMobil"s interconnected 191,000-b/d Botlek refinery and Rotterdam aromatics plant beginning in the first quarter. The Rotterdam aromatics plant is one of the largest aromatics production facilities globally and produces pure aromatics such as benzene, orthoxylene, paraxylene (PX), and cyclohexane.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

MRC

MOSCOW (MRC) -- Occidental Petroleum's low-carbon unit said on Tuesday it plans to construct and operate a pilot plant that would use human-made carbon dioxide, instead of hydrocarbon-sourced feedstocks, to produce bio-ethylene, said Hydrocarbonprocessing.

The pilot plant will be jointly developed by Occidental's venture capital arm, Oxy Low Carbon Ventures LLC, and bio-engineering startup, Cemvita Factory. It is expected to start functioning in 2022. Bio-ethylene is currently made from bio-ethanol, which is made from sugarcane.

The new technology produces bio-ethylene from carbon dioxide, water and light, which helps lower costs and carbon emissions, Cemvita's Chief Executive Officer Moji Karimi said. Ethylene, widely used in the chemical industry, is a component of products ranging from plastic films to PVC piping and coolants.

Interest in low-carbon initiatives has grown in recent years, ranging from companies seeking to offset their climate impact to public officials worried about the slow pace of international agreements to cut emissions. Oxy Low Carbon Ventures in 2019 had invested in Cemvita to look at bio-manufacturing for Occidental's chemical unit.

As per MRC, OxyChem, a subsidiary of Occidental Petroleum Corporation (OXY), a major international petrochemicals manufacturer, plans to resume caustic soda, chlorine production in Convent, Louisiana, USA on May 3. OxyChem in the United States is reopening its 350,000 tonnes of chlorine and 392,000 tonnes of caustic soda plant in Convention, Louisiana after a year of downtime. The plant was closed for commercial reasons in the second quarter of 2020. According to market sources, due to the increased supply of chlorine, it is being restarted.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) -- Colonial Pipeline's is having network issues preventing shippers from planning upcoming shipments of fuel, just after the system reopened after a week-long ransomware attack, reported Reuters with reference to the company's statement.

Last week's closure of the 5,500-mile (8,900-km) system was the most disruptive cyberattack on record, preventing millions of barrels of gasoline, diesel and jet fuel from flowing to the East Coast from the Gulf Coast.

Colonial has been using its shipper nomination system to schedule batches of fuel deliveries to bring flows back to normal.

A prolonged outage could prevent shippers from scheduling deliveries - once again hampering fuel delivery across the US southeast and east coasts.

The pipeline is a critical part of US petroleum infrastructure, transporting around 2.5 million barrels per day of gasoline, diesel fuel, heating oil and jet fuel. The pipeline stretches 5,500 miles and carries nearly half of the East Coast’s fuel supply. The system also provides jet fuel for airports, including in Atlanta and Baltimore.

As MRC informed previously, Valero Energy chartered an oil products' tanker for storage in the US Gulf Coast on Friday amid a cyber attack that shut the Colonial pipeline, the biggest US fuel pipeline.

Besides, last week, Marathon Petroleum, the largest US refiner, said it could meet its supply commitments but was working to find alternative ways to ship motor fuels to the eastern United States if the Colonial Pipeline shutdown is extended.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) -- Japanese refiners plan to sell assets and speed structural reform and overseas expansion as fuel demand is expected to fall at a faster pace due to a prolonged impact from the COVID-19 pandemic and an accelerating global decarbonization trend, reported Reuters.

The dual headwinds of the pandemic and stronger pressure to cut carbon dioxide have forced Japan's top refiner Eneos Holdings and second-ranked Idemitsu Kosan to downgrade their profit goals for the three years to March 2023.

"There has been a significant environmental change since 2019, with the unprecedented coronavirus crisis, green recovery and Japan's declaration of becoming carbon neutral," Idemitsu President Shunichi Kito told a news conference last week after the company released its earnings.

"We have taken a much harder look at future scenario," he said, pointing to the revised estimate of domestic fossil fuel demand contracting 30% by 2030 from 2019 levels, instead of its 2019 assumption of 20%.

To get funds to realign its portfolio and trim CO2 emissions, Eneos will exit coal mining by selling stakes in mines in Canada and Australia, and scale down its upstream oil assets. Idemitsu said it will also downsize its coal assets by cutting out investments in new projects.

The two energy companies will also accelerate structural reform, they said, shifting away from coal and oil to renewable energy and cleaner fuels such as hydrogen, while beefing up their overseas operations in Asia.

The moves are similar to those of global energy majors such as Royal Dutch Shell. Shell has said it plans to curb its emissions through the rapid growth of its low-carbon businesses, including biofuels and hydrogen.

"Our goal is to provide clean energy through a new energy management system using renewable energy with storage battery and electric vehicles (EVs), and to supply CO2-free hydrogen and synthetic fuels using cheaper renewable power to be generated abroad," Eneos President Katsuyuki Ota said last week.

Idemitsu will focus on low-carbon fuels such as ammonia and plant-derived black pellets - advanced wood pellets that can be used in place of coal - while expanding renewable energy projects, including geothermal and biomass. Idemitsu also aims to turn its refineries into bases to recycle solar panels, make lithium battery materials and import and store ammonia.

To seek growth overseas, Eneos may raise its stake in Vietnam National Petroleum Group (Petrolimex) (PLX.HM), while Idemitsu will expand natural gas development in Southeast Asia, such as in Vietnam where it operates the Nghi Son refinery.

We remind that, as MRC informed earlier, ENEOS Corporation restarted its naphtha cracker in Kawasaki on 1 February 2021. The company shut this cracker with an annual capacity of 515,000 tons/year of ethylene, 300,000 tons/year of propylene, and 105,000 tons/year of butadiene on 4 December, 2020, for repairment after a technical issue reported at the butadiene separation unit and initially planned to resume operations on 28 December, 2020.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

Japan's largest refiner JXTG Nippon Oil & Energy was renamed ENEOS Corporation on 25 June, 2020, as part of a wider re-organization of the parent company JXTG Holdings. The move, which also involved renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, 2019. JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.
MRC

MOSCOW (MRC) -- North Huajin Refining and Petrochemical Company, LTD. (North Huajin) has signed contracts with Refining Technology Solutions, LLC, a subsidiary of DuPont Clean Technologies (DuPont) for the license, basic engineering, and technical services for a new combined IsoTherming kerosene/diesel hydrotreater (KDHT), according to Hydrocarbonprocessing.

The grassroots hydrotreater is one of many units included as part of the greenfield fully integrated refining and petrochemical complex that will be located in Liaodong Bay New Area, Panjin, Liaoning Province, China. North Huajin commissioned DuPont for an IsoTherming® KDHT unit with a nameplate capacity of 1,600 kmta (37,000 bpd), capable of producing fuels compliant with both Jet 3 fuel standard and China VI diesel.

IsoTherming hydrotreaters enable refiners to produce high-quality, low-sulfur fuels that comply with increasingly stringent environmental requirements, but at lower energy consumption rates and operating costs than trickle bed hydroprocessing units. The IsoTherming® technology is commercially proven to process a wide range of feedstocks, from kerosene to vacuum gas oil, including 100 percent light cycle oil. The units are designed to provide refiners with consistent savings on utilities in the magnitude of 30-60% compared to trickle bed technologies and the potential of 30 percent capital cost savings or more.

The greenfield complex is a key part of the revitalization of the rustbelt region of northeast China. In addition, by selecting the IsoTherming® technology for this hydrotreater, the refinery will minimize CO2 emissions due to lower energy requirement within the unit in comparison to trickle bed technologies. This decrease in emissions will further assist China in its goal to become carbon neutral by 2060.

Startup of the IsoTherming® KDHT unit at the Panjin site is expected to take place by the end of 2023.

As MRC reported earlier, DuPont is to invest around USD 5 m at facilities in Germany and Switzerland to increase capacity for automotive adhesives. The investment will expand capacity to support growing demand for advanced mobility solutions for vehicle electrification. New equipment has been delivered and installed that will increase manufacturing capacity as well as accelerate delivery of product samples to customers.

We remind that DuPont is also investing USD400 million in the production capacity of Tyvek nonwoven fabric made from high density polyethylene (HDPE) at its site in Luxembourg. A new building and a third work line at the production site will be constructed. The launch of new facilities is scheduled for 2021.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased.

The DuPont Corporation, founded in the USA in 1802, operates in more than 70 countries. The company produces specialty chemicals, offers goods and services for agriculture, food production, electronics, communications, security and protection, construction, transport and light industry. In Russia, DuPont has 100% control over the DuPont Khimprom plant since 2005, and in 2006 established a joint venture between DuPont - Russian Paints and Russian Paints.
MRC