Valero Q2 operating income fell 72%

MOSCOW (MRC) -- Valero Energy Corp said its adjusted profit rose in the second quarter from the previous three-month period, as fuel consumption improved with the easing of coronavirus-related travel restrictions, said Hydrocarbonprocessing.

Adjusted net income attributable to Valero stockholders was USD197 million, or 48 cents per share, for the three months ended June 30, compared with USD140 million, or 34 cents per share, in the prior quarter.
Valero's Q2 operating income fell 72% year on year as sales growth was outpaced by an increase in total cost of sales.

In the refining segment, Valero reported operating income of USD349m, compared with USD1.8bn for Q2 2020. “Our system’s flexibility and the team’s relentless focus on optimisation in a weak, but otherwise improving, margin environment enabled us to deliver positive earnings in the second quarter,” said CEO Joe Gorder.

In its renewable diesel segment, Valero reported USD248m of operating income, up from USD129m in Q2 2020, and in the ethanol segment it reported USD99m of operating income, up from USD91m from Q2 2020. Valero continues to expand capacity at its Diamond Green Diesel (DGD) joint venture with Darling Ingredients to produce renewable diesel, it said.

At St Charles, Louisiana, a new plant, DGD 2, is expected to increase renewable diesel production capacity by 400m gal/year. The expansion project remains on budget and on track to be completed and operational in the middle of the fourth quarter of 2021, Valero said. It will also provide the capability to market 30m gal/year of renewable naphtha into low-carbon fuel markets.

Also, a new plant, DGD 3, at Port Arthur, Texas, which is expected to increase renewable diesel production capacity by 470m gal/year, is progressing well and is now expected to commence operations in the first half of 2023, the company said. DGD 3 will raise DGD’s total annual production capacity to about 1.2bn gallons of renewable diesel and 50m gallons of renewable naphtha.

As per MRC, Valero Energy Corp, the second largest U.S. crude oil refiner, plans to operate its 14 refineries up to 89% of their combined total throughput capacity of 3.15 million barrels per day (bpd) during the second quarter of 2021, a company executive said. Valero’s U.S. Gulf Coast refineries are planned to operate up 92% of their combined total throughput of 1.86 million bpd.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

MOSCOW (MRC) -- Europe's top energy companies signalled confidence in a lasting recovery from the pandemic impact by drawing on higher oil prices to boost shareholder returns and reassure investors as they roll out risky climate strategies, said Hydrocarbonprocessing.

After swiftly cutting spending and jobs in response to the unprecedented collapse in energy demand last year, executives from Royal Dutch Shell, TotalEnergies and Norway's Equinor were eager to highlight the rapid reversal in fortunes. "We wanted to be really clear and signal to the market the confidence that we have in our prospects and our cash flows," Chief Executive Ben van Beurden said on Thursday, after Shell launched a $2 billion buyback programme and boosted its dividend for a second consecutive quarter, a year after cutting it for the first time since the 1940s.

Energy companies have come under heavy pressure from climate campaigners, governments and shareholders to speed up the shift from fossil fuels to cleaner sources. While some investors welcome the change as they perceive carbon-intensive, fossil fuel energy as unsustainable, others are worried about the implications for profit margins of new business models.

Benchmark Brent crude oil prices more than doubled in the second quarter from a year earlier to around USD69 a barrel, driven by recovering demand and tightening global supplies. As profits surged, France's TotalEnergies also announced on Thursday plans to buy back shares. CEO Patrick Pouyanne said however that a large increase in dividends would not be reasonable yet and would be linked to higher cash flow.

The group said it expected to generate more than USD25 billion in cash flow this year, based on current high oil price forecasts, and would invest in more new projects and return surplus amounts to shareholders if oil prices remained high. Equinor also said on Wednesday it would begin a long-planned share buyback that will reach USD300 million by the end of the third quarter after profits surged.

BP reports its second quarter results on Aug. 3. It launched a USD500 million buyback in the previous quarter after halving its dividend last year.

As per MRC, Shell agreed to sell its stake in eastern German refinery PCK Schwedt, the latest in a string of refinery disposals as part of the Anglo-Dutch company's energy transition strategy. Shell said in a statement that it will sell its 37.5% share in the refinery for an undisclosed sum to Vienna-based Alcmene GmbH, part of the Liwathon Group, an integrated logistics and investment business headquartered in Estonia. The deal is expected to close in the second half of 2021, pending approval by cartel authorities and its partners, Russia's Rosneft and Italy's Eni.

As MRC informed earlier, Royal Dutch Shell closed the FCC unit at its Deer Park, TX facility on 18 July due to a fire. It is not known how long this facility will be closed with a capacity of 340,000 barrels per day and 90,000 tonnes of propylene per year.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
MRC

MOSCOW (MRC) -- Indian Oil Corp (IOC) said it was operating its refineries at 90% capacity as diesel sales were yet to reach pre-COVID-19 levels, but it expects to ramp up refining to full capacity within a quarter as demand picks up, said Reuters.

Indian state fuel retailers’ gasoline sales exceeded pre-pandemic levels in the first fortnight of July, as motorists took back to the roads after states eased COVID-19-related lockdowns. Even as a second wave of COVID-19 infections battered the country during April and May, this year’s lockdown restrictions were not as severe as compared to last year, with most states allowing some vehicular movement.

Still, Indian refiners had reduced crude processing during the quarter and curtailed oil purchases amid higher fuel inventories. Diesel sales are still at around 85%-90% of pre-COVID-19 levels and are expected recover by the festival of Diwali in November, Chairman S.M. Vaidya said in a press conference, adding that the refinery runs are also expected to be at 100% capacity by then.

Higher fuel prices also sapped consumption, with India’s tax-heavy retail prices of gasoline and gasoil touching record highs due to a surge in global crude oil prices. International Brent prices jumped about 18% during the June quarter.
The state-owned company had reported a net profit of 59.41 billion rupees ($798.92 million) in the quarter ending June 30, compared with a profit of 19.11 billion rupees a year earlier, when lockdowns due to the COVID-19 pandemic hammered fuel demand and squeezed margins.

Revenue from operations soared 74.3% to 1.55 trillion rupees in the quarter. Indian Oil also said it has extended its joint venture partnership with Malaysia’s Petronas for the retail sale of diesel and gasoline, but it did not divulge more details. IOC, along with its unit Chennai Petroleum, controls about a third of India’s five million-barrels-per-day refining capacity.

Meanwhile, as MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world's third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

Indian Oil Corporation (IOC) is an Indian state-owned oil and gas corporation headquartered in New Delhi.
MRC

MOSCOW (MRC) -- Saudi Kayan Petrochemical Co., an affiliate of Saudi Basic Industries Corp (SABIC), swung to a net profit in the second quarter, ending a run of five straight quarterly losses, benefiting from low feedstock costs, reported Reuters.

The company made a net profit of 91.02 million riyals (USD24.27 million) in the three months to June 30, it said in a bourse statement. This compares with a loss of 13.42 million riyals in the same period of 2015.

The average estimate of three analysts polled by Reuters was for a quarterly loss of 184.2 million riyals.

Like many petrochemical firms in the kingdom, Kayan’s earnings have been hit hard by falling product prices as they are closely tied to the price of oil. In addition to the feedstock costs, Kayan cited higher sales quantities and reduced marketing fees from SABIC for its return to profit.

It restarted April 10 a plant that produces ethylene glycol and oxide ethylene which was offline since the start of March for scheduled maintenance. The financial impact of the shutdown was estimated to be 96 million riyals, split across its first- and second-quarter results.

As MRC wrote previously, Saudi Kayan conducted a 21-day scheduled maintenance at its ethylene glycol (EG) and ethylene oxide (EO) facilities at Jubail, Saudi Arabia, starting on 1 February, 2020. The company said that some of its other facilities that rely on EG and EO feedstocks would also undergo periodic maintenance and improvements.

EO is one of the main feedstocks for the production of purified terephthalic acid (PTA), which is used to produce polyethylene terephthalate (PET). And PET is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.

Saudi Kayan operates a MEG plant in Jubai, Saudi Arabia, which has a production capacity of 566,000 mt/year.

As per MRC's ScanPlast report, May estimated PET consumption in Russia increased by 15% year on year to 85,850 tonnes. Russia' overall estimated PET consumption totalled 349,940 tonnes in January-May 2021, up by 22% year on year.

Saudi Kayan Petrochemical Company is a manufacturing affiliate of the Saudi Basic Industries Corporation (Sabic).
MRC

MOSCOW (MRC) -- India’s crude oil imports in June dropped to their lowest level in eight months as refiners cut down processing in the face of a tumultuous second wave of the coronavirus, government data showed, said Reuters.

Crude oil imports rose in June by 16.3% to 15.90 million tonnes from a year earlier, but dropped 7.8% from May, data on the website of the Petroleum Planning and Analysis Cell (PPAC) showed. “Refiners reduced runs after the COVID-19 cases increased in April-May, which might have contributed to lower imports,” said Refinitiv analyst Ehsan Ul Haq, adding that the nation’s vaccine programme is the key to future demand. “If we don’t see another wave, demand will recover significantly in the fourth quarter of this year."

India’s coronavirus caseload of 31.48 million infections is the world’s second-highest behind the United States. Oil product imports rose 11% to 3.51 million tonnes from the previous month, while refined products exports slipped about 4% to 5.51 million tonnes in June. Diesel shipments were down 3.8% from the preceding month, while petrol exports slipped 14%.

India imports and exports refined fuels as it holds surplus refining capacity. The world’s third-biggest oil importer and consumer, India has decided to commercialise half of its current strategic petroleum reserves as the nation looks to enhance private participation in the building of new storage facilities, two government sources told Reuters.

Indian refiners’ crude throughput in June was little changed from the previous month when it fell to multi-month lows, data showed last week. Julie Torgersrud from Rystad Energy’s Oil Market team expects crude processing by Indian refiners to grow by 200,000 barrels per day (bpd) in third quarter following a drop in second quarter. “However, we still expect India’s refinery runs in 2021 to average nearly 300,000 bpd below pre-pandemic levels as the lag in jet fuel recovery keeps runs in check."

Meanwhile, as MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world's third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
MRC