Indian Oil Corp plans 100% crude processing within a quarter

Indian Oil Corp plans 100% crude processing within a quarter

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

Saudi Kayan swings to Q2 2021 net profit on lower feedstock costs

Saudi Kayan swings to Q2 2021 net profit on lower feedstock costs

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

India June crude imports dropped to their lowest level in eight months as virus dampens demand

India June crude imports dropped to their lowest level in eight months as virus dampens demand

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

SIBUR increased profit by 60% in the second quarter

SIBUR increased profit by 60% in the second quarter

MOSCOW (MRC) - The largest Russian petrochemical holding SIBUR in the second quarter of 2021 increased its net profit by 60% to 76.43 billion rubles from 47.8 bn rubles a year earlier, mainly due to an increase in prices for its products,the Russia-headquartered producer said.

Adjusted net profit of the holding excluding exchange rate differences in the second quarter increased to 62.8 bn rubles from 4.2 bn rubles in the same period in 2020. Thus, in the second quarter, the company's revenue, compared to the first, increased by 15.8% and amounted to 200.9 bn rubles. Increased by 39.9% and net profit - excluding exchange rate differences, amounted to 62.8 bn.

The company's total debt at the end of the second quarter decreased by 4.4% compared to the end of the previous year, to RUB 388.08 bn.

The company's revenue for the first half of the year increased by 59% year-on-year to RUB 374.24 bn.
The company's EBITDA grew 2.3 times year-on-year to RUB 169.98 billion. EBITDA margin in the second quarter was 48.4% versus 42.4% at the end of the first quarter of 2021. The holding's capital investments in the reporting period decreased by 12.1% and reached 22.2 bn rubles.

In the first half of the year, SIBUR's gas processing plants processed 9.85 bn cubic meters of associated petroleum gas (APG), a decrease of 9.6% from a year earlier, the report said.

Fractionation volume of broad fraction of light hydrocarbons increased by 2.9% year on year and amounted to 3.96 m tonnes. Liquefied petroleum gas sales volumes fell 25.2% to 1.37 m tonnes. Sales of naphtha increased by 3.2% compared to the previous year - up to 506.65 thousand tons. At the same time, polypropylene sales increased by 20.3% - up to 612,000 tonnes. Polyethylene sales volume increased by 48.3% to 818,000 tonnes.

Sales volumes of petrochemical products in the second quarter of this year decreased by 4.8% to 1.3 m tonnes in annual terms. Polypropylene sales during this period increased by 9.2% to 291 thousand tons, polyethylene sales decreased by 8.4% to 383,000 tonnes, the company said.

In April, SIBUR announced a merger with TAIF by exchanging 15% of its shares for 50% + 1 share in TAIF. The scope of the transaction includes only TAIF's petrochemical and generating companies. This merger will increase the scale of SIBUR's operations and strengthen its market leadership. SIBUR and TAIF expect to reach final terms and close the deal in the second half of 2021. TAIF together with SIBUR will spend more than 1 trillion rubles. for the implementation of joint projects. In total, the companies plan to implement over 30 projects.

As per MRC's Sacnplast, SIBUR Tobolsk / Zapsibneftekhim increased capacity utilization in June, the total production of polypropylene reached 97,900 tonnes versus 76,900 tonnes a month earlier (in late April - early May, the company carried out preventive maintenance works). Tobolsk complex's PP overall output reached 537,200 tonnes in the first six months of 2021, up by 28% year on year.

SIBUR manufactures and sells petrochemical products on the Russian and international markets in two business segments: olefins and polyolefins (polypropylene, polyethylene, BOPP, etc.), as well as plastics, elastomers and intermediate products (synthetic rubbers, expanded polystyrene, PET, etc.).
MRC

COVID-19 - News digest as of 30.07.2021

1. Shell raises dividend by almost 40% amid soaring oil prices

MOSCOW (MRC) -- Royal Dutch Shell has raised its dividend almost 40 per cent and launched a USD2bn share buyback scheme, as the energy major takes advantage of stronger energy prices to try to attract back investors, said The Financial Times. Thursday’s moves, which came as the group reported a jump in second-quarter earnings helped by oil’s recovery above USD70 a barrel, were more aggressive than analysts had anticipated and show the pressure on energy majors to resurrect flagging share prices. France’s TotalEnergies also reported strong results on Thursday with its highest half-year earnings in five years, and will use some of its cash flow for share buybacks. Investors remain wary of a sector that has been hard hit by two price slumps since 2015 while facing the long-term challenge of a possible peak in oil demand and increasing government action to tackle climate change.


MRC