Saudi Aramco Q2 profit surges almost 4 times

MOSCOW (MRC) -- Saudi Aramco, the world's largest oil company, said Aug. 8 that its hydrocarbons production fell 8% to 11.7 million boe/d in the second quarter from the year-earlier period due to OPEC+ cuts, but its profit surged almost four times thanks to higher oil prices and a recovery in worldwide demand, reported S&P Global.

Net income soared to USD25.5 billion in the second quarter from USD6.6 billion a year earlier, the company said in an earnings statement.

Aramco's total hydrocarbon production, which averaged 12.7 million boe/d in the second quarter of 2020, fell mainly due to OPEC+ cuts this year, CEO Amin Nasser said in a media call with journalists.

"Our second quarter results reflect a strong rebound in worldwide energy demand and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery gains momentum," Nasser said in the statement. "While there is still some uncertainty around the challenges posed by COVID-19 variants, we have shown that we can adapt swiftly and effectively to changing market conditions."

The Q1 dividend of USD18.8 billion was paid in the second quarter, and the Q2 dividend of USD18.8 billion will be paid in the third quarter, the company said.

Aramco is working on boosting its maximum sustainable capacity to 13 million b/d from 12 million b/d and expects most of the increase to come from offshore fields, Nasser said on the call. Fields that will contribute to production increments are Zuluf, Marjan and Berri.

Saudi Aramco expects global oil demand to rise by the end of 2021 and in 2022 on economic recovery and higher oil demand, particularly in the US and China, the CEO added.

"Our expectation that recovery will continue, yes variants are having a certain impact; however we are seeing more openings of economies and we expect by year end the demand will be around 99 million b/d," he said. "There is strong economic recovery that we see and demand rebound especially from the US and China and we expect it to be at a 100 million b/d next year as a forecast for total demand."

OPEC in July put 2021 global oil demand at 96.58 million b/d and 2022 at 99.86 million b/d.

Capital expenditure was USD7.5 billion in the second quarter, up 20% from a year earlier and the company expects 2021 total to be approximately USD35 billion.

Aramco is still doing its due diligence to buy a 20% stake in the oil-to-chemicals unit of Reliance Industries (RIL), the CEO said. The deal could not progress in 2020 after the oil price crash and demand destruction caused by the pandemic, which saw Aramco tighten its belt.

"India is a very important market for us. We continue to review opportunities in India," he said. "We are still doing our due diligence (on the Reliance deal). We were delayed a little bit because of COVID 19 but we are back on track doing our due diligence."

As MRC informed earlier, Mukesh Ambani, chairman and managing director of RIL, said in June, 2021, he expects the company's deal with Saudi Aramco to materialise this 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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) -- China's crude oil imports rebounded in July from a six-month low as state-backed refiners ramped up output after returning from maintenance, though independent refineries slowed restocking amid probes by Beijing into trading and taxes, reported Reuters.

China brought in 41.24 million tonnes of crude oil last month, equivalent to 9.71 million barrels per day (bpd), data from the General Administration of Customs showed on Saturday. That compares with 40.14 million tonnes in June and 51.29 million tonnes in July 2020.

In the first seven months of the year, China, the world's top crude oil importer, took in 301.83 million tonnes, or 10.39 million bpd, down 5.6% from the corresponding period last year.

"With state-owned refineries completing overhauls, the number of refineries resuming operation is gradually increasing," said analysts at China-based Longzhong consultancy, while adding that overall utilisation rates have not seen a significant jump.

Operating rates at independent refiners in refining hub Shandong, however, showed a clear downtrend in the last month, with the average rate hitting the lowest level this year at 63% in late July.

Analysts had expected that Beijing's crackdown on the misuse of import quotas and the impact of higher crude prices could see China's oil import growth sink to the lowest in two decades in 2021.

China in June cut 35% of crude oil import quotas to non-state refiners in a second batch of allowances for 2021, in which several small refiners did not receive any quotas.

Customs data on Saturday also showed China exported 4.64 million tonnes of refined oil products in July, up 44.5% from a year ago but down 28.0% from June. Natural gas imports, including piped and liquefied natural gas (LNG) were at 9.34 million tonnes last month, up 27.1% on year, the data showed.

As MRC wrote before, earlier this year, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

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 density 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 refining giant Reliance Industries (RIL) is doubling its polyethylene terephthalate (PET) recycling capacity by setting up a recycled polyester staple fiber (PSF) manufacturing facility in Andhra Pradesh, according to The Hindu.

The move is part of RIL's commitment to lead the industry on circular economy, enhance its sustainability quotient and bolster the entire polyester and polymer value chain.

As a part of this endeavour, Srichakra Ecotex India will build and operate exclusively for RIL the new recycled PSF - Recron GreenGold and PET flakes wash-line in Andhra Pradesh.

RIL's initiative to more than double its recycling capacity to 5 billion post-consumer PET bottles will ensure India maintains over 90% recycling rate.

RIL is focusing on sustaining India's post-consumer PET recycling rate which is currently the highest in the world.

As MRC reported earlier, in June 2021, Reliance Industries signed an agreement with Abu Dhabi National Oil Co (ADNOC) to build a multi-billion-dollar chemical project in Ruwais, marking the group’s first investment in a greenfield overseas project. Reliance, which operates the the world’s biggest refining complex at Jamnagar in western India, is becoming more international in its focus. Previously, it has bought stakes in some overseas explorations and manufacturing assets.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
MRC

1. Evonik posts strong earnings for H1 2021 and raises outlook for 2021

MOSCOW (MRC) -- Evonik has raised its outlook for 2021 after posting strong earnings in the first half. Demand for Evonik products increased significantly worldwide with sales prices also rising, as per the company's press release. "We have emerged out of the crisis stronger than before and have made substantial gains in the first half," said Christian Kullmann, chairman of the board of management. "This positive dynamic will continue into the second half. Therefore, we are confident about raising our outlook. From today’s perspective we will even end up in the upper part of the range.” For 2021 Evonik now expects adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) of between EUR2.3 billion and EUR2.4 billion for the full year. Previously the range was EUR2.1 billion to EUR2.3 billion. The outlook for sales is now EUR13 billion to EUR14.5 billion, up from a previously expected EUR12 billion to EUR14 billion. Last year Evonik posted adjusted EBITDA of EUR1.91 billion and sales of EUR12.2 billion.


MRC

MOSCOW (MRC) -- The financial and production indicators of PJSC "Nizhnekamskneftekhim" (NKNKh, part of the TAIF) grew rapidly in the first half of 2021. Thus, NKNK's net profit increased by more than 8 times over the stated period to Rb24.9 bln from Rb2.9 bln a year earlier, reported Realnoe Vremya.

It should be noted that in 2019, the company's net profit before the introduction of restrictions during the pandemic was Rb23.7 bln.

The company's revenue for the first six months of 2021 was Rb118.2 bln versus Rb67.1 bln a year earlier. Gross profit rose to Rb38 bln, up by Rb21.6 bln from the first half of 2020 (Rb16.5 bln).

Sales profit rose to Rb29 bln from Rb9.4 bln in 2020.

Nizhnekamskneftekhim turned out to be one of the leaders in terms of industrial growth dynamics. The output of the company's products grew by 15.5% in the first half of 2021, compared to the pandemic period. "This is due to the recovery of the global economy and the growing demand for polymer products in the world, "said Rafinat Yarullin, Director General of OAO Tatneftekhiminvest-holding, at one of the meetings.

Thus, PJSC "Nizhnekamskneftekhim" produced 1.35 mln tons of marketable products of all types in the first six months of 2021. The plant's overall production increased by 170,000 tonnes (20%) year on year.

The output of rubbers rose by 74,000 tonnes year on year in the first half of 2021. Overall, 336,400 tonnes of rubbers were produced at the plant in January-June 2021, compared to 262,700 tonnes a year earlier. The output of plastics was 357,400 tonnes.

According to experts, the positive production and financial results of NKNKh were achieved due to the favourable situation in the global markets.

"This year, world prices for most grades of polymers have renewed their historic highs. Domestic prices went up, following the global prices. Wholesale prices for motor fuels, polymers, rubbers grew by 13%-50%. Large-scale chemical plants expect the maximum level of revenues, profits and taxes, "noted R. Yarullin.

Analysts predict Nizhnekamskneftekhim's strong performance in the future, already due to growing production amid a recovery in demand for petrochemical products and an expansion of the product range.

As reported earlier, Nizhnekamskneftekhim continues construction of the Ethylene-600 olefin complex in accordance with the schedule, despite the claims of Rostekhnadzor due to the adjustment of the project documentation, the general director of the company Ayrat Safin said in April 2021 at the international forum on energy efficiency and ecology in Kazan.

The construction of the olefin complex is carried out within the framework of a memorandum of strategic cooperation concluded in June 2017 between TAIF Group, which includes Nizhnekamskneftekhim, and the German company Linde AG. The basic agreement on the design, supply of equipment and provision of services for the commissioning of the first stage of the future plant was signed between Nizhnekamskneftekhim and the Linde Engineering division. In February 2019, a contract for construction and installation works was signed with the Turkish company Gemont.

As MRC informed previously, NKNKh's revenue totalled Rb153.989 bln in 2020, down by Rb24.981 bln yera on year. The spread of the new coronavirus infection had a significant impact on the financial performance of Nizhnekamskneftekhim. Quarantines have been introduced in many countries of the world, restrictions have negatively affected economic growth and demand and, as a result, economic results.

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 density 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.

PJSC "Nizhnekamskneftekhim" (NKNKh) is one of the largest Russian manufacturers of petrochemical products. The industrial complex of the company includes ten major production plants and ten departments (Railway Transport, Ethylene pipelines, etc..). NKNKh produces more than 120 types of chemical products, including synthetic rubber, polyethylene, polypropylene, polystyrene, surfactants. Nizhnekamskneftekhim is a member of TAIF Group of Companies.
MRC