TotalEnergies posts sharp rise in earnings and higher output in Q3 2021

MOSCOW (MRC) -- France's TotalEnergies reported higher production and a sharp jump in earnings in the third quarter of 2021, predicting that surging oil and gas prices and rebounding demand will lift its performance into early 2022, reported S&P Global.

Given the outlook for higher OPEC+ production quotas and seasonal gas demand in the fourth quarter, TotalEnergies said Oct. 28 it expects fourth-quarter 2021 hydrocarbon production to be in the range of 2.85 million-2.9 million b/d of oil equivalent, up from Q3 levels.

After gas prices hit record levels in Europe and Asia during the quarter, TotalEnergies said, "barring an exceptionally mild winter, the low inventory level for gas and expected sustained demand are likely to keep gas prices in Europe and Asia at high levels until the second quarter 2022."

Global oil prices reached multiyear highs in the quarter at over $85/b, marking a steady recovery in oil demand to pre-crisis levels from the pandemic.

TotalEnergies said it anticipates that 2021 oil price increase will positively impact its average LNG selling price for the next six months, given the lag effect on price formulas. As a result, TotalEnergies said it expects LNG to be above $12/MMBtu in the fourth quarter 2021.

For the third quarter, the company's upstream division reported production of 2.81 million b/d of oil equivalent in the quarter, up 4% year on year, on higher OPEC+ quotas, rebounding gas demand and project start-ups and ramp-ups. These included North Russkoye in Russia as well as Iara in Brazil, and the resumption of production in Libya.

TotalEnergies reported adjusted net income of USD4.77 billion, up more than fivefold from the year-ago quarter and 38% higher compared to the second quarter of 2021.

"The global economic recovery, notably in Asia, drove all energy prices sharply higher in the third quarter due to the interconnection of energy systems. Gas prices in Asia and Europe, up more than 85% from the previous quarter, reached unprecedented levels, and oil prices gained 7%, continuing their steady year-long rise," CEO Patrick Pouyanne said in a statement.

TotalEnergies' integrated gas, and renewables & power segment generated record adjusted net income of USD1.6 billion and cash flow of USD1.7 billion, helped by "an outperformance" of its trading activities, which leveraged its integrated worldwide LNG portfolio.

Total LNG sales increased sharply compared to 2020, up 24% for the quarter and 7% for the first nine months. The average LNG selling price increased by 38% compared to the previous quarter, benefiting on a lagged basis from the increase in the oil and gas price indexes on long-term contracts.

Downstream, TotalEnergies - Europe's biggest refiner - saw its average refining margin double in the third quarter of 2021 as fuel demand continued to recover in the region, but said higher energy costs had dented earnings from the sector.

The company's "variable cost margin" for its European refineries averaged USD20.5/mt, or about US2.8/b, in the third quarter, compared with USD10.2/mt in the previous quarter, it had said in an Oct. 15 trading statement. The margin recovery, which remains below average 2019 levels, compares to minus USD2.7/mt in the year-earlier period when coronavirus lockdowns flipped TotalEnergies' reference margin into negative territory for the first time in over a decade.

Adjusted net operating income for the refining and chemicals segment rose sharply year on year to USD602 million in the third quarter, compared to a loss of USD88 million in the third quarter of 2020.

Crude throughputs in the third quarter, however, were little changed at 1.22 million b/d.

As MRC informed before, with its name change from Total to TotalEnergies amid its transition from fossil fuels, the major oil company is investing more in renewables and energy storage while decreasing emissions from its natural gas business.

We remind that TotalEnergies has recently inaugurated the extension of Synova in Normandy, the French leader in recycled polypropylene production. TotalEnergies is therefore doubling its mechanical recycling production capacity for recycled polymers, to meet growing demand for sustainable polymers from customers, such as Automotive Manufacturer (Auto OEM) and the construction industry.

According to MRC's ScanPlast report, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

TotalEnergies is a broad energy company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables, and electricity. The company rebranded itself from Total to TotalEnergies during Q2 2021. The French firm has announced allocating part of surplus revenues to share buybacks. Its 105,000 employees are committed to energy that is ever more affordable, clean, reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
MRC

MOSCOW (MRC) -- Europe's gas crisis has demonstrated the risks of moving away too fast from traditional energy sources, the head of Russian oil giant Rosneft said, adding that underinvestment could threaten the ability to meet demand, said Hydrocarbonprocessing.

The remarks by Igor Sechin, a close ally of Russian President Vladimir Putin, reflected the degree of resistance in Russia's powerful energy sector to embracing rapid transition to renewables - the issue at the heart of U.N.-sponsored climate talks starting in Scotland on Sunday. Sechin told an energy conference in Verona, Italy, that global investment in oil and gas this year would be only half the level of 2014.

Renewables would not be able fully to replace traditional sources of energy even in the long term, he said, and targets on carbon neutrality could be reached without completely abandoning oil, gas and coal. Russia is the world's fourth-biggest emitter of greenhouse gases but has said it aims to be carbon-neutral by 2060 - a target that Britain, as host of the COP26 climate summit, has urged it to bring forward by 10 years. It faces a huge challenge in reducing the dependence of its economy on hydrocarbons.

Putin's decision not to attend the talks in person has been viewed as a blow to hopes of a breakthrough agreement on action to curb climate change. Sechin said the gas crisis in Europe, which is facing soaring natural gas prices amid low stockpiles and higher energy demand in other parts of the world, had highlighted the importance of commodity inventories.

"The current gas crisis confirms a message ... about the fragility of energy market balances and risks related to the acceleration of the energy transition and discouragement of traditional energy," he told the Eurasian Economic Forum in Verona. Sechin also said the spike in gas prices could lead to overheating crude oil markets. Citing analysts from Citi and Goldman Sachs, he said it could trigger additional oil demand of up to 1 MM barrels per day.

As per MRC, Rosneft implementing a USD750 million refinery development program in India. The Indian company Nayara Energy, 49.13% of which is owned by Russia's largest state oil company - Rosneft, has launched a USD750 million petrochemical development program.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC

MOSCOW (MRC) -- China's state-owned Sinopec will increase its gasoil supply by 19% in November from October to meet domestic demand, reported S&P Global with reference to the company's press release Oct. 28.

Sinopec will run its refineries at full capacity while adjusting yield to lift gasoil supply in November by 29%, it said without giving the actual number.

In October, the company has already raised its gasoil supply by about 20% from the monthly average level in the first three quarters of the year, Sinopec added.

The supply increase in October was more likely from gasoil yield adjustment and sourcing the barrels externally, as the refiner actually led the utilization cuts among state-run refiners in the month.

Its run rate was down two percentage points from September at 82%, processing 4.3 million b/d in October. This was mainly due to scheduled maintenance works at several refineries while the operating ones maintained throughputs with limited feedstocks, S&P Global Platts has reported.

In November, three of its refineries are due for scheduled maintenance. They are the 260,000 b/d Gaoqiao Petrochemical, the 264,000 b/d Guangzhou Petrochemical and the 280,000 b/d Fujian Refining & Chemical refineries. But its flagship 540,000 b/d Zhenhai refinery, which just started up a new 80,000 b/d crude distillation unit in late September, and some of its Sinopec peers are set to further lift throughput to ensure domestic gasoil supply, a company source said.

Sinopec is the world's biggest refiner by capacity. Its gasoil production averaged 4.76 million mt in the first half of 2021, accounting for about 37.4% of China's gasoil output.

As MRC informed before, in August, 2021, Sinopec, the world's petrochemical major, launched the first phase of the Gulei refining complex in Zhangzhou city in China’s southeastern Fujian province. The refining complex, a 50:50 joint venture between Sinopec’s Fujian Petrochemical Company Ltd and Taiwan Xuteng Investment Company Ltd, invested 27.8 billion yuan (USD4.28 billion) in the first phase. That will result in an 800,000 tonnes per annum ethylene plant, a 600,000 tonnes per annum styrene unit and seven other downstream petrochemical units, Sinopec said.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC

MOSCOW (MRC) -- Plastic Energy Ltd has announced plans to partner with Freepoint Eco-Systems LLC and TotalEnergies to build a pyrolysis-based chemical recycling facility in Texas, said the company.

According to a joint news release on the partnership, the project will process and convert 33,000 tons of postconsumer end-of-life plastic scrap annually. The plant is expected to become operational by 2024. TACOIL will be used to manufacture polymers in TotalEnergies’ Texas-based production unit to help create items such as flexible and rigid food packaging containers.

“We are delighted to announce Plastic Energy’s first project in the U.S., which is a region that has enormous potential for the plastic-to-plastic advanced recycling market,” says Carlos Monreal, founder and CEO of Plastic Energy. “Using our patented and innovative technology, this new advanced recycling plant in the U.S. will be able to treat postconsumer waste that would otherwise be incinerated, landfilled or end up polluting the environment."

Plastic Energy, Freepoint Eco-Systems and TotalEnergies say they are committed to developing plastics recycling to build a more circular and sustainable economy. In 2020, TotalEnergies and Plastic Energy announced a joint venture to build a plastic waste conversion facility with a capacity of 15,000 tons annually at the TotalEnergies Grandpuits zero-crude platform in France. That project is expected to be operational in early 2023.

“Freepoint Eco-Systems is thrilled to partner with these two like-minded firms to reduce plastic disposed of in landfills and to increase the recycling of plastic that heretofore has been challenging to recycle,” says Jeff McMahon, managing director of Freepoint. “The Texas project will reduce the need for fossil feedstocks, which results in carbon left in the ground, a more sustainable economy and a healthier planet."

As MRC informed before, TotalEnergies has recently inaugurated the extension of Synova in Normandy, the French leader in recycled polypropylene production. TotalEnergies is therefore doubling its mechanical recycling production capacity for recycled polymers, to meet growing demand for sustainable polymers from customers, such as Automotive Manufacturer (Auto OEM) and the construction industry.

According to MRC's ScanPlast report, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

TotalEnergies is a broad energy company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables, and electricity. The company rebranded itself from Total to TotalEnergies during Q2 2021. The French firm has announced allocating part of surplus revenues to share buybacks. Its 105,000 employees are committed to energy that is ever more affordable, clean, reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
MRC

MOSCOW (MRC) -- Petrochemical operating profit at Polish oil, gas and petrochemicals group PKN Orlen almost tripled to zloty (Zl) 802m (USD201m) in the third quarter, with higher margins countering lower sales volumes, said the company.

Polish energy company PKN Orlen saw revenues climb by 52% year on year in the third quarter of 2021. Orlen said the result was due to higher prices of refinery products due to a year-on-year rise in crude oil prices of USD 31 a barrel.

The company's quarterly results, published on Thursday, showed that a 2% rise in sales volume also had an effect on incomes. The company's EBITDA LIFO (earnings before interest, tax, depreciation and amortisation, last-in-first-out inventory method) indicator rose by PLN 2.3 bn (EUR 500 mln) year on year.

Orlen said this was due to the positive influence of the macro environment, higher sales volumes, a higher margin on wholesale trade and higher margins in non-fuel retail as well as a revaluation of inventories to obtainable prices.

These positive effects were partly mitigated by the negative effects of lower margins on fuel retail, higher CO2 emission reserve costs and higher labour costs, Orlen said.

As per MRC, Orlen Unipetrol (part of PKN Orlen), a major Czech producer of petrochemical products, will expand the capacity of its steam cracker in Litvinov (Czech Republic) by installing a new furnace. The new cracking unit will be built by Technip Energies in Zaluzi, the largest chemical plant in the Czech Republic, and is due to be commissioned in 2022. Orlen is investing over 700 mln Polish zlotys (Zl) in the project.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year.

Czech Orlen Unipetrol is a joint stock company that deals with oil refining and production of petrochemical products in the Czech Republic and Central Europe. It is one of the ten largest Czech companies in terms of revenue. The company was founded in 1994 and since 2004 has been part of PKN Orlen, which owns 94.05% of the shares in the company.
MRC