Kuwait and Iraq support OPEC+ oil supply rise plan

Kuwait and Iraq support OPEC+ oil supply rise plan

MOSCOW (MRC) -- Kuwait and Iraq support sticking to plans to raise oil output by 400,000 barrels per day (bpd) at an OPEC+ meeting on Thursday, as the US called again for extra supply to cool rising prices, reported Reuters.

Kuwait's oil minister Mohammad Abdulatif al-Fares said on Monday that the OPEC member supports the plan to raise output, which would ensure adequate crude supply to balance the global market, state news agency KUNA reported.

Iraq's state oil marketing company, SOMO, said on Saturday that the OPEC member sees raising output as already planned was sufficient to meet demand and stabilize the market.

US President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery. President Biden's statement is part of a broad effort by the White House to pressure OPEC and its allies to increase supply.

Brent crude prices were trading at near USD85 a barrel on Monday, despite China announcing a release of fuel reserves to increase market supply and support price stability in some regions.

OPEC heavyweight Saudi Arabia has already dismissed calls for more oil supplies from the group, saying the oil market was well-supplied.

"Other than the potential for the market returning to surplus next year, the other factor holding back the group is the uncertainty over if and when Iranian supply could return to the market," bank ING said on Monday.

Last week, Iran said talks with six world powers to try to revive a 2015 nuclear deal will resume by the end of November.

As MRC informed earlier, in September 2021, Iraq signed an initial deal with Swedish company SEAB to build a 70,000-barrels-per-day oil refinery near the northern city of Mosul. The refinery will use the heavy crude oil from the northern Qayyara oilfield to produce fuel, said oil ministry officials, without giving an estimated cost of the project.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, 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.
MRC

Eni income indicator Q3 exceeded forecasts

Eni income indicator Q3 exceeded forecasts

MOSCOW (MRC) -- Eni's chemical business managed by Versalis swung to a third-quarter adjusted operating profit of €25m from a loss of EUR53m in the same period of last year on the back of higher margins, said the company.

Sales of petrochemical products were 1.03m tonnes in the third quarter, down by 7% year on year.
Petrochemical product margins improved significantly on the back of "macroeconomic recovery, which mitigated competitive pressure, and contingent factors due to temporary supply shortages during the first half of the year", the company said in a statement.

"The exceptionally strong products spread versus feedstocks recorded in the second quarter 2021 moderated in the third quarter as plants affected by contingent issues returned to normal activity", it said.

Adjusted operating profit for the group surged in the third quarter, with the upstream business supported by the rise in oil and gas prices.

Downstream pro-forma adjusted earnings before interest and taxes (EBIT) expected at about €200m in 2021, which is expected to be negatively affected by a deteriorated margin environment driven by higher feedstock and utilities costs. "This guidance could be revised downward under current market conditions," the company added.

As MRC wrote previously, Italian energy group Eni is evaluating conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this to at least five times by 2050, as part of its pledge to achieve complete carbon neutrality by 2050.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, 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.

Eni, abbreviation of Ente Nazionale Idrocarburi, in full Eni SpA, Italian energy company operating primarily in petroleum, natural gas, and petrochemicals. Established in 1953, it is one of Europe's largest oil companies in terms of sales.
MRC

Exxon will be focused on hydrocarbons

Exxon will be focused on hydrocarbons

MOSCOW (MRC) -- Exxon Mobil Corp remains focused on hydrocarbons and plans to press ahead with a USD30 B liquefied natural gas project in Mozambique, said Hydrocarbonprocessing.

"We've been in hydrocarbons for over 130 years... it's the core part of our business and it will be for a long time," Exxon Senior Vice President Neil Chapman said at a conference in the northern Italian city of Verona.

Chapman's comments come after a report that Exxon's board was questioning whether to pursue several major oil and gas projects as investors call on fossil fuel companies to be more cost-conscious and green-energy friendly. Activist investor Engine No. 1 shocked the industry earlier this year when three of its four nominees were elected to the board by Exxon shareholders. The appointment of activist Jeff Ubben in March put a third of the 12-member board in new hands.

"Yes we've had changes in the boardroom but it's the responsibility of management to lay out a clear strategy for stakeholders," Chapman said. He said Exxon's capabilities in oil and gas would support its pivot to the new technologies it was working on of carbon capture and storage, hydrogen and biofuels.

"It's the pace issue we have to manage and that requires a flexible strategy," he said. As oil and gas demand falls in the energy transition, Exxon believes the world is better served by companies supplying the lowest cost barrels with the lowest emissions, he said.

Chapman said the group had not changed its plans over multi-billion-dollar gas investments in Mozambique and Vietnam. "We don't know the date (for the Mozambique final investment decision) right now but there's no change and what was reported in the U.S. media was not correct," he added.

As per MRC, ExxonMobil plans to build its first, large-scale plastic waste advanced recycling facility in Baytown, Texas, and is expected to start operations by year-end 2022. By recycling plastic waste back into raw materials that can be used to make plastic and other valuable products, the technology could help address the challenge of plastic waste in the environment. A smaller, temporary facility, is already operational and producing commercial volumes of certified circular polymers that will be marketed by the end of this year to meet growing demand.

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.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.
MRC

China 2030 carbon emissions peak action plan provides more opportunities than threats to Sinopec business

China 2030 carbon emissions peak action plan provides more opportunities than threats to Sinopec business

MOSCOW (MRC) -- China's 2030 carbon emissions peak action plan provides more opportunities than threats to Sinopec's business, Secretary to the Board of Directors Huang Wensheng said during the company's third quarter results briefing conference call Oct. 29, reported S&P Glboal.

China's State Council on Oct. 26 released the nation's action plan to peak carbon emissions, including targets to have around 40% of incremental vehicles in the country fueled by new energy sources and reach peak petroleum consumption for land transportation by 2030.

Huang said the company expected China's gasoline demand to peak in 2025 or 2026, with more and more electric vehicles to replace gasoline and gasoil cars.

Output of transportation fuels gasoline, gasoil and jet fuel accounted for more than 50% of Sinopec's production and more than 30,000 oil product retail pump stations in China, which is a threat to the company when consumption peaks, Huang said.

However, the company has started to leverage the retail network to provide integrated energy supplies, with hydrogen refueling and battery service on top of petroleum fuels, to meet demand for energy transition, Huang said, adding that this was an opportunity.

Meanwhile, Sinopec has significantly lifted its capex in the chemical sector, aiming to increase petrochemical product yield while capping oil products output as consumption approaches peaking, Huang added. Sinopec spent Yuan 29.7 billion in its chemical segment over January-September, surging 184% from Yuan 10.46 billion over the same period a year earlier, the company results showed.

The company's yield of the key oil products gasoline, gasoil and jet fuel fell to 57% in the first nine months of the year from 60% a year earlier.

China also targets keeping domestic capacity for the primary refining of crude oil below 1 billion mt/year (20 million b/d) and raising the utilization rate of production capacity for main products to above 80% by 2025, according to the action plan. Huang said there was still room for China's refining capacity to grow, given that the current capacity is about 900 million mt/year and some small and independent capacities were set to be shut.

Sinopec is the world's biggest refiner, with 296.90 million mt/year refining capacity at end 2020.

The refiner and PetroChina slashed their gasoil yields over January-September, which led to a supply shortage in the domestic market when imports of gasoil blending material light cycle oil were impacted by a hefty consumption tax.

Sinopec's gasoil yield fell to 23% over January-September from 27% in a year earlier, resulting in gasoil output dropping 10.3% to 42.92 million mt despite crude throughput rising 9.3% over the same period. The company said it will increase gasoil supplies in Q4 to meet strong domestic demand by lifting throughput and production yields. It has already raised its gasoil supply by about 20% in October from the monthly average level in the first three quarters of the year, and aims to further boost supply in November by 29% month on month. Gasoil production averaged 7.15 million mt/month over January-September, according to the company's results.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, 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.

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

Phillips 66 psts higher Q3 2021 financial results

Phillips 66 psts higher Q3 2021 financial results

MOSCOW (MRC) -- Phillips 66, a diversified energy manufacturing and logistics company, has announced third-quarter 2021 earnings of US402 million, compared with earnings of USD296 million in the second quarter of 2021, as per the company's press release.

Excluding special items of USD1.0 billion, primarily an impairment of the Alliance Refinery following Hurricane Ida, the company had adjusted earnings of USD1.4 billion in the third quarter, compared with second-quarter adjusted earnings of USD329 million.

“In the third quarter, we delivered a significant improvement in earnings and cash generation,” said Greg Garland, Chairman and CEO of Phillips 66. “Our Midstream, Chemicals, and Marketing and Specialties businesses continued to deliver strong results. In Refining, we saw a notable improvement in realized margins, operated well and navigated hurricane-related challenges.

“So far this year we have reduced debt by USD1 billion, further strengthening our balance sheet. We recently increased the dividend, reflecting our confidence in the company’s strategy and cash flow recovery, as well as our commitment to a secure, competitive and growing dividend. We will continue to focus on debt repayment, disciplined capital allocation, and delivering attractive shareholder returns.

“Earlier this week we announced an agreement to buy-in Phillips 66 Partners. The transaction simplifies our structure and asset ownership across our integrated portfolio. We believe both PSX shareholders and PSXP unitholders will benefit from the combination.

“In addition, we recently announced our greenhouse gas emissions intensity reduction targets, demonstrating our commitment to sustainable providing energy today and in the future. Our targets are measurable, achievable and meaningful. We believe achieving the targets will drive value for shareholders and other stakeholders. We are expanding our presence in the battery supply chain through our investment in NOVONIX and announced a collaboration with Plug Power to identify and advance green hydrogen opportunities. We will continue to focus on lower-carbon initiatives that generate strong returns.”

The Chemicals segment reflects Phillips 66’s equity investment in Chevron Phillips Chemical Company LLC (CPChem). Chemicals third-quarter 2021 pre-tax income was USD631 million, compared with USD623 million in the second quarter of 2021. Chemicals results in the third quarter included a USD2 million reduction to equity earnings for pension settlement expense and USD1 million of maintenance and repair costs related to Hurricane Ida. Second-quarter results included an USD18 million reduction to equity earnings for pension settlement expense and USD16 million of winter-storm-related maintenance and repair costs.

CPChem’s Olefins and Polyolefins (O&P) business contributed USD613 million of adjusted pre-tax income in the third quarter, compared with USD593 million in the second quarter. The USD20 million increase was primarily due to higher polyethylene sales volumes driven by continued strong demand, partially offset by higher utility costs. Global O&P utilization was 102% for the quarter.

CPChem’s Specialties, Aromatics and Styrenics (SA&S) business contributed third-quarter adjusted pre-tax income of USD37 million, compared with USD82 million in the second quarter. The decrease was driven by lower margins.

As MRC informed earlier, US Refiner Phillips 66 said on 30 September it would cut greenhouse gas emissions by 30% from its operations by 2030, amid mounting pressure on the industry to join the fight against climate change and cut carbon emissions by mid-century.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, 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.

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Headquartered in Houston, the company has 14,100 employees committed to safety and operating excellence. Phillips 66 had USD56 billion of assets as of Sept. 30, 2021.
MRC