Petrobras sells its shale oil unit to Canadian bank for USD33 mln

MOSCOW (MRC) -- Brazil's state-run oil company Petrobras signed a contract to sell its Shale Industrialization Unit (SIX) for USD33 MM to Forbes & Manhattan Resources, reported Reuters with reference to the company's statement in a filing on Thursday.

The refining unit is in Parana state on one of the world's largest reserves of oil shale, a sedimentary rock with organic matter that can be converted to oil and gas by heating.

It is the third refinery Petrobras has sold in its divestment strategy that will in total sell eight refineries.

The buyer is wholly owned by Forbes & Manhattan Inc, a private merchant bank based in Toronto, Canada.

Petrobras said USD3 MM has been paid to guarantee the sale. The deal is still subject to approval by Brazil's antitrust regulator CADE.

As MRC informed before, Petrobras said earlier this month it had halted talks with Brazilian conglomerate Ultrapar on the sale of the state-run oil company's Refap refinery, part of its program to sell eight plants. The company said it would relaunch the process of selling Refap in the future but did not provide a date.

We remind that in August 2021, Petrobras hired JPMorgan Chase & Co as an advisor to sell its stake in the petrochemical company Braskem SA.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

MOSCOW (MRC) -- Japanese refiners reported strong earnings for April-September and lifted their annual forecasts as surging oil prices brought hefty valuation gains on inventories and boosted earnings from their upstream oil assets, reported Reuters.

The companies said they would use the additional cash to help pay for the investment needed in cleaner energy amid a global decarbonization push.

Japan's top refiner Eneos Holdings (formerly known as JXTG Nippon Oil & Energy) said on Thursday its first-half net profit rose 480% to 211 B yen (USD1.9 B) as the value of its inventories shot up while soaring copper prices also boosted its profit from metals.

The oil and metals giant doubled its profit forecast for the year to March 31 to 280 B yen, beating a forecast of 222 B yen based on the mean estimate from 10 analysts compiled by Refinitiv.

Earlier this week, the second biggest refiner Idemitsu Kosan and third-placed Cosmo Energy Holdings more than doubled their annual profit guidelines.

In their key refining operation, Idemitsu and Cosmo booked a profit gain as they benefited from recovering margins at home and abroad. Meanwhile, Eneos suffered a series of setbacks at its refineries which resulted in a refinery run for April-September of 61% while Idemitsu reached 73% and Cosmo's utilization was 95%.

"Higher resource prices led to a significant profit increase in upstream oil and metals assets, but the performance in our flagship energy segment was very unsatisfactory," Eneos' President Katsuyuki Ota told a news conference.

"The cash flow from the energy segment is the core source of our future investments in new businesses, so we must do better in this area," he said.

Like many other global oil companies, Eneos has been accelerating its transformation into a supplier of low-carbon energy and has decided to acquire a renewable company and invest in hydrogen projects.

"There is no time for complacency (about strong earnings) as 90% of our profit comes from fossil fuels. We'll allocate our cash to innovations to help our energy transition," Idemitsu President Shunichi Kito said.

"The oil business is the money tree. We generate cash from it and allocate the cash to renewable energy, which will enable us to make sustainable transitions," Takayuki Uematsu, Cosmo's senior executive officer, said.

As MRC wrote before, Japan's largest refiner Eneos Corp has restarted the 136,000-bpd crude distillation unit (CDU) at its Oita refinery. The unit was shut since May last year. It resumed operations in mid-August 2021.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

Japan's largest refiner JXTG Nippon Oil & Energy was renamed ENEOS Corporation on 25 June, 2020, as part of a wider re-organization of the parent company JXTG Holdings. The move, which also involved renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, 2019. JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders, and synthetic rubber, and its affiliate companies in Europe, have announced a price increase for all ENLITE acrylonitrile-butadiene-styrene long glass fiber (ABS LGF) alloys in the EMEA region, according to the company's press release.

Effective November 1, 2021, or as existing contract terms allow, the contract and spot prices for the products stated above rose by EUR300 per metric ton.

The present price increase in response to unprecedented and escalating pressure from energy prices and apply to all current agreements and contracts for deliveries as of November 1, 2021 and are subject to further potential adjustments linked to fluctuating energy prices.

As MRC reported earlier, Trinseo also raised its prices for all PULSE polycarbonate (PC)/ABS grades in the EMEA region on November 1, 2021 by EUR300 per metric ton.

According to ICIS-MRC Price report, in Russia, Plastk, Uzlovay maintained its ABS prices at the previous month's level and offered lots of over 20 tonnes of uncoloured material at Rb293,000-300,000/tonne FCA Uzlovaya, including VAT, this month. At the same time, the producer said prices for the plant's regular customers might drop by Rb3,000-4,000/tonne.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.
MRC

1. Stronger fuel demand boosts profits at Asia crude oil refineries

MOSCOW (MRC) -- Stronger fuel demand has boosted profits at crude oil refineries across Asia in recent weeks, but they have also been given a helping hand by lower exports of refined products from regional heavyweight China, reported Reuters. China's exports of refined fuels dropped in October to 3.95 MM tons, snuffing out what was a slight rise in shipments in September and reverting to the declining trend seen since April. The past four months have been the weakest for fuel exports from China since a slump in mid-2020. That was largely the result of plummeting fuel demand across Asia as many countries locked down their economies in a bid to combat the coronavirus pandemic.

MRC

MOSCOW (MRC) -- Crude oil futures fell during midafternoon trade in Asia Nov. 12 on profit-taking activity following uncertainty about any US intervention to curb rising oil prices, including releasing some of its Strategic Petroleum Reserve, reported S&P Global.

At 2:59 pm Singapore time (0659 GMT), the ICE January Brent futures contract was down 68 cents/b (0.82%) from the previous settle at USD82.19/b while the NYMEX December light sweet crude contract was 62 cents/b (0.76%) lower at USD80.97/b.

"The uncertainty over how US may intervene to curb elevated oil prices may draw some profit-taking, coming off the back of a stronger US dollar and virus resurgences in China and Europe, which may dampen some sentiments on eventual reopening," IG market strategist Yeap Jun Rong told S&P Global Platts Nov. 12.

Some analysts have talked about the buildup of a risk-off sentiment as there were few events to move markets at the end of the week, particularly after recent headlines of higher-than-expected US inflation numbers weighing on investors' minds.

The US recorded its highest inflation rate in 31 years. Data from the Bureau of Labor Statistics showed Nov. 10 that consumer prices rose 6.2% year on year and 0.9% month on month.

This has also led to a stronger dollar index, which in turn impacted oil prices. At 2.59 pm in Singapore, the Dollar Index was trading at 95.20, up 0.02% from the previous close at 95.18.

Market watchers were awaiting moves from the Biden administration on a possible release of SPR crude in a bid to combat high gasoline prices, which might stem rising oil prices.

"US President Biden is facing pressure from fellow Democrats to address high gasoline prices with measures such as a ban on oil exports. He is still weighing the merits of an emergency release of crude from strategic reserves," ANZ research analysts said.

Echoing a similar sentiment, UOB Market Research has said that traders have remained concerned about whether the Biden administration would intervene to cool rising energy prices in response to growing political pressure, including from his own party.

Meanwhile, the OPEC+ alliance released its latest monthly market report late Nov. 11 that saw only marginal changes to supply and demand estimates for both this year and next. The group has downgraded its 2021 global oil demand forecast by 160,000 b/d.

The group also cut its demand estimates for the final quarter of this year, expecting that high energy prices will have a dampening impact on demand.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.
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