Petrobras to sell Braskem stake by February

Petrobras to sell Braskem stake by February

MOSCOW (MRC) -- Brazilian state-run oil company Petrobras has announced it expects to sell 100% of its preferred stake in petrochemical producer Braskem SA by February, reported Reuters.

The detailed timeframe came after Petrobras announced earlier in the day that the move was planned for the first quarter of 2022.

Petroleo Brasileiro SA, as the company is formally known, also reiterated in a securities filing that the move will be conducted through a joint follow-on share offering with conglomerate Novonor.

Petrobras had repeatedly expressed its intention to sell its 36.1% stake in the petrochemical company. Novonor, formerly known as Odebrecht, holds a 38.3% stake in Braskem.

As MRC wrote previously, in August 2021, Petrobras hired JPMorgan Chase & Co as an advisor to sell its stake in the petrochemical company Braskem SA.

We 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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).

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

Crude oil prices hit their highest in more than three years on supply worries, limited Omicron impact

Crude oil prices hit their highest in more than three years on supply worries, limited Omicron impact

MOSCOW (MRC) -- Oil prices rose on Monday, with Brent futures touching their highest in more than three years, as investors bet supply will remain tight amid restrained output by major producers with global demand unperturbed by the Omicron coronavirus variant, reported Reuters.

Brent crude futures gained 40 cents, or 0.5%, to USD86.46 a barrel by 0641 GMT. Earlier in the session, the contract touched its highest since Oct. 3, 2018 at USD86.71.

US West Texas Intermediate crude was up 58 cents, or 0.7%, at USD84.40 a barrel, after hitting USD84.78, the highest since Nov. 10, 2021, earlier in the session.

The gains followed a rally last week when Brent rose more than 5% and WTI climbed over 6%.

Frantic oil buying, driven by supply outages and signs the Omicron variant will not be as disruptive as feared for fuel demand, has pushed some crude grades to multi-year highs, suggesting the rally in Brent futures could be sustained a while longer, traders said.

"The bullish sentiment is continuing as (producer group) OPEC+ is not providing enough supply to meet strong global demand," said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.

"If (investment) funds increase allocation weight for crude, prices could reach their highs of 2014," he said.

The Organization of the Petroleum Exporting Countries, Russia and their allies, together known as OPEC+, are gradually relaxing output cuts implemented when demand collapsed in 2020. But many smaller producers cannot raise supply and others have been wary of pumping too much oil in case of renewed COVID-19 setbacks.

"What comes in view next is the summer demand bump, especially in Europe and the US, which could be bigger than last year's, if the growing hope around the Omicron finally turning COVID from pandemic to endemic proves right," said Vandana Hari, energy analyst at Vanda Insights.

Festering geopolitical threats to supply are also supporting bullish sentiment, Hari said.

US officials voiced fears on Friday that Russia was preparing to attack Ukraine if diplomacy failed. Russia, which has amassed 100,000 troops on Ukraine's border, released pictures of its forces on the move.

The US government has held talks with several international energy companies on contingency plans for supplying natural gas to Europe if conflict between Russia and Ukraine disrupts Russian supplies, two US officials and two industry sources told Reuters on Friday.

US crude oil stockpiles, meanwhile, fell more than expected to their lowest since October 2018, but gasoline inventories surged due to weak demand, the Energy Information Administration said on Wednesday.

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 was expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, EIA said in a monthly report earlier last year, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC

Shell to hand over Deer Park refinery to Pemex on January 20

Shell to hand over Deer Park refinery to Pemex on January 20

MOSCOW (MRC) - Mexican state oil company Petroleos Mexicanos will take control of the Deer Park refinery in Houston, Texas on Jan. 20, reported Reuters with reference to three sources with knowledge of the matter.

Royal Dutch Shell had agreed in May to sell its majority stake in the Deer Park refinery, which can process up to 340,000 barrels per day (bpd), to Pemex, its long-time partner in the plant, for about USD596 million.

"Next Thursday, the payment and transfer of the asset will happen," said a Pemex source, who spoke on condition of anonymity. "The refinery will then be operated directly by Pemex".

Pemex has reached an agreement with personnel already working in the refinery, the source added.

The operators would be the same to guarantee stability, but they would no longer be working for Shell, the source said.

A Pemex delegation, including Chief Executive Officer Octavio Romero, will travel to Texas to finalize the deal on Thursday, a second source added.

Pemex did not immediately respond to a request for comment and a Shell spokesman did not immediately confirm the delivery date.

A third source close to the talks said there are still final transition activities pending, but added that he expected the deal to complete in the next few days.

Conversations had accelerated in recent days in order to complete the entire purchase operation before Feb. 1, the third source said.

As MRC informed previously, Royal Dutch Shell plc. said in November that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

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 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

Solvay to collaborate with Trillium on bio-based acrylonitrile for carbon fiber applications

MOSCOW (MRC) -- Solvay has signed a partnership letter of intent with Trillium Renewable Chemicals to enable it to produce bio-carbon fibre from bio-based acrylonitrile (bio-ACN), said the company.

Solvay and Trillium Renewable Chemicals have signed a letter of intent to develop the supply chain for bio-based acrylonitrile (bio-ACN). Trillium will supply Solvay with bio-ACN from Trillium’s planned commercial asset, and Solvay will evaluate bio-ACN for carbon fiber manufacturing as part of its long-term commitment to developing sustainable solutions from bio-based or recycled sources. The aim of this partnership is to produce carbon fiber for use in various applications such as aerospace, automotive, energy, and consumer goods.

Acrylonitrile is a chemical intermediate typically made from petroleum-based feedstocks like propylene and is the primary raw material used in the production of carbon fiber. Trillium’s Bio-ACNTM process delivers acrylonitrile from plant-based feedstocks like glycerol with a lower carbon footprint.

"We are thrilled to be partnering with Trillium which aligns well with our Solvay One Planet commitment to more than double our revenue based on renewable or recycled materials by 2030," comments Stephen Heinz, head of composite research & innovation, Solvay.

Innovation partnerships such as this are driven by a desire to make a real-world sustainability impact. Bio-based feedstocks are a key part of Solvay’s sustainability strategy, and we look forward to being a consumer of bio-ACN from Trillium’s first bio-based acrylonitrile plant.

ACN is also used in the production of synthetic fibres for clothing and home furnishings, as well as engineering plastics and elastomers.

As per MRC, Solvay completed the deal to split and sell the polyamide business to BASF and Domo Chemicals for EUR1.6 billion. Initially, the acquisition of the Solvay division by the German petrochemical giant was announced in September 2017. The parties planned to complete the transaction in the third quarter of 2018.

We remind that BASF-YPC, a 50-50 joint venture of BASF and Sinopec, undertook a planned shutdown at its naphtha cracker on 30 April 2020. The company initially planned to start turnaround at the cracker on April 5, 2020. The plant remained under maintenance unitl 18 June, 2020. Located in Jiangsu, China, the cracker has an ethylene capacity of 750,000 mt/year and propylene capacity of 400,000 mt/year.

Solvay is a science company whose technologies bring benefits to many aspects of daily life. With more than 24,100 employees in 64 countries, Solvay bonds people, ideas and elements to reinvent progress. The Group seeks to create sustainable shared value for all, notably through its Solvay One Planet plan crafted around three pillars: protecting the climate, preserving resources and fostering better life. The Group’s innovative solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices, health care applications, water and air purification systems. Founded in 1863, Solvay today ranks among the world’s top three companies for the vast majority of its activities and delivered net sales of EUR10.2 billion in 2019. Solvay is listed on Euronext Brussels (SOLB) and Paris and in the United States, where its shares (SOLVY) are traded through a Level I ADR program.
MRC

PetroChina expects 2021 net income to rise significantly

PetroChina expects 2021 net income to rise significantly

MOSCOW (MRC) -- PetroChina Co. said preliminary net income for 2021 rose by 374% to 395% from the previous year as oil and gas prices surged, reported Bloomberg.

Net profit attributable to shareholders will increase by 71 billion to 75 billion yuan (USD11.2 billion to USD11.8 billion) over the 2020 level of 19 billion yuan, the company said in an exchange filing. Profits are up by as much as 48.3 billion yuan from 2019.

Brent crude rebounded to an average USD71 a barrel in 2021 as vaccines let governments around the world lift harsh transportation restrictions that cut oil demand in 2020, when it averaged about USD43 a barrel.

“The strong performance can be attributed to the oil price recovery and lower-than-expected import gas losses,” Morgan Stanley analysts including Jack Lu said Wednesday in a note.

State-owned PetroChina is the nation’s largest oil and natural gas driller, operating a fleet of refineries that produce transportation fuel. It’s also a major gas buyer and is required to import the fuel even if that means incurring losses. The company’s performance was the best in seven years, it said.

Investors will be looking for clues as to what PetroChina plans do with its windfall profits, after fellow state-owned oil giant Cnooc Ltd. on Tuesday promised a special dividend, stock buybacks and guaranteed dividends through 2024.

As MRC informed previously, PetroChina, Asia's largest oil and gas producer,aims to have oil, gas and green energies to each account for a third of its portfolio by 2035, as the Chinese oil major shifts toward a lower-carbon future.

We remind that in August, 2021, PetroChina Liaoyang Petrochemical Co Ltd , part of the Chinese petrochemical major - PetroChina,successfully started up its new polypropylene (PP) plant last week. Based in Liaoning City, Liaoyang Province, China, the new PP plant has a production capacity of 300,000 tons/year.

According to MRC's ScanPlast report, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation, headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.
MRC