Czech Litvinov refinery started receiving state reserves crude

MOSCOW (MRC) -- The Czech oil refinery at Litvinov, owned by PKN Orlen unit Unipetrol, in the early May started receiving oil from state emergency reserves due to halt in Russian supplies via the Druzhba pipeline, news agency CTK reported, citing the head of state reserves Pavel Svarc, said Reuters.

Svarc said a loan from the state reserves would be enough to cover 15-20 days of operation at the refinery, one of two oil processors in the country.

Poland, Germany, Ukraine, Slovakia and other countries halted Russian oil imports via the Druzhba pipeline last week after finding contaminants that could damage refinery equipment.

Belarus said that clean oil had reached its territory after corrective measures were taken but would not reach its Mozyr refinery before May 4.

Svarc said clean oil from Druzhba could reach the Czech Republic around May 15. The country has another pipeline bringing oil from the Italian port of Trieste.
MRC

MOSCOW (MRC) -- Asia’s oil refiners are considering reducing output after margins slumped to their lowest for the season since 2003, said Hydrocarbonprocessing.

Companies that planned to trim output include SK Energy, a unit of SK Innovation, the Singapore Refinery Company (SRC), owned by PetroChina and Chevron Corp and at least one refiner in Thailand, five people familiar with the matter said.

In China, independent refiners known as ‘teapots’, which account for about a fifth of the country’s crude imports, operated at below 50% of capacity on average in April through May, versus 64% in the first quarter, said Zang Wengang, an analyst with Sublime Information Co. A spokeswoman for SK Innovation spokeswoman declined to comment, while SRC did not respond to a request for comment.

The people familiar with the matter declined to be identified because they are not authorized to speak to media. Rising crude purchasing costs have hit refiners’ bottom line. “We plan to lower (the operating rate) a bit...soon,” one of the sources said.

Spot crude cargoes have sold at multi-year high premiums as U.S. sanctions on Iran and Venezuela reduced supplies for Asia while a crisis in Russia over contaminated crude boosted Brent prices.

Meanwhile, excess supplies of light products, gasoline and petrochemical feedstock naphtha have squeezed margins further. Margins at a refinery complex in Singapore are at their lowest for this time of the year since 2003, even narrower than lows seen in 2009’s global financial crisis, data showed.

The profits are more than USD3 a barrel lower than the average for the past decade since 2009. Next month, Middle East producers led by top exporter Saudi Arabia are set to raise official selling prices (OSP) for a fourth straight month to track stronger spot markets.

Crude prices “are too high while product cracks (profit margins) are getting worse,” another source from a north Asian refiner said, adding that refiners are cutting cost by buying cheaper straight-run fuel oil to process at secondary refining units.
MRC

MOSCOW (MRC) -- Shareholders of two German refineries are arranging crude tanker shipments via the Baltic Sea in response to the halt of import flows on the Russian Druzhba pipeline, a spokesman for industry group MWV said, as per Reuters.

He said that one tanker had been discharged in the Polish port of Gdansk to ship oil to the Leuna refinery while the German port of Rostock was preparing to receive a shipment to feed to the nearby Schwedt refinery.

Both refineries had sufficient on-site inventories to keep operating for the time being, he said.

He declined to give further details, saying it is policy in the Mineraloelwirtschaftsverband to leave further internal communications up to member firms.
MRC

MOSCOW (MRC) -- Total is set to start up a biodiesel refinery using palm oil whose planned launch last summer sparked opposition from farmers producing vegetable oil and from environmental activists, reported Reuters.

The refinery in La Mede in southern France will begin production in two weeks, Chief Executive Patrick Pouyanne told journalists on the sidelines of the company’s annual shareholders’ meeting last Wednesday.

"Operationally the project is starting," he said.

The start-up of the 500,000 tons-per-year refinery has been delayed several times.

Farmers expressed concern about palm oil competing with locally produced vegetable oil and environmental activists cited the deforestation caused in producing it.

Palm oil cultivation results in excessive deforestation and its use in transport fuel should be phased out, the European Commission concluded in February, although it granted some exemptions production by smallholdings or on unused land.

Total, which has invested around 200 million euros (USD223 million) to convert the loss-making crude refining unit to biodiesel, hopes those exemptions help convince France to overturn its plan to end subsidies for adding palm oil to diesel.

"We can have a refinery that is competitive," Pouyanne said. If the French law is not changed, La Mede will not be competitive with its European peers," he said.

Total has committed to using less than 300,000 tons of crude palm oil per year at La Mede out of a total of 650,000 tons, with the rest coming from oils from other plants, recycled animal fat, cooking oil and industrial oil.

As MRC wrote before, in December 2017, Total inaugurated the new units at its Antwerp integrated refining & petrochemicals platform, which havdprogressively started up in the previous few months.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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MOSCOW (MRC) -- OMV, the international integrated oil and gas company based in Vienna, Austria, and Aker BP ASA, the oil exploration and development company headquartered in Oslo, Norway, signed a Memorandum of Understanding, committing to share digitalization competencies and technology across borders and advancing both companies’ digital agendas, said the company.

Together, the two companies will collaborate on projects that explore how to set up and execute wide-scale digital transformation processes. Aker BP will share best practices from Eureka, their digital transformation program that started two years ago. These insights will advance the digital maturity of OMV Upstream and also benefit a wide range of suppliers and partners connected to OMV’s operations. In turn, OMV will share the insights from its digitalization program DigitUP to advance the digital transformation of Aker BP.

Aker BP and OMV are also planning joint collaboration and technology projects within the areas of operational efficiency, drilling and subsurface. These projects will involve agile ways of co-developing use cases and advancing technology together with Cognite, Scandinavia’s fastest-growing technology company.

In addition to the Memorandum of Understanding between OMV and Aker BP, OMV today also formally entered into a long-term agreement with Cognite, a Norway-based company that works with heavy-asset industries. Cognite will be OMV’s technology partner in digital transformation.

As Aker BP’s technology partner for the past two years, Cognite has helped Aker BP with their digital transformation and delivered measureable bottom line results. Cognite is providing foundational digital twins for all Aker BP’s operations, and with the support of Cognite Data Fusion, Cognite’s data contextualization software, Aker BP’s digital transformation program has increased worker safety and improved worker efficiency, reduced maintenance costs, and optimized production across installations.
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