ORLEN Group ramps up production potential in Norway

MRC) -- ORLEN Group's PGNiG Upstream Norway has bought interests in two fields on the Norwegian Continental Shelf, said the company.

The deal is consistent with the Group's strategic goal of raising its own gas production volumes to improve Poland's energy independence and security. Under an agreement with Sval Energi AS, PGNiG Upstream Norway has purchased a 10% interest in licence PL211 CS, covering the Sabina and Adriana fields.

The licence area is situated in the Norwegian Sea, around 20 kilometres southwest of the Skarv production field, which is the primary centre of the Group's operations on the Norwegian Continental Shelf. The new fields will be connected to the existing production infrastructure in the area through PGNiG Upstream Norway's Aerfugl field, situated near Skarv. This will guarantee higher profitability of output from the new fields, cut the cost and time of the development work while also lowering carbon emissions related to the process. Sabina is an oil and gas field, while Adriana contains gas and condensate. Both were discovered in 1Q 2021.

According to preliminary estimates, their overall recoverable reserves could range 38-88 mBoE. These volumes can be confirmed following the drilling of an appraisal well, which is set in 4Q 2023. The licence partners anticipate production from the Adriana and Sabina fields to begin in 2029 and 2033, respectively. This will permit PGNiG Upstream Norway to offset the natural fall in output from the existing producing fields.

The agreement between Sval Energi and PGNiG Upstream Norway is awaiting final approval from the Norwegian Ministry of Petroleum and Energy. Once greenlit, PGNiG Upstream Norway's licence allies will be Petoro (35% interest), Aker BP (15% interest), and Wintershall DEA (40% interest, operator). The ORLEN Group's updated strategy, revealed in 1Q 2023, offers for raising the Group's own gas production volume in Poland and outside the country to nearly 12 bcm in 2030. Of that volume, 50% will come from fields positioned on the Norwegian Continental Shelf. For this purpose, PGNiG Upstream Norway will invest around $3 bn over the next five years.

PGNiG Upstream Norway has total oil and gas reserves of 346.6 M barrels of oil equivalent. It generates roughly 88,000 barrels of oil equivalent a day from 17 fields. Once the purchase of interests in licence PL211 CS is completed, the ORLEN Group will secure interests in 99 licences on the Norwegian Continental Shelf.

We remind, ORLEN Poludnie, a leading player in biofuels in Poland, has recently concluded the first year of operation of its BioPG plant, converting glycerol, a by-product of biodiesel production, into renewable propylene glycol (BioPG).

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The Chemours Company (Wilmington, Del.) has announced that Sameer Ralhan, CFO, will resign effective June 19. Jonathan Lock, current senior vice present and chief development officer, has been appointed to the CFO role, effective June 6, said the company.

The company says Ralhan will work with Lock to ensure a “seamless leadership transition.” The company also announced that Matt Abbott, current vice president, digital and data analytics, has been promoted to senior vice president, chief enterprise transformation officer, which has responsibilities for information technology, cyber security, digital and data analytics and procurement.

Lock joined Chemours in 2018 as vice president of corporate development and investor relations; he was promoted to an officer role in 2021 and has helped lead the recent fuel cell joint venture with BWT/FumaTech and the divestiture of Chemours’ glycolic acid business. With Lock taking over the CFO responsibilities Kristine Wellman, senior vice president, general counsel and corporate secretary, will be responsible for the company’s sustainability efforts.

Abbott joined Chemours in 2017 and has held various roles across audit and controllership. Prior to serving as vice president, digital and data analytics, he served as chief audit executive and chief accounting officer and controller. Abbott has over 25 years of experience in the chemical industry.

Chemours president and CEO Mark Newman thanked Ralhan for his impact on the company: “[Ralhan] has … made significant contributions to the company’s success through his transformation of the finance function into a source of strategic insight and analysis. We wish him all the best in his future endeavors.”

This is third resignation within Chemours’ top executives in the last few months. Alisha Bellezza, president, thermal & specialized solutions, and Edwin Sparks, president, titanium technologies and chemical solutions business, resigned on May 31 and March 31, respectively.

We remind, Chemours Company, DuPont de Nemours, Inc. and Corteva, Inc. announced they have reached an agreement in principle to comprehensively resolve all PFAS-related drinking water claims of a defined class of public water systems that serve the vast majority of the United States population.

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The Biden administration will abandon a proposal to include the electric vehicle industry in the U.S. biofuel blending program and withdraw potentially billions of dollars worth of tradable credits that had been attributed to the scheme, three sources familiar with the matter told Reuters.

Reuters had first reported in early May that the Environmental Protection Agency (EPA) was considering delaying the EV program over concerns the plan could trigger lawsuits. A final rule is set to be released later this month after review by the White House.

Scrapping the plan pushes the administration further away from allowing electric vehicles to generate nearly 2 billion credits under the U.S. Renewable Fuel Standard over the next two years, something companies such as Tesla Inc have pushed for. The EV program would have been a boost to President Joe Biden's goal of electrifying the motor vehicle industry to fight climate change.

The EPA, which administers the RFS, said it was considering comments for a final rulemaking on biofuel blending mandates for the years 2023, 2024 and 2025 and could not comment further. The White House, which is currently reviewing a final rule on the biofuel mandates, declined to comment.

The EPA proposed last year the inclusion of EVs into the RFS, in what would have been a major overhaul of an often-contentious law that mandates that oil refiners must blend billions of gallons of biofuels into the nation's fuel mix or buy tradable credits from those that do.

Most credits generated under the RFS are for blending liquid fuels such as corn-based ethanol into gasoline. Adding credits for power generated from renewable gas and then used for charging EVs would take the program in a new direction.

In last year's proposal, the EPA foresaw EV manufacturers could generate as many as 600 million credits in 2024 and 1.2 billion of them by 2025. Those estimates were included within the cellulosic credit pool in the proposal. However, the EPA will remove those estimated volumes from a final rule that the agency is expected to release by June 14, the three sources said.

The EV plan represented the largest growth in the cellulosic credit pool in the RFS program history, roughly doubling the credits generated from 720 million this year to 2.13 billion by 2025, according to the proposal.

Those in the electric vehicle and renewable natural gas industries were hopeful that even with a delay, an EV program could still be passed by the end of the year.

We remind, Russia agreed to extend its existing 0.5 million bpd curbs into 2024, Angola and Nigeria agreed to give up their unused quotas. The United Arab Emirates was allowed to boost its production quota by 0.2 million bpd to 3.2 million from 2024.

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Oil prices were little changed on Tuesday after erasing earlier losses as worries over sluggish global economic growth that could reduce energy demand offset Saudi Arabia's pledge to deepen output cuts, said Hydracarbonprocessing.

Brent futures remained unchanged at USD76.71 a barrel at 11:18 a.m. EDT (1518 GMT), while U.S. West Texas Intermediate (WTI) crude rose 12 cents, or 0.2%, to USD72.27. Earlier in the session, WTI was down USD2 a barrel and Brent down almost USD2.

Growing interest in energy trading in recent weeks boosted open interest in WTI futures on the New York Mercantile Exchange to its highest level since March 2022 for a fourth day in a row on Monday. Brent gained as much as USD2.60 a barrel on Monday and WTI as much as USD3.30 after Saudi Arabia, the world's top exporter, said at the weekend that its output would drop by 1 million barrels per day (bpd) to 9 million bpd in July.

But weaker demand, stronger non-OPEC supply, slower economic growth in China and potential recessions in the U.S. and Europe mean the Saudi cut is unlikely to achieve a "sustainable price increase" into the high $80s and low USD90s, Citi analysts said in a note on Tuesday.

The U.S. dollar, meanwhile, rose to its highest level against a basket of currencies since hitting a 10-week high on May 31 as investors waited on fresh signals on whether the U.S. Federal Reserve (Fed) will raise or hold interest rates in June.

A stronger dollar can weigh on oil demand by making the fuel more expensive for holders of other currencies. One of those signals came from the U.S. services sector, which barely grew in May as new orders slowed.

"The market remains focused on the risk to demand, with recession concerns mounted on a broad-based miss in U.S. services PMI (Purchasing Managers' Index), giving room for a Fed pause on rates," said Ole Hansen, head of commodity strategy at Saxo Bank.

We remind, Russian is fulfilling its oil output cut obligations, Russian Deputy Prime Minister Alexander Novak told Rossiya-24 TV channel on Sunday following a meeting of the OPEC+ group of leading oil producers. OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, on Sunday after seven hours of talks decided to reduce overall production targets from 2024 by a further total of 1.4 million barrels per day (bpd).

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BASF is gradually bringing additional alkoxylation capacity on stream in Antwerp, Belgium, and Ludwigshafen, Germany, from the second quarter of 2023, said the company.

The investment benefits European customers in particular with a significant capacity increase well in excess of 150,000 metric tons per year.

"With this expansion, we are strengthening our position in Europe and opening up important growth opportunities in the European market through a wide range of applications such as in the detergents and cleaners, automotive and construction industries," said Mary Kurian, President Care Chemicals. “This capacity expansion – implemented despite the challenges faced over the past few years – gives our customers enhanced flexibility and supply security. It is in response to the long-term increase in demand for alkoxylates and reinforces our market leadership in this growing segment,” adds Soeren Hildebrandt, Senior Vice President, Home Care, I&I and Industrial Formulators Europe at BASF.

Most of the capacity increase is part of the expansion of ethylene oxide and ethylene oxide derivatives at the Belgian Verbund site in Antwerp. In addition to alkoxylation, the expansion encompasses investment in a second world-scale ethylene oxide production line, including purified ethylene oxide capacity.

Alkoxylation is used for instance to produce surfactants for the home care industry and for various applications in industrial and institutional cleaning. BASF customers utilize these surfactants in the formulation of laundry detergents, cleaning agents, and dishwashing products. Alkoxylates are also used in technical applications for industrial solutions. Examples include raw materials for superplasticizer production, emulsion polymerization emulsifiers, crop protection additives, and polyurethane foams for the automotive and construction industries.

We remind, BASF had a 13.4% decrease in sales for Q1 2023, from EUR23.1 billion in Q1 2022 to EUR20.0 billion. However, net income was EUR1.6 billion, EUR340 million higher than in the same period of the previous year. The company forecasts sales of between EUR84 billion and EUR87 billion for 2023.

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