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France to rein in export guarantees for oil and gas industry

October 27/2020

MOSCOW (MRC) -- The French government will stop providing export guarantees to projects involving dirty forms of oil from next year, all oil in from 2025 and gas in from 2035, reported Reuters with reference to the finance ministry's statement earlier this month.

France stopped giving export guarantees this year to projects where fracking and flaring were involved and also stopped support for coal projects.

In a second step, guarantees would be halted next year for projects involving heavy oil, shale oil and bitumen oil sands, affecting the creation of up to 700 new jobs, the ministry said in its proposal to parliament.

From 2025, public export guarantees would no longer be provided for the exploration and development of new oilfields, potentially at a cost of 1,800 jobs, followed by new gas fields from 2035, which could affect 3,000 jobs.

The ministry said the later date for gas was because that could help some countries with the transition to cleaner forms of energy.

It also proposed scrapping export guarantees for thermal power stations with emissions higher than the national median of the benefiting country from 2021.

The proposals will be submitted to parliament in the 2021 budget bill being considered by lawmakers.

As MRC wrote before, in mid-October, 2020, Russian oil pipeline monopoly Transneft and producer Rosneft reached a settlement with Total over dirty oil supplies to the French companys Leune refinery in Germany. Up to 5 MM tons of Russian oil in route to central Europe via the Druzhba pipeline were found to be contaminated last year. Total declared a force majeure in June 2019 on the production of jet fuel at its Leuna refinery in Germany following the supply of contaminated crude from Russia. Transneft did not disclose how much compensation would be paid to Total.

We remind that French energy major Total said in April that its joint USD5 billion petrochemical project with Saudi Aramco in the Saudi city of Jubail would not be hit by planned cuts in investment, although the partners were focused on controlling costs.

We also remind that in November 2019, Total disclosed that itis evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, ethylene, petrochemistry, Rosneft, Transneft, Hanwha Total, Saudi Aramco, Total Petrochemicals, Russia, Saudi Arabia, France, South Korea.
Category:General News
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