Moody cut Petrobras outlook to negative

(upstreamonline) -- Credit-ratings agency Moody's Investors Service cut its credit outlook for Brazilian state-run energy giant Petroleo Brasileiro, raising concerns that the company's prized investment-grade credit rating could be in danger.

Moody's changed the outlook for Petrobras to "negative" from "stable," citing rising debt levels and growing uncertainty over how quickly the oil company can bring new production onstream, Dow Jones reported.

Moody's also questioned how quickly Petrobras can boost cash flow given the company's massive investment plan, rising costs and losses in its refining operations.

The revised outlook by one of the three major credit ratings agencies raises concerns that Petrobras could face greater financial scrutiny as the company embarks on a USD237 billion spending plan to develop recently discovered offshore oil fields.

The potential loss of Petrobras's investment-grade credit rating would mean higher borrowing costs and throw into jeopardy development of the subsalt, a series of ultra-deepwater oil discoveries made off the country's southeast coast.

In August, Petrobras officials said the company was focused on keeping its financial house in order, including greater review of projects under the latest investment plan. The audits were done to ensure returns that would guarantee the investment-grade credit rating.

While Petrobras holds one of the world's best long-term oil production growth profiles, Moody's noted that the company has been outspending cash flow and crude oil production has fallen short of targets. Heavy gasoline and diesel imports have combined with Petrobras's fuel-pricing policy, which doesn't pass along increases in international oil prices to consumers at the pump, to cause steep losses in the company's refining operations, Moody's also noted.

Petroleo Brasileiro S.A. or Petrobras is a semi-public Brazilian multinational energy corporation headquartered in Rio de Janeiro, Brazil. It is the largest company in the Southern Hemisphere by market capitalization and the largest in Latin America measured by 2011 revenues.
MRC

(tehrantimes) -- Iran has launched the world’s longest ethylene pipeline, which carries the chemical compound from the southern Persian Gulf port of Assaluyeh to petrochemical complexes in the western provinces of Iran.

Ethylene was injected into the West Ethylene Pipeline in Assaluyeh Port in Bushehr Province on Monday, IRNA reported.

Kavian Petrochemical Complex, situated in Assaluyeh, is the main producer of ethylene for the pipeline with an annual petrochemical production capacity of 2.18 million tons.

That the first phase of the pipeline, which carries ethylene from the Pars Special Economic Energy Zone, is 1,200 kilometers long.

Iran has significantly expanded the range and volume of its petrochemical products over the past few years, and the National Iranian Petrochemical Company has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.

The Islamic Republic exported a total of 18.2 million tons of petrochemical and polymer products, worth about USD 14.2 billion, to more than 60 countries in the previous Iranian calendar year (ended March 19, 2012).


"The joint production capacity of Kavian is 2 million tons annually and the tentative production has started early December", said Reza Amiri in a meeting with the media reporters. He also announced the launching of the world's largest ethylene producer unit in Pars Special Economic-Energy Zone.

Kavian Petrochemical Complex Directing Manager said that the operation of this large unit of ethylene production has made the West Ethylene Pipeline the world's largest petrochemical pipeline. He maintained that so far, some of the ethylene produced at Kavian has been pumped to Arvand Petro-chemicals as raw material via the West Pipeline.

MRC

(Chemical Week) -- DuPont reports of investments that the company are making in all its divisions keep on delivering results which are offset by the weakness in titanium dioxide (TiO2) markets.

"While we are seeing indications that market conditions are firming up in some areas, volatility and uncertainty also persist," says DuPont chair and CEO Ellen Kullman. "Investments we are making in agriculture and nutrition, industrial biosciences and advanced materials continue to deliver results offset by the weakness in titanium dioxide (TiO2) markets." Excluding the performance chemicals unit, which includes TiO2, the company expects earnings growth of at least high-teens in 2013 versus 2012, DuPont says. Performance chemicals margins are expected to fall six to seven percentage points in 2013, DuPont says.

According to Thomson Reuters, DuPont expects full-year 2012 earnings from continuing operations to be at the high end of previous guidance of USD3.25 -USD3.30/share and 2013 earnings to grow up to 13%, to USD3.70/share on global economic growth, which is expected to remain modest in 2013, according to DuPont estimates. DuPont expects global GDP growth of about 2% in 2013, says executive v.p. and CFO Nicholas Fanandakis.

We remind that, as MRC informed previously, earlier this year DuPont Co. struck a deal to sell its car paint business to Washington-based investment firm Carlyle Group LP for USD4.9 billion. The transaction is expected to close in the first quarter of 2013.
MRC

MOSCOW (MRC) - The import duty on the product group "other polymers of ethylene" is to be cleared on 20, December. At the same time there is no official explanation on the future classification of the import of linear polyethylene with copolymer chains more than 5% of the total weight, MRC analysts said on Monday.

Council of the Eurasian Economic Commission made a decision № 89 from 12,October, 2012 "On amendments to the common nomenclature of foreign economic activity of the Customs Union and the Common Customs Tariff of the Customs Union on the silicone resins, polymers of ethylene, of certain grades of organic chemicals, fish", which comprises 0% import duties on other polymers of ethylene (FEACN code 3901 90 900 0). Officially, the commission's decision was published on 20, November, 2012 and comes into force after 30 days from the date of its official publication, which is, on 20, December, 2012.

According to the Common Customs Union, FEACN code 3901 90 900 0 includes all other polymers of ethylene. Linear polyethylene with a total weight of more than 5% of the copolymer chains of butene, hexene or octene are under this classification. Thus, this year, about 16% of the declared linear polyethylene refers to the group of "other ethylene polymers" (FEACN code 3901 90 900 0). From 20, December the import duty for this group of goods will make 0% from the current 10%.

On the other hand, there is also a group of products "other polymers of ethylene with a specific gravity of less than 0.94" in classifier of Common Customs Union (FEACN code 3901 10 900 0), which is under the import duty of 10%. According to some importers, linear polyethylene containing a total weight of more than 5% of the copolymer chains can be classified under this commodity code as well. According to unofficial information, the customs had not received an official explanation as to the imports of linear polyethylene containing a total weight of more than 5% of the copolymer chains.

Importing companies are also confused, as FEACN codes of imported linear polyethylene with a total weight of more than 5% of the copolymer chains can be simply mixed up.

MRC

MOSCOW (MRC) -- In January-November, 2012, import of PET to the Ukrainian domestic market grew by 6% year-on-year and made about 150,000 tonnes, according to MRC Data Scope.

This year, Ukrainian converters have been actively increasing purchasing volumes in the foreign markets. Most clearly this tendency was observed in the first half of the year. Significant spikes of purchases were registered in February and May. In anticipation of preparation for the season, converters increased stocks of the finished goods and feedstock at their warehouses, reporting an increase of orders from beverage and water producers. Due to the growth of shipments in the said months, the total import of PET in January-November made 150,000 tonnes, up 8,200 tonnes year-on-year.

China is still the leader in terms of shipments to Ukraine. 52% of the processed granulate in the country account for the Chinese PET makers. In January-November, 2012, around 78,000 tonnes of bottle PET granulate arrived in the market from China. China Resources Chemicals, SK Chemicals and Jiangsu Sanfangxiang make the Top-3 Chinese suppliers. However, the total import volumes of the Chinese material dropped by 1,000 tonnes over the past 11 months year-on-year.

Despite the reduction of purchases of Chinese PET, Pakistani, Lithuanian and Belarusian PET grades showed a significant increase. During the reporting period, supply volumes of Pakistani PET rose more than three times and made 21,800 tonnes, while in 2011 this index made 7,000 tonnes. Import of Lithuanian PET grew more than twofold and made 17,600 from 7,770 tonnes of the previous year. Purchases of Belarusian PET increased more than 2,5 times and made almost 8,000 tonnes in January-November from 3,000 tonnes last year.

MRC