Rosneft offers to buy out small TNK-BP shareholders in cut-price deal

MOSCOW (MRC) - Russian state oil major Rosneft offered to buy out small shareholders in TNK-BP Holding but said it would pay less for the stock than the price at the time of the takeover in March, said Reuters.

Chief executive Igor Sechin said that Rosneft was not a "charity fund" when it bought TNK-BP and did not intend to buy out minority shareholders, raising complaints from them and questions from international investors about corporate governance in Russia.

Following the TNK-BP deal, Rosneft became the world's No. 1 oil producer by output, pumping 4.5 million barrels per day - nearly half of Russia's total - but its capitalization of USD74 billion is a fraction of U.S. ExxonMobil's.

Rosneft Vice President Igor Maidannik said that while the company has no legal obligations towards TNK-BP shareholders, the state-owned giant's shares are sensitive to the situation.

"We don't have any obligations. It would be a voluntary offer or, if a decision on a reorganization is taken, a conversion. We will see," he told reporters at TNK-BP's annual shareholders meeting.

Based on TNK-BP's market capitalization of USD21.6 billion, down 57% since October when the deal was announced, a buyout of about 5 percent owned by minorities would cost Rosneft approximately USD1 billion. TNK-BP shares rose up 1.8%.

Minority shareholders welcomed the idea with caution, as Sechin has previously rebuffed such calls.

Earlier this month, Rosneft recommended waiving 2012 dividends for TNK-BP, saying its own policy of paying out 25% of earnings as dividends could only be extended to TNK-BP after the deal closed on March 21.

MRC

MOSCOW (MRC) - The market of low-density polyethylene (LDPE) continues to be oversupplied in the Russia on the back of weak demand. The only exception makes LDPE shrink films, limited supply of which could result in price increase, according to ICIS-MRC Price Report.

In the early July Russian market of LDPE continues to be excessive as capacity utilisations of Russian plants are loaded at high level, while exports are weak because of sluggish demand in the foreign markets.

All of these factors put pressure on the Russian prices of LDPE. The only exception is polyethylene for shrink films, the prices of which are high on the limited supply in the market.

Two Russian producers - Kazanorgsyntez and Ufaorgsintez have limited their supplies of shrink films. Besides, Kazanorgsyntez announced a price increase of PE 153 by Rb1,000/tonne, effective from 1 July. So, the price of LDPE 153 in the Russian market grew to Rb60,000-61,500/tonne FCA, including VAT.

The maintenance works in Tomsk and Salavat can strengthen the shortage of shrink films. Gazprom neftekhim Salavat plans to stop on the turnaround from 18 July to 17 August. Tomskneftekhim plans maintenance works from 18 July to 9 August.

The prices of LDPE 158 in the beginning of the week were at a fairly large range: Rb52,500-57,000/tonne FCA, including VAT.

Despite the long stoppage of two Russian producers in the second half of July, many market participants do not expect a shortage in the market of LDPE. The demand is weak and Russian producers have got sufficient stock inventories to cover the current needs.

An exception can make LDPE shrink film prices, as Tomskneftekhim is the largest producer of this polyethylene in Russia.

MRC analysts expect the prices of LDPE shrink films to be increased on the back of scheduled maintenance works in Tomsk and Salavat.
MRC

MOSCOW (MRC) -- Royal DSM announces a broad portfolio of halogen free materials for electronics and electrical applications, said the producer in its press-release.

By eliminating substances of potential hazardous concern, DSM makes a significant contribution to solutions that reduce the environmental impact of e-waste and address the customer drive for more sustainable solutions.

The electronics and electrical industry is facing growing regulatory demands and OEM requests related to the elimination of substances of hazardous concern, requiring, for example, halogen-free technology and solutions for lead-free soldering.

Moreover, producers of key electronic components, such as connectors, sockets, wire & cables, low voltage switch gear devices and, more specifically, enclosures of MCB, MCCB and other Industrial Control Gear devices and LED lighting, are looking to advance miniaturization, system cost reduction and integration of components. This requires materials with higher mechanical, thermal and processing performance over conventional halogen-free high temperature polyamide materials, such as higher temperature performance and flow, thin wall strength, high reflectivity and Glow Wire Ignition Temperature (GWIT) at end use part level.

DSM has recently introduced its new thermally conductive thermoplastic polyester for such components, as foglamp housings, lens holders and AFL (Adaptive Forward Lighting) frames.

We remind that, as MRC wrote previously, DSM is going to invest about EUR100 million in three new R&D facilities in Delft and Sittard-Geleen (both in the Netherlands) over the next two years.

DSM delivers innovative solutions that nourish, protect and improve performance in global markets such as food and dietary supplements, personal care, feed, pharmaceuticals, medical devices, automotive, paints, electrical and electronics, life protection, alternative energy and bio-based materials.

MRC

MOSCOW (MRC) -- Three contract workers injured in the June 13 explosion at the Williams Olefins plant in Geismar have filed suit against the company, said Theadvocate.

Rigoberto Rio, Manuel Escobedo Sr. and Manuel Escobedo Jr., employees of Chicago Bridge and Iron Co. who were working as independent contractors at Williams Olefins, filed suit against the company.

The three men were working as pipefitters and suffered severe injuries in the blast, according to the suit, which was filed in the 23rd Judicial District Court in Ascension Parish.

The lawsuit alleges Williams Olefins’ failure "to properly and completely clear and maintain the pipeline … resulted in a catastrophic explosion," killing two people and injuring more than 100 others. Lawsuits against the company have started to mount since the first suit was filed the day after the explosion by a contractor working at the nearby BASF facility.

Several class-action lawsuits featuring plaintiffs working in neighboring plants also have been filed, attorneys said, as well as a suit filed Friday afternoon on behalf of two truck drivers making deliveries to the plant at the time of the explosion.

As MRC reported previously, the explosion and fire at Williams Olefins plant injured 77 and killed two persons. Williams president and CEO Alan Armstrong and Geismar plant manager Larry Bayer held a press conference Friday near the site of the explosion and said that they are still unsure what caused the deadly explosion and massive fire at the natural gas liquids processing facility.

The Geismar, La. plant is a natural gas liquids cracker that processes olefins used in the petrochemical industry. Williams Partners produces approximately 1.3 billion pounds of ethylene and 90 million pounds of polymer grade prophylene from the plant.
MRC

MOSCOW (MRC) -- Sabic, the Saudi Arabia-based raw materials group, launched its Innovation Challenge last week in order to find and develop new "smart polymer materials", said the producer in its press-release.

Speaking at the European Polymer Congress in Pisa, Frank Kuijpers, vice president of Sabic’s Technology & Innovation operation, said: "When we speak about "smart polymer materials", Sabic is referring to high-performance polymers that change depending on the environment they are in."

Kuijpers said the polymer’s responsiveness will lead to a different functionality compared with the original polymer material.

"These polymers can be found in both highly specialised applications and the products we use in our daily lives. This challenge creates interesting opportunities to further develop these smart polymers."

Apart from Sabic employees anyone can take part in the challenge, said Kuijpers, "from students to researchers or from up-and-coming entrepreneurs to small businesses".

Sabic is ranked among the world's largest petrochemicals manufacturers. It is the largest public company in Saudi Arabia. The comany manufactures chemicals and intermediates, industrial polymers, fertilizers and metals. It is currently the second largest global ethylene glycol producer. Among its products are propylene, paraxylene, styrene, vinyl chloride monomer. Sabic's venture capital arm is looking for opportunities in the U.S., Europe and China to buy stakes in start-up companies that can turn shale gas into petrochemicals, as MRC reported earlier. Formed last November, the Netherlands-based business is negotiating 30 to 40 deals and is looking especially at technologies that use different feedstocks.
MRC