Shell cuts American upstream spending to lower shale exposure

MOSCOW (MRC) - Royal Dutch Shell will cut spending in its American exploration and production business by a fifth and could sell more of its shale assets, in another sign that oil majors are struggling to make profits in the booming sector, said Hydrocarbonprocessing.

Oil and natural gas pumped from North American shale has boosted the fortunes of smaller energy firms, but the world's biggest oil companies, including BP and Exxon Mobil, have been slower to realize the full potential of the prolific rock.

London-based BP announced last week it was spinning off its onshore U.S. oil and gas assets into a separate business to help it improve performance.

Shell, which is already selling more than 700,000 acres of U.S. shale assets, said in a strategy update on Thursday that it would reduce spending in its American upstream business by 20% compared with last year.

"Shell's ongoing restructuring of this portfolio, could potentially lead to future asset sales and/or impairments," the company said.

In North America, the oil companies have broad exposure to profit-sapping natural gas, a commodity whose price fell to the lowest level in a decade in 2012 but has since rebounded as a cold winter depleted gas in storage.

Sentiment about the fuel's prospects is improving with the prospect of liquefied natural gas (LNG) exports and increased industrial use, but uncertainty remains.

The Anglo-Dutch oil major stuck to its 2014-15 divestment target of USD15 billion, of which USD4.5 billion has already been announced, including the USD2.6 billion sale of its Australian refinery and petrol stations business to oil trader Vitol.

Some analysts said they were disappointed the company was not stepping up its disposal programme to raise more cash.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

MRC

MOSCOW (MRC) -- As part of its ongoing commitment to innovation, The Dow Chemical Company has announced that a new research and development (R&D) facility will be built in Lake Jackson, Texas, near its largest manufacturing site in Freeport, Texas, reported Dow in its statement.

The Texas Innovation Center will house state-of-the-art laboratory facilities and technical expertise centers to enable ongoing innovation that supports the commercialization of solutions across the various high-growth end-use markets, such as food packaging, personal care and automotive.

"The Freeport site has long been an important research and development location for Dow, providing breakthroughs that have paved the way for a more sustainable future," said Andrew N. Liveris, Dow’s chairman and chief executive officer. "The enhanced capabilities at our new location will continue the tradition of R&D expertise in Texas by delivering leading edge technology."

The new center replaces several of the company’s existing R&D facilities in Freeport, Texas. Upon completion in 2016, the Texas Innovation Center will be a global research and development hub of modern lab and office facilities for more than 2,000 people from Dow R&D, businesses, functions and manufacturing.

"In the next five years our site will see remarkable growth in manufacturing and the Texas Innovation Center will bolster our R&D operations on a long-term path forward as well," said Earl Shipp, vice president of US Gulf Coast Operations.

The Texas Operations site employs more than 12,000 people and has more than 65 manufacturing plants working together to produce 44 percent of Dow’s products sold in the United States and about 21% of the company’s products sold globally. It is also home to one of the largest R&D centers in Dow.

As MRC informed previously, in February 2014, CB&I was awarded a contract to provide pipe fabrication for Dow Chemical's US Gulf Coast investment program. Dow's investment plan includes construction of a new propylene and ethylene production unit in Texas and four new polyethylene plants in Texas and Louisiana.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene (PP), and synthetic rubber. The company's more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.
MRC

MOSCOW (MRC) -- Following further discussion, the European Commission has decided to market test an alternative remedy package submitted by Ineos and Solvay for evaluation of the proposed 50/50 joint venture between the parties in a Phase II investigation, reported Ineos on its site.

The proposed remedy package consists of the LVM heritage assets (Beek in The Netherlands, Mazingarbe in France and Tessenderlo in Belgium) as well as the PVC and VCM plants at Wilhelmshaven (Germany) and potentially the EDC and chlorine membrane plants at Runcorn (UK) which are operated by INEOS. This remedy package will be tested in lieu of the remedy package initially submitted on 27 February.

Discussions with the Commission will continue during the market testing phase, ahead of any final decision on clearance being made, which is now expected by 16 May.

The parties are confident that the proposed Joint Venture will ultimately secure clearance.

Ineos and Solvay will continue to run their businesses separately until completion of the transaction, which is dependent on the above approvals and procedures.

As MRC wrote before, two of Europe’s biggest chemical companies agreed a joint venture that will create one of the world’s largest producers of PVC plastics by revenues in May 2013.

Solvay S.A. is a Belgian chemical company founded in 1863, with its head office in Neder-Over-Heembeek, Brussels, Belgium. The company has diversified into two major sectors of activity: chemicals and plastics. Solvay supplies over 1500 products across 35 brands of high-performance polymers – fluoropolymers, fluoroelastomers, fluorinated fluids, semi-aromatic polyamides, sulfone polymers, aromatic ultra polymers, high-barrier polymers and cross-linked high-performance compounds.

INEOS Group Limited is a privately owned multinational chemicals company consisting of 15 standalone business units, headquartered in Rolle, Switzerland and with its registered office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell) and the largest privately owned company in the United Kingdom.
MRC

MOSCOW (MRC) -- China Petroleum & Chemical Corp. (SINOPEC), Asia’s biggest oil refiner, has identified 1,100 sections of its national pipeline network that are too close to residential areas, reported Hydrocarbonprocessing with reference to chairman Fu Chengyu's statement.

The discovery follows a nationwide pipeline safety inspection after a blast at a China Petroleum-controlled oil pipeline in East China’s Qingdao killed 62 people in November.

As MRC wrote previously, Qingdao is one of China's largest crude oil import terminals, supplying at least two major Sinopec refineries - the Qingdao plant and Sinopec Qilu Petrochemical Corp - as well as many small, independent refineries. The explosion occurred after an oil leak led to a fire.

"City regulators have to follow pipeline rules in urban planning, otherwise not only the enterprise and residents, but the whole society may get hurt," Fu said in an e-mailed newsletter on Wednesday.

China should also consider shortening pipeline safety distance rules for more efficient law enforcement, Fu said. Current regulations list the safe distance at between 700 to 1,200 meters, while the US and Japan allow 103 meters and 30 meters respectively, he said.

A total of 48 officials were disciplined and 15 face criminal charges after the Qingdao explosion. Fu was among those disciplined by the central government.

China Petroleum & Chemical Corporation (SINOPEC) is a large scale integrated energy and chemical company with upstream, midstream and downstream operations. Sinopec is the worlds seventh biggest company by revenue.
It is one of the major petroleum companies in China. Sinopec's business includes oil and gas exploration, refining, and marketing; production and sales of petrochemicals, chemical fibers, chemical fertilizers, and other chemical products. Sinopec is China's largest manufacturer and supplier of major petrochemical products. It is the second largest producer of crude oil in China. Its refining capacity and ethylene capacity rank No.2 and No.4 globally.
MRC

MOSCOW (MRC) -- Qatar’s stock exchange began listing shares of Mesaieed Petrochemical Holding Co. on 26 Feb. 2014, opening up trading in the company to foreigners, as per GV with reference to press reports from Doha.

Mesaieed Petrochemical, a wholly-owned subsidiary of Qatar Petroleum (QP), recently raised USD 880-million in an initial public offering of nearly 26 % of the company’s shares to Qatari private citizens.

To be listed under the symbol MPHC, foreigners will be permitted to acquire up to 15% of Mesaieed Petrochemical in the secondary market.

As MRC reported earlier, Qatar Petroleum (QP) and Qatar Petrochemical Company (QAPCO) have recently signed the FEED contract with Tecnimont SpA for the Al Sejeel Petrochemical Complex, to be built in Ras Laffan Industrial City. The signing of the FEED contract for the project, in which QP and QAPCO own respectively 80% and 20% equity interest, marks a strategic milestone for the progress of the mega-petrochemical complex.

The complex's construction scheduled for completion in 2018. It will comprise the worlds largest mixed-feed steam crackers, and is designed to produce 2.2 million tpa of polymers, including polyethylene (PE) - high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) - and polypropylene (PP) resins.

Mesaieed Petrochemical is a holding company for medium- and high-density polyethylene and 1-hexene producer Q-Chem I, high-density polyethylene and normal alpha olefins producer Q-Chem II, and Qatar Vinyl Co., a producer of caustic soda, ethylene dichloride and vinyl.

Qatar Petroleum is a state owned petroleum company in Qatar.
MRC