Repsol to lose EUR1.2bn in 2015 on oil plunge

МОSCOW (MRC) -- Spain's oil giant Repsol has announced it has put aside an exceptional provision of 2.9 billion euros (USD3.2 billion) due to a plunge in crude prices that will lead to a net 2015 loss of 1.2 billion euros, said Business Recorder.

The past few months have been trying for companies and countries which produce oil and other commodities, the prices of which have slumped as demand has slowed in China -- the motor of global growth in recent years -- casting a cloud over the global economic recovery.

"In the current environment of low crude oil and gas prices, the board of directors of Repsol has agreed... to apply extraordinary impairments totaling approximately 2.9 billion euros to its 2015 earnings," the company said in a statement late onWednesday.

Repsol, which acquired Canada's energy firm Talisman last year, added in its 2015 earnings preview that the group would register an annual net loss of 1.2 billion euros as a result of this exceptional charge.

It added that without the provision, the group would have made a net profit of 1.85 billion euros last year -- an eight-percent rise from 2014.

As MRC informed earlier, in June 2014, Mexico's national oil company Pemex announced that it would sell a 7.9% stake in Spanish oil firm Repsol, worth about 2.2 billion euros (USD3.0 billion). The sale ends a long relationship between Pemex and Repsol that had run into trouble in recent years over disagreements on policies ranging from top management to the handling of Repsol's investments in Argentina.

Repsol S.A is an integrated Spanish oil and gas company with operations in 28 countries. The bulk of its assets are located in Spain.
MRC

MOSCOW (MRC) -- BG Group shareholders overwhelmingly approved Royal Dutch Shell's USD52 billion takeover on Thursday, clearing the way for the two firms to create the world's biggest trader of liquefied natural gas (LNG), said Shell on its site.

BG will now merge with Shell on Feb. 15, nearly two decades after the company was born from British Gas and just a few months after it reached record oil and gas output thanks to new projects in Australia and Brazil.

At a meeting in London, 99.53% of BG shareholders voted in favor of the merger, a day after 83% of Shell's shareholders approved the deal first announced on April 8 last year.

Shell shareholders are putting their faith in CEO Ben van Beurden's decision to focus the Anglo-Dutch company's operations in liquefied natural gas (LNG) and deep water oil production over the coming decades as the industry undergoes one of its worse downturns in decades.

Once the two companies merge, Shell will start a complex integration process that will include thousands of job cuts, tens of billions of dollars in asset sales and the harmonizing of the companies' trading and production operations as they overlap in many parts of the world.

Shell has promised to find USD3.5 billion from cost savings and overlaps by 2018, from various areas including its corporate, administrative and IT operations.

BG was created in 1997 when British Gas split into two separate companies. In 2000, another change saw the creation of BG Group, focused on international oil and gas production.

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) -- Univation Technologies and The Linde Group’s engineering division have entered into a cooperation agreement aimed at providing performance and cost efficiency for the production of polyethylene (PE) resins, said the companies on their sites.

The parties say they expect that this exclusive partnership will deliver measurable benefits to resin producers globally.

"Our combination of technology and engineering, procurement and construction (EPC) capabilities is a key driver to deliver competitive solutions to the petrochemical industry," said Dr. Christian Bruch, a member of the Linde's executive board and responsible for the company’s engineering business. "We are excited to leverage the enormous potential synergies inherent in this close collaboration with Univation Technologies to deliver value to our existing and future customers."

Under the agreement, Univation and Linde will work toward delivering streamlined technology, capital expense and operational expense reduction opportunities and improved quality in early-stage design to ethylene cracker and polyethylene projects.

The companies believe this will be valuable for both new construction projects as well as retrofit projects.

Dr. Steven F. Stanley, president of Univation Technologies, expressed his company’s excitement to embark on this partnership with Linde.

"As the leading polyethylene technology licensor around the world, we are constantly looking for ways to deliver more value for our licensees," Dr. Stanley said. "This agreement with Linde allows us to take our solution-driven approach to the next level covering the entire UNIPOL PE process platform, including back-integration into cracker operations and improved economics for both new plant and retrofit projects."

This agreement is non-exclusive for the engineering, procurement and construction (EPC) phase of UNIPOL projects.

As MRC informed earlier, the Dow Chemical Company announced the completed sale of ANGUS Chemical Company to Golden Gate Capital. The company finalized the divestiture of its Sodium Borohydride business to Vertellus Performance Chemicals LLC and certain of its affiliates.

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 (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber. EBITDA was up 15% in 4Q at USD2.4 bn. Net profits were down 24% at USD734. Dow's sales in 4Q were unchanged on a year earlier at USD14.38 bn.

MRC

МОSCOW (MRC) -- Strong margins propelled net profit at Czech downstream oil group Unipetrol in 2015 to its highest level since Poland's PKN Orlen took over a decade ago, despite a blast that has shut down its petrochemicals production, as per Reuters.

Unipetrol swung from a loss in 2014 to a profit of 7.0 billion Czech crowns (USD281.99 million) last year, double what it made in 2005, the year that PKN Orlen acquired a 63 percent stake in it.

Margins rebounded and Unipetrol also benefited from savings programmes. It also bought out shareholders in the country's only refining group to gain full ownership last year.

Unipetrol stumbled in August when a blast and fire at its steam cracker unit in Litvinov hit production and the company reiterated on Thursday it expected the plant back working at minimum capacity by July 2016.

It estimated the accident had resulted in lost profit of 4.5 billion crowns in 2015. It expects to recover 2.4 billion of that. In total, it expects to recover 6.7 billion from lost profit, repair costs and other expenses.

Net profit fell to 182 million crowns (USD7.3 million) in the fourth quarter from 598 million a year earlier and missed the average estimate of 249 million in a Reuters poll. Revenue dropped by a fifth to 22.96 billion crowns in the quarter.

Unipetrol's rising fortunes have prompted speculation it may pay its first dividend since 2007. Shares hit a five-month high of 165.55 crowns on 27, January ahead of the results.

As MRC informed earlier, Unipetrol declared force majeure on the petrochemical production section of its Litvinov complex, in the Czech Republic, following a 13 Aug. fire at the 544,000-t/y ethylene cracker. The company said the occurrence and continuation of the force majeure makes it impossible for Unipetrol to fill its contractual obligations with its business partners. Rail and road access to the complex is also temporarily closed. In addition to the ethylene cracker, the complex includes a polypropylene unit and two polyethylene units, having a combined capacity of 595,000 t/y.

Unipetrol , a.s. is a group of companies operating in the petrochemical industry in the Czech Republic. In 2005 Unipetrol became a part of the PKN ORLEN Group, the largest oil processor in Central Europe. The UNIPETROL Group is oriented mostly towards oil processing, fuel distribution and petrochemical production. In all of these business areas the Unipetrol Group is among the key players both in the Czech Republic and on the Central European market. The Group ranks among the leading firms in the Czech Republic in terms of its revenues, and employs almost 4,000 people.

MRC

MOSCOW (MRC) -- CNOOC and Shell Petrochemicals Co (CSPC) has shut its polypropylene (PP), high density polyethylene (HDPE) and low density polyethylene (LDPE) plants, as per Apic-online.

A Polymerupdate source in China informed that all the units were taken off-stream over the weekend on account of severe cold weather. The plant is likely to remain shut for about 7-8 days.

Located in Nanhai, Guangdong province of China, the PP plant has a production capacity of 260,000 mt/year, HDPE plant has a production capacity of 240,000 mt/year and LDPE plant has a production capacity of 250,000 mt/year.

As MRC wrote previously, in the second half of October 2015, CSPC shut its naphtha cracker for a maintenance turnaround. The plant remain off-stream for around 7 weeks. Located at Huizhou in Guangdong province, China, the cracker has a production capacity of 950,000 mt/year.

CNOOC and Shell Petrochemicals Company Limited (CSPC) was established in late 2000. It has built and now operates a world-scale petrochemical complex in the Daya Bay Economic and Technological Development Zone, Huizhou, Guangdong Province. The joint venture partners are Shell Nanhai BV, a member of the Royal Dutch Shell Group, with a 50 per cent stake, and CNOOC Petrochemicals Investment Limited (CPIL), also with 50 per cent. CPIL is owned by China National Offshore Oil Corporation (CNOOC) (90%) and Guangdong Guangye Investment Group Company Limited(10%).

As an integrated petrochemical complex, the major facilities of the complex include 11 process units, steam and power generation and other utility provisions, storage and handling and shipping facilities, as well as environmental protection facilities. The heart of the complex is a world-scale cracker producing 950,000 tons per annum ethylene and 500,000 tons per annum propylene. In total, the complex produces some 2.7 million tons per annum of ethylene and propylene's derivative products to supply the domestic market.
MRC