Sasol earnings hit by low oil price, says outlook uncertain

MOSCOW (MRC) -- South African energy and chemicals group Sasol reported a 17 percent fall in full-year earnings on Monday due to lower crude oil prices and said the economic environment it operates in remained "volatile and uncertain", said Reuters.

Sasol's earnings were also hit by a writedown of 9.9 billion rand (USD680 million) on its Canadian shale gas project, an impairment which had stood at 7.4 billion rand when the group released its interim results in March.

"In order to manage the shale gas asset through the low gas price environment, we concluded an agreement with our partner, Progress Energy, to settle the outstanding funding commitment of 4.16 billion rand and reduce the pace of appraisal, development and drilling activities," Sasol said.

Sasol also said the lower oil price had a "significant impact" on its interest in offshore Gabon oil production, resulting in a loss of 994 million rand compared with a 1.124 billion loss in the prior year.

The company has reduced its headcount to 30,000, a 15 percent decrease from 2013, as part of a restructuring drive and a response to the lower oil price, and the company said it expected it workforce to remain at around that number.

Sasol said it had reaped 28 billion rand of cash savings for the year, exceeding an original target of 16 billion rand, and was targeting savings of 65 to 75 billion rand by 2018.

Headline earnings per share fell 17 percent at 41.40 rand (USD2.87), in the middle of the range that the company had flagged to the market.

Joint Chief Executive Stephen Cornell said he saw a limited impact from an almost three-week strike by the Association of Mineworkers and Construction Union (AMCU) at its Secunda coal mines. Four other unions have accepted a 7 percent wage hike offer there.

"The operations are normal, we have been able to continue our production relatively unaffected," Cornell said on a media conference call.

The company has cut the final gross dividend by 21 percent to 9.10 rand per share.

As MRC informed earlier, Sasol has started construction work on its USD8.1bn ethane cracker and derivatives complex in Westlake, Louisiana, US. Said to triple Sasol's chemical production in the US, the petrochemical complex will benefit from domestic ethane supplies, to produce various speciality chemicals for global markets.

Sasol Limited is an integrated energy and chemical company based in Johannesburg, South Africa. It develops and commercialises technologies, including synthetic fuels technologies, and produces different liquid fuels, chemicals and electricity.
MRC

MOSCOW (MRC) -- The Dow Chemical Company has declared a dividend of 46 cents per share, payable October 28, 2016, to shareholders of record on September 30, 2016, as per the company's statement.

This marks the 420th consecutive cash dividend issued by the Company. Dow has paid its shareholders cash dividends every quarter since 1912.

As MRC reported earlier, Dow Chemical's polyethylene (PE) expansion at its Freeport, Texas, complex is on track for a mid-2017 startup. The Freeport complex currently has a 640,000 mt/year of PE capacity and is expected to add 1,050,000 mt/year of LDPE and LLDPE.

Besides, Dow's construction of its world-scale steam cracker is over 70% complete, with startup expected in mid-2017. Four derivative plants and a bi-modal gas phase debottlenecking will be synced with the startup of the cracker. The 1.5 million mt/year ethylene capacity cracker being built at Dow's Freeport petrochemical complex will use ethane as its main feedstock but feature up to 30% of initial propane flexibility.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber. In 2015, Dow had annual sales of nearly USD49 billion and employed approximately 49,500 people worldwide. The Company's more than 6,000 product families are manufactured at 179 sites in 35 countries across the globe.
MRC

MOSCOW (MRC) -- China National Petroleum Corp. (CNPC), the country's largest state energy group, will sell USD3.8 B worth of engineering related assets to a listed arm as part of a push to restructure its non-core business, said Reuters.

Xinjiang Dushanzi Tianli High & NewTech Co., a unit listed on the Shanghai exchange, said that it plans to buy engineering construction businesses from CNPC via cash and a share issue. It aims to raise up to USD898 M in a private placement of shares to help fund the acquisition.

The seven subsidiaries that CNPC is selling to the listed unit include China Petroleum Pipeline Bureau, China Petroleum Engineering and Construction Corp., China Huanqiu Contracting & Engineering Corp., China Kunlun Contracting & Engineering Corp., China Petroleum Engineering Co., CNPC Engineering Co. and CNPC Northeast Refining & Chemical Engineering Co.

Under Beijing's broad reform agenda to make its state-owned enterprises more efficient and competitive, CNPC said it will restructure non-core departments, such as oilfield services, engineering and financial operations, and list them on stock exchanges.

CNPC said last week it will sell USD11 B worth of financial assets to another listed arm Jinan Diesel Engine.

As MRC informed earlier, China National Petroleum Corporation (CNPC) posted a rise in output during 2013, driven mainly by an increase in overseas production. China's Xinhua news agency reported the company's output had risen 10.2%, compared to 2012, to 306.65 million tonnes of oil equivalent.

China National Petroleum Corporation (CNPC) is the largest oil & gas company in China in terms of reserves and production. It is wholly owned by the government, and is the largest state-owned enterprise in terms of assets, and second-largest in terms of revenue. Its oil & gas reserves of 23 billion boe and production of 1.67 billion boe also position it among the top five integrated oil and gas companies in the world.
MRC

MOSCOW (MRC) -- Mitsubishi Heavy Industries (MHI) will expand the scope of its oil & gas services to plants in the North American market, said Hydrocarbonprocessing.

The company will deliver a broad range of new technologies that simplify LNG plant facilities, reduce costs and increase environmental performance. Mitsubishi Heavy Industries Compressor International Corporation (MCO-I), the Houston-based US subsidiary of Mitsubishi Heavy Industries Compressor Corporation (MCO), will strengthen its compressor and steam turbine after-sale services – including retrofitting, repair and parts manufacture – by improving and expanding its repair and machining facilities at its Pearland Works plant in Texas.

Planned LNG plant enhancement offerings include medium-scale, high-efficiency H-100 gas turbines manufactured by Mitsubishi Hitachi Power Systems, Ltd. (MHPS), which will drive MCO-manufactured compressors. Adoption of this configuration enables space savings, a broader and variable operating range and start-up at full pressure.

To deliver this offering, MCO-I has installed the latest parts machining equipment (large-scale lathes, machining centers, 5-face machining centers, etc.), diverse testing equipment (rotor balancing machines, etc.) and rotor repair equipment at Pearland Works. To ensure outstanding quality control and production consistency, the company chose equipment compatible with the operation programs and training materials in use at MCO’s existing facilities.

Pearland Works began operations in April 2015. Initial operations consisted of local production primarily of compressor packaging and after-sale servicing of equipment delivered by MCO. In June, 2015 the plant shipped its first locally packaged compressor, initiating the steps needed for a local production system.

"With this new enhancement of the factory’s repair and machining functions, MCO-I aims to attract orders from new petrochemical plants for compressors and turbines," said Masanori Kobayashi, President, MCO-I. "We will also seek to increase our parts manufacture and repair business to upgrade or replace MCO legacy equipment, and will develop a system to improve response time to requests for upgrades, parts replacement or repairs for equipment originally provided by other companies."

By expanding business in North America finely attuned to local customers’ needs, MHI and its Group companies will seek to make deep inroads into that huge market and also strengthen their competitiveness within global markets, including those of Latin America, Europe and Africa.

As MRC informed earlier, oversupply of purified terephthalic acid (PTA), mainly from China, has prompted Mitsubishi Chemical to off load Indian as well as Chinese PTA businesses. Thus, Mitsubishi Chemical Holdings is planning to sell its PTA business, the primary raw material used to manufacture various polyester products and polyethylene terephthalate (PET), in India and China amid profitability concerns with oversupply of the acid, mainly from China, according to a Nikkei Asian Review report.

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
MRC

MOSCOW (MRC) -- South Korea-based Hanwha Total Petrochemical is in plans to expand the production capacity of its low density polyethylene (LDPE)/ethylene vinyl acetate (EVA) swing plant, as per Apic-online.

A Polymerupdate source in South Korea informed that the company plans to increase the production capacity of the existing plant by 40,000 mt/year. The plant is likely to be shut for debottenecking in October 2016.

Located at Daesan in South Korea, The swing plant has a total capacity of 240,000 mt/years.

As MRC informed before, Hanwha Total Petrochemical Co. is expanding its business into the global high value-added EVA market by commercial production using the tubular reactor polymerization process for the first time in the world, and investing in facilities, including the expansion of the second EVA plant.

Hanwha Total has established EVA production facilities of 320,000 tpa. The company expects to turn over 1.5 trillion won (USD1.28 billion) in solar EVA products alone in the next five years.

The company achieved a 35% share in the global solar encapsulment EVA market amounting to 350,000 tons, being ranked first.

Hanwha Group is one of the largest business conglomerate in South Korea. Founded in 1952 as Korea Explosives Inc., the group has grown into a large multi-profile business conglomerate, with diversified holdings stretching from explosives, their original business, to retail to financial services.
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