Petrobras and Total form a Strategic Alliance in Upstream and Downstream

MOSCOW (MRC) -- Petrobras and Total have signed a Memorandum of Understanding (MOU) which sets the general framework for a Strategic Alliance covering Upstream and Downstream activities in Brazil as well as international potential opportunities, as per Total's press release.

Through this agreement, the companies undertake to join forces in some key areas of mutual interest and to evaluate opportunities in Brazil and abroad to jointly benefit from their internationally recognized expertise on all segments of the oil and gas value chain.

As a first phase of implementation, the companies intend to focus on Upstream and on Gas and Power.

In Upstream, Petrobras will propose Total to partner in projects in Brazil and Total will propose Petrobras to partner in opportunities outside Brazil. This new partnership will allow both companies to combine their world class experience and expertise in deep water development to optimize the production and jointly develop this strategic area of activity in Brazil and in other high potential oil and gas provinces, as well as sharing costs and risks in projects with high investment and complexity.

In Downstream, the companies will be working to develop joint activities in the gas and power generation in Brazil.

MOU also states that the cooperation will be extended, in a second phase, to a broader cooperation in Brazil focused on all downstream segments.

Currently, Petrobras and Total are jointly participating in 15 consortiums worldwide in exploration and production, nine of which are in Brazil and six abroad. In Brazil, the companies are partners in the development of the giant Libra area which is the first production sharing contract in the Brazilian pre-salt in Santos basin. Outside Brazil, Petrobras and Total are partners on the Chinook field in the US Gulf of Mexico, on the deep-water Akpo field in Nigeria and on the gas fields of San Alberto and San Antonio/Itau in Bolivia, as well as in the Bolivia-Brazil gas pipeline.

As MRC reported earlier, Brazil's state-led oil company Petrobras wants to sell its stake in Brazilian petrochemicals producer Braskem, Latin America's largest petrochemical producer. Petrobras owns 47% of Braskem's common shares and 21.8% of its non-voting preferred stock. Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.

PP imports to Kazakhstan up 8% in the first eight months of 2016

MOSCOW (MRC) -- Imports of polypropylene (PP) into Kazakhstan rose in the first eight months of 2016 by 8% year on year and exceeded 15,000 tonnes. At the same time, exports from the Republic of Kazakhstan decreased, reported MRC analysts.

In August 2016, PP imports to Kazakhstan grew to 1,900 tonnes from 1,200 tonnes a month earlier, wiht PP pipes producers accounting for the increase in imports. Overall PP imports exceeded 15,000 tonnes in January-August 2016, compared to 13,900 tonnes a year earlier. Export sales of Kazakh PP, on the contrary, fell by 27%.

The structure of PP imports by grades looked the following way over the stated period: imports of propylene homopolymer (homopolymer PP) rose to 9,000 tonnes in the first eight months of the year from 6,600 tonnes a year earlier. Shipments of propylene copolymers increased by more than one and a half times this year, namely, to 6,000 tonnes, compared to 3,600 tonnes in the same period of 2015.

Stronger demand for PP from the local market allowed "Neftekhim LTD" to reduce exports this year. 13,600 tonnes were shipped to foreign markets, whereas this figure was 18,700 tonnes a year earlier.

PE imports into Kazakhstan decreased by 15% in January - August 2016

MOSCOW (MRC) - Imports of polyethylene (PE) into Kazakhstan dropped to about 63,200 tonnes in January-August 2016, down 15% compared with the same time a year earlier, according to MRC analysts.

The main decrease in demand occurred for high density polyethylene (HDPE), according to MRC analysts. August PE imports into Kazakhstan increased to 9,700 tonnes, compared with 4,700 tonnes in July. Local companies increased the volume of purchases of HDPE, in particular producers of pipes. Total PE imports into the country were about 63,200 tonnes in January - August 2016, compared with 74,300 tonnes in the same time a year earlier. Demand for HDPE and low density polyethylene (LDPE) decreased over the reported period, while the need for linear low density polyethylene (LLDPE), on the contrary, increased.

Structure of PE imports into the country in the reporting period was as follows.

August HDPE imports into Kazakhstan rose to 8,200 tonnes from 2,700 tonnes a month earlier. The main increase in supply accounted for local producers of pipes, which significantly increased their purchases on the back of future shutdowns of Russian producers. PE imports from Uzbekistan also increased in August. Kazakhstan's HDPE imports totalled 48,000 tonnes in the first eight months of the year, down 18% year on year.

August imports of LDPE into the country reduced to 900 tonnes against 1,600 tonnes in July because of reduced export quotes from Russian producers, which are the main suppliers of LDPE in the region. Total imports of LDPE into Kazakhstan were about 11,800 tonnes in the first eight months of the year, down 8% year on year.

Purchases of LLDPE by local companies in August increased to 555 tonnes compared to 400 tonnes a month earlier. Total LLDPE imports reached 3,300 tonnes in January-August versus 2,700 tonnes a year earlier.


Lyondell Houston refinery draws bids from Aramco, Valero and Suncor

MOSCOW (MRC) -- At least three firms including Saudi Arabian state oil giant Saudi Aramco have bid over USD1 B for LyondellBasell's refinery in Houston, according to four people familiar with the process, reported Reuters.

The Saudi firm was initially seen as the front-runner among bidders that also included Valero Energy Corp. and Suncor Inc., sources said, but added it is unclear if that is still the case.

Aramco has bid USD1.5 B for the plant, after an initial bid of USD1.2 B, three sources said.

Aramco may be looking to boost its US refining capability to compensate for capacity that it is losing as it breaks up a JV with Royal Dutch Shell.

Canadian crude producer Suncor also bid around USD1.2 B, and San Antonio-based refiner Valero bid USD900 MM, three of the people said.

Lyondell has not stated publicly what it considers the plant to be worth, but a source familiar with negotiations said that the refinery could fetch USD2 B.

"As we stated on August 25, we are continuing to explore all options," said Michael Waldron, vice president of corporate communications for LyondellBasell. He said the company would not "comment further on market rumors or speculation."

Recent US refinery sales have fetched about USD5,000/bbl of capacity, which would value the plant at about USD1.3 B. Variables such as a plant's operating income and its ability to process heavy grades of crude help determine its value.

The cost of renewable fuel credits may affect the price of the plant, because Lyondell will need to spend about USD200 MM this year on the credits, known as RINs, said Matthew Blair, an equity analyst with Tudor, Pickering and Holt. That could cap the price bidders are willing to pay, he added.

In August, Reuters reported that Lyondell retained Bank of America Merrill Lynch to advise on the potential sale of the 264 Mbpd refinery.

The plant imports South American and Mexican grades of crude oil, so it could offer Saudi Arabia a new outlet for its crude.

The US currently imports about 1 MMbbl of Saudi crude a day. Motiva processed 162 Mbpd of Saudi crude in July, the most recent month for which data is available.

The Motiva joint venture is currently being dissolved. After the split, Aramco may seek additional outlets for its crude besides the one Motiva plant it will retain in Port Arthur, Texas.

Valero operates refineries close to the Lyondell plant in Houston and Texas City. Suncor, which produces crude in Alberta's oil sands, could also be seeking additional outlets for its crude.

We remind that, as MRC wrote before, LyondellBasell completed the previously announced acquisition of the polypropylene (PP) compounding assets of Zylog Plastalloys Pvt. Ltd. (Zylog) in India. The company entered into a definitive agreement to acquire Zylog's PP compounding assets in November 2015.

LyondellBasell is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell manufactures products at 57 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels. Hostacom and Hifax are trademarks owned by LyondellBasell. The manufacturing facilities in India are owned and operated by Basell Polyolefins India Pvt. Ltd., a wholly-owned subsidiary of LyondellBasell.

Clariant responds to global megatrends to deliver value for people

MOSCOW (MRC) -- Clariant, a world leader in specialty chemicals, focused on the global Megatrends influencing the plastics industry at its K 2016 press conference, demonstrating how the company is bringing true value to the industry based on the real needs of people arising from these trends, said The company on its site.

Clariant’s commitment to delivering Value for People – its motto for K 2016 – was summarized by Executive Committee Member Christian Kohlpaintner in the context of the trends driving the challenges of its plastics industry customers. "Our customers in the plastics industry require a mixture of tailor-made innovation and volume driven support in order to address the needs being accelerated by global Megatrends. At K 2016, we show our particular focus on innovations underlined by sustainability because these are priorities connecting both. By supporting our customers developing innovative and sustainable solutions, this is how we can create most Value for People."

Christian Kohlpaintner drew attention to four global Megatrends impacting the plastics industry: Health & Nutrition, Lifestyle, Mobility, and Urbanization.

To provide optimum support to its customers and end-users, Clariant’s services and solutions for plastics applications address aspects such as safety and comfort, more efficient and environmentally-compatible production, and reliable cleaner energy.

We remind that, as MRC reported previously, in February 2016, Clariant Masterbatches Saudi Arabia, a joint venture (JV) between Clariant and Rowad National Plastic Company, started construction of a new masterbatch production unit in Yanbu, Saudi Arabia.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.