SK Innovation buys Dow Chemical ethylene acrylic acid unit for USD370 MM

MOSCOW (MRC) -- South Korea's SK Innovation said on Thursday it would acquire Dow Chemical Co's ethylene acrylic acid (EAA) business for USD370 million, a move that will expand its range of high value-added chemical products, said Reuters.

Dow said the sale was part of the ongoing regulatory process for its USD130 billion merger with DuPont and that the divestiture would be "conditioned" on the two companies closing their deal.

The merger of Dow and DuPont, announced in December 2015, has drawn regulatory scrutiny, particularly in the European Union.

SK Innovation said in January that it would invest up to USD2.5 billion in chemicals, oil exploration and battery businesses to spur growth.

The acquisition, made through its unit SK Global Chemical Co Ltd, will include Dow Chemical's EAA business in the United States and Spain.

"We will continue strategic investments to upgrade our business structure and in the long term we aim to be the leader in high-value added chemicals for emerging markets including China," Kim HyungKun, president of SK Global Chemical, said in a statement.

Ethylene acrylic acid is mainly used as an adhesive for wrapping products such as aluminum foil.

As MRC informed earlier, SK Innovation also aims to bolster its businesses in China through a JV or mergers and acquisitions of Chinese chemical companies, the statement added.
MRC

MOSCOW (MRC) -- Shenhua Yulin Energy Co. Ltd. is likely to take its low density polyethylene (LDPE) plant off-stream for maintenance, as per Apic-online.

A Polymerupdate source in China informed the company has schedule to shut the plant in April 2017. The plant is expected to remain off-line for around 4 weeks.

Located at Yulin in Shaanxi province of china, the LDPE plant has a production capacity of 300,000 mt/year.

As MRC reported earlier, on November 28, 2016, Shenhua Yulin Energy Co. Ltd. restarted its coal based LDPE and polypropylene (PP) plants following an unplanned outage. The plants were shut on November 23, 2016 owing to technical glitch. Located at Yulin in Shaanxi province of china, the LDPE & PP plant have a production capacity of 300,000 mt/year each.

Shenhua Yulin Energy Co. Ltd. operates as a coal company. The Company manufactures, processes, and distributes coal products and other related products, including various petrochemical products, such as polyethylene and polypropylene.
MRC

MOSCOW (MRC) -- Shell’s 2016 fourth-quarter earnings on a current cost of supplies (CCS) basis were at USD1 billion compared with USD1.8 billion in the same quarter of 2015, said the company on its site.

"Earnings were impacted by charges of USD0.5 billion related to deferred tax reassessments which were not included as identified items," Shell said in a statement.

Excluding these items, fourth-quarter earnings were USD1.8 billion compared with USD1.6 billion in the year before, an increase of 14 percent.

For the full-year of 2016, earnings attributable to Shell’s shareholders were USD3.5 billion compared with USD3.8 billion in 2015. Excluding identified items, full-year earnings were USD7.2 billion compared with USD11.4 billion in 2015.

These results are Shell’s fourth following the purchase of BG Group in February last year. The deal between BG and Shell created the world’s largest liquefied natural gas (LNG) company.

"We are reshaping Shell and delivered a good cash flow performance this quarter with over USD9 billion in cash flow from operations. Debt has been reduced and, for the second consecutive quarter, free cash flow more than covered our cash dividend," Ben van Beurden, chief executive officer of Shell, said.

"Production and LNG volumes included delivery from new projects, with ramp-up continuing in 2017 and 2018. Meanwhile we are operating the company at an underlying cost level that is USD10 billion lower than Shell and BG combined only 24 months ago."

"We are gaining momentum on divestments, with some USD15 billion completed in 2016, announced, or in progress, and we are on track to complete our overall USD30 billion divestment programme as planned," van Beurden said.

Looking ahead, the CEO said that Shell would further focus its portfolio and strengthen the company’s financial framework in 2017.

"Our strategy is starting to pay off and in 2017 we will be investing around $25 billion in high quality, resilient projects. I’m confident 2017 will be another year of progress for Shell to become a world-class investment," he added.

MRC

MOSCOW (MRC) -- Annual profits at ExxonMobil, the world's largest publicly listed oil and gas firm, fell by 51% to USD7.8bn last year, said the company on its site.

The company wrote off USD2bn from the value of undeveloped gas fields in the Rocky Mountains in the US.
It also blamed the profit slump on low oil and natural gas prices for the past two years.

Exxon's former chief executive, Rex Tillerson, is likely to become the next US secretary of state.
He is the first choice for the job of the newly-elected President Donald Trump.

"Financial results for the year were negatively impacted by the prolonged downturn in commodity prices and the impairment charge," said Darren Woods, who replaced Mr Tillerson as chief executive officer.

Despite this, the company's shareholders received USD12.5bn in dividends for last year.

The gas field write-off is partly a response to pressure from the US authorities at the Securities and Exchange Commission (SEC).

Last September it asked the company to explain why, in the light of the big fall in oil prices, it had not cut the book value of some of its assets, when the firm's main rivals had all done so.

At the time Exxon said it was "fully complying" with a request from the SEC for accounting information.
But the annual results fail to make any mention of the issue.

Brent crude, the international benchmark, finished 2016 priced at about USD56.80 a barrel, down 48% compared with two years earlier.

As MRC informed earlier, ExxonMobil is studying a proposal to expand its 334,600-bpd refinery in Beaumont, Texas, into the largest in the US. According to the Reuters report, ExxonMobil has pulled together a group of experts at the plant to do more detailed studies on potentially adding a third crude distillation unit (CDU). The new CDU could make the Beaumont refinery the largest in the US, with capacity rising to as much as 850,000 bpd.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- South Korea's S-Oil Corp expects healthy refining profits this year, buoyed by growing demand for oil products in places such as China and Southeast Asia, said Reuters.

The country's third-largest oil refiner said in a quarterly earnings statement on Thursday that global oil demand would grow soundly in 2017, although the rate of increase could ease slightly from last year.

"Healthy margins are expected as 1.32 MMbpd of oil demand growth will outstrip an incremental net capacity increase of 574,000 bpd," the company said, referring to the profit margin on refining barrels of crude oil.

Inventory gains and a recovery in refining margins helped S-Oil, whose top shareholder is Saudi Aramco, notch up a USD386 million profit in the last quarter of 2016, compared with a loss of 42.9 billion won the year before.

S-Oil treasurer Shin Kwan-bae said on a call with analysts that the company expected the official selling price (OSP) for Arab Light crude, supplied by Saudi Arabia, to remain steady in Asia from last year.

He said that even if Middle Eastern crude supply drops in the wake of a deal by producers to curb output, Saudi Arabia would not want to harm its market share in Asia by increasing OSPs.

A company official said S-Oil planned to carry out less scheduled maintenances this year, limiting such work to a condensate fractionation unit (CFU) and a No.2 paraxylene unit. He did not give further details.

Industry sources have said S-Oil would shut down its No.1 residue hydro desulphurisation unit (RHDS) and crude oil refining unit in April for about a month.

S-Oil also said on Thursday that its 2018 expansion project was on track to complete in the first half of next year.

Under the project, the company will build a residual fuel oil upgrading system and an olefin production system that will churn out 405,000 t of polypropylene a year, along with other products.

As MRC informed earlier, in January 2016, a fire hit the 91,000 barrels per day (bpd) condensate unit at South Korea's S-Oil Corp second aromatics complex on Wednesday, although it is now almost extinguished with no injury to workers.
MRC