South Africa wants Sinopec to retain refinery capacity

MOSCOW (MRC) -- South Africa is in talks with China's Sinopec about its takeover of Chevron Corp's Cape Town refinery as it wants to ensure its production capacity is retained and enhanced, Economic Development Minister Ebrahim Patel said on Thursday, as per Hydrocarbonprocessing.

Sinopec will pay almost USD1 B for a 75% stake in Chevron Corp's South African assets and its subsidiary in Botswana to secure its first major refinery in Africa, the companies announced in March.

"A key concern that government will raise in every major transaction like this is how to retain and expand our industrial capability and includes in this case, refinery capability," Patel told reporters before his budget vote speech in parliament.

Patel's ministry oversees competition authorities in Africa's most industrialized country.

South Africa has a history of taking its time over approving takeovers, partly because competition authorities have a public interest mandate to safeguard jobs in addition to an antitrust mandate to maintain competition.

In 2011, the regulator told US retailer Wal-Mart Stores not to cut jobs for two years following its acquisition of South African retailer Massmart, delaying implementation of the USD2.4 B deal by at least two months.

Last year, Anheuser-Busch InBev said it would invest USD77.3 MM to support small South African farmers as part of concessions agreed with the government to secure regulatory approval for its USD100 billion-plus takeover of SABMiller.

Patel did not go into details of the Sinopec discussions, saying the deal with Chevron would still need to go for formal regulatory scrutiny.

As MRC reported before, China's Sinopec group, parent of Sinopec Corp, will invest USD29.05 billion to upgrade four refining bases between 2016 and 2020 to produce higher-quality fuels. Sinopec's upgrades come as China, the world's second-biggest oil consumer, is embracing more stringent fuel standards in its battle against pollution and suffering an overall glut in refining capacity.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001.
MRC

MOSCOW (MRC) -- Investors are pushing oil giant Royal Dutch Shell to explain the finer details of its plan to link executives' bonus pay to lowering carbon emissions, urging more transparency as the world shifts away from fossil fuels, said Reuters.

Shell was hailed by investors as a pioneer among the world's biggest fossil fuel producers when it announced the policy to tie 10% of executives’ bonuses to cutting greenhouse gas emissions, which will be voted on at a May 23 annual general meeting in the Hague.

But scrutinizing the small print, some investors want Shell to show how it will calculate the targets for lowering emissions in the new bonus scheme rather than provide the information retrospectively in its annual report.

"This is a good move by the company but we would like to see more," said Bruce Duguid, director in the stewardship team at Hermes Investment Management, which holds shares in Shell. He declined to say how he would vote next week.

Shell has been criticized for developing projects such as Canadian oil sands, one of the most energy intensive and polluting forms of exploration, although it has reduced its exposure to those developments this year.

"We would prefer to see public, pre-set greenhouse gas reduction targets using a methodology appropriate to the type of an emission," Duguid said.

"It could be an intensity target rather than an absolute emissions number but ideally set over a long period of time that is part of a long-term efficiency and carbon reduction plan," Duguid said.

Investors also urged Shell to include 100% of emissions from its operations in its remuneration policy. They note that the calculation does not encompass emissions from oil and gas production and only factors in polluting gases from refineries, chemical plants and gas flaring, accounting for roughly 60% of the total emissions.

"We would love to see that metric be expanded to cover the trickier issue of upstream emissions, from exploration and production. The more difficult issue of the carbon intensity of its reserves hasn't been addressed," said Matt Crossman of Rathbone Greenbank Investments, also a shareholder in Shell.

A Shell spokeswoman said the company was "working hard on reducing carbon intensity", adding it planned to disclose emission reduction targets retrospectively at the end of each year, the same as with annual bonuses. She declined to comment on why oil and gas production was not included in targets.

Shell, along with several of its peers including BP have called for a global pricing of carbon which it believes will help the transition to cleaner energy.
MRC

MOSCOW (MRC) -- Mammoet, the world’s largest service provider specializing in engineered heavy lifting and transport, completed heavy lifting, transportation and rigging activities at Chevron South Africa in Cape Town for their annual scheduled maintenance, said Hydrocarbonprocessing.

Megchem, an engineering company operating primarily in the oil, gas, power generation and energy related industries, contracted Mammoet for the refurbishment of a 350-t reactor dome, replacement of a 400-t atmospheric column and 400-t heat exchanger.

The shutdown started on schedule on Feb. 10 and all components had to be replaced within 41 days. With the shutdown happening during a windy time of year in Cape Town, special attention was paid to weather conditions.

The refurbishment of a heat exchanger column had to be executed with surgical precision as the structure around the column was extremely congested and left little room for maneuvering. The preparations to install the new column started immediately after removal of the old column using a 400Te crawler crane and a suitable assist crane for the top and tailing purposes of the column. The old column was directly installed on a conventional trailer for transportation to the demolition yard 26 km off site. To minimize impact on traffic, the column was transported in the early hours of the morning.

For the refurbishment of the reactor the crane had to be assembled in an extremely tight location and the new dome and cyclones were built next to the crane in a specially designed structure leading up to the shutdown period.
MRC

MOSCOW (MRC) -- Synthomer plc has acquired Perstorp Oxo Belgium AB from the Swedish Perstorp Holding AB for EUR 78 million, reported GV.

Perstorp Belgium is a niche additives business serving the decorative and industrial coatings industries. In 2016, the business generated earnings before interest and tax of EUR 8 million and had gross assets of EUR 21 million. The company operates from a single site in Ghent, Belgium, and has 41 employees, who will all be transferred with the business.

As MRC informed before, in March 2016, Synthomer acquired the Hexion Performance Adhesives & Coatings (Hexion PAC) business of US-based Hexion in a transaction valued at USD226m. Following the acquisition, Synthomer will get access to new product technologies and markets. Hexion PAC is complementary to the company's existing business, both geographically as well as in the markets in which it operates. The acquisition will enable Synthomer to venture into the speciality coatings market. Integration of the Hexion PAC business will offer around USD12m of annualised synergies to the company by the end of 2018.

Synthomer is one of the world’s major suppliers of latices and speciality emulsion polymers supporting leadership positions in many market segments including coatings, construction, textiles, paper and synthetic latex gloves. The company has its Head Office in London, UK and provides customer focused services from operational centres in Marl, Germany, Harlow, UK, and Kuala Lumpur, Malaysia.
MRC

MOSCOW (MRC) -- Covestro has announced that it has lifted force majeure for polymeric MDI in the Europe, Middle East, Africa (EMEA) region with immediate effect, as per GV.

The company declared force majeure on 25 April 2017 due to an unforeseeable production problem at its site in Brunsbuttel, Germany.

According to Covestro, despite all its efforts to sustainably improve its product availability for polymeric MDI, the supply situation will continue to be tight for some time, due in particular to a currently strong demand.

Furthermore, Covestro said it needs to prepare a turnaround at the Brunsbuttel facility, which is legally required. At the same time the company advances its MDI capacity extension at this site.

As MRC informed previously, in late March 2017, Covestro announced that it would continue manufacturing MDI in Tarragona, Spain. The plant closure that had originally been planned for the end of 2017 had been suspended for the time being. The main reason for this decision was the significant increase in demand for MDI, said Covestro. Furthermore, the company has managed to get access to important raw materials - in particular chlorine - for the Tarragona site for the next years beyond the end of 2017.

Covestro (formerly Bayer MaterialScience) is an independent subgroup within Bayer. It was created as part of the restructuring of Bayer AG from the former business group Bayer Polymers, with certain of its activities being spun off to Lanxess AG. Covestro manufactures and develops materials such as coatings, adhesives and sealants, polycarbonates (CDs, DVDs), polyurethanes (automotive seating, insulation for refrigerating appliances) etc.
MRC