November prices of European PP for the CIS countries remained at the October level

MOSCOW (MRC) - November contract price of propylene in Europe was agreed down EUR10/tonne below the level of the October. However, practically all European producers announced a roll-over of October export polypropylene (PP) prices for November shipments to the CIS markets, according to ICIS-MRC Price report.

Negotiations over November prices of European PP began last week. All market participants reported producers' desire to maintain their export prices of propylene polymers at the last month's level, despite the decrease of EUR10/tonne in propylene prices in the region. At the same time, one of the producers, on the contrary, raised prices by EUR20/tonne, but this affected the lower price limit.

Deals for November shipments of homopolymer PP were discussed in the range of EUR1,185-1,240/tonne FCA, which virtually corresponds to October with the exception of the lower limit ofthe prices.

Deals for block propylene copolymers (PP block copolymers) were discussed in the range of EUR1,250-1,310/tonne FCA, while in October deals were done in the range of EUR1,230-1,310/tonne FCA.

Many companies reported no restrictions on this month's PP exports.

Nigerian NNPC says Shell, ExxonMobil also looking at crude swaps

MOSCOW (MRC) -- Nigeria's state oil firm NNPC could sign crude-for-product deals with Shell and ExxonMobil, similar to one signed with BP last week, reported Reuters with reference to a senior NNPC official's statement.

Nigerian National Petroleum Corporation (NNPC) announced last Wednesday that it had signed such a deal with BP and would provide more details later.

"Unfortunately, Shell and ExxonMobil exited the downstream sector in Nigeria a couple of years ago but they are coming back for this particular arrangement, because it’s an opportunity for them to get crude and sell their products to the refineries," NNPC’s chief operating officer for upstream, Bello Rabiu, told Reuters on the sidelines of an African oil and gas conference in Cape Town.

NNPC imports about 70 percent of Nigeria's fuel needs, mainly gasoline, via swap contracts. NNPC has contracts, known as direct sale direct purchase agreements, with 10 consortiums that include trading houses Vitol, Trafigura , Mercuria and Total.

It extended the existing contracts to June 2019 but several trading sources in the consortiums said they had requested new price terms.

Rabiu said NNPC hoped in 2019 to emulate savings of around USD1 billion seen in 2016 with its crude-for-product swaps, which he said would likely end once Africa's top crude producer revamps its refineries.

"If our refineries are back, which we want in the next 18 months, this thing will stop. So, all these things are just stop-gap measures, but the key issue is that we wanted to import at the least cost before our refineries come back onstream," he said.

NNPC is in the final stages of talks with consortiums including top traders, energy majors and oil services companies to revamp its long-neglected oil refineries in an effort to reduce its reliance on imported fuel.

"It is on track and I believe if we don't sign a final deal (on the project to upgrade refineries) this month of November we will surely sign in December," Rabiu said.

As MRC wrote before, in March 2016, Royal Dutch Shell Plc was lining up assets for a USD30 billion divestment program that may extend from the US and Trinidad to India following its record takeover of BG Group Plc.

Royal Dutch Shell, commonly known as Shell, is an Anglo–Dutch multinational oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom.Created by the merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading, it is the fourth largest company in the world as of 2014, in terms of revenue, and one of the six oil and gas "supermajors".

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.

India signs initial pact to lease half of Padur storage to ADNOC

MOSCOW (MRC) - Abu Dhabi National Oil Co. (ADNOC) has signed a preliminary agreement to use half of the Padur strategic reserve facility in Southern India, which can store about 2.5 million tons or 18 million barrels of crude, Reuters said.

Officials of Indian Strategic Petroleum Reserves Ltd (ISPRL) and ADNOC signed the memorandum of understanding in the presence of Indian Oil Minister Dharmendra Pradhan and ADNOC Chief Executive Sultan al-Jaber. India, the world's third biggest oil importer, is scouting for partners to fill the reserves and also to build storage to hold oil reserves and to cut costs.

"It is our firm hope that we will be able to convert this framework agreement into a new mutually beneficial partnership that will create opportunities for ADNOC to increase deliveries of high-quality crude oil to India's expanding energy market and help India meet its growing energy demand and safeguard its energy security," the ADNOC CEO said in statement. The announcement confirmed an earlier Reuters report.

India, which relies on oil imports for about 80 percent of its needs, has built underground emergency storage in three places to protect itself from any disruption. The reserves can hold 36.87 million barrels or about 9.5 days of average demand.

ADNOC, the only foreign company with a deal to store oil in India's strategic reserves, has a similar storage deal already at the Mangalore strategic storage in Karnataka. "This agreement reflects the strong bonds of cooperation between India and the UAE and provides a foundation for strengthening and expanding our strategic energy relationship," Pradhan said in the statement.

The agreement allows ADNOC to sell oil to local refiners but would give the government of India the first right to the oil held in the reserve in case of an emergency.

Pradhan said earlier on Monday that India was also in talks with Saudi Arabia to store oil in Padur, after India's cabinet approved a plan last week allowing foreign firms to store oil in the facility.

"Participation by foreign oil companies will significantly reduce budgetary support of government of India by more than 100 billion rupees (USD1.38 billion) based on current prices," Law Minister R. S. Prasad told a news conference last week.

The Padur site is about 5 km (3 miles) from the southwest coast and 40 km (25 miles) from Mangalore Refinery and Petrochemicals Ltd's refinery.

Saudi Aramco and ADNOC sign framework agreement on strategic natural gas and LNG cooperation

MOSCOW (MRC) -- Saudi Aramco and the Abu Dhabi National Oil Company (ADNOC) have signed a framework agreement to explore opportunities for collaboration in the Natural Gas and Liquefied Natural Gas (LNG) sector, as per Saudi Aramco's press release.

The cooperation brings together two of the world’s leading energy producers from the Arabian Gulf to jointly work together in an area of strategic importance for both companies as they seek to boost revenues from the natural gas and LNG business segments.

The agreement was signed by Amin H. Nasser, Saudi Aramco President and CEO, and His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO on the sidelines of ADIPEC.

Saudi Aramco and ADNOC will jointly assess investment opportunities across the natural gas and LNG value chain, exchange technical knowledge and expertise in natural gas and LNG growth markets.

Nasser said: "Our partnership with ADNOC continues to strengthen, after the recent decision to jointly develop a major refinery in India. We have shared strategic interest to expand our gas businesses, and this new agreement underlines our confidence in strong global gas demand growth. Our cooperation further supports the corporate transformation strategy of both ADNOC and Saudi Aramco to pursue opportunities that help unlock greater value for both companies, and meet the growing needs of stakeholders around the world that depend on our energy to develop and grow their economies."

Al Jaber said: "The UAE and the Kingdom of Saudi Arabia have a strong relationship built on shared strategic interests. Increased cooperation between ADNOC and Saudi Aramco will ensure greater energy security and long-term economic prosperity for both nations."

"This agreement reinforces our strategy to undertake partnerships with forward-thinking partners who can help accelerate access to new growth centers of global demand. It will ensure that we are well positioned to secure greater returns from global natural gas and LNG demand growth by combining the technological and operational expertise of two of the world’s leading National Oil Companies."

ADNOC LNG, a subsidiary of ADNOC, is a reliable LNG supplier with a proven track record over 40 years and 2% of the global share of the LNG market.

LNG is the fastest-growing hydrocarbon with a growth rate of 4% per annum. Global LNG demand is expected to exceed 500 million tonnes per annum by 2035, up from nearly 300 million tonnes per annum in 2017.

We remind that, as MRC reported before, in early October 2018, Saudi Aramco signed a long-term deal with Zhejiang Rongsheng to supply crude oil to the Chinese company’s new refinery in eastern China.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.

SOCAR to supply its new Turkish refinery with third-party oil

MOSCOW (MRC) - Azeri state energy company SOCAR plans to supply its new refinery in Turkey with oil from different producers in Europe, the Black Sea region and the Gulf, the head of SOCAR's trading arm said in an interview, said Reuters.

SOCAR last month launched the $6.3 billion SOCAR Turkey Aegean Refinery (STAR), the first to be built in Turkey for the past 30 years. The facility on Turkey's Aegean coast will supply feedstock to Turkish petrochemicals firm Petkim to help cut Turkey's dependence on imports of refined oil products. It will boost the country's refining capacity by 25-30 percent.

"Initial consumption (of oil) will be 100,000 barrels per day with a further increase to 215,000 bpd," Adnan Ahmadzadeh, SOCAR Trading executive chairman, said in answers to Reuters questions sent by email.

"SOCAR Trading will supply oil (to STAR) from different producers at ports in the Mediterranean, Black Sea and Persian Gulf, as well as from Russian company Rosneft."

He said the company had secured contracts to buy А-92 grade gasoline from producers in Russia, Switzerland and Turkmenistan due to planned maintenance at the Azeri Heydar Aliyev refinery in the capital Baku. Russia and Swiss company Vitol have provided around 30,000 tons of gasoline each, while around 5,000-10,000 tonnes will be shipped from Turkmenistan.

Geneva-based SOCAR Trading was set up in 2007 and has become a global player in the last few years, having previously been only a marketer of its country's crude, Azeri Light. Poaching top traders from established rivals, it moved into paper trading and third-party oil.

Ahmadzadeh said oil was still "playing a central role" in the firm's trading strategy, having a 50 percent share in its portfolio. The firm last year traded 1.54 million bpd of crude oil, of which about 1.06 million bpd was from third parties, it said in July. Combining crude and oil products, it traded 104 million tons. The firm also started trading liquefied natural gas in 2017.

Ahmadzadeh said the company had decided to reduce the share of fuel oil - recently at 30 percent - in its trading portfolio. "The strategic decision has been made, but it will start to reflect on figures in 2019," he said.

Ahmadzadeh said SOCAR Trading was open to discussions on obtaining crude from Russia's Filanovsky and Rakushechnoye oilfields in the Caspian Sea operated by Russian company Lukoil , with shipment via the Baku-Tbilisi-Ceyhan pipeline.