Russia expands list of oil refineries eligible for tax relief

MOSCOW (MRC) - Russian has expanded the list of oil refineries eligible for so-called reverse excise tax after they agreed to invest around 300 billion roubles (USD4.5 billion) to upgrade capacity by 2026, the energy ministry said, as per Reuters.

Russia’s most significant oil industry tax overhaul took effect on January 1.

It is phasing out exporting duty in the next five years and increasing its mineral extraction tax.

Some refineries, including those affected by Western sanctions against Moscow, will be able to claim back some excise tax.

The ministry said it has expanded the list of the plants eligible to claim back the excise tax to include nine refineries: Neftekhimservis, Novoshakhtinsky, Afipsky, Taneko, Orsk, Antipinsky, Mariysky, Ilsky and Slavyansk ECO.

The refineries have pledged to launch 13 secondary processing units by Jan. 1 2026 to boost their combined high-quality gasoline production by over 3 million tonnes per year.

Their investment from 2015 to 2026 is seen at around 300 billion roubles, the ministry said.
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MOSCOW (MRC) - Indian conglomerate Reliance Industries posted a record quarterly profit, driven by growth in its petrochemicals and refining business, while its telecoms group Jio notched up a fifth consecutive profitable quarter, as per Reuters.

The telecoms business is central to the ambition of Chairman Mukesh Ambani - Asia’s richest man - to make Reliance’s consumer businesses as big as its energy operations, which contribute the bulk of group revenue and profit.

In the last two years, Jio has used cut-price data and free voice calls to cornered over 250 million subscribers, leaving rivals nursing losses. Jio posted a nearly 65 percent jump in profit to 8.31 billion rupees (USD117 million).

In the conglomerate’s refining and petrochemicals unit, which contribute around three-quarters of overall revenue and profits, revenue rose 47 percent and 37 percent respectively.

On a standalone basis, which includes primarily refining and petrochemicals, Reliance’s third-quarter profit rose 5.6 percent to 89.28 billion rupees.

Gross refining margin (GRM)- the profit earned on each barrel of crude processed - was USD8.8 per barrel for the quarter, outperforming the benchmark Singapore complex margin by USD4.5 per barrel.

The benchmark GRMs have come down to multi-year lows in the third quarter to below USD2 per barrel, hitting all refining companies globally.

Reliance’s refinery in the western state of Gujarat is the world’s biggest single-location refinery, with a capacity to process 1.36 million barrels per day of crude.

Net profit on a consolidated basis rose to 102.5 billion rupees (USD1.44 billion) for October-December, beating analyst average estimate of 96.48 billion rupees, Refinitiv Eikon data showed.

Reliance’s consolidated revenue grew 56.4 percent to 1.60 trillion rupees.
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MOSCOW (MRC) -- Brazil’s Paulinia refinery (Replan), the country’s largest, is back to operating at full capacity after the ANP oil regulator said it had authorized the reopening of a unit shuttered in the wake of a 2018 accident, reported Reuters.

The ANP said the refinery, owned by state-run oil firm Petroleo Brasileiro SA, was still without one of the three units that had been closed after the accident, but noted it did not affect production.

As MRC wrote before, on 5 December 2018, Brazil's state-run oil company Petroleo Brasileiro SA said it had halted operations at its Abreu and Lima refinery in Pernambuco state after a fire broke out there early in the morning. The fire, which occurred in a tower of the coking unit, caused no injuries and has been put out, Petrobras said, adding that it should not affect fuel supply.
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MOSCOW (MRC) -- Par Pacific Holdings, Inc. announced that it has successfully completed its previously announced acquisition of U.S. Oil & Refining Co. and certain affiliated entities, a privately-held downstream business, for USD358 million plus net working capital, as per Hydrocarbonprocessing.

The transaction was financed with proceeds from a USD250 million Term Loan B issuance, a USD45 million Par Pacific Term Loan funded by Bank of Hawaii ("BOH"), the issuance of approximately 2.4 million shares of Par Pacific common stock to the seller of U.S. Oil, and available liquidity.

These shares represent the initial tranche of shares issuable to the seller at closing. Par Pacific elected not to exercise its right to issue additional shares to the seller to fund the transaction. Additionally, the Company has executed a non-binding term sheet with BOH that contemplates replacing the Par Pacific Term Loan with a newly-issued loan secured by certain unencumbered real estate assets in the State of Hawaii.

"We are pleased to close the U.S. Oil transaction, which balances our Pacific and mainland market exposure," said William Pate, President and CEO of Par Pacific. "We expect the transaction to be immediately accretive to our 2019 earnings and cash flow. We would like to take this opportunity to welcome our new colleagues to the Par Pacific organization."
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MOSCOW (MRC) -- BP and Lotte have agreed on a major expansion of production capacity at their joint venture Lotte BP Chemical Company Limited facility in Ulsan, South Korea, as per Hydrocarbonprocessing.

The expansion is expected to add 100,000 tonnes a year (tpa) of acetic acid capacity by May 2019 through debottlenecking, and to double the current 200,000 tpa vinyl acetate monomer (VAM) capacity with the addition of a second VAM plant by the end of 2020. The new expansion will bring total production capacity of the site to over 1 million tpa.

Nigel Dunn, BP petrochemicals vice president for acetyls, said: "This project demonstrates our ability to execute low capital cost debottlenecks to meet customer needs. Building on the long-standing success of our partnership with Lotte, this expansion will allow us to continue to meet Korea’s growing demand for these key petrochemicals."

Soo-Young Huh, vice chairman of Lotte, said: "We are pleased with the successful launch of this project, based on the track record of manufacturing excellence of Lotte BP and expect it to strengthen the partnership between BP and Lotte."

The expected investment of USD175 million will be funded by the joint venture.
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