EU Commission clears BASF acquisition of Solvay polyamide business

MOSCOW (MRC) -- The EU Commission has granted conditional clearance for BASF to acquire Solvay’s polyamide business, as per BASF's press release.

This approval is an important milestone for the transaction. Closing is expected in the second half of 2019 after all remaining closing conditions have been fulfilled, including the sale of a remedy package to a third party.

During the approval process in Europe BASF made commitments to address the competition concerns of the EU Commission. They require divesting parts of the original transaction scope to a third-party buyer, namely manufacturing assets and innovation capabilities of Solvay’s polyamide business in Europe. The divestment process started in Q4 2018.

The polyamide businesses to be acquired in the Americas and in Asia are not affected by the commitments.

As MRC informed before, in September 2017, BASF and Solvay signed an agreement related to the sale of Solvay’s integrated polyamide business to BASF. The purchase price on a cash and debt-free basis would be EUR1.6 billion. The acquisition would complement BASF’s engineering plastics portfolio and expand the company’s position as a solution provider for the transportation, construction, industrial applications and consumer industries. Regionally, the transaction would enhance access to key growth markets in Asia and South America. At the same time, the purchase would strengthen BASF’s polyamide 6.6 value chain through increased polymerization capacities and the backward integration into the key raw material ADN (adipodinitrile).

Solvay is a multi-specialty chemical company, committed to developing chemistry that addresses key societal challenges. Solvay innovates and partners with customers in diverse global end markets. Its products and solutions are used in planes, cars, smart and medical devices, batteries, in mineral and oil extraction, among many other applications promoting sustainability. Its lightweighting materials enhance cleaner mobility, its formulations optimize the use of resources and its performance chemicals improve air and water quality. Solvay is headquartered in Brussels with around 27,000 employees in 58 countries. Net sales were EUR10.9 billion in 2016, with 90% from activities where Solvay ranks among the world’s top 3 leaders.

BASF is the largest diversified chemical company in the world and is headquartered in Ludwigshafen, Germany. BASF produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of more than EUR60 billion in 2017. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and Zurich (BAS).

Saudi Aramco eyes multi-billion-dollar US gas acquisitions

MOSCOW (MRC) - Saudi Aramco, the world's top oil producer, is looking to acquire natural gas assets in the United States and is willing to spend "billions of dollars" there as it aims to become a global gas player, the company's CEO said Reuters.

Amin Nasser told Reuters in an interview that his company wants to increase its US investments. It already owns Motiva, the biggest US oil refinery. "We have agreed to bring an additional USD10 B in the Motiva refining complex," said the chief executive, attending the World Economic Forum in Davos, Switzerland.

"We do have appetite for additional investments in the United States. Aramco’s international gas team has been given an open platform to look at gas acquisitions along the whole supply chain. They have been given significant financial firepower – in the billions of dollars." Aramco’s gas expansion strategy needs USD150 B of investment over the next decade as the company plans to increase output and later become a gas exporter, Nasser said in November.

Aramco is pushing ahead with its conventional and unconventional gas exploration and production program to feed its fast-growing industries, freeing up more crude oil to export or turn into chemicals. Investing in the US gas and petrochemical sector has become "very lucrative" due to the large availability of ethane resources, Nasser said. "In gas we will be one of the main global players," he added.

Aramco is a major gas player but much of its production is used domestically. The firm plans to boost its gas production to 23 billion standard cubic feet (scf) per day over the next decade, from 14 billion scf now.

Saudi Arabia, the world's largest crude oil exporter, wants to diversify its energy mix and increase the share of its gas capacity to 70% in the coming decade from around 50% now.

Aramco also aims to become a global leader in chemicals with plans to expand its refining operations and petrochemical output. The company is considering acquiring a strategic stake - up to 70% - in Saudi Arabia’s SABIC, the world’s fourth-largest petrochemicals maker. Aramco plans to issue bonds in the second quarter of 2019, likely worth about USD10 B, Saudi Energy Minister Khalid al-Falih said this month. The bond issuance could help finance the SABIC acquisition.

Nasser said banks were being considered for the bond issuance but declined to identify them. "Since 2018, we have been preparing quarterly results. We will publish our financial results as part of the bond issuance process," he said.

"I can tell you that investors will like our results; 2017 was a good year and 2018 was even better. We are trying to close the transaction with SABIC soon." Aramco is working with JP Morgan and Morgan Stanley on the SABIC acquisition, sources previously told Reuters.

The two banks, along with others, were working on the planned stock market listing of Aramco before the move was put on hold. Aramco's new planned listing date is 2021, Saudi officials have said.

PP imports into Ukraine rose by 8% in 2018

MOSCOW (MRC) -- Overall polypropylene (PP) imports to the Ukrainian market totalled about 132,400 tonnes last year, up by 8% year on year. Demand for all PP grades increased, as per MRC's DataScope report.

December PP imports into Ukraine dropped to 9,600 tonnes from 11,600 tonnes a month earlier, with propylene homopolymers (homopolymer PP) accounting for the main decrease in shipments. Overall PP imports reached 132,400 tonnes in 2018 versus 123,100 tonnes a year earlier. Demand for all PP grades increased, with statistical copolymers of propylene (PP random copolymers) accounting for the greatest growth.

The supply structure by PP grades looked the following way over the stated period.

December imports of homopolymer PP to the Ukrainian market decreased to 7,400 tonnes from 9,000 tonnes a month earlier, local companies reduced their purchasing of homopolymer PP raffia in Saudi Arabia. Overall shipments of homopolymer PP reached 100,600 tonnes last year versus 94,300 tonnes a year earlier.

Last month's imports of block propylene copolymers (PP block copolymers) were 1,200 tonnes, compared to 1,100 tonnes in November. Demand for injection moulding propylene copolymers grew slightly from local companies. 13,300 tonnes of PP block copolymers were imported over the stated period, whereas this figure was 12,900 tonnes a year earlier.

December imports of PP random copolymers did not exceed 800 tonnes versus 1,300 tonnes a month earlier, demand for PP subsided from producers of pipes and injection moulding products. Overall imports of PP random copolymers exceeded 16,000 tonnes in 2018, whereas this figure was 13,800 tonnes a year earlier.

Total imports of other propylene copolymers were 2,400 tonnes over the stated period.


Total may pursue LNG project in Nigeria

MOSCOW (MRC) -- French oil group Total will approve plans to proceed with the Ikike project in Nigeria in the coming months, and also aims to expand its liquefied natural gas (LNG) project in the country, reported Reuters with reference to CEO Patrick Pouyanne's statement.

Total is one of the strongest players in the African oil sector, holding more proven reserves on the continent than any of the other top global oil companies.

The 60,000 barrels-per-day (bpd) Ikike project is one of several projects the group has earmarked in Nigeria for a final investment decision, including the 70,000 bpd deepwater Preowei project, which would help Total increase its oil production.

"There is a huge potential in Nigeria, it is probably the most prolific country in west Africa in terms of oil and gas and it is time to launch new projects and we are working on many of them," Pouyanne told journalists.

He was speaking on the sidelines of a meeting of Nigerian and French businesses in Paris.

This month, Total started production at the Egina oilfield off the coast of Nigeria.

"On the same area as Egina, we have Preowei, which could be connected to Egina, We are working on that," Pouyanne said.

Total also planned to expand its Nigerian LNG project this year, he said.

"The market is very good today to do that, it is a very interesting project and the partners are in line to develop it... 2019 should be the year of expanding Nigeria LNG," he added.

Pouyanne called on Nigeria to issue new exploration licences, saying the country's oil and gas sector had been dormant in recent years in terms of exploration and new projects due to uncertainties and the ongoing discussions over Nigeria's oil industry regulation.

The last round of exploration licenses tenders was in 2011. "I hope the new government that will come after the election will launch new tenders for awarding new exploration licenses," he said.

Nigerians will vote on Feb. 16 in a presidential election with incumbent President Muhammadu Buhari seeking a second term.

Total is also developing Uganda's first oilfield with China's CNOOC and Pouyanne said the company would make a final investment decision this year on whether to start production. Uganda has said it expects to start producing oil in 2021.

Pouyanne said he recently told Ugandan President Yoweri Museveni that Total would also be willing to take a stake in a refinery to process crude from the field which is due to be built and operational by 2023.

Uganda signed a deal with a consortium, including a subsidiary of General Electric, to build and operate a 60,000 barrel per day refinery that will cost USD3 billion-USD4 billion.

As MRC informed before, in December 2017, Total inaugurated the new units at its Antwerp integrated refining & petrochemicals platform, which have progressively started up in the last few months. This event marks the completion of the upgrade program launched in 2013 of one of the largest and most efficient integrated refining & petrochemicals platforms in Europe. Thus, the company has invested more than EUR1 B to further improve the competitiveness of this major site located in the heart of Europe's main markets.

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.

Curacao puts off selecting oil-refinery operator pending probe

MOSCOW (MRC) - The government of Curacao has suspended its selection of a new operator for the Caribbean nation’s 335,000-barrel-per-day Isla refinery until a probe into corruption allegations involving the search has concluded, officials said, as per Reuters.

Isla refinery, which has operated under a contract with Venezuelan state-run oil firm PDVSA that lasts through December, began a search for a PDVSA replacement after a dispute last year between the Venezuelan firm and U.S. oil producer ConocoPhillips left the plant idled amid asset seizure attempts.

A memorandum of understanding with PDVSA’s replacement was expected to be signed and disclosed in mid-January, a refinery executive said last month.

Negotiations to choose a new operator, however, “are still in status quo pending the finalization of the internal investigation at Refineria di Korsou,” the company said in an email to Reuters, using the formal name for the refinery.

A spokesperson was not available to immediately elaborate on the statement. In December, Houston-based Motiva Enterprises was chosen as the “preferred bidder,” after an 8-month review, according to local media. Isla resumed operations earlier this year after an 8-month paralysis.

An investigation into the operator bidding process was opened last November after the refinery’s supervisory board received unspecified allegations about the bidding.

The board put the plant’s managing director and two other employees on temporary leave during the probe, which has delayed the selection.