Shell buys out Brunei deepwater block from Total for USD300 million

MOSCOW (MRC) -- Shell has agreed to buy Total's majority stake in a large exploration block off Brunei in the South China Sea for USD300 million, according to S&P Global with reference to the French oil major's statement Wednesday.

Total holds a 86.95% interest in 5,850 sq km Block CA1, which is located 100 km off the coast of Brunei in water depths ranging from 1,000 to 2,500 meters. Total currently operates the block alongside partners Murphy Oil (8.05%) and Petronas (5%).

"This transaction fits with our strategy of actively managing our portfolio and will contribute to our program to dispose of USD5 billion of non-core assets over the period 2019-2020," Total's upstream head Arnaud Breuillac said in a statement.

Total said the transaction is subject to approval by the local authorities and is expected to close by December.

As MRC reported previously, in mid-October, Royal Dutch Shell Plc restarted the hydrocracker at its 225,300 barrel-per-day (bpd) Norco, Louisiana, refinery. The 40,000 bpd hydrocracker was shut on Sept. 9 for a planned month-long overhaul. A longer than expected restart of the unit stretched the outage to six weeks.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

Clariant Q3 earnings rise 6% on lower exceptional cost

MOSCOW (MRC) -- Switzerland’s Clariant expects its markets to stabilise at a lower level next year, the speciality chemicals company said after reporting weaker than expected earnings and sales in its third quarter, as per Reuters.

The company, which lost its chief executive earlier this year as its joint venture with Saudi Basic Industries (SABIC) collapsed, blamed a worsening economic climate for the downturn.

In particular, Clariant was hit in its care chemicals business that supplies ingredients for soaps and shampoos. The company also felt the impact of weakness in the automobile and electronics sectors. “From today’s point of view I would not expect any recovery, I would rather expect a stability of the current environment,” Chief Financial Officer Patrick Jany said when asked about prospects for 2020.

"We will see a counter-effect at one stage, but it is too early to say when,” Jany said. “Looking into 2020, I see a rather stable environment with a bit of fluctuation, quarter by quarter. We have to organise our company in a way to be profitable at a lower level."

Jany said the search for a permanent CEO may carry into next year. Clariant’s third-quarter sales fell 1% to 1.043 billion Swiss francs ($1 billion), missing an average analyst forecast of 1.06 billion, according to Refinitiv data.

Core earnings (EBITDA) also declined by 1% to 169 million francs, but after exceptional items rose 6% to 151 million francs, missing expectations for 178 million. Clariant increased its profit margin to 14.5% from 13.5%. Margins should improve during the fourth quarter, Jany said.

The Basel company maintained its 2021 outlook for continuing businesses to achieve above-market growth, higher profitability and stronger cash generation, though some analysts said those targets were too optimistic.

“Clariant did not show any underlying progress towards its too ambitious 2021 targets and today’s results do not provide more confidence,” said Vontobel analyst Daniel Buchta. Clariant stock was down 1.6% by 0910 GMT after losing 2.5% in early trading.

A revival of the joint venture with SABIC, which holds a 25% stake in Clariant, is off the table, Jany said, since Clariant now plans to sell major portions of the business it had originally hoped to combine with the Saudis’ operations.

That plan was scrapped after a disagreement about how much Clariant would pay for the SABIC assets.

As MRC informed earlier, Clariant announced that it has been awarded a contract by Dongguan Grand Resource Science & Technology Co. Ltd. to develop a new propane dehydrogenation unit in cooperation with CB&I. The Dongguan plant will be one of the largest single-train dehydrogenation units in the world. Clariant's technology partner CB&I will base the plant's design on its Catofin® catalytic dehydrogenation technology, which uses Clariant's tailor-made Catofin catalyst and Heat Generating Material (HGM).

Propylene is the main feedstock for producing polyprolypele (PP).

According to MRC's ScanPlast report, the estimated consumption of PP in the Russian market totalled 694,210 tonnes in January-June 2019, up by 14% year on year. The supply of propylene block copolymers (PP-block) and propylene homopolymers (PP-homo) increased.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints. Clariant India has local masterbatch production activities at Rania, Kalol and Nandesari (Gujarat) and Vashere (Maharashtra) sites in India.

Saudi Aramco IPO coming soon

MOSCOW (MRC) -- The initial public offering of Saudi Aramco - the company that is preparing to sell up to a 5% stake - will happen soon, reported S&P Global with reference to the country's energy minister's statement on Wednesday.

The Aramco IPO is "going to come soon. It will come at the right time with the right approach and definitely with the right decision, and it will be a Saudi decision, specifically by [Crown] Prince Mohammed," Prince Abdulaziz bin Salman told delegates attending the Future Investment Initiative conference in Riyadh.

He didn't provide further details.

Saudi-owned Al Arabiya TV channel reported on Tuesday that the local listing of Aramco will take place on December 11, with a final flotation price set to be announced on December 4.

The country's Capital Market Authority will announce the launch of Aramco IPO on November 3, according to an article on the TV's website citing unnamed sources on Tuesday. The report didn't mention the size of the stake to be listed on the local exchange, known as Tadawul.

Saudi Crown Prince Mohammed bin Salman has said he wants a local and an international listing for Aramco, which he has valued at USD2 trillion, but some analysts are skeptical the company could fetch such a price.

Saudi officials have yet to choose an international jurisdiction for Aramco, but Aramco CEO Amin Nasser has said the local listing will be the "primary" one.

The IPO, which was supposed to take place in 2018, was delayed partly to allow Aramco to finalize the $69 billion acquisition of a 70% stake in SABIC, the Middle East's largest petrochemical company, Saudi officials had previously said.

The Aramco IPO is a cornerstone of the Crown Prince's Vision 2030, the economic road map to wean the kingdom off oil income.

As MRC informed earlier, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,436,390 tonnes in the first eight months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.

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.

EPS imports to Kazakhstan remained in Jan-Aug at the level of last year

MOSCOW (MRC) -- Overall imports of expandable polystyrene (EPS) to Kazakhstan remained in the January-August 2019 at the last year's level, totalling 4,600 tonnes, according to MRC's DataScope report.

August EPS imports into the country grew by 42% from July to 590 tonnes. This figure was at 420 tonnes in July, whereas imports of material to Kazakhstan was 630 tonnes in August 2018.

Russia and China with the share of 67% (3,090 tonnes) and 32% (1,470 tonnes) of the total imports, respectively, are the main EPS importers to Kazakhstan.

PE production in Russia remained in Jan-Sep at the level of last year

MOSCOW (MRC) -- Russia's production of polyethylene (PE) totalled about 1,384,000 tonnes in the first nine months of 2019, which virtually corresponds to the same figure of 2018. PE output by grades both increased and decreased, according to MRC's ScanPlast report.

September total PE production in Russia was slightly over 110,000 tonnes versus 152,220 tonnes a month earlier, lower production was caused by shutdowns for maintenance simultaneously at three plants. Thus, overall PE output reached 1,348,400 tonnes in January-September 2019, compared to 1,344,700 tonnes a year earlier. Linear low density polyethylene (LLDPE) and low density polyethylene (LDPE) production increased, whereas production of high density polyethylene (HDPE) decreased.

The structure of PE output by grades looked the following way over the stated period.

Last month's HDPE production was about 45,880 tonnes, compared to 78,100 tonnes a month earlier, such a significant decrease in the output was caused by the shutdowns for maintenance at the two largest producers - Kazanorgsintez and Stavrolen. Overall HDPE production exceeded 695,200 tonnes in the first nine months of 2019, down by 5% year on year.

September low density polyethylene (LDPE) production dropped to 46,000 tonnes from 52,200 tonnes a month earlier because of the shutdowns for turnarounds at Tomskneftekhim and Kazanorgsintez. Overall LDPE output reached 479,200 tonnes over the stated period, up by 2% year on year.

Last month's LLDPE production grew to 18,100 tonnes from 14,900 tonnes in August, Nizhnekamskneftekhim was forced to reduce its capacity utilisation in the last month of summer due to technical issues. The two plants' overall LLDPE output totalled slightly over 174,000 tonnes in January-September 2019, up by 22% year on year.