Mexico gives oil firms more time to get permits due to coronavirus

MOSCOW (MRC) -- Mexico’s oil regulator will extend the time companies have to secure needed permits and plan approvals through the end of this month because of the coronavirus pandemic, it said in a statement, reported Reuters.

Deadlines will be suspended until at least May 31, according to the regulator known as the National Hydrocarbons Commission.

Since last month, the commission’s governing body has been holding virtual sessions in an effort to prevent project delays.

As MRC informed earlier, Mexico’s state oil company Petroleos Mexicanos increased crude production to 1.745 million barrels per day (bpd) in March while processing more at its domestic refineries, according to official data seen by Reuters. Mexico agreed to a 100,000-bpd output cut as part of an initiative by the OPEC+ group to push up plummeting oil prices by withdrawing barrels from an oversupplied market. The cuts will be put in place this month. Mexico’s energy minister, Rocio Nahle, said the nation would cut output only during May and June.

We also remind that in 2016, Pemex shut its steam cracker at its Cangrejera complex for maintenance on February 15. The cracker was idle for about 14 days. The conducted repairs at the cracker were a part of planned maintenance.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

Pemex, Mexican Petroleum, is a Mexican state-owned petroleum company. Pemex has a total asset worth of USD415.75 billion, and is the world's second largest non-publicly listed company by total market value, and Latin America's second largest enterprise by annual revenue as of 2009. Company produces such polymers, as polyethylene (PE), polypropylene (PP), polystyrene (PS).
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Westlake Chemical Q1 earnings up

MOSCOW (MRC) --Westlake Chemical Corporation’s first-quarter sales fell by nearly 5%, year on year on the back of lower selling prices, said the company.

Net profit, however, doubled on the back of a tax benefit related to the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March to alleviate the coronavirus pandemic aftermath, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose.

Net income rocketed due to a tax rate benefit of USD62m from the carry-back of federal net operating losses, as permitted under the CARES Act enacted in March 2020.

The firm’s olefins division posted income from operations of USD62m, up from USD37m in Q1 2019, due to higher polyethylene (PE) sales and lower feedstock costs.

In its vinyls division, income from operations fell to USD73m, down from USD101m a year earlier, due to lower sales for caustic soda and polyvinyl chloride (PVC) due to the global slowdown caused by the coronavirus pandemic.

In February 2018, as MRC informed before, Westlake Chemical announced plans to expand its capacities for the production of PVC and VCM at three of its chemical facilities. Two of the plants are located in Germany (Burghausen, Gendorf) and one is located in Geismar, Louisiana. The expansions in Burghausen and Geismar are expected to be completed in 2019. The Gendorf expansions are expected to be completed in 2020 and 2021.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

Westlake Chemical Corporation is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, chlor-alkali and derivative products, PVC suspension and specialty resins, PVC Compounds, and PVC building products including siding, pipe, fittings and specialty components, windows, fence, deck and film.
MRC

CVR Energy to explore converting refining units for renewable diesel production

MOSCOW (MRC) -- CVR Energy Inc is looking to convert certain units in its refineries to renewable diesel production to reduce its exposure to the cost of renewable fuel credits (RINs), the company said, as per Hydrocarbonprocessing.

The project, which would involve using excess hydrogen capacity and converting some desulfurization units for renewable diesel production, is still in its early stages, the refiner’s chief executive said on its first quarter earnings call.

“The fact of the matter is we have existing assets and excess hydrogen,” said David Lamp, president and CEO of CVR. CVR Energy’s RINs expense in the first quarter of 2020 was USD19 million compared with USD13 million in the same period last year.

The company now estimates that its RINs expense will be approximately USD65 million to USD75 million in 2020. "We continue to try to mitigate our RIN exposure, which is still way too high,” said Lamp.

The refiner reported a net loss of USD87 million, or 87 cents per diluted share, for the first quarter of 2020, compared with a net income of USD101 million in the prior year period. Under the Renewable Fuel Standard, refineries must blend billions of gallons of ethanol into their gasoline each year or buy credits from those that do.

The 10th U.S. Circuit Court of Appeals ruled in January that Environmental Protection Agency exemptions for small refineries can only be used as extensions for refineries that had secured them continuously each year since 2010.

Oil refiners HollyFrontier Corp and CVR Energy, both of which had received waivers the court considered inappropriate, had sought a rehearing in the case but were denied in April.

Ethylene and propylene are feedstocks for producing PE and PP.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

Transition to low-carbon energy may accelerate after crisis: Shell

MOSCOW (MRC) -- The ongoing transition to low-carbon energy sources may accelerate as economies recover from the impact of the coronavirus crisis, reported Reuters with reference to the head of oil and gas company Royal Dutch Shell's statement.

Chief Executive Ben van Beurden said while Shell was not ringfencing its low-carbon Integrated Gas and New Energies division from spending cuts to weather the crisis, those businesses would be shielded from the worst of the reductions.

"Where possible, we try to spare (New Energies) a little bit and that is basically because we still believe that there is an energy transition underway which may even pick up speed in the recovery phase of this crisis and we want to be well positioned for it," he said after Shell announced first-quarter results.

Under pressure from a slide in oil prices, Shell slashed its dividend by two-thirds on Thursday having already announced a USD5 billion cut to its 2020 investment budget to USD20 billion last month.

About 45% of the spending cuts will hit Shell’s upstream - or exploration and production - business, with 30% for downstream which includes the refining and marketing of oil products, van Beurden said.

He said the other 25% in cuts would come from Integrated Gas and New Energies but added that the crisis would not distract the company from its shift to low-carbon energy as it braces for a complete overhaul over the next 30 years.

The head of the world’s energy watchdog, Fatih Birol, told Reuters this week that global efforts to minimise the fallout from the pandemic presented an historic opportunity to scale up the technologies needed to move to cleaner energy.

The European Union, meanwhile, is working on a revised work plan for its climate policies because of the crisis which is set to include new, more ambitious targets for 2030, according to a draft seen by Reuters.

Shell’s low-carbon energy division, which includes wind and solar energy and retail power distribution, was due to receive investment of up to USD2 billion in 2020 and then up to USD3 billion a year thereafter.

Chief Financial Officer Jessica Uhl said the fundamental outlook for Shell’s focus on shifting from liquid fuels to generating and distributing electricity had not changed.

"Companies growing low-carbon businesses should eventually be rewarded by the market, and ultimately we see this as the most likely way for Shell to rebuild its ambition to be a world- class investment case over the longer term," Barclays equities analysts said in a note.

As MRC reported earlier, Pilipinas Shell Petroleum Corp said it will shut down its 110,000-barrel-per-day Tabangao refinery in the Philippines for one month from mid-May as the coronavirus pandemic has hammered oil demand.

We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island this week following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.

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.
MRC

COVID-19 - News digest as of 08.05.2020

1. BASF manufactures and donates hand sanitizer to support the fight against COVID-19 in Canada

MOSCOW (MRC) -- With the goal of helping overcome current and future bottlenecks for hand sanitizer resulting from a significant increase in demand, BASF has started production of hand sanitizers in Canada, said the producer in its press release. This safe and high-quality sanitizing product manufactured at BASF’s Windsor facility, will be donated to hospitals, care facilities and other institutions in areas of high need, identified in collaboration with the provincial governments of Quebec, Ontario and Alberta.


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