Saudi Aramco Q1 net income falls amid lower oil prices

MOSCOW (MRC) -- Saudi Aramco's net income fell in the first quarter on the back of lower crude oil prices and production volumes, coupled with declining refining and chemical margins, said the company.

"The first quarter of 2020 was impacted by declining global crude oil demand resulting from Covid-19 and its impact on worldwide economic activity. This led to lower crude oil prices and continued pressure on refining and chemicals margins," the company said in a statement.

Downstream earnings before interest and taxes (EBIT) fell in the first quarter, primarily due to inventory re-measurement losses as a result of lower crude and refined product prices.

The company's downstream EBIT swung to a loss of Saudi riyal (SR) 19bn in the first quarter, compared with a profit of SR5.12bn in the same period last year.

Refining and chemicals margins were weakened by slower global economic growth caused by the global impact of the coronavirus pandemic.

As MRC wrote before, Saudi Aramco’s plan to buy USD15-billion stake in Reliance Industries hydrocarbon business may not go through due to the rising risk of collapsing oil prices, US-based brokerage Bernstein has warned.

Apart from Reliances oil to chemicals business, Aramco also agreed last year to buy the controlling stake in SABIC from the kingdom’s wealth fund for USD69.1bn, sealing one of the biggest-ever deals in the global chemical industry.

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.

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.
MRC

Thailand IVL Q1 net profit falls

MOSCOW (MRC) --Thailand-listed producer Indorama Ventures Ltd (IVL) on Tuesday reported a sharp drop in its first-quarter net profit, weighed by negative foreign exchange effects and higher inventory losses, said the company.

- Foreign exchange loss of baht (Bt) 362m in Q1 2020 versus gain of Bt99m in the same period last year.
- Inventory loss widened to Bt3.44bn in the first quarter from Bt1.21bn in the same period in 2019.
- Production volumes rose by 12% year on year to 3.31m tonnes in the first quarter.

As MRC wrote before, in May 2019, IVL announced that its indirect subsidiary Indorama Ventures Olefins in Westlake, LA, a manufacturer of Ethylene from Ethane with an annual capacity of 440,000 MT, achieved mechanical completion and was undergoing trial runs. IVOL then stabilized the production of on-spec ethylene and its byproducts at 5 of its 7 furnaces and ramped up gradually during the course of 2Q19. This project is the most ambitious project of its kind in IVL history and creates an exciting new platform of growth as well as affording stability and supply chain advantages to the EO/EG business by its pipeline integration. At normalized production, IVL will secure ~75% ethylene for internal consumption for EO/EG production and merchant the remaining output.

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.

Indorama Ventures Public Company Limited, listed in Thailand, is one of the world's leading petrochemicals producers, a global manufacturing footprint with 59 sites in 20 countries across Africa, Asia, Europe and North America. The company's portfolio is comprises necessities and high value-added (HVA) categories of polymers, fibers, and packaging. Indorama Ventures has approx. 15,000 employees worldwide and consolidated revenue of USD 8.4 billion in 2017. The company is listed in the Dow Jones Sustainability Index (DJSI).

(USD1 = Bt22.7)

MRC

ExxonMobil posts loss on USD3 bln writedown, oil price plunge

MOSCOW (MRC) -- ExxonMobil Corp joined a parade of oil companies posting downbeat results on plunging oil demand and collapsing prices, reporting a USD610 million first-quarter loss after a nearly USD3 billion inventory writedown, reported Reuters.

Global fuel demand has tumbled by a third on coronavirus-related lockdowns and business shutdowns. Oil giants largely have reported losses on weaker margins and writedowns from an oil glut that has sent prices to historic lows.

All of Exxon’s businesses posted lower profits or wider losses except for chemicals, where low oil and gas prices lifted earnings.

“COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” said Exxon Chief Executive Officer Darren Woods.

Exxon’s results echoed those of rivals Royal Dutch Shell and BP, though Chevron reported a first-quarter profit gain due to asset sales.

The largest oil companies have largely sought to protect investor payouts by increasing borrowing or cutting expenses. Exxon, BP, and Chevron maintained their quarterly payouts while Shell cut its dividend for the first time since World War Two.

Exxon has cut this year’s project spending by USD10 billion and expects to reduce oil and gas output by 400,000 barrel per day in line with rivals. Chevron also plans to cut as much as 300,000 bpd this month and up to 400,000 in June.

Exxon posted a loss of USD610 million, or 14 cents per share, in the quarter, compared with a profit of USD2.35 billion, or 55 cents per share, a year earlier.

Excluding charges, adjusted profit was 53 cents a share, beating Wall Street’s forecast for an adjusted profit of 18 cents.

Earnings from oil and gas production fell 91% from a year ago on weak oil prices. Exxon’s volumes were higher, with its U.S. shale production up 56% from a year-ago.

Its refining business swung to a USD611 million operating loss on weak demand and inventory charges. Lower costs and gains from trading helped limit losses, the company said.

The chemical unit posted a profit of USD144 million, down 75% from a year ago but up from a fourth-quarter loss.

“The downstream in particular came in ahead of our expectations,” wrote RBC Capital Markets analyst Biraj Borkhataria. The chemicals unit “was a better result than any time in 2019,” he added.

Its shares were down 3% at USD45.03 in morning trading. The stock is down 34% this year.

Exxon’s production rose slightly to about 4 million barrels of oil equivalent per day (boepd) from 3.98 million boepd. A goal of producing 750,000 bpd from Guyana discoveries by 2025 would be pushed back a year, Exxon said.

As MRC informed before, in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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.

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.
MRC

Honeywell technology to purify hydrogen for petrochemical complex

MOSCOW (MRC) -- Honeywell announced that Zhejiang Satellite Petrochemical Co., Ltd. is using a Honeywell UOP Polybed pressure swing adsorption (PSA) unit to supply high-purity hydrogen to its integrated refining and petrochemicals complex in China, as per Hydrocarbonprocessing.

The PSA unit purifies hydrogen generated by its UOP C3 Oleflex propane dehydrogenation unit.

Zhejiang Satellite, which recently announced a second C3 Oleflex unit to meet the growing propylene demand in China, has used the PSA technology to upgrade the purity of hydrogen to meet refining needs. In addition to technology licensing, Honeywell UOP, a technology leader in the oil and gas industry, provided services, equipment, catalysts and adsorbents for the Satellite plant.

“In the last five years, we’ve worked with Zhejiang Satellite to construct new petrochemicals facilities centered around our Oleflex technology, which helped to maximize operating flexibility and onstream reliability,” said Bryan Glover, vice president and general manager, Petrochemicals & Refining Technologies at Honeywell UOP. “Their selection of our PSA technology further enhances the reliability of their operations and provides a steady, stable source of high-purity hydrogen.”

The PSA process uses proprietary UOP adsorbents to remove impurities at high pressure from hydrogen-containing process streams, allowing hydrogen to be recovered and upgraded to more than 99.9% purity to meet refining needs.

In addition to recovering and purifying hydrogen from steam reformers and refinery off-gases, the Polybed PSA system can be used to produce hydrogen from other sources such as ethylene off-gas, methanol off-gas and partial-oxidation synthesis gas. Polybed PSA systems are skid-mounted, modular units complete with hardware, adsorbents, control systems and embedded process technology, enabling quick and efficient installation to reduce cost and downtime.

Since its introduction in 1966, UOP has improved Polybed PSA technology with new generations of adsorbents, enhanced cycle configurations, modified process and equipment designs and more reliable control systems and equipment. Today, Honeywell UOP has installed more than 1,100 Polybed PSA units in more than 70 countries. As a result, Polybed PSA is a proven technology with dozens of large-scale unit references globally.

As MRC reported earlier, in August 2019, Honeywell announced that PetroChina Guangdong Petrochemical Company will adopt advanced heavy oil processing technology from Honeywell UOP for its integrated petrochemical complex in China. The new facility will have an annual crude processing capacity of 20 million tons, helping to meet a national energy security strategy while transforming PetroChina Guangdong into a more fully integrated petrochemicals supplier.

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.
MRC

Phillips 66 Q1 chem earnings rise

MOSCOW (MRC) -- Phillips 66’s Q1 chemical segment earnings rose quarter on quarter as the company’s Chevron Phillips Chemical (CP Chem) petrochemical joint venture benefited from higher polyethylene (PE) sales volumes, said the company.

PE demand increased, primarily for food packaging and medical supplies. CP Chem’s Olefins & Polyolefins (O&P) business ran at 98% utilisation in Q1.

Q1 adjusted pre-tax income in CP Chem’s Specialties, Aromatics and Styrenics business fell sequentially, primarily due to lower margins and higher turnaround activity. Year on year, total adjusted chemical segment earnings fell from USD227m in Q1 2019. Phillips 66 did not comment on the year on year decline.

Phillips 66 added that CP Chem was “closely monitoring” economic developments and has deferred a final investment decision on a US Gulf Coast petrochemical project it is working on with Qatar Petroleum.

Overall, Phillips 66 swung to a $2.5bn Q1 loss, from positive earnings of USD736m in Q4 2019 and USD204m in Q1 2019.

Excluding special items of USD2.9bn in Q1, primarily impairments related to goodwill and the company’s investment in DCP Midstream, adjusted earnings were USD450m.

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