MOSCOW (MRC) -- OxyChem, the chemical segment of Occidental Petroleum (Oxy; Houston, Texas) reports second-quarter pre-tax income of USD108 million, down 48% year-over-year (YOY) from USD208 million and 35% ahead of the company’s guidance. Sales totaled USD846 million, down 15% YOY from USD998 million, according to Chemweek.
Pre-tax income during the first quarter totaled USD186 million. Oxy attributes the 42% sequential decline to the negative impact of the COVID-19 pandemic on product demand. “Operational spending at various facilities was lower in the second quarter, offset by softening realized domestic and export (polyvinyl chloride - PVC) prices and volumes,” says the company.
Looking ahead, the company expects OxyChem to turn in pre-tax income of about USD145 million during the third quarter, down 30% YOY from USD207 million, and annual pre-tax income of USD550-600 million, versus USD799 million in 2019. Oxy has also lowered its projected capital spending in the segment to USD0.2 billion, down from original guidance of USD0.3 billion.
OxyChem is a major producer of chlor-alkali and vinyls.
Oxy’s overall net income for the quarter came to a loss of USD8.4 billion, and an adjusted loss of USD1.6 billion. Net sales totaled USD2.9 billion, down from USD4.5 billion in the year-ago period. Conditions were particularly difficult for the oil & gas segment, which reported a pre-tax loss of USD7.7 billion, down from income of USD153 million in the year-ago period, and sales of USD2.0 billion, down from USD2.7 billion. The results included pre-tax impairment charges of USD4.3 billion for unproved domestic onshore acreage, USD1.2 billion for proved domestic onshore and Gulf of Mexico oil and gas properties and USD0.9 billion for international assets.
As MRC reported previously, OxyChem, the chemical division of Occidental Petroleum, conducted a seven-day turnaround at its PVC plant in Pasadena, Texas, USA, in April, 2020. This plant's production capacity is 1 million mt/year.
According to MRC's ScanPlast report, Russia's overall PVC production reached 557,000 tonnes in the first seven months of 2020, up by 1% year on year. Only three Russian producers managed to increase their output.
Occidental Petroleum Corporation (OxyChem) is a California-based oil and gas exploration and production company with operations in the United States, the Middle East, North Africa, and South America. Oxychem is Oxy"s Texas-based subsidiary which manufacture polyvinyl chloride (PVC) resins, chlorine and caustic soda used in plastics, pharmaceuticals and water treatment chemicals.