OxyChem earnings drop on COVID-19 impact

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.

Phillips 66 to reconfigure California refinery for renewable fuels

MOSCOW (MRC) -- US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils, reported Reuters.

The refiner expects the Rodeo Renewed project to produce 680 million gallons of renewable diesel, renewable gasoline and sustainable jet fuel annually. Combined with the production of renewable fuels from an existing project in development, the plant would produce more than 800 million gallons a year of renewable fuels, it said.

If approved by regulatory authorities, the production of renewable fuels is expected to begin in early 2024.

Refiners, including HollyFrontier Corp and CVR Energy, have been exploring opportunities to produce renewable diesel to save money on less profitable refineries and offset compliance costs associated with US blending laws.

Phillips 66 also said it plans to shut down the Rodeo Carbon Plant and Santa Maria refining facility in Arroyo Grande, California in 2023 and that crude oil pipelines to the facilities will be taken out of service in phases starting that year.

As MRC informed earlier, US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

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

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Angarsk Polymers Plant shut PE production

MOSCOW (MRC) -- Angarsk Polymers Plant has shut down its low density polyethylene (LDPE) production for a scheduled turnaround, according to ICIS-MRC Price Report.

The plant's customers said Angarsk Polymers Plant took off-stream its LDPE production for the scheduled maintenance on 10 August. The exact terms of the forced shutdown were not announced; according to preliminary information, the resumption of production should begin on the weekend. The plant's annual production capacity is about 75,000 tonnes.

As noted earlier, Angarsk ZP shut its facilities for scheduled maintenance works from 22 June to 2 August. It is also worth noting that three producers simultaneously intend to shut their production capacities for a turnaround in late August-September: Ufaorgsintez (shutdown in two phases, the first one - in late August), Tomskneftekhim (for two weeks from 2 September) and Kazanorgsintez (shutdown n two phases from 17 September to 13 October).

Angarsk Polymer Plant (controlled by Rosneft through OOO Neft-Aktiv) is the only petrochemical full-cycle plant in Eastern Siberia. The bulk of the produced ethylene is used by the plant for the production of LDPE, styrene monomer (SM) and polystyrene (PS). Straight-run gasoline and hydrocarbon gases, mainly produced by OAO Angarskaya NHK, are the feedstocks for the plant.

Chemours Q2 earnings fall on lower sales

MOSCOW (MRC) -- US-based pigment producer Chemours reported a decline in net income because sales fell faster than costs, said the company.

The following shows the company's Q2 performance. Figures are in millions of dollars. Revenue fell because of lower volumes across the company's segments. Earnings fell because of lower volumes and prices, idle production charges, lower fixed cost absorption and limited F-gas quota sales.

F-gas quotas refer to regulations adopted by the EU to control emissions of fluorinated gases used as refrigerants. The regulations led to the rise in black-market sales of refrigerants, which compete with legitimate refrigerants sold by Chemours. Offsetting the declines in earnings were stronger operational performance and lower costs.

The following breaks down the company's performance by segment. Figures are in millions of dollars.

Second-quarter volumes fell 9% year on year because of lower demand in Europe, Latin America and Asia. Volumes in North America were flat because of a rise in do-it-yourself (DIY) consumers taking on paint projects. Globally, average sales prices were flat quarter on quarter and down by 5% year on year.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell because of higher costs caused by idled production. Earnings were also dragged down by illegal refrigerant sales in the EU.

As MRC informed earlier, Chemours will close its aniline and nitrobenzene site in Pascagoula, Mississippi state, by the end of the year. The First Chemical site produces aniline, nitrobenzene and nonylated diphenylamine (NDPA) lubricant antioxidant.

As MRC informed earlier, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year.

Chemours is a global leader in titanium technologies, fluoroproducts and chemical solutions, providing its customers in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Chemours has approximately 9,000 employees across 37 manufacturing sites serving more than 5,000 customers in North America, Latin America, Asia-Pacific and Europe. Chemours is headquartered in Wilmington, Del.

Vietnamese Dung Quat refinery processes first batch of Russian Sokol crude

MOSCOW (MRC) -- Vietnam’s Dung Quat oil refinery has processed its first batch of Russian Sokol crude oil on a trial basis, as it seeks a replacement for shrinking domestic Bach Ho output, reported Reuters with reference to the refinery's operator Binh Son Refining and Petrochemical.

The 130,000-barrel-per-day refinery imported more than 710,000 barrels of Sokol crude oil last month to mix with other types of crude oil for the test run, Binh Son said in a statement, adding that Sokol accounted for 20% of the mix and Bach Ho crude 29%.

The processing of Sokol crude oil “is an important milestone in Dung Quat refinery’s efforts to diversify its crude oil sources,” Binh Son said.

“The processing result has shown that Bach Ho crude oil can be replaced in the future.”

The refinery in the central province of Quang Ngai, which became operational in 2009, was designed to use crude oil from the Bach Ho field offshore Vietnam.

Output from that field has been shrinking in recent years, however, prompting the owner of the refinery, state-run PetroVietnam, to look for imports and plan to upgrade the facility.

Last year, Dung Quat processed its first batch of West Texas Intermediate (WTI) and Bonny Light crude oil.

PetroVietnam said Dung Quat would import 8 million to 10 million barrels of these two types of crude this year.

The refinery will shut down later this week for maintenance until early October.

As MRC informed earlier, Nghi Son Refinery & Petrochemical (NSRP) shut its polypropylene (PP) unit on 21 June, 2019, owing to technical issues. The exact duration of the shutdown could not be ascertained. Besides, the company conducted a scheduled maitenance at this unit from 22 October, 2019, to end-November, 2019.

We also remind that Vietnam’s Nghi Son oil refinery officially began commercial production from 14 November 2018, following months of tests. The USD9 billion refinery is 35.1 percent owned by Japan’s Idemitsu Kosan Co, 35.1 percent by Kuwait Petroleum, 25.1 percent by PetroVietnam and 4.7 percent by Mitsui Chemicals Inc.

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.