Exxon to cut 1,900 US jobs as pandemic hurts demand

MOSCOW (MRC) -- Exxon Mobil Corp announced it will lay off about 1,900 employees in the United States as the COVID-19 pandemic batters energy demand and prices, reported Reuters.

Exxon was once the largest US publicly traded company, but has been cutting costs due to a collapse in oil demand and ill-timed bets on new oilfields and expansions. It has promised to shed more than USD10 billion this year in project spending and cut operating expenses 15%.

The company lost nearly USD1.7 billion in the first six months of the year and is expected to post another quarterly loss on Friday.

Exxon said the job cuts, part of a global reorganization, will come mainly from its Houston, Texas office and will include voluntary and involuntary cuts.

"The impact of COVID-19 on the demand for Exxon Mobil's products has increased the urgency of the ongoing efficiency work," the company said in a statement.

Employees who are separated through involuntary programs will receive severance and outplacement services.

Exxon had nearly 75,000 global employees at the end of 2019, but has been reviewing its businesses on a country-by-country basis. Earlier this month it said it would cut 1,600 jobs in Europe. It has also announced cuts in Australia.

Prior to the pandemic, Chief Executive Darren Woods pursued an ambitious spending plan to boost oil output and turn around sagging profits on a bet that a growing global middle class would demand more of its products.

Exxon on Wednesday said it would continue to hold stable its quarterly shareholder dividend payments, which cost it nearly USD15 billion per year.

Its shares were trading up 2.3% higher at USD32.29 on Thursday.

As MRC wrote before, Royal Dutch Shell Plc and BP Plc also have outlined up to 15% workforce cuts. Chevron Corp’s planned cuts of 10%-15% would imply a reduction of between 4,500 and 6,750 jobs. It will also cut roughly another 570 positions as part of its acquisition of Noble Energy.

We remind that earlier this month, US oil giant ExxonMobil announced it plans to reduce its European workforce by up to 1,600 across the company"s affiliates by the end of 2021 as part of its global review. Exxon said country-specific cuts will depend on the oil major's local business footprint and market conditions, after the COVID-19 pandemic hammered demand for its products and crude prices tanked.

We also remind that ExxonMobil has undertaken a planned shutdown at its cracker in Singapore. The company halted operations at the cracker for maintenance on September 14, 2020. The cracker is expected to remain off-line till end-October, 2020. Located at Jurong Island, Singapore, the cracker has an ethylene production capacity of 1 million mt/year and a propylene production capacity of 450,000 mt/year.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

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

PetroChina third quarter profit surges on recovering oil prices, pipeline spin-off

MOSCOW (MRC) -- PetroChina, Asia's largest oil and gas producer, reported a surge of around 350% in third-quarter profit versus a year earlier, owing to recovering oil prices and revenue from pipelines spin-offs, said Reuters.

Net income reached 40.05 billion yuan (USD6 billion) versus 8.86 billion the same period a year ago, and compared with a loss of 13.75 billion the previous quarter when decades-low oil prices hammered its revenue.

PetroChina in September completed the spin-off of its pipeline and storage facilities and a liquefied natural gas (LNG) terminal in Shenzhen to newly established PipeChina for 268.7 billion yuan.

Profit for the first nine months fell 73% year-on-year to 10.07 billion yuan. Crude oil production between January and September rose 2.7% on the year to 701 million barrels, in response to Beijing’s urge to improve national energy security.

Total gas output increased 6.5% to 3,080 billion cubic feet. Its domestic operation, making up 94% of the total, rose 8.2% on year while that of overseas projects fell 16%.

The company, China’s second-largest refiner, processed 877.3 million barrels of crude during the period, down 3.2% from a year earlier.

As MRC informed earlier, PetroChina Daqing Petrochemical, a subsidiary of Chinese petrochemical giant PetrChina, closed its polypropylene (PP) plant in Daqing City (Daqing, Heilongjiang Province, China) on September 29 for technical reasons. The company stopped both lines with a total capacity of 300 thousand tons of PP per year (No. 1 - 180 thousand tons and No. 2 - 110 thousand tons per year) - for technical reasons.

As MRC reported earlier, Ufaorgsintez (UOS, Bashneft’s petrochemical asset) has resumed its polypropylene (PP) production after a shutdown for maintenance. The plant"s customers said Ufaorgsintez had resumed its PP output since 13 October after the shutdown for a scheduled turnaround. The outage was quite long and started on 12 September. Ufaorgsintez's overall PP production capacities are 120,000 tonnes/year.

PetroChina is a Chinese state-owned oil company. It is engaged in the exploration, development and production of oil and natural gas, as well as the refining, transportation and distribution of oil and oil products, petrochemical products and the sale of natural gas. CNPC owns 86% of the company.
MRC

ACC CAB rises at slower rate in October

MOSCOW (MRC) -- ACC’s chemical activity barometer (CAB), a leading economic indicator and composite of industry activity, rose 0.9% in October on a three-month moving average (3MMA) basis, reported Chemweek.

This is significantly smaller than the 1.5% increase in September, and a 2.6% gain in August, indicating a continued economic recovery, albeit at a slower pace.

“With six consecutive months of gains, the October CAB reading remains consistent with recovery in the US economy,” said Kevin Swift, chief economist at ACC.

Production-related indicators for September were mixed, but leaning positive. Trends were positive for construction-related resins, pigments, and resins and chemistry used in light vehicles and durable goods. Trends were mixed for plastic resins used in packaging, and in consume and institutional applications. Equity prices, product and input prices, and supply chain indicators were also positive.

As MRC wrote previously, US chemical volumes are expected to drop nearly 10% this year as global economic activity contracts due to the impacts of COVID-19, according to the American Chemistry Council's (ACC) Mid-Year 2020 Chemical Industry Situation and Outlook. Volumes should recover in 2021 with a return to pre-COVID-19 output levels in the US by the second half of 2021.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.
MRC

VEGA Americas is investing in sales, service, and training operations

MOSCOW (MRC) -- VEGA Americas, Inc., a leader in industrial level and pressure measurement instrumentation, is expanding its operations and growing its workforce across Texas, Oklahoma, and parts of New Mexico and Arkansas, said Hydrocarbonprocessing.

The company is expanding its sales force, increasing field service support, and investing in training capabilities to serve everywhere from the Gulf Coast to the High Plains and everywhere in between.

VEGA is implementing a direct sales model in the region to accommodate the company’s steady growth and maximize the region’s potential. In the short-term, the company will be hiring sales, service, and marketing to cover Texas, Oklahoma, eastern New Mexico, and northwest Arkansas, and in the long-term, the company will expand its office in the Greater Houston area. These investments in additional personnel and office space will enable the company to directly support customers in the variety of industries Texas, Oklahoma, New Mexico, and Arkansas have to offer.

"VEGA has a long history of working closely with our customers, helping them find the best measurement solution for their process,” said John Groom, Co-CEO of VEGA Americas. “This not only helps our customers make their processes safer and more efficient, but it allows us to make constant improvements to our instrumentation."

VEGA sensors perform critical measurement tasks in the Oil & Gas, Refining, and Petrochemical industries in addition to making important process measurements inside municipalities, Food and Beverage facilities, and other industrial plants, all of which play a prominent role in the Texas, Oklahoma, New Mexico, and Arkansas economies. By working directly with these facilities, VEGA will provide optimal service and support to plant managers, engineers, and technicians, enabling them to operate more safely, reliably, and efficiently.

"One of our core values at VEGA is ‘responsiveness’,” said John Kronenberger, Co-CEO of VEGA Americas, “and by making these investments across the great states of Texas, Oklahoma, New Mexico, and Arkansas, we’ll be able to provide better support to our customers and keep their processes running safely and efficiently."

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.

VEGA uses radar, guided wave radar, pressure, and radiometric technologies, among others, to make all-important level, point level, and pressure measurements. Most instrumentation is manufactured in the United States, and 85% of products ship within 2–5 business days of placing an order.
MRC

North America chemical rail passes recovery milestone

MOSCOW (MRC) -- Chemical railcar traffic in North America has passed a milestone along the path to economic recovery, reported Chemweek.

During the week ended 24 October, volume increased 1.4% year-over-year (YOY) on a four-week basis, marking the first YOY gain since 4 April. The figure was down 1.5% from 2018, improving over the previous week’s shortfall of 2.5%, according to data released on 29 October by the Association of American Railroads (AAR).

For the year to date, chemical railcar traffic in North America was down 4.1% from 2019 and 5.6% from 2018.

Volume for the week totaled 42,375 carloads, up 1.1% YOY and down 1.8% from the previous week.

Chemical railcar traffic in the United States contributed 30,947 carloads to the total, up 2.8% YOY and up 4.1% from the previous week. For the year to date, US chemical railcar traffic was down 4.8%.

Canadian chemical rail traffic totaled 10,496 carloads, down 3.6% YOY and down 15.5% from the previous week. For the year to date, Canadian chemical railcar traffic was down 1.9%.

Chemical railcar traffic in Mexico totaled 932 carloads, a YOY increase of 1.4% and a sequential decrease of 7.1%. For the year to date, Mexican chemical railcar traffic was down 5.5%.

As MRC informed earlier, Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4% year on year.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
MRC