CNOOC to raise its oil an gas output by 4,5% in 2021

MOSCOW (MRC) -- China National Offshore Oil Corporation Ltd., or CNOOC, targeted to produce 545 million-555 million barrels of oil equivalent, or 1.49 million-1.52 million boe/d, of oil and gas in 2021, up about 4.5% from its estimated production of 528 million boe in 2020, on the back of contribution from its 19 new projects, including Buzzard oil field phase II, reported S&P Global with reference to CFO Xie Weizhi's statement in the company's 2021 business strategy briefing call.

The estimated output in 2020 outpaced its target of 505 million-515 million boe set early last year.

The 19 new projects to start up in 2021 are expected to contribute 221,232 b/d toward the company's peak production. In comparison, CNOOC commenced production at eight new projects last year, which contributed a total of 174,652 boe/d to its peak output.

To meet its development target, CNOOC lifted its budget in development to account for 61% of it total capital expenditure of Yuan 90-100 billion (USD13.92 billion-USD15.47 billion), Xie said, adding that the 2021 budget was set on the Brent price assumption of USD50/b.

Looking forward, CNOOC targeted to produce 590 million-600 million boe of oil and gas in 2022 and 640 million-650 million boe in 2023, representing above 8% annual growth, according to Xie.

Meanwhile, the proportion of domestic production was set to fall to 66% in its global output from 68% in 2021, suggesting more overseas projects would start up or resume production as oil price recovers. CNOOC has cut its oil sand and shale production in North America in 2020 due to low oil price.

CNOOC's CEO Xu Keqiang continued to emphasize the future target to significantly lift gas output to account for 30% of the company's production mix from the current 21%.

Lifting of gas output was also a part of the state-owned CNOOC's effort to promote low-carbon transformation to meet China's net zero carbon emissions plan by 2060.

The company planned to invest above 5% of its annual budgets in the coming years in new energy sector from the current 3%-5%, especially offshore wind power.

As MRC informed before, CNOOC Dongfang, a subsidiary of CNOOC, halted production at its propylene plant in Hainan province on March 2 for a schedule turnaround. It was expected that the maintenance at this plant with a capacity of 150,000 mt/year of propylene to continue until mid-April 2021.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

CNOOC is China's third largest national oil company after CNPC and Sinopec. The company was founded in 1982. The headquarters is located in Beijing. The company is engaged in the production, processing and marketing of oil and natural gas offshore China. The Chinese government owns 70% of the company's shares.
MRC

ExxonMobil mulls USD100 bln carbon storage project under the Gulf of Mexico

MOSCOW (MRC) -- ExxonMobil, the largest private US company, has floated a proposal for a public-private carbon storage project that would collect planet-warming carbon dioxide emissions from US petrochemical plants and bury them in deep under the Gulf of Mexico, according to Hydrocarbonprocessing.

The plan would require "USD100 billion or more" from companies and government agencies to store 50 million metric tons of CO2 by 2030, with capacity potentially doubling by 2040, Joe Blommaert, president of Exxon's Low Carbon Solutions business, said in an interview.

Blommaert outlined the plan on Monday, about two months after the largest U.S. oil producer appointed him to run a new Low Carbon Solutions business that could profit from selling carbon-reduction technology and services.

Houston has a large concentration of "hard-to-decarbonize" industry near the Gulf, said Blommaert. "We could create an economy of scale where we can reduce the cost of the carbon dioxide mitigation, create jobs and reduce the emissions," he said.

Exxon, which suffered a USD22.4 billion loss last year, is battling shareholder groups that want the company to shift to cleaner fuels, including a hedge fund that wants four board seats to drive proposed changes. Exxon has pledged to increase spending on low-carbon projects and lower the intensity of greenhouse gas emissions.

While many oil and gas companies have seized on carbon capture programs to offset emissions, "it is not something that's going to save them from having to go through the energy transition," said Rob Schuwerk, executive director of the North American office of Carbon Tracker Initiative, a think-tank that analyzes the financial implications of a clean fuel transition.

Burying carbon dioxide underground "is not going to be a solution that works to preserve fossil fuel industries for an extended period of time," said Schuwerk.

The carbon storage project is proposed for the Houston Ship Channel, a 50-mile (80-km) long waterway that is part of the Port of Houston and home to dozens of refineries and chemical plants. Exxon acknowledges that the proposal will require enormous support from other companies and from federal, state and local government agencies.

The company is contacting potential partners on the project among its refining and chemical rivals.

The project aims to capture CO2 from the 50 largest industrial emitters along the Houston Ship Channel, said Guy Powell, vice president of Low Carbon Solutions. CO2 would be piped to offshore reservoirs up to 6,000 feet (1.83 km) below the sea floor, he said.

Exxon projects carbon capture will be a USD2 trillion market by 2040. The company has supported a carbon tax that would use market incentives to reduce emissions and supported the United States rejoining the Paris climate accord.

As MRC informed previously, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) have just entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.

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

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

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

Braskem joins chemical recycling consortium

MOSCOW (MRC) -- Cyclyx International, a consortium-based feedstock management company with a mission to increase the recyclability of plastic from 10% to 90%, and Braskem, the largest polyolefins producer in the Americas and leading producer of biopolymers in the world, have announced that Braskem has joined Cyclyx as a member, as per Cyclyx' press release.

Besides, Braskem has appointed Geoffrey Inch, Braskem’s Sustainability and Circular Economy Director, to the Cyclyx Executive Advisory Board.

As a member of the Cyclyx consortium, Braskem will have access to the Cyclyx platform which includes an integrated set of innovations including chemical characterization of plastics and predictive modelling of feedstock sources to product pathways, custom feedstock recipes, and customized supply chains. These innovations aim to deliver waste plastic feedstock appropriate for all existing and new mechanical and advanced recycling pathways.

"As the North American leader in polypropylene, Braskem is thrilled to be a founding member of Cyclyx,” says Geoffrey Inch, Sustainability and Circular Economy Director at Braskem. “Braskem has a long history in the use of sustainable feedstock and is committed to working collaboratively to increase the circularity of plastics. We believe Cyclyx addresses some of the key challenges that will allow advanced recycling to scale, which is an important step in the development of certified circular polypropylene for our clients.”

As MRC reportved earlier, in late 2020, Braskem announced its latest sustainability ambitions to significantly expand its efforts to eliminate plastic waste in the environment by 2030 and to achieve carbon neutrality by 2050.

We remind that Brazilian petrochemical producer Braskem's 450,000 mt/year PP plant in LaPorte, Texas, along the Houston Ship Channel completed its initial commercial production, as per the company's statement as of Sept. 10. "The launch of commercial production at our new world-class PP production line in La Porte clearly affirms Braskem's position as the North American polypropylene market leader," Braskem America CEO Mark Nikolich said in a statement. With a USD750 million investment, the new PP plant's construction started in October 2017 and was completed in June, 2020.

Braskem operates five other US PP plants in Texas, Pennsylvania, and West Virginia, with a cumulative capacity of 1.57 million mt/year that the company acquired. The new plant in La Porte, Texas, is Braskem America's first PP new build.

According to MRC's ScanPlast report, PP shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
mrcplast.ccom

Formosa to increase capacity utilisation at its refinery in Taiwan to 74% in May

MOSCOW (MRC) -- Taiwan's Formosa Petrochemical Corp plans to ramp up operating rates at its refinery in May to 74% once it restarts a gasoline-making unit after maintenance and as refining margins have improved, reported Reuters with reference to the company's spokesman.

Formosa plans to process 400,000 barrels per day (bpd) of crude in May, or 74% of its total capacity, up from 340,000 bpd in March and April, spokesman KY Lin told Reuters.

The higher utilization rate comes as Asian gasoline refining margins have returned to pre-COVID-19 levels.

Formosa is among the largest oil products exporters in Asia and a ramp-up in its output is expected to lead to more exports.

Formosa's refinery has been operating at about 60% between February and April due to maintenance, while its No.2 residue desulphuriser unit is undergoing repairs following a fire in July. "Our RCC (residue catalytic cracker) will resume operations in May so we'll process some sweet crude," Lin said, adding that prices for gasoline and propylene, a petrochemical feedstock, produced from the RCC are favourable.

Formosa operates three crude distillation units with a capacity of 180,000 bpd each at its complex in Mailiao.

As MRC informed earlier, Formosa Plastics Company (FPC), part of Formosa Petrochemical, expects to resume 100% capacity utilisation at its No. 1 cracker in Mailiao, Taiwan in a couple of days after restart. This cracker was unexpectedly taken off-stream on 12 April 2021 due to an unspecified technical issue and resumed operations on 19 April 2021. The No. 1 cracker has an annual capacity of 700,000 tons of ethylene and 350,000 tons of propylene.

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

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

COVID-19 - News digest as of 20.04.2021

1. Crude futures fall as COVID-19 pandemic concerns mar bullish economic outlook

MOSCOW (MRC) -- Crude oil futures slipped during mid-morning Asian trade April 19, as concerns on the COVID-19 pandemic front pulled the market back after it ended higher last week on bullish data releases and improved demand forecasts, reported S&P Global. At 10:55 am Singapore time (0255 GMT), the ICE Brent June contract was 20 cents/b (0.28%) lower than the April 16 settle at USD66.57/b, while the May NYMEX light sweet crude contract was 11 cents/b (0.17%) lower at USD63.02/b. COVID-19 cases in key European economies, such as Germany and France, remain elevated, while analysts expressed further concerns over the rise in case numbers in India and Japan. India reported a record high 261,394 cases on April 17, latest data from John Hopkins University showed. The data also showed that cases in Japan have crept up to 4,802 by April 17, the highest on record since late January.

2. Asia Distillates-Jet cracks continue going down on worries of renewed coronavirus lockdowns

MOSCOW (MRC) -- Asian refining margins for jet fuel decreased for a second straight session on Friday, weighed by worries that renewed coronavirus lockdowns in several markets would dampen aviation demand recovery, reported Reuters. Refining margins, or cracks, for jet fuel dropped to USD4.59 per barrel over Dubai crude during Asian trading hours, 15 cents lower from Thursday. Jet cracks have gained 10% this week, but still remain 63% lower than the ten-year seasonal average for this time of the year, Refinitiv Eikon data showed. While pockets of demand have emerged from some domestic routes, a majority of international flights remain grounded due to prolonged border restrictions amid fresh virus waves in many parts of Asia. Business travel is still being avoided as much as possible across sectors.

MRC