SIBUR approved strategy of circular economy and climate impact mitigation

MOSCOW (MRC) -- SIBUR, Russia’s largest integrated petrochemicals company and a leader in sustainable development, has approved its Policy on Circular Economy and Climate Impact Mitigation at the meeting of its Board of Directors, said the company.

The Policy sets out the main principles, strategic goals and objectives of SIBUR in these areas and outlines the key activities at each stage of product life cycle to achieve the above objectives. The petrochemical industry is well positioned to develop circular economy due to the unique properties of polymers, including recyclability and reusability. This enables reducing the use of primary feedstock and cutting greenhouse gas emissions, while the development and improvement of polymer waste recycling helps build on these effects.

The Policy spans such business areas as risk management and strategic goal setting, supplier and customer relations, R&D and investment planning, operational efficiency and contribution to regulatory environment. SIBUR realises that achieving global tasks is only possible through awareness and joint efforts of a wide range of stakeholders. Therefore, the Policy focuses, in particular, on building partnerships as well as sharing experience and educational initiatives in environmental awareness and responsible consumption.

By approving and implementing the Policy, the Company also declares its commitment to the UN Sustainable Development Goals, the UN Global Compact, circular economy principles, the goals of the Paris Agreement, and Russia' Long-term Development Strategy with Low Greenhouse Gas Emissions to 2050. The progress in implementing the Policy will be the subject of regular discussions at meetings of the Company’s Board of Directors and its Sustainable Development Committee.

On April 23, SIBUR and theTAIF Group announced plans to merge their petrochemical businesses. As a result of the transaction, a merged company will be created on the basis of SIBUR, in which the existing shareholders of the Taif group will receive a 15% stake in exchange for the transfer of a controlling stake in the group, which consists of petrochemical and energy enterprises. The remaining stake in Taif may subsequently be bought out by the combined company. After the completion of all ongoing investment projects, the combined company will enter the top 5 world leaders in the production of polyolefins and rubbers.

Earlier it was reported that SIBUR increased sales of polypropylene and polyethylene last year amid growing utilization of the ZapSibNeftekhim complex. This led to an increase in the company's revenue in the olefins and polyolefins segment by 77.1% to Rb187.3 bn. This growth was mainly due to an increase in sales of polypropylene and polyethylene as a result of increased utilization of the ZapSibNeftekhim complex and was partially offset by a decrease in prices for these types of products.

SIBUR is the largest vertically integrated gas processing and petrochemical company in Russia, uniting a number of production sites in various regions of the Russian Federation. The company sells products to consumers in the fuel and energy complex, automotive, construction, consumer goods, chemical and other industries in more than 80 countries around the world.

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1. BP forecasts further reduction in oil, gas output in 2021 due to impact of asset sales on its portfolio

MOSCOW (MRC) -- On April 27, BP, the world's oil and petrochemical major, forecast a further drop in its upstream production in 2021 due to the impact of asset sales on its portfolio, as it reported a 14% year-on-year fall in upstream oil and gas output for the first quarter, reported S&P Global. In a results statement, the UK major said second-quarter production would be even lower than first-quarter production in both its conventional operations and newly created 'gas and low carbon' unit due to a combination of asset sales and maintenance, the latter in the North Sea, Gulf of Mexico as well as Trinidad and Tobago. The downbeat production outlook follows a 10% drop in the company's 2020 output, mainly attributed to asset sales in its US shale business and Alaska. Upstream production in the first quarter hit 2.22 million b/d of oil equivalent, excluding the company's near-20% stake in Rosneft, due to the asset sales, reduced investment and asset decline, BP said.

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MOSCOW (MRC) -- Crude oil futures ticked lower during mid-morning Asian trade April 28, as data from the American Petroleum Institute showed a build in US crude inventories, and the OPEC+ Joint Ministerial Meeting Committee recommended to uphold the earlier OPEC+ decision to increase production from May onwards, reported S&P Global.

At 10:55 am Singapore time (0255 GMT), the ICE Brent June contract fell 6 cents/b (0.09%) from the April 27 settle at USD66.36/b, while the June NYMEX light sweet crude contract was down 12 cents/b (0.19%) at USD62.82/b.

Data from the API took the market by surprise as it showed a significant 4.32 million-barrel build in US crude inventories in the week ended April 23. Market analysts had expected a marginal draw in crude oil inventory amid an uptick in refinery demand.

A dip in sentiment was, however, tempered by indications that downstream demand remained strong, with US gasoline and US distillate inventories falling 1.29 million barrels and 2.42 million barrels, respectively. Market participants will be looking to the more comprehensive US Energy Information Administration data, due to be released later April 28, for corroboration of the inventory changes, and for fresh pricing cues.

Meanwhile on April 27, the OPEC+ JMMC, co-chaired by Saudi Arabia and Russia, backed the coalition's earlier decision to gradually taper crude production cuts from May onwards, delegates told S&P Global Platts. As per the decision reached during the April 1 OPEC+ meeting, the producer group is due to raise its collective output by 350,000 b/d in May, another 350,000 b/d in June, and 441,000 b/d in July. Saudi Arabia, which is currently in the middle of an additional 1 million b/d cut, will also ease the cut by 250,000 b/d in May, 350,000 b/d in June and 400,000 b/d in July.

Delegates said the full OPEC+ meeting scheduled for April 28 will also be canceled, and that ministers will convene online again on June 1 to review their decision.

The endorsement from the JMMC comes after the OPEC+ Joint Technical Committee had raised its 2021 crude demand growth forecast on April 26 from 5.6 million b/d to 6 million b/d, bringing it in line with the 5.95 million b/d forecasted in the April 13 OPEC oil market report.

The OPEC+ coalition's rosy demand outlook is predicated on robust vaccination programs in the US and Europe, which are expected to fuel their respective economic rebound. OPEC+ is confident that the increased demand brought upon by an economic expansion in these regions will outweigh the demand-destruction caused by an escalation of the pandemic in countries such as India, Japan and Turkey.

As MRC informed earlier, COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

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.
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MOSCOW (MRC) -- On April 27, BP, the world's oil and petrochemical major, forecast a further drop in its upstream production in 2021 due to the impact of asset sales on its portfolio, as it reported a 14% year-on-year fall in upstream oil and gas output for the first quarter, reported S&P Global.

In a results statement, the UK major said second-quarter production would be even lower than first-quarter production in both its conventional operations and newly created 'gas and low carbon' unit due to a combination of asset sales and maintenance, the latter in the North Sea, Gulf of Mexico as well as Trinidad and Tobago.

The downbeat production outlook follows a 10% drop in the company's 2020 output, mainly attributed to asset sales in its US shale business and Alaska. Upstream production in the first quarter hit 2.22 million b/d of oil equivalent, excluding the company's near-20% stake in Rosneft, due to the asset sales, reduced investment and asset decline, BP said.

"For full-year 2021 we expect reported upstream production to be lower than 2020 due to the impact of the ongoing divestment program. However, underlying production should be slightly higher than 2020 with the ramp-up of major projects, primarily in gas regions, partly offset by the impacts of reduced capital investment and decline in lower-margin gas assets," BP said, noting its startup of two gas projects in recent days, in Egypt and India.

BP responded to the global price crash and pandemic by slashing its capital expenditure by 21% last year, starting in the second quarter, and has since said it expects to see its oil and gas output fall by 40% by 2030 as it shifts toward lower-carbon energy production.

However, in a broadly optimistic results statement, CEO Bernard Looney hailed the company's success in lowering its net debt and reviving its cash generation, and forecast an improvement in oil market conditions.

"The oil market is set to continue its rebalancing process. Global stocks are expected to decline and reach historical levels (in terms of days of forward cover) at the end of 2021," BP said. "Oil demand is expected to recover in 2021 due to strong growth in US and China and as the distribution of vaccinations gains momentum and lockdown restrictions are gradually lifted," it added, noting also that OPEC+ decisions would play a significant role.

In the downstream, "industry refining margins are expected to improve over the course of 2021 compared to the first quarter, with the recovery in demand and the closure of some capacity supporting higher utilization rates compared to the exceptionally low levels seen last year. However, refining margins are expected to remain weaker than pre-COVID-19 levels," BP said.

As MRC informed earlier, Rosneft together with BP will develop the hydrogen business. Together they will study the prospects for new projects using renewable energy sources (RES), as well as the use of technologies for capturing, utilizing and storing CO2. Earlier in Russia, Gazprom and Novatek spoke about their intention to create a hydrogen business and new technologies for the disposal of harmful emissions.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

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.
MRC

MOSCOW (MRC) -- Sika has agreed to acquire Hamatite, the adhesives business of Japanese tyre producer The Yokohama Rubber Co for an undisclosed fee, said the company.

Sika has agreed to acquire Hamatite, the adhesives business of The Yokohama Rubber Co., Ltd. Hamatite is a market leader in Japan, offering adhesives and sealants to the automotive and construction industries. The acquisition will significantly strengthen Sika’s market position in Japan, increase market access to all major Japanese OEMs, and notably extend the product offering for sealing and bonding applications in the Japanese construction industry. Headquartered in Tokyo, the business generates annual sales of CHF 160 million. The transaction is subject to clearance by anti-trust authorities.

As per MRC, Sika, one of the leading European manufacturers of building materials, has expanded its product line through the acquisition of the Belarusian plant "BelINECO", which is a resident of the FEZ "Brest".

We remind that Russia's output of chemical products rose in February 2021 by 5.3% year on year. Thus, production of basic chemicals increased year on year by 7.5% in the first two months of 2021, according to Rosstat's data. February production of polymers in primary form was 861,000 tonnes versus 196,000 tonnes in January. Overall output of polymers in primary form totalled 1,770,000 tonnes over the stated period, up by 8.4% year on year.

Hamatite 's business portfolio comprises various technologies such as polyurethanes, hot melts, and modified silicones. The company operates five plants, the main site being in Hiratsuka, Japan. Additional Hamatite manufacturing facilities are located in Japan, China, Thailand, and the US.

Sika has been operating in Russia since 2003 and has 5 plants for the production of concrete admixtures, 2 plants for the production of dry building mixtures, a plant for the production of polycarboxylate ethers, a plant for the production of roofing and waterproofing PVC membranes, a plant for the production of epoxy and polyurethane floor coatings. laboratory of physical and chemical tests of concretes and concrete mixtures, a chemical laboratory and 5 branches in different regions of the country with a central office in the city of Lobnya, Moscow region.
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