ExxonMobil to increase Permian output in Q3 2021

MOSCOW (MRC) -- ExxonMobil pumped 400,000 b/d of oil equivalent from the Permian Basin in Q2 021, which it aims to increase by 40,000 boe/d in Q3 through continued operating efficiencies, reported S&P Global with reference to the company's statement July 30.

Jack Williams, senior vice president, said the company's current eight rigs are drilling the same lateral length that it took 25 rigs two years ago.

"Completions are improving, too," Williams said during a Q2 earnings call. "Our frac rates are around 50% faster. This has resulted in a reduction in drilling and completion costs of more than 40%."

Williams said the producer remains focused on capital efficiency, delivering free cash flow "across a broad range of price scenarios" and making double-digits returns when oil prices are below USD35/b.

ExxonMobil's Q2 refining throughput increased 3% from the previous quarter, when winter storms in Texas disrupted operations. Fuel margins also increased but remain low because of an ongoing market oversupply.

It was ExxonMobil's first earnings call since climate-focused investors secured three seats on the company's board of directors, delivering their strongest pushback yet that the oil driller must start facing the future by shifting to lower-carbon technologies and preparing for sharply lower fossil fuel demand.

Woods said executives have had productive meetings with the new board about developing a new strategy for the energy transition. He detailed plans for carbon-capture projects, low-emission fuels and methane detection technologies, but he took a cautious tone about the timelines.

Woods said ExxonMobil expects to make final investment decisions next year for an expansion of its LaBarge CCS facility in Wyoming and a new carbon-capture technology pilot associated with the Porthos project at the port of Rotterdam.

The company signed a memorandum of understanding this month to explore infrastructure to help decarbonize the industrial basin in France's Normandy region and an MOU to participate in the Acorn CCS project in Scotland.

Woods said a USD100 billion proposal to capture and store CO2 emissions from heavy industries around the Houston Ship Channel was "gaining industry and third-party support," without giving more details.

The company aims to increase production for low-emission fuels by 40,000 b/d by 2025 through several projects to repurpose existing refinery units and through co-processing biofeeds and purchase agreements, Woods said.

As MRC informed previously, ExxonMobil and SABIC have announced that their joint venture, Gulf Coast Growth Ventures located near Corpus Christi, Texas, has reached mechanical completion of a monoethylene glycol (MEG) unit and two polyethylene (PE) units. Project startup is expected to begin ahead of schedule, likely in the fourth quarter of 2021.

MEG is commonly used in the manufacturing of polyesters and automotive coolants, and as a building block to create various forms of high-performance plastics. PE is commonly used in protective film, packaging and bottles and containers that prolong the shelf-life of food and medicines, as well as in various automotive parts that improve fuel efficiency and performance, and in medical applications.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High density polyethylene (HDPE) shipments decreased.

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

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced a price increase for all polycarbonate (PC) grades in Europe, as per the company's press release as of August 3.

Effective Augustl 1, 2021, or as existing contract terms allow, the contract and spot PC prices for the products listed below increased as follows:

- CALIBRE PC resins - by EUR100 per metric ton.

As MRC reported earlier, Trinseo last raised its prices for all PC grades in Europe on May 1, 2021 by EUR510 per metric ton.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in January-May 2021 by 8% year on year to 42,200 tonnes (38,900 tonnes a year earlier).

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.
MRC

MOSCOW (MRC) -- In the Purovsky district of the Yamal-Nenets Autonomous Okrug, a fire broke out in the building of the plant for the preparation of condensate for transportation (part of Gazprom Pererabotka), the press service of the Ministry of Emergency Situations in the region told Interfax.

The shift duty officer received a message about the fire at 02:42 Moscow time. The first group of firefighters arrived at the plant, which is 23 kilometers from Novy Urengoy, at 02:50.

"At the time of arrival, there was a burning inside the building, there is no threat to nearby objects (the plant is located outside the city). According to preliminary information, no one was killed or injured, "the Emergencies Ministry said.

Gazprom's subsidiary, Gazprom Pererabotka, was registered in 2007 and includes the Urengoysky Condensate Preparation Plant, the Surgut Gas Processing Plant, the Sosnogorsk Gas Processing Plant, the Astrakhan Gas Processing Plant, the Orenburg Gas Processing Plant, the Orenburg Helium Plant and Gazprom neftekhim Salavat.

As MRC reported earlier, Gazprom neftekhim Salavat (Salavat, Bashkortostan) shut down its polyethylene (PE) production for a scheduled turnaround. The plant's customers said Gazprom neftekhim Salavat took off-stream it low density polyethylene (LDPE) and high density polyethylene (HDPE) production capacities for a scheduled maintenance on 20 July. The outage will be quite long and will last for 30 days. The plants' production capacities are 45,000 and 120,000 tonnes per year, respectively.

According to MRC's ScanPlast report, Gazprom neftekhim Salavat's total HDPE production reached 11,400 tonnes in May, compared to 10,200 tonnes in April. Thus, the Salavat plant's overall production of this PE grade totalled 48,900 tonnes in January-May 2021, down by 8% year on year.
MRC

1. Crude oil futures going down on unexpected build in US crude inventories

MOSCOW (MRC) -- Crude oil futures extended decline Aug. 4 on the heels of an unexpected build in US crude inventories, reported S&P Global. NYMEX September WTI settled down USD2.41 at USD68.15/b Aug. 4, and ICE October Brent declined USD2.03 to USD70.38/b. Total US commercial crude oil stocks climbed 3.63 million barrels to 439.23 million barrels in the week ended July 30, US Energy Information Administration data showed Aug. 4. The build narrowed the deficit to the five-year average to around 6%, the smallest since the week ended June 18.
The build came as a surprise to markets that were largely expecting US inventories to continue a tightening trend.
American Petroleum Institute data released late-Aug. 3 showed a US crude draw of 879,000 barrels, while analysts surveyed by S&P Global Platts on Aug. 2 had pointed to a four-million barrel draw over the period.

MRC

MOSCOW (MRC) -- Crude oil futures extended decline Aug. 4 on the heels of an unexpected build in US crude inventories, reported S&P Global.

NYMEX September WTI settled down USD2.41 at USD68.15/b Aug. 4, and ICE October Brent declined USD2.03 to USD70.38/b.

Total US commercial crude oil stocks climbed 3.63 million barrels to 439.23 million barrels in the week ended July 30, US Energy Information Administration data showed Aug. 4. The build narrowed the deficit to the five-year average to around 6%, the smallest since the week ended June 18.

The build came as a surprise to markets that were largely expecting US inventories to continue a tightening trend.

American Petroleum Institute data released late-Aug. 3 showed a US crude draw of 879,000 barrels, while analysts surveyed by S&P Global Platts on Aug. 2 had pointed to a four-million barrel draw over the period.

The crude build comes as exports fell 590,000 b/d to 1.9 million b/d, a 12-week low, while total refinery crude demand edged 50,000 b/d higher, but still fell more than 5.5% behind the five-year average.

NYMEX September RBOB settled 2.08 cents lower at USD2.2500/b and September ULSD declined 5.23 cents to USD2.0741/gal.

The relatively modest slide in RBOB futures was likely due to a larger-than-expected 5.29 million-barrel draw in US gasoline stocks last week - the bulk of which was realized on the US Atlantic Coast. USAC stocks are now the tightest since May at 6.5% below the five-year average, out from just 0.7% the week prior.

Adding to pressure was an ADP jobs report released Aug. 4 showing US payrolls added just 330,000 jobs in July, well under market expectations of around 683,000. The official Labor Department unemployment report for July is expected Aug. 6.

"The big miss with the ADP raised concerns that the delta variant is having a bigger impact on the economy," OANDA senior market analyst Edward Moya said in a note. "The labor market recovery is extremely uneven and suggests the economy continues to struggle in matching individuals up with the current job vacancies."

The ADP report comes on the heels of data from the Institute of Supply Management release Aug. 2 showing a slowdown in US manufacturing activity, with national factory activity falling from 60.6 in June to 59.5 in July, its lowest since January.

We remind that as MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.

We also remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.

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 PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
MRC