ADNOC raising over USD1.1 blln from drilling unit IPO

ADNOC raising over USD1.1 blln from drilling unit IPO

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) has completed the book-building process for the initial public offering of its drilling unit, raising more than USD1.1 billion in the company's second flotation of a subsidiary, reported S&P Global.

Now ADNOC is selling 11% of ADNOC Drilling, which is expected to be listed on the Abu Dhabi Securities Exchange on Oct. 3, it said in a Sept. 27 statement. ADNOC initially had intended to sell a 7.5% stake in its drilling unit.
Following the listing, ADNOC will own 84% of ADNOC Drilling and Baker Hughes will retain the 5% stake it bought in the unit in 2018. Helmerich & Payne will own 1% through its IPO investment that was announced on Sept. 8.

ADNOC Drilling, which currently has 96 rigs, will acquire eight more for USD86.5 million from Helmerich & Payne, ADNOC said in a Sept. 8 statement. After the transaction, Helmerich & Payne will invest USD100 million in ADNOC Drilling's IPO.

This will be ADNOC's second flotation of a unit after it sold 10% of fuel retailer ADNOC Distribution on the Abu Dhabi exchange in 2017, raising USD851 million.

Last year, ADNOC raised USD1 billion from institutional placement of another 10% of shares of ADNOC Distribution, with the parent company retaining an 80% shareholding in the unit.

Since 2019, ADNOC has been monetizing its oil and gas assets as it seeks to unlock cash to fund strategic projects, which include increasing oil output capacity to 5 million b/d by 2030, from around the current 4 million b/d.

In June 2020, ADNOC inked a deal worth more than USD10 billion with a group of investors to sell a 49% stake in its gas pipelines a year after striking a similar transaction for its oil pipelines.

As MRC wrote before, in August 2021, ADNOC partnered with Fertiglobe for the sale of blue ammonia to Idemitsu in Japan, for use in its refining and petrochemicals operations.

We remind that in June 2021, Indian refining giant Reliance Industries signed an agreement with ADNOC to build a multi-billion-dollar chemical project in Ruwais, marking the group’s first investment in a greenfield overseas project.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

COVID-19 - News digest as of 25.09.2021

1. August crude oil processing of Indian refiners down to its lowest in 10 months

MOSCOW (MRC) -- Indian refiners' crude oil throughput in August dipped to its lowest in 10 months due to ongoing maintenance activities at multiple refineries, reported Reuters with reference to government data. Refiners processed 4.36 million barrels per day (18.44 million tons) of crude oil last month, the lowest since October 2020 and about 4.8% lower than 4.58 million bpd processed in July. Maintenance activities at some facilities limited production in August, Refinitiv analyst Ehsan Ul Haq said, adding that demand was likely to resume as the festival season approaches, provided cases of COVID-19 remain low.

MRC

Crude oil futures continue rising in Asia amid bullish demand outlook and supply constraint

Crude oil futures continue rising in Asia amid bullish demand outlook and supply constraint

MOSCOW (MRC) -- Crude oil futures were higher in mid-morning trade in Asia trade Sept. 27 amid bullish demand outlook and supply tightness, reported S&P Global.

At 10:05 am Singapore time (0205 GMT), the ICE November Brent futures contract was up 1.14 cents/b (1.46%) from the previous close at USD79.23/b, while the NYMEX November light sweet crude contract was 1.12 cents/b (1.51%) higher at USD75.10/b.

"Supply tightness continues to draw on inventories across all regions," said ANZ research analysts on Sept. 27, adding that the rally in the natural gas price improved the price parity for oil to produce power, which is exerting upward pressure on oil.

Concerns remained over tightness in energy markets, particularly for natural gas, as the gas market continues to trade at elevated levels amid tight supply going into winter.

"These higher gas prices will lead to some gas to oil switching, which would be supportive of oil demand. This stronger demand coupled with supply losses in excess of 30 million barrels from the US Gulf of Mexico due to Hurricane Ida suggest a tighter than expected market," said ING market analysts in a note Sept. 27.

The US Bureau of Safety and Environmental Enforcement reported Sept. 23 that around 294,414 b/d, or 16.18%, of the Gulf's oil production remained offline post-Ida. Despite the proportion of offline production easing, full production recovery is not expected until early 2022, with Shell reporting extensive damage to its infrastructure.

Meanwhile, market watchers will track the OPEC+ meeting, which is scheduled to have on Oct. 4 to discuss about the strength in energy markets. In the previous meeting on Sept. 1, OPEC+ alliance agreed to stick with its existing plan to release 400,000 bpd to the market in October.

As informed earlier, Shell said earlier this month it observed damage from Hurricane Ida to its transfer station West Delta-143 offshore facilities in the Gulf of Mexico. West Delta-143 serves as the transfer station for all production from its assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals. Shell said then it was not yet safe to send personnel offshore to learn the full extent of the damage and estimate the effect on production.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC

ADNOC to supply full-term oil quantities to most Asian refiners for December

ADNOC to supply full-term oil quantities to most Asian refiners for December

MOSCOW (MRC) -- The Abu Dhabi National Oil Company (ADNOC) has allocated full-term volumes to most Asian refiners for December loading, contrary to previous months where term allocations were issued with some cuts in volumes, according to market participants surveyed by S&P Global Sept. 27.

Several refiners in China, Taiwan, India and Japan confirmed receiving their term crude supplies from the producer without any reductions, sources told S&P Global.

ADNOC could not be reached for a comment on the matter.

ADNOC has raised supplies to term buyers in recent months. Term allocation for October and November supplies saw a cut of only 5% each compared with September, when allocations were cut by 15%.

Murban exports by ADNOC are expected to rise, starting with 1.175 million b/d in October 2021 and increasing gradually to a high of 1.437 million b/d in August 2022, according to an ADNOC report.

Amid an increase in oil supplies by the OPEC+ group, Middle Eastern producers have been raising supplies, sources said.

Meanwhile, spot buying appetite could continue to remain tepid despite soaring gas prices weighing on winter season demand for many Asian buyers while spread of the pandemic could further pressure sentiment, traders said.

As MRC wrote before, in August 2021, ADNOC partnered with Fertiglobe for the sale of blue ammonia to Idemitsu in Japan, for use in its refining and petrochemicals operations.

We remind that in June 2021, Indian refining giant Reliance Industries signed an agreement with ADNOC to build a multi-billion-dollar chemical project in Ruwais, marking the group’s first investment in a greenfield overseas project.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

Demand for rPET increases in Asia with lockdowns lifting

Demand for rPET increases in Asia with lockdowns lifting

MOSCOW (MRC) -- With the lifting of lockdowns in various Southeast Asian countries, there are signs of demand improvement in consumer markets of recycled polyethylene terephthalate (rPet), reported S&P Global.

Demand for rPET is increasing especially for packaging and flexible film, which could potentially provide some supply for more recycled plastics, though the overall market fundamentals will remain tight in Southeast Asia.

Asian R-PET sellers are expected to release new offers for October in the week starting Sept. 27, though some are still facing a backlog of orders amid container shortage and high freight.

We remind that, as MRC informed earlier, Alpek (Monterrey, Mexico) expects to finish commissioning and begin production at a Reading, Pennsylvania, rPET facility in the third quarter of 2021, said CEO Jose de Jesus Valdez in August, 2021. DAK Americas, Alpek's US subsidiary, bought the facility in late-May for USD98.1 million at an auction in the bankruptcy case of California recycled PET producer CarbonLite.

Valdez said the recycling and pelletization facility is one of the largest recycled PET units in the Americas, and can produce food-grade pellets.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.
MRC