Trafigura to exit Rosneft Indian refining JV

Trafigura to exit Rosneft Indian refining JV

MOSCOW (MRC) -- Trafigura is preparing to sell its 24.5% indirect stake in an Indian oil refining joint venture with Russia's Rosneft to an Italian group, a letter seen by Reuters shows and people familiar with the commodity trading firm's plans said.

Trafigura holds the stake in Nayara Energy, which owns India's third largest refinery, a port and a network of more than 6,000 fuel stations across India, indirectly through a 49.84% holding in Singapore-based Tendril Ventures Pte Ltd.

It plans to sell the Nayara stake to Italy's Genera Group Holding S.P.A, people familiar with the matter said, without giving detail on what had prompted Trafigura to sell.

Trafigura declined to comment. Genera did not respond to Reuters emails and messages seeking comment. Nayara said it could not comment on the actions of its shareholders.

It is unclear how much Trafigura's stake in Nayara, formerly known as Essar Oil, is worth.

Nayara, which owns the 400,000 bpd Vadinar refinery plant in the western Indian state of Gujarat, changed hands for nearly USD13 B in 2017, so the Trafigura stake then would have been worth more than USD3 B.

The other owner of Tendril is Russian investment group United Capital Partners (UCP), which also has 49.84%. Tendril's wholly-owned subsidiary, Cyprus-registered Kesani, owns a 49.13% stake in Nayara Energy. Rosneft's Singapore unit also has a 49.13% stake and public shareholders the remainder.

When Kesani and Rosneft bought the Nayara stakes in 2017, the sale was structured in a way to prevent Rosneft from acquiring a controlling stake and avoid running foul of US sanctions on the Russian oil major.

"As a result of the proposed transfer, Trafigura will cease to hold an indirect shareholding in Kesani and hence also in the borrower (Nayara)," Virag says in the letter seen by Reuters.

After the transfer, Genera will hold a 24.5% stake in Nayara, through Tendril and Kesani, the letter said.

As MRC informed earlier, India's Nayara Energy hopes to operate its 400,000 barrels per day (bpd) refinery in western India at close to 100% capacity in 2021 as fuel demand is picking up.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.

COVID-19 - News digest as of 18.11.2021

1. Brenntag Q3 profit increased on the back of strong demand

MOSCOW (MRC) -- Brenntag’s third-quarter profits rose year on year on the back of strong demand at its commodity and specialty chemical divisions, although the CEO of the Germany-headquartered distributor warned that market disruption would last “well into” 2022, said the company. Base chemical division Brenntag Essentials saw a 29% annual increase in operating earnings before interest, taxes, depreciation and amortisation (EBITDA) on demand growth in Europe and the Americas. COVID-19 restrictions and environmental policy in China hit its Asia-Pacific performance.


Crude oil futures down in Asia as bearish sentiment dominates

MOSCOW (MRC) -- Crude oil futures were lower in mid-morning trade in Asia Nov. 18, extending losses following a sharp overnight tumble, as a draw in US oil inventories across the board failed to overcome rising bearish pressures on both the supply and demand side, reported S&P Global.

At 10:35 am Singapore time (0214 GMT), the ICE January Brent futures contract was down 30 cents/b (0.37%) from the previous close at US79.98/b, while the NYMEX December light sweet crude contract fell 68 cents/b (0.87%) at USD77.68/b. Both benchmarks had shed 2.6%-3% in value overnight.

"Oil prices took center stage in pulling the energy sector lower, as expectations of a coordinated release in oil supplies from the US and other countries drove some profit-taking," IG market strategist Yeap Jun Rong said.

Media reports indicated the US has asked multiple countries, including China, Japan and India, to tap on their oil reserves in a bid to counter surging energy prices.

While analysts have noted that such a move would be a short-term fix for rising oil prices, the news nonetheless brings back into focus inflationary pressures faced by major economies around the world.

Most recently, the UK reported Nov. 17 inflation rising by 4.2% on the year last month, a 10-year high. This comes on the back of the US reporting last week inflation reaching highs not seen in three decades.

COVID-19 cases also continue to be a point of concern, with several countries in Asia not seeing a let-up in caseload figures despite high vaccination numbers and some tightening lockdown restrictions further.

"Despite improving vaccination across the region, COVID-19 risks continue to be closely monitored," Yeap said.

"Singapore's daily new cases have jumped back to the 3,500 level yesterday (Nov. 17), likewise for South Korea with a new record in daily virus cases, while Beijing sees some tightening of restrictions despite fewer daily infections. That may put a cap on upside for now as markets look towards the next catalyst to lift sentiments," he added.

The bearish headlines overshadowed any upside from US Energy Information Administration data showing inventory draws across the board last week.

Total US commercial crude oil inventories declined 2.1 million barrels in the week ended Nov. 12 to 433 million barrels, the EIA said Nov. 17. Total US gasoline stocks slipped 710,000 barrels to 212 million barrels, while distillate stocks fell 820,000 barrels to 123.69 million barrels.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

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, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.

PVC imports to Belarus rise by 17.3% in Jan-Sep 2021

MOSCOW (MRC) -- Overall imports of unmixed polyvinyl chloride (PVC) into Belarus totalled 45,600 tonnes in the first nine months of 2021, up by 17.3% year on year, according to MRC's DataScope report.

According to the Statistics Committee of the Republic of Belarus, local converters were unable to fully replenish their PVC inventories in September 2021 due to the increased supply from the main suppliers-producers from Russia. September imports were 5,600 tonnes, whereas this figure was at 4,900 tonnes a month earlier.

Thus, imports of unmixed PVC reached 45,600 tonnes in January-September 2021, compared to 38,900 tonnes a year earlier.
As reported earlier, Russian producers with the share of about 92% of the Belarusian market were the key suppliers of resin to Belarus over the stated period. Producers from Germany with the share of over 7% were the second largest suppliers.


Olin Corporation announces leadership changes

Olin Corporation announces leadership changes

MOSCOW (MRC) -- Olin Corporation (Clayton, Missouri) has announced that Pat D. Dawson, Olin's Executive Vice President and President, Epoxy and International, will retire from Olin effective April 30, 2022, or an earlier mutually agreeable date, according to Street Insider.

Mr. Dawson will remain with Olin as an Executive Vice President until his retirement, focusing on business leadership transition activities and strategic business projects.

Mr. Damian Gumpel, Olin's current Vice President and President, Chlor Alkali Products and Vinyls will become its Vice President and President, Epoxy and Corporate Strategy, effective November 29, 2021. Damian will lead Olin's Epoxy and International operations, as well as Olin's Corporate Strategy activities, including mergers and acquisitions. Mr. Gumpel earned a Bachelor of Science degree in Chemical Engineering from the University of Texas - Austin and a Masters of Business Administration with Honors from the University of Chicago Booth School of Business.

Olin further announced that it has hired Patrick M. Schumacher to serve as Vice President and President, Chlor Alkali Products and Vinyls, and Dana C. O'Brien to serve as Senior Vice President, General Counsel and Secretary, both effective November 29, 2021.

Patrick Schumacher most recently served as Senior Vice President for Prince Corporation where he led the sales organization and global mergers and acquisitions activities. Prior to his time at Prince Corporation, Mr. Schumacher worked at Celanese Corporation in various leadership positions. While at Celanese, he was a Senior Vice President of multiple business areas from 2018 to 2020, Vice President, Emulsion Polymers in 2018, and Vice President, Business and Strategy Development from 2014 to 2018. Prior to joining Celanese, Mr. Schumacher was Managing Director, Head of Chemicals M&A Practice at Blackstone Group, Senior Vice President at UBS Investment Bank, an Associate at Lehman Brothers and an Associate at Valuemetrics. Mr. Schumacher earned a Bachelor of Business Administration degree in Finance from the University of Wisconsin and Master of Science in Finance degree from Boston College.

Dana O'Brien was most recently Senior Vice President, General Counsel and Chief Ethics & Compliance Officer at The Brink's Company. Prior to her time at The Brinks' Company, Ms. O'Brien was Senior Vice President, General Counsel and Corporate Secretary at CenterPoint Energy from 2014 to 2019, Chief Legal Officer, Chief Compliance Officer at CEVA Logistics from 2007 to 2014, General Counsel, Chief Compliance Officer and Secretary at EGL, Inc. from 2005 to 2007, and held various legal roles at Quanta Services, Inc. from 1999 to 2005. Prior to transitioning to an in-house setting, Ms. O'Brien was an associate at Weil, Gotshal & Manges and a briefing attorney with the Supreme Court of Texas. Ms. O'Brien earned a Bachelor of Arts degree from Trinity University and her Juris Doctorate degree from the University of Texas - Austin.

As MRC reported previously, Olin Corporation has recently announced that it plans to permanently shut down the remaining diaphragm-grade chlor-alkali capacity at its McIntosh, Alabama facility, by the end of third quarter 2022. The closure of approximately 200,000 electrochemical unit (ECU) tons is in addition to the 200,000 ECU tons shut down at McIntosh in first quarter 2021.

We remind that in July 2021, Olin Corporation entered into an agreement with ASHTA Chemicals, Inc. to purchase and sell the chlorine produced at ASHTA's Ashtabula, OH facility. Existing contracts will be honored for chlorine customers of both companies.

Olin Corporation is a leading vertically-integrated global manufacturer and distributor of chemical products and a leading US manufacturer of ammunition. The chemical products produced include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach, and hydrochloric acid.