ConocoPhillips profit powered by crude price rally driven by global economic recovery

MOSCOW (MRC) -- ConocoPhillips has posted a quarterly profit that trounced market expectations as supply bottlenecks and a global economic recovery helped drive a rebound in crude prices, according to Hydrocarbonprocessing.

Oil prices have gained nearly 63% since the start of 2021, with global crude benchmark Brent rising above USD86 a bbl to its highest level in about three yr after the pandemic depressed fuel demand in 2020.

This year's strong demand offers "some pretty constructive tailwinds for the industry," Chief Executive Ryan Lance said on a conference call.

ConocoPhillips said it was still evaluating production targets for next yr. It plans to keep the number of shale drilling rigs "steady" until the close of its USD9.5 B purchase of Royal Dutch Shell's Permian assets, expected in the current quarter.

The company forecast fourth-quarter production between 1.53 MMbpd and 1.57 MMbpd, excluding Libya and any impact from the Shell deal. Its production, excluding Libya, rose 41.36% to 1.51 MMbpd in the third quarter, while the total average realized price surged nearly 84%. Adjusted earnings of USD1.77 per share beat expectations of USD1.51 per share, according to Refinitiv data.

Senior Vice President Dominic Macklon said ConocoPhillips does not believe in setting emissions reduction targets that include the use of the company's fuels, as they do not address consumer demand and would shift supply to less accountable producers and jurisdictions.

Unlike their European counterparts, few US producers have set so-called Scope 3 targets that include emissions from customers using the fuel they have purchased. ConocoPhillips has, however, outlined net-zero 2050 goals for Scope 1 emissions that include its own operations and Scope 2 emissions, which account for the power generation to run its facilities.

As MRC informed before, last month, Libya's Government of National Unity approved the sale of US oil company Hess Corporation's stake in the giant Waha oil concessions to both TotalEnergies and ConocoPhillips.

We remind that TotalEnergies has recently inaugurated the extension of Synova in Normandy, the French leader in recycled polypropylene production. TotalEnergies is therefore doubling its mechanical recycling production capacity for recycled polymers, to meet growing demand for sustainable polymers from customers, such as Automotive Manufacturer (Auto OEM) and the construction industry.

According to MRC's ScanPlast report, PP shipments to the Russian market were 1,138,510 tonnes in the first nine months of 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 PP random copolymers decreased significantly.
MRC

MOSCOW (MRC) -- Fondazione Politecnico di Milano and Politecnico di Milano, together with Edison, Eni and Snam have created a platform to develop technologies linked to hydrogen, the new energy vector for decarbonisation., as per the company's press release.

A new university-company joint research platform set up to study and develop an energy vector capable of playing a decisive role in the achievement of global climate objectives, i.e. hydrogen.

Hydrogen JRP will promote innovative studies and research in several areas: the production of clean hydrogen, which includes green hydrogen and low carbon hydrogen; associated transport solutions and advanced storage systems; innovative electrochemical and thermal applications for domestic and industrial use and in transport systems; and the development of best practices in the design and construction of hydrogen transport and storage infrastructure.

The intention is to stimulate the creation of a hydrogen value chain in Italy, to encourage company competitiveness and the growth of new high-tech companies. Hydrogen JRP is open to all companies that want to experience research and development into hydrogen-associated products and services, with the support of Italy’s first technical university and its laboratories.

To increase its impact, Hydrogen JRP will establish a strategic advisory body, which will involve all the main institutional stakeholders, including at global level, in view of attracting interest and investment. Hydrogen JRP intends to take up the hydrogen challenge and build an ecosystem of innovation. Over the upcoming months, we will confirm JRP membership for companies interested in developing a hydrogen value chain. The platform enables the members themselves, depending on their membership level, to propose vertical research topics that encourage the advance of expertise and know-how within Italy’s energy industry.

Hydrogen can play a central role in addressing the current demand for progressive decarbonisation in many sectors. In order to pursue this prospect and promote the production and use of hydrogen, one of Italy’s aims is to support hydrogen research and development, and complete all the reforms and regulations necessary to its use, transport and distribution. In Europe’s hydrogen strategy, the share of green hydrogen in its energy mix is projected to increase up to 13-14% by 2050.

As MRC wrote earlier, Eni is evaluating conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this to at least five times by 2050, as part of its pledge to achieve complete carbon neutrality by 2050.

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 the first nine months of 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 PP random copolymers decreased significantly.

Eni, abbreviation of Ente Nazionale Idrocarburi, in full Eni SpA, Italian energy company operating primarily in petroleum, natural gas, and petrochemicals. Established in 1953, it is one of Europe's largest oil companies in terms of sales.
MRC

MOSCOW (MRC) -- Russian energy giant Rosneft backed Nayara Energy, earlier known as Essar Oil, has chalked out massive expansion plans for India which include setting up of a greenfield petrochemical complex and ramping up its existing refining capacity from 20 million tonnes per annum (mtpa) to 46 mtpa at Vadinar near Jamnagar in Gujarat, said the company.

The total envisaged investment for expansion, of which a major part is towards building a new petrochemical complex, is about Rs.1.5 lakh crore, they said. The expansion plans also include increasing its retail presence and additional investment at the captive port of Vadinar.

When contacted principal secretary to Gujarat chief minister, M K Das, confirmed the development. The company has recently received necessary environmental clearances for the expansion project and it aims to carry out the proposed expansion on the existing land spread over 2,275 hectares and does not require any additional land.

Nayara’s proposed refinery expansion will be focused on production of fuel products as well as petrochemical feedstock. The strong demand growth outlook will require capacity addition of nearly 224 MTPA refining capacity in India and this is likely to create considerable need of polypropylene, ethylene and other petrochemical capacity in India by 2025, Nayara has said in a presentation to the government. A senior official at Nayara Energy when contacted refused to comment on the development.

In August 2017, Petrol Complex Pte Ltd, a subsidiary of PJSC Rosneft Oil Company acquired 49.13% and Kesani Enterprises Company Ltd, a consortium led by Trafigura Group Pte Ltd and Russian private equity fund United Capital Partners, acquired another 49.13% from the Essar Group in what was then known as Essar Oil.

The proposed expansion shall take place in phases and is expected to be completed by 2024. The company has also made a proposal to Deendayal Port Trust, the maritime regulator for Vadinar port, for setting up a single-point mooring (SPM) and two product jetties for an investment of about? 450 crore, said a senior official at Deendayal Port Trust who did not wish to be named. The petrochemical complex includes setting up an ethylene cracker and associated units, aromatics, polyester intermediates, polymer units, phenol chain and speciality chemicals.

As per MRC, 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, according to Hydrocarbonprocessing with reference to Chief Executive Alois Virag's statement at APPEC 2021 conference. Nayara, part owned by Russian oil major Rosneft, cut rates at its Vadinar refinery in Gujarat state last year.

According to MRC's ScanPlast report, Russia's 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.
MRC

MOSCOW (MRC) -- The U.S. administration plans to propose in days the amount of biofuels oil refiners must blend into their fuel mix this year and next year, as it reaches out to lawmakers to discuss the move, said Hydrocarbonprocessing.

President Joe Biden's administration has delayed decisions on 2021 blending obligations by more than a year, and it missed a deadline to finalize 2022 obligations this week. The delays came as the COVID-19 pandemic hammered fuel demand and Democratic lawmakers focused on other legislation.

Officials for the Environmental Protection Agency (EPA), which administers the mandates, declined to comment on the timing. The oil and biofuel industries have called for the EPA to announce the proposals, saying delays have created uncertainty for the market.

After the news on Thursday, prices for renewable fuel (D6) credits, known as RINs, fell from USD1.08 each to USD1.06 each, traders said. Merchant oil refiners and the biofuel industry have battled over the requirements for years. Refiners say the mandates are too costly, while ethanol producers and corn farmers like the mandates as they have helped to create a multibillion gallon market for their products.

Reuters previously reported that the administration was considering big cuts to the blending requirements, a move that would anger the biofuel industry. The EPA would reduce blending mandates for 2020 and 2021 to about 17.1 B gallons and 18.6 B gallons, respectively, Reuters reported, compared to the 20.1 B gallons finalized for 2020 before the pandemic.

The agency would also set the level for 2022 at about 20.8 B gallons, Reuters reported. The EPA did not comment on those levels at the time of publication.

As per MRC, The European Union plans to capture five MM tons of CO2 from the atmosphere each year by 2030 through technologies, and create an EU system to certify carbon removals. The EU has committed to reach net zero emissions by 2050, eliminating the more than 3 B tons of CO2 equivalent it currently emits each year.

As MRC wrote before, deployment of carbon capture storage (CCS) in Indonesia by American energy giant ExxonMobil Corp could cost about USD500 mln. In November 2021, Pertamina and ExxonMobil signed a MoU during the COP26 summit to look at ways of using CCS in Southeast Asia's largest country. CCS facilities are likely to be implemented in two Indonesia oil and gas fields, namely the Gundih field in Cepu and the Sukowati field in Bojonegoro, in Central and East Java respectively.

MRC

MOSCOW (MRC) -- Brazil's powerful biofuel and farm lobbies are pushing the government to reverse a measure announced last week that maintained the minimum biofuel content level in diesel at 10% for all of 2022, reported Reuters.

"Lawmakers of the biodiesel caucus will act. As soon as the president learns of the repercussions of the measure, and he will certainly change his stance," Francisco Turra, board chairman of the Aprobio biofuels lobby, told Reuters in an interview on Wednesday.

A 10% mix represents a drop from the 13% requirement initially planned for 2021, and an even sharper fall from the 14% that was supposed to be adopted from March 2022, Turra said.

"There is a huge loss of the investments made and of jobs that would be generated," Turra said.

In September, Brazil's National Energy Policy Council cut the minimum biofuel content requirement to 10% from 13% previously, citing a rise in the price of soybeans, which represent some 75% of biodiesel content.

But lowering the biofuel mix in diesel is irrelevant to the its final price, the industry says.

As MRC informed previously, Brazilian President Jair Bolsonaro reiterated in late October, 2021, that he is considering the privatization of state-run oil company Petrobras, formally known as Petroleo Brasileiro SA, boosting its shares along with news of a fresh price hike in the domestic gasoline and diesel market.

We remind that in August 2021, Petrobras hired JPMorgan Chase & Co as an advisor to sell its stake in the petrochemical company Braskem SA.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

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 the first nine months of 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 PP random copolymers decreased significantly.
MRC