COVID-19 - News digest as of 28.12.2021

1. Crude ol prices rise over 2% on hopes Omicron to have limited impact on global demand

MOSCOW (MRC) -- Oil prices rose more than 2% on Monday to the highest level since late November on hopes that the Omicron coronavirus variant will have a limited impact on global demand in 2022, even as surging cases caused flight cancellations, reported Reuters. Global benchmark Brent crude rose USD2.46, or 3.2%, to settle at USD78.60 a barrel. US West Texas Intermediate (WTI) crude rose USD1.78, or 2.4%, to settle at USD75.57 a barrel. The US market was closed on Friday for a holiday. Both benchmarks rose on Monday to the highest since Nov. 26. On that day, oil plunged by more than 10% when reports of a new variant first appeared. The benchmarks gained last week after early data suggested that Omicron could cause a milder level of illness. “Though Omicron is spreading faster than any COVID-19 variant yet, a relatively relieving news is that most people infected with Omicron are showing mild symptoms, at least so far,” said Leona Liu, analyst at Singapore-based DailyFX.

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Petrobras to sell its stakes in 11 onshore fields in Brazil to Carmo Energy

Petrobras to sell its stakes in 11 onshore fields in Brazil to Carmo Energy

MOSCOW (MRC) -- Brazilian state-run company Petrobras has signed a deal with Carmo Energy to sell its stakes in 11 producing fields located in Polo Carmopolis area for USD1.1bn, according to OGV.

Located in different municipalities in the state of Sergipe, the onshore production concessions are jointly called Carmopolis Cluster. The concessions include integrated facilities with an access to oil and natural gas processing, flow, storage and transportation infrastructure.

Under the terms of the agreement, Carmo Energy will pay USD275m as down payment and a further USD550m at the closing of the transaction. The company will have to pay the remaining USD275m to Petrobras, one year upon the closing the deal.

Petrobras stated: “This operation is aligned with the portfolio management strategy and the improved allocation of the company’s capital, aiming to maximize value and greater return to society.

“Petrobras is increasingly concentrating its resources on deep and ultra-deep water assets, where it has shown a great competitive edge over the years, producing better quality oil and with lower greenhouse gas emissions.”

As MRC reported before, Brazil’s state-controlled oil producer has taken a step closer to selling its stake in the Braskem petrochemicals business after the board approved a share offering. Rio de Janeiro-based Petrobras can sell up to 100% of its preferred Braskem shares in a follow-on offering, it said in a filing earlier this month.

We 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 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
MRC

PVC imports into Russia increased by 35% in January-November, exports down by 8%

MOSCOW (MRC) -- Imports of suspension polyvinyl chloride (SPVC) into Russia totalled about 59,600 tonnes in the first eleven months of 2021, up by 35% year on year. At the same time, exports decreased by 8%, according to MRC's DataScope report.

Last month's SPVC imports to Russia dropped to 3,200 tonnes from 6,200 tonnes in October. The main decrease in supplies accounted on Chinese manufacturers due to restrictions on cargo transportation on the border with Kazakhstan.

Total PVC imports in the country were 59,600 tonnes in January-November 2021, compared with 44,200 tonnes year on year, the share of producers from China was 87%.
After the May surge in export sales, in the following months, Russian producers gradually began to reduce their exports of suspension polyvinyl chloride.

8,500 tonnes were shipped to foreign markets in November (excluding deliveries to the countries of the Customs Union) versus 12,500 tonnes a month earlier. Overall exports were 168,900 tonnes in January-November 2021 versus 183,300 tonnes a year earlier.


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Crude ol prices rise over 2% on hopes Omicron to have limited impact on global demand

Crude ol prices rise over 2% on hopes Omicron to have limited impact on global demand

MOSCOW (MRC) -- Oil prices rose more than 2% on Monday to the highest level since late November on hopes that the Omicron coronavirus variant will have a limited impact on global demand in 2022, even as surging cases caused flight cancellations, reported Reuters.

Global benchmark Brent crude rose USD2.46, or 3.2%, to settle at USD78.60 a barrel. US West Texas Intermediate (WTI) crude rose USD1.78, or 2.4%, to settle at USD75.57 a barrel. The US market was closed on Friday for a holiday.

Both benchmarks rose on Monday to the highest since Nov. 26. On that day, oil plunged by more than 10% when reports of a new variant first appeared. The benchmarks gained last week after early data suggested that Omicron could cause a milder level of illness.

“Though Omicron is spreading faster than any COVID-19 variant yet, a relatively relieving news is that most people infected with Omicron are showing mild symptoms, at least so far,” said Leona Liu, analyst at Singapore-based DailyFX.

Britain’s government will not introduce new COVID-19 restrictions for England before the end of 2021, its health minister, Sajid Javid, said on Monday.

More than 1,300 flights were cancelled by US airlines on Sunday as COVID-19 reduced the number of available crews while several cruise ships had to cancel stops.

“The disruption to goods and services from isolating workers, notably air travel, seems to be the main fallout so far,” Jeffrey Halley, analyst at brokerage OANDA, said of rising Omicron cases. “That is only likely to cause short-term nerves, with the global recovery story for 2022 still on track.”

Oil prices have risen over 50% this year, supported by recovering demand and supply cuts by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+.

Talks resume on Monday between world powers and Iran on reviving Tehran’s 2015 nuclear deal. Iran said oil exports were the focus of the talks, which so far appear to have made little progress on boosting Iran’s shipments.

As MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world's third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.
MRC

CenterOak Partners sells Vivify to Gryphon Investors

CenterOak Partners sells Vivify to Gryphon Investors

MOSCOW (MRC) -- Gryphon Investors, a leading middle-market private equity firm, announced that it has acquired Vivify Specialty Ingredients in partnership with the Company's current family owner Aakash Shah, who will remain on the Board of Directors, and Vivify management, said the company.

Vivify is a leading provider of specialty organic colorants, functional ingredients, and additives across multiple consumer and industrial end markets. This represents the third platform investment closed by Gryphon's Heritage Fund, a small-cap fund offering launched by Gryphon in 2020. Financial terms of the transaction were not disclosed.

Based in Glendale Heights, IL, Vivify is a leading provider of specialty chemicals for colorant and related specialty applications in the personal care & cosmetics, food & beverage, packaging, plastics, coatings, and agriculture industries. Specializing in organic pigments, dyes, liquid colorants, slip additives, specialty resins, and specialty food ingredients, the Company distributes products that are manufactured both domestically and internationally and sold in more than 50 countries. Through a technical, high-touch salesforce, innovative lab and regulatory support capabilities, and the ability to support short turnaround times, the Company supports customer-specific solutions focused on product performance and customized applications. CEO Devlin Riley and other members of the management team will continue to lead the Company.

Keith Stimson, Deal Partner and Head of the Heritage Fund Team at Gryphon, said, "Gryphon's Heritage Fund leverages our firm's sector initiative strategy and deep pool of relevant operating resources, and focuses on partnering with market leaders with sustainable differentiation. We believe Vivify is an exceptional player in the attractive colorant and ingredient markets, and we see a variety of opportunities for additional investments to accelerate growth, including add-on acquisitions."

Craig Nikrant, Gryphon Operating Partner on the Heritage Fund Team, said, "Vivify has 40 years of experience addressing customer needs through innovative formulations, robust laboratory and regulatory support capabilities, and high-quality products. Its outstanding research has developed standardized methods to assure consistency and meet customers' quality, safety, and environmental requirements. We look forward to working with Devlin and his team as we invest in this business and enable its continued growth."

Gryphon was advised by legal counsel Kirkland & Ellis and financial advisor Guggenheim Securities, LLC. Keybanc Capital Markets served as the exclusive financial advisor to Vivify, and Gibson Dunn served as legal counsel.

Vivify is a leading provider of specialty colorants and functional ingredients to customers across multiple consumer and industrial end markets. Through diverse sourcing capabilities, advanced lab expertise, and a technical, high-touch salesforce, Vivify delivers customer-specific solutions focused on product performance and customized applications.

Based in San Francisco, Gryphon Investors is a leading private equity firm focused on profitably growing and competitively enhancing middle-market companies in partnership with experienced management. The firm has managed over USD7.5 billion of equity investments and capital since 1997. Gryphon targets making equity investments of USD50 million to USD300 million in portfolio companies with enterprise values ranging from approximately USD100 million to USD600 million. Gryphon prioritizes investment opportunities where it can form strong partnerships with owners and executives to build leading companies, utilizing Gryphon's capital, specialized professional resources, and operational expertise.

In May 2021, Aakash Chemicals & Dye-Stuffs, a Glendale Heights, Ill.-based value-added supplier of colorants and specialty ingredients, said it rebranded as Vivify Specialty Ingredients.

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 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.

Vivify also said its subsidiary Calico Food Ingredients, a supplier of colors, flavors, vitamins and coatings, simplified its brand to Calico while unveiling a new logo and website. The new website, highlights Calico’s range of more than 1,000 custom product formulations, including powder blends, liquids and oil dispersions, as well as formulation support.
MRC