BP beefs up hydrogen team in bet on fuel's future

BP beefs up hydrogen team in bet on fuel's future

MOSCOW (MRC) -- BP is beefing up its hydrogen management team as the energy company prepares to accelerate investments in the low-carbon fuel which it believes will play a key role in the world's shift away from fossil fuels, said Reuters.

The revamp of the hydrogen team is the first clear sign of changes Anja-Isabel Dotzenrath, a former head of RWE Renewables, has made since becoming BP's head of natural gas and renewables in March. It also comes as BP announces it has agreed to buy a 40.5% stake and become operator of an Australian renewable energy project that could become one of the world's biggest producers of green hydrogen.

BP's new hydrogen organisation will be led by Felipe Arbelaez, a veteran BP executive who has helped shape its renewables strategy since Chief Executive Bernard Looney took office in 2020, according to an internal memo seen by Reuters. The business will include six regional team leaders as well as two separate teams dedicated to technical developments and integration of hydrogen in BP's operations, the memo said.

As per MRC, British energy giant BP has agreed to sell its remaining 50% stake in the Sunrise oil sands project in northern Alberta, Canada, to Cenovus Energy. The deal’s total consideration includes a USD466.9m (CD600m) cash payment and a conditional payment with a USD466.9m (CD600m) maximum aggregate value that expires after a two-year period. As part of the deal, Cenovus will sell its 35% stake in the undeveloped Bay du Nord project offshore Newfoundland and Labrador, in Eastern Canada, to BP.
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OMV Schwechat oil refinery at 20% capacity after accident

OMV Schwechat oil refinery at 20% capacity after accident

MOSCOW (MRC) -- OMV's 200,000 bpd Schwechat oil refinery is running at 20% capacity with repairs to fix a crude distillation unit set to take several weeks at least, OMV Chief Executive Alfred Stern told Reuters.

On June 3, two people were injured when a part at a crude oil distillation unit exploded at the refinery towards the end of a planned turnaround that has put a stop to output at the site since April 19. It was the biggest incident at a refinery OMV has had to deal with and requires dozens of people to fix the 40-meter high unit at the refinery next to Vienna Airport, Stern said.

OMV will learn over the next couple of weeks how long repairs might take, but was expecting the outage to last at least "several weeks", he added. "The main distillation unit is a big part (of the refinery), we also have a smaller one. The rest of the refinery has resumed operations but at a significantly smaller capacity - at around 20% of the overall production capacity," Stern said in an interview.

The outage happened while global refinery margins and prices at petrol pumps across the world are at record levels on the back of soaring post-pandemic demand and shrinking refining capacity. On Wednesday, U.S. President Joe Biden even demanded oil companies explain why they aren't putting more gasoline on the market. OMV has been using its own stockpiles and public reserves to cover the shortfall to its customers.

But it will also have to buy additional refined products such as diesel and jet fuel from European countries like Germany or Romania, and the Middle East, for example Abu Dhabi, via the ports of Trieste or Koper, Stern added. The additional cost to OMV will be buffered partially by its insurance coverage.

Stern said some airlines are now filling up before they return to Austria "to reduce demand and relax the situation", whereas before the accident they would have waited until they arrive at Vienna Airport. Stern said he expected OMV's refinery margins to be higher than last year - alongside refinery margins across the globe amid high demand and tight fuel supply - high energy costs and more expensive crude oil were eating into some of those profits.

As per MRC, OMV reported utilization of 83% at its European refineries in H1, 2021, down by 3% on the year yet "relatively resilient in light of the COVID-19 impact". It expects the utilization rates at its European refineries to remain at the 2020 level this year. Last year its refineries reported 86% utilization. The company's refineries in Europe ran at 85% utilization in Q2, up from 81% in the year-ago quarter.

As MRC wrote before, OMV is investing EUR40 million (USD48 million) to expand and modernize a steam cracker and associated units at its refining and petrochemicals complex at Burghausen, Germany. The upgrade will increase the site’s ethylene and propylene production capacity by 50,000 metric tons/year. Following a planned turnaround of the refinery, the revamped cracker and petchem units are expected to start operations in the third quarter of 2022. Initial groundwork is already underway ahead of the upgrade.

OMV produces and markets oil and gas, innovative energy and high-end petrochemical solutions – in a responsible way. With Group sales of EUR 23 bn and a workforce of around 20,000 employees in 2019, OMV Aktiengesellschaft is one of Austria’s largest listed industrial companies.
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Clariant Q1 sales, earnings up sharply

Clariant Q1 sales, earnings up sharply

MOSCOW (MRC) -- Clariant’s first-quarter sales and earnings jumped, year on year, because of 16% higher selling prices and 14% higher volumes, said the company.

Sales came in at Swiss francs (Swfr) 1.26bn (USD1.26bn), up 25% year on year, while earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at Swfr220m. The company delayed the publication of its Q1 results following an investigation into its accounting, now concluded.

The company's 16% increase in selling prices “in part addressed continued cost” inflation as energy and raw materials prices remained high during the first quarter. “Catalysis sales decreased by a slight 1% in local currency [Swiss francs], despite significantly higher Specialty Catalysts sales, which could not entirely counterbalance the weakness in parts of Petrochemicals and Syngas,” said Clariant. “Natural Resources sales increased by a resounding 31% in local currency with growth attributable to all three Business Units, especially Additives."

For the second quarter, the company said sales would decline, compared to the first quarter, due to seasonal impacts in key sectors such aviation and refinery. Year on year, however, sales are still expected to rise.

It added that in 2022, economic growth would be likely impacted by geopolitical conflicts, its suspension of business with Russia, and the resurgence of COVID-19 in China. “Clariant expects the high inflationary environment with regard to raw material, energy, and logistics cost as well as supply chain challenges to persist in the second half of 2022,” it concluded.

Chemicals equity analysts at Baader Bank said Clariant’s Q1 results were more positive than expected, with the company managing to keep its selling margins high while other companies in the petrochemicals space had suffered more from high raw material prices.

Lummus Technology announced it and its catalyst partner Clariant have been awarded a major contract by Fujian Meide to supply CATOFIN technology and catalysts for a new, world-scale propane dehydrogenation (PDH) unit in Fuzhou, China. Already operating one PDH unit at its Fuzhou petrochemical complex, Fujian Meide is now building one of the largest PDH units in the world and has selected the CATOFIN process and catalysts for the project's second phase. The new unit will produce 900,000 mtons of propylene annually and is scheduled to commence operation in 2023.
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Biden blasts oil refiners for record high gasoline prices, profits

Biden blasts oil refiners for record high gasoline prices, profits

MOSCOW (MRC) -- U.S. President Joe Biden demanded oil refining companies explain why they are not putting more gasoline on the market, sharply escalating his rhetoric against industry as he faces pressure over rising prices, said Hydrocarbonprocessing.

Biden wrote to executives from Marathon Petroleum Corp , Valero Energy Corp and Exxon Mobil Corp and complained they had cut back on oil refining to pad their profits, according to a copy of the letter seen by Reuters. The letter is also being sent to Phillips 66, Chevron Corp, BP and Shell, a White House official, who declined to be identified, told Reuters.

"At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable," Biden wrote, adding the lack of refining was driving gas prices up faster than oil prices. U.S. energy companies are enjoying bumper profits as the Russian invasion of Ukraine has added to a supply squeeze which has driven crude oil prices above $100 a barrel, and as fuel demand has remained robust, despite record high gasoline prices.

U.S. refining capacity peaked in April 2020 at just under 19 MMbpd, as refiners shut several unprofitable facilities during the coronavirus pandemic. As of March, refining capacity was 17.9 MMbpd, but there have been other closures announced since. U.S. refiners are running at near-peak levels to process fuel - currently at 94% of capacity - and say there is little they can do to satisfy Biden's demands.

“Our refineries are running full out,” Bruce Niemeyer, corporate vice president of strategy and sustainability at Chevron, told Reuters on the sidelines of a New York energy transition conference on Tuesday, before Biden’s letter was made public.

Biden said the industry's lack of action is blunting the administration's attempts to offset the impact of oil-rich Russia's invasion of Ukraine, such as releases from the nation's oil reserves and adding more cheaper ethanol to gasoline. On Friday, the president accused the U.S. oil industry, and Exxon Mobil Corp XOM.N in particular, of capitalizing on a supply shortage to fatten profits after a report showed.

As per MRC, The White House is considering waiving U.S. gasoline environmental rules aimed at reducing summertime smog, hoping the waiver will combat rising pump prices, according to three sources involved in the discussions. The Biden administration is considering waiving U.S. gasoline environmental rules aimed at reducing summertime smog, hoping the waiver will combat rising pump prices, according to three sources involved in the discussions.
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Aramco Trading plans to absorb Motiva Trading ahead of possible IPO

Aramco Trading plans to absorb Motiva Trading ahead of possible IPO

MOSCOW (MRC) -- Saudi Aramco is planning to merge two energy trading units, people familiar with the matter said, with Aramco Trading Co (ATC) due to absorb Motiva Trading ahead of a potential initial public offering of the business, said Reuters.

The move to combine the businesses is expected to give potential investors a better sense of the scale of Aramco's trading and would also allow the state oil producer to simplify financial reporting and cut duplication. The restructuring is likely to be announced before the end of the year, one of the two people familiar with the matter said. The merger would come four years after Shell Plc exited Motiva Enterprises, leaving Aramco in control of Motiva Trading and Motiva's refinery, the largest in the United States.

Saudi Aramco and other Middle East producers accelerated their trading efforts as a way to boost incomes after the 2014 collapse in oil prices. They have slowly gained market share from oil majors and Swiss commodity merchants, using access to their own feedstocks and strength in refining to compete aggressively.

Plans for the combination come amid reports Aramco plans an initial public offering of its trading business and as European countries move away from buying Russian crude over its invasion of Ukraine. The two people familiar with the situation, who are not authorized to speak to reporters, did not confirm plans for an IPO.

Motiva and Saudi Aramco spokespeople declined to comment, while ATC did not immediately respond to requests for a comment. Saudi Arabia's state oil monopoly, Saudi Aramco, is the world's top oil producer. It plans to increase output capacity to 13.4 MMbpd by 2027 from 12.4 MM currently and from May's actual 10.5 MMbpd.

Aramco's share of U.S. oil imports has declined in recent decades as it turned more to Asia and as U.S. shale output grew. However, refiner Motiva remains an important outlet for Saudi crude and its entry point into the world's biggest oil consuming market.

It was not immediately clear which of the two businesses' executives would be put in charge of the merged operation. Aramco's listing plans are part of a wider Saudi 2030 vision which encourages extracting maximum value from traditional fossil fuel industries to help diversify the economy.

ATC was set up in Dhahran in 2012 and has offices in London, Singapore and the United Arab Emirates. It began by marketing refined products and petrochemicals and later expanded into crude trading that fed ventures such as Motiva and S-Oil in South Korea.

ATC is a top blender in the Arabian Gulf and India and the largest charterer of refined products in the Middle East, according to its LinkedIn profile. The bulk of ATC's traded crude belongs to third parties – Kuwaiti and UAE crudes with some Guyana and indirectly, Iraqi Basra.

Motiva Trading trades crude oil, feedstocks, refined products and bio-fuels, managing transactions covering 2.8 MMbpd, according to its website. Competition between Saudi Arabia and Russia in European and Asian markets has been heating up in recent years even as the two major producers cooperated under the OPEC+ production-limiting deal.

Since the start of the year, ATC and its parent company have signed at least two crude supply deals in northern Europe. ATC agreed to exclusively supply Klesch Group's Kalundborg refinery in Denmark and in Poland, Aramco bought refining assets and agreed to supply the country's top refiner.

As per MRC, Saudi Aramco posted a record first-quarter net profit of riyal (SR) 148bn (USD39.5bn), up by about 82% year on year, thanks for strong crude oil prices and sales volumes, as well as improved downstream margins.
The energy giant’s total hydrocarbon production in the first three months of the year stood at 13m boe/day (barrels of oil equivalent per day), Saudi Aramco said in a statement on 15 May. Capital expenditure in January-March 2022 was USD7.6bn, it said.

As per MRC, Aramco is exploring further collaboration with Thailand’s national oil company PTT, as it expands its downstream presence in Asia. The two companies signed a memorandum of understanding at a ceremony in Bangkok on May 11. The companies aim to strengthen cooperation across crude oil sourcing and the marketing of refining and petrochemical products and LNG. Other potential areas of activity include blue and green hydrogen and various clean energy initiatives.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
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