TotalEnergies quits Russia Kharyaga oil project in wake of sanctions

TotalEnergies has agreed to transfer its remaining stake in Russia's Kharyaga oil field to the country's state producer Zarubezhneft, the French company told Reuters, in its first major divestment in Russia in the wake of Western sanctions, said Reuters.

"TotalEnergies has agreed to transfer to Zarubezhneft the remaining 20% interest that the company held in the Kharyaga oil field," a spokesperson for TotalEnergies told the news agency on Wednesday. "This transaction is subject to the approval of the Russian authorities," the spokesperson said, without elaborating on the terms of the stake transfer.

The Kharyaga oil project is operated under a product sharing agreement. As the part of the agreement, TotalEnergies received some 100,000 tons of oil for exports as every month. According to two sources in Russian oil trading, TotalEnergies did not act as the seller of that volume in June, but Zarubezhneft did instead.

TotalEnergies had been a part of the Kharyaga oil project for over 20 years along with Norway's Equinor, which quit earlier this year. TotalEnergies said in March that it would not renew its Russian gasoil and crude oil supply contracts for its German refinery, but would source gasoil from Saudi Arabia and crude via Poland instead.

The French oil major, which has faced criticism for stopping short of joining rivals Shell and BP in divesting oil and gas assets in Russia, still has minority stakes in a number of non-state-owned Russian companies: Novatek (19.4%), Yamal LNG (20%), Arctic LNG 2 (10%) and TerNefteGaz (49%). It has said it could exit Russia if it had to because of sanctions, which have already caused it to book a USD4.1 billion impairment.

As per MRC, TotalEnergies Marine Fuels and Mitsui O.S.K. Lines, Ltd. (MOL) have successfully completed the first biofuel bunker operation for a vehicle carrier in Singapore. The local operation was made possible with support from the Maritime and Port Authority of Singapore. The MOL-operated car and truck carrier, Heroic Ace, was refueled by TotalEnergies-supplied biofuel on 11th June 2022 via ship-to-ship transfer, while the carrier performed cargo operations simultaneously. The biofuel has been consumed during the carrier’s voyage to Jebel Ali, in the United Arab Emirates.
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Wall Street analysts sharply increased their ExxonMobil Corp second-quarter profit estimates after the largest U.S. oil producer projected it could almost double its first-quarter earnings, said Hydrocarbonprocessing.

Exxon's preview, released on Friday, signaled strong results ahead by oil companies and refiners and brought renewed criticism from the White House and fresh calls for a windfall profit tax by U.S. lawmakers under pressure from voters feeling pain at the pump.

The White House repeated its call for oil companies to "use their record profits to expand refining capacity, increase supply, and most urgently reduce costs for the American people." "This would be one of the strongest quarters in Exxon's history," said Credit Suisse analyst Manav Gupta in a note. The disclosures indicated an operating profit of about USD16.8 B, a historic quarterly peak. Official results are due July 29.

Analysts raised their quarterly profit outlook on Exxon to about USD4.02 per share from USD2.99 a share prior to the Friday securities filing. The filing showed Exxon expects oil and gas operating profits of more than USD10 billion, $4.5 B from producing gasoline and diesel, and about USD2 billion from chemicals and motor oils. Exxon, like other U.S. oil companies, has been plowing higher profits into debt reduction and plans to buy back up to USD30 B of its shares.

At the same time, spokesperson Casey Norton said Exxon was "investing more than any other U.S. company to grow oil and natural gas production." Its U.S. shale output will rise by 25% this year and oil processing at its biggest Texas refinery will grow 250,000 bpd in the first half of next year, he said.

Exxon shares fell 3% to USD84.81 on Tuesday as benchmark oil prices slid USD10.73 a barrel on worries a possible global recession could hurt demand. The largest refiner among the U.S. oil majors, Exxon will be a key beneficiary of a tight refined products market, analysts said. "We think this could drive material earnings upgrades," said Biraj Borkhataria, an oil analyst at RBC Capital Markets.

Exxon borrowed heavily during the pandemic and posted a historic USD22.4 B loss in 2020 to finance future production and pay dividends to shareholders. "High energy prices are largely a result of underinvestment by many in the energy industry over the last several years and especially during the pandemic," said Exxon's Norton.

As per MRC, ExxonMobil, Grieg Edge, North Ammonia, and GreenH have signed a memorandum of understanding to study potential production and distribution of green hydrogen and ammonia for lower-emission marine fuels at ExxonMobil’s Slagen terminal in Norway.

As per MRC, ExxonMobil expects to add approximately 20,000 bpd of light, heavy and extra-heavy lubricant base stocks when upgrades at its Singapore integrated refining and petrochemical complex are complete in 2025.
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The Wacker Group is concentrating its biotechnology research activities in Munich. The company is investing a double-digit million-euro sum in the construction of a Biotechnology Center, which is scheduled to be operational in 2024, said the company.

This investment will strengthen Wacker biotechnology business, said the company. “The Wacker Biotechnology Center will allow us to concentrate and intensify our research activities in the area of biotechnology. The additional capacity we will create here will accelerate the growth of our life-sciences division,” Wacker CEO Christian Hartel said about the construction project. As part of its strategy for growth, the company is planning to significantly increase investment in the biotechnology sector in the coming years. The product portfolio is to expand through innovation, partnerships and acquisitions. By the year 2030, Wacker BIOSOLUTIONS plans to contribute around €1 billion to Group sales. The construction of the Wacker Biotechnology Center, in which the company is investing a double-digit million-euro amount, will aid this strategy.

The Biotechnology Center will be built in Munich, at the location of the Consortium fur elektrochemische Industrie (WACKER’s corporate research facility). Wacker has been conducting fundamental research here for over 100 years and in the field of biotechnology since the 1980s. The growth of biotech business has stretched the capacity available for research activities to its limits. The Biotechnology Center, with space for around 90 employees, is intended to alleviate this. The foundation stone was laid today for the building, whose commissioning is planned for 2024.

Fundamental research in biotechnology has been conducted at the WACKER Consortium in Munich since the 1980s. The construction of the Biotechnology Center will expand research capacity in this field. (Photo: WACKER)
The plans include laboratory and pilot plant areas across approximately 2,000 square meters, spread over three floors. The research here will mainly concentrate on the manufacturing process of biopharmaceuticals, especially in the area of advanced medicines, as well as the fermentation-based manufacture of ingredients for foods and food supplements. The efficiency of the research work will be improved through the consolidation of biotechnological R&D under one roof.

There will also be space available in the Wacker Biotechnology Center for staff from the BIOSOLUTIONS division and project groups. Together with customers and development partners, the Biotechnology Center will bridge the gap between R&D and practice. Is there market demand? With which partners can the specified goals be reached? Does the cost-benefit ratio add up? Various criteria will be used to decide which projects are promoted so that ultimately new products and solutions are developed for customers.

As per MRC, Wacker Chemie AG is accelerating the expansion of its production capacities. Investment projects to this end are either in the planning stage or are nearing completion. Significant capacity expansions for liquid silicone rubber (LSR) will be available in the second half of this year, and will come into full effect in 2023. Increasing production volumes for high con¬sistency rubber (HCR) are also scheduled. With expansion measures at several other sites, Wacker will gradually in¬crease its capacities for HCR and LSR grades significantly in the next few years. Over EUR100 million have been earmarked for this capacity boost.

Wacker Polymers is a leading producer of state-of-the-art binders and polymeric additives based on polyvinyl acetate and vinyl acetate copolymers and terpolymers. These take the form of dispersible polymer powders, dispersions, solid resins, and solutions. They are used in construction chemicals, paints and surface coatings, adhesives, sealants, carpet applications and nonwovens, as well as in fiber composites and polymeric materials based on renewable resources.

Wacker Polymers operates production sites in Germany, China, South Korea and the USA. The business division also maintains a global sales organization and runs technical centers in all key regions.
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U.S. manufacturing activity slowed more than expected in June, with a measure of new orders contracting for the first time in two years, signs that the economy was cooling amid aggressive monetary policy tightening by the Federal Reserve, said Reuters.

"The June Manufacturing PMI registered 53 percent, down 3.1 percentage points from the reading of 56.1 percent in May. This figure indicates expansion in the overall economy for the 25th month in a row after a contraction in April and May 2020. This is the lowest Manufacturing PMI® reading since June 2020, when it registered 52.4 percent. The New Orders Index reading of 49.2 percent is 5.9 percentage points lower than the 55.1 percent recorded in May. The Production Index reading of 54.9 percent is a 0.7-percentage point increase compared to May's figure of 54.2 percent. The Prices Index registered 78.5 percent, down 3.7 percentage points compared to the May figure of 82.2 percent. The Backlog of Orders Index registered 53.2 percent, 5.5 percentage points below the May reading of 58.7 percent. The Employment Index contracted for a second straight month at 47.3 percent, 2.3 percentage points lower than the 49.6 percent recorded in May. The Supplier Deliveries Index reading of 57.3 percent is 8.4 percentage points lower than the May figure of 65.7 percent. The Inventories Index registered 56 percent, 0.1 percentage point higher than the May reading of 55.9 percent. The New Export Orders Index reading of 50.7 percent is down 2.2 percentage points compared to May's figure of 52.9 percent. The Imports Index climbed into expansion territory, up 2 percentage points to 50.7 percent from 48.7 percent in May."

"All of the six biggest manufacturing industries — Computer & Electronic Products; Machinery; Transportation Equipment; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Chemical Products — registered moderate-to-strong growth in June.

We remind, analysts expected Manufacturing PMI to be flat from its ugly preliminary print of 52.4 and saw ISM Manufacturing dropping to 54.5 from 56.1 - both still comfortably in expansion (above 50) despite the collapse in US macro data relative to expectations. BUT... things improved intra-month for Manufacturing PMI - rising to 52.7 final from 52.4 preliminary - but still notably below April's 57.0 print. ISM Manufacturing was worse, falling to 53.0 from 56.1 (below the 54.5 expectations).
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China's Yantai Port Group started on Monday pumping oil into a newly expanded crude oil pipeline that connects the port of Yantai to a group of independent refineries in the country's refining hub Shandong, said Reuters.

The 370-kilometer (229.91 mile) pipeline, with an annual transport capacity of 20 MMt (400,000 barrels per day), is solely invested by Yantai Port Group, a unit of provincial government-backed Shandong Port Group.

The new line, linking Yantai with city of Weifang, adds to an existing parallel 650-km pipeline connecting Yantai with Zibo, bringing total transport capacity to 40 MMt annually, or 800,000 bpd.

About ten independent refineries are linked to the two pipelines, according to Shandong-based commodities consultancy JLC. As part of commodities logistics operations, Yantai Port also operates a 300,000-tonnage crude oil terminal and a 3.6 MMcm3 (23 million barrels) crude oil tank farm. Yantai is also China's largest port for fertiliser and bauxite, according to the group's website.

As per MRC, China's Ministry of Commerce has released 52.56 million mt (385.26 million barrels) of crude import quotas to 35 qualifying independent and non-major state-owned refineries in the second batch for 2022. However, the higher second batch this year brought up total crude import quotas for 2022 by only 4.9% to 159.96 million mt as of June 28, from 152.44 million mt last year. The independent refinery sources said they were less anxious about this second batch than the one last year, because most of them had sufficient quotas in hand amid low throughput during the previous months.
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