Production at Petrobras falls

Oil production at Brazil's Petrobras fell in the second quarter as asset divestments and increased work stoppages took their toll, while the company's refinery utilization rate hit a whopping 97%, said Hydrocarbonprocessing.

In a securities filing, Petroleo Brasileiro SA, as the state-run firm is formally known, said crude production came to 2.114 MMbpd, down 5.2% from the previous quarter and 5% from the same period a year ago. Including natural gas, the company produced 2.653 MM barrels of oil equivalent per day (boepd), down 5.1% in both quarterly and annual terms.

In comments accompanying the results, Petrobras attributed the decline to the sale of 10% of its Sepia and Atapu fields to a pair of Chinese state-run companies, China National Offshore Oil Corp and China National Offshore Development Corp. The company also completed a smaller divestment to Brazilian oil independent 3R Petroleo Oleo e Gas SA.

Second quarter production was also affected by an increase in maintenance stoppages, Petrobras said. The company characterized the production decline as in line with expectations, and said it was not revising its 2022 production guidance of roughly 2.6 MMbpd.

Two major platforms, the P-68 and the Carioca FPSO, continued to ramp up, while the Guanabara FPSO came online. Refinery utilization rates came in at 89%, up 2% in quarterly terms and 14% in annual terms. Its refineries were running nearly full tilt, at 97%, at the end of June.

Petrobras warned there would be a significant number of planned stoppages at its refineries in the second half of the year, particularly during the fourth quarter.

As per MRC, Petrobras’ PBR eligibility committee recently stated that two of the Brazilian government's seven nominees for a refurbished board at the company did not meet the requirements to hold the position. Brazilian President Jair Bolsonaro picked the two ineligible nominees – Jonathas Assuncao Salvador Nery de Castro and Ricardo Soriano de Alencar. Both of them, however, are not qualified to become the board members of PBR based on the company’s internal bylaws, the committee established, per the minutes of its last meeting.

As per MRC, Petrobras’ PBR eligibility committee recently stated that two of the Brazilian government's seven nominees for a refurbished board at the company did not meet the requirements to hold the position. Brazilian President Jair Bolsonaro picked the two ineligible nominees – Jonathas Assuncao Salvador Nery de Castro and Ricardo Soriano de Alencar. Both of them, however, are not qualified to become the board members of PBR based on the company’s internal bylaws, the committee established, per the minutes of its last meeting.
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Dow and Mura Technology have announced plans to build multiple advanced recycling facilities in the US and Europe, which the companies say could add as much as 600 kilotons (KT) of aggregate advanced recycling capacity by 2030 and will apparently enable the HydroPRS technology to be scaled globally, said Packagingeurope.

In 2021, Dow and Mura initially announced plans to collaborate. The companies say they are now aiming to scale the advanced recycling of plastics with multiple new facilities in both Europe and the US, which could each offer 120 KT in annual advanced recycling capacity. Overall, the project could reportedly offer up to 600 KT in annual advanced recycling capacity by 2030, which the companies claim is the largest commitment of its kind.

As part of the partnership, Dow will become a key off-taker of Mura’s feedstock, which is reportedly derived from plastic waste that would otherwise be sent to landfill or incineration. Dow claims this will allow it to use recycled plastic feedstock for the development of new, virgin-grade plastics and to reduce reliance on fossil-based feedstocks.

Marc van den Biggelaar, Advanced Recycling Director for Dow, explains: “The strengthening of Dow and Mura’s partnership is another example of how Dow is working to build momentum around breakthrough advanced recycling technologies.

As per MRC, Dow has signed a memorandum of understanding (MoU) with Chinese food and beverage firm Want-Want for zero-solvent emissions and to develop a circular economy for flexible packaging, said the company.
The agreement intends to strengthen value-chain partner cooperation with customised adhesives solutions to meet the demands of the industry for more eco-friendly packaging options. With Dow’s water-based and solventless adhesives technologies, Want-Want will shift to more sustainable laminating adhesives for all of its flexible packaging.
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Dow posted second-quarter net income of USD1.7 billion, down 13% year-on-year (YOY) as price increases as well as earnings recovery in performance materials and coatings were more than offset by sharp hikes in raw material and energy costs, said the company.

Reported earnings were USD2.31/share, down 15% YOY but 8% above the mean consensus estimate. Net sales were USD15.7 billion for the quarter, up 13% YOY with gains in all operating segments and regions.

Gains in the Performance Materials & Coatings segment were more than offset by higher raw material and energy costs across the company, as well as lower equity earnings.

Sequentially, Q2 operating EBIT fell 2% from Q1, with gains in Packaging & Specialty Plastics more than offset by declines in Industrial Intermediates & Infrastructure.

Net sales rose 13% year on year to a USD15.7bn, with gains in all operating segments and regions. Sequentially, sales were up 3% with gains in all regions except Asia Pacific, which was impacted by pandemic-related lockdowns in China, the company said.

We remind, Dow, recycler KW Plastics of Troy, Alabama; molder Core Technology Molding Corp. of Greensboro, North Carolina; and sustainable golf company Evolve Golf of Wilmington, North Carolina, collaborated to reuse high-density polyethylene (HDPE) plastic mesh fencing from the previous year’s GLBI in the form of 20,000 ball markers and 5,500 divot tools for this year’s event.
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The U.S. Chemical Production Regional Index (U.S. CPRI) eased by 0.1% in June following gains of 0.5% in May and 1.0% in April, according to the American Chemistry Council (ACC).

Chemical output was mixed across regions. The U.S. CPRI is measured as a three-month moving average (3MMA).

On a 3MMA basis, chemical production within segments was mixed in June. There were gains in the production of synthetic rubber, industrial gases, coatings, manufactured fibers, synthetic dyes and pigments, adhesives, other organic chemicals, crop protection chemicals, other specialty chemicals, and fertilizers. These gains were offset by lower production of plastic resins, organic chemicals, and consumer products.

As nearly all manufactured goods are produced using chemistry in some form, manufacturing activity is an important indicator for chemical demand. Manufacturing output eased by 0.1% in June (3MMA). The 3MMA trend in manufacturing production was mixed, with gains in the output of motor vehicles, aerospace, iron and steel, oil and gas extraction, and rubber products.

Compared with June 2021, U.S. chemical production was ahead by 2.5%, a slower rate of growth than last month. Chemical production was higher than a year ago in all regions except the Gulf Coast, which was 0.5% lower.

The U.S. CPRI was developed to track chemical production activity in seven regions of the United States. The U.S. CPRI is based on information from the Federal Reserve, and as such, includes monthly revisions as published by the Federal Reserve. The U.S. CPRI includes the most recent Federal Reserve benchmark revision released on June 28, 2022. To smooth month-to-month fluctuations, the U.S. CPRI is measured using a three-month moving average. The reading in June reflects production activity during April, May, and June.

As per MRC, U.S. crude oil stockpiles edged lower last week but gasoline inventories posted a larger-than-expected build on weakened demand. Crude inventories fell by 446,000 barrels in the week to July 15 to 426.6 MM barrels, compared with expectations in a Reuters poll for a 1.4 MM-barrel rise. Demand figures rebounded from the previous week's sharp fall, and product supplied rose to 21 MMbpd. However, gasoline demand continued to sag, and supply of that product over the last four weeks was 8.7 MMbpd, or about 7.6% lower than the same time a year ago.
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Braskem Q2 resin sales volume in Brazil increased by 11% compared to the same period last year due to higher market share, which had declined in 2Q21, said the company.

Compared to Q1, sales volume fell by 1% on stable local demand for polyethylene (PE) and polypropylene (PP).

Q2 exports increased by 29% from Q2 2021 because of better logistics conditions for exports. Compared to Q1, exports increased by 7% due to higher PE sales in the export market, given the lower PE availability in the US for exports and better logistics conditions for exports.

The average utilisation rate of crackers decreased by 2 percentage points to 74% compared to Q2 2021 due to last year’s scheduled maintenance in the Rio Grande do Sul petrochemical complex and Alagoas PVC plant, and due to the feedstock shortage at the petrochemical complexes of Rio de Janeiro and ABC, Sao Paulo, the Brazilian producer said. Compared to Q1, the average utilisation rate decreased by 12 percentage points.

As per MRC, Nexus Circular and Braskem, the largest polyolefins producer in the Americas, as well as a market leader and pioneer producer of biopolymers on an industrial scale, announced that they have signed a detailed Memorandum of Understanding (MOU) to secure the production output from a new advanced recycling facility planned near Chicago, IL.The new facility will have an initial capacity to convert over 30,000 metric tons annually of used plastic into new materials, with the potential to rapidly expand the processing capacity to over 120,000 metric tons annually.
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