BP wins contract to market Guyana's share of oil production

BP Plc will market Guyana's share of crude oil produced over the next year from two offshore production platforms, the South American country's Ministry of Natural Resources said, as per Reuters.

Guyana is home to one of the largest oil discoveries in the last decade, with about 11 B barrels found to date. A consortium that controls the country's crude output expects to pump 1.2 MM barrels per day (bpd) by 2027, up from an expected 380,000 bpd at year-end.

The London-based oil company agreed to market the state's share produced from the Liza Destiny and Liza Unity platforms at no charge per barrel, according to a ministry statement on Thursday. It replaces a Saudi Aramco trading unit, which previously held the contract.

bp did not reply to requests for comment on the contract. Along with Spain's Repsol and Italy's Eni, it has received cargoes from the county's offshore oilfields this year, vessel tracking data showed. Its proposal to take over as marketing agent was chosen over 13 others, the ministry said. The statement did not identify the others and the ministry did not reply to a request for details.

Through mid-year, Guyana's share of oil production from the consortium composed of ExxonMobil, CNOOC Ltd and Hess Corp was worth USD307 MM. The group markets two crudes: a medium to light sweet oil called Liza, and an even lighter grade called Unity Gold.

The government recently said it would auction 14 offshore blocks to increase output by adding more oil producers. Guyana has not yet disclosed a timetable but indicated it could hold the auction by May.

BP will market crude to refiners, provide benchmark and performance comparisons, and help the government understand the behavior and yields of the Liza blend, the ministry said.

We remind, BP refinery in Rotterdam processes about 400,000 barrels of oil annually and is an important supplier of diesel to Northern Europe. BP's final offer in talks over a new collective labor agreement under discussion since April had been for a 5% wage increase and one-off bonus of 4,000 euros (USD4,000).

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Poland is seeking German support to slap EU sanctions on the Polish-German section of the Druzhba crude pipeline so Warsaw can abandon a deal to buy Russian oil next year without paying penalties, two sources familiar with the talks said, as per Reuters.

The sources also said the pair are nearing an agreement for Poland to coordinate seaborne oil supplies to Germany via Gdansk and part of Druzhba to facilitate Poland's purchase of the Russian-owned Schwedt refinery in Germany.

The EU has pledged to stop buying Russian oil via maritime routes from Dec. 5 but Druzhba is currently exempt from sanctions. That presents a problem for Polish refiner PKN Orlen which has a long-term deal to purchase Russian oil via the pipeline and would need to pay penalties to break the contract.

If the EU were to impose sanctions on Druzhba - or at least its northern section supplying Poland and Germany - both countries would be able to get out of their Russian oil importing commitments penalty-free.

The southern section of the pipeline supplies Hungary, Slovakia and the Czech Republic which, unlike Poland and Germany, would struggle to diversify their oil imports.

According to the sources, the Polish climate ministry and German economy ministry are in the final stage of talks on a memorandum of understanding on oil logistics, which could unlock non-Russian flows and help Poland’s top refiner pursue its interest in Schwedt.

Germany remains committed to not using Russian oil from 2023 and is working on a solution with Poland to secure the supply of Schwedt, a spokeswoman for the economy ministry in Berlin said on Friday. The Polish climate ministry was not immediately available to comment.

Germany has put Schwedt under a six month trusteeship, stopping short of nationalizing the refinery, and is seeking ways to supply it with oil.

Poland and Germany promised in spring to try to end Russian oil imports via Druzhba's northern leg by the end of year but Orlen remains tied to its contract with Russian oil and gas company Tatneft.

The Polish refiner has nominated supplies for Druzhba for 2023 as stipulated by the contract but these would stop if the pipeline is hit by sanctions, one of the sources said.

Orlen declined to comment on Friday.

The company has already cut its reliance on Russian oil to 30% of its requirement, replacing it with deliveries from Saudi Arabia and Norway among others.

Kommersant newspaper reported earlier this month that Orlen had submitted an application to the Russian oil pipeline operator Transneft for the supply of 3 MMt of oil to Poland through Druzhba in 2023.

We remind, Polish oil refiner PKN Orlen has submitted an application to the Russian oil pipeline monopoly Transneft for the supply of 3 MMt of oil to Poland through the Druzhba pipeline system in 2023 under continuing long-term contracts.

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SIBUR (Moscow, Russia) says it is developing and testing a catalyst for use in the production of linear alpha-olefins as part of the company’s strategic program to strengthen its technological independence, said the company.

Pilot tests have taken place for the use of zirconium tetra-isobutyrate, with the catalyst developed by specialists from Sibur’s NIOST research center at Tomsk and the Nizhnekamskneftekhim Scientific and Technical Center (STC), it says.

SIBUR , Russia’s largest producer of petrochemicals and plastics, plans to build a production plant with a catalyst capacity of 50,000 metric tons/year by 2024 at Nizhnekamskneftekhim (Nizhnekamsk, Tatarstan, Russia), it says. Zirconium tetra-isobutyrate and hexene are mandatory components in the polyethylene (PE) production chain, enabling the manufacture of special polymer grades with improved properties for sectors including medical products, packaging materials, and gas and water supply systems, according to the company.

Domestic production by SIBUR of key components in small- and medium-tonnage chemicals is a “necessary element in maintaining the stability of the main technological chains,” it says. The company recently announced the development and testing of hexene, another key component for the production of polymers, with plans to build a 50,000-metric tons/year plant, also at Nizhnekamsk, with start of operations planned in the second half of 2024. Hexene is used in the production of high- and low-density polyethylene.

We remind, SIBUR has launched production of PET granules using recycled feedstock. The new product, Vivilen rPET granules, contains up to 25–30% recycled polymers and will now be manufactured at POLIEF, said the company.
Once the facility reaches its design capacity, each year POLIEF will be able to produce up to 144,000 tonnes of Vivilen PET granules with a share of recycled content.

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There are signs that China and India are pulling back from buying Russian crude oil ahead of the Group of Seven nations' proposed price cap and a European Union ban on imports, said Reuters.

However, the more important question for the market is whether any slowing by China and India of purchases from Russia is a temporary factor that will be reversed once participants figure out how to work with, or around, the price cap.

China, the world's largest crude oil importer, and India, the third-biggest, have increasingly turned to Russian crude this year, buying cargoes at steep discounts as Moscow sought to keep up export volumes after Western countries shunned its oil.

The G7 price cap and the EU ban on imports are aimed at cutting the revenue Russia receives from its exports of crude oil and products and are part of efforts to punish Moscow for its Feb. 24 invasion of Ukraine. Russia calls its actions there "a special operation".

Chinese refiners have begun slowing their purchases of Russian crude for December arrivals, according to traders and industry players in China.

The reduced volumes from Russia for December come after several months of strong imports. China is forecast to bring in 1.80 million barrels per day (bpd) of Russian crude in November, up from October's 1.69 million bpd and in line with September's 1.82 million bpd, according to data compiled by Refinitiv Oil Research.

It is also likely that Russia will overtake Saudi Arabia as China's biggest supplier of crude in November, with the two leading members of the OPEC+ group having swapped the top spot several times so far this year.

We remind, China’s State Administration for Market Regulation has approved unconditionally the acquisition deal of Shanghai SECCO Petrochemical between Sinopec and INEOS. Sinopec and INEOS in July this year announced the transaction, under which INEOS will take over 50% of SECCO from Sinopec.

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Covestro has reached another important step towards its path to circularity, with the ISCC PLUS1 certification in Brazil for the sales of bio-2 and bio-circular2 attributed diphenylmethane diisocyanate (MDI) and toluylene diisocyanate (TDI), said the company.

With this important milestone the company is expanding its sustainable efforts in one of the biggest and most important markets in Latin America.

Such achievement serves as a clear proof point of the company?s commitment towards circularity, leading the transition within the different segments served by Covestro not only in Brazil, but also in important countries such as Chile, Uruguay, Colombia, Argentina and Costa Rica, among others.

"This is an extremely important step for us as it makes the transformation towards the circular economy tangible, supporting our customers in achieving their sustainability goals and accelerating the substitution of fossil raw materials", says Andreas Stumpf, Managing Director of Covestro Brazil.

ISCC PLUS certification contributes to more sustainable production processes and markets, increasingly encouraging the participation of supply chain entities. At a local level, the certification can make fairer work relationships, more efficient processes and promote the reduction of greenhouse gas emissions and the use of fossil resources, while expanding the possibilities for the international market, mainly the European one.

"The Brazilian certification project of Covestro shows that it is possible to contribute to more sustainable production even in complex production chains with materials of different origins and destinations. It is another important step in promoting genuinely sustainable production chains", states Felipe Bottini, founding partner at Green Domus, ISCC recognized certification body in Brazil.

We remind, Covestro AG (Leverkusen, Germany) broke ground in Antwerp, Belgium for a new world-scale production facility for the manufacture of aniline. With the Covestro breaks ground in Antwerp for new aniline plant.

Covestro is one of the world’s leading manufacturers of high-quality polymer materials and their components. With its innovative products, processes and methods, the company helps enhance sustainability and the quality of life in many areas. Covestro supplies customers around the world in key industries such as mobility, building and living, as well as the electrical and electronics sector. In addition, polymers from Covestro are also used in sectors such as sports and leisure, cosmetics and health, as well as in the chemical industry itself.
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