Petrobras boosts five-year investment plan to USD78 bn

MOSCOW (MRC) -- Brazil's state-controlled oil producer Petrobras disclosed a 15% increase in its five-year spending plan to USD78 billion, with little change to the company's strategy of focusing on fossil fuel production, said Reuters.

Throughout 2022, Petrobras delivered an operational and financial performance in line with its commitment to generate value for society and shareholders and in full adherence with the 2022-2026 Strategic Plan, showing the Company's resilience and solidity, and thus increasing the degree of confidence in achieving its goals.

From an operational standpoint, in the first nine months of 2022, the Company maintained a solid performance delivering significant advances in its operations.

From a financial standpoint, the Company continued on its path of delivering consistent and sustainable results. The capital structure was maintained at a healthy level and cash reached a level more compatible with the Company’s financial needs. The Company delivered solid financial results, reaching the first and second highest quarterly EBITDA and operating cash flow marks in its history, in the second and third quarters of 2022, respectively. The generation of operating cash flow associated with stable and controlled indebtedness and solid liquidity prospects allowed Petrobras to declare R$13.80 per common and preferred share in shareholder remuneration in 2022. It is important to note that the Brazilian government receives about 37% of this total, the largest single portion, in addition to being benefited by the payment of taxes, which reached a record for the first nine months of the year of R$ 222 billion.

In this context, the new SP 2023-27 was prepared preserving the Company's vision, values, and purpose. The strategies were maintained, with the exception of those related to Environmental, Social and Governance (ESG) and Innovation, which were improved.

We remind, Petrobras completed the sale of Isaac Sabba (REMAN) refinery in Manaus, Amazonas state to Ream, a subsidiary of Grupo Atem. Petrobras received USD257.2m, higher than the initial sale price of USD189.5m. The additional money reflects variation in working capital, net debt, investments and what Petrobras called monetary correction. The refinery has a throughput capacity of 46,000 bbl/day.

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MOSCOW (MRC) -- Essar Oil UK Limited announced its plan to build a GDP360 MM major new carbon capture plant at its Stanlow refinery in line with its ambition to become a leading low carbon refinery by 2030, said Hydrocarbonprocessing.

Essar is investing over GDP1 B into a range of energy efficiency, fuel-switching, and carbon capture initiatives, designed to decarbonize its production processes significantly by 2030 and put Essar at the forefront of the UK’s shift to low carbon energy.

Essar’s energy transition strategy is based on five principles: running the core Stanlow refining processes as efficiently and safely as possible; decarbonizing Stanlow’s operations; building a hydrogen future through the launch of Vertex Hydrogen (“Vertex”) and as a key part of the HyNet consortium; developing green fuels (including Sustainable Aviation Fuels); and establishing the UK’s largest biofuels storage facility through Stanlow Terminals Limited.

Essar will achieve its decarbonization targets through a combination of incremental (energy efficiency and operating improvements) and transformational projects, including the ?360 million carbon capture plant announced today, but also as a result of the significant investments Essar is making into hydrogen and biofuels.

Kent plc has been awarded a pre-FEED engineering contract to develop the facility that will take the CO2 emitted from one of Europe’s largest full-Residue Fluidized Catalytic Cracking units, located at the Stanlow refinery. The gas will be permanently sequestered into depleted gas fields under the sea in Liverpool Bay, as part of the HyNet cluster infrastructure in the North West of England.

Once complete in 2027, the plant will eliminate an estimated 0.81 MMt of CO2 per year – the equivalent of taking 400,000 cars off the road, eliminating nearly 40% of all Stanlow emissions. The project has been selected by BEIS as a Phase-2 winner in the CCUS cluster sequencing process earlier this summer, and as such, is currently progressing through the due diligence stage.

We remind, Essar Oil UK, the leading UK-focused downstream energy company, announces plans to install a new GBP45 MM (US60.8 MM) furnace at Stanlow that’s capable of using hydrogen as its fuel source, which is the first for the UK. This marks another milestone in Essar’s goal to becoming the UK’s first low carbon refinery. It follows the launch of Vertex Hydrogen last month, a new Essar-led JV, in which the company will invest GBP1 B (USD1.3 B) over the next five years to drive down emissions, including the development of new hydrogen production plants at Stanlow, forming a central part of the HyNet Northwest decarbonization cluster.

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MOSCOW (MRC) -- Ryanair signed an SAF supply agreement with Shell , but Chief Executive Michael O'Leary said it would take a "revolution" to hit his target of powering 12.5% of flights with the fuel by 2030, said Hydrocarbonprocessing.

The Irish airline, Europe's largest by passenger numbers, said the memorandum of understanding could give it potential access to 360,000 tons of SAF from 2025 to 2030, a fifth of what it says it needs to reach its 12.5% target.

"I'm not sure we'll get there (12.5%) but by signing up more partnership agreements with Shell, with Neste and with the other fuel suppliers, I think that gives us our best chance of maybe getting to 8, maybe 10, maybe 11," O'Leary told a sustainability conference the airline was hosting on Thursday.

"Who knows, hopefully we will get to 12.5% by 2030. But that will not happen unless we have a dramatic revolution in supply of production of SAFs and availability at our airports." The Shell deal follows similar agreements Ryanair has struck with Finnish biofuel producer Neste and Austrian oil and gas group OMV.

Sustainable jet fuel generally produces up to 70% less carbon than fossil fuels, offering airlines a way to become greener while continuing to fly, before less carbon-intensive hybrid, electric or hydrogen aeroplane options become available.

O'Leary told an Irish parliamentary committee on Wednesday that he did not expect a hydrogen engine to be ready before 2040 or 2050.

Ryanair has committed to cutting its carbon emissions to net zero by 2050 and said the Shell agreement could save 900,000 tons in carbon dioxide emissions, equivalent to over 70,000 flights from Dublin to Milan.

Ryanair operates an average of 3,000 flights per day and plans to grow from a record 168 MM passengers this financial year to 225 MM by 2026.

We remind, Shell Petroleum NV, a wholly owned subsidiary of Shell plc (Shell), has reached an agreement with Davidson Kempner Capital Management LP, Pioneer Point Partners and Sampension to acquire 100% shareholding of Nature Energy Biogas A/S (Nature Energy) for nearly USD2 bn (EUR1.9 bn).

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mOSOCW (MRC) -- INEOS has signed a 20-year contract with Sempra Infrastructure for the supply of approximately 1.4 million tonnes per annum (mtpa) of Liquified Natural Gas (LNG) from Phase 1 of the Port Arthur LNG facility under development in Texas North America, said the company.

Under the agreement INEOS has agreed to purchase approximately 1.4 mtpa and has also signed a non-binding heads of agreement (HOA) for the potential purchase of an additional 0.2mtpa from the Port Arthur LNG Phase 2 project under development. The first deliveries are expected in 2027.

In July, INEOS also signed a contract for long-term regasification capacity in the proposed German LNG Terminal in Brunsbuettel, Germany. These agreements mark INEOS’ entry into the global Liquified Natural Gas (LNG) market. The company is a first mover among European corporates as it secures competitive sources of energy to meet its own needs and those of its customers in Europe, as part of the energy transition.

The agreements come at a critical time for energy markets and will provide much needed security of supply for Europe.

Brian Gilvary Chairman, INEOS Energy said, “This long-term contract with Sempra Infrastructure and the agreement of regasification capacity in Brunsbuettel, secures the key areas of the value chain for INEOS across the Atlantic corridor and represents a major step forward in the INEOS Energy journey, at a time of significant transformation in the energy industry."

The Port Arthur LNG project is a fully permitted facility on a 3,000-acre site in Jefferson County, Texas. It is expected to include two natural gas liquefaction trains and LNG storage tanks and associated facilities capable of producing, under optimal conditions, up to approximately 13.5mtpa of LNG.

The German LNG Terminal is a planned regasification facility in Brunsbuettel, Germany, that will have an annual throughput capacity of 8 billion cubic metres (bcma) of natural gas and can be expanded to at least 10bcma. German LNG has executed the Engineering Procurement and Construction Contract and has entered into agreements with foundation customers INEOS, ConocoPhillips and RWE for long-term regasification capacity in the terminal. It is now focussing on securing the final permits to fully develop the terminal.

We remind, INEOS Europe AG and Pacific Gas (Hong Kong) Holdings Co., Ltd, have signed long-term time charter agreements for four 99,000 cbm (cubic metre) VLECs (Very Large Ethane Carriers). The deal will bring INEOS’ ethane fleet to 16 vessels, with eight VLEC and eight Dragon class ethane carriers. With these agreements, INEOS will have a total of six VLECs under time charter with Pacific Gas.
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MOSCOW (MRC) -- Petrobras completed the sale of Isaac Sabba (REMAN) refinery in Manaus, Amazonas state to Ream, a subsidiary of Grupo Atem, said the company.

Petrobras received USD257.2m, higher than the initial sale price of USD189.5m. The additional money reflects variation in working capital, net debt, investments and what Petrobras called monetary correction. The refinery has a throughput capacity of 46,000 bbl/day.

Petrobras will continue to support Ream in operating the refinery for up to 15 months under a service agreement. Grupo Atem is a fuel distributor and retailer with more than 320 franchised stations.

The company has distribution centres in Manaus, Amazonas state; Santarem and Itaituba in Para state; Porto Velho and Vilhena in Rondonia state; Sinop in Mato Grosso state; and Campo Grande in Mato Grosso do Sul state.

It can handle more than 5bn litres/year of fuel. Atem is building two more distribution centres.

We remind, Petrobras rejected a binding proposal for the Gabriel Passos Refinery (REGAP) in Minas Gerais state.
Petrobras rejected the bid because the proposal was below its "economic and financial evaluation", the company said. It will now consider when it could start a new bidding process.

We remind, Petrobras rejected a binding proposal for the Gabriel Passos Refinery (REGAP) in Minas Gerais state.
Petrobras rejected the bid because the proposal was below its "economic and financial evaluation", the company said. It will now consider when it could start a new bidding process.

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