IOC posts strong net profit growth

IOC posts strong net profit growth
MOSCOW (MRC) -- Indian Oil Corporation (IOC) has recorded an almost 17-fold growth in standalone net profit to Rup 21,836 crore for the financial year ended 31 Mar 2021 (FY 2020-2021), from Rup 1313 crore in FY 2019-2020, said Economictimes.

It attributed the sharp growth in bottomline to higher inventory hikes and petrochemical margins. However, its annual revenue from operations dived year-on-year by more than 9% to Rup 514,890 crore. This was due to the decline in total fuel demand because of COVID-19. For 4Q FY 2020-2021, the standalone net profit stood at Rup 8781 crore.

This is compared to a loss of Rup 5185 crore during 4Q FY 2019-2020. Annual crude processing and pipeline throughput dived by 10% to 62.351 M tonnes (mt) and 76 mt, respectively. However, IOC increased the length of its pipeline network by 2.3% to 15,007 km in FY 2020-2021. Its total local sales plummeted by 11% during 2020-2021 to 72.71 mt. Sale was down by 17% for petrol, 14% for diesel, and 52% for ATF. Local sales of LPG increased by 4.7%.

Even as total revenue dived, the company's contribution to the central exchequer in 2020-2021 escalated by 60% to Rup 153,827 crore. On the other hand, IOC's share in States dived by 1.2% to Rup 84,959 crore. Average Gross Refining Margin (GRM) for the year is USD5.64/barrel, a year-on-year increase from $0.08/barrel. The present cost of GRM for FY 2020-2021 after offsetting inventory hikes comes to USD2.31/barrel.

The refinery run for Apr 2021 has been 96.1% while for 1-17 May 2021 has been 84%. In comparison, the total refinery run rate for FY 2020-2021 stood at 89.5%. IOC has set a capital expenditure goal of Rup 26,000 crore for the ongoing financial year.

We remind, India has announced an extension on the deadline for the implementation of the quality certifications mandated by the Bureau of Indian Standards (BIS) on purified terephthalic acid (PTA) imports. The Department of Chemicals and Petrochemicals, under the Ministry of Chemicals and Fertilizers, via an order issued on 21 December 2022, set 22 June 2023 as the implementation date for the certification to come into effect.

BASF shareholders say Russia exit sets up oil and gas IPO

BASF shareholders say Russia exit sets up oil and gas IPO

MOSCOW (MRC) -- BASF investors said that oil and gas business Wintershall Dea's exit from Russia, though painful, clears the way for plans to take it public and for BASF to focus on its chemicals operations, said Reuters.

BASF late Tuesday flagged a 7.3 B euro (USD7.9 B) writedown on Wintershall Dea (WD), as the energy business, in which Russian billionaire Mikhail Fridman's investment firm LetterOne owns a 27% stake, pulls out of Russia.

Portfolio manager Arne Rautenberg of mutual fund company Union Investment, among the 10 largest BASF shareholders, welcomed BASF drawing a line.

"No-one in the market has ascribed any more value to the Russian activities," Rautenberg told Reuters, adding that the remainder of WD had been boosted by high oil and gas prices.

"The way to an IPO, which has long been in the making, has now been paved," he added.

It took the company much longer than other oil companies to face up to the loss of its Russian operations, with Wintershall Dea CEO Mario Mehren saying last year that the company could not just allow assets to fall into the hands of the Russian state.

We remind, BASF has broken ground on the third and final phase of the methylene diphenyl diisocyanate (MDI) expansion project at its Verbund site in Geismar, Louisiana, announced in July 2022. The company will increase production capacity to approximately 600,000 metric tons per year by the middle of the decade to support the ongoing growth of its North American MDI customers.

BASF is a leading supplier, manufacturer, and innovation partner of plastic additives. Its comprehensive and innovative product portfolio includes additives that provide ease in processing, and heat and light resistance to a variety of polymers and applications including molded articles, films, fibers, sheets, and extruded profiles.

TotalEnergies CEO says refineries will not be disrupted by strike day

TotalEnergies CEO says refineries will not be disrupted by strike day

MOSOCW (MRC) -- The chief executive of oil major TotalEnergies said this week that strikes against France's planned pension reform should not disrupt operations at refineries, adding that petrol stations were also prepared for the strike action, said Reuters.

Refinery operations will only be disrupted if strikes last several days, Patrick Pouyanne told BFM TV in an interview from Davos.

A union official said earlier on Wednesday that no refined oil products will be shipped from the TotalEnergies' refinery in Dunkirk, northern France during the strike.

We remind, LANXESS and French energy group TotalEnergies have entered into a cooperation on the supply of biocircular styrene. Unlike conventional styrene, the raw material used by TotalEnergies is based on tall oil, which is derived from a tree resin and is a by-product of pulp production. LANXESS uses the styrene to produce sustainable ion exchange resins. These products are applied primarily in the treatment of wastewater and chemical process flows as well as in the food industry.

Reliance Industries hit by unexpected drop in quarterly profit

Reliance Industries hit by unexpected drop in quarterly profit

MOS OW (MRC) -- Reliance Industries Ltd., helmed by billionaire Mukesh Ambani, posted a larger-than-expected quarterly profit as growth in its consumer units offset the weakness in its traditional petrochemicals business, said Bloomberg.

Net income fell 15% to 157.9 billion rupees (USD1.9 billion) in the quarter ended Dec. 31 but was still higher than the average 156.19 billion rupees estimated in a Bloomberg survey. India’s largest company by market value also secured approval of its board to raise as much as 200 billion rupees via bonds.

Analysts had been penciling in a steeper drop in profit due to windfall taxes on fuel exports and as last year’s numbers were flattered by a one-off gain. Overall revenue did indeed come in weaker than consensus and costs surged but a strong showing at Ambani’s dominant telecom business helped blunt the impact.

“Reliance Industries witnessed strong growth momentum in consumer verticals,” Joint Chief Financial Officer V. Srikanth said in a post-earnings call Friday. “Retail growth was led by festive demand, strong momentum in e-commerce and continued store addition.”

We remind, Abu Dhabi Chemicals Derivatives Company RSC Ltd (“TA’ZIZ”) and Reliance Industries Limited (RIL), have agreed to launch TA’ZIZ EDC & PVC, a world-scale chemical production partnership at the TA’ZIZ Industrial Chemicals Zone in Ruwais. The new joint-venture will construct and operate a Chlor-Alkali, Ethylene Dichloride (EDC) and Polyvinyl Chloride (PVC) production facility, with an investment of more than USD2 billion.

Saudi Arabia stays top crude supplier to China in 2022, Russian barrels surge

Saudi Arabia stays top crude supplier to China in 2022, Russian barrels surge

MOSCOW (MRC) -- Russia remained China's second-largest source of crude oil in 2022, following repeat top supplier Saudi Arabia, as Chinese refiners snapped up low-cost Russian barrels while Western countries shunned them after the Ukraine crisis, said Reuters.

China's crude oil imports from Russia jumped 8% in 2022 from a year earlier to 86.25 MMt, equivalent to 1.72 MM barrels per day (bpd), data from the General Administration of Customs showed on Friday.

Russian crude has been trading in widening discounts to global oil benchmarks following Western sanctions over its invasion of Ukraine, which the Kremlin has called a "special operation". China, which refused to condemn the attack, cranked up procurement of Russian barrels and has largely ignored the sanctions imposed by Western nations on seaborne Russian crude from Dec. 5.

In December, it brought in 6.47 MMt of crude oil from Russia, or 1.52 MMbpd, compared to 1.7 MMbpd in the same period in 2021. China's state-backed refiners have wound down the purchase of Russian oil since November, but the independent refineries have continued buying from intermediary traders who arrange shipping and insurance, shielding them from the risk of secondary sanctions. Saudi Arabia shipped a total of 87.49 MMt of crude to China in 2022, equivalent to 1.75 MMbpd, customs data showed, on par with the level in 2021.

China's state-backed oil refiners largely fulfilled their term contracts with Saudi in 2022 despite the sluggish domestic demand. Saudi Arabia is expected to remain a key, if not the dominant, crude exporter to China after President Xi Jinping's visit to Riyadh in December, where he told Gulf leaders that China would work to buy oil in Chinese yuan, rather than U.S. dollars. Customs data also showed that crude imports from Malaysia almost doubled in 2022 to 35.68 MMt.

The Southeast Asian country is a transfer point for sanctioned shipments originating from Iran and Venezuela. No Venezuelan crude imports were recorded by Chinese customs throughout 2022 and a total of 780,392 tons of crude oil from Iran arrived in China.

China is Iran's biggest oil buyer, but most Iranian exports are rebranded as crude from other countries to evade U.S. sanctions. Vortexa, a ship tracking specialist, assessed that China's December imports of Iranian oil rose to a record of 1.2 MMbpd, up 130% from a year earlier. Crude shipments from the United States reached 7.89 MMt in 2022, down 31% year-on-year.

We remind, China Petroleum & Chemical Corporation officially published the “China Energy Outlook 2060” (the “Outlook”) on December 28 in Beijing. This is Sinopec’s first publicly released research findings of their medium and long-term energy outlook, providing a new perspective for the scientific planning of transformation and development of China’s energy and chemical industries. This in the context of the “Dual-Carbon” goals laid out by the Chinese government, with the core goal of achieving carbon neutrality by 2060.