Indian fuel demand in February was the highest in 24 years

Indian fuel demand in February was the highest in 24 years

India's fuel demand hit its highest level in at least 24 years in February, data showed on Thursday, with industrial activity in Asia's third biggest economy boosted by cheap Russian oil, said Hydrocarbonprocessing.

Consumption of fuel, a proxy for oil demand, rose by more than 5% to 4.82 million barrels per day (18.5 MMt) in February, its 15th consecutive year-on-year rise, data showed. Demand was the highest recorded in data compiled by the Indian Oil Ministry's Petroleum Planning and Analysis Cell (PPAC) going back to 1998.

The strength highlights a combination of profitable refining from record Russian crude imports in February, total utilization for primary distillation across India and still-robust domestic consumption, said Viktor Katona, lead crude analyst at Kpler.

Katona forecasts demand in March at 5.17 MMbpd and then the seasonal monsoon-driven slowdown will lead to it to drop to 5 MMbpd in April-May. Sales of gasoline, or petrol, rose 8.9% year-on-year to 2.8 million tonnes in February, while diesel consumption climbed 7.5% to 6.98 million tonnes.

Sales of jet fuel jumped more than 43% to 0.62 MMt, the data showed. "For 2023, the strongest demand growth rate is projected to be in jet fuel, followed by gasoline and then diesel/gas oil," said Alan Gelder, VP Refining, Chemicals and Oil Markets at Wood Mackenzie.

While fuel sales data showed total volumes of both gasoline (motor spirit) and diesel (HSD) fell in February relative to January, they grew strongly on a daily consumption basis as February is a short month, Gelder noted.

Cooking gas, or liquefied petroleum gas (LPG), sales slipped by 0.1% to 2.39 MMt. Sales of bitumen, which is used for building roads, jumped 21.5% month-on-month, while fuel oil use declined slightly more than 5% in February, compared with January.

We remind, BASF has commenced production of its first bio-based polyol, Sovermol®, in Mangalore, India, said the company. This is the company’s first bio-based polyol production facility in Asia Pacific, serving the region’s fast-growing demand of eco-friendly products for new energy vehicles (NEV), windmills, flooring and protective industrial coatings, it said.

Russia exporting diesel to Saudi via STS loadings

Russia exporting diesel to Saudi via STS loadings

Russia is ramping up its diesel supplies to Saudi Arabia using ship-to-ship (STS) loadings in addition to direct supplies, market sources said and Refinitiv data showed, said Hydrocarbonprocessing.

Exporters of Russian diesel are trying STS to save on new longer and therefore costly routes after a full EU embargo on Russian oil products was imposed on Feb. 5. They are switching Russian diesel exports to Africa and Asia instead of adjacent European countries.

In February, Russia began direct diesel exports to Saudi Arabia, sending about 190,000 tons to the ports of Ras Tanura and Jeddah. STS loadings help to shorten the routes and could save time by going through the Suez Canal, one trader said.

According to Refinitiv shipping data, about 99,000 tons of diesel from two cargoes loaded in February in the Baltic port of Primorsk - Agios Nikolaos and Mandala - were transferred ship-to-ship near Kalamata port to the tanker Dimitri, which is heading to the port of Ras Tanura in Saudi Arabia.

Another 30,000 tons of gasoil from the tanker Butterfly loaded in the Russian Black Sea port Tuapse were co-loaded on STS near Kalamata port on the tanker Aether, which is already discharged in the port Jizan.

We remind, Russian ultra-low-sulphur diesel (ULSD) diesel shipments to Brazil hit a record high in February, while Moscow is exploring new markets following the European Union ban, according to traders and Refinitiv data. A full EU embargo on Russian oil products went into effect on Feb. 5, and Africa, Asia and ship-to ship (STS) loadings took market share of Russian diesel buyers instead of Europe. According to Refinitiv, at least four cargoes carrying 140,000 tonnes of diesel were loaded in the Russian Baltic port of Primorsk in February and were now heading to Brazil.

Brazil senator to probe sale of Petrobras refinery to Mubadala

Brazil senator to probe sale of Petrobras refinery to Mubadala

A Brazilian senator called on Thursday for a Congressional investigation into the sale of a Petrobras refinery to United Arab Emirates' Mubadala Capital, citing a suspected link to jewelry given to former President Jair Bolsonaro, said Hydrocarbonprocessing.

The RLAM refinery in the state of Bahia was sold in 2021 to Mubadala's Acelen unit along with its logistical assets for USD1.8 B.

Senator Omar Aziz, who chairs the Senate committee on governance and consumer protection, said on Twitter that "any violation of federal interests, any relation to the attempt to smuggle in the jewels, or any act that created advantages in this sale" would be taken to courts to punish those involved.

The senator said his committee would first ask Petrobras, formally known as Petroleo Brasileiro S.A., to provide documents on how the refinery deal was priced.

On Wednesday, Brazil's oil workers union FUP said it had asked public prosecutors to investigate any link between the refinery sale to Bolsonaro's alleged attempt to bring a USD3.2-MM gift of jewelry into the country in 2021 without declaring it. Customs officials seized the jewels found in the backpack of a government aide.

The gift by Saudi Arabia's king to Bolsonaro and his wife Michelle Bolsonaro was not from the United Arab Emirates, but the union pointed out that two countries are geographically close and that the former president had said in a recent interview that the gift was settled in the Emirates.

FUP added that the Institute for Strategic Studies in Petroleum, Natural Gas and Biofuels (Ineep) estimated the refinery to be worth USD3 B to USD4 B, about double the price it was sold for.

We remind, Petrobras said on Tuesday it will reduce gasoline and diesel prices at its refineries from Wednesday, a move that will likely offset the resumption of federal taxes levied on fuels. Shares in the company dropped sharply after the news, trading down more than 3% by midday and making Petrobras one of the biggest fallers on the local benchmark stock index Bovespa , which slipped 0.5%. The price cut comes as the government announced on Monday it was set to resume the collection of taxes on fuels, ending a waiver set by former President Jair Bolsonaro last year - a measure that will boost government revenues but is seen as upsetting the middle class.

New Talara refinery will be 100% operational in three months

New Talara refinery will be 100% operational in three months

In a press conference with members of the Association of Foreign Press in Peru (APEP), the Chairman of the Board of Petroperu, Carlos Vives Suarez, reported that Petroperu has all the corresponding permits for the gradual and progressive start-up period of the New Refinery Talara (NRT) which has been carried out satisfactorily, said Hydrocarbonprocessing.

Likewise, it was specified that the start-up of the conversion units has begun this month to later start the same with the deep conversion units. "So far everything has been surmountable within the stipulated deadlines, it is expected that the plant will operate at 100% between May and June," he said.

It is important to mention that between June and October the integral warranty tests will be carried out with a 100% load in the entire refining complex with the participation of the licensing companies and contractors (Tecnicas Reunidas and Cobra), as has been carried out in the gradual and progressive startup of each of the units.

The NRT conversion units will give Petroperu greater profitability, which added to a recomposition process in the hydrocarbon purchase scheme, will allow greater competitiveness in the market. In this sense, the EBIDTA estimated for the year 2023 is $500 MM,” said Cristina Fung, General Manager of the company.

Regarding the start of operations in Block 192, it was specified that -since this facility has been paralyzed since February 2020- there is hard work to be done to rehabilitate the field, however, production is expected to begin during the first quarter of 2024.

"It should be noted that Lot 192 has reserves of 127 MMb, so it is a priority for Petroperu to value this important resource," he said, adding that operational production projections are estimated at 10,500 barrels of crude oil per day.

On the other hand, the official specified that the preparation of a sustainability plan for the North Peruvian Pipeline is already underway, which includes social and operational components, one of them being the closing of social gaps in the communities in charge of the State. "This is how, hand in hand with the Executive, we have been working to close the gaps, which will significantly help improve the quality of life of the communities surrounding the North Peruvian Pipeline," he added.

Parallel to this, the incorporation of Petroperu in the lots in the northwestern part of the country, located in Talara, is being coordinated with the Ministry of Energy and Mines and Perupetro, which will strengthen Petroperu's participation in oil exploitation activities.

Finally, it was reported that the company has been carrying out the necessary actions to strengthen its governance, as well as ensure its financial and operational sustainability, which is how it was recently able to sign a contract with the prestigious international specialized consultant Arthur D. Little LLC in consortium with Columbus HB Latam Inc. to carry out the service for preparing the Restructuring Plan, which must be presented before July 31 of this year.

We remind, workers striking over proposed changes to France's pension system continued to block fuel deliveries and reduce electricity production at several sites on Thursday. About 7% of French refueling stations lacked at least one product as of Wednesday, but "there is no supply problem for service stations and the situation is improving", said Olivier Gantois, president of the French Union for Petroleum, Energy and Mobility Industries UFIP.

Saudi oil giant Aramco posts record USD161 billion profit for 2022

Saudi oil giant Aramco posts record USD161 billion profit for 2022

Saudi Arabia’s state-controlled oil giant Aramco on Sunday reported a record net income of USD161.1 billion for 2022 — the largest annual profit ever achieved by an oil and gas company, said Cnbc.

Aramco said net income increased 46.5 percent over the year, from USD110 billion in 2021. Free cash flow also reached a record USD148.5 billion in 2022, compared with USD107.5 billion in 2021.

“This is probably the highest net income ever recorded in the corporate world,” Aramco CEO Amin Nasser said on a Sunday earnings call. The results are nearly triple the profit that oil major ExxonMobil posted for 2022, bolstered by soaring oil and gas prices through last year, along with higher sale volumes and improved margins for refined products.

Oil and gas prices surged at the start of 2022, with western sanctions on Russia for its invasion of Ukraine steadily tightening access to Moscow’s supplies, particularly seaborne crude and oil products. Oil prices have since pulled back more than 25% year-on-year, with hot inflation and rising interest rates overshadowing a more bullish demand outlook from China. Brent and WTI prices fell 6% last week alone. Brent last traded at around USD80 dollars per barrel.

“We are cautiously optimistic,” Nasser said. “If you consider China opening up, the pickup in jet fuels and the very limited spare capacity, we are cautiously optimistic in the short to mid-term [that] markets will remain tightly balanced.”

Aramco raised its fourth-quarter dividend by 4% to USD19.5 billion, to be paid in the first quarter of 2023. Aramco also said it would issue bonus shares to eligible shareholders as a result. “We’re aiming to sustain [the dividend] at this level,” Aramco Chief Financial Officer Ziad Al-Murshed told the earnings call. “We have the financial strength to go through the ups and downs of the cycle."

We remind, Saudi Aramco has agreed to take a minority stake in a new powertrain engine company that French car maker Renault SA and China's Geely Automobile Holdings Ltd plan to set up jointly, said Hydrocarbonprocessing.
A report in January said that Aramco has been involved in advanced discussions to take a stake of up to 20% in a previously announced but still-unnamed Geely-Renault powertrain company that would develop and supply internal combustion engines (ICE) and hybrid technologies.