Repsol's Q2 adjusted profit beats expectations

Spanish oil company Repsol said that its adjusted profit fell sharply in the second quarter, dragged by lower energy prices, but came in above analysts’ expectations, said Reuters.

The adjusted profit for the period was 827 million euros (USD917.4 million), down from 2.16 billion euros a year earlier, when oil and gas prices, as well as refining margins, were much higher.

Analysts had expected an adjusted profit of 706 million euros, according to a consensus forecast provided by the company.

Net profit declined to 308 million euros from 1.15 billion euros in the same quarter last year.

We remind, Repsol will nearly double the production capacity of its Reciclex recycled polyolefins with a new production line at its Puertollano Industrial Complex in Spain. The company will invest EUR 26 M to install a new 25,000 tonnes/y production line for polyolefins with mechanically recycled plastic content. Repsol currently has 16,000 tonnes/y of Reciclex polyolefins capacity.

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Ecopol, developer and producer of water-soluble and biodegradable films for household detergent products, has signed a strategic investment with SK Capital Partners in a bid to support its upscaling endeavours, enter new markets, and expand its production footprint into the United States, said Packagingeurope.

Ecopol’s films and delivery systems are primarily geared toward the unit dose household detergent market for automatic and dishwashing laundry applications. It aims to develop more sustainable, convenient, and environmentally friendly systems for delivery, while opening the door to lower carbon emissions, plastic packaging consumption, and water usage across businesses’ supply chains.

The company is headquartered in Chiesina Uzzanese, Italy, and the company owns production facilities in Italy and the United States. Growing demand for innovative films is expected to accelerate Ecopol’s growth, and it has invested over €70 million into new assets since 2019 – including a new PVOH film line for laundry applications and a new production facility in Griffin, Georgia, USA.

SK Capital will acquire a majority interest in Ecopol with CEO and controlling shareholder Mauro Carbone retaining his position within the company, as well as his status as the largest individual shareholder. Existing minority investor Tikehau Capital will also keep its minority stake.

Legal counsel was provided to SK Capital by Latham & Watkins LLP, and to Ecopol by Legance and Alpeggiani Studio Legale Associato. STS Deloitte served Ecopol as a tax advisor, UBS as a financial advisor, and lead arrangers Credit Agricole Italia and Intesa Sanpaolo are supporting the transaction with committed financing.

Customary regulatory conditions and approvals must be satisfactorily met before the transaction is closed.

Previously, Constantia Flexibles signed a joint venture agreement with Premji Invest and S.B. Packagings to expand its business and operations in various packaging sectors and create value in the Indian market.

DS Smith has also invested €11.35 million into the expansion of its Cartogal production plant in A Pobra do Caraminal, which is said to utilise ‘environmentally friendly’ materials to construct energy-efficient systems.

Other homecare products have also taken on more sustainability-minded packaging solutions, including the home-recyclable cardboard cartons for 750ml own-brand Sainsbury’s laundry detergents and Tesco’s recyclable cardboard packaging for its laundry detergent pods.

We remind, Lotte Chemical Titan Holding Bhd expects the outlook for the petrochemical industry to remain volatile.
In the second quarter ended June 30, Lotte reported a wider net loss of RM313.5mil against RM145.9mil last year. Revenue for the quarter tumbled 34% to RM1.86bil from RM2.8bil a year ago while loss per share stood as 13.76 sen versus 6.41 sen previously.

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A Liberian-flagged oil tanker set sail in May from Russia's Ust-Luga port carrying crude on behalf of a little-known trading company based in Hong Kong. Before the ship had even reached its destination in India, the cargo changed hands, said Reuters.

The new owner of the 100,000 tons of Urals crude carried on the Leopard I was a similarly low-profile outfit, Guron Trading, also based in Hong Kong, according to two trading sources.

The number of little-known trading firms relied on by Moscow to export large volumes of crude exports to Asia has mushroomed in recent months, since sanctions over the Ukraine war led major oil firms and commodity houses to withdraw from business with producers in Russia, reporting by Reuters has found. At least 40 middlemen, including companies with no prior record of involvement in the business, handled Russian oil trading between March and June, according to a Reuters tally after speaking to 10 trading sources, along with analysts from think-tank Kpler, and analyzing data from Refinitiv and the non-public books of shipping companies.

The new players have shipped at least half of Russia’s overall crude and refined products exports of 6-8 million barrels per day (bpd) on average this year, turning the little-known companies collectively into some of the world's largest oil traders, according to Reuters calculations based on private information from the 10 trading sources and Eikon data.

The companies began appearing after Russia's February 2022 invasion of Ukraine, which Moscow calls a special military operation, with as many as 30 middlemen involved in trades over the course of last year, according to the tally.

The network marks a major departure from the handful of well-established oil majors such as BP and Shell and top trading houses including Vitol, Glencore, Trafigura and Gunvor that handled Russian crude and oil products for decades.

There is no suggestion the trades break sanctions, although they may make it difficult for sanctions enforcement agencies in Europe and the United States to track Russian oil transactions and prices. Earlier this month, Urals prices jumped above a price cap of $60 a barrel on Russian exports imposed by the Group of Seven nations, Australia and the European Union from Dec. 5 that was intended to punish firms involved in any trade above that level.

When prices are above the cap, the rapidly changing trading network could make it hard to identify those involved in moving the oil, five traders involved in handling Russian oil said. The reporting shows that in May, Russia, one of the world's top three oil producers, supplied record volumes to China and India, which have not imposed sanctions on Moscow and became its leading buyers after sanctions by Europe, the United States and other powers limited their own purchases.

Neither Guron Trading or Bellatrix Energy, the company that originally chartered the Leopard I and bought the cargo from Russian oil company Rosneft, responded to requests for comment. Rosneft did not respond to questions. The websites for Guron Trading and Bellatrix Energy appeared to have been taken down recently. Both were online prior to the companies being contacted by Reuters.

We remind, Russia is considering limiting the number of companies allowed to export oil products in a bid to curb illegal exports of fuel intended for the domestic market. The Kommersant newspaper reported earlier that Russia was looking at creating a list of approved refiners to combat so-called "grey exports" of subsidised domestic fuel.

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Lotte Chemical Titan Holding Bhd expects the outlook for the petrochemical industry to remain volatile, said Thestar.

In the second quarter ended June 30, Lotte reported a wider net loss of RM313.5mil against RM145.9mil last year. Revenue for the quarter tumbled 34% to RM1.86bil from RM2.8bil a year ago while loss per share stood as 13.76 sen versus 6.41 sen previously.

In the first six months to June 30, Lotte recorded revenue of RM3.8bil, a decrease compared with the same period last year due to lower sales volume and selling prices.

We remind, Indonesia's state-controlled gas company Perusahaan Gas Negara on Thursday said it would supply natural gas to a petrochemical plant operated by a unit of South Korea's Lotte Chemical Corp. PGN signed a gas sales agreement with Lotte Chemical Indonesia (LCI) to supply between 2.62 billion and 10.5 billion British thermal units per day (BBTUD) to power Lotte's plant to produce ethylene, PGN said.

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Argentina’s YPF SA and Petroliam Nasional Berhad (Petronas) are considering creating a joint-stock company to manage business related to development of a 5-million tonne/year (tpy) LNG plant should regulators approve legislation aimed at boosting the liquefaction industry and potential future exports, said OGJ Online.

New details about the project—being pursued as part of a September 2022 MOU for joint development of an LNG plant in Bahia Blanca in the southern province of Buenos Aires—were made by Pablo Gonzalez, president of YPF, in statements to national media.

Collaboration on the project’s design is under way, Gonzalez said, but the project requires not only favorable market and legal conditions but also "a volume equivalent to 80% of the gas currently produced in Argentina more than 140 million cu m/day."

"After the law is approved, we will bid for the gas pipeline with Petronas, sign the final investment decision, and probably establish a joint-stock company…which will commence with a USD10 billion investment and require a new legal structure," Gonzalez said.

The multi-phased project, which will be the largest in South America, envisages eventual construction of three land-based liquefaction trains. Land has been secured to initiate construction. A dedicated, 36-in OD natural gas pipeline will supply initial feedstock to the plant, followed by two more pipelines.

The plan is to begin with one FPSU during construction of the first of the three trains, although a second ship could be added prior to completion of the first onshore phase, according to a company source.

The second phase includes construction of the scalable liquefaction plant with a final capacity of 25 million tpy. Total investment is estimated at USD56 billion, which includes infrastructure and Vaca Muerta development over the 15-year project period.

We remind, Petronas sees its domestic oil and gas production peaking at about 2 million barrels of oil equivalent per day (boepd) by 2024. About 60-70% of its production is natural gas and will remain so going forward.

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