Sinopec not interested in acquiring Shell's Singapore assets

MOSCOW (MRC) -- Asia's top refiner, Sinopec Corp, is not interested in acquiring Shell's refinery or petrochemical plant in Singapore although it is keen on participating in a shale gas project in Saudi Arabia, as per Hydrocarbonprocessing.

Sinopec President Yu Baocai was speaking after sources last week told Reuters that Shell had hired Goldman Sachs to advise on a potential sale of its Singapore assets and that Sinopec was among the companies reviewing them.

However, Yu, speaking at a briefing in Hong Kong after the state-run oil and gas giant reported a 20% decline in interim earnings, said that Sinopec is interested in participating in Saudi Arabia's Jafurah shale gas project.

This is in line with an earlier Reuters report saying Sinopec and TotalEnergies were in separate discussions with state-run Saudi Aramco to invest in the Jafurah project, the largest shale gas development outside the U.S., with reserves estimated at 200 trillion cubic feet of raw gas.

Yu also said that Sinopec was one of the international companies invited by the Sri Lankan government to build a refinery there, and that it was evaluating the matter. Sri Lanka shortlisted Sinopec and commodities trader Vitol to become potential investors in a proposed export-oriented refinery in Hambantota.

Separately, Sinopec is set to start operating a retail fuel business in the island nation next month. Yu also said that Russian oil makes up a small fraction of Sinopec's international crude purchases and that it will make "dynamic adjustment" in future buying based on the global market situation.

Chinese refiners have benefited from cheap crude oil supplies from Iran, Venezuela and Russia as Western sanctions have forced those producers to sell oil at deep discounts to keep revenue flowing. Although Chinese state majors have shied away from Iranian and Venezuelan oil, Sinopec has been taking in Russian supplies, traders have said.

We remind, Sinopec reported a 10.5% year-on-year increase in first-half 2022 net profit on the back of strong crude, even as its chemical earnings shrunk 94% as demand collapsed amid COVID-19 curbs. Strong crude and COVID-19 outbreaks dampened domestic demand for oil products in April-June 2022, with chemical operations have had to grapple with high cost, high inventory, low utilisation rates and poor margin. Ethylene consumption in the first half barely grew, logging a 0.1% year-on-year increase, while output grew 5.9% to 6.85m tonnes. Sinopec is targeting to produce 7.2m tonnes of ethylene in the second half, which will bring the full-year production to 14.05m tonnes, up 4.9% from 2021.

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MOSCOW (MRC) -- Braskem and the University of Sao Paulo (USP) have announced a partnership to develop lines of research for converting CO2 into other chemical products. CO­2 is one of the greenhouse gases and among the biggest contributors to climate change, said the company.

The project's mission is to deploy the technologies resulting from these lines of research to reuse CO2 to obtain chemical products such as olefins and alcohols, thus mitigating its emissions into the environment and using it as a raw material for the production of polyolefins.

The partnership with USP, through the Research Center for Greenhouse Gas Innovation (RCGI), which also includes the participation of the Federal University of Sao Carlos (UFSCar), focuses on studying innovative routes for CO2 conversion through both catalytic and electrocatalytic processes. While in conventional processes in the chemical industry, catalysts (materials that trigger chemical reactions) are thermally activated, electrocatalysis uses electricity to activate them. As such, renewable energy can be used partially or fully for CO2 conversion.

The project, which started one year ago, considers a total period of five years for developments on a laboratory scale, with the possibility of extension based on the progress of research.

Braskem will contribute with investments and its expertise in industrial processes, and will also monitor and guide the studies. The research groups from USP and UFSCar will coordinate and conduct the studies using state-of-the-art infrastructure at the laboratories and with assistance from multidisciplinary teams consisting of chemists, physicists, and engineers, among others, with various levels of academic qualifications.

For Braskem, the partnership will also help it achieve its sustainable development targets, especially concerning reaching carbon neutrality. The company expects to reduce its greenhouse gas emissions by 15% by 2030 and attain carbon neutrality by 2050.

We remind, Petrobras is not planning to sell its 36% stake in petrochemical firm Braskem, newspaper Valor Economico reported on Thursday, citing unnamed sources. Petrobras is one of Braskem's main shareholders alongside conglomerate Novonor, which holds a controlling stake in the firm but has sought to sell it to repay creditors after entering bankruptcy protection. According to Valor Economico, Petrobras CFO Sergio Leite said during a meeting with analysts that the company has no plans to sell off its stake in Braskem.

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MOSCOW (MRC) -- Turkey's foreign and energy ministers met the head of Iraq's semi-autonomous Kurdistan regional government for talks on Thursday, including on oil exports, which Turkey has blocked from the region since March this year, said Hydrocarbonprocessing.

Iraqi Kurdish Prime Minister Masrour Barzani, met with Turkey's Foreign Minister Hakan Fidan and its Energy Minister Alparslan Bayraktar in Erbil, the government of the region said in a statement.

"We discussed a range of regional issues, including bilateral Iraq-Turkey relations and also with the Kurdistan Region, as well as the mechanism of exporting the Kurdistan region’s oil," Barzani said in a joint press conference with Fidan following the meeting.

Neither official gave any further information on Iraq's northern oil exports and did not say if a deal had been reached to resume crude flows through Turkey.

Turkey stopped the oil flows on March 25 after losing a long-standing arbitration case brought by Iraq. Bagdad deems exports from the region via Turkey's Ceyhan port as illegal.

Iraq's oil minister has been in Ankara this week where he and his Turkish counterpart failed to reach an agreement to restart the oil exports, although both sides agreed on further talks.

We remind, The CEO of Brazil-based Braskem, Roberto Bischoff, said that the company that is Latin America?s biggest petrochemical organization is seeing atypical scenarios in plastic resin markets that include very large flows of plastic resin exports from the world?s top producer countries into the less developed areas because much of the Northern Hemisphere demand remains challenged. “Atypycal scenarios are common in the industry but this scenario specifically includes a few aspects that really aggravate this,” Bischoff said at the end of the second quarter conference call.

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MOSCOW (MRC) -- The third phase of China's largest single coastal oil storage facility has been completed and went into operation on Wednesday in Qingdao port, in the eastern province of Shandong, the state media outlet China News reported, as per Reuters.

The third phase of the Dongjiakou crude oil reserve has a total capacity of 1.2 million cubic meters, taking the combined capacity of the project to 5.2 million cubic meters, state media said.

The facility is operated by the provincial government-backed Shandong Port Group, which owns and operates the province’s top ports at Qingdao, Rizhao, Yantai and Baohaiwan.

The port group handles approximately a quarter of China’s crude oil imports, the world’s largest.

We remind, rising prices of a popular Russian crude sold to China are poised to peak soon as more independent refiners are likely to switch to cheaper oil from Iran which has ramped up exports to fresh 4-1/2 year highs in August, several trade sources said. OPEC+ supply cuts and strong demand from large Chinese refiners for Russian oil have pushed prices for the ESPO Blend grade exported from the Pacific port of Kozmino to the narrowest discounts since the Ukraine war started.

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MOSCOW (MRC) -- India’s petroleum consumption increased to a record high in the first seven months of 2023 but growth has slowed markedly as the rebound from the coronavirus pandemic and lockdowns is completed, said Reuters.

The economy is being hit by the same combination of rapid inflation and slowing global trade that has hit other major economies across South and East Asia. Petroleum consumption increased to 135 million metric tons in the first seven months of 2023 from 128 million metric tons in the same period in 2022.

The increase in the first seven months was equivalent to roughly 255,000 barrels per day (bpd), down from growth of 415,000 bpd in 2021/22. Oil consumption growth of roughly 5% to 6% per year is consistent with the same reported growth in manufacturing output.

But it compares with growth of more than 1.0 million bpd in U.S. oil production in the first five months of 2023. It has not been fast enough to absorb the extra crude and tighten the global market at a time when consumption has been depressed in North America, Europe and China.

The relatively sluggish growth in India’s consumption has therefore added to downward pressure on crude petroleum prices so far in 2023.

We remind, Indian refiner Hindustan Petroleum Corp Ltd is meeting up to 23% of its oil needs through discounted Russian grades. Indian refiners, which rarely used to buy Russian oil, have been snapping up discounted barrels after many Western countries shunned purchases from Moscow following its invasion of Ukraine. HPCL's Russian oil intake is limited by the configuration of its refineries, Joshi said, but the company is maximizing the use of these cheaper so-called opportunity crudes, he added, helping "ringfence" it from risks arising from high oil prices.

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