January 31, 2020:

Lyondell Basell Industries’ Houston refinery operated at near full capacity in the fourth quarter of 2019, providing earnings before interest, taxes, depreciation and amortization (EBITDA) of $22 million, Chief Executive Bob Patel said. The refinery ran at 1,000 barrels per day (bpd), or 0.3%, below its capacity, which the company places at 268,000 bpd, Patel said in a conference call on Thursday. The Houston refinery has been able to run high-sulfur fuel oil as a feedstock in its crude distillation units (CDUs), Patel said, after HFSO dropped in price in the fourth quarter due to the switch to very low-sulfur fuel oil for ships on Jan. 1, 2020 under a mandate from the United Nations’ International Maritime Organization. “We are able to run supplemental feed typically when we’ve cut back on crude run rates for a variety of reasons,” Patel said. “We can run between 20,000 and 40,000 barrels a day of additional HSFO. And I would say in a typical month, maybe that contributes $5 million to $9 million of additional EBITDA. So that gives you a sense for contribution.” Lyondell has run HFSO while the production levels on its CDUs have been reduced. “We did do some of that back in January because we had some external events that caused some downtime on one of our crude units and some internal issues,” Patel said. The refinery’s two CDUs were cut back in January because of clogging in the initial intake sections of the units. Asked about the refinery’s future as a Lyondell property, Patel said the company would see what develops in the long term.

“Again, our focus has been very consistent: run the refinery as well as possible, try to optimize on the product side so that we can maximize value, and we’re continually focused on that. And we’ll see how things play out longer term,” he said.

By Reuters

January 30, 2020:

Unifor and the Federated Co-operative Limited (FCL) pledged to be back bargaining at 9 a.m. Friday after a nearly two-month-long lockout.Scott Doherty, Unifor’s executive assistant to the national president, said Thursday he hopes negotiations go smoothly and a fair deal is reached for members of Local 594. But during the union’s rally outside the Saskatchewan Legislative Building, Doherty again called on Premier Scott Moe to show leadership, should talks break down.“We haven’t seen much leadership from you,” charged Doherty, with those gathered saying “shame” in response. “If Co-op doesn’t come to the table ready to bargain in good faith tomorrow, then we need your government to impose binding arbitration,” he added.Doherty said the union hasn’t yet made a formal request for binding arbitration, but at this point, it wants to send a message to the government.“If it becomes clear at the table that FCL is still unwilling to engage in good faith negotiations, the union’s demand that Premier Moe step in still stands,” Unifor’s national president Jerry Dias said in a statement. “We need the provincial government to support Saskatchewan workers.”According to statements from both sides, the two sides are meeting because the union agreed to follow Justice Janet McMurtry’s injunction order, allowing all vehicles entry and exit from the Co-op Refinery Complex (CRC). This includes all CRC gates, the refinery business office and McDonald Street terminal. The injunction, imposed in late December, limited how long pickets could delay vehicles at the CRC. But within weeks, the union erected fences and reinforced them with vehicles and wooden pallets.In a release, the company had said the union had to dismantle the blockade at Gate 7 and follow the court order for negotiations to resume. Doherty said the barricades around the CRC are set to come down Friday morning as talks resume.

But he said should anything change, or should FCL bargain in bad faith, the union is ready to double down on it’s previous action.“We’re also willing to put the barricades up as quickly as they come down if in fact bargaining doesn’t proceed the way it should go and we can’t get a deal,” he said.As of early Thursday evening, the barricades still appeared intact.In its release announcing the return to bargaining, Unifor said, “Out of respect for the collective bargaining process, no other information will be released until a tentative agreement is reached or talks break off.”But there were plenty of words said at the rally outside the Legislative Building.Gil McGowan, president of the Alberta Federation of Labour, addressed the crowd, saying the workers he represents in Alberta salute their efforts.“You guys are demonstrating the power of working people,” said McGowan. “They have the money, but you know what we have? We have the many.”

Unifor Ontario director Naureen Rizvi also spoke, tying the locked-out workers of Regina to the protests and riots in France, also over pensions. She offered a message of support to Local 594 leading up to Friday morning’s meeting.“While you’re bargaining we’re going to hold down your picket line,” said Rizvi, to applause from those pickets gathered. arla McCrie, a process operator and recording secretary for Local 594, was glad the fences are coming down and the sides are speaking again. Having worked at the refinery for 15 years, McCrie feels the union was forced to use a heavy hand during the lockout and that without the barricades, she doesn’t think talks would have resumed.“It makes me feel like what we’ve done is really push our company to come back to the table,” said McCrie. “There’s only so many avenues we have with legislation and with the current political atmosphere here in Saskatchewan.”The union has removed previous pre-conditions that have held up bargaining.According to management, those pre-conditions included demands that a fully employer-funded defined benefit (DB) pension plan remain untouched for employees who now have it, and that in future rounds of bargaining, the existing DB pensions would off limits.The police, city, and fire services have said their concerns are public safety, and wanting emergency services access to the CRC.As a show of good faith a week ago, pickets opened up an emergency access to the CRC’s main entrance, then on Wednesday, Dias said pickets also opened up access to several additional gates.

By leaderpost.com

January 30, 2020

Advocates for restoring the Philadelphia Energy Solutions complex in South Philadelphia as an oil refinery say the 1,300-acre property comes with legal restrictions that inhibit its reuse as anything unrelated to energy or chemical production, complicating the property’s potential bankruptcy sale to an industrial redeveloper.A deed restriction on the properties, included as part of a previous sale, provides that the land can be used only for commercial or industrial activity. The language specifically excludes schools, nursing homes, residential-style facilities, and “publicly accessible recreation areas,” which some community activists had hoped would replace refining operations. Another deed restriction appears to even more narrowly circumscribe potential uses of the property by limiting disturbances of its soil, which is seriously contaminated after 150 years of oil processing.The deed language provides that “disturbance of the subsurface strata and soils of the premises shall be avoided,” except as may be necessary when constructing and developing improvements to the refinery, or “installing new operations, business or processes at the refinery that are related to the refinery business, the energy industry generally and the chemical industry.”The deed restrictions apply to most land parcels occupied by the fuel refining complex.

The restrictions, which are filed in the public record, are powerful legal tools that bind subsequent property purchasers and are difficult to modify without a separate court proceeding, according to legal experts who spoke anonymously because their firms have relationships with one of the parties in the bankruptcy.Advocates for resuming refining operations, who conducted a rally at Philadelphia City Hall on Thursday, say the legal restrictions support their campaign to get PES to reject a $240 million bid from Hilco Redevelopment Partners of Chicago for the property. In a Jan. 17 bankruptcy auction, the refinery chose Hilco, which city officials say does not intend to resume refining operations. Hilco beat out a rival developer, Industrial Realty Group (IRG), of Santa Monica, Calif., whose supporters say bid $25 million more than Hilco, but was listed as the runner-up. IRG has since teamed up with Philadelphia Energy Industries, headed by former refinery chief executive Philip Rinaldi, who said he wants to restore refining operations.Hilco and IRG could not be reached Thursday. The refinery shut down and declared bankruptcy — for a second time in two years — after a devastating June 21 fire.U.S. Bankruptcy Court Judge Kevin Gross has scheduled a Feb. 6 confirmation hearing in Wilmington to consider the refinery’s reorganization plan. Objections to the plan are due Feb. 3. The refinery can change the plan before the confirmation hearing.About 500 labor union members rallied outside City Hall on Thursday afternoon to support saving the refinery, which they say is a major economic engine for the region. The unions — including steelworkers, pipefitters, steamfitters, insulators, and electricians — represent workers who were among the refinery’s 1,100 employees, as well as hundreds of other contracted workers. The rally was organized by the Philadelphia Building and Construction Trades Council.Organizers said they intended the rally to serve as a counterpoint to activists and public officials who have welcomed the closure of the refinery as an improvement to public safety and public health. Before its closure, the refinery was the region’s largest stationary source of air pollution.“The things these people have been saying — it’s getting to the point where we’ve had enough,” said Jim Snell, business manager of Steamfitters Local 420, who encouraged the crowd to serenade City Hall with boos.Potential complications with the deed restrictions have emerged publicly only in recent days as supporters of restoring the refinery have mounted an effort to resume operations at the site, which was the East Coast’s largest refinery before it closed.The restrictions are spelled out in a 22-page “special warranty deed” filed in 2012 with the Philadelphia commissioner of records when the property was sold by Sunoco Inc. to Philadelphia Energy Solutions. Sunoco, which is now owned by Energy Transfer LP, retains legal responsibility for remediating contamination that occurred before 2012. The deed restrictions apparently were a means to protect its ongoing interests to remediate the property under an agreement with the Pennsylvania Department of Environmental Protection. The deed restrictions were not mentioned in a report issued in November by Mayor Jim Kenney’s Refinery Advisory Group, which encourages a reuse of the site that is “cleaner, safer, and better for Philadelphians.” The restrictions were also not cited in a 2018 report by Penn’s Kleinman Center for Energy Policy, which closely examined legacy issues with the financially troubled refinery. Peter Navarro, the assistant to the president for trade and manufacturing policy, mentioned the deed restrictions in an interview with The Inquirer on Tuesday, in which he expressed the Trump administration’s support for efforts to keep the 335,000-barrel-a-day refinery operating. Navarro said that a thousand jobs and national security interests would be affected by the closure, and would make the Northeast too dependent upon fuel imports.Rinaldi, the retired refinery executive who has teamed up with IRG to restart the plant, also mentioned the deed restrictions in an interview Tuesday, saying the provisions were “certainly not inconsistent with what we’re trying to do.” Rinaldi’s plans, which he outlined in August, include restarting the refining and working in partnership with a company that announced plans in 2018 to build a $120 million digester that can convert food waste into renewable methane gas. Rinaldi also suggested that some solar panels might also be installed on the site.

City officials, in the advisory group’s report, suggested the property most likely would be reused in an industrial or commercial capacity, including some continued use as either a refinery or as a fuel depot. A city contingent was present at the closed-door auction and afterward welcomed Hilco’s bid.A spokesman for Mayor Jim Kenney on Thursday broadly interpreted the deed restrictions.“There is a deed restriction for the property underlying the refinery, but it most certainly does not limit the property’s use to refining, or to only industrial uses,” Mike Dunn, a city spokesman, said in an email. “The current deed, in fact, permits use for most commercial and industrial uses. Use of the property for housing, recreational areas open to the public generally, nursing homes, and other similar sensitive uses are prohibited.”Some language in the deed restrictions seems to be open to interpretation — the requirement that soil disturbances “shall be avoided” may not be as strong a commandment as “must be avoided.”Any disputes over the deed restrictions, and whether they might be modified, could complicate the final resolution of the property with additional litigation.

By www.inquirer.com

January 30, 2020:

The Angolan Ministry of Mineral Resources and Petroleum (Ministério dos Recursos Naturais e Petróleos – MIREMPET) has closed the call for applications for the construction of the Soyo Refinery. Ministry officials will hold an opening ceremony on Friday, when the proposals submitted for the tender will be publicly opened. The different offers will then be analysed by the ministry and the winner will be announced on 31 March, 2020.The new refinery will be able to process 100 thousand barrels of crude oil per day and greatly contribute to expand Angola’s downstream sector. The only refining facility operating in the country currently is the Luanda Refinery, processing around 60 000 barrels per day, corresponding to just 20% of the country’s fuel needs.The Soyo venture, along with the new Lobito and Cabinda refinery projects and the refurbishment of the Luanda refinery, is part of the government’s plan to make Angola self-sufficient in fuel production and to develop an economy-boosting the downstream sector. TThe government has designed a number of fiscal incentives to lure investors to bid for the Soyo project. In particular, the Private Investment Law reduced the Industrial Tax by 80% for an eight-year period, cut the Urban Building Tax by 75% for office and investment buildings and reduced taxes on capital and dividends by 80% for the same time period.

The conclusion of the tender period comes just 12 days after Sonangol announced the signing of an agreement with Gemcorp Capital LLP for the construction of the Cabinda Refinery. Works to prepare the terrain for construction are expected to start in February 2020. Located in the Malembo plane, some 30 kilometres North of the city of Cabinda, the refinery’s first phase of development, scheduled for conclusion by the end of 2021, will be able to process 30 thousand barrels per day. The second phase will double that capacity by the end of 2023. Sonangol expects the first phase will create 2,000 direct and indirect jobs while the second phase could add another 1,800 positions.Sonangol first announced the commissioning of the Cabinda refinery to United Shine Ltd in June 2019, a consortium that was responsible for financing 90% of the development, with the rest being assured by Sonangol. In early December 2019, Sonangol announced it had revoked the contract as United Shine had not complied with its obligations and had failed to demonstrate it had the financial capability to complete the project. Gemcorp, a capital investment fund based out of London and focused on emerging markets, has an established history of financing projects in Angola.The Lobito refinery is the largest of the three new downstream facilities, at 200 thousand barrels per day. The project kicked off in 2012 with an estimated budget of $10 billion, but it was suspended by Sonangol in 2016 following the oil price crash. Reportedly, 75% of the budget had already been spent on developing infrastructure at the site.

The project only restarted in late 2017.In 2018, Sonangol announced it had shortlisted seven companies to conclude the project, but never publicly revealed the winner. In a rare interview to a local Angolan newspaper in December 2019, Sebastião Gaspar Martins, Member of the Board of Directors at Sonangol indicated that due to its considerable dimension, the Lobito refinery would not be operational until 2025. It is expected to create up to 10, 000 direct and indirect jobs.Finally, President João Lourenço indicated in his October 2019 state-of-the-nation address that the expansion and refurbishment project of the 60-plus year old Luanda refinery was already approved and that it would see the facility’s processing capacity expand by as much as four-fold by 2021, to what would amount to around 240 thousand barrels per day.According to the available figures, this development alone could cover 80% of the country’s fuel needs and ease the pressure on national oil company, Sonangol.

By africaoilandpower.com

January 29, 2020:

Exxon Mobil Corp (XOM.N) on Friday reported a 5.2% drop in fourth-quarter profit on weaknesses in chemicals and refining and flat oil and gas output, with asset sales helping to stem the decline. Oil companies last quarter suffered from weaker prices for their products, and in Exxon’s case it has been spending heavily to boost its oil output to reverse production declines.Shares were down 3% to $62.86 in early trading. The stock has dropped about 29% since Chief Executive Darren Woods took over three years ago.Exxon’s full-year profits of $14.3 billion fell short of the potential $25 billion that Woods forecast last March at the company’s investor day.“There’s no doubt that 2019 was a challenging year for a number of our businesses,” Woods said on a Friday morning call with analysts, noting that prices and margins are near or at 10-year lows for natural gas, refining and chemicals.Exxon is betting that a growing global middle class will drive demand for its products despite what Woods called the “short-term impact” of excess supply.

“We believe strongly that investing in the trough of this cycle has some real advantages,” he said.Its production in the Permian Basin, the largest U.S. shale field, was up 54% from a year ago to around 294,000 barrels of oil and gas daily. But quarterly profits on U.S. production were down 74% as the company spent heavily to boost output and suffered from lower natural gas prices.Overall, the exploration and production business, its largest, benefited the most from the sale of production assets in Norway for $4.5 billion to Vår Energi AS.Analysts said the weakness across its businesses means Exxon will still have to borrow to cover its shareholder dividend. Investors have been pushing oil companies to improve their returns by increasing dividends or share buybacks. Exxon has frozen its share repurchases except for offsetting dilution for employee awards.“Unlike its peers, the company is not generating free cash flow given its large capital spending program,” said Jennifer Rowland, analyst with Edward Jones.Exxon’s $355 million loss in chemicals mirrors that of rival Royal Dutch Shell (RDSa.L), and was the first loss in that business in at least 13 years, said Biraj Borkhataria, analyst with RBC Capital Markets, adding “we do not expect a significant recovery” in 2020.Oil majors have added and expanded plants to boost plastics production but now face a global chemicals glut and tariffs on U.S. exports to China. Exxon’s chemicals business regularly generated $1 billion in quarterly profit as recently as 2018.

Its refining business earned $898 million, down 67% from last year, on lower margins.Net income attributable to Exxon fell to $5.69 billion, or $1.33 per share in the quarter from $6 billion, or $1.41 per share, a year earlier.Excluding one-time items, per share earnings were 41 cents, below Wall Streets expectation of 43 cents, according to Refinitiv. Analysts earlier this month had slashed estimates from 71 cents after the company warned of weakness in chemicals and refining.

The largest U.S. oil producer’s oil and gas output rose less than 1% to 4.02 million barrels per day in the quarter, the sixth quarter in a row of year-over year gains.Earlier this week, the company raised its Guyana oil estimates by 2 billion barrels, bringing total recoverable oil and gas resources from the discovery to more than 8 billion barrels.

By Reuters