April 14th, 2015:

Baghdad, Iraq (CNN)Hundreds of additional Iraqi troops are being sent to reinforce colleagues who are trying to fend off ISIS' attempt to overrun Iraq's largest oil refinery, a key paramilitary force said Tuesday.   The reinforcements come four days after ISIS began attacking northern Iraq's Baiji oil refinery, a key strategic resource that has long been a target because the facility refines much of the fuel used by Iraqis domestically.

The additional troops came from Camp Speicher, a fortified Iraqi base near the city of Tikrit, according to the media office of the Hasd Al-Shaabi militia. The reinforcements include two federal police regiments, an Iraqi military quick reaction force battalion and a regiment from Hasd Al-Shaabi, which is a predominantly Shia militia that worked with the Iraqi military as well as Sunni fighters to liberate Tikrit from ISIS about two weeks ago. ISIS launched an assault on the Baiji oil refinery late Saturday. By Sunday, ISIS said its fighters were inside the refinery and controlled several buildings, but Iraqi government security officials denied that claim and insisted that Iraqi forces remained in full control. The Hasd Al-Shaabi media office said Tuesday that Iraqi troops already at the refinery were holding their ground, preparing to push ISIS out of the facility entirely.  The attack could have a significant effect if it damages oil fields or machinery.

The refinery is 40 kilometers (25 miles) from Tikrit.

CNN's Hamdi Alkhshali reported from Baghdad. CNN's Jason Hanna wrote in Atlanta. CNN's Arwa Damon and Catherine E. Shoichet contributed to this report.

By CNN

April 14th, 2015:

Contrary to assertions by government that the Tema Oil Refinery’s (TOR) debts have been paid out of levies instituted in 2003 to clear the refinery of all its debts, The Finder’s investigations indicate that the refinery has over Ghc400 million outstanding debt sitting in its books. The amount is made up of loans for the construction of tanks and an outstanding amount owed GCB Bank, some trade supplies, the Volta River Authority, and the Nigerian National Petroleum Corporation. The debts, which are in dollars, have also increased as a result of foreign exchange losses due to the depreciation of the cedi and interests that have accrued on the amount over the years. As at the time the TOR recovery levy was introduced in 2003, the company owed Ghc1.4 billion, but how much was actually collected and what the amount was used for continue to be a mystery. The Finder also gathered that TOR currently owes other banks such as UT Bank, Access Bank, Ecobank, and GT Bank. For example, information gathered indicates that TOR took a 120-day $60 million facility from Access Bank to purchase crude after it resumed operations recently but has only been able to pay $30 million out of the amount, even though the time for full payment has elapsed. Efforts by civil society groups and many well-meaning Ghanaians to have government account for the monies collected as TOR recovery levy have not yielded any result. With the myriad of problems facing the efficient operations of Ghana’s only refinery, The Finder can report that the facility continues to make a loss of a minimum of $5 million each time it is forced to shut down due to the unavailability of crude or in the event of a power cut to the facility. TOR requires a constant supply of eight megawatts of power to be fully operational, but it is able to generate 5.5 megawatts from its generators and depends on ECG for the remaining 2.5 megawatts.

With the erratic power supply over the past three years, the effect on the refinery is anyone’s guess. By design, the refinery is expected to run continuously for a maximum of two years before it is shut down for a major maintenance of its equipment, but information gathered by The Finder indicates that the refinery is only able to run continuously for only two to three weeks and then shuts down due to unavailability of crude. The general shutdown turnaround maintenance for 2011 and 2013 were not carried out because of lack of finance. In 2010, TOR requested for $67.7 million for plant stabilisation and enhancement projects. Consequently, TOR has completed the first phase of plant stabilisation and enhancement projects on the crude distillation and residual fluid catalytic cracking units at a cost of $30 million given to TOR in 2012. TOR is awaiting the remaining $37.7 million in government funding to fix the problem and begin a second phase of stabilisation and enhancement projects designed to ensure the reliability of operations at the refinery. “Now we run the machines for two or three weeks and we shut it down because of the lack of crude oil, so you have small amount of crude and you run for about two weeks, you shut down and you start again and shut down,” Samuel Boateng, Junior Staff Secretary of TOR told The Finder. “When you start the plant and you shut it down, you lose about $5 million,” he stated. He explained that the regular shut down of the machines at the facility was having a heavy financial toll on the refinery. He explained that, ideally, “after every two years you shut the whole equipment down and open every unit to assess its state, and because we have not done this for the past six years, it is really affecting our plant.”

He explained that the refinery deals with very high-temperature equipment and very corrosive chemicals, hence a shutdown cause’s thermal shock to the equipment. “The effect of starting and shutting down is what breaks down our equipment. We start from a gradual process to a level of about 700 degrees Celsius and all of a sudden there is either a light out, and what it means is that you have to shut down and shutting down at that temperature there is a sudden cooling causing contraction of metals of our equipment,” he explained. The Finder also gathered that for the past six years, the refinery has not undertaken any maintenance work on the facility, which accounts mainly for the recent shut down just a few months after it resumed operations. As a result of the incessant shutdown of the plant and lack of maintenance of the facility, a unit at the Residual Fluid Catalytic Cracker, called the regenerator, has a component called the Cyclone, has currently broken down. A crane to lift this component out for repairs will cost $49,000 per day for four days, an amount management of the refinery is struggling to raise to get the job done. The Finder gathered that, alternatively, the maintenance personnel at the refinery are opting for a second option of using chain blocks, which involves a lot of manual work and risks in their effort to save the refinery cost. TOR’s operations were stalled for a long period due to its operational inefficiency and the inability to the facility to establish letters of credit for the purchase of crude oil. It resumed operations on December 29, 2014 only to break down on March 13, 2015. Yesterday, management, at the behest of anxious workers at the refinery, held a durbar to explain management’s plan to resuscitate the ailing refinery. The workers’ anxiety stems from rumours making rounds among the workers that government was deliberately running the facility down to enable it justify reasons to privatise it. In November 2014, then Deputy Minister of Energy and Petroleum, John Jinapor announced that the government was in talks with Petro-Saudi in a joint-venture arrangement to revive the ailing oil refinery. The agreement, when reached, would see the Arabian firm plug the inefficiencies that have engulfed TOR. Per the agreement, a new marketing firm called TOR-PS (TOR Petro-Saudi) would be set up to procure crude oil and sell the finished product. Petro-Saudi is expected to control 49% of the stakes while Ghana manages the remaining 51%. Information gathered by The Finder indicates that the Petro-Saudi deal is premised on getting a healthy and reliable processing plant.

By GhanaWeb

April 14th, 2015:

Australia's oil product imports in 2015 are expected to grow at the fastest pace in at least seven years as it shuts another ageing refinery, putting it on track to become Asia-Pacific's second biggest gasoline importer by the end of the decade. Higher Australian imports should curb losses in Asian diesel margins that have dropped 14 percent this year due to expanding refining capacity in the Middle East. "The shutdown of the refineries will mean a big increase in imports, which will give some relief to (an oversupplied) oil market," said Richard Gorry, director at JBC Energy Asia. Australia, which relies heavily on diesel to operate mines and carry output to ports, is the Asia-Pacific region's top importer of the fuel. Diesel makes up more than half of its total oil product arrivals. There are worries rising dependence on imports could hit Australia's energy security, but the country sought to allay concerns in a white paper last week, saying diversity of global crude and fuel markets would help maintain supply reliability. Many of Australia's ageing refineries have shut or converted into fuel terminals as they chalked up losses amid competition from newer mega-processing sites in Asia. BP will cease production at its 102,000 barrels-per-day (bpd) Bulwer Island refinery in Brisbane in May, following closures by Royal Dutch Shell, Caltex Australia and Exxon Mobil Corp over the past few years. Due to the shutdowns, Australia will import about 30 percent to 42 percent more oil products this year, consultancies Wood Mackenzie, FGE and JBC Energy said. This implies an additional supply of 110,000 to 157,00 barrels per day versus 2014 levels.

That would be the biggest rise since at least 2007, Reuters calculations based on Australian government data show. The country's overseas purchases of oil products are set to climb also because output from its remaining four ageing refineries needs to be shut sometimes for maintenance purposes. Australia's demand for diesel is seen rising by about 2 percent to 3 percent this year, while jet fuel demand could grow 2 percent to 7 percent, the consultancies said. But gasoline demand may remain flat or drop about 1 percent, as consumers switch to more energy-efficient automobiles.

Australia attracts new trade flows

The refinery closures are already redrawing trade flows in the region, with Indian diesel and Chinese gasoline cargoes being shipped to Australia despite higher freight rates. Australia typically ships in gasoline from South Korea and Singapore, while diesel and jet fuel are predominantly shipped from Singapore, Japan and South Korea. Australia is set to topple Malaysia to become Asia-Pacific's second largest gasoline importer by 2020, just after Indonesia, consultancy FGE says. Gasoline arrivals in the country were at 3.2 million barrels in January, up 24 percent from a year ago and more than double from January 2011 when most of the refineries were operational. Australia's diesel imports more than tripled from 2011 to about 9.3 million barrels in January, while jet fuel imports more than doubled to nearly 2 million barrels, government data showed. Australia's growing import appetite has prompted global oil traders such as Vitol, Trafigura through its Puma unit, Mitsubishi Corp and Idemitsu Kosan to enter the country by snapping up assets such as refineries, retail stations, fuel depots or storage terminals.  "The market will become more competitive and those who have a strong supply chain would emerge as winners," said Suresh Sivanandam, a senior analyst at Wood Mackenzie.

By Sydney Morning Herald

April 13th, 2015:

HOUSTON — More than 400 striking hourly workers represented by the United Steelworkers union at Lyondell Basell Industries’ Houston refinery are scheduled to vote on the company’s last offer today and Tuesday, a local union official said Sunday.  “We were presented with a last, best and final offer yesterday evening,” said Kent Farr, an official of USW local 13-227. A Lyondell spokesman confirmed the company sent the offer across the negotiating table Saturday night. Companies usually make a last, best and final offer in an attempt to bring negotiations to a close. If the offer is rejected, the company can declare an impasse and impose rules that take the place of a contract. Negotiations can continue while such rules are in place. USW Local 13-227’s executive committee recommended on Sunday that the union’s membership reject the offer.

Talks between the union and Lyondell have been focused on the company’s proposal to curtail long-standing rules on overtime pay that allow a worker to receive several wage premiums when working extensive overtime hours. Hourly workers went on strike at the 263,776 barrel-per-day Lyondell refinery on Feb. 1, as part of the largest U.S. refinery workers’ strike in 35 years. A total of 6,550 workers walked off their jobs at 15 plants including 12 refineries that account for one-fifth of national refining capacity. A national settlement was reached March 12. As at Lyondell’s Houston refinery, ongoing disagreements over local issues have kept strikes going at Marathon Petroleum Corp's Galveston Bay Refinery and South Houston Green Power Plant in Texas City, Texas; BP Plc's Whiting, Ind., refinery; and the BP and Husky Energy joint-venture refinery in Toledo, Ohio.

By Reuters

April 13th, 2015:

HANOI, April 13 (Bernama) -- Negotiations under which PetroVietnam will sell a 49 per cent stake in the Dung Quat refinery, the country's sole oil processing facility, to the Russian oil company Gazprom Neft are expected to be concluded soon, Vietnam News Agency (VNA) reported citing Russia-based Interfax-ANI news agency.  "At the current time, we don't see any obstacles that can destroy this potential agreement," Gazprom Neft's Chairman Alexander Dyukov was quoted as saying.  Dyukov said Vietnam's economy was booming and its demand to import oil products was likely to increase. The oil refinery's capacity needed to be upgraded to make more profit. Earlier, Gazprom Neft said it now had exclusive rights to negotiate with PetroVietnam on acquiring 49 per cent of shares, the highest foreign ownership rate in a Vietnamese company, in the refinery operator's Binh Son Refining and Petrochemical Co. However, no value or timing was given for the purchase.  This negotiation is in line with an agreement signed between the two countries during Russian President Vladimir Putin's visit to Vietnam in 2013. Following this, Gazprom Neft, the oil arm of top global gas producer Gazprom, may buy a 49 per cent share in Dung Quat refinery.

The two countries also signed a tentative intergovernmental agreement under which, after the share purchase, the Russian company is responsible for supplying oil to Dung Quat refinery, from 3 million tonnes in 2015, 3.6 million tonnes in 2016 to 4.8 million tonnes in 2017 - and no lower than 6 million tonnes from 2018 onwards. According to Gazprom Neft's assessment, the refinery upgrade may cost US$1-1.5 billion. This would raise capacity from the current 6.5 million tonnes per year to 10-12 million tonnes. The refinery is expected to produce 8.5 million tonnes of crude oil a year (171,000 barrels per day) once a projected upgrade is finished by 2022.  On the state-level visit by Russian Prime Minister Dmitry Medvedev to Hanoi early this week, the two countries also agreed to step up cooperation in expanding oil and gas exploration and production in Vietnam.

Early this week, PetroVietnam and Gazprom Neft signed a tentative agreement to collaborate on exploring and developing oil and gas resources beneath the Pechora Sea in the Russian Arctic. The signing was witnessed by the two countries' prime ministers. By October, the two sides will unveil the basic terms of partnership, as well as release a list of priority oil and gas fields. Vietnam and Russia have long had close energy cooperation, beginning with the construction of a hydropower plant in the 1980s and then oil and gas joint venture Vietsovpetro. 

By BERNAMA