ExxonMobil Baytown at reduced rates: Update 4

  • Market: Crude oil, Oil products, Petrochemicals
  • 23/12/21

Adds market impact.

ExxonMobil's 557,000 b/d refinery in Baytown, Texas, is operating at reduced rates following an explosion and fire on a desulfurization unit that injured four workers.

The fire broke out around 2am ET on 23 December on a unit that processes gasoline components, according to the company. Hours earlier refinery workers found a leak in a bypass line on the desulfurization unit, according to a report to state regulators, which led to flaring. Refinery crews lowered pressure on the leak location and put a repair plan into action to isolate the leak, according to the filing.

While outright prices in US Gulf coast distillates markets continue to rise on higher futures prices, no obvious effect was observed in spot markets today from the incident.

Regional ultra-low sulfur diesel (ULSD) cash differentials rose by 0.23¢/USG today, with a single trade confirmed at February Nymex -5.25¢/USG. ExxonMobil Baytown was not heard in any trades for naphtha.

The Harris County Sheriff's Office described the event as "some type of explosion" early in the day. The fire was extinguished around 10:30am ET and air quality monitoring is ongoing along the fenceline, ExxonMobil said.

The Baytown complex also houses petrochemicals operations — it has 1.13mn t/yr of propylene capacity spread across an olefins cracker and the refinery and 3.82mn t/yr of ethylene capacity at the olefins unit, along with associated downstream elements.


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27/03/24

South Sudan crude output halves on pipeline blockage

South Sudan crude output halves on pipeline blockage

London, 27 March (Argus) — South Sudan's crude production has almost halved to around 80,000 b/d because of a blockage at a pipeline in war-torn Sudan, South Sudan's oil ministry undersecretary William Anyak Deng told Argus today. A blockage along the Chinese-led Petrodar Pipeline is currently preventing around 100,000 b/d of South Sudan's heavy sweet Dar Blend grade from reaching Sudan's Bashayer terminal on the Red Sea for export, Deng said. But production of South Sudan's medium sweet Nile Blend grade has not been impacted as this is transported to Bashayer through the separate Greater Nile oil pipeline which remains online, he said. His comments come after Sudan earlier this month warned major oil exporting companies in South Sudan that his country [could no longer carry out its obligation to transport their crude]( https://direct.argusmedia.com/newsandanalysis/article/2549736). Dar Petroleum Operating Company (DPOC) — a consortium including China's state-controlled CNPC and Sinopec and Malaysia's state-owned Petronas — produces Dar Blend but has had to all but cease output, Deng said. Nile Blend production is split between the South Sudan-based firms Sudd Petroleum Operating Company's (SPOC) and Greater Pioneer Operating Company (GPOC) and currently running at around 80,000 b/d, he added.South Sudan's crude production stood at around 150,000 b/d in February, according to Argus estimates. The blockage is due to gelling issues — solidifying crude — in the Petrodar Pipeline which Sudanese and South Sudanese engineers are struggling to resolve. This is because of a lack of diesel which is used to heat the crude or dilute it to help it flow, Deng said. "We are working to resolve the problem right now. There is mechanical work that is ongoing, we are trying to flush out the oil," he added. But the pipeline has been suffering from leaks and pressure drops for months, with repairs complicated by the ongoing civil war in Sudan between the army and the paramilitary Rapid Support Forces. Deng said it was becoming increasingly difficult to get permission from the warring parties in Sudan to move workers, equipment and spare parts to maintain infrastructure. He also said South Sudan has been sending diesel to Sudan to help with repair work given the closure of Sudan's 100,000 b/d Khartoum refinery which has come under repeated fire since the civil war began last year. Sudan also typically produces around 50,000 b/d of mostly Nile Blend crude, but this is thought to have been impacted by the civil war. Crude exports from Sudan's Bashayer port averaged 130,000 b/d in 2023 and hit 168,000 b/d in January, according to Kpler. But exports only averaged about 75,000 b/d since February. Landlocked South Sudan is entirely reliant on Sudan to export its crude and depends on oil sales for more than 90pc of government revenues. Any prolonged disruption to exports would put the country's economy in a precarious position. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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News

European bio-bunker March prices firm on uncertainty


27/03/24
News
27/03/24

European bio-bunker March prices firm on uncertainty

London, 27 March (Argus) — Marine biodiesel prices firmed in the second half of March across Europe as higher levels in underlying markets combined with supply uncertainty to lend support to blend prices, despite limited demand. Very-low sulphur fuel oil (VLSFO) firmed by $16/t to $585.58/t on a dob Amsterdam-Rotterdam-Antwerp (ARA) basis and $17.47/t to $628.17/t on a dob Gibraltar-Algeciras-Ceuta (GAC) basis during 14-26 March compared with the two weeks prior. Gains in the fossil market were mainly attributed to an increase in European refinery turnarounds as well as stronger crude values. The front-month Ice Brent crude futures 16:30 GMT marker averaged $86.07/bl on 14-16 March, an increase of $2.92/bl from 1-13 March. Rising fossil levels were accompanied by increases in the biodiesel spot barge market. Prices for advanced fatty acid methyl ester (Fame) 0°C cold-filter plugging point (CFPP) on a fob ARA barge basis averaged $1,407.15/t during the last two weeks of March, a $53.58/t rise from 1-13 March. Used cooking oil methyl ester (Ucome) barges firmed by $47.47/t to $1,316/t during the same timeframe. Biodiesel prices have firmed from long-term lows on the back of a reduction in European production and limited demand. Higher prices in underlying markets were accompanied by an emerging theme of biofuel supply uncertainty. Participants reported that European suppliers may look to steer away from Chinese-origin biodiesel as the EU's anti-dumping investigation continues, with a conclusion by early 2025 at the latest. This was compounded by chronic disruption in the Red Sea, historically the most utilised route on the east-west voyage, leading to traffic redirecting via the Cape of Good Hope and a subsequent increase in freight costs. The potential shift in supply routes can be supported by changes in product flows. Some 19,000t of Fame has been exported from China with a marked destination in Europe in March so far, an 80pc drop from February's 106,000t — according to Kpler data. This month's exports are just 10pc of the 184,000t exported from China to Europe in March last year, according to Kpler. Declining volumes from China were accompanied by an increase in Fame volumes exported from northwest Europe intra-continental to 409,000t in March from 364,000t a month prior. GTT data pointed to a 47pc decline in Chinese biodiesel exports in January-February, coinciding with an increase in Chinese exports of used cooking oil (UCO) with northwest Europe the main destination. Uncertainty in the supply import pool coincided with raised concerns around the presence of "unestablished" biodiesel feedstocks in bunker fuels. A report from Lloyd's Register fuel oil bunkering analysis and advisory service (FOBAS) highlighted a correlation between engine fuel pump and injector related damage in vessels and the presence of cashew nut shell liquid (CNSL) in marine fuels utilised by the vessels. CNSL is one of the cheaper advanced feedstocks and can be eligible for Dutch renewable tickets (HBE-G) — which can help make marine biodiesel blends more appealing and price competitive to buyers, as well as reduce production costs. But participants noted that during tests conducted by shipowners to assess the compatibility of CNSL with marine engines, technical and specification limitations emerged because of potentially high acidity and metal contents. This prompted shipowners and bunker suppliers to avoid fuels that contain CNSL, which may further constrict the pool of biodiesel supply that can be integrated into the maritime sector. Argus assessed the price of B30 Ucome dob ARA, a blend comprising 30pc Ucome and 70pc VLSFO, at $839.17/t during 14-26 March — an increase of just under $22/t from the 1-13 March average. B30 Advanced Fame 0°C CFPP dob ARA range averaged just over $785/t during 14-26 March, higher by $16.19/t from the two weeks prior. B100 Advanced Fame 0 levels rose by $16.62/t to $1,159.79/t in the second half of March. B24 dob Algeciras-Gibraltar firmed to $812.61/t in 14-26 March, an increase of $19.50/t from prices on 1-13 March. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Grupo Carso expande su huella en energía


27/03/24
News
27/03/24

Grupo Carso expande su huella en energía

Mexico City, 27 March (Argus) — En los últimos años Grupo Carso, dirigido por Carlos Slim, ha expandido sus operaciones en el sector de petróleo y gas natural, destacándose como uno de los pocos operadores que han fortalecido su presencia a pesar de las restricciones del presidente mexicano Andrés Manuel López Obrador a la inversión del sector privado. A medida que los independientes y las grandes empresas petroleras han empezado a cerrar sus negocios en medio de la falta de nuevas oportunidades en subastas de la fase de exploración y producción, el Grupo Carso ha adquirido dos de los mayores contratos de aguas someras en los últimos 12 meses y ha expresado interés en hacer nuevas adquisiciones. Durante una conferencia de prensa de cuatro horas en febrero, Slim confirmó el interés de la empresa en desempeñar "un papel más importante en el sector de los hidrocarburos y, finalmente, participar en los productos petroquímicos." Slim, la persona más rica de México y director de un conglomerado que abarca desde las telecomunicaciones hasta la minería, también expresó su interés por "ser socio de alguien con experiencia" y por aumentar la participación de la empresa en el operador independiente estadounidense Talos Energy. La división de energía de Grupo Carso, Carso Energy, tenía un papel marginal en el sector aguas arriba de México antes de esta administración, con derechos de producción y exploración de dos bloques terrestres asegurados tras la reforma energética de 2014. A pesar de que los contratos se adjudicaron en 2017, los bloques 12 y 13 de Veracruz siguen en fase de exploración en medio de la falta de equipos de perforación disponibles y la presencia del crimen organizado en la zona, que ha impedido el acceso al emplazamiento, el operador informó al regulador de petróleo CNH el pasado diciembre. Pero los dos bloques terrestres son pequeños en comparación con los bloques de aguas poco profundas que Grupo Carso compró el año pasado. En septiembre, Grupo Carso completó la compra por $124 millones de una acción de 49.9pc en la filial mexicana de Talos Energy, involucrada también en el mega yacimiento de aguas superficiales de Zama que se está desarrollando con la paraestatal Pemex. Con un pico pronosticado de producción de 180,000 b/d de crudo para 2026, el yacimiento sería el segundo campo de producción de crudo más importante de México según las cifras de enero. El pasado diciembre, Carso Energy llegó a un acuerdo de $530 millones para adquirir el bloque de aguas someras 4 del conglomerado mexicano Petrobal en la cuenca sureste. El bloque es el tercer contrato de producción de crudo más alto, con una producción de 11,784 b/d en enero, según la CNH. Inversiones en gas En el sector del gas, Carso Energy también opera el gasoducto de gas natural Sasabe-Samalayuca de 472mn cf/d y es socio en las líneas estadounidenses de interconexión Waha-Presidio y Waha-San Elizario. Pero mientras que la mayoría de las empresas del sector de la energía han visto un colapso de las oportunidades de inversión durante la administración de López Obrador, el Grupo Carso parece ser una de las pocas empresas del sector privado con las que el presidente permitirá que las empresas estatales Pemex y CFE hagan negocios. CFE adjudicó directamente un nuevo contrato de gasoducto al operador en diciembre del año pasado, con un acuerdo para ampliar la línea de gas Sasabe-Samalayuca de 416km y 472mn cf/d de Sasabe, Sonora a Mexicali, Baja California. López Obrador, a menudo crítico de las empresas del sector privado dentro del sector de la energía, incluso ha elogiado el papel creciente de Slim en el mercado del petróleo y el gas, celebrando su adquisición del contrato Petrobal por permitirle "permanecer en manos mexicanas." Mirando hacia el futuro, los profundos bolsillos del Grupo Carso podrían convertirlo en un socio potencial para desarrollar el campo de gas de aguas profundas de Lakach tras la decisión de New Fortress Energy de retirarse el pasado mes de noviembre. Pero el entorno de bajos precios del gas podría complicar el proyecto en el que Pemex ya ha invertido $1.4 mil millones, mientras que la falta de experiencia de Carso en aguas profundas plantea preguntas sobre su viabilidad como socio. Carso Energy representó sólo 1.6pc de los Ps55.4 mil millones ($3.29 mil millones) totales de ventas del Grupo Carso durante el cuarto trimestre del año pasado, pero la estrategia de adquisición del grupo y el estatus favorecido frente a la administración podrían ver esa cuota aumentar en los próximos años. Por Rebecca Conan Proyectos de energía de Carso Proyecto Tipo de proyecto Tamaño/capacidad Bloque 12 E&P en tierra Fase de exploración Bloque 13 E&P en tierra Fase de exploración Zama E&P en aguas someras 180,000 b/d crudo en 2026 Bloque 4 E&P en aguas someras 11,784 b/d crudo en enero Sasabe-Samalayuca Gasoducto 472mn cf/d Waha-Presidio Gasoducto 1.4 Bcf/d Waha-San Elizario Gasoducto 1.1 Bcf/d Grupo Carso Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Serica CEO warns on UK offshore investment


27/03/24
News
27/03/24

Serica CEO warns on UK offshore investment

London, 27 March (Argus) — The lack of a stable offshore fiscal regime is creating shareholder pressure on UK-focused independent oil and gas operators to invest abroad, according to outgoing Serica Energy chief executive Mitch Flegg. "The feedback I get from shareholders and from banks is: 'What are you doing in the UK? We want you to invest in other parts of the world'," Flegg told attendees at a meeting of industry group Offshore Energies UK (OEUK) today. "That's the elephant in the room. We can't ignore that." The UK government introduced an Energy Profits Levy (EPL) windfall tax on oil and gas profits in summer 2022 in response to the jump in energy prices resulting from Russia's invasion of Ukraine. Initially the levy meant profits were taxed at 65pc, but by the start of last year this was 75pc. In February, UK finance minister Jeremy Hunt extended the duration of the EPL for a year to 2029. Flegg said the offshore oil and gas sector is "not whining about the levy itself" but it is concerned about "the continual changes in the fiscal regime and it's the instability, rather than the rate, that we're worried about". Serica, which in recent months has averaged production of 45,500 b/d of oil equivalent (boe/d) in the UK offshore, is now facing pressure to look at other countries, such as Norway. While that country has always had a 78pc tax rate, "that doesn't put us off at looking at working [there]", Flegg said. "What makes it more attractive is that it's been stable and the allowances that go with that are well thought through and have been there for years and years," he said. Flegg said another concern is offshore regulator NSTA's new emissions reduction plan, announced today , which could see the authority require operators to cease production of assets with high-emissions intensity as part of an increased drive for electrification at offshore facilities. Flegg acknowledged the industry has needed encouragement "to move in the right direction" on emissions, but said some elements of the NSTA plan "have gone too far" and that important infrastructure could be lost if facilities shut down because of a lack of electrification. "This is a fragile industry. We all depend upon each other and we've built upon the supply chain," he said. "The supply chain depends on operators and operators depend upon the infrastructure that's out there. "If the infrastructure doesn't exist then we're not going to be able to tie back new discoveries." Flegg, who will step down as Serica chief executive in mid-April, was speaking at the launch of OEUK's Business and Supply Chain Outlook report. This said UK offshore oil and gas production will continue to decline at double-digit rates if measures are not taken to improve the investment environment. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Oil transition plans inadequate for investors: Report


27/03/24
News
27/03/24

Oil transition plans inadequate for investors: Report

London, 27 March (Argus) — Oil and gas producers' energy transition plans are "insufficient for investors to accurately gauge transition risk", according to a report released today from investor initiative Climate Action 100+ and investor research group Transition Pathway Initiative (TPI). Several companies measured have net zero goals, but there is an "absence of disclosure on critical elements", which makes it difficult for investors to understand how companies will achieve net zero, as well as the transition risks posed. The lack of sufficient transition plans presents a "material financial risk", Climate Action 100+ said. The report assessed 10 publicly-listed oil and gas producers — European firms BP, Eni, Repsol, Shell and TotalEnergies, and North American companies Chevron, ConocoPhillips, ExxonMobil, Occidental and Suncor. The companies scored lowest against 'alignment' metrics, measuring if they are in line with the Paris climate agreement that seeks to limit global warming to 1.5°C above the pre-industrial average. "More disclosure is required on the central aspects of transition planning, including measures to neutralise emissions, and production forecasts", TPI found. Companies assessed failed to score on 87pc of metrics related to quantifying emissions cuts, and on 89pc of metrics related to future oil and gas production. Most North American firms assessed have stated they plan to lift output, the report noted. But "without acknowledging the impact of the transition on the core business, companies risk deploying capital that… accentuates the risk of assets becoming stranded", it said. The report flagged a stark difference between the two regions. "European companies provide substantially better disclosure, set more aligned targets and are investing more in climate solutions", it said. North American firms are "not planning to meaningfully diversify into low carbon energy production", while European ones are exploring a range of lower-carbon options, including biofuels, hydrogen and renewable power. The companies assessed are also not reaching for "easy wins" on methane abatement, with just two having "convincing strategies" on this, the report found. Of the 10 companies, seven have joined reduction initiative the Oil and Gas Methane Partnership, but "most companies have not set a methane emissions reduction target with a clear and specific base and target year." Investment is crucial for companies looking to decarbonise. A report this week from non-profit CDP and consulting firm Oliver Wyman found that more than half of corporations in high-emitting sectors said access to capital was "a key concern in decarbonisation efforts". Their report analysed data from 1,600 European companies, which reported via CDP's environmental disclosures programme. "This implementation gap between concrete business actions and stated climate goals persists despite most businesses reporting they have a transition plan and emissions reduction targets in place", CDP said. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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