Repsol 2Q profit doubles but cash flow turns negative
Spanish integrated Repsol's profit more than doubled on the year in the second quarter, as lower one-time losses and better results in the upstream and customer divisions more than offset a weaker refining performance.
But its cash flow turned negative as it completed the buyout of its UK joint venture with China's state-controlled Sinopec, raised investments and experienced weaker refining margins. Net debt was sharply higher, largely reflecting share buy-backs.
Repsol has said it will acquire and cancel a further 20mn of its own shares before the end of the year, which will probably further increase its debt. It completed a 40mn buy-back in the first half of the year.
Repsol's profit climbed to €657mn ($714mn) in April-June from €308mn a year earlier, when earnings were hit by a large provision against an arbitration ruling that obliged it to acquire Sinopec's stake in their UK joint venture. Excluding this and other special items, such as a near threefold reduction in the negative inventory effect to €85mn, Repsol's adjusted profit increased by 4pc on the year to €859mn.
Repsol confirmed the fall in refining margins and upstream production reported earlier in July. Liquids output increased by 3pc on the year to 214,000 b/d, and gas production fell by 4pc to 2.1bn ft³/d.
Adjusted upstream profit increased by 4pc on the year to €427mn. The higher crude production and a 13pc rise in realised prices to $78.6/bl more than offset lower gas production and prices, which fell by 6pc to $3.1/'000 ft³ over the same period.
Adjusted profit at Repsol's industrial division — which includes 1mn b/d of Spanish and Peruvian refining capacity, an olefins-focused petrochemicals division, and a gas and oil product trading business — was down by 16pc on the year at €288mn. Profit fell at the 117,000 b/d Pampilla refinery in Peru after a turnaround and weak refining margins, and there was lower income from gas trading. Spanish refining profit rose on a higher utilisation rate and gains in oil product trading.
Repsol's customer-focused division reported adjusted profit of €158mn in April-June, 7pc higher on the year thanks to higher retail electricity margins, a jump in sales from an expanded customer base, higher margins in aviation fuels and higher sales volumes in lubricants.
Repsol swung to a negative free cash flow, before shareholder remuneration and buy-backs, of €574mn in the second quarter, from a positive €392mn a year earlier. After shareholder remuneration, including the share buy-backs and dividends, Repsol had a negative cash position of €1.12bn compared with a positive €133mn a year earlier.
Repsol's net debt more than doubled to €4.595bn at the end of June from €2.096bn on 31 December 2023, reflecting the share buy-backs and new leases of equipment.
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Opec+ members delay output increases to December
Opec+ members delay output increases to December
Dubai, 6 September (Argus) — Opec+ members have opted to delay their plan to start increasing output by two months, against the backdrop of a sharp fall in prices and growing concerns about the oil demand outlook. Eight members of the group — Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman — are now scheduled to start unwinding 2.2mn b/d of "voluntary" crude production cuts from December, instead of October, over a 12-month period, the Opec secretariat said on 5 September. The plan had carried a proviso that the unwinding was subject to "market conditions". And the return of this supply is still not a foregone conclusion. The eight members retain the "flexibility to pause or reverse the adjustments as necessary", the secretariat says. If they go ahead with the updated plan, their collective output targets will rise by around 180,000 b/d in December. The delay to the output increase came as Atlantic basin benchmark North Sea Dated fell close to $75/bl on 5 September, its lowest since December, on concerns over oil demand in China and the US. Beijing imported 1.3mn b/d less crude in July than June, taking its monthly tally of receipts down to 10mn b/d, the lowest in nearly two years. The oil price drop has not taken place in isolation, JP Morgan says. "Alongside commodities, US 10-year treasury yields have tumbled (-70bp) and the US dollar index came down by almost 2pc, signalling a shift in the assessment of macroeconomic risk in the US and globally." The Opec+ delay means that any unwinding of its cuts will not come until after the 5 November US elections. But with gasoline prices there not seen at concerning levels and edging down, oil prices are not viewed as much of an election issue. The decision could help establish a floor under prices, which have fallen despite an oil blockade in Libya that has driven the country's production down to around 300,000 b/d, from almost 1mn b/d. Opec+ may also have sought to add further support to prices by emphasising assurance by overproducers Iraq, Kazakhstan and Russia on "planned compensation schedules". Promised belt tightening from the three would effectively wipe out most barrels coming back to the market until October 2025 — as long as they deliver. For now, the eight members have chosen to buy time and gain more clarity on how the markets develop in the fourth quarter, while also seeking to tighten the noose on compliance. Come early November, those members will have to determine if the market can handle the incremental increase — if not, Opec+ might be up for some hard decisions in December. Compliance and compensation Compliance by some serial overproducers improved in August, Argus estimates. Russia, which has tended to exceed its targets in recent months, saw its output fall by 70,000 b/d to 8.98mn b/d, bang on its formal output target. And Kazakhstan finally started to deliver on its pledge to start compensating for exceeding its targets, with its output in August coming in 40,000 b/d below its effective target under its compensation plan. The biggest overproducer was usual suspect Iraq, which was 200,000 b/d above its formal target and 290,000 b/d over its effective target under its latest plan to compensate for overproducing. Overall production by Opec+ members subject to cuts was barely changed, easing by 10,000 b/d in August, as falls from Russia and Kazakhstan were offset by increases from Nigeria and the UAE. This drove the alliance's output down to 33.82mn b/d, around 30,000 b/d below its collective target. But the forced outages in Libya drove the group's overall output down by a hefty 300,000 b/d. Libya, like Iran and Venezuela, is exempt from production targets. Opec+ crude production mn b/d Aug Jul* Target† ± target Opec 9 21.54 21.45 21.23 +0.31 Non-Opec 9 12.28 12.38 12.62 -0.34 Total 33.82 33.83 33.85 -0.03 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Aug Jul Target† ± target Saudi Arabia 8.96 9.00 8.98 -0.02 Iraq 4.20 4.25 4.00 +0.20 Kuwait 2.40 2.38 2.41 -0.01 UAE 2.98 2.94 2.91 +0.07 Algeria 0.91 0.91 0.91 0.00 Nigeria 1.54 1.46 1.50 +0.04 Congo (Brazzaville) 0.26 0.24 0.28 -0.02 Gabon 0.23 0.21 0.17 +0.06 Equatorial Guinea 0.06 0.06 0.07 -0.01 Opec 9 21.54 21.45 21.23 +0.31 Iran 3.33 3.35 na na Libya 0.92 1.20 na na Venezuela 0.88 0.88 na na Total Opec 12^ 26.67 26.88 na na †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Aug Jul* Target† ± target Russia 8.98 9.05 8.98 +0.00 Oman 0.76 0.76 0.76 +0.00 Azerbaijan 0.49 0.48 0.55 -0.06 Kazakhstan 1.37 1.41 1.47 -0.10 Malaysia 0.33 0.34 0.40 -0.07 Bahrain 0.18 0.18 0.20 -0.02 Brunei 0.09 0.09 0.08 0.01 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.06 0.05 0.12 -0.06 Total non-Opec 12.28 12.38 12.62 -0.34 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Egypt’s Egas seeks LNG over October-December
Egypt’s Egas seeks LNG over October-December
Singapore, 6 September (Argus) — Egypt's state-owned gas firm Egas is seeking 20 spot LNG cargoes for delivery over October-December through a tender that will close on 12 September. The firm is seeking 17 deliveries to Ain Sukhna, and three deliveries to Jordan's 3.8mn t/yr Aqaba import terminal, through a tender that closes on 12 September. This tender may create additional competition for spot LNG for European buyers. News of the tender may have contributed to a rise in European gas prices, with the front-month contract at the Dutch TTF trading at over €37.50/MWh in the morning, against an Argus assessment of €36.13/MWh on Thursday. But the TTF lost most of its gains later in the day. Egas was last in the market to seek up to five cargoes for delivery over August-September , through a tender that closed on 29 July. This tender was likely to have been fully awarded at an average of a $1.50/mn Btu premium to the TTF, possibly to TotalEnergies, Gunvor and BP, traders said. Traders in mid-August estimated that Egypt would seek about eight to 15 spot cargoes for winter. Its latest requirement for 20 cargoes may indicate that the country's demand for imports is leaning towards the higher end. At the same time Egas executive managing director Magdy Galal had told Argus this February that Egypt would be able to export in winter 2024-25, "as usual". Europe was the main destination for Egyptian LNG exports in recent years. Egypt shipped 84 cargoes to Europe in the past two years, while only 35 vessels were exported elsewhere. Croatia, Greece, Italy, Poland, France, the Netherlands, Spain and the UK were among the recipients of Egyptian cargoes. Egypt last exported LNG in April, when it delivered 209mn m³ of equivalent pipeline gas, data from the Joint Organisations Data Initiative (Jodi) show. But Egypt's appetite for spot cargoes is likely to remain, particularly as domestic gas production in the country has been falling. Gas production in Egypt fell to its lowest for seven years in June , the latest Jodi data show. At the same time, its pipeline gas deliveries from Israel have been hit with uncertainty since the start of the Israel-Hamas conflict in Gaza. Pipeline deliveries from Israel to Egypt fell to 731mn m³ in June from 851mn m³ in May, having reached record highs earlier this year. LNG exports from Egypt this winter are "not very likely" , Italy's Eni said on 26 July. By Rou Urn Lee and Alexandra Vladimirova Egas tender delivery windows Delivery to Ain Sukhna, Egypt Delivery to Aqaba, Jordan 4-5 Oct 2024 16-17 Oct 2024 9-10 Oct 2024 21-22 Nov 2024 14-15 Oct 2024 23-24 Dec 2024 19-20 Oct 2024 24-25 Oct 2024 29-30 Oct 2024 8-9 Nov 2024 13-14 Nov 2024 18-19 Nov 2024 23-24 Nov 2024 28-29 Nov 2024 3-4 Dec 2024 9-10 Dec 2024 15-16 Dec 2024 21-22 Dec 2024 27-28 Dec 2024 31 Dec 2024 - 1 Jan 2025 — Egas Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Plaza Marine alleges Ankora used company secrets
Plaza Marine alleges Ankora used company secrets
New York, 6 September (Argus) — New Jersey-based marine fuel supplier Plaza Marine is suing another supplier, Ankora Fuels, alleging that two former Plaza Marine employees used company trade secrets to benefit a rival company and to compete in the same market. Plaza Marine alleges that the two ex-employees, John and Zachary Barbarise, used its trade secrets, confidential information, customer, and supplier relationships to conduct business that is virtually identical to Plaza Marine, according to the suit filed last month in US District Court for the District of New Jersey. John Barbarise was vice president of sales and trading at Plaza Marine until May 2023 and Zachary Barbarise was an operations manager until July 2024. Both individuals are listed as defendants in the suit in addition to Ankora Fuels. According to the lawsuit, John and Zachary's positions at Plaza Marine gave them access to proprietary information about Plaza Marine's business including contracts with its customers, supplier lists and long-term planning like price strategies for its customers. Plaza Marine alleges that John and Zachary used this information to attempt to "clone" Plaza Marine including chartering a vessel that is a long-term vendor of the company and creating a pricing methodology that is like Plaza Marine. This has created confusion in the marine fuel market, according to Plaza Marine. "By creating a competing company engaged in virtually the same activities as Plaza Marine, it is inevitable that John and Zachary will necessarily use and disclose Plaza Marine's trade secrets for their own personal gain and to create an unfair competitive advantage for Ankora," the company said in the suit. According to the lawsuit, prior to resigning from Plaza Marine, Zachary allegedly contacted John on multiple occasions and accessed files related to Plaza Marine's customers, including once after an internal meeting that discussed confidential information related to its customers and suppliers. Zachary also allegedly created Google document files on a personal device and copied and pasted Plaza Marine's trade secrets into that file prior to departing from the company. Plaza Marine alleges that Zachary was passing along this confidential information to John for use at Ankora. Ankora said the allegations are "completely baseless" and that John and Zachary have never taken any information from Plaza Marine. The company said that Zachary has never worked for Ankora and the Google sheets Plaza Marine allegedly found in Zachary's computer were files "for a fantasy football draft and an ultimate fighting championship contest." "The simple truth is Plaza Marine does not want to face competition from a new player in its space. Plaza Marine wants to continue to mistreat customers and other business partners by blocking Ankora Fuels' entry into the market. That's why Plaza Marine has filed this baseless lawsuit. Plain and simple. We are confident that our customers will see the same, and that they will realize – if they haven't already – that Plaza Marine is not a good partner for their businesses," Ankora said. By Luis Gronda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
East-west marine biodiesel spread near six-month low
East-west marine biodiesel spread near six-month low
London, 6 September (Argus) — The east-west marine biodiesel spread narrowed amid firm demand for the B24 blend in Singapore and lacklustre spot marine biodiesel demand in northwest Europe in recent sessions. The east-west marine biodiesel spread — the premium held by B30 used cooking oil methyl ester (Ucome) dob ARA to B24 Ucome dob Singapore — was marked at $47.50/t on 5 September, its narrowest since 19 March. The spread narrowed amid a noted increase in demand from Asian-based shipowners who embark on voyages to Europe ahead of the implementation of FuelEU Maritime regulations in Europe next year — according to market participants. The latter had also reported an increase in B24 demand in Singapore from containerships seeking scope 3 emissions rights that can then be passed on to cargo owners. Scope 3 emissions rights can be obtained on a mass-balance system, allowing shipowners flexibility with regards to the port at which a blend can be bunkered. Argus assessed B24 dob Singapore prices at an average of $720.70/t on 1 July–5 September this year, compared with $757.70/t on 8 February–28 June following the launch of the B30 Ucome dob ARA price on 8 February. Consequently, the east-west marine biodiesel spread was marked at an average of $95.34/t on 1 July–5 September, compared with $74.57/t on 8 February–28 June. A wider east-west spread would incentivise shipowners to opt for the B24 blend in Singapore rather than ARA, when operationally viable, to meet the voluntary scope 3 demand from their customers. Rising demand in the Singapore bunkering hub was further supplemented by higher sales of marine biodiesel blends at the port. According to official data released by the Maritime and Port Authority of Singapore, sales of marine biodiesel blends in the second quarter of the year were marked at about 161,400t — higher by 34,500t from the previous quarter. This was also higher by 52,600t from the second quarter of last year. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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