Kuwait Reviving US$14 Billion Refineries

Kuwait will be reviving its US$14 billion project which will see new fourth oil refinery, previously on hald in March due to corruption allegations. The refinery targeting production of 615,000 barrels a day was earlier planned to be built by Japanese and South Korean companies.

The allegation which accuses government officials profiting from the project due to bypassing of central bidding committee was denied by the Kuwait government.

China Increasing Oil Stock

As part of China's third phase strategic oil reserves, the country has announced that it will buildup its reserve capacity as commented by China's National Energy Administration Head, Zhang Guobao. China is planning to be in the league of international standard of developed countries of at least 90 days of oil rerserve.

Given China's hunger for oil, this would be a huge requirement and work will be starting on 5.4 million cubic meter oil reserve in Karamay City for a gross combined storage for the country amounting to 26.8 million cubic meters.

Improving Economy Boosting Oil Demand

The International Energy Agency had revised its forecast for world oil demand on improved Asian economic activity however most likely will still be offset by countries like Russia who are pumping more crude than the added rise in consumption.

The agency which is based in Paris revised the forecast to 83.94 million barrels a day. The world is still having a huge reserve of oil supply with non-Organization of Petroleum Exporting Countries producing more supply than previously expected. Russia, the world's biggest oil producer churns out a total of 360,000 barrels a day as new fields being developed in Western Siberia and enhanced oil recovery techniques are used to squeeze out more hydrocarbons from existing fields.

Despite current projection, some analysts think Russia will pump around 9.7-9.8 million barrels a day on average this year rather than 10.07 million barrels a day as expected by the IEA with global crude demand to rise 1.6% next year outpacing non-OPEC supply growth of about 1% in 2010.

Countries like the U.S which is the biggest consumer for oil and energy has 8 days higher average on its inventory which stands at 61.7 days this year. China has indicated a move to follow the same lead.

Sasol - Petronas Joint Feasibility Study on Uzbekistan GTL

Sasol is in the stage of doing feasibility study with Petronas for a Gas-to-Liquid (GTL) proposition in Uzbekistan. The two giants, Sasol which is the biggest producer of motor fuels from coal and Petronas, one of the seven sisters will be doing the study overseen by a joint-venture company.

The GTL plant which will be using Sasol's technology is rumoured to produce 1.3 million tonnes of fuel components including diesel, kerosene and liquefied petroleum gass similar to Sasol's GTL plant in Qatar.

Petronas Entering Cameroon

Malaysian national oil company, Petroliam Nasional (Petronas) and Noble Energy have been granted a production sharing contract offshore Douala in Cameroon. Societe Nationale des Hydrocarbures (SNH), the national petroleum company of Cameroon has confirmed that the deal was to develop the Gulk of Guinea with exploration rights worth US$119 millions.

The deal is seen as an extension to Noble-Petronas current involvement in Cameroon's YoYo gas project.

The exploration right is reported to contain oil reserves of between 40 million and 70 million bbl with SNH holding 25% interest in production right. Both Petronas and Noble Energy are given a 25-year exploitation license renewable for ten additional years.

BP CNPC & Exxon Petronas Bidding for Rumaila Field

Oil giants U.K BP PLC with its pair China National Petroleum Corp. and U.S. oil major Exxon Mobil Corp. and Malaysia's Petroliam Nasional Bhd, or Petronas are bidding for joint offers to develop Iraq's Rumaila oil field.

Despite Iraq's long black history with the western world, the country is holding Iraq's first bidding round in 30 years for Rumaila future development oil field. Rumania's current output capacity is 1 million barrels a day, in which the Iraqi government persuing to increase by up to 1.75 million barrels a day by getting foreign participation into the country.

Malaysia Regulates New Petrol Quality RON95

Malaysia has requested its National Oil Company, Petronas to supply the country with new petrol quality of RON95 instead of the current available petrol quality RON92 and RON97. The country's administration move will eliminate RON92 to better position with global petrol quality.

The move has been getting different response from the Malaysian people. The move will help Malaysia as a whole to save subsidy by supplying a lower quality petrol RON95 at a price expected to be as close to the current RON97. However, the government will also increase the price of RON97 which expected by analysts to be the country's premium petrol. Whilst many of today's car are designed to run by RON95; some of outdated models are incompatible.

The move is also likely to incur significant cost for PETRONAS under its marketing arm, PETRONAS Dagangan Bhd as RON95 petrol is formulated with a detergent to prevent the build-up of deposits that degrade the engine's performance. The company has said that the change involves the whole supply chain from refineries to delivery of the fuel to the consumers which comes September 9 is likely to be followed by other oil companies like Shell, BHP, Caltex and Exxon Mobil in the country as set by the Malaysian government.

China Postponing Stockpiling Oil & Energy

China has announced that it is suspending the energy and oil stockpiling program due to unavailability of new storage facilities. China has been aggressively looking at its energy security for growth and stability protection especially after the global oil price hike in 2008.

China's oil stockpiling program's first phase is looking at 100 million barrels equivalent to China's 30 days of oil import for emergency usage.

Beijing administration is interested to have oil reserve in case of a crisis scenario, in particular to situations in Middlea East & Africa where most of world oil production is located now. China's plan has been regarded by analysist as getting the help from heaven as the global financial and economic crisis has put a pressure on and subsequently much lower global oil prices enabling the cash-rich Chinese to pursue the mega-plans of oil reserve.

The last phase of the strategic plan will enable China to have 100 days of total oil import enabling independance on China's soil without any foreign interference on energy usage which is the same as U.S Strategic Petroleum Reserve.

Malaysian Having Closer Tie with Iran on Oil Exploration

Malaysian under one of the country's state Chief Minister of Kedah had a discussion with Iran for investment in oil exploration and exploitation in Iran. Iran Ambassador to Malaysia Mehdi Khandaqabadi assuring Iran's great potentials through economic and cultural cooperation with Iran and Malaysia would transpire into benefits for both countries.

Also on discussion was to declare the two islands of Malaysian Langkawi and Iranian Kish as sister cities, promoting better ties and perhaps investment opportunities through government support.

Floating USD20 Billion of Oil & Gas Assets

Derrick Petroleum Services in their comprehensive study of the Top 1000 global oil and gas companies has identified that as much as $20 billion of oil and gas assets excess currently for sale worldwide. The whole assets are currently floating through 69 separately announced transactions.

Derrick estimation only takes into account deals with value greater than $10 million with North America leading the inventory with over $9 billion followed by Africa (22%), Europe, South America, Asia, Australia and Middle East.

Some of these assets could worth more due to their potential in future discoveries such as Devon Energy's offer for its four discoveries (Kaskida, Cascade, Jack and St. Malo) in the deepwater Gulf of Mexico.

It is interesting to note that most of the potential buyers are Middle Eastern and National Oil Companies compared to the usual Western investors and public listed companies.

Petronas to Produce 5 Billion cm of Gas in Turkmenistan

The Turkmenistan government had announced that Malaysian state oil firm Petronas could produce up to 5 billion cubic metres of gas annually in the Turkmen portion of the Caspian Sea with opportunity to double up the capacity in the near future.

Petronas had invested about $2 billion in the Caspian shelf project since 1996 and is likely to be the sourced for the planned Nabucco project. The Nabucco project will be responsible to ship gas volumes of Central Asian gas to Europe.

Caltex to Expand Distributorship through Chevron

Chevron Corp under its Malaysian wing, Chevron Malaysia Ltd is planning to expand the petrol distributorship in the Malaysia through its Caltex brand. The expansion of Chevron's local network of Caltex service stations and the availability of its highly quality Techron products will include a target of 30 additional stations next year.

Chevron currently operates and manages some 420 service stations in the Peninsular of Malaysia which at this time offering dedicated service stations, asphalt and lubricants.

Italy Triton LNG Terminal Postponed

GDF Suez has postponed the start-up of its Triton LNG terminal in Italy from 2012 to 2013. However, the date is yet to be confirmed as the company has not taken the final investment decision. The comissioning date of 2013 may be due to lengthy process of protocols with the local and national authorities of the LNG terminal. Italy is venturing into many LNG projects as Qatar had earlier agreed to lower prices of LNG over the long run. The agreement was much influenced by the European countries as a whole.

Japanese Economy Taking Hit

Japan, who has been prone to deficit for nearly 30 years is experiencing its first deficit indicating the economy trouble wave is rippling towards Japan. Japan posted a trade deficit of Y725.3bn in fiscal 2008. However, the government of Japan is confident that the economy is in its state for a rebound especially in the indsutrial production and exports. The petrochemical industry in the country is yet to see a clear signs of rebound and the industry is now in wait and see situation.

Petchem Overcapacities Expected

Petchem industry is feeling the pinch as industrial analysts are worrying on overcapacities including Bayer CEO in the recent interview. The financial crisis has turned the chemical and plastics industry into a huge overcapacities at least for 2009 and 2010 petrochemical outlook.

The mostly hit industry is plastics and polymers business used in the auto industry which is not building a huge industry overcapacities and inventories. Bayer CEO also predicted that growth in Bayer's pharmaceuticals and crop chemicals businesses to be much affected in 2009.

$9 Billion Refinery Investment Needed

As the economy is collapsing it is getting harder and harder for oil and gas projects to seek external funds to invest in their projects. PetroSA who is planning for a $9 billion refinery project is currently in the same situation as the state-owned oil and gas company starting negotiations with potential investors.

PetroSA is trying to get external fund for its new capacity 400,000 barrels a day refinery in Coega, answering South African Petroleum Retailers' Association call for security of oil supply via partnership between the government and the private sector. The country is currently facing poor sustainable oil supply due to low buffer in the country resulting from poor stock planning.

PetroSA vice-president of new ventures: midstream, Joern Falbe, said on Friday that PetroSA had "from the beginning" indicated that it was looking for a partner in the $9bn project. 

China & Myanmar Signing New Oil & Gas Pipeline Contract

A cross boarder oil and gas pipelines to enable oil and other oil-derivatives to China is already in plan as China and Myanmar signed a pipeline contract between China and Myanmar to slash the transfer time for crude oil imports.

The agreement reportedly consists of pipeline project as well as join-venture for hydropower projects. China and Myanmar plan to build 2,000-km gas and oil pipeline through Ruili and Kunming in Yunnan province which can tremendously cut out oil cargos long detour through the congested Malacca Strait.

The project is however under strict control due to Myanmar's history with human rights which means less injection of capital from external sources. As the project benefits China in great length, Beijing is offering incentives including cheap loans and tax breaks to attract foreign participation.

Brazil Discovers Huge Oil Deposit

Brazil may be striking a gold mine or more precisely a black gold mine as its' discovery on the Maranhao site may have oil deposits as huge as the Campos Basin, which produces 85 percent of the Brazil's oil.

The basin was discovered by Petroleo Brasileiro SA and Devon Energy Corporation 160 kilometers off the coast of Sao Luis which this year alone has produced an average of 1.65 million barrels per day this year.

Maranhao state in northeast Brazil is famous for luring oil refining, steelmaking and pulp for export due to its five days closer to Europe proximity. With the stable output from Maranhao basin, Brazil's state oil company, Petrobras is planning to build a $20 billion premium-products refinery 30 kilometers from Sao Luis, for Europe and North America export by 2013.

Pertamina Planning to Start Up New Polypropylene Plant in 2011

Pertamina, Indonesia's state-run refinery operator is planning to start up its new 250,000 tonne/year polypropylene (PP) plant at Balongan, Indonesia in early 2011. Pertamina is under huge expansion and and rumours of it planning to acquire local polypropylene producer, Polytama Propindo has also been rumoured.

The feedstock for the plant will be coming from Pertamina's new 250,000 tonnes/year of propylene capacity residual fluid catalytic cracker (RFCC) expansion unit in Balongan.

Malaysian Researchers Looking at New Biofuel Technology

Malaysia University of Science and Technology (MUST) is developing new ways of using oil palm-related products to produce renewable fuels, in what is seen as a response to European Union concerns in food and environment-related carbon balance. 

The MUST university is collaborating with a German research organization, Fraunhofer to work on directly processing oil palm biomass into biodiesel, instead of bidiesel being produced from crude palm oil. However, the MUST-Fraunhofer research is focusing on making the fuel from non-CPO biomass. This is to alleviate the mass requirement for oil palm plantations where only 10% of the biomass comprises CPO (Crude Palm Oil) and the rest includes fibers, empty fruit bunches, shells, fronds and tree trunks. 

Much of the reasearch will be to turn non-CPO biomass into gas and liquefied gas for usage as gasoline and biodiesel which will see bigger commerical gassification plant in Malaysia from palm oil. MUST is in the hope that the technology to be developed for commercial use in 2-3 years.

The World's New Currency: Oil. And China is Piling Some

As the world economy is collapsing and the energy demand is skyrocketing nevermind the usual hiccups, China is taking advantage by stocking up on foreign oil offering $43 billion in loans to foreign oil companies in Brazil, Venezuela, and Russia to secure future oil supplies and energy.

The China's new strategy is seeing by analysts as a powerful move especially as the state-owned oil companies in Russia, Brazil, and Venezuela are in needs of financial support. Analysts predicting that China oil import will double in few years after the recession placing China's oil loans as a sign of both opportunism and confidence that the economy will recover from the worldwide recession soon. 

Dow Chemical & Rohm & Haas Completing Merger Dispute Deal

Dow Chemical Co. (DOW) ccompleted its dispute with Rohm & Haas Co. (ROH), agreeing to pay the $78 a share as originally established. Dow Rohm & Haas struck a $15.3 billion merger deal in July 2008. 

The legal battle started after Rohm & Haas sued Dow in January after the company stalled on the merger which Dow blamed due to the frozen credit markets. Dow, like other companies in the world faced threatening decline in its business due to the global recession. 

Several parties have agreed to help Dow to pay for its purchase of Rohm & Haas including a $3 billion in funding from Berkshire Hathaway and $1 billion from the Kuwait Investment Authority. 

Santos Seeking Indian Oil & Gas Joint Venture

Australia's third- biggest oil and gas producer, Santos Inc. is seeking partners to take stakes in two deepwater exploration permits off India's east coast. The Adelaide-based company owns 100 percent of the two licenses and in need to reduce risks as it proceeds towards drilling.

Santos during the bid to win the permit has committed itself as the operator for the permits to carry out seismic surveys and drilling of exploration wells. Santos anticipated of spending $70 million over eight years on exploration in India covering about 16,500 square kilometers establishing its root in India.

Exxon Australian LNG Welcomed PetroChina Accord

China's oil producer PetroChina Co will be signing an accord with Exxon Mobil Corp. targeted in the first half of this year to buy liquefied natural gas (LNG) from the Gorgon project in Australia under a term contract. 

The world's largest oil company, ExxonMobil owns 25% of the Western Australian Project with remaining stakes by Chevron Corp with 50 percent stake and Royal Dutch Shell Plc has 25 percent. Under the agreement, Exxon agreed to sell 2 million metric tons of LNG a year from the Gorgon project.

This will be on top of PetroChina's 2 million ton per year agreement with Shell in 2008 from the Gorgon project under Shell's portfolio.

Nitrogen Enriched Gasoline by Shell

Shell has unveiled its new nitrogen-enriched gasolines at Shell stations across the U.S codenamed Nitrogen Enriched Gasolines.

The new gasoline contains a unique cleaning system designed to purge carbon deposits in the engine. The new Nitrogen Enriched cleaning system protects and cleans up carbon deposit build-up on intake valves and fuel injectors.

It is believed that the usage of nitrogen as an active cleaning molecule in the new fuel significantly makes it more stable at higher temperatures in modern, tougher conditioned engines. The nitrogen increases the properties of resisting thermal breakdown better than conventional cleaning additives.

Petrochemical Industry Getting Worse: BASF

As the economy downturn is getting worse, most of the petrochemical companies are not seeing the bottom-out yet; or signs of recovery for their petrochemical business, at least not from BASF. As BASF CEO CEO Jurgen Hambrecht, put it, BASF is not expecting a growth for 2009, worse still is expected to shrink.

To date, as much as 25% of BASF operating units worldwide have been shut down or idling due to uneconomical route of production especially in North America and Asia Pacific. Most of BASF's units are to make coatings, performance plastics, electronics and intermediates which are taking toll due to significant dropped in automatives and construction business.

BASF is expecting that more operating units will be closed and possible of job cuts; especially for units not serving the crops, hygienes and oil & gas industry. The plastic business seems to be taking the strongest hit so far.

Sonagas Partnering with Eon Ruhrgas

Sonagas, Equatorial Guinea's state gas company is in negotiations to partner with Eon Ruhrgas, the German utility for a second LNG export facility in Equatorial Guinea project creating a West African gas hub. It is likely that a consortium will be set-up comprising of Sonagas, Eon, Union Fenosa of Spain and Portugal's Galp Energia.

Taking advantage of West Africa as a potential route to Europe and amidst instability dependence on Russia gas, the project is expected to get a strong push factor. It is likely that the source gas will be  from gas currently flared as waste by ExxonMobil at the Zafiro deepwater oilfield. 

The consortium is however exposed to a major risk as Equatorial Guinea is one of Africa's most volatile country due to local uprising.

Huge offshore oil discoveries have boosted Equatorial Guinea's oil production from almost nothing a decade ago to about 380,000 b/d, ranking it behind only Nigeria and Angola among sub-Saharan African producers.

Fierce Competition in Australia's LNG Business

Royal Dutch Shell PLC has been reportedly joined the bandwagon as the latest big prospector in Australia's coal seam gas rush. This comes after news that Shell is planning to build a multibillion dollar gas export facility at Gladstone in Queensland state.

It has been a competition of media coverage alongside with BG, ConocoPhillips and Malaysia's Petronas planning to team up with local companies to convert Australia's rich CSG reserves to liquefied natural gas for export.

As to date, five LNG plants are planned to be constructed. Heavy participations comes from all corners including Liquefied Natural Gas Ltd, a smaller scale company compared to the oil giants.

Shell has already signed an exclusive right to investigate a site on Curtis Island near Gladstone for a possible LNG plant with Gladstone Port Corp and has already commenced a feasibility study.

Analysts are not ruling out that there perhaps will be hitting back at Shell by making an even higher bid for Pure Energy from BG.

Malaysian Biodiesel Sold Out

Mission New-Energy, an Australian firm  which has a stake of 100 kmta of biodiesel plant at Malaysian port of Kuantan told the press that all of the potential production is already sold out in 2009. Mission is now on its way for a second palnt which will be able to produce an extra of 250 kmta of biodiesel.

The second plant project has been delayed in construction for many months due to technology switching. Despite the global economic turmoil, Mission Energy has able to sell all of 2009 contractual production to a major global oil and biofuels player for a cost-plus-margin basis protecting it from the volatility in commodities markets.

The recent huge price drop in biodiesel last year had pushed many biodiesel producers to the brink of collapse.

LDPE Production in Halt for LyondellBasell UK France

LyondellBasell is reportingly will be idling its production of low density polyethylene (LDPE) units at France and UK. The Carrington unit in the UK has a nameplate capacity of 185,000 tonnes/year, and France's Fos plant has a nameplate capacity of 110,000 tonnes/year of LDPE.

The news comes in the midsts of demand for polyethylene has significantly improved compared to the fourth quarter of 2008 however the idling is due to demand still not within normal patterns especially in Europe. 

Analysts believe that the production cut is more due to extremely steep ethylene contract prices in the market which is the major feedstock for LDPE production.

India Building It's First Biodiesel Plant

Mission Biofuels, a Mumbai-based biodiesel company is planning to build the India's first biodiesel plant in the eastern Indian state of Orissa with a capacity of 100,000 mt/year plant. The construction cost for the biodiesel plant is expected to be around $USD 75million which does not include the company's already access to 350,000 acres of jatropa farms across the country.

The construction will take two years to coincide with the maturity of its jatropha crops which are 40% planted in Orissa. Jathropa crops have made its way as a sustainable source for biodiesel fuels in the debate of carbon balance.

Petronas Looking for Concession Extension in Mozambique

A Malaysian state oil company, PETROLIAM Nasional Bhd or widely known as Petronas has asked for an extension to its exploration licence in the Zambezi River delta in Mozambique in a request to the National Petroleum Institute.

The claim for the extension is to allow Petronas to do further investigations after an initial study of exploration activities. It was rumoured that evidents of extraction opportunities have been found in the area.

Shanghai, China is Booming with LNG Demand

China, one of the world's biggest demand for energy, is going to be the next LNG vacuum with demand increase up to 3 billion cubic metres last year. China National Offshore Oil Corporation (CNOOC); is due to commission a terminal to receive liquefied natural gas in Shanghai in early February 2009 from Malaysia LNG Tiga. This first ever cargo is said to be about 20,000 cubic metres of gas before commercial operation in April.

CNOOC's Shanghai terminal will receive 1.1 million tonnes per annum from Petronas LNG complex in Malaysia with incremental volume up to 3 million tpa in 2012. Shanghai is now looking at ways to increase its emergency gas reserves as demand is shooting up.

Petchem Conference: APTC & Asia BBTC Conferences, Seoul

7th Asia Petrochemicals Technology Conference - APTC 12 & 13 May

3rd Asia Bottom of the Barrel Technology Conference - Asia BBTC 14 & 15 May
The Ramada Hotel, Seoul

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EPC is proud to announce that the APTC & Asia BBTC will take place in the exciting city of Seoul in May this year.

APTC: The Leading Event for the Asian Petrochemical Community

APTC will once again be the essential event to be updated on the current performance and future prospects for the region, including implications for supply and demand, industry profitability and the very latest technology developments.

Special Presentations by Petronas, PTT Phenol, Petrovietnam and many more..

ASIA BBTC: The Leading Forum for Residue Upgrading in Asia

Now in its 3rd impressive year, Asia BBTC remains the only event capable of bringing you up to date with the latest economic and technology developments for upgrading crude oil residues including the modernisation of existing facilities, new equipment and catalyst technologies.

Special Presentations by SK Energy, SRC , PDVSA and many more..

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We look forward to welcoming you to Seoul!  Please contact us with any queries.

Despite Economic Turmoil, Shell is Expanding in Asia

Recently Shell Malaysia has announced that it will be expanding its retail business to include additional 40 petrol pump stations in the year of 2009 despite the recent global turmoil. Some anylysts are confident that this is showing the good fundamentals for Malaysian economy. 

Asia has been hit by the economic slowdown with major share market in the region has been nosediving. However, most are confident that the turmoil are largely affecting the western economy and countries with good fundamentals will see a shake to its economy but nothing major that will cut demand growth significantly.