Page 9 - FSUOGM Week 17 2021

FSUOGM COMMENTARY FSUOGM

are combining gas and oil. Gas is more expen- Sibur’s expansion plans will benefit from
sive, oil is cheaper. “Adding new feedstock to our a new subsidy on petrochemicals feedstock
portfolio is strategically right. It makes a better approved by the government in March. Starting
quality company with various resource flows. It January 2022, companies using ethane to pro-
offers greater opportunities.” duce polymers will receive a reverse excise tax
By taking over TAIF’s business, Sibur will of RUB9,000 ($121) per tonne of the feedstock,
raise its production capacity by 40% versus the while those using LPG will get RUB4,500 per
2020 level, to over 7.2mn tonnes per year (tpy). tonne.
There have been a number of other consolida- Sibur has been discussing holding an initial
tion deals in the global petrochemicals sector in public offering (IPO) for several years now, to
recent years. The largest by far was Saudi Ara- raise financing for a further scaling-up of its
mco’s $69bn takeover of a 70% interest in Saudi operations. Previously its owners had said the
Arabian player SABIC last summer, bringing placement would take place once Zapsibneft-
together the former’s cheap oil and gas feedstock ekhim had reached full capacity. Leonid Mikhel-
and logistical strength with the latter’s significant son, the company’s largest shareholder, said in
petrochemical capacity. February that "now is not the worst time” for an
Earlier this year the Zapsibneftekhim com- offering, according to the RIA news agency. But
plex in Western Siberia reached its full capacity CFO Peter O’Brien told the FT days earlier that
of 1.5mn tpy of polyethylene, after producing its the offering had been put on hold for two years.
first polymers in October 2019. The IPO will not take place before the merger
The Amur Gas Chemical Complex (GCC) in deal is closed, Konov said, according to the FT.
the Far East will receive ethane and LPG from But the company will not have to wait until the
Gazprom’s neighbouring Amur Gas Processing full consolidation of TAIF’s assets before pro-
Plant (GPP). The Amur GCC will produce up ceeding with the sale.
to 2.8mn tpy of polyethylene and polypropylene, “We don’t have a specific date, but an IPO can
using 2.mn tpy of ethane and 1.5mn tpy of LPG. be done before a 100% consolidation,” he said.
Production is expected to start in 2024, although “It’s not that that’s what we want to do, but it can
a final investment decision (FID) has not yet be done if there are no issues with approvals and
been taken. if we want it.” ™

INVESTMENT

SOCAR withdraws from

Antipinsky refinery

AZERBAIJAN AZERBAIJAN’S national oil company SOCAR in August 2019.
said on April 22 that it was withdrawing from its The three oilfields have 45mn tonnes (330mn
The plant's former role as a minority equity shareholder in SOCAR barrels) of proven reserves.
owners filed for Energoresurs, which controls Russia’s largest The Antipinsky refinery endured several dif-
bankruptcy in 2019. independent oil refinery, Antipinsky, and three ficult years prior to entering the bankruptcy pro-
oil fields. cess, highlighting the hardship that independent
SOCAR has opted not to participate as a bid- operators can face in Russia’s oil industry.
der in planned sales of Antipinsky’s assets under The plant ran into difficulties after a long
bankruptcy proceedings, it added. period of low fuel prices in Russia left it unable to
Antipinsky, a 180,000 barrel per day refinery service debts it had taken out to fund costly new
in Western Siberia, filed for bankruptcy in May investments. Its problems were exacerbated by
2019 and the following month its largest credi- tax changes in Russia that drove up the domestic
tor, Russian state-owned Sberbank, announced cost of oil.
it had banded together with a group of investors The refinery began struggling to afford oil
to form a joint venture, Socar Energoresurs, that supplies needed to stay in operation and was
had acquired an 80% stake in the refinery and eventually forced to shut down.
its other assets from private firm New Stream. Prior to the Antipinsky move, SOCAR had
Socar later became a shareholder in Socar Ener- no large-scale assets in Russia, with its activities
goresurs, saying it was brought in for its “mana- in the country confined to a small oil trading
gerial expertise”. The plant resumed operations operation. ™

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