Market prospects

Pump Industry Analyst

July 1996

The Fergana refinery is the sole source of base oil manufacturing in Central Asia and is Uzbekistan’s only lubricant blending facility. US PETROLEUM

AMOCO’S

INDUSTRY

MALAYSIAN

ENVIRONMENTAL

FACILITY

PERFORMANCE

ONSTREAM

REPORT

According to Petroleum Zndusby Environmental Performance (PZEP) Report, published by tbe American Petroleum Institute, the environmental,

health and

safety record of the US pe-

troleum industry is continuing to improve. I’he fourth PIEP report meas-

ures performance by eight :riteria: chemical releases, workplace safety, environmental expenditures, refin:ry waste management, oil spills, underground storage :a&, gasoline vapour con:rols and used oil recycling. I’he report finds that the US petroleum industry is maklng cleaner fuels, emitting ess and recycling If the chemicals

PTA COMES

more present in

.efineries.

Production has started at Amoco Corporation’s new Malaysian purified terepbthallc acid (PTA) fadlity. The plant, which has an an-

nual capacity of 500 000 metric tons, is Malaysia’s first PTA manufacturing facility. Amoco has invested US$SOOmillion in the project. Amoco continues to expand its PTA manufacturing capacity. Amoco is currently building a 350 000 metric ton facility in Indonesia in partnership with Mitsui, which is scheduled to come onstream in mid-1997. The company has completed its fifth PTA unit at its joint venture CAPCO plant in Taiwan and has also invested in PTA projects in the USA and Europe. THAI OIL REFINERY

TEXACO JOINT

OPENS

FORMS VENTURE

WITH UZBEKNEFTEGAZ Texaco Overseas Holdings [nc, a wholly-owned

sub-

iidiary of Texaco Inc, has signed an agreement

with

A US$2 billion oil refinery has come onstream in Thailand. The 145 000 b/d Rayong re-

finery is a joint venture between Shell and the state-owned Petroleum Authority of Thailand.

GPO Uzneftepererabotka, part of Uzbekneftegaz,

the

state-owned

oil

integrated

company of Uzbekistan,

to

form a joint venture. Uz-Texaco,

the joint ven-

ture, will manufacture

lubri-

cants at an existing blending plant located within GPO Uzneftepererabotka’s gana refinery.

Fer-

EASTMAN

INVESTS

IN TENNESSEE Eastman Chemical Company is to build two plants at the Tennesse Eastman Division in Kingsport, Tennessee.

The purified terephthalic acid (WA) plant, with annual capacity of 160 000 metric tons, is expected to begin production by late 1997. The isophthalic acid (IPA) plant will have an annual capacity of 68 000 metric tons and is expected to come onstream by mid-1998. Eastman is headquartered in Kingsport, TN, and has annual sales of US$5 billion. The company manufactures and markets chemicals, fibres and plastics. UK CHEMICAL INDUSTRY ENVIRONMENTAL SPEND

CONTINUES

TO GROW The Chemical Industries Association

(CIA) has pub-

lished its annual Responslble Care survey on the health, safety and environmental performance

of the

UK chemical industry.

EASTMAN

CAPACITY Construction

while the disposal of special waste has been reduced by 17 per cent since 1990. Energy efficiency

within the

UK chemical industry has improved by 2 per cent since

1994.

of a polyetb-

ylene terephthalate

(PET) plant has started in Zarate, Argentina for the Eastman Chemical Company. The plant is expected to

come onstream in the first quarter of 1998. The plant will have an annual capacity of 130 000 metric tons. The Argentinean plant is part of Eastman’s expansion of its PET capacity worldwide. A new plant recently came onstream in Veracruz, Mexico and plants are either under construction or planned for Spain, the Netherlands and the USA. Eastman plans to have 30 per cent of its total manufacturing assets and 50 per cent of total sales outside the United States by the year 2000. FINANCIAL l

The UK Indicators of Performance 1990-1995 has

found that during 1995, 12 per cent of capital spending was on environmental applications. Total expenditure on the environment during 1995 was El046 million, an increase from f959 million during 1994. Capital expenditure on the environment increased to E243 million in 1995 from E230 million in 1994. Environmental operating costs increased to E803 million during 1995 from f729 million in 1994. The discharging of Red List substances has been reduced by 89 per cent since 1990

EXPANDS

PET PRODUCTION

l

RESULTS

Japan’s Sumitomo Chemical Company has reported net income of Y18.5 billion on sales of Y95 1.9 billion for the 12 months ended 3 1 March 1996. Sales of Basic Chemicals & Petrochemicals increased 7 per cent, while sales of Specialty Chemicals and Others decreased 11.1 per:cent and 3.4 per cent respectively. Overseas operations grew 20.7 per cent, driven by strong polyolefin activity in Southeast Asia. Kemira, the Finnish chemicals company, has reported a 14 per cent increase in group operating income to FM626 million for the first four months of 1996. Sales increased to FM45 15 million from FM4445 million for the corresponding four months in 1995.

Pump Industry Analyst

July 1996

yen, is located approxi-

BP STA’S’YS~CAL REVIEW OF WORLD ENERGY According to the recently published 1996 BP Sfcltisiical Review of World Energy, the world’s energy consumption

grew 1.8 per

cent during 1995.

Consumption of energy in the Former Soviet Union decreased 5.9 per cent, compared with declines of more than 10 per cent in 1994 and 1993. Demand for energy in the Asian Emerging Market Economies grew 5.7 per cent, while European demand grew by 2.0 per cent and North American demand slowed slightly on 1994’s figure. Both world oil production and world oil consumption increased 1.2 per cent in 1995 while world gas consumption increased 2.5 per cent. The annual Review now incorporates additional material from its sister publication BP Review of World Gas, which is no longer published separately. This year, the Review is published for the first time on the Internet. It can be found through BP s home page at http:llwww.bp.com or directly at http://www.bp.comibpstats . GENESIS

PROJECT

TO PROCEED

mately15Omilessouthof New Orleans. Production should start in late 1998 and peak in 2000 at approximately 55 000 barrels of oil and 72 million cubic feet of natural gas per day. Estimated recoverable reserves are in excess of 160 million barrels of oil equivalent over 15 to 20 years. The cost of the production facility and development drilling is projected at US$750 million. Chevron holds a 56.67 percent interest in the project, while Exxon holds 38.38 per cent and FINA owns 4.95 per cent.

CHEVRON ACQUIRES C-E OFFSHORE EXPLORATION TRACT Chevron Overseas Petroleum Limited has signed a production-sharing

OIL FLOWS AT CONGO OILFIELD

The first oil flows from the

in the South China Sea.

N’Koara offshore oiffield in

ASIAN LNG DEMAND SET TO DOUBLE In the recently published

Asia Gas Study, the Intemational Rnergy Agency predicts that demand for liqueiied natural gas (LNG) in Asia wig more 2010.

proceed with the

Regional trade in natural gas is predicted to triple by 2010. The report focuses on Brunei-Darussalam, Chinese Taipei, Indonesia, the Republic of Korea, Malaysia and Thailand. Given Asia’s natu-

Genesis, formerly known as Vancouver or Green Can-

Recently protection for the domestic oil industry was scrapped. This will open the industry to foreign competition and true market prices. A number of oil companies, including Mobii, Thai Petrochemicals Industry and BP, have shown interest in the Philippine oil sector.

to explore for natural gas

Exxon and FINA are to

ject in the Gulf of Mexico.

March 1997.

Offshore 011 Corporation

than double by the year

velopment Project, a new deepwater oil and gas pro-

The Philippines plans to liberalire its oil sector by

con-

Chevron will begin a 3-D seismic survey during 1996, with exploratory drilling scheduled to begin in 1997.

last year. Pre-tax profit for the quarter was NKr3.8 billion, down from NKr5.3 billion. 1995 figures were affected by US dollar exchange rate gains. Repsol, the Spanish energy group, has acquired a 37.7 per cent controlling stake in Astra, the Argentinean oil group, for US$360 million. US imports of petroleum, which include crude oil and products, during May 1996 averaged 9 979 000 b/d. This was the highest import figure since the record 9 997 000 b/d imported in February 1977. US crude oil output during May 1996 declined 3.6 per cent to 6 345 000 b/d from 6 584 000 bld during May 1995. Hindustan Petroleum, India’ s second largest oil group, has reported a 3 1.42 per cent increase in net profits for the year to March 1996. Enron, the US oil company, has concluded talks to build a US$300 million regasification plant in Aqaba, Jordan. Cambodia is expected to offer onshore blocks for oil exploration to intemational bidders during the few months.

PHILIPPINES SET TO LIBERALIZE OIL SECTOR

tract with China National

Joint owners Chevron,

US$750 million Genesis De-

ml gas reserves, it is expeeted that by 2010, up to 40 per cent of the LNG traded in Asia will come from outside the region. Copies of the report can be obtained from OBCD, 2 rue Andr6 Pascal, 75775 Paris Cedex 16, France. Tel: +33 145 24 82 00, Fax: +33 149 10 42 76.

the Republic of Congo have been recorded. The N’Kossa field is ex-

pected to produce in excess of 100 000 barrels per day (b/d) by the end of this year, reaching 120 000 b/d in early 1997. The N’Kossa consortium includes Elf, Chevron, Engen and Hydro-Congo, the stateowned oil company of the Republic of Congo. OIL AND GAS BRIEFS l

Statoil, the Norwegian oil and gas company, reported first quartet 1996 profit after taxation of NKrl.2 billion, down from NKrl.8 billion in the corresponding quarter

MIXED FINANCIAL RESULTS FOR PAPER COMPANIES .

Annual pre-tax pro&s for New Oji Paper Company reached WS. 1 billion during fiscal 1996, a 180 per cent increase on fiscal

Pump Industry Analyst

1995. Sales increased 8 per cent to Y48. I billion, UPM-Kymmene of Finland, formed last year with the merger of Repola and Kymmene, saw pre-tax profits fall to FMl.65 billion for the first four months of 1996,

OFWAT SETS LEAKAGE DEADLINE CLEAN COAL TECHNOLOGIES REPORT A new report entitled Fac-

1995. Group turnover in-

tors A#txting the Take-Up of Clean Coal Technologies has been prepared by The

creased to FM17.6 billion from FM17.4 billion. This increase was mainly

Board of the International Energy Agency.

from FM 1.9 billion in the corresponding period of

attributable to growth in newsprint sales. Enso, formed by the recent merger of EnsoGutzeit and Veitsiluoto, saw pre-tax profits fall from FMl.2 billion in the first four months of 1995 to FM801 million for the first four months of this year. Sales decreased to FM8.8 billion from FM9.3 billion. Mets%Serla of Finland saw turnover increase to FM4.9 billion in the first four months of 1996, from FM4.1 billion during the corresponding period of 1995. The rise in turnover reflects corporate restructuring, a strategic alliance with Myllykoski of Finland and the acquisitions of paper mills in Germany. Mets&Serla’s profits de creased to FM3 18 million from FM607 million. January - March 1996 interim results for Swedish paper company MoDo saw sales fall to SKr5227 million from SKr5672 million in the corresponding quarter of1995. Net profit decreased to SKr583 million from SK19 I2 million.

CoaI Industry Adyisory

Some of the rep*; s fiiings include: The different clean coal technologies are at various stages of development and have individual strengths and weaknesses. Further demonstration of new technologies is necessary to promote their adoption. The bulk of new coalfired power plant construction over the next ten years will be in South East Apia and the In&an sub-continent. There is a need to promote supercritical plant in emerging nations. Copies of the report can be obtained from OECD, 2 rue Andre Pascal, 75775 Paris Cedex 16, Fran&. Tel: +33 145 24 82 00; Fax: +33 1 49 1042 76.

CO-GENERATION POWER PLANT FOR SOUTH AUSTi&%LIA An A$175 million co+eneration power facility is to be built in South’Aukralia, by a joint venture ktween Boral, the AustraIian building materials and energy group, and CU Power International of Canada.

Construction of the 180MW plant will begin in October and the plant should he operational by July 1998.

Ofwat, the UK water induatry regulator, has given water companies a oneyear deadline to reduce leakage rates. Companies failing to meet the leakage targets could face mandatory targets. This crackdown is being driven by the high rate &%&age experienced last summer during the water shortages. Ofwat believes that most of the big water and sewerage companies have failed to significantly reduce the levels of leakage since last summer.

VENEZUELAN IRON SMELTER VENTURE A USS260 million iron smelter is to be built in Venezuela. The project is a joint venture

with Corporaci6n de Guayana (CVG). Investors include Kobe Steel, Marubeni. Mitsui and Nishi Iwai of Japan, Tubos de Acero de Mtxico and Hanbo Steel of Korea.

ACQUJSlTION OF AUSTRALIAN ROLLED PRODUCTS PLANT KAAL Australia, Pty, an

Australian joint venture be-

SOUTH AFRICAN BREWERIES INVESTS IN POLAND South African Brewer& (SAB) has invested in Lech Brewery of Poland, in partnerahlp with Euro Agro Centrmq a Polish food processing company. SAB already has investments in breweries in Hungary and Romania.

NZ BREWER EXPANDS IN CHINA Lion Nathan of New Zealand b to build a brewery in Suzhou, soutb China. The brewery will be Lion Nathan’s second in China. In 1995, the company began a joint venture, the Lion Nathan Taihushui Brewery in Wuxi.

NESTLti ACQUIRES MAJORITY STARE IN DANISH DAIRY COMPANY NestiC of Switzerland has agreed in principle to ac-

quire a majority stake in Danish Dairy Iudustries of Thahld. Danish Dairy Industries is one of Thailand’s largest producers of dairy products and is also an important distributor.

SIEMENS SELECTS PORTUGAL FOR CHIP PLANT

tween Kobe Steel Ltd and

Siemens is to build a

Aluminhtm

US$380 million chip plant near Oporto, Portugal. The plant, which is expected

Co of America

(Alcoa), has bought an alumininm rolled products factory from Alcoa of Australia Ltd for approximately A$100 million.

to begin production by the end of this year, will have an annual capacity of 150 million 16MB D-Ram chips.