ICIS Publishes Top 100 Companies For 2009

ICIS has recently published its regular Top 100 Chemical Companies feature, together with an excellent analysis of the events of the last year.

The Top 5, ranked in terms of sales, are BASF, Dow Chemical, ExxonMobil, Sinopec and Lyondell Basell. Of these, Sinopec is new to the top 5, having been ranked 8th last year.

Looking back over the last year, it is really quite remarkable that the major chemical companies have fared so well in adapting to an economic crisis that saw an oil price crash from a peak of $147 per barrel down to $32 per barrel and a virtual collapse in markets such as construction and automotive.

Clearly survival required significant cost reduction across the board. Reduced working capital, operating and maintenance cost reductions and reduced capital expenditure were commonplace, the only difference being the depth of cuts from one company to the next.

This blog has talked much about a new normal in the post recession period. The challenge remains a difficult one for all chemicals producers as we move forward. It will be necessary to deal with the economic conditions that this new normal will bring, whilst also adopting strategies to address the impacts of the recent cost cuts in areas such as capital expenditure.

However, in having survived so far, companies have clearly demonstrated that they have the management capabilities and willingness to adapt.

Weekly News Round Up

This week's round-up of news and updates on previous stories

• The Thai Government has formally ordered construction work to stop at the Map ta Phut petrochemical complex. There is no clear information regarding a likely restart date at this time.

• The new Boeing 787 Dreamliner made its first test flight on Tuesday. Each 787 contains carbon fibre and adhesives to the value of $1M, with the carbon fibre coming from polyacrylonitrile. Boeing has already received 840 orders for the new aircraft.

• Following recent shale gas discoveries, the American Natural Gas Alliance (ANGA) now believes that the US now has approximately 100 years of natural gas reserves. If correct, this could significantly impact future petrochemical investment in the USA. This news follows the recent announcement of ExxonMobil's acquisition of  major US natural gas producer XTO Energy.

• According to reports, the bankruptcy court in New York has adjourned the hearing to consider the LyondellBasell's proposed reorganisation plan, until January 12th. The outcome of the hearing is of much interest for Reliance Industries which has made a preliminary non-binding offer for a controlling interest in LyondellBasell.
  
  
  

ExxonMobil Develops Shale Gas Business With XTO Acquisition

Photo : Energy Tribune

ExxonMobil has clearly signalled its intent to develop a global shale gas business with the acquisition of XTO Energy, the Texas-based 'unconventional' gas producer.

The deal, which cost some $41bn, gives ExxonMobil a strong global position in the fast growing shale gas market, with assets throughout the world.

Shale gas extraction has become increasingly attractive as extraction techniques have improved and costs have fallen. Estimates of the potential gas supply are being revised steadily upwards as new reserves are located. The involvement of the majors such as ExxonMobil will further increase the amount of new exploration and production. It is unlikely that the 'unconventional' tag will last much longer.

Shale Gas - The Next Petrochemical Feedstock?

photo : Energy Tribune

Is shale gas set to become the next major feedstock for the Chemical Industry? Shale gas, oftern referred to as an 'unconvetional' source of natural gas, has become an increasingly more important source of natural gas in the United States over the past decade, and interest has spread to potential gas shales in Canada and Europe.

Some projections suggest that shale gas could supply as much as half the natural gas requirement in North America by 2020 as well as providing a significant proportion of Europe's gas supply.

Recent improvements in extraction techniques have attracted the major players into the arena, with companies such as Shell, ExxonMobil, Statoil and BG Group becoming increasingly involved.

Shale gas currently costs more to produce than gas from conventional sources, due of the expense of extraction process but this is expected to eveolve quickly as more major players become involved.

Given current overcapacity and new investment in plants in the Middle East and Asia, shale gas will not revolutionise petrochemicals manufacture but it is very likely to play some part in shaping it.

Friday News Round Up

Being Friday, I thought it would be a good time to give an update on some of the stories covered in earlier postings.

Naphthachimie has been bringing plants back on stream at the Lavéra Site, whilst Arkema has been forced to declare force majeure on all PVC production in France due to the shutdown of the Lavéra VCM unit.

Jurong, the Singapore Chemical Park celebrated the completion of its land reclamation project - many years ahead of schedule.

ExxonMobil shared the secrets of its success in reaching number 2 in the ICIS list of Top 100 Chemical companies. In an interview with Bloomberg, an EM spokesperson reiterated the company strategy of integration and optimisation throughout the entire value chain.

OPEC shared its view on economic recovery, stating their belief that it will be slow and gradual. The group left its world oil demand forecast for 2010 unchanged.

Top 10 Chemical Companies in 2008 and in 1998

ICIS has recently published its fascinating analysis of the top 100 chemical companies in 2008 (ranked by sales). The names in the list will not be a surprise to many; BASF, ExxonMobil, Dow Chemical, LyondellBasell, Du Pont and Shell figure prominently in the list.

What is more interesting is to look back to the top 10 in 1998 and look at the differences. BASF, Dow and Du Pont were all present but other names have disappeared completely; ICI, Hoechst and Rhone Poulenc were very big 1998.

New additions to the top 10 are the likes of SABIC, Sinopec, LyondellBasell and Ineos, with SABIC and Sinopec growing very quickly in recent years. LyondellBasell and Ineos are, of course, new companies formed in recent years and which have grown through successions of acquisitions.

The brave amongst us might like to try and predict what 2018 might look like. New names like Borouge and ChemaWEyaat may well appear, with some European and North American companies coming under some pressure?