Record Fine For BP

Following on from my previous comment on BP Texas City, the  BBC has now reported that BP has been fined a record $87m (£53m) for failing to correct safety hazards at the site.

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As noted previously, the Occupational Safety and Health Administration (OSHA) cited 270 violations at the oil refinery. BP said it believed it was in "full compliance" with a 2005 settlement agreement with OSHA and would work with the agency to resolve the issue.

The $87m fine is the largest in OSHA's history.

Mixed News as Companies Report on Q3

Mixed news for the chemical and process industries as companies reported Q3 results

• BASF reported third quarter profits down 69% year on year to €237M. BASF expects a long slow climb out of recession. BASF expects some employees will remain on short-time working into 2010. Whilst business has stabilised the climb out from the trough will be slow.
• Shell reported a collapse in Q3 profits from $10.9 billion in 2008 last year down to $3 billion. As a result of this poor performance, Shell will axe some 5000 jobs worldwide in its 'Transition 2009' programme
• BP's results were some 50% better than city analyst's expectations, with replacement cost profit of $4.98 billion. BP has already cut costs following reorganisation and efficiency improvements and aims to do even more this year. BP noted that they had achieved a 7% increase in production as well as a number of new developments in the Gulf of Mexico, Iraq and China, amongst others.
• GSK showed that the pharma sector is still reasonably strong. Profits were up 12% at $2.4 billion. Demand for the H1N1 vaccine has help bolster GSK

Overall, things remain tough for commodity sector, and particularly for those who rely on housing starts and the automotive sector for a major proportion of their demand. The end to the various stimulus packages will also create issues as volumes drop back to the 'new normal'.

Some sectors are clearly much less affected, such as pharma, although cost cutting and a move to generics will make things tougher.

For manufacturers, we can anticipate another tough year, chartacterised by reorganisations, reduced capital expenditure and some site closures as we slowly start to pull out of recession.

World's Largest Polymer Park Changing Face of Plastics Conversion

photo: Arabianoilandgas.com

With up to 15 million tonnes of new polymer capacity coming on stream in the GCC region from highly integrated and effficient plants, the obvious next step was to improve the integration of these plants with the downstream convertors. The new Abu Dhabi Polymers Park is a huge step in achieving that goal.

The park, developed by the Abu Dhabi Basic Industries Corporation (ADBIC), a state owned organisation, will cost some €3.5 billion to complete and once fully operational, will consume up to 2 million tonnes per year of polymers (mostly PE, PP, PVC and Polyester).

The park's developers have given considerable thought to the design of the cluster and have come up with a very well structured package. The park will have purpose designed logistics facilities, a nearby deep-sea container port, flexible supply chain and technical service capabilities and competitively priced utility and land costs. Unlike existing clusters, the concept has been carefully designed from the outset, rather than evolving out of large corporate supersites, as was the case with many of the European clusters.

So with leveraged procurement, high quality logistics, on-site technical support capability and competitive land and utility costs, it sounds pretty good. Add to that a growing local market and zero tax on company and private income and you have an irresistible opportunity.

Shell - Integration Key To Successful Growth

photo : Hydrocarbons Technology

Shell believes that integration is key to delivering what it calls the 'oil chemicals advantage' in its petrochemical facilities.

Downstream Today has reported a recent speech at the recent Petchem Arabia 09 in Abu Dhabi by Aslam Moola, Business Development Manager for Shell Chemicals. Mr Moola cites various examples of projects and existing installations that clearly demonstrate the benefits of integration.

Integration, together with strong project implementation and effective production and energy management, is increasing the competitiveness of plants such as SEPC on Jurong Island, Singapore as well as other integrated Shell complexes around the world, according to Mr Moola.

The Middle East is set to benefit fom this integration. This will be even further enhanced by the development of downstream manufacturing capabilities, such as the polymer parks in Abu Dhabi and the growth of domestic markets in the region.

At International eChem, we have long argued that the critical success factors for petrochemical operations are integration, size, technology, global reach and location. Clearly, all of these factors must be supported by a strong business strategy, together with highly effective delivery of that strategy.

Recent projects in the Middle East and Asia tick all of the boxes and will increasingly dominate supply in the years to come.

RSC Identifies Top-Ten Challenges for the Chemical Sciences

photo : RSC

Using a series of workshops and on-line conultations, Royal Society of Chemistry (RSC)  has been working for the last year to identify priorities and challenges for the chemical sciences. The intention is to set the science agenda for the coming years.

In total, 41 challenges were identified, with the following top 10

• Agricultural productivity
• Conservation of scarce natural resources
• Conversion of biomass feedstocks
• Diagnostics for human health
• Drinking water quality
• Drugs and therapies
• Energy conversion and storage
• Nuclear energy
• Solar energy
• Sustainable product design

Next step for the RSC is to identify partners and start to develop implementation plans for associated projects.

Clearly many of these challenges will increasingly impact the chemical industry and chemicals manufacturers. Involvement in these challenge areas will help address these challenges and support business development. As mentioned in many previous posts, innovation and flexibility are key to long term success.

OSHA Rejects BP's Request For More Time In Texas City Follow-Up

photo : ABC

In a letter seen by Reuters, OSHA has rejected BP's request for more time to fix safety problems at its Texas City Refinery.

OSHA has forwarded the dispute to a review commission and objected to BP's appeal, arguing that BP had failed to show how it would fix safety problems found after the deadly 2005 explosion at the refinery. OSHA has also said that BP could not ask for more time whilst simultaneously claiming that the refinery had met the terms of a four-year agreement to fix the safety issues which led to the explosion in March 2005 which killed 15 people and injured 180 other workers.

BP has said the commission would find the company has lived up to its agreement to comply with federal safety regulations at Texas City.

Without the detail, it is impossible comment on specifics. In broad terms however, it is fair to say that questions of interpretation can be argued and debated but questions of fundamental process safety must be fully addressed.

Friday News Round Up

Friday once again, so a time to update on various past stories and news items

• ICIS has analysed the various chemical companies job loss related annoucements reported to them since the start of the financial crisis in September 2008. The figures show that chemical companies have cut over 77,000 jobs since the crisis began.

• In the UK, NEPIC, the North East Chemical Industry Cluster, will investigate the commercial feasibility of chemical production from biomass. The 30-month project is being carried out on behalf of the UK Government department DEFRA

•  BASF has announced that it will close its maleic anhydride plant at Feluy, Belgium by the end of this year, with the loss of 133 jobs

• As Copenhagen approaches, UK Prime Minister, Gordon Brown expressed his views on climate change. He warned delegates at the Major Economies Forum in London (representing 17 of the world's biggest greenhouse gas-emitting countries) there was "no plan B" regarding climate change and that negotiators had "50 days to save the world from global warming".
  
  
• Paul Hodges sets out his views on what's to come for 2010 in his analysis 'Budgeting for a New Normal'. In his summary, he states "2010 to be a transition year. Full economic recovery is unlikely to take place much before the 2011/13 timeframe. But the return of economic growth will offer companies the opportunity to identify likely future market needs. Those that focus on this new reality, rather than simply hoping for a quick return to the Boom years, will position themselves for future success."