Media Focus on Multinational Corporations[2022.07.11]






Shell adds $1 billion in refining profits from record fuel prices

Shell Plc said soaring margins from fuel production may have added more than $1 billion to the earnings of its refining business last quarter, when gasoline prices broke records in several countries.

The trading update from the London-based energy giant is the first indicator of just how much cash was flowing into the coffers of major oil companies due to the inflationary surge in the price of gasoline, which climbed above $5 a gallon in the US for the first time.

While the rising cost of energy is strengthening the oil majors after several tough years, it risks a political backlash. US has directly called on fuel retailers to cut prices and companies are facing windfall taxes in some countries.

Shells indicative refining margin jumped to $28.04 a barrel in the second quarter from $10.23 in the first three months of the year, the company said in a statement on Thursday. Thats expected to have a positive impact of $800 million to $1.2 billion on the results of its products division, compared with the prior period.

Shells shares advanced as much as 2.5%, and traded up 1.2% at 1,997.2 pence as of 9:36 a.m. in London.

Still, analysts at RBC Europe Ltd. saw the update as neutral,citing uncertainty around the magnitude of working capital outflows.In May, Shell said that it would be hit by around $7.4 billion of working capital movements.

Oil prices have jumped 30% this year as the war stokes supply concerns. Having ramped up its long-term price assumptions, Shell now expects to reverse previous writedowns on asset values by $3.5 billion to $4.5 billion.

Trading and optimization results from Shells sprawling integrated gas unit fell from the previous quarter, when the business benefited from exceptionaltrading opportunities. The renewables and energy solutions division is expected to report adjusted earnings of $400 million to $900 million for the second quarter amid an exceptional market environment,the statement showed.

Shell didnt give an update on the future of its buyback program, having said it completed $8.5 billion of repurchases in the first half of the year. The company has previously signaled an acceleration in returns, saying that shareholder distributions would be in excess of 30% of operating cash flow.



Shell to Build Offshore Wind-powered Green Hydrogen Plant in Port of Rotterdam

Shell has made the final investment decision for Holland Hydrogen I, which, when completed in 2025, will be Europe's largest renewable hydrogen plant. The plant will be powered by electricity produced from an offshore wind farm in the Dutch section of the North Sea.

Shell said Wednesday that the200MW electrolyser would be built on the Tweede Maasvlakte in the port of Rotterdam and will produce up to 60,000 kilograms of renewable hydrogen per day.

The renewable power for the electrolyser will come from the offshore wind farm Hollandse Kust (noord), which is partly owned by Shell.

'The renewable hydrogen produced will supply the Shell Energy and Chemicals Park Rotterdam, by way of the HyTransPort pipeline, where it will replace some of the grey hydrogen usage in the refinery. This will partially decarbonise the facilitys production of energy products like petrol and diesel and jet fuel. As heavy-duty trucks are coming to market and refuelling networks grow, renewable hydrogen supply can also be directed toward these to help in decarbonising commercial road transport,' Shell said.

'Holland Hydrogen I demonstrates how new energy solutions can work together to meet societys need for cleaner energy. It is also another example of Shells own efforts and commitment to become a net-zero emissions business by 2050,said Anna Mascolo, Executive Vice President, Emerging Energy Solutions at Shell. Renewable hydrogen will play a pivotal role in the energy system of the future and this project is an important step in helping hydrogen fulfil that potential.

Shell is part of the CrossWind consortium with Eneco, which in July 2020 won the tender for the subsidy-free offshore wind farm Hollandse Kust (Noord) in the Netherlands.

The consortium said at the time it planned to have Hollandse Kust (Noord) operational in 2023 with an installed capacity of 759 MW, generating at least 3.3 TWh per year, whichis enough electricity to power the equivalent of more than 1 million Dutch households.

Hollandse Kust (Noord) Wind Farm Zone is located 18.5 kilometers off the west coast of the Netherlands. The total surface area of the Wind Farm Site within this zone (including maintenance and safety zones within the WFS) is approximately 125 km².



ExxonMobil methanol to jet technology to provide new route for SAF production

ExxonMobil announced a unique process technology to enable the manufacture of sustainable aviation fuel (SAF) from renewable methanol. ExxonMobil is focused on growing its lower-emission fuels business by leveraging technology and infrastructure.

ExxonMobil is engineering proprietary methanol to jet technology that will produce SAF when renewable methanol is used as feedstock. This expands upon ExxonMobils suite of technology solutions that are engineered to manufacture SAF from other biofeeds.

SAF produced from renewable methanol can play an important role in helping the aviation industry achieve the transition to a net-zero future. Reaching that goal by 2050 will require a multi-faceted approach, including advancements in aircraft-related technology, changes to infrastructure and operations, and a dramatic increase in SAF supply. Our process technology can be an important step in this direction,said Russ Green, ExxonMobils lower-emission fuels venture executive.

Proprietary Methanol to Jet Technology ExxonMobil has a long history of developing advantaged proprietary process technologies and catalysts to make energy products that society needs. ExxonMobil is leveraging its core capabilities to develop a solution that converts methanol to SAF. Methanol derived from the gasification of biomass and waste, as well as from lower-carbon hydrogen and captured carbon dioxide (CO), can be converted into SAF using ExxonMobils methanol to jet proprietary process technology and catalysts.

Preliminary estimates by ExxonMobil suggest that this solution has a higher yield of jet fuel than other options. The ExxonMobil solution also provides the flexibility to use a mix of alcohols as feedstock and produce renewable diesel and lower-carbon chemical feedstocks.

Methanol to jet technology is scalable and suitable for the conversion of methanol produced from today's world-scale plants. The work necessary to qualify the resulting renewable jet fuel pathway has already started,said James Ritchie, president of ExxonMobil Catalysts and Licensing LLC.

Additionally, ExxonMobil has process technology and catalysts that are available to customers today which convert other renewable biofeeds, such as used cooking oils, animal fats, and vegetable oil, into renewable jet fuel.



Italys Snam Buys Floating Regasification Unit for $400 Million

Italy's Snam has signed a $400-million deal with BW LNG to buy a floating storage and regasification unit (FSRU), the gas grid operator said on Wednesday, as Rome rushes to find alternative supplies togas.

Last year Moscow supplied 40% of Italy's imports of gas, or 29 billion cubic meters. But since mid-June, the bigger producer has been supplying less gas than requested by Rome, increasing pressure on the government to diversify its energy sources.

State-controlled Snam, which last month acquired a first regasification vessel from Golar LNG, said it expected the unit, called BW Singapore, to become operational in the third quarter of 2024, once a contract with a third party currently using the unit expires and the permitting process is completed.

'With this operation, we are providing Italy with its second new floating regasification unit thus making a decisive contribution to the country's energy security and diversification,' Snam CEO Stefano Venier said in a statement.

The two FSRUs which have recently been acquired by Snam will contribute 13% of Italy's gas demand and bring the country's regasification capacity to over 30% of demand, Venier added.



Uniper starts construction of Germanys first LNG terminal in Wilhelmshaven

German energy major Uniper officially started the construction work for Germanys first LNG terminal in Wilhelmshaven on 4 July 2022.

Germanys first LNG terminal will be built in Wilhelmshaven at the Voslapper Groden transshipment facility. Uniper will build and operate the terminal at the request of the Federal Republic of Germany.

On 4 July, Uniper said the construction work for the LNG terminal and for the onshore and seaward port infrastructure can begin after the State Trade Supervisory Authority Oldenburg has given its approval for an early start.

Up to 7.5 billion cubic meters of natural gas per year are to be handled via this terminal as quickly as possible. This is about 8.5 per cent of Germanys current gas demand per year.

The German Federal Ministry for Economic Affairs and Climate Protection and Uniper are aiming for commissioning this winter.


Saudi Aramco

Saudi Aramco Raises Oil Prices for Asian, European Buyers

Saudi Arabian Oil Co., the nation's state-run oil company, raised its crude oil prices for Asia and Europe for August, as OPEC+ struggles to increase output.

Saudi Aramco raised the price of its benchmark Arab Light crude by $2.80 a barrel for Asian buyers to a premium of $9.30 a barrel compared to Oman and Dubai.

Buyers in Northwest Europe saw the premium rise by $1 a barrel to $5.30 against ICE Brent oil benchmark, while Mediterranean buyers saw the premium rise by $1.20 a barrel to $5.10.

The price hike comes as OPEC+ and its members struggle to lift oil output in the near term. Last week, the group agreed to raise oil output by 648,000 barrels a day, but analysts say the alliance is unlikely to meet its targets.



RWE, Hellenic Petroleum Partner Up to Build Offshore Wind Farms in Greece

RWE and Hellenic Petroleum Holdings have agreed to collaborate on the development, construction and operation of offshore wind farms off the Greek coast.

Greece, which doesn't have any offshore wind farms installed at the moment, has set a 2 gigawatt (GW) target of offshore wind capacity in operation by 2030 for both fixed-bottom and floating projects.

George Alexopoulos, Executive Member of the BoD of Hellenic Petroleum Holdings and CEO of its renewables branch HELPE Renewables said: 'We believe that our country has excellent potential for the development of a thriving offshore wind sector and we aim, together with our partner RWE, to lead this effort.

Sven Utermöhlen, CEO Wind Offshore of RWE Renewables, said: The countrys excellent wind resource in combination with its long coast line result in a vast potential for offshore wind developments, which makes us confident that the Greek offshore wind industry will gain real momentum. The complementary nature of our partnership with Hellenic Petroleum is the key to developing a value proposition that accelerates the offshore wind build-out off the Greek coast. Hellenic Petroleum is deeply rooted locally and shares our ambition to drive the growth of offshore wind. Combined with RWEs track record of more than 20 years in developing, constructing and operating offshore wind projects, we are well placed to supply competitive green energy from offshore wind to the Greek market.

While Greece has ambitions to install 2GW of offshore wind capacity by 2030, RWE currently has 3GW of offshore wind installed globally, and plans to grow this to 8 GW by 2030.



Who Produced the Most Oil and Gas in 2021?

According to BPs latest annual statistical review of world energy, the top oil producer in the world in 2021 was the United States with an output of 16.58 million barrels per day.

The figure marked a 0.8 percent increase from 2020s production rate, which was shown to be 16.45 million barrels per day. BPs report highlighted that the U.S. produced 17.11 million barrels of oil per day in 2019, 15.31 million barrels per day in 2018, 13.14 million barrels per day in 2017, 12.35 million barrels per day in 2016, and 12.78 million barrels per day in 2015.

Saudi Arabia ranked second in oil production last year with 10.95 million barrels per day, according to BPs review. Saudi Arabias production in 2021 marked a 0.8 percent drop compared to 2020, BPs review highlighted.

Looking at natural gas, the U.S. also took the top spot in terms of 2021 production, according to BPs review. The U.S. was shown to have produced 934.2 billion cubic meters of gas last year, which BP highlighted was a 2.3 percent increase compared to 2020s figure of 915.9 billion cubic meters of gas.

The U.S. produced 928.1 billion cubic meters of gas in 2019, 840.9 billion cubic meters of gas in 2018, 746.2 billion cubic meters of gas in 2017, 727.4 billion cubic meters of gas in 2016, and 740.3 billion cubic meters of gas in 2015, BPs review outlined.

BPs latest review highlighted that total world oil production in 2021 was 89.87 million barrels per day and total world natural gas production was 4.03 trillion cubic meters. Oil production was shown to have grown 1.6 percent compared to 2020, while gas production was shown to have grown 4.8 percent compared to 2020.



Samsung Sees About 11.4% Rise In Q2 Operating Profit

(RTTNews) - Samsung Electronics Co Ltd (SMSN.L, SSNNF.OB, SSNLF.OB) expects that its second-quarter operating profit will rise about 11.38 percent from last year, helped by strong semiconductor business despite slowing demand for smartphones and home appliances. It projects quarterly sales will increase 20.94 percent.

The South Korean tech giant projects operating profit of about 14.00 trillion Korean won in the second-quarter, compared to 12.57 trillion won reported last year. While it reported operating profit of about 14.12 trillion won in the first-quarter.

The company also expects second-quarter consolidated sales of about 77.00 trillion won compared to 63.67 trillion won last year. It reported consolidated sales of about 77.78 trillion won in the first-quarter.

Second-quarter earnings results will be released later this month.



Boeing CEO says planemaker could be forced to cancel 737 MAX 10 -Aviation Week

WASHINGTON, July 7 (Reuters) - Boeing BA.N Chief Executive Dave Calhoun told Aviation Week in an interview that the planemaker could be forced to cancel the 737 Max 10 over potential regulatory issues.

Boeing has a December deadline to win approval for the 737 MAX 10 - the largest member of its best-selling single-aisle airplane family. Otherwise, it must meet new cockpit alerting requirements under a 2020 law, unless Congress waives it. Calhoun's comments could put more pressure on Congress.

'If you go through the things weve been through, the debts that weve had to accumulate, our ability to respond, or willingness to see things through even a world without the -10 is not that threatening,' Calhoun told Aviation Week, adding that he does not expect to cancel the 737 MAX 10 but said 'its just a risk.'

A Boeing spokeswoman confirmed the accuracy of Calhoun's quotes and reiterated the planemaker is 'working transparently with the (Federal Aviation Administration) to provide the information they need, and are committed to meeting their expectations and those of our customers to certify and deliver the 737-10.'

The 2022 deadline was mandated by Congress as part of broader regulatory reforms at the FAA after fatal 737 MAX crashes in 2018 and 2019 killed 346 people.

Boeing has more than 640 orders for MAX 10 planes from 17 airlines, Aviation Week said. In June 2021, United Airlines UAL.O said it would order another 150 MAX 10s.

In March, the FAA warned Boeing it may not win certification of the MAX 10 by the end of the year and asked the company to provide a 'mature certification schedule.' Boeing declined to comment on its current certification schedule.

Unlike other Boeing aircraft, the 737 lacks the Engine Indicating and Crew Alerting System known as EICAS.

Missing the deadline could require Boeing to revamp the jet's crew alerting system and mean separate pilot training.

Calhoun told Aviation Week: 'I think our case is persuasive enough. ... This is a risk Im willing to take. If I lose the fight, I lose the fight.'



Previewing JPMorgan and the Big Banks to Kick Off Q2 Earnings Season

Bank stocks have been big-time laggards in the ongoing market pullback. This is despite the fact that core features of the economy have been stable and rising interest rates are generally expected to benefit banks since they help expand their margins.

It will be interesting to see if the groups stock market fortunes will change in any meaningful way when they start coming out with June-quarter results this week. We have JPMorgan JPM and Citigroup C kicking off the Q2 reporting cycle for the group on Thursday (7/14) and Friday (7/15) this week, respectively.

The performance variance between JPMorgan and Citigroup this year, while not much, is nevertheless likely a function of the latters persistent earlier underperformance that Citigroups new management has been trying to account for through a strategic restructuring and repositioning.

With respect to current earnings expectations for the group, Q2 earnings for the Zacks Finance group are expected to be down -20.4% on +3.1% higher revenues. For the Zacks Major Banks industry, of which JPMorgan and Citigroup are a part, Q2 earnings are expected to be roughly a third below the year-earlier level on +1.9% higher revenues.

The table below shows the Zacks Finance sectors 2022 Q2 earnings and revenue growth expectations in the aggregate, as well as at the industry level.



Airbus reports flat first-half deliveries

PARIS, July 8 (Reuters) - Europe's Airbus AIR.PA delivered 297 jets in the first half, unchanged from the same period last year, the company said on Friday.

The world's largest planemaker posted a net total of 295 first-half deliveries after deducting two jets originally destined for Russia's Aeroflot that it had booked last year.

Airbus also reported 442 first-half airplane orders or a net total of 259 after cancellations, up sharply from 38 net orders at the mid-way point last year.



Volvo Cars to leave ACEA car lobby group over climate goals

LONDON, July 8 (Reuters) - Volvo Cars VOLCARb.ST said on Friday it will leave the European Automobile Manufacturers Association (ACEA) by the end of 2022, citing differences between its zero-emission strategy and that of Europe's car lobby group.

The Swedish carmaker has committed to having a fully-electric car range by 2030, well ahead of the European Union's proposal for an effective ban on fossil-fuel cars as of 2035.

Volvo has been a proponent of moving more swiftly to zero-emission transport, but after the EU parliament voted in June in favour of the 2035 deadline the ACEA said that 'any long-term regulation going beyond this decade is premature at this early stage.'

In a statement Volvo said 'we have concluded that Volvo Cars' sustainability strategy and ambitions are not fully aligned with ACEAs positioning and way of working at this stage.'

'We therefore believe it is better to take a different path for now,' the carmaker added. 'What we do as a sector will play a major role in deciding whether the world has a fighting chance to curb climate change.'

The news comes less than a month after world No. 4 carmaker Stellantis STLA.MI said it would leave the ACEA by the end of 2022 as part of a new approach to addressing issues and challenges of future mobility, including a shift away from traditional lobbying activity.

The European Automobile Manufacturers Association, widely known by its French acronym ACEA, has been the industry's main lobbying group since its creation in 1991, uniting Europe's 16 major car, truck, van and bus makers.



Amazon eyes bigger H2 e-commerce sales in China

US tech giant Amazon is banking on the burgeoning cross-border e-commerce in China and anticipates Chinese consumers' purchasing demand to rebound in the second half, said Li Yanchuan, head of Amazon China Global Store and Prime.

'Although the resurgence of the COVID-19 pandemic had an impact on international logistics in the first half, the most difficult period has passed and the global logistics segment is gradually recovering in the second quarter,' Li said.

Li said Chinese consumers have shown immense enthusiasm and vibrant purchasing power for cross-border online shopping, as the sales on Amazon Global Store, its cross-border shopping platform, during this year's June 18 shopping carnival increased 30 percent compared with the same period last year.

'The country's cross-border e-commerce sector will likely show greater vitality in the second half along with the recovery of consumption,' Li added.

He underscored Amazon Global Store's long-term commitment to development in China, saying he has full confidence in the future prospects of the cross-border e-commerce market in China.



Vivo says acts in line with India laws, codes

Chinese smartphone vendor Vivo said on Wednesday that its branch in India is cooperating with local authorities to provide them with all required information, and the company is committed to full compliance with Indian laws.

The comments came after Indian media reported that authorities there conducted searches at over 40 locations across India in connection with an alleged money-laundering case linked to Vivo and other Chinese firms.

Vivo said in a statement to China Daily that 'As a responsible corporate, we are committed to be fully compliant with laws in India'.

Chinese brands currently account for four of the top five smartphone vendors in India by shipments. At the end of the first quarter, Vivo had a 15 percent market share in the country, according to market research company Counterpoint. That puts Vivo in fourth place, behind Xiaomi, Samsung and Realme.

The Vivo investigation came after Indian tax authorities conducted searches at multiple premises of Chinese companies including Huawei Technologies Co, Xiaomi and Oppo as part of tax investigations earlier this year.

After seizing $726 million from Xiaomi in April, India began the process of inspecting accounting records of more than 500 Chinese companies, including ZTE Corp, Vivo, Xiaomi and Huawei, Bloomberg reported in May.



Airbus eyes local airlines to sell A220 planes

European aircraft manufacturer Airbus said it has been in close discussions with Chinese airlines, especially small and medium-sized carriers, for possible sales of its 100-to 150-seat, low-emission A220 aircraft, which are not yet in service in China.

The aircraft model is considered by aviation industry experts as suitable for flights in western China and second-tier cities in eastern China.

The single-aisle A220 fills the gap between regional-level aircraft like the domestically developed jetliner ARJ21 and single-aisle aircraft such as the A320 and the Boeing B737 that are used on both short and long-haul routes.

Airbus said among its single-aisle aircraft family, the A320 is equipped with 160 to 240 seats. The A319neo comes with 130 to 150 seats, and is mainly designed for airports in ultra-high plateau regions. The A220 is designed for airports located in regular plateau areas and plains.

'Among all Airbus aircraft models, the A220 boasts the highest number of Chinese elements-15 Chinese suppliers have been contributing to its manufacture, from providing raw materials and components to the assembly of big parts,' said Yang Xiaoyu, Airbus' head of flyable procurement in China and East Asia.

'We will continue to localize the supply chain and reduce costs for the A220. This approach can help reduce international transportation logistics and significantly cut down the emission of carbon dioxide.'

SAC Commercial Aircraft International Ltd, a subsidiary of Aviation Industry Corp of China, which is based in Shenyang, Liaoning province, serves as a major supplier, producing forward fuselages, rear barrel sections, hatch doors, tail cones and mid-fuselage of the A220.

So far, the A220 model has received 741 orders from more than 25 customers globally, including Delta Air Lines, Air Canada, Air France and Korean Air.

Airbus has been working hard to receive the airworthiness certificate for the A220 from the Civil Aviation Administration of China, the company said.

Currently, the monthly production rate of the A220 stands at six aircraft. Airbus aims to increase it to 14 by 2025. The company said it has already started preparations to realize its goal through close cooperation with its local suppliers.

In 2019, Airbus' annual spending on the commercial aircraft business in China reached about $1 billion. The company will continue to increase its investments in the country. In the near future, the procurement value related to the A220 is expected to account for about 40 percent of the total procurement value of Airbus in China, when A220 reached its full production rate of 14 aircraft a month.

Between 2015 and 2025, the government plans to build 136 new airports on the Chinese mainland. Nearly half of them will be built in western China, the CAAC said.

'Smaller cities in short-haul domestic markets need more direct flights to connect them, and the A220 is the type of aircraft suitable for such markets,' said Xie Li, a professor at the Civil Aviation Management Institute of China.



CREC4-built sewage plant in Ulaanbaatar reaches new milestone

With the help of a Chinese State-owned enterprise, Mongolia's No 1 project concerning people's livelihoodsa new central sewage treatment plant in the capital that will benefit 45 percent of the nation's residentsis on its way to a smooth completion and acceptance by August next year.

Construction of the plant in Ulaanbaatar, capital of Mongolia, being built by the First Engineering Co Ltd of China Railway No 4 Engineering Group Co Ltd (CREC4), hit another milestone on March 31 with the successful concrete pouring into the inner walls of three reaction tanks.

This marked the simultaneous completion of three planned construction nodes in building the plant, dubbed the No 1 public wellbeing project of Ulaanbaatar, since the resumption of construction work from the COVID-19 disruptions.



Sinovac begins trials on Omicron vaccine booster in HK

Chinese vaccine producer Sinovac Biotech officially kicked off a clinical trial in Hong Kong on Monday to assess the safety and immunogenicity of its Omicron-specific COVID-19 inactivated vaccine which will be used as a booster shot in healthy adults.

The trial program plans to recruit around 300 or more healthy volunteers who are above the age of 18 and who have already been inoculated with two or three shots of either inactivated or mRNA COVID-19 vaccine.

This study is being led by a research team from the University of Hong Kong Clinical Trials Centre in collaboration with Gleneagles Hospital Hong Kong.

Sinovac obtained a sample of the Omicron variant in early December last year to further the research and development of its Omicron-specific inactivated COVID-19 vaccine.

Preclinical studies have showed the vaccine is safe and effective on animals, the company said.