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Argus Media: Total reports lower profit, flags name change- Update

Total’s adjusted profit fell by 59% but it performed relatively well compared with its peer group, some of which are reeling from record losses, reports Argus Media.




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Rowena Edwards and Caroline Varin of global energy and commodity price reporting agency Argus Media on Tuesday (9 February) published a summary on Total’s published results for 2020 focusing on how it fared throughout the pandemic and its plans to move forward with the energy transition:

Added quotes from chief executive

Total saw its fourth-quarter profit and full-year earnings plummet on year as the Covid-19 pandemic lowered fuel demand and weighed on oil and gas prices. But the firm performed relatively well compared with its peer group, some of which are reeling from record losses.

Total — which used today's results announcement to confirm plans to change its name to TotalEnergies — reported a profit of $891mn for the fourth-quarter, a marked improvement on the previous three months but 66pc lower than the same period of 2019. A hit from heavy impairment charges in the second quarter, mainly related to Canadian oil sands assets, drove the firm to an overall loss of $7.2bn for the full year, compared with a profit of $11.3bn in 2019.

Adjusted profit — which strips out inventory valuation effects and one-off items — dropped by 59pc on the year to $1.3bn in October-December and was down by 66pc to $4.1bn for the full year.

"We demonstrated that we could resist better than our competitors in 2020, a year that brought extreme volatility," chief executive Patrick Pouyanne said today.

Total's fourth-quarter oil and gas production fell by 9pc from a year earlier to 2.84mn b/d of oil equivalent (boe/d), driven by Opec+ quotas, voluntary reductions in Canada, and maintenance and unplanned outages, notably in Norway. Full-year output was 2.87mn boe/d, 5pc lower than 2019. The company expects 2021 production to be stable compared with last year, benefitting from the recovery in Libyan production, and it expects LNG sales to rise by 10pc because of the ramp-up of the 15mn t/yr Cameron LNG facility in the US.

In the downstream, Total's fourth-quarter refining throughput fell to 1.3mn b/d and the utilisation rate dropped to 60pc, compared with a respective 1.5mn b/d and 71pc a year earlier. Refining margins "remained depressed, still affected by low demand and high inventories," Pouyanne said.

Total reiterated its plans to transform itself over the next decade, reducing its reliance on oil and focusing its energy production growth on LNG and renewables and electricity. It expects oil products to fall to 30pc of sales over the next decade from 55pc now. The company will propose changing its name to TotalEnergies at its annual general meeting on 28 May to reflect the transformation.

Total will allocate over 20pc of this year's $12bn net investment budget — which includes organic capital expenditure (capex) and net acquisition spending — to renewables and electricity. The 2021 budget is almost $1bn lower than 2020 spending, when investment was reduced by a quarter from the previous year to tackle the impact of the Covid-19 pandemic.

If oil prices rise this year, Total's priority will be to use the extra cash flow to reduce debt, but it remains open to raising investment levels as well, Pouyanne said. "If Total increases investment, there will be two uses. More investments in renewables — we could imagine 20pc [of the budget] could become 25pc — and we could restart drilling that we stopped last year," he said.

The firm said it is maintaining its priorities for cash flow allocation, which include investing in profitable projects to implement its transformation into a broad energy company, supporting the dividend and maintaining a strong balance sheet. It is keeping its quarterly dividend flat at €0.66/share, unchanged from the previous three quarters.


Photo credit and source: Argus Media
Published: 11 February, 2021

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Kambara Kisen orders methanol dual-fuel bulker from Tsuneishi Shipbuilding

Firm ordered a 65,700-dwt methanol dual-fuel dry bulk carrier with Tsuneishi Shipbuilding; MOL signed a basic agreement on time charter for the newbuilding that is slated to be delivered in 2027.





Kambara Kisen orders methanol dual-fuel bulker from Tsuneishi Shipbuilding

Japanese shipowner Kambara Kisen has ordered a 65,700-dwt methanol dual-fuel dry bulk carrier newbuilding from Tsuneishi Shipbuilding Co., Ltd, according to Mitsui O.S.K. Lines (MOL) on Wednesday (20 September).

MOL said it signed a basic agreement on time charter for the newbuilding that is slated to be delivered in 2027. 

The vessel will be designed to use e-methanol produced primarily by synthesising recovered CO2 and hydrogen produced using renewable energy sources, and bio-methanol derived from biogas. 

The vessel's design maximises cargo space while ensuring sufficient methanol tank capacity set to allow the required navigational distance assuming various routes, at the same time maximising cargo space. 

MOL added the vessel is expected to serve mainly in the transport of biomass fuels from the east coast of North America to Europe and the U.K. and within the Pacific region, as well as grain from the east coast of South America and the U.S. Gulf Coast to Europe and the Far East.

Details on the time-charter contract:

Shipowner: Kambara Kisen wholly owned subsidiary
Charterer: MOL Drybulk Ltd.
Charter period 2027: -

Details on the newbuilding methanol dual fuel bulk carrier:

LOA: About 200 m
Breadth: About 32.25 m
Draft: About 13.80 m
Deadweight: About 65,700 MT
Hold capacity: About 81,500m3
Shipyard: Tsuneishi Shipbuilding Co., Ltd.

Photo credit: Mitsui O.S.K. Lines
Published: 22 September, 2023

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Argus Media: Alternatives may drive methanol market growth

Driven by low-carbon policies and regulations, the transportation sector — especially the marine fuels industry — could be a source of heightened demand, according to Argus.





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The growth of sustainable alternatives to traditional methanol production sources likely will shape the market over the next several years, industry leaders said this week at the Argus Methanol Forum.

20 September 

Driven by low-carbon policies and regulations, the transportation sector — especially the marine fuels industry — could be a source of heightened demand.

"The aim is to be net zero by 2050 but [those solutions are] expensive today and one of the main challenges to build e-methanol or bio-methanol plants is a huge queue for these pieces of equipment that aren't available," Anita Gajadhar, executive director for Swiss-based methanol producer Proman, said.

Bio-based and e-methanol plants of commercial scale, like Proman's natural gas-fed 1.9 million metric tonne/yr M5000 plant in Trinidad and Tobago, are not ready today.

"But that's not to say 10 years from now they won't be there," Gajadhar added.

Smaller projects are popping up. Dutch fuels and gas supplier OCI Global announced plans last week to double the green methanol capacity at its Beaumont, Texas, facility to 400,000 t/yr and will add e-methanol to production for the first time. Production will use feedstocks such as renewable natural gas (RNG), green hydrogen and biogas.

The globally oversupplied methanol market will not get any major supply additions starting in 2024 until 2027. But that oversupply will not last long, Gajadhar said.

Global demand has slowed this year, driven by stagnate economic growth and higher interest rates, according to industry observers.

As much as half of methanol demand is tied to GDP growth, with total methanol demand estimates at 88.9mn t globally in 2023. This is essentially flat from 2022, but up from 88.3m t in 2021 and 87.7mn t in 2020, Dave McCaskill, vice-president of methanol and derivatives for Argus Media's consulting service, said.

Demand is not expected to rebound to 2019 levels of 89.6mn t until 2024 or 2025, he added.

The period of oversupply combined with lackluster demand places methanol in a transition period, Gajadhar said, which opens the door for sustainable feedstock alternatives to shape market growth.

Danish container shipping giant Maersk and French marine logistics company CMA-CGM announced earlier this week a partnership to drive decarbonization in shipping. The partnership seeks to develop fuel and operations standards for bunkering with alternative fuels. The companies will develop net-zero solutions, including new technology and alternative fuels.

Maersk has previously ordered dual-fuel methanol-powered vessels and CMA-CGM LNG-propelled vessels.

The demand for alternative feedstock-derived fuels is there, but the ability to scale-up such production lags. Certified lower-carbon methanol produced using carbon capture and sequestration — also known as blue methanol— can ramp up much more quickly, according to Gajadhar.

By Steven McGinn

Photo credit and source: Argus Media
Published: 22 September, 2023

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Royal Caribbean completes over 12 weeks of bio bunker fuel testing in Europe

Firm expanded its biofuel testing this summer in Europe to two additional ships — Royal Caribbean International’s “Symphony of the Seas” and Celebrity Cruises’ “Celebrity Apex”.





Royal Caribbean completes over 12 weeks of bio bunker fuel testing in Europe

Royal Caribbean Group on Tuesday (19 September) said it successfully completed over 12 consecutive weeks of biofuel testing in Europe. 

Royal Caribbean International’s Symphony of the Seas became the first ship in the maritime industry to successfully test and use a biofuel blend in Barcelona to meet part of her fuel needs. 

The company confirmed onboard technical systems met operational standards, without quality or safety concerns, demonstrating the biofuel blend is a reliable “drop in” supply of lower emission energy that ships can use to set sail across Europe and beyond. 

The tests across Europe also provided valuable data to understand the availability and scalability of biofuel in the region, the firm added. 

Jason Liberty, president and CEO, Royal Caribbean Group, said: “This is a pivotal moment for Royal Caribbean Group’s alternative fuel journey.”

“Following our successful trial of biofuels this summer, we are one step closer to bringing our vision for net-zero cruising to life. As we strive to protect and promote the vibrant oceans we sail, we are determined to accelerate innovation and improve how we deliver vacation experiences responsibly.”

President of the Port of Barcelona, Lluís Salvadó, said: “Royal Caribbean’s success is a clear example of how commitment to innovation makes possible the development of solutions to decarbonise the maritime sector.”

“In this case, it involves the cruise sector and focuses on biofuels, an area in which the Port of Barcelona is already working to become an energy hub, producing and supplying zero carbon fuels, such as green hydrogen and ammonia, and of other almost zero-carbon alternative fuels, such as methanol, biofuels or synthetic fuels. Innovation and collaboration between ports and shipping companies is key to accelerate the decarbonisation of maritime transport.”

The company began testing biofuels last year and expanded the trail this summer in Europe to two additional ships — Royal Caribbean International’s Symphony of the Seas and Celebrity Cruises’ Celebrity Apex

The sustainable biofuel blends tested were produced by purifying renewable raw materials like waste oils and fats and combining them with fuel oil to create an alternative fuel that is cleaner and more sustainable. The biofuel blends tested are accredited by International Sustainability and Carbon Certification (ISCC), a globally recognized organization that ensures sustainability of biofuels and verifies reductions of related emissions.

With Symphony of the Seas departing from the Port of Barcelona and Celebrity Apex departing from the Port of Rotterdam, both ships accomplished multiple sailings using biofuel and contributed critical data on the fuel’s capabilities. 

“These results will help accelerate Royal Caribbean Group’s plans to continue testing the use of different types of biofuels on upcoming European sailings this fall. The company is exploring strategic partnerships with suppliers and ports to ensure the availability of biofuel and infrastructures to advance the maritime energy transition,” the firm said. 

Photo credit: Royal Caribbean Group 
Published: 22 September, 2023

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