Chevron reduces spending plans through 2025

California-based Chevron Corp. (NYSE: CVX), which has a major presence in Houston, has reduced its capital and exploration budget through 2025.

The energy giant set its organic capital and exploratory spending program at $14 billion for 2021, according to a Dec. 3 press release. That’s down 30% from the $20 billion budget for 2020 that Chevron announced at this time last year — before the Covid-19 pandemic caused oil prices to crash in March and April. On March 24, Chevron slashed its 2020 budget 20% to $16 billion for the year.

The 2021 budget includes $11.5 billion for upstream, $2.1 billion for downstream and $400 million for other capital and exploratory costs. About $6.5 billion of the upstream budget is for currently producing assets, including about $2 billion for Permian unconventional development, and another $3.5 billion is for major capital projects underway, of which about 75% is associated with the Future Growth Project and Wellhead Pressure Management Project at the Tengiz field in Kazakhstan.

Through 2025, Chevron anticipates its budget will be between $14 billion and $16 billion, down from a range of $19 billion to $22 billion previously. Over that period, capital for the Kazakhstan expansion is expected to decrease, and Chevron plans to increase investments in several other advantaged assets, including in the Permian, other unconventional basins and the Gulf of Mexico.

“Chevron remains committed to capital discipline with a 2021 capital budget and longer-term capital outlook that are well below our prior guidance,” said Chevron Chairman and CEO Michael Wirth. “With our major restructuring behind us and Noble Energy integration on track, we’re prepared to execute this program with discipline.”

Chevron announced its multibillion-dollar deal to acquire Noble Energy on July 20 and closed the acquisition on Oct. 5. The company reportedly plans to lay off about 25% of the former Noble employees. Although the exact number of job cuts was not disclosed, cutting Noble’s 2019 workforce of 2,280 employees by 25% would mean eliminating about 570 positions. Most of the layoffs will be complete this year.

Before even announcing the Noble acquisition, Chevron confirmed in May that it expected to reduce its global headcount by 10% to 15% to “match projected activity levels.” Based on Chevron’s May headcount, that plan translates to about 4,500 to 6,750 jobs eliminated worldwide.

As part of that global reduction, Chevron planned to lay off about 700 employees in downtown Houston in October, according to a Worker Adjustment and Retraining Notification Act letter Chevron sent to the Texas Workforce Commission on Aug. 24. Those cuts are separate from those associated with the Noble acquisition. In April, the Houston Business Journal reported that about 6,500 Chevron employees worked in downtown Houston, not including the company’s contract workers, putting the 700 cuts in line with the 10%-15% reduction plans.

“Chevron is in a different place than others in our industry,” Wirth said in the Dec. 3 release. “We’ve maintained consistent financial priorities starting with our firm commitment to the dividend. We took early and swift action at the beginning of the pandemic to prudently allocate capital, reduce costs and protect our industry-leading balance sheet. And we’ve completed a major acquisition and restructuring that positions our company to deliver higher returns and grow long-term value.”

Also this week, competitor Exxon Mobil Corp. (NYSE: XOM) slashed its capital and exploration investments to a range of $16 billion to $19 billion in 2021. In April, Exxon cut its 2020 capital spending to $23 billion, down 30% from its previous plan of $33 billion.

After 2021, Exxon plans $20 billion to $25 billion in capital and exploration expenditures annually through 2025, according to the Nov. 30 announcement.

The changes to Exxon’s budget include removing less strategic assets — certain dry gas resources in the Appalachian and Rocky Mountains, Oklahoma, Texas, Louisiana and Arkansas as well as in western Canada and Argentina — from its development plan.

Exxon expects that decision to result in a $17 billion to $20 billion write-down in the fourth quarter, its largest-ever impairment charge, according to media reports. The company also plans to increase its focus on divesting some of those less strategic assets, including certain North American dry gas assets.

By Olivia Pulsinelli – Assistant Managing Editor

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/12/03/chevron-reduces-spending-plans-through-2025.html

/0 Comments/by

Houston’s Terra Energy Partners buys Ursa Resources business in $60M deal

The biggest Western Slope natural gas producer is buying Ursa Resources’ business and wells two months after the company filed for Chapter 11 bankruptcy protection.

Houston-based Terra Energy Partners LLC agreed to pay $60 million to acquire Denver-based Ursa Piceance Holdings LLC and its subsidiaries after a bankruptcy court sale.

The sale of Ursa Piceance’s business includes its 41,000 acres of mineral rights and 579 operating wells.

Privately held Terra Energy Partners succeeded with a bid at auction in federal bankruptcy court in Delaware earlier this month. U.S. Bankruptcy Judge Brendan L. Shannon signed off on the deal Nov. 23, according to court documents.

Terra Energy, which operates as TEP Rocky Mountain, produces natural gas from 5,300 wells on 370,000 acres in northwest Colorado’s Piceance Basin.

The deal is the latest transaction in the oil and natural gas industry that has been shaken by a historic collapse in the demand for fuels triggered by the Covid-19 pandemic.

Coming off years of weak natural gas prices, the collapse of crude oil has pushed many companies into filing for bankruptcy protection.

Ursa Piceance Holdings and its operating and pipeline subsidiaries filed for bankruptcy protection Sept. 2 with $282 million in debt on its books.

A well pad it developed in 2017 proved disappointing and, afterward, Ursa could afford to drill no new wells with natural gas prices so low and creditors steadily reducing its lines of credit. The passage of Senate Bill 181 in 2019 clinched the inability of the company to raise more capital, said Jamie Chronister, the company’s restructuring officer, in bankruptcy filings.

Ursa Piceance had tried without success to sell the business or its assets outside of bankruptcy court. Buyers were troubled and ultimate dissuaded from buying by the financial obligations in a pair of Ursa Piceance’s pipeline agreements, the company said.

The 21-employee company has offices in Rifle and Denver and producing wells in the western Colorado areas of Boise Ranch, Battlement Mesa, Gravel Trend and Castle Springs.

Ursa Piceance was formed in 2012 after acquiring wells and mineral rights acreage from Denver-based Antero Resources, which was exiting northwest Colorado to focus its natural gas production on the Marcellus and Utica shale formation in West Virginia, Pennsylvania and Ohio.

By Greg Avery – Senior Reporter, The Denver Business Journal

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/11/30/terra-energy-ursa-piceance-natural-gas-bankruptcy.html

/0 Comments/by

McDermott secures funds for growth

Houston-based McDermott International Ltd. is making moves to secure $560 million in new liquidity to fund growth moving forward.

The company has reached an agreement to adjust its debt with a new letter of credit that will free up $390 million in cash that was previously unusable because McDermott had to hold it as collateral, according to a company press release. On top of that, McDermott is selling more common shares to some of its exiting investors, raising gross proceeds of about $170 million, the company said.

“This additional capital will further solidify our liquidity position, enabling us to continue to deliver superior project execution for our customers and consistently pursue new growth opportunities as demand for our expertise and capabilities increases,” said CEO David Dickson.

Both of the liquidity-raising transactions are expected to close before the end of the year. They have support from a group of investors and a steering committee comprising certain lenders, the company said in the press release. Dickson said in the press release that the support of those groups is indicative of their confidence in McDermott’s strategy.

This liquidity expansion activity comes on the heels of McDermott’s exit from Houston’s bankruptcy court in June. The in-court restructuring process cut away $4.6 billion of debt, leaving it at the time with $2.4 billion in letter of credit capacity and $544 million of funded debt. In exchange, McDermott turned ownership of the company over to creditors and cancelled the interests of its previous ownership, including common shareholders. The moves took McDermott off of the NYSE, where it had previously been traded as a public company.

Kirkland & Ellis LLP is serving as legal counsel to McDermott. AP Services, LLC, an affiliate of AlixPartners, is serving as operational advisor and Centerview Partners is serving as the company’s financial advisor.

By Joshua Mann – Senior Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/11/20/mcdermott-secures-funds-for-growth.html

/0 Comments/by

Texas energy data wrap: Oil field services sector adds thousands of jobs in October

The oil and gas industry is still trying to recover from sharp declines this year as the Covid-19 pandemic cuts into demand for fuel and manufacturing. That has, in turn, slashed demand for oil and gas, which has had effects that reverberate up and down the value chain.

Here are four data points to know in Texas Energy this week.

Oil field services sector adds jobs

The oil field services and equipment sector added 6,430 jobs in the U.S. during October, according to a Petroleum Equipment & Services Association analysis of Bureau of Labor Statistics data. Despite the increase last month, employment in the sector is still down a total of 101,087 jobs since October 2019. That’s a decline of 13.2% of all U.S. OFS&E jobs over the past year. PESA said in its analysis that while it thinks the worst of the cuts are in the past, the future is still uncertain because of a resurgence in Covid-19 cases.

Texas to add wind power generation

Project developers in Texas expect to add another 4 gigawatts of wind power generation capacity by the end of the year, extending Texas’ already prodigious lead in the metric over other states, according to a report by the U.S. Energy Information Administration. Texas had 29.1 gigawatts of wind capacity installed as of August, more than double that of Iowa, the next state on the list. “The impending phaseout of the full value of the U.S. production tax credit at the end of 2020 is leading to more capacity additions than average this year, just as previous tax credit reductions led to significant wind capacity additions in 2012 and 2019,” the EIA said in the report.

Crude production to move down until second half of 2021

The EIA expects crude oil production in the U.S. to decline through the first half of 2021, then increase back to current levels in the latter half of the year, according to a report. The U.S. was producing 12.7 million barrels of crude oil per day in March, up until the president declared a national emergency because of the Covid-19 pandemic. After that, production fell to 10 million barrels per day, then rose back to 10.6 million barrels per day by August.

Rig count up on week, way down on year

The Texas oil and gas rig count reached 145 rigs on Nov. 13, down 263 from the comparable week in 2019, according to data published by Baker Hughes Co. (NYSE: BKR). The Texas rig count is up by six over the past week, however. The broader North American rig count is up 15 for the week to 401 rigs, but it’s down 539 rigs from a year ago, according to the data.

By Joshua Mann – Senior Report

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/11/14/oil-field-services-adds-jobs-in-october.html

/0 Comments/by

NRG Energy plans hundreds of millions of dollars’ worth of divestment

NRG Energy Inc. (NYSE: NRG) is expecting to draw at least $250 million from asset sales in the near term.

That would be the net proceeds, after associated debt repayment, for divestments in the next six to 12 months, CEO Mauricio Gutierrez said during his company’s quarterly earnings conference call.

“We have significantly rebalanced our portfolio by reducing generation and growing retail, but we’re not done yet,” Gutierrez said.

The electricity generator and retailer isn’t providing additional detail on what it might target for divestment, but the first $200 million will go toward NRG’s $3.6 billion acquisition of Direct Energy Inc., Gutierrez said. That deal is on track to close by the end of the year, he noted.

NRG will issue a more comprehensive update on its divestment plans as it gets further along in the process. In the past, the company has generally cut portions of its power generation business in favor of expansions to its retail arm.

NRG produced $2.81 billion in revenue during the third quarter, according to the company’s financial report. That translated to $249 million in net income during the period.

NRG reached its Direct Energy deal in the third quarter. Direct Energy, a subsidiary of London-based Centrica PLC since 2000, is a retail provider of electricity, natural gas, and home and business energy-related products and services.

The deal is the latest in a series of changes for Direct Energy over the past few years. In 2019 alone, the company announced it would move its headquarters from Greenway Plaza to downtown’s 2 Houston Center, sell its Clockwork home services business unit and cut local jobs. The company moved its headquarters from Toronto to Houston several years ago, and it has since shaken up its business structure and sold off other business units.

Meanwhile, NRG has had dual headquarters in New Jersey and Houston since December 2012, when it acquired Houston-based GenOn. NRG is also the parent company of Houston-based Reliant Energy.

By Joshua Mann – Senior Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/11/05/nrg-energy-divestment-plans.html

/0 Comments/by

Exxon Mobil to cut 1,900 U.S. jobs, primarily in Houston

Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM), which employs thousands of people in the Houston area, has announced more details of its previously anticipated U.S. layoff plans.

The energy giant expects about 1,900 U.S. employees “will be affected through voluntary and involuntary programs,” an Oct. 29 press release states.

Exxon’s management offices in the Houston area will feel the biggest impact, the release notes, but a specific number of local layoffs was not disclosed. Exxon’s Houston presence includes its 385-acre corporate campus in Springwoods Village, between Houston and The Woodlands, as well as offices in The Woodlands’ 66-acre Hughes Landing mixed-use development. It also operates the ExxonMobil Baytown Complex, which is one of the largest integrated and most technologically advanced refining and petrochemical complexes in the world, according to the company.

Beyond the U.S. layoffs, Exxon expects to reduce its global workforce by about 15%, according to reports. The Wall Street Journal reports that the company projects cutting about 14,000 jobs, including employees and contractors, through 2021.

“The workforce reductions are the result of ongoing reorganizations and work-process changes that have been made over the past several years to improve efficiency and reduce costs,” Exxon said in its Oct. 29 press release. “These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions. The impact of Covid-19 on the demand for ExxonMobil’s products has increased the urgency of the ongoing efficiency work.

“The company recognizes these decisions will impact employees and their families and has put these programs in place only after comprehensive evaluation and thoughtful deliberation. Employees who are separated through involuntary programs will be provided with support, including severance and outplacement services.”

In May, Exxon CEO Darren Woods said the company was cutting its expenses but not its jobs.

But news surfaced last week that Exxon would announce U.S. layoffs soon. Exxon already said this month that it expects to cut as many as 1,600 jobs in Europe.

Plenty of other oil and gas companies have cut jobs during 2020, including some of the biggest.

California-based Chevron Corp. (NYSE: CVX) confirmed to Reuters in May that the company expected to reduce its global headcount by 10% to 15% to “match projected activity levels.” Based on Chevron’s May headcount, that plan translates to about 4,500 to 6,750 jobs eliminated worldwide. Around 700 Houston employees were expected to be let go this month.

Additionally, Chevron will cut about 25% of former Noble Energy employees now that its acquisition of the Houston-based company is complete. Although the exact number was not disclosed, cutting Noble’s 2019 workforce of 2,280 employees would mean eliminating about 570 positions.

In late September, Royal Dutch Shell PLC (NYSE: RDS-A, RDS-B) said it expects to have eliminated 7,000 to 9,000 jobs worldwide by the end of 2022. That includes around 1,500 people who have already agreed to take voluntary redundancy but excludes anyone who might leave Shell because of divestments.

In June, BP PLC (NYSE: BP) said it will cut about 15% of its global headcount, or about 10,000 of the company’s 70,100 positions worldwide. The cuts will mainly target office jobs at BP and are expected to impact senior levels significantly, making the senior structure flatter.

By Olivia Pulsinelli – Assistant Managing Editor

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/10/29/exxon-mobil-us-job-cuts.html

/0 Comments/by

Report: French government delays Engie-NextDecade LNG deal in Brownsville

The signing of a $7 billion, 20-year contract to ship liquefied natural gas from a future terminal in Brownsville, Texas, to a customer in France was blocked by that country’s government, according to media reports.

French utility Engie SA was told by the French government to wait on signing the contract with Houston-based NextDecade Corp., which was due to supply Engie with LNG from its future terminal at the Port of Brownsville. The news was first reportedby a French outlet on Oct. 2 and confirmed by the American news site Politico on Oct. 21.

The French government, which is a minority stakeholder in Engie, apparently told the company to delay signing the contract last month over worries that U.S. shale gas was too dirty. It wasn’t clear whether the contract would be canceled or possibly signed at a later date.

While NextDecade (Nasdaq: NEXT) didn’t respond to a request for comment, an activist with the local branch of the Sierra Club praised the decision.

“The French government has banned fracking in their own country, so it should come as no surprise that they wouldn’t want to lock in decades of fracked gas imports from here in Texas, where fracking pollution is left unchecked,” Rebekah Hinojosa said in a statement.

The oil and gas industry has long touted natural gas as a cleaner alternative to fuel and a necessary step in the transition to renewables. The International Energy Agency reported in 2019 that replacing the world’s coal plants with natural gas plants could reduce global power sector emissions by 10% and total carbon dioxide emissions by 4%.

But environmental activists worry about the damage caused by fracking, which the U.S. Environmental Protection Agency said in 2016 could harm drinking water, as well as the release of more climate change-causing methane into the air. Methane is the largest component of natural gas and warms the planet at a higher rate than carbon dioxide, according to the EPA.

It isn’t clear whether the reported Engie contract delay will have an impact on NextDecade’s final investment decision in the Brownsville project, which is slated for next year. NextDecade’s project, called Rio Grande LNG, is scheduled to be the largest of three planned LNG facilities at the South Texas port. All of the projects are being developed by Houston-based companies, but none have broken ground.

By Jessica Corso – Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2019/08/15/houston-based-arm-of-french-energy-co-to-move.html

/0 Comments/by

Schlumberger’s Q3 revenue misses analysts’ expectations, stock falls

Oil field services giant Schlumberger Ltd. (NYSE: SLB), which has a primary office in Houston, reported revenue of nearly $5.26 billion in the third quarter.

That’s down 38% from $8.54 billion in revenue in the same period a year earlier but down just 2% from the company’s Q2 revenue of nearly $5.36 billion, according to an Oct. 16 press release. However, analysts had predicted Q3 revenue would come in higher than the Q2 figure, with an average estimate of $5.38 billion, according to Yahoo Finance.

Schlumberger’s stock opened Oct. 16 at $15.62 per share, down almost 5% from the Oct. 15 closing price, and continued to fall throughout the day, landing just under $15 each, down nearly 9%, shortly before markets closed. It’s the biggest one-day post-earnings drop for Schlumberger since October 2007, MarketWatch reports.

But Schlumberger is seeing improvements elsewhere.

The company reported a net loss of $82 million for the quarter, a significant improvement from losses of over $3 billion in Q2 and over $11 billion in the third quarter of 2019. When excluding $350 million in charges — most of which came from facility exit charges — and credits, Schlumberger’s Q3 net income was $228 million, or diluted earnings of 16 cents per share. That beat analysts’ average estimate of 12 cents per share.

In an Oct. 16 earnings call, Schlumberger CEO Olivier Le Peuchnoted that the company was making progress on its “intermediate goal of restoring 2019 EBITDA margins before the end of 2021.” The company’s organizational restructuring efforts are also going well.

“We are on track to realize most of our permanent structural cost savings as we exit this year,” Le Peuch said. “We also began the transition to our leaner, customer-aligned structure, comprised of Divisions and Basins, designed to support the basin-specific innovation that will solidify Schlumberger’s position as the performance partner of choice.”

In North America, Schlumberger achieved two key milestones: an agreement to combine the company’s OneStim pressure pumping business with Denver-based Liberty Oilfield Services Inc. and an agreement to divest Schlumberger’s low-flow artificial lift business in a cash transaction.

“The closing of these transactions will not only enhance our EBITDA margins at the global level but will further support lower capital intensity and an accelerated path to our financial goals for North America,” Le Peuch said.

However, the company’s short- to- midterm outlook is uncertain as the economic recovery remains fragile and the threat of another Covid-19 resurgence looms.

“Absent of a pause in demand recovery or higher Covid-19 disruption, the fourth-quarter activity will likely extend the trends experienced as we closed the third quarter, with the continuation of a modest activity uptake in North America and the stabilization towards a steady activity internationally, albeit with visible seasonal variations; the combination of which resulting into an about flat outlook overall for the quarter,” Le Peuch said.

“Looking out farther, the prevailing uncertainties make it much too early to call. However, directionally, and absent of a slowdown in the pace of economic recovery, we anticipate the overall activity to consolidate gradually during 2021. In line with the most recent IEA projections, we see that the conditions will exist to rebalance demand and supply, with improving demand recovery supported by economic stimulus measures and continued supply discipline from the major producers, ultimately resulting in a visible activity rebound.”

Schlumberger employed about 82,000 people worldwide as of Sept. 30, down from 85,000 as of June 30 and 103,000 as of the end of Q1.

By Olivia Pulsinelli – Assistant Managing Editor

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/10/16/schlumberger-q3-2020.html

/0 Comments/by

Houston’s largest energy employers donated more than $2M to federal campaigns

Political action committees organized by Houston’s 10 largest energy employers have donated more than $2 million to candidates for federal office since the start of 2019. That’s about 66% more than the comparable figure donated by employees at those companies.

Corporate PACs run by the energy companies with the 10 largest local headcounts contributed $2.48 million to federal campaigns since the start of 2019, according to data from the Center for Responsive Politics published on OpenSecrets.org. Individuals who worked at those companies donated about $1.49 million during that period.

That’s not to say local individuals were slow to open their wallets for candidates — Houston is one of the top cities for individual campaign contributions this election cycle.

The corporate PACs and the corresponding employees often expressed different political leanings in their campaign contributions. About 81% of funding from the corporate PACs went to Republican candidates, compared to 31% of the funding from individual donors. The remaining PAC contributions ended up with Democrats, while the employees donated 7% of their total to independents and 62% to Democrats, according to the CRP data.

Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM) had the most active PAC of the top 10 employers, donating $858,300 to federal candidates, 78% of which went to Republicans. Exxon is also the top energy employer in the Houston area, at about 13,000 employees, according to Houston Business Journal research.

Wood, the company formed from a $2.7 billion merger between Scotland-based Wood Group and London-based Amec Foster Wheeler in 2017, has the fourth-largest local workforce among energy-related companies. However, data around Wood’s political activities could not be found via CRP or the Federal Election Commission, so it was not used in the overall analysis. That means that Halliburton Co. (NYSE: HAL), technically the 11th-largest energy employer in the city, was included instead.

By Joshua Mann – Senior Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/10/12/largest-energy-employers-political-campaigns.html

 

/0 Comments/by

LyondellBasell to pay Sasol $2B to form chemicals JV in Louisiana

LyondellBasell Industries NV (NYSE: LYB) is teaming up with Sasol Ltd. (NYSE: SSL) on a joint venture that will own and operate ethane and polyethylene facilities along the Louisiana coast.

The Netherlands-based LyondellBasell, which has its operational headquarters and executive team in Houston, will pay South Africa-based Sasol $2 billion for a 50% stake in the assets, according to an Oct. 2 press release. The deal is expected to close by the end of the year, and the joint venture will be called Louisiana Integrated PolyEthylene JV LLC.

The newly constructed assets include a 1.5-million-ton ethane cracker, a 900,000-ton low- and linear-low-density polyethylene plants, and associated infrastructure. LyondellBasell will operate the assets on behalf of the JV, while both companies will provide pro-rata shares of ethane feedstocks and will offtake pro-rata shares of cracker and polyethylene products at cost, per the release.

The deal will transfer some Sasol U.S. employees to LyondellBasell, though the release did not indicate how many. Meanwhile, Sasol will retain full ownership and operational control of several other assets in Lake Charles, Louisiana.

The deal will help Sasol achieve its goals of reducing net debt and shifting the company’s portfolio toward specialty chemicals, according to the release. For LyondellBasell, the deal helps the company expand in a core area of its business without the risks that come with building a new project from the ground up.

“This approach is consistent with our strategy of investing in high quality assets that meet our threshold for value creation while also maintaining our investment-grade rating and commitment to our dividend,” Bob Patel, CEO of LyondellBasell, said in the release. “The transaction is expected to be accretive to both cash flow and (earnings per share) within one year with significant upside as market conditions continue to improve.”

Before the Covid-19 coronavirus pandemic, LyondellBasell had seen significant growth in recent years. The company completed its acquisition of Ohio-based A. Schulman Inc. in August 2018. The deal was valued at $2.25 billion when it was announced in February 2018.

Also in August 2018, LyondellBasell broke ground on a $2.4 billion propylene oxide and tertiary butyl alcohol plant at its Channelview Complex — the final project in its $5 billion U.S. Gulf Coast organic growth program. However, the end of the growth program doesn’t mean the end of growth for the company, Dan Coombs, the company’s executive vice president of global manufacturing, projects, refining and technology, said in August 2018. At the time, LyondellBasell was considering billions of dollars in other organic projects, much of which will likely be spent in the U.S. and quite possibly on the Texas Gulf Coast.

After Covid-19 hit the U.S., LyondellBasell decided to slow construction operations at the Channelview site in the interest of health and safety. That resulted in Zachry Industrial Inc., a subsidiary of San Antonio-based Zachry Group, laying off workers at the site in April.

“We believe it is prudent to limit construction activities at this time,” Torkel Rhenman, LyondellBasell executive vice president of intermediates and derivatives, said in a March 30 press release. “We remain committed to the completion of this strategic investment.”

At the time, the project was about 30% complete, and LyondellBasell was working with its contractors and developers on a revised timeline. LyondellBasell’s other operations in Channelview and Bayport weren’t affected by the decision.

More recently, LyondellBasell announced the startup of a new joint venture polyolefin complex in China and a new molecular recycling facility in Italy, both in September.

LyondellBasell produced $34.73 billion in 2019 revenue, of which $3.39 billion was net income, according to the company’s most recent annual financial report.

Kirkland & Ellis LLP is serving as LyondellBasell’s legal counsel, while Gordon Dyal & Co. and J.P. Morgan are serving as LyondellBasell’s financial advisers. Latham & Watkins LLP is serving as Sasol’s legal counsel, while Bank of America is serving as Sasol’s financial adviser.

By Olivia Pulsinelli – Assistant Managing Editor

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/10/02/lyondellbasell-sasol-chemicals-jv-louisiana.html

 

/0 Comments/by