Jobs may be the key to resolve GCC oil dependency issue

Oil rates have dropped to $80 per barrel from around $100, which now raises the question whether these economies will be able to withstand the tests of time. Will these economies be able to flourish in an environment of fixed terms of trade?

This will depend on the condition in each nation. However, all the countries are bound by the need to increase generation of productive jobs and to improve skills and productivity of the workforces. Despite progress in economic diversification in some nations, this accomplishment will not be enough to offset the operational challenges. Dependency on the oil and gas sector has hardly changed in these countries.

Economic diversification may seem to be moving quickly, between 2007 and 2013 GCC non-oil GDP developed by 7 per cent per year, which surpasses the growth of a mere 2 per cent in the oil and gas sector. Nevertheless, the share of oil and gas sector in the GCC economies’ GDP has increased during the past 10 years, primarily because of the climbing oil prices in the period, which increased the minimal value of oil output.

Analysts believe that the diversification that has taken place is to sectors that rely on inexpensive hydrocarbon feedstock. GCC governments have formulated a plan to expand their economy away from oil and gas, which has boosted investment. The investment ratio of these nations has grown from 21 per cent of GDP in 2011 to around 24 per cent in 2014.

A number of projects are in the pipeline and these projects will account for nearly 155 per cent of 2013 GDP, with just Saudi Arabia planning on projects worth $1.1 trillion. But the other investments in infrastructure may not point directly to diversification or sustainable development.

The major hindrance to diversification lies in the lack of education, skills and jobs. The poor quality of education results in poor development of skills and a lack of innovation in the economy, and this can be seen in the number of patents registered that originate in the GCC. The effects of an unskilled population are also reflected in the little money that has been spent on research and development.

GCC nations can be regarded as the world’s weakest performers in primary as well as secondary school levels, accompanied by nations like Yemen and Ghana.

Thus, education continues to weaken the region and GCC’s plans of boosting investments into human resources should gain utmost importance. It seems like GCC members spend much more on infrastructure than any middle/high income nation, while expenditure on education is far less when compared to several other countries, excluding Saudi Arabia and the UAE.

This attitude towards education has led to reduced labour participation levels, especially among women. But when GCC girls surpass boys in global mathematical exams, then lower female participation levels cannot be explained by poor academic feats.

Labour force in GCC is growing by 3-4 per cent every year but the skills of the workforce remain underdeveloped, which makes higher employment rates and greater economic growth much more difficult to achieve.

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Petrochemical industry to facilitate storing solar energy

A new study has shown how electrolysis (the process of passing via water to separate hydrogen from oxygen in H2O) electricity could generate hydrogen to store renewable energy. The solar panels would provide extra electricity for electrolysis, producing hydrogen in the day. At night the hydrogen generated would be combined with oxygen in the air to produce electricity.

Chemical engineers at Stanford have modelled a catalyst that could possibly enable producing large amounts of pure hydrogen by means of electrolysis. Currently, pure hydrogen is derived from natural gas; industrial hydrogen is mostly used for petroleum refining and fertilizer production.

The research team intend to use electrolysis to derive H2 from water and then use the process to conserve solar energy. However to make this method industrially successful the research team must come up with a cost-effective way.

Electrolysis is typically a simple experiment: place two metal electrodes in water, and pass electricity through these electrodes which makes them acts as catalysts to split water molecules into hydrogen and oxygen gas. Platinum is a perfect catalyst for water-splitting process. However to transform this method into an industrial process a low-cost electrode must be used. Thus the aim of the research team is to make H2 without using precious metals.

The team intends to go further than using electrolysis to replace the existing demand for hydrogen. At present there is no economically viable and large-scale method to store solar energy. This research team thinks that electrolysis could convert gallons of water into batteries for preserving solar energy. With the help of electricity, electrolysis will break the chemical bonds that hold H2O together.

Breaking the chemical bonds of H20 will result in the production of a hydrogen ion- a proton with no electron to create a balance. A good H2 catalyst will provide the proton with a place to stick until it can use an electron to form a hydrogen atom on the catalyst surface and then combine with a neighbouring hydrogen atom to come off as H2. This method needs a catalyst with the right stickiness because if the binding is not strong then the ions wouldn’t stick and if the binding is too strong then the ions will never be released.

Platinum is the best catalyst but is quite expensive. In 2013, the Stanford engineers came across a type of molybdenum sulphide, typically used for petrochemical processing, that had some of the properties to act as a cheap yet effective alternative to platinum.

Petrochemical processing has certain similarities to electrolysis as petroleum feed stocks consist of a substantial fraction of heavy molecules. Petroleum refineries rely on catalytic reactions that use hydrogen to break these heavy molecules into lighter molecules.

Electrolysis also involves breaking water molecules or their chemical bonds. However, the researchers soon found a better way of producing hydrogen from water.

Petroleum processing includes scrubbing sulphur out of fuels in order to reduce acid rain, during which some of the sulphur atoms get integrated into petroleum processing catalysts, thereby boosting the activity of the catalysts. This scrubbing process armed the team with another idea- if they added sulphur atoms to a good catalyst, it would function as a better electrode for generating pure hydrogen.

The team decided to lace molybdenum phosphide with sulphur atoms, which resulted in the production of a new catalyst molybdenum phosphosulfide. This new catalyst was much more effective at creating hydrogen than its precursor. This catalyst was much more resilient, which is an extremely important property for a catalyst used in an industrial process. This new catalyst is also stable and has the efficiency similar to that of platinum.

Now the team at Stanford is trying to further improve the catalyst. The team has been relying on environment friendly methods, but these methods have been developed on the basis of concepts borrowed from petrochemical plants.

It is enthralling to see researchers link two totally different areas of technology for such a noble purpose.

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Demand for oil tumbles on the back of weak demand

Industrial output in Germany dropped in August, the lowest since January 2009, putting pressure on European equities and leading to weak demand for oil. Europe and China are experiencing stagnation, thereby making it difficult for the oil price to climb up.

The US Energy Information administration (EIA) made a discouraging forecast, which added to the bearish sentiment. Brent November crude fell $1.03 at $91.76 per barrel, while Brent dropped to a contract low of $91.25 on Monday. US November crude oil fell 96 cents at $89.38.

Iran has declared that OPEC does not intend to hold an emergency meeting to deliberate the drop in oil prices. OPEC oil ministers are slated to meet in Vienna on November 27 to consider making adjustments to their output of 30 million barrels per day. Unless OPEC doesn’t take measures to reduce supply, oil prices will likely remain under pressure.

Brent crude long futures and options positions on the Intercontinental Exchange fell by a sixth in the week to September 30, which points to the fading investor expectations for higher prices.

US crude oil output has risen over 3 million barrels per day since 2010 amidst a global economic slowdown and increase in efficiency has limited growth in oil demand. Experts suggest that the current oil market scenario represents the effect of the colossal rise in US oil production.

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Declining oil prices benefits the West

The fall in oil prices in the midst of violent clashes in Iraq, hightened tensions between the West and Russia and sanctions against Iran has brought about drastic changes.

However, the rising supplies of crude in North America and the slowing demand have led to a decline in prices, a move indicative of how the shale oil boom has benefitted Washington and its Western allies both politically and economically.

Russia and Iran are dependent on oil sales and are currently experiencing budget shortages, which has affected their position in negotiations concerning Ukrainian sovereignty or the Iranian nuclear deal.

Increasing oil production from the US and Canada have helped provide a buffer against threats of supply disruptions from Russia or the Middle East.

Russian currency has declined drastically against the dollar as its economy is restrained by sanctions from US and EU. These sanctions have forced Russia to shell more money for imports.

Oil production in the United States has increased tremendously. US continues to ban export of crude and has forced barrels from West Africa and the Middle East to look for new markets.

Lower oil prices will benefit US energy firms, while the consumers will gain from spending less the pump.

On the other hand lower oil prices will affect Iran's economy as well as its crude sales. Analysts have also stated that despite having captured oil fields in Syria and Iraq, Iran will be affected by lower oil rates as they will have to discount the black market sales that provide funds for the militant group.

As far as Saudi Arabia is concerned, lower oil prices may lead to short-term budget shortages.

Experts suggested that a price drop may not spur action from OPEC members unless crude falls below $85 per barrel.

For the time being, the surge in US oil production combined with poor demand has forced traders to store additional barrels as they wait for prices to improve.

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Major expansion of Petrochemical industry is scheduled in Qatar

Qatar which is one of the richest state per-capita in the world and as per the year 2012 the country has established nearly 15 billion barrels of oil reserves and around more than 5% of gas fields of the global resource. In terms of its petrochemicalindustry, Qatar is at second position in the midst of Gulf Co-operation Council (GCC) countries. Moreover for the country the petrochemical industry is a key source of hard earning which ranks behind the crude oil and the liquefied natural gas (LNG) sectors.

According to the industry experts, over next 5-10 years the country has a greater petrochemical expansion plans than any other country in the region and the expansion of the petrochemical industry will bring in growing revenue and produce numerous new jobs in the coming years.

According to the industry experts, in the petrochemical industries the country is taking good steps to prolong their success and with this it is taking action against the potential threats from the international souk. Moreover at the same time from low cost shale gas as a feedstock, most of the US manufacturers are gaining benefits as these will make the US the cheapest place in the world to produce petrochemicals.

In the coming years the US tactics to spend around USD 100 billion in the petrochemical facilities and it much prone to flow into the Asian market once the product starts to come on-stream by setting it in an unswerving competition with the product from the Middle East.

According to the sources, the current production of petrochemicals in the small nation state intends to boost surplus twice in order to reinforce its traction in the industry. Moreover in the Gulf region the construction of the two largest petrochemical projects is at present on track and due to the high outlay of these projects the government remains the largest shareholder in petrochemical investments.

In past few years the petrochemical industries in Qatar have seen a noteworthy rise and most of the Petchem companies based in this country have a few really big decisions in front of them as they are facing the choice of defending their markets in Asia against the low cost US product in the midst of a budding impact on price and margin.

Furthermore for the development and expansion of the chemical and the domestic petrochemical industries, the country plans to invest around USD 25 billion and in the year 2012 major petrochemical manufacturers Shell oil companies and the Qatar Petroleum had affirmed the plan to build up an olefins project in Ras Laffan Industrial City at a total outlay of USD 6.4 billion.

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Does chemical Triclosan in Colgate Total lead to cancer-cell growth?

Triclosan is said to cause cancer-cell growth and disrupted development in animals. Thus, is it safe to put chemical triclosan in soaps, toys, toothpastes etc. Let’s find out.

Consumer companies are gradually stopping the use of this harmful chemical. However, millions continue to be exposed to triclosan put in toothpastes like Colgate-Palmolive Co.’s Total. Colgate asserts that Total is safe and that the product underwent rigorous Food and Drug Administration process that led to the toothpaste’s approval in 1997 as an over-the-counter drug.

However, FDA recently published Colgate’s findings on triclosan which proved that FDA’s drug approval process is based on company-backed science to show products are safe and effective. This report made experts question the company’s research on triclosan.

The study showed fetal bone malformations in mice and rats, which was put aside as irrelevant by Colgate. However, such findings when viewed in terms of today’s science may prove that triclosan is capable of disrupting the endocrine system and affecting hormonal functioning.

Colgate continues to defend the effectiveness of its product. Colgate spokesman Thomas DiPiazza said, “In the nearly 18 years that Colgate Total has been on the market in the U.S., there has been no signal of a safety issue from adverse-event reports. Colgate also pointed to an independent 2013 review by the Cochrane Oral Health Group, a network of doctors, researchers and health advocates, which found no evidence of harmful effects associated with using Colgate Total.” The safety of this product is supported by 80 clinical studies involving 19,000 people.

The FDA is reviewing safety information available on triclosan in hand soaps and not in Colgate Total as triclosan hasn’t been proven superior to soap and water at washing hands, however its effectiveness as an ingredient in toothpastes has been made clear through its FDA approval process. FDA, however, is positive that triclosan doesn’t pose a cancer risk for humans.

Colgate stopped use of triclosan in its Softsoap liquid handsoaps and Palmolive antibacterial dish liquid in 2011. Triclosan is the most scrutinized chemical since it is now used in nearly 200 products including rugs and pet-food dispensers. Firms like Johnson & Johnson, Avon Products Inc. and Procter & Gamble Co. have decided to remove triclosan from their products.

Consumers have turned away from chemicals like Bisphenol A and phthalates and have become much more aware about toxicity ranking.

At the end of the day it is the manufacturer’s responsibility to assure that its product is safe and to provide consumers with relevant information.

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Indian agrochemical market to reach USD 7.5 billion by 2018-19

After Japan, United States and China, India is noted as the fourth largest producer of agrochemical globally and for the Indian economy it is also a significant industry. According to the researched report, in the year 2013 the domestic crop shield industry stood at USD 2.1 billion which has in turn over the five years has grown at around 8% compound annual growth rate (CAGR). In addition, the exports of Indian agrochemical have boost around 17% compound annual growth rate (CAGR) to USD 2 billion, in compare to last five years and had reported for nearly 50% of the total production.

In the fiscal year of 2013-14 the Indian agrochemical market has been estimated at USD 4.25 billion amid exports consisting 50% of the market and in order to reach USD 7.5 billion by the fiscal year 2018-19 it is projected to boost by 12-13% per annum, according to the report released by the Minister of Chemicals & Fertilizers, Ananth Kumar.

In the Indian economy the agrochemical industry plays an important role and is also noted as one of the key component of the speciality chemicals industry. Moreover in India, with the rising demand of dilapidated farmlands and food grains, have increased demands on farm yield enhancement and diminution in crop losses due to pest attacks.

According to one of the researched report by the fiscal year 2017 the crop protection market is expected to boost at around 12% per annum to reach USD 6.8 billion as in the past the crop protection market has experienced a sturdy growth and the demand of export will be largely driven as it is anticipated to grow at 15-16% per annum and at the same time as it also expected to boost its domestic demand by 8-9% per annum.

Moreover in India at present bio-pesticides is the only pesticide market with overall 4.2% and in the near future, it has been projected to reveal an annual growth rate of about 10%. According to the Chemicals & Fertilizers Minster few pesticides which has been banned in the US, could be ban in India also and by increasing the usage of bio-pesticide these have several advantages over conformist pesticides. As they are by and large intrinsically less toxic than conformist pesticide and target pest are normally affected by these chemicals, which are closely related organisms.

In terms of low awareness among farmers where approximately 25-30% of farmers are aware of agro products, Indian agrochemicals industry faces challenges in spite of strong growth drivers and for the industry players, large number of end users reach across the managing inventory, geography & distribution costs is also a challenge.

In past few years the growth in local demand have been outpaced due to exports of agrochemical from India and is now reckoned as one of the leading suppliers  of quality technical agrochemicals at attractive pricing, like Indian pharmaceuticals industry. However, few long term trends in the Indian industries will be posed by new challenged.

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Chemicals & Fertilisers Minister emphasize action points for Ministry

With the coming of new government, on 28th May, 2014 Chemicals& Fertilisers Minister Mr. Ananth Kumar who took charge had said that petrochemical hubs has been schedule to set up in Tamil Nadu, Assam and Orissa and to gain momentum and in order to make the country self-dependent on the widely used soil nutrient, necessary measures will be taken by the government to revive the sick urea manufacturing plants. Furthermore he stresses that the government should also plans to stimulate all closed urea plants and make the country self-reliant in fertiliser supply.

The Chemicals & Fertilisers Minister Mr. Ananth Kumar for his ministry on taking charge have stressed on three actions which is to set up petrochemical hubs in a hastening efforts in Assam, Orissa and Tamilnadu, plummeting the costs of medicines by over 25% and ensuring ample & appropriate supply of fertilisers to farmers and reinforcement of all closed urea plants.

In the year 2013, the global economic growth of fertiliser industry had been quite inadequate, whereas in 2014 the growth of world economic activity was seen as recuperating. Since mid 1990s the fertiliser sector had not seen any momentous growth to capacity for making urea which is noted as the most important fertiliser and for improving the domestic availability of fertilisers can only meet up by encouraging new projects particularly by existing manufacturers, however in last two decades demand and import of fertiliser has soared high. With the slowdown of growth in China towards 7% will affect many other countries especially the commodity exports. In the year 2014-15, highest growth rates have been projected in the emerging economies particularly in Indonesia, China and India.

Furthermore with the formation of the new government, the new Chemicals & Fertilisers Minister assures the farmers that there will be no shortage of urea in the coming kharif season. As per the sources, India produces nearly 22 million tonnes of urea whereas the annual domestic demand is about 30 million tonnes. According the market outline, the Ministry of Chemicals and Fertilizers are struggling to pay out subsidies and the demand of India continues to remain under pressure, moreover the demand of fertiliser may possibly collision with a nascent weakening rupee and inadequate monsoons season. Hence an innovative and comprehensive policy for fertiliser sector is needed.

For more than a decade the creation of chemical manufacturing hubs in coastal India is an idea that has been languished and only one petrochemical hub ONGC has taken off in Dahej which has commissioned a world-scale cracker and is will considerably boost the availability of raw materials for downstream processing. However diminutive progresses have been made by four other clusters in Orissa, Andhra Pradesh, Karnataka and Tamil Nadu not a great deal exists aside plans on paper. Moreover, to improve the battered image of the Indian chemical industry, the scheduled growth will be served.

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China’s shale gas production to enter its booming years

Chinese shale gas industry is about to enter its booming years, made possible by China National Petroleum Corp and Sinopec Group. These two oil and gas companies enabled the nation’s shale output to hit 200 million cubic meters in 2013.

Shale gas production in China is expected to reach 1.5 billion cubic meters this year. China has made significant breakthroughs in the unconventional oil and gas exploration sector. 

In 2013, at the Chongqing Fuling shale gas block Sinopec averaged single well output of 150,000 cubic meters per day. The company is hoping to reach an annual production of 1 billion cubic meters by the end of this year. 

CNPC has commercialized shale gas output of 70 million cubic meters from Changning-Weiyuan block in Sichuan province, Zhaotong block in Yunnan and the Fushun-Yongchuan block in Sichuan. Based on the current development level these Chinese companies have managed to achieve will help increase domestic shale gas capacity.

However, there are analysts who are not so upbeat about the future. China is expected to consume nearly 170 billion cubic meters of natural gas in 2014. And even if the country manages to accomplish the goal, all the production cannot be used for society as it requires well-developed pipeline infrastructure and other supporting facilities. 

Low utilization rate and issues in upstream exploration will hinder the industry’s forward march.

The greatest hindrance is the lack of a method that can be used for most shale gas blocks in China. For instance, Sinopec’s technology for the Chongqing Fuling block cannot be used for other blocks.

Other major concerns include groundwater exploitation and contamination. Furthermore, China’s geological conditions are very different from those in the US- world’s biggest shale gas producer.
Majority of the shale gas blocks in China are in mountainous regions, which makes it extremely difficult to bring in huge fracturing equipments necessary to extract gas.
Shale gas exploration requires huge quantities of fresh water and technology available at present hasn’t been able to address this issue. Fresh water once used in shale gas extraction can’t be cleared for residential use and removing fluids from reservoirs can lead to surface subsidence.

These challenges have been limiting the growth of the shale gas industry. Companies are also reluctant to carry out operations in blocks they won from the bidding. 

Drilling a well can cost around 100 million yuan, which still cannot assure that shale gas will be found. Thus, the high cost and the inherent risks in shale gas exploration have deterred Chinese companies from making any big moves. The reluctance of the companies has also prevented any further bids.

China’s shale gas boom, however, has brought about opportunities for some machinery manufacturers. For instance, Yantai Jereh Oilfield Services Group Co Ltd has been trying to manufacture fracturing equipment suitable to China’s geological contours. This company is the only Chinese firm to supply shale gas equipment to North American companies. Jereh, recently, started developing machines meant specifically for Chinese projects. Their equipments can be used in areas with poor roads and uneven land.

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Chemical waste can been recycled and reused

Waste disposed at the industries clusters can be recycled in a great way as it can be reused to make new products, however, if these waste are not recycled than new products are made by hauling out fresh raw material from the earth through mining and forestry process. Chemical materials like plastic, glass and aluminum can be recycled and can be used in manufacturing other products. For chemical industry, treating waste discharge is a mandatory requirement for using it to make useful products which requires innovative thinking. Aluminum which is a cheaper chemical produced using recycled and scraps aluminum instead of using ores.

Nowadays, recycled products are on augment by many consumers and major industries have adopted this stance and most of the manufacturers are facing mounting pressure to provide products from recycled materials. Carpet manufacturers are also facing this pressure. Major chemical producers such as Honeywell/Allied Signal and DSM Chemicals have developed new technology which can help to recycle approximately 1.8 million tons of nylon carpet each year. This technology allows nylon manufacturers to recover and reuse caprolactam which is a raw material used to make nylon 6.

The recycled materials used in manufacturing process considerably take less energy than required for producing new products from raw material. On the contrary, more energy is saved as extra energy is required to extort, refine, transport and process ready raw material for industry in compare with providing industry ready material.

This process of recycling diminishes the need for mining, quarrying and logging, refining and processing raw materials as each one creates substantial air and water pollution. It also helps in saving energy and cuts down greenhouse gas production which in turn embarks upon the climate change. Currently, recycling in UK has projected to save more than 18 million tonnes of C02 a year which is equivalent of taking 5 million cars off the road.

According to the Tata Strategic Management Group (TSMG) report, approximately 20% of global effluents are liable for the chemical industry, even though it accounts for only 3% of global chemicals industries. Consequently several chemical companies have started to explore green chemistry based routes of synthesis to depose wastage and optimize the usage of raw material consumption.

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Asian buyers reduce imports of Iranian oil

The Western sanctions imposed upon Iran in mid-2012 led to declining oil revenues and a wobbly economy. If sanctions on the Islamic Republic are fully lifted, Tehran will have to persevere to regain the share of world oil markets it lost.

iran oil

Six countries namely China, Japan, Taiwan, India, Turkey and South Korea continue purchasing Iranian crude, but under exemption from US financial sanctions for which they have to reduce import of Iranian oil.

Since the sanctions came into force, Iran has lost market share in all these countries. Taiwan’s import volumes are rather small and inconsistent. Combined imports of crude oil from Iran by China, Japan and South Korea hit 1.09 million bpd in 2011, a year before the sanctions came into force. In 2013, the combined imports were at 740,000 bpd- a decline of 33.27 per cent from the 2011 level.

Over the same period, the combined total crude import volume by the 3 countries was at 14.81 million bpd in 2013 compared to 11.18 million bpd in 2011, a rise of 32.43 per cent from the 2011 level.

Iran is the only nation with declining volumes, whereas other suppliers increased volumes. For instance, Saudi Arabia increased supply by 4.66 per cent, whereas Russia raised supply by 39.6 per cent. Russia has been delivering larger volumes to Asia- the perfect market for its ESPO crude blend considering demand and logistics. After Russia, the biggest increase in supplies was from Kuwait, Iraq and Oman.

In 2011, combined imports of Saudi crude by the 3 countries stood at 2.895 million bpd. In 2012, Saudi raised supply by 7.36 per cent to 3.108 million bpd. In 2013, Saudi reduced volumes by 2.5 per cent to 3.03 million bpd. Imports from the UAE also increased by over 10 per cent to 1.325 million bpd in the previous year from 1.2 million bpd in 2011 and 2012.

In 2011-13, imports from Qatar to Japan and South Korea increased from 634,000 bpd to 700,000 bpd- a rise of 10.41 per cent.

Imports from Oman rose by 22.9 per cent to 601,000 bpd in the previous year from 489,000 bpd in 2011. In Iraq, imports increased from 620,000 bpd in 2011 to 784,000 bpd in 2013- a rise of 26.25 per cent. Iraq’s supply increase was concentrated on China.

Iraqi imports increased to 472,000 bpd in 2013 from 277,000 bpd in 2011. Japan’s import of crude oil from Iraq declined to 63,000 bpd fro, 99,000 bpd- a drop of 36 per cent between 2011 and 2013. While South Korea’s imports of Iraqi crude, at 249,000 bpd in 2013, showed little change.

Combined crude imports from Kuwait increased to 882,000 bpd in 2013 from 753,000 bpd in 2011- an increase of 17.13 per cent. For Saudi Arabia the greatest year-on-year percentage increase was in 2012, when imports from Kuwait increased by 21.78 per cent to 917,000 bpd. However, between 2012 and 2013 import volume declined by 3.82 per cent.

Saudi Arabia, Qatar, Iraq, Kuwait and the UAE increased supply to China, Japan and South Korea by 516,000 bpd between 2011 and 2013.

Volume increase from Gulf exporters, including Oman, over the 2011-2013 period stood at 728,000 bpd, almost double the 369,000 bpd volume by which imports from Iran declined.

China witnessed increased supply from two other OPEC producers. Supply from Angola increased from 626,000 bpd in 2011 to 804,000 bpd in 2013, an increase of 28.43 per cent. Venezuela also raised supply from 231,000 bpd in 2011 to 316,000 bpd in 2013, an increase of 36.8 per cent.

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Outlook on Indian petrochemical industry

In the year 2013, Indian petrochemical industry was significantly affected by an economic slowdown and the depreciation of the Indian currency. The Indian petrochemical producers are optimistic about the outlook of Indian petrochemical industry in near future. A number of investments are begin made by various state-owned energy companies to boost their petrochemical activities and are also expecting to become a major players in the petrochemical industry.

Indian petrochemical industry

Several petrochemical producers have scheduled to expand their production capacity at their plants, which will slow and steadily fill the gap between domestic and supply. However, as per the industry sources, comparatively, limited new domestic capacity is projected to come on-stream and as a result, import threats from Mideast and East Asian producers remain noteworthy for Indian producers.

According to the market experts, in the recent year the overall outlook petrochemical industry in India is somewhat more positive as the augmentation in GDP and industrial output is anticipated to be higher in year 2014 in compare to the previous year. Since November 2013 the market condition had been buoyant and double digit growth is expected to grow in the ending of the FY15.

The Indian petrochemical and downstream industries were drastically affected by the fall of the Indian currency. This fall in Indian currency were directly impacted on the converter industry in India, as the values of majority of petrochemical products in India were based on an import parity price. In the fiscal year 2012, one of major petrochemical producers Indian Oil had reported revenue of almost USD 2.5 billion in compare to the previous fiscal year. Currently the total revenue of petrochemical business of Indian Oil accounts for about 3.5% and in the next few year the company is planning to increase the share of petrochemicals in the overall revenue.

During past three year, the economic growth in India is once again increasing after a slowdown and as per the estimates done by the research analyst, in the fiscal year ending 31st March 2014, the GDP growth rate of India will increase from 4.6% to 5.4% and 6.3% in the fiscal 2015. According to the market experts, the long term growth outlook of Indian petrochemical industry is likely to remain optimistic and during 2013, the demand growth in India was low in compare to the prior year. As the manufacturing sector is struggling the market experts do not expect the single digit growth rate to considerably improve in the near future.

Nearly few major petrochemical manufactures have scheduled to build up new petrochemical plants at their units. Indian Oil and BP which is one of the major petrochemical manufactures are planning to start a new Acetic Acid plant in Gujarat. The plant will be having production capacity of 1 million mt/year and will be one of the largest Acetic acid plants in Gujarat, India. This plant is a joint venture between Indian Oil and BP and the firm would be investing nearly USD 1 billion for setting up the facility near Koyali refinery of IOC. The acetic acid facility which is located in Vadodara city is expected to begin its operational in 2017. Indian Oil is also studying a number of projects based on refinery propylene at Koyali.

Another petrochemical major ONGC Mangalore Petrochemicals Ltd. is building an aromatics complex in the 

Mangalore special economic zone (SEZ). The OMPL is promoted by ONGC and Mangalore Refinery and Petrochemicals Ltd. is a subsidiary of ONGC. The Aromatics complex will be producing Paraxylene with production capacity of 900,000 mt/year, Benzene with about 300,000 mt/year and the plant is expected to starts its operational in the fiscal year ending March 2015.

Two major petrochemical industry Ineos and Sinopec have signed a joint venture agreement and the Articles of Association to form a 50-50 joint venture company at Nanjing on Tuesday. The joint venture will be called Ineos YPC Phenol Nanjing Co. which will set to build the largest Phenol-Acetone plant in China and will have a total investment of approximately USD 0.5 billion (RMB 3.15 billion) and is expected to start its operation by the end of 2016. The plant will be located Nanjing Chemical Industrial Park and the annual capacity of the new plant will be at least 400,000 tonnes of Phenol and 250,000 tonnes of Acetone. The complex will also include 550,000 mt/year of cumene capacity. This joint venture is the largest investment of Ineos in China and the eighth joint venture of Sinopec Yangzi Petrochemical Company.

Global Petrochemical manufacturer – Reliance to expand its production capacity at two major petrochemical plants based in Dahej and Jamnagar. The company will commission PTA plant located at Dahej around 1.1 million mt/year in the third quarter of 2014 which is followed by another plant of the same capacity within six months. However, the total production capacity of PTA will be 4.3 million mt/year, which will make the company the fifth largest producer of PTA in the world. In the year 2015, the company is likely to build Ethylene plant at Jamnagar. The commercial start up of the plant is expected to start in the second half of 2015. The plant situated at Jamnagar will have a production capacity of 1.5 million mt/year.

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Syria’s oil and gas production may take years to recover

The ongoing hostilities between the Syrian government and the rebels have made it impossible for the nation’s oil and gas production to recover in the near term. Oil production in Syria has dropped drastically since March 2011 primarily due to the conflict and also due to the imposition of Western sanctions, which has led to loss of oil export revenues.

Even Syria’s natural gas production has been adversely affected, although not as significantly as oil, but dry gas production has declined by nearly 30 per cent compared with pre-conflict production levels.

Analysts estimate that Syria’s oil and gas production may take months even years to recover. Even when the fighting subsides, it would probably take a while for the Syrian domestic energy system to reach pre-conflict levels. Production and export of crude oil has fallen dramatically. Syria is also facing supply shortages for some refined products.

Syria’s proven oil reserves are estimated to stand at 2.5 billion bbl, larger than all of Syria’s neighbours except for Iraq.

During 2008-10 Syria’s oil production was more than 400,000 bpd. However, in January the country’s oil production was estimated at less than 25,000 bpd. In 2014, production also included production outside control of the Syrian government. In late 2013, the Syrian government lost control of nearly all of the nation’s key oil fields. Rebels had managed to seize control of Syria’s oil and gas resources.

Majority of the international oil firms involved in Syria’s energy sector have terminated operations. The oil companies currently operating in Syria are Hayan Petroleum and the Elba Petroleum Co. However, these firms are operating without their IOC partners. In December 2013, the Syrian government and the Russian company SoyuzNefeGaz signed a 25-year exploration agreement in Block 2 offshore.

Although the oil fields have escaped damage from the violence and clashes, oil production has been stopped because of insufficient export opportunities and limited refining capacity.

Syria is facing serious issues in importing petroleum products and is also experiencing shortage of heating oil and diesel fuel. The shortfalls are expected to continue.

Currently, Syrian refineries are being operated at reduced rates. Syria has refineries in Hams and Banias and the combined capacity of both the refineries has fallen to half of their pre-conflict production levels.

Plans to set up new refineries are either on hold or have been cancelled. For instance, the proposed 100,000 bpd facility at Abu Khashab was cancelled due to widespread anarchy in the country.

In 2012, Syria’s consumption of products was below 260,000bpd. Experts believe that consumption in 2013 will be even lower.

The Syrian government continues to subsidize domestic use of petroleum products. The government spent over $1 billion on petroleum subsidies in the first half of 2013.

Thus, the future of Syrian energy sector appears rather bleak at the moment.

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Perfumes laced with chemicals?

A recent study has worried numerous perfume lovers, including me. The report revealed that fragrances often consist of hormone-disrupting chemicals and chemicals that could cause allergic reactions. Major perfume brands have not even bothered to mention the ingredients they use in their products. Consumers take into consideration only the brand, reading the product label is deemed unnecessary.

Perfume brands are allowed to use any chemical to manufacture fragrances, with no required safety assessments, and are not even obligated to reveal the ingredients. Cosmetics can reach consumers without pre-approval. Public awareness on how hazardous low-level toxins are is extremely low. Experts have found nearly 14 hidden chemicals in several popular fragrances, including American Eagle’s Seventy-Seven, Dolce & Gabbana Light Blue, Coco Mademoiselle Chanel and Calvin Klein Eternity. Majority of these chemicals are unstudied and unregulated.

The products that were tested comprised of 10 sensitizers, which are chemicals that can cause allergic reactions such as wheezing, asthma, headaches etc. These products also consisted of 12 hormone-disrupting chemicals. Low-dose exposure to toxic chemicals can lead to long-term health issues.
The commonly found chemicals in perfumes are:-

ACETONE – found in cologne, dishwashing liquid and detergent, nail enamel remover etc. Long-term exposure to this chemical can cause coma, dryness of the mouth and throat, dizziness, nausea, slurred speech etc. It acts as a central nervous system depressant.

BENZALDEHYDE – found in perfume, cologne, hairspray, laundry bleach, deodorants, detergent, Vaseline lotion, shaving cream, shampoo, bar soap, dishwasher detergent etc. This chemical can cause kidney damage, irritation to the throat, mouth, eyes, skin, lungs etc.

BENZYL ACETATE- found in perfume, cologne, shampoo, fabric softener, stickup air freshener, dishwashing liquid and detergent, soap, hairspray, bleach, after shave, deodorants. It is carcinogenic and can cause irritation to respiratory passages, eyes, skin etc.

BENZYL ALCOHOL - found in perfume, cologne, soap, shampoo, nail enamel remover, air freshener, laundry bleach and detergent, Vaseline lotion, deodorants, fabric softener.  Exposure to this chemical may lead to headache, nausea, dizziness, drop in blood pressure and respiratory failure.

CAMPHOR – found in perfume, shaving cream, nail enamel, fabric softener, dishwasher detergent, nail colour, stickup air freshener.  It is a central nervous system depressant and is readily absorbed through body tissues. It may cause irritation of eyes, throat, dizziness, nausea, convulsions etc.

ETHANOL –found in perfume, hairspray, shampoo, fabric softener, dishwashing liquid and detergent, laundry detergent, shaving cream, soap, Vaseline lotion, air fresheners, nail colour and remover, paint and varnish remover. Inhalation of ethanol vapours may lead to drowsiness, impaired vision, ataxia, CNS disorder, fatigue etc.

ETHYL ACETATE – found in after shave, cologne, perfume, shampoo, nail colour, nail enamel remover, fabric softener, dishwashing liquid. It can cause irritation to the eyes and the respiratory tract. It may also cause headache, anaemia, damage to liver and kidneys.

LIMONENE –found in perfume, cologne, disinfectant spray, bar soap, shaving cream, deodorants, nail colour and remover, fabric softener, dishwashing liquid, air fresheners, after shave, bleach, paint and varnish remover. It is carcinogenic and can cause irritation to eyes and skin.

LINALOOL –found in perfume, cologne, bar soap, shampoo, hand lotion, nail enamel remover, hairspray, laundry detergent, dishwashing liquid, Vaseline lotion, air fresheners, bleach powder, fabric softener, shaving cream, after shave, solid deodorant. Exposure to this chemical can lead to CNS disorder.

METHYLENE CHLORIDE – found in shampoo, cologne, paint and varnish remover. This chemical has been banned by the FDA. It is carcinogenic and can lead to headache, giddiness, irritability, CNS disorder etc.   

a-PINENE – found in bar and liquid soap, cologne, perfume, shaving cream, deodorants, dishwashing liquid, air freshener. This chemical is damaging to the immune system.

g-TERPINENE – found in cologne, perfume, soap, shaving cream, deodorant, air freshener. It may cause asthma and CNS disorder.

a-TERPINEOL – found in perfume, cologne, laundry detergent, bleach powder, laundry bleach, fabric softener, stickup air freshener, Vaseline lotion, cologne, soap, hairspray, after shave, roll-on deodorant. It can cause irritation to mucous membranes, hypothermia, ataxia, CNS and respiratory depression and headache.
Manufacturers need to divulge what’s in their products, eliminate use of hazardous chemicals and ensure safety of chemicals before putting them into their products.

The need for legislations that would overhaul outdated cosmetics oversight and regulation has become absolutely essential. Consumers have a right to know that the products they use are as safe as possible. 

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