Last Week in World Oil:

Prices

–       Oil prices took a tumble as rising worries over demand in China offset another disruption in Libya. Output at Sharara, Libya’s largest field, fell by 30% on security threats, but sliding refinery runs in China are spooking traders that the gap between demand supply might widen even further. Brent started the week at US$50/b, with WTI at US$48/b.

Upstream & Midstream

–       Encouraged by discoveries in Israel and Cyprus, Greece wants to get in on the hydrocarbon party, launching two tenders for offshore exploration. A consortium of Total, ExxonMobil and Hellenic Petroleum wants to explore two sites off Crete and local player Energean wants to search a block in the western Ionian Sea. Energean is the only current offshore producer at a miniscule 3,500 bpd.

–       Zambia has allowed the UK’s Tullow Oil to begin exploring for oil in the northern part of the landlocked country, as it attempts to diversify its economy away from copper. This, however, will be a long game as Tullow warns that production could be as far away as 20-50 years away.

–       The US rig count fell again, losing a net six rigs. This was entirely down to inland gas rigs, which fell by 8. In contrast, oil rigs actually gained, up by 3, mainly in the Cana-Woodford shale play in Oklahoma.

Downstream

–       Shell’s Pernis refinery in Rotterdam will only be returning to full operation at the end of August, after a fire knocked out the site’s two crude units in late July. Some smaller units have been brought back online, but full operations will only resume by early September, leaving gasoil and diesel in northwestern Europe, prompting increased imports.

–       Uganda has chosen a group led by General Electric to build and operate a US$4 billion 60 kb/d refinery, processing crude produced by Total and Tullow Oil. Including Yaatra Ventures, Intracontinent Asset Holdings and Italy’s Saipem, the consortium is a successor to a Russian-Korean venture, with a target of 2020 to begin operations.

Natural Gas and LNG

–       BP has started production from a natural gas well in the Mancos shale play in New Mexico that is revealing itself to be far more significant than previously thought. Output average 12.9 million cubic feet per day in the first month, the highest in the San Juan basin in 14 years, possibly unlocking the gate to one of the largest untapped reserves of shale gas in the US, in an area where acreage is still relatively cheap.

–       Plans to deliver gas from the Israel’s Leviathan field may be routed through Jordan to avoid the direct route through Egypt’s Sinai desert that is mired in unpaid fines owed to Israel over cancelled gas contracts. The pipeline issue is holding up talks between Egypt’s Dolphinus with Delek Group and Noble Energy to purchase 3 bcm/year of gas.

–       Brazil’s government has authorised Petrobras to export idle LNG cargoes on the spot market of up to 6.6 million cubic metres. The volumes are coming from Petrobras’ three regas terminals, built in the good times but now stuck in a glut. As a state company, Petrobras requires state approval to proceed with the sale of what are essentially state assets.

Last Week in Asian oil

Upstream

–       Abu Dhabi will be splitting its massive ADMA-OPCO offshore oil concession into at least two, aiming to ‘unlock greater value and increase opportunities for partnerships.’ The current concession produces some 700,000 b/d of oil, rising to a projected 1 mmbpd by 2021, held by Adnoc along with BP (14.67%), Total (13.33%) and Japan Oil Development (12%). The existing partners will be joined by new firms in the newly split fields, with Adnoc holding 60% in all new concession areas.

–        Also in Abu Dhabi, Japan’s Cosmo Energy Holdings announced that production at the offshore Hail field will begin in October, slightly delayed from the original projection of June 2017. Cosmo, which is owned partly by Abu Dhabi’s state investment firm, holds a 63% joint stake in the field with other Japanese firms, with a target production of 20,000 b/d at peak.

Downstream

–       A new refinery has been announced in Malaysia, spearheaded by Hong Kong’s NewOcean Energy Holdings. To be located on Peninsular Malaysia’s east coast in Kuantan – with has easy access to Northeast Asia – the US$1.2 billion project will be a joint venture with Kuantan Port Consortium and the Malaysian east coast development body. Size, capacity and timeline have not yet been confirmed, but the development price suggests that it will be on the smaller side, at least than 100 kb/d.

–       India is finalising a new biofuels policy that is aimed at slashing carbon emissions in the world’s third-largest emitter as well as cut imports of fossil fuels. The policy will compel state companies to expand their network of ethanol and biodiesel plants, which could impact long-term projections of India’s transport fuel growth.

Natural Gas & LNG

–        Efforts to ease the gas crunch on Australia’s populous east coast are continuing. Producer Santos is redirecting natural gas earmarked for LNG export and other purposes to Engie’s Pelican Point power plant in South Australia in a contract for 14.1 bcf of gas. The short term is necessary leading up to the Australia summer, with Pelican Point plant identified as ‘critical’ to South Australia’s energy needs. For the longer run, AGL Energy has selected a site for its Crib Point LNG import terminal in Victoria. Construction is planned to begin in 2019 with completion in 2021, which will help ease the growing shortage in Australia’s largest gas market.

Corporate

–        India’s upstream giant ONGC is tapping the debt market for the very first time, to pay for the purchase of the Indian government’s stake in HPCL and to bankroll an extensive slate of projects aimed at boosting domestic and overseas asset production. The bond issuance is expected to be blockbuster, given ONGC’s strong fundamentals. HPCL’s own US$500 million offering in July attracted bid six times the initial amount.

 

Source link

NO COMMENTS

LEAVE A REPLY