Oil prices remained mixed initially of this week, with Brent at US$53/b and WTI at US$48/b. The aftermath of Hurricane Irma hitting the Caribbean and Florida has stoked fears over demand, while there was some delay in Texas refineries restarting put up-Hurricane Harvey. Rumblings that Saudi Arabia and the UAE were pushing for a new extension in the OPEC provide minimize settlement did present some raise.
- Azerbaijan’s Socar is taking part in hardball because it negotiates new production sharing agreements with BP and the consortium for the Azeri-Ciraq-Gunashli oil fields. Initially signed in 1994, all parties want to extend it past expiration in 2024, however Azerbaijan is reported demanding its share to be elevated to 20% from eleven.6%. BP would be the main loser below this proposition, having its share lowered from 35.Eight% to 30%.
- After gaining approval to maneuver forward with the Karish-Tanin pure area fuel in Israel last week, Greece’s Energean Oil and Gasoline has additionally gained approval for Kataloko oil area in Western Greece. This will likely be Energean’s third project in the eastern Mediterranean, with a goal of producing 11 million barrels of oil by 2020 and FID expected in 2018.
- The rebalancing in Canadian heavy oil sector continues, as Canadian Natural Assets bought Cenovus Energy’s Pelican Lake mission in northern Alberta for US$788 million. Cenovus has been promoting off property acquired from ConocoPhillips in March to optimise its portfolio, permitting Canadian Pure to select up its second main purchase this 12 months, having bought Shell and Marathon Oil’s oil sands production for US$10.3 billion.
- The US lost three oil rigs final week – the third fall prior to now 4 weeks – though this was offset by a gain of four fuel rigs, resulting in a net achieve of 1.
Downstream & Midstream
- Shell has joined the race for Mexico’s gas retail sector, opening its first gas station last week as Pemex’s monopoly ends. The inaugural station is positioned in Mexico Metropolis, with Shell reporting that more will come as investments of up to US$1 billion are deliberate over the following decade.
- Magellan Midstream Partners will be increasing its refined merchandise pipeline system to handle emerging demand for gasoline, gasoil and jet fuel in Central and North Texas. A new 216-km pipeline will probably be build from Magellan’s terminal to Hearne, in partnership with Valero Power, while an current pipeline will be reversed and linked to the new phase.
Natural Gas and LNG
– Angola shall be promoting LNG from its sole export facility to Vitol in its first lengthy-time period deal. Prior to this, Angolan LNG had been offered solely via aggressive tenders on the spot market, as concerns over plant reliability and constant supply failed to create multi-yr offers. Details of the settlement are confidential, however are a part of a growing pattern of traders securing lengthy-time period offers with producers to create a world LNG portfolio.
– Chinese conglomerate CEFC will purchase a 14.Sixteen% stake in Russia’s Rosneft from Glencore and the Qatar Investment Authority for US$9.1 billion, boosting power partnership between China and its largest provider.
Final week in Asian oil
– The newest revisions to Indonesia’s new oil and fuel production sharing contracts are seen as constructive steps to attract investors. The newest tweaks retains the government’s share at fifty two% for fuel and 57% of oil production, but improve different elements such as contractors share of output in the second and third phases of manufacturing or the place belongings have increased sulphur content. The Indonesian Petroleum Association described the revisions as ‘encouraging also praising the brand new tax incentives being drafted to make new energy contracts extra attractive.
Natural Gasoline & LNG
- India’s Reliance and BP have revived funding plans for the fuel-wealthy NEC-OSN-97/2 block in the Bay of Bengal, within the offshore Mahanadi basin. Plans to develop the block have been initially hindered by objections from the Defence Ministry resulting from its proximity to the Chandipur missile take a look at base. These objections appeared to have been assuaged, and Reliance is now proceeding with improvement. This would be the second major undertaking for Reliance and BP, which not too long ago signed off on a US$6 billion plan to develop the Krishna-Godavari offshore basin, part of the India government’s plan to revive and boost home natural fuel production.
- BP has begun drilling its first shale gas properly in the Neijiang-Dazhu block in China’s Sichuan basin, underneath a PSC with CNPC. This can be the primary shale gasoline well to be drilled by a overseas main in China in several years, though CNPC is technically the block’s operator underneath the PSC phrases. The block is one of two PSCs signed by BP with CNPC within the Sichuan basin, the opposite being Rongchangbei. Each blocks are understood to include shale fuel and conventional natural gas, but current disappointments by Shell, Chevron and Hess in Sichuan and Guizhou might mean that the assets might not be commercially viable.
- Australia’s Senex Power can be growing a new gas area in the Surat Basin in Queensland, aiming to offer first gasoline to a tight native market by 2019. Senex gained the acreage without spending a dime on the condition that it be used to provide the Australian east coast market, and is next to Shell’s QGC acreage and near present gasoline pipeline infrastructure.
- India’s Petronet LNG has announced a joint enterprise with Japanese and Sri Lankan partners to construct an LNG terminal in Colombo. The plant is geared toward supplying fuel to Sri Lanka’s energy and transport sector, with preliminary design and capacity nonetheless underneath discussion. Completion is predicted inside two years of FID.
- Western Australia has briefly banned onshore hydraulic fracturing because it assesses atmosphere risks associated. The state joins Victoria in banning fracking, with other Australian state additionally having moratoriums.
– Recent of China’s acquisition of a stake in Rosneft by CEFC, Japan has also expressed curiosity in investing in vitality firms, specifically citing Rosneft. The expressions of interest are by the Japan Oil, Gas and Metals Nationwide Company (JOGMEC), and could be seen as an try and not be left behind by China’s drive to amass strategic stakes in key producers.
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